Norada Real Estate Investments

Grow Your Real Estate Business With Independent Contractors

by

Seven Reasons You Want to Use Independent Contractors To Grow Your Business

There are dozens, maybe hundreds, of strategies that we've used successfully over the years to save our clients taxes. One such strategy is to use Independent Contractors to build your business. I'm going to cut right to chase here and just jump into this.

Reason #1: It's easier to ramp up your business

You can contract with Independent Contractors (ICs) for short term, month-to-month work or just by project. You don't have to worry about training them or providing tools for them to work with.

There is an assumption that they can hit the ground running. If they can't, the worst case is you've tried it out for only 30 days. You didn't have to invest time in training them and providing salary & benefits during this time. They either can perform, or not. If they don't, they're gone.

Reason #2: It's easier to change the business model if you need to change quickly

If your real estate investing business goes down, it's a lot easier to stop using an IC than it is letting an employee go. Besides the emotional issues of letting go an employee who depends on you completely for their income, there are also legal and benefit issues. You might be forced to cover the employees under the new COBRA laws. Your unemployment rates will go up. [Read more…]

How to Keep a Positive Perspective in a Negative Market

by

I am sure you've heard the expression, “Attitude is everything.”  This is very true. Right now, it's simply your attitude and mentality that will give you the edge over others who are trying to invest in real estate in this highly volatile market.

You've undoubtedly heard the importance of thinking positive and having the right attitude.  Most people are intelligent enough to know that this statement is true.  Some people reading this will argue that a positive attitude doesn't always work.  Well, maybe not, but I know one thing for sure – negative thinking and a negative attitude NEVER works!  So your only choice and your only chance for success in this market are to pick the positive things in life and maintain a positive attitude at all times.

I once read a fortune cookie that said, “An optimist is someone who tells you to cheer up when things are going his way”.  I know that if you are reading this article, times may be difficult and you need serious answers to your burning questions such as, “How do I profit in a slow market?”  There are many answers to this question, but first I need to impart to you some relative perspective.

A History Lesson on Real Estate Cycles

About every ten to twelve years, as an average, real estate values tend to double in most major metropolitan areas.  For example, in the 1920's, the original colonial homes sold for just under $2,500 in Long Island, New York.  Since then, real estate prices have doubled almost eight times over the last 80 years.  That averages out to a 100% increase approximately every ten years.  An interesting note to this is that about every ten to twelve years, real estate values must correct before they enter their next “doubling cycle”.    [Read more…]

Asset Protection for Real Estate Investors

by

During the early years of my real estate investing I ran my business as a sole proprietor because I was confused about asset protection. All the books and expensive courses only added to the confusion, and the subject of asset protection only became more frustrating for me.

Luckily, I survived with only minimal damage, but there comes a point when it is time to assess the best legal structure to use for real estate investing. This becomes increasingly important as your net worth grows.

Consider this scenario. You are sued for an accidental injury that occurred on one of your properties where you held title in your name personally. You are sued for $2,000,000.Your insurance only covers $1,000,000. That's a very bad day.

The biggest mistake you can make in real estate is to hold title on your property in your own personal name. Title to property is public record. Anyone can look up what you own, determine its market value, and deduct what you owe to determine what they can attempt to sue you for. It's like painting a bulls-eye on your back for prying eyes such as attorneys, creditors and even your tenants.

So what entity provides you the best asset protection? How do you limit your liability exposure? [Read more…]

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.

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.

Top 10 Economic Predictions for 2009

by

The U.S. and world economies are about to suffer through some of the worst recessions in the postwar period. Most measures of economic and financial activity look like they fell off a cliff in September and October, and have been deteriorating at an alarming rate ever since. The United States is now officially in a recession that started in December 2007. Japan and many European countries are in the same boat. At the same time, growth in most emerging markets is faltering. IHS Global Insight now believes that global growth will be in the 0.0 – 0.5% range during 2009, compared with 2.7% in 2008.

  1. THE U.S. RECESSION WILL BE ONE OF THE DEEPEST — IF NOT THE DEEPEST — IN THE POSTWAR PERIOD.
    The current downturn is well on its way to becoming the longest in the past six decades. Based on the December IHS Global Insight baseline forecast for the U.S. economy, it will be the fourth deepest in the postwar period (the 1957 recession was the deepest, followed by the contractions of 1973 – 75 and 1981– 82). Nevertheless, given the very negative tone of the incoming data (including the 533,000 drop in November payrolls), the recession could well be the worst in the postwar period. At the same time, the large back-to-back declines in real GDP predicted for the fourth quarter of 2008 and the first quarter of 2009 (down 5.0% and 3.8%, respectively) are the worst since the 1982 recession, and may easily be the worst in more than six decades. Overall, we expect the U.S. economy to shrink at least 1.8% in 2009.
  2. THE FEDERAL RESERVE AND OTHER CENTRAL BANKS WILL KEEP CUTTING RATES.
    The race to zero is on! The Fed has already cut the federal funds rate to 1% and is likely to take it all the way to zero by the end of January. Once the overnight rate is at zero, the Fed may have to engage in “quantitative easing” (direct purchases of long-term Treasuries). It is already engaging (massively) in unorthodox measures such as buying commercial paper, mortgage-backed securities, credit card debt, and loans to small businesses, students, and car buyers. On December 4, the European Central bank joined the fray by cutting the overnight rate by 75 basis points (to 2.5%), while the Bank of England cut by 100 basis points (to 2.0%). IHS Global Insight now believes that the ECB and BoE will push rates all the way to 1.0% and 0.5%, respectively—and could cut all the way to zero. Most central banks around the world have followed suit. Notably, on November 26, the People’s Bank of China lowered rates by 108 basis points, the largest cut in 11 years and the fourth cut since mid-September.

    3. [Read more…]

What You Should Know About HUD Properties

by

imageHUD properties are available all over the United States, and make great investments for anybody that is interested. These homes often get a bad rap for being in bad condition, but in all actuality they are not any worse than other foreclosed homes that are available. Just like anything else, there are some HUD properties that are in good condition, and some that are in need of repairs. It is simply a matter of how well the past owner cared for the home.

HUD properties are homes that had loans which were insured by the Department of Housing and Urban Development (HUD). But when the owner fails to live up to the financial obligations that are expected, the bank then takes over the home and it becomes an HUD property. At this point, the Department of Housing and Urban Development is in charge of repaying the lender any money that they lost on the deal. So as you can see, the Department of Housing and Urban Development sticks their neck on the line when they insure the loans on these homes; if the owner doesn’t pay, they are stuck with owing money to the lender.

[Read more…]

Fed Slashes Key Interest Rate to 1 Percent

by

In an effort to revive the economy the Federal Reserve cut the federal funds rate today but a half-point (0.5%). This lowers the rate to 1 percent – the lowest rate since 2003-2004. The last time the federal funds rate was lower than 1 percent was during the Eisenhower administration in 1958.

Today’s interest rate cut was the second half-point cut this month. The last one on October 8, 2008 was in a coordinated move with foreign central banks.

This year’s economic weakness has created huge declines in the price of oil and other commodities. While many economists believe the country is in a recession, they also believe the recent rate cuts and other aggressive actions by the Fed will help prevent a prolonged downturn and help unfreeze the credit markets.

If these aggressive moves by the federal government are successful in thawing the credit markets, it will be great news for real estate investors who are having difficulty financing their real estate investments.

National Real Estate Market Analysis

by

eppraisal.com released their National Market Analysis Report for the three months ending August 2008. Of the 188 market areas tracked across the U.S., 43.6 percent show a decline in median home values, which is up from 32.4 percent from the previous three months. This ends the upward trend from the last three reports where the number of markets showing an increase in median home values was on the rise.

Most markets in the report are showing signs of leveling out or increasing values, with California being an exception. California again tops the bottom of the list with 27 of the 28 markets tracked by eppraisal.com showing declining median home values. Chico, CA is the only market that is showing signs of rebounding (see figure below). For this report Chico, CA, saw an increase of 1.70 percent to a median sales price of $245,000.

Six California markets saw double digit declines: Madera down 10 percent, Bakersfield down 10.7 percent, Riverside-San Bernardino down 11.1 percent, Modesto down 11.3 percent, Salinas down 14.3 percent, and Merced down 11.5 percent.

Markets in North Carolina, South Carolina, Ohio, and Oregon continue to gain in value and continue to show signs of a changing market. For example, the Raleigh-Cary, NC, Florence, SC, and the Dayton, OH, markets all saw median home value increases of over five percent. Raleigh-Cary, NC, increased by 8.1 percent to $200,000, Florence, SC, increased by 8.7 percent to $106,000, and Dayton, OH, increased by 10.6 percent to $110,000.

Texas continues to hold on to the postitive trend while Florida starts to dip back into negative waters. In the last report 11 of the 20 areas tracked in Florida by eppraisal.com showed positive increases in median values. This month the number of Florida markets showing increases in home values is down to six: Fort Walton Beach-Destin up 9.7 percent to $203,000, Palm Coast up 8 percent to $175,000, Panama City up 6.7 percent to $176,000, Palm Bay-Melbourne up 5.7 percent to $156,000, West Palm-Boca Raton up 5.6 percent to $285,000 and Jacksonville up 1.7 percent to $183,900. Texas shows the opposite with seven of the 11 areas tracked by eppraisal.com showing increases in median values. At the top of the list sits McAllen-Edinburg with an increase of 7 percent to $115,875, Waco with an increase of 6 percent to 119,621, and Midland with an increase of 4 percent to $172,500.

See the complete list »

Riding Out the Real Estate Market Crash

by

Riding Out the Real Estate Market CrashReal estate has been regarded as one of the safest investments for quite some time.  However, despite the relative safety of real estate investments, there is always the possibility that the real estate market can fall just like any other investment.

Over the long term, real estate remains relatively safe simply due to the fact that the population of the world continues to increase while land is a limited resource.  When there is an occasional downturn in the real estate market, it is important to recognize certain strategies which can be used in order to keep a real estate investment from becoming a complete loss.

The first thought many people have when they realize the market has turned down is to attempt to sell the property as quickly as possible before the market gets worse.  In reality, most investors have found that it is often better if they can hold onto the property and ride out the market downturn.  While it is possible the market might dip lower before it rebounds, historically real estate markets always come back.

[Read more…]

Blog Posts

Contact

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

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