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Wednesday, May 21, 2008

1031 Exchanges

Today I attended a seminar on 1031 exchanges. I've been selling for over 27 years, and I have done my fair share of exchanges, but I went to the class anyway just to see if I could pick up any *new info to share with my customers. The class was given by a gentleman named Marshall Beene who is an exchange account coordinator with U.S. National 1031 Exchange. An investor in real estate understands how important it is to preserve wealth and assets. The investor is fortunate to have this tax code which gives them the ability to defer taxes on their gain and rollover equity of "like kind" properties. Thus, the investor continues to build wealth through real estate investments and maintains the hard earned equity. First of all, let me define what an IRC 1031 Tax deferred Exchange is: A 1031 Exchange is a transaction which specifies if an asset (a form of real estate such as land or a commercial building) is sold and the proceeds of the sale are then reinvested in an asset of a similar kind, therefore no capital gain or loss is recognized, allowing the deferment of capital gains taxes that would otherwise been due on the first sale. The actual law is Title 26, section 1031 of the Internal Revenue Code. All clients should refer to their CPA for tax or legal advice, but if you have basic questions about what an IRC 1031 Tax Deferred Exchange is we welcome your call. Many of these questions can also be answered by logging onto Okay, now for the *new info...I thought this was interesting...If you, an investor, purchased a property for $200,000. and the current market value is $500,000...BUT, if you have taken equity out of the property over your time of ownership, you will still owe capital gains on the estimated $300,000 difference--known as gain (less added improvements, less depreciation, less selling expenses,etc...I'm just trying to keep the example simple) even if your current mortgage debt is $400,000 or more...The tax due on the sale is based on the estimated gain on the sale regardless of whether you have refinanced or gotten equity out of the property. In this instance, it would be better to consider a 1031 exchange and "roll" the sale into another like kind property of equal or greater value and continue to build wealth rather than get "stuck" owing taxes on a property you now have little or no equity in. Again, I always recommend you call your CPA, but I thought that in today's market there might be a few investors out there in similar situations that might find this info helpful. If you own an investment property here in Naples Florida and want more info about the 1031 exchange and how it could benefit you, please call The Harris-Peppe Team today. 239.370.0574
Thank you, and make it a great day,
The Naples Real Estate Blogger

Monday, May 12, 2008

Name Brand Recognition

1. Did you know that 96% of consumers know the Coldwell Banker Brand? What's in a name? EVERYTHING! A strong brand can command a premium price and influence buying decisions that shape the ownership experience. Put the strength of the Coldwell Banker to work for you. With over 100 years as an industry leader and a 96% brand awareness, Coldwell Banker is in the same league as Coke, Pepsi and Nike! 2. Did you know that 80% of today's consumers begin their home search on the internet? What's in a name? EVERYTHING! That's why is fast becoming the most popular website used by today's consumer looking for a home in Naples! 3. Did you know that over 70% of The Harris-Peppe Team's real estate transactions are a result of repeat and referral business? What's in a name? EVERYTHING! The Harris-Peppe Team, "the name friends refer to friends" Coldwell Banker, & The Harris-Peppe Team... Call them today to put this winning combination to work for you! 239-370-0574

Monday, May 5, 2008

Market Hits Bottom!

A week or so ago our local newspaper reported that the housing market in Collier had "hit bottom" and was back on track. I'd say a lot of folks read that article because showings on our listings are up again after experiencing a bit of a lull earlier last month. At a recent real estate forum, organized by The Naples Area Board of Realtors, Hank Fishkind, renowned Florida economist spoke the words Naples real estate agents have been waiting to hear..."The markets are not eroding further". Yes, it looks like prices have leveled off, but it will probably take another 6 to 12 months for sales to really start improving in the Naples area. Fishkind described the unsold inventory of new homes in Collier County as "fairly small" while he predicts it will be "years" before prices go up again. He also spoke about the decline in housing starts which will also "bottom" out in 2008. This will make finding new homes around town more scarce in a couple of years. Certain neighborhoods are already rebounding. Why just today I selected 7 homes to show a prospect tomorrow and 2 of the 7 went under contract over the weekend! In the first weekend of May! Yahoo! Usually by this time of year Naples is pretty quiet, but people are coming back to make decisions that they didn't make in February! For a list of what we think are the areas hottest properties email or call us today! or Chip's direct line: 239-370-0574