Norada Real Estate Investments

How to Maximize Your Tax Deductions on Investment Property

by

Every real estate investor knows that investment property provides more tax benefits than almost any other investment.  Therefore, maximizing those tax deductions only makes good business sense.

Let's take a quick look at the most important tax deductions available as an owner of investment property:

1.  Mortgage Interest
Your largest deductible expense is likely to be interest.  There are two types of interest that you can deduct.  The first is mortgage interest from any mortgage loan on the property.  This includes Home Equity Lines of Credit (HELOC) and other loans secured by your property.  The interest deduction applies to any of these loans provided that they were used to acquire and/or improve your investment property.

Additionally, credit card interest can also be deducted for goods and services used in the operation of your rental property.  Closing costs and points paid by you to close on your mortgage loan is also deductible.

2.  Depreciation
Depreciation is simply the loss in value of your income property over time due to physical deterioration, age, and normal wear and tear.  Fortunately, the IRS allows you to depreciate income properties over their “useful” life.  This is defined as 27.5 years for any residential property (1 to 4 unit properties) and 39 years for commercial properties.  Depreciation can provide you a significant and welcomed deduction every tax year!

3.  Insurance
Premiums paid for insurance policies are tax deductible expenses too.  This includes, but is not limited to, fire, theft, flood, and landlord liability insurance.  Also, health and workers' compensation insurance for your employees (if any) can also be deducted. [Read more…]

Protecting Yourself From Mortgage Fraud

by

With the large number of foreclosures to hit this country over the last few years, con artists have come out of the woodwork  to prey on those in trouble — including real estate investors.

The number of schemes, and those being caught and charged, can be found in the news and on many internet website like Mortgage Fraud Blog (www.mortgagefraudblog.com).

This short 2-minute video by Freddie Mac teaches you how to spot a foreclosure scam and find out how to avoid becoming victim to home foreclosure fraud.

Do you know someone who's been victimized?  Do you think this problem is getting worse?

Bailed-out Banks May Buy Toxic Assets

by

There's a lot going on today. The unemployment rate "surprisingly" hit 8.5%. President Obama knocked 'em dead at the G-20 meetings.

But the headline that caught my eye was "Bailed-out banks may buy toxic assets."

Believe it or not, Citigroup, Goldman Sachs, Morgan Stanley and JP Morgan, are considering using the Public-Private Investment Program to buy toxic assets from other banks, according to the Financial Times.

The Public-Private Investment Program is designed to encourage private investors to put money to work buying toxic assets from distressed banks. The Treasury and the Fed have offered loans to make the purchases less risky for the buyer. In essence, all a buyer has to do is put up a token amount of cash and the government will fund the rest.

Yes, the plan reduces risk to the point that it's kind of like a free money giveaway – the taxpayer takes the risk, the subsidized investor makes the profit, assuming there is one.

Personally, I'm not happy about the plan. But something has to be done to get the market for these toxic assets moving. Right now, there's a huge spread between the banks asking price and investors' bid. And nobody's budging. Throw in some free money via the Public-Private Investment Program, and the bid can rise to be more in line with the ask price. It's a sweetheart deal.

Brand New Townhomes – $349/mo Cash Flow – 24 Month Rent Guarantee

by

If you are in the know, then you are aware that you MUST buy a piece of property in the GO Zone AND have a renter in place before the end of THIS YEAR (2009). That doesn't leave you much time to find a GO Zone qualified property in an outstanding location with good income potential.

Well, here is the good news! You have a chance to piggy back off of our hard work for the last 2 years working in the GO Zone. We are aware of all the projects that qualify for this amazing benefit and we can say that this project offers the best combination of benefits than any other in the GO Zone, hands down.

  • Positive Cash Flow — $349 per month per unit!
  • Outstanding location directly across from a new $900 Million Town Center (jobs).
  • Completely Turn Key — with a 24 Month Rent Guarantee from the Developer!
  • Invest in one of the best emerging markets in the country.
  • GO Zone qualified for huge tax savings from the 50% Bonus Depreciation.
  • Possibly offset ALL of your Federal income taxes.
  • Appliance package (stove, refrigerator, microwave, dishwasher).
  • Full builder's warranty.
  • Property Management Available
  • Financing Available

Download the free Property Info-Pak here: Slidell, Louisiana Real Estate Investment.

The Ballad of Bernie Madoff

by

Although the massive $65 billion Ponzi scheme created by charlatan Bernie Madoff is no laughing matter, I couldn't resist posting this video as it's quite humorous.  Enjoy…

(Video created by Flinch Studio.)

The Credit Crisis Visualized – An 11 Minute Video

by

Understanding the credit crisis can be somewhat complex.

This short (11 minute) video explains what the credit crisis is and how it got started.  It's a fun and informative way you will get a quick lesson in the economics and the impact that this economic crisis has from the home owner to the global economy.  Enjoy this animated lesson in modern economics!

(Video created by Jonathan Jarvis.)

New IRS Red Flag – Mortgage Interest

by

The IRS has begun targeting individuals with larger mortgage interest deductions in an effort to increase their tax revenues. They are currently sending out audit notices to DC residents as part of their test, but will quickly expand to the rest of the country once their audit systems are in place. If you're a real estate investor you need to be aware of this and plan accordingly.

You must meet three criteria in order to legally take the mortgage interest deductions:

  • You can only deduct the mortgage interest on debt up to $1,000,000. This includes your personal and second residence combined.
  • You can claim an additional $100,000 for a second loan or HELOC. (This is completely disallowed for AMT taxpayers.)
  • You can only deduct the original amount of your indebtedness. In other words, once you pay down your loan your deduction does down and stays down. Even if you refinance, you can only claim the original (lower) amount of your loan before refinancing. This is one item that most people forget or don’t know about.

The IRS may strike gold here. They will want to see where you spent the money from your refinances or new HELOC loans. It would be wise to show that the money was used for home improvements or business purposes.

With the economy in disarray and the federal government hungry for additional tax revenues, it’s more important than ever for you to be on top of the real estate tax law changes. Remember that a good tax advisor can help you achieve your real estate investing goals sooner by avoiding the pitfalls along the way.

Building Your Real Estate Team

by

A good real estate team is the way to assure your investing success. Failure increases when you tend to be a “lone wolf” and try to do too much by yourself.

In real estate, you need a good team of people you can trust and rely on. Here are some possible team members, and why they need to be on your team.

Mortgage broker or banker: A broker can offer you many loan options and shop your mortgage to find the best deal that meets your needs. A mortgage banker may be limited in the loan options they can offer you but they can make more decisions on your loan than a broker can. They each have their advantages and you should have both on your team. In either case, it's important that they understand your needs (i.e. fast closing, low interest, concession approval, etc.)

Property manager: Be sure that the company you hire has experience, is responsive, and will have time for you when you call. Good property managers can tell you what you should get for rent in a given area BEFORE you buy. Your property manager is one of your most important team members. Your real estate investments live and die by them.

Good real estate agent: An agent with experience in the area you invest in and access to the MLS (Multiple Listing Service) can be a great help. Even if they are a seller's agent, they can still ethically bring you the best deals once they know you're a serious investor.

Real estate investment firm: In addition to a real estate agent, you should work with a good real estate investment firm. These companies offer pre-screened investment properties in growth markets around the country. [Read more…]

Home Prices Dropped Sharply Late 2008

by

You were hoping the worst was over, but then they release the latest stats showing that home prices tumbled by the sharpest annual rate on record ending the fourth quarter of 2008.

The widely watched Standard & Poor's/Case-Shiller U.S. National Home Price Index plunged 18.2 percent for the fourth quarter of 2008 compared to the same period a year ago.  That makes it the largest year-over-year drop in its 21-year history.  The index shows homes prices at levels not seen since the third quarter of 2003.

Home prices in the 20-city index have dropped by 27 percent from its peak in the summer of 2006, and the 10-city index has fallen more than 28 percent.

Again, Norada Real Estate Investments reminds investors that there is no “national” real estate market and the all real estate is local. Therefore, focus on local markets nationwide that offer great buying opportunities and make sense the day you buy them.

New Investment Condos – 30 Month Lease-Back with Positive Cash-Flow

by

We just announced our latest real estate investment opportunity located in Ocean Springs, Mississippi.

Predicted by CNN Money to average 5% annual appreciation for the next 5 years. Forbes rated the Go Zone market as one of the Top 3 areas to invest, and Realtor.com rated the Mississippi gulf coast as the number one appreciating market of 2008.

This investment opportunity features a unique 30-month lease-back program that covers 100% of your mortgage payment, property taxes, homeowner association fees, management fees, maintenance costs, and utilities!

We also have several lending options available including some private financing options with 90% to 100% fininacing.

The investment is also Go Zone qualified for the 50% “bonus depreciation” provided by the IRS.

Visit our website and download the FREE Property Info-Pak for complete details, or just click here: Ocean Springs Investment Condos.

Blog Posts

Contact

Norada Real Estate Investments 30251 Golden Lantern, Suite E-261 Laguna Niguel, CA 92677

(949) 218-6668
(800) 611-3060
BBB