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San Diego Real Estate News

17 Jan 2014

Using Your IRA to Purchase New Homes

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Using Your IRA to Purchase New Homes

Checkbook IRAs can be a great resource to those who want to invest in a tangible asset and escape traditional fees that come with using a broker and investing stocks and bonds.

Using a Checkbook IRA allows you to take control over your investments and money. It provides you with the ability to make decisions on your own, carry out those decisions, and escapes the fees generally associated with financial advisors and custodians.

This type of IRA was created almost 20 years ago behind the idea that its your money and you should have autonomy over it, as long as you follow the law. Prior to 1996 you were forced into having a third party carry out any investments associated with your IRA, but now you can decide how you want to spend your money as long as you follow some rules. But because you have direct control over your money, you can now use your funds to purchase homes, and property, as long as you and your family do not use these properties directly until you are 59.5 years of old.

The only stipulations of a Checkbook IRA are roughly the same as a regular IRA. Money from your current retirement account will be rolled over into a self-directed fund. This fund is then established as an LLC and your new IRA controls all the membership units so that you can then invest as you see fit.

Using this new LLC you are now free to move fast and purchase domestic commercial, residential, rental or foreign properties that are on the open market, in foreclosure, or have tax liens levied against them.  You can then flip these properties, or collect rent from them. All profit from these properties will be tax-deferred because your IRA is tax-deferred. Additionally, you can sell your properties and there will be no capital gains taxes.

Properties purchased have to be bought using only IRA money, but if you do not have enough funds yourself you can pool your money with others who are also using a Checkbook IRA as long as they are not family members.

However, there are fees associate with setting up and LLC, and you must have a custodian, but you don’t have to pay the custodian for each transaction you wish to do.

So if you are in the real estate market and looking for a creative way to earn money, save on costs, and invest in your future, then you should definitely ask a financial advisor about Checkbook IRAs. ]

 

13 Jan 2014

Finding the right home for your client

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Finding the Right Home for Your Client

Although the housing market is improving, supply of non-distressed homes is still far below the norm in many communities throughout the country. An influx in demand, coupled with a low supply of quality homes, can create a crisis for many real estate agents, and their clients.

During a shortage realtors need to assist their clients in prioritizing what is really important to them: home price, neighborhood, size, and style. Armed with this knowledge you can then use the tools at your disposal to find your client’s dream home.

Proactive Searching

It is crucial that you are constantly looking for new listings every day when supply is low. You can then notify your clients about new listings through text message and e-mail. This gives your clients the chance to give you as much feedback as possible regarding their preferences and helps you find them the right home.

Connect with People who Bought when the Market was Low

Many smart investors bought homes during the economic downturn, and home prices were low. Not everyone will be looking to sell, but some owners purchased with the sole intention of selling.

Use your databases to search for previous clients who bought low, and inform them of the recent economic upturn and what the value of their home might be now.

Rental Properties

Contacting the owners of rental properties is another great way to find quality homes when supply is low. Many rental property owners are looking to sell, but not actively looking, so if you can make them a strong offer could lead to success.

Talk to the Neighbors

If your client has a neighborhood where he or she wants to live, ask the neighbors if they are aware of any houses that might be going on the market soon.

Two good methods of doing this are through written letter, and talking to people walking their dogs. They might have a friend who is thinking of selling, or have seen a house being prepared to go on the market.

Zillow.com

Websites like zillow.com have a “make me move” section for home owners to test the market. These home owners are apprehensive about moving, but the right offer could be the nudge they are looking for.

Use your network

Talk with other realtors in your area and ask them if they have any clients who are thinking about selling, or if they have any unlisted properties. This might be the most underused resource, and best resource, at your disposal.

For Sale By Owner

Search websites like: craigslist, zillow, and forsalebyowner, to find homes that are for sale by owner, and could possibly fall between the cracks of a conventional search.

 

 


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