Fear Plays Role in First Time Home Purchase
There are so many emotions connected with buying your first house: stress, anxiety, anticipation, doubt, joy and fear.Not only are first time buyers nervous about the process of buying a home, they are especially worried about being rejected for their mortgage. Many will continue to rent a home, even though they are excellent candidates for buying. They worry that their credit will not allow them to qualify for a mortgage.Most home buyers look at not qualifying for a mortgage as an embarrassing experience.Most people will only take the plunge when the cost of renting far exceeds the fear of rejection. Buying a home represents the largest financial investment most people will ever undertake. The renter may decide to look for a home when he or she realizes that they are basically paying their landlord's mortgage.Once they look at the benefits to owning a home, the fear becomes a little less and they take the first steps.Most first home buyers worry about the finances involved in purchasing a home. Do I qualify? What if my credit is bad? How much will

How To Reduce Student Loan Payments through Refinancing
Finishing one’s education is not a cheap task. In fact, it could place a student into debt before even entering the real world. Since not all students have thousands of dollars to pay every year for college tuition fees, most college students obtain educational loans to survive college. However, when these students graduate, the majority of them do not know where to begin paying the student loans back.The principal goal of refinancing is to reduce your monthly total student loan payments. Sadly, this option has been overlooked over the years. As you leave the college life, you will be facing a variety of loans with different interest rates. Refinancing your student loans could help your credit lower its interest rates. In turn, would save you thousands of dollars in the end. If you choose to refinance your educational loan, there are a number of factors to consider.First, if you have two kinds of loans, make sure to refinance them separately. Do the federal student loan first, before any other private loans. This way, you will enjoy the benefits of the low interest rate

The 'Red' Pill or the 'Blue' -- the Truth About Professional Selling
In the film “The Matrix”, the main character, Neo had a choice in one of the deeply compelling scenes in the movie. His choice had to do with the option of choosing the “red pill” or the “blue pill.” You see, the red pill would reveal the truth (the WHAT) and the blue pill would make him forget everything that had happened and put him back into his comfortable reality. This article examines this within the context of PROFESSIONAL SELLINGThere is a major problem in professional selling today.The problem is, most people within the profession today don’t even know what professional selling entails to be effective, efficient or successful. That makes it a great opportunity for you, but a real problem for you at the same time.It really comes down to making a distinction between two different ways of “being” effective in professional selling just like making a distinction between how something is and what something is.Let me clarify…“Learning How to Sell”is COMPLETLEY different than“Learning Professional Selling”By this I mean…ce of reliable income; so, you are not completely dependent on your salary. Your company says its employees are its most valuable assets, but it also outsources many jobs to China and India to cut costs. You know you should not blame your company. It has to remain competitive. So when you see an attractive multi-tenant shopping strip in a middle-class suburb of Dallas, 100% NNN lease with $200K/year of Net Operating Income (income after all expenses except the mortgage payment) on the market for $2.6M, you get excited!

Since the residential real estate market in the Bay Area has softened, you consider selling your rental property to buy this shopping strip. You estimate that you would have to pay about $200K in federal and state income taxes on $800K of capital gain ($1M less $250K purchase price and selling fees, plus $50K in depreciation recapture). You just hate having to pay $200K to the government – money that may go toward your down payment on the shopping strip. There is a better way – a way to defer the income tax.

What is a 1031 Tax-Deferred Exchange?

Section 1031 of the Internal Revenue Code generally provides that neither gain nor loss is recognized if qualifying property is exchanged for other qualifying property of a like-kind. In the above scenario, you may defer the payment of $200K in both federal and state taxes if you acquire another investment property with equal or greater debt and equal or greater equity. In other words, if you buy another investment real property for $1M or more, using all of the net proceeds as down payment, then you may defer the $200K of taxes. Essentially, the government would lend $200K to you, without interest. And you may repeat this deferral and never pay income taxes.

How Do You Qualify for a 1031 Exchange?

You must comply with several strict rules. Failure to satisfy any of the rules will disqualify your transaction from a 1031 tax-deferred exchange.

1. You must trade up. The property you buy (replacement property) must have an equal or greater debt AND an equal or greater equity than the property you sell (relinquished property). This means you must put all of the net proceeds from the relinquished property to the replacement property and the fair market value (FMV) of the replacement property must be more than the FMV of the relinquished property.

2. The qualifying property must be of like-kind. The relinquished and replacement properties must be held for productive use in a trade or business or for investment, before and after the exchange. And one kind of property may not b

opping strip. You estimate that you would have to pay about $200K in federal and state income taxes on $800K of capital gain ($1M less $250K purchase price and selling fees, plus $50K in depreciation recapture). You just hate having to pay $200K to the government – money that may go toward your down payment on the shopping strip. There is a better way – a way to defer the income tax.

What is a 1031 Tax-Deferred Exchange?

Section 1031 of the Internal Revenue Code generally provides that neither gain nor loss is recognized if qualifying property is exchanged for other qualifying property of a like-kind. In the above scenario, you may defer the payment of $200K in both federal and state taxes if you acquire another investment property with equal or greater debt and equal or greater equity. In other words, if you buy another investment real property for $1M or more, using all of the net proceeds as down payment, then you may defer the $200K of taxes. Essentially, the government would lend $200K to you, without interest. And you may repeat this deferral and never pay income taxes.

How Do You Qualify for a 1031 Exchange?

You must comply with several strict rules. Failure to satisfy any of the rules will disqualify your transaction from a 1031 tax-deferred exchange.

1. You must trade up. The property you buy (replacement property) must have an equal or greater debt AND an equal or greater equity than the property you sell (relinquished property). This means you must put all of the net proceeds from the relinquished property to the replacement property and the fair market value (FMV) of the replacement property must be more than the FMV of the relinquished property.

2. The qualifying property must be of like-kind. The relinquished and replacement properties must be held for productive use in a trade or business or for investment, before and after the exchange. And one kind of property may not b

defer the payment of $200K in both federal and state taxes if you acquire another investment property with equal or greater debt and equal or greater equity. In other words, if you buy another investment real property for $1M or more, using all of the net proceeds as down payment, then you may defer the $200K of taxes. Essentially, the government would lend $200K to you, without interest. And you may repeat this deferral and never pay income taxes.

How Do You Qualify for a 1031 Exchange?

You must comply with several strict rules. Failure to satisfy any of the rules will disqualify your transaction from a 1031 tax-deferred exchange.

1. You must trade up. The property you buy (replacement property) must have an equal or greater debt AND an equal or greater equity than the property you sell (relinquished property). This means you must put all of the net proceeds from the relinquished property to the replacement property and the fair market value (FMV) of the replacement property must be more than the FMV of the relinquished property.

2. The qualifying property must be of like-kind. The relinquished and replacement properties must be held for productive use in a trade or business or for investment, before and after the exchange. And one kind of property may not b

1. You must trade up. The property you buy (replacement property) must have an equal or greater debt AND an equal or greater equity than the property you sell (relinquished property). This means you must put all of the net proceeds from the relinquished property to the replacement property and the fair market value (FMV) of the replacement property must be more than the FMV of the relinquished property.

2. The qualifying property must be of like-kind. The relinquished and replacement properties must be held for productive use in a trade or business or for investment, before and after the exchange. And one kind of property may not be exchanged for property of a different kind. For instance, you may not exchange a residential rental property for one you intend to occupy as your principal residence – not qualifying property. And you may not exchange a factory for equipment – not like kind. On the other hand, residential and commercial real properties are of like kind. So, you may exchange a residential rental property for a shopping center.

3. In a delayed exchange, you must identify the replacement property within 45 days and receive it within 180 days from the closing date of the relinquished property or by the due date of your tax return (with extension) whichever is sooner.

4. You may identify up to 3 replacement properties and must receive at least 1 of the 3. Alternatively, you may identify as many properties as you want as long as the total value of these properties does not exceed 200% of the value of the relinquished property.

5. You should have an exchange intermediary hold the sales proceeds of the relinquished property. Most investors use an exchange company as the qualified intermediary for a delayed 1031 exchange.

6. If you exchange a property with a related person (your children, parents), then both parties may not dispose the properties within 2 years.

7. If the sale proceeds are deposited in an interest bearing account during the exchange, you must receive the interests AFTER the close of escrow of the replacement property.

Strategies for a 1031 Exchange

The following strategies are intended for investors looking for commercial property as a replacement property.

1. Start looking for a replacement property early. Since you have only 45 days to identify replacement properties, you should make an offer as soon as the relinquished property is in escrow. By the time you close escrow on the relinquished property, you should have one offer accepted on a replacement property. This first choice does not need to be the most desirable property at the best price. You should think of it as a “back-up” property. It is intended to take away your worries, such as “Oh my God, what if I cannot find a replacement property?”.

2. Identify more than 1 replacement property. If something unexpected comes up with your first choice, e.g. the soil is contaminated, you have a second and third choice to fall back on.

3. Specify a 30-day due diligence and cancellation period in the contract. This will give you more time to specify more than 1 property.

4. Think twice about choosing a replacement property with loan assumption. It’s much harder to get lender a