What You Need To Know About Choosing The Right Real Estate Agent!

Whether you are buying a house or selling land, it is one of the biggest things you will ever do in your lifetime. Therefore, you need to hire the right real estate agent. You may ask, “How do I do that?” Here are some things to look for or consider when making that selection.

• Trustworthy: First and foremost, you need to feel completely comfortable talking with your real estate agent. Choose someone you can relate to because you will be spending a lot of time with them. Make sure they feel real to you and most importantly, trustworthy. You want someone who is experienced, ignore all the flattery and promises. Finding a trustworthy agent can go a long way in ensuring your property sells at top dollar or that you’re buying at the best price in the market. Don’t go with an agent who promises you the highest price for your property, find one that has a proven track record of success and the skills needed to get you the highest price. Don’t ever be afraid to ask agents for testimonials or referrals from their past clients to make sure they check out.

• Expertise: People use the terms REALTOR® and real estate agent interchangeably, but they are not the same. Not every real estate agent is a REALTOR®. REALTORS® are members of the National Association of REALTORS® (NAR) and subscribe to the REALTORS® Code of Ethics. This Code is strictly enforced by local real estate boards. The standards that they uphold and adhere to are much more restrictive and confining to conduct than those state guidelines governing agents who simply hold a real estate license.

Take it a step further and choose a REALTOR® who is a member of the REALTORS® Land Institute (RLI) as they are experienced professionals that specialize in land transactions. If you want the best of the best in the land real estate business then you need to choose an Accredited Land Consultant (ALC). They aren’t just land sales professionals, they are the most prestigious, experienced and highest performing land sales experts in the country. They have a proven track record of success in completing land transactions and are certified to have completed over 104 hours of education courses in conducting land transactions.

• Connections: Having a good network of other agents in the industry can help sell a property faster. They can also help provide their clients additional value because they may know an expert in everything from conducting 1031 Tax Deferred Exchanges to conservation easements. If they are not exactly sure about something, they have a national network of land agents they can easily reach out and connect with to help make sure their clients are getting the best value out of their property.
• Tech Savvy: Technology advancements in the industry have provided more tools for real estate agents to remain connected while on the go, which is especially important in fast-paced market places. At the same time, these changes have also raised the bar for what it means to be a good agent. It’s no longer about possession of information, but about being able to translate that information into useful insights for buyers and sellers.

Looking back 15 years ago, the real estate market was a different animal, information-wise. It could take hours trying to find old documents and records that were buried in folders. It put buyers in a much different place than they are today. Not only do you get answers to simple questions much faster, but you can also get any document sent to your email without leaving the comforts of your home. With today’s technology, you can access detailed property records right from your smartphone. There is more transparency for consumers, making them feel empowered during a real estate transaction.

Technology enables agents to deliver more value through new and innovative ways to connect and communicate with their clients. Having software, along with apps and tools at their disposal gives them an edge in today’s market. These tools take the “grunt work” off the agent’s plate so they can spend more time building relationships with their clients.

Make sure to also take a close look at how the agent is marketing other properties and ask how they plan to market your property. Are they using a website, social media, and digital ads? Do they have brochures or information packets available? Is there an MLS listing? Drone footage? Property maps? Is there signage clean and up to date? Using the latest technologies to market a property can help decrease days on market and increase the final sale price.

Finding the right agent takes balancing credentials and interaction. You want to choose someone you like. Keep in mind, not all real estate licensees are qualified to assist you in buying or selling land. Their license may make it permissible to practice, but their inexperience in land transactions could be costing you thousands of dollars and potentially getting you or themselves into legal trouble. Do your research, ask for referrals, talk with the agents’ recent clients, and do some interviews before choosing the best agent for your particular real estate needs. Don’t forget to check for license and disciplinary actions with your state’s Real Estate Commission. All agents are not all created equal. If it feels right after doing your research, vetting against the above considerations, and meeting with them, then they just might be the guy or gal for the job!

Looking for a land professional in your area? Use the REALTORS® Land Institute Find A Land Consultant search tool to find an agent in your area that specializes in conducting land transactions.

This post is part of the 2019 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here. 

About the Author: Wendy Forthun, ALC, is an Accredited Land Consultant with 1 Stop Realty Inc in Kasson MN. She specializes in farmland sales, management and 1031 Tax Deferred Exchanges.

The post What You Need To Know About Choosing The Right Real Estate Agent! appeared first on REALTORS® Land Institute.

Source: https://www.rliland.com/need-know-choosing-right-real-estate-agent/

Whole-Tailing vs. Wholesaling: What’s the Difference? (Plus, Property Walk-Through!)

Are you familiar with whole-tailing? Not wholesaling—whole-tailing. It’s an investment strategy that is rarely used. It’s similar to wholesaling, but there’s one key difference. Here I’ll explain whole-tailing, walk you through an example property, and tell you what to watch out for when considering this type of deal.

View the full article: Whole-Tailing vs. Wholesaling: What’s the Difference? (Plus, Property Walk-Through!) on The BiggerPockets Blog. This content is Copyright © 2017 BiggerPockets, Inc. All Rights Reserved.

Source: https://www.biggerpockets.com/blog/whole-tailing-versus-wholesaling-differences

Knowing The Difference Between 1031 Versus 1033s in Land Real Estate

As real estate professionals, we have a fiduciary responsibility to help our clients achieve their goals relating to real property. Often times, these goals revolve around maximizing the return the client will achieve either during the acquisition or disposition of their real estate assets. A valuable tool in this process is the like-kind exchange. This tool could permit non-recognition of a gain for tax purposes, allowing our clients to invest ALL of the proceeds from a sale into a new asset.

As land professionals, many of us encounter owners of raw land assets that generate very little cash flow, or worse, don’t have potential to generate income. The ability to sell this passive asset without any tax exposure and exchange into a cash flow asset such as an apartment building or net leased shopping center is a power motivator that can in many cases, substantially increase our client’s income and positively impact their lives.

As investors, it is imperative that you seek the guidance of your tax advisor, a Qualified Intermediary (QI), and a real estate professional well before considering a disposition or acquisition to ensure the transaction is structured appropriately to achieve your overall financial goals.

What is a 1031 Exchange?

Since 1921, Internal Revenue Code (IRC) Section 1031 provides for the opportunity to defer payment of capital gains tax liability by reinvesting the proceeds from the sale of a relinquished property into another similar asset. There are many nuances to the code but generally, to exchange from one asset to another, the proceeds of a sale must be reinvested into a “like-kind” property. “Like-kind” refers to the character of the asset, not the quality. For example, property purchased and held for investment purposes may be exchanged for another investment property. The properties can be land, apartments, or different so long as they are both held for investment. Conversely, a primary residence being sold and exchange into an investment asset would NOT qualify. So long as the process is followed, the taxes are not eliminated but payment of the taxes is delayed until such time as the gain is realized when the acquired asset is sold, without being exchanged further.

This does not require an investor to trade their real estate straight across or sell their relinquished property and acquire a replacement property at the same time.  By using a QI, investors are given a certain period of time to complete the acquisition of their replacement property.

What is a 1033 Exchange?

Similar to IRC Section 1031, Section 1033 provides for non-recognition of gains and deferral of the tax liability. The primary difference is that a 1033 exchange can be used only when the property is being relinquished through a “forced-conversion.” Examples of “forced-conversion” would be taking by eminent domain or loss from a natural disaster, even if insurance proceeds are received.

While similar, there are distinct differences between the two.  Below are highlights of some of the rules and how they differ between the 1031 and 1033 exchange.

 

	1031	1033
Use	Exchange of real property held for productive use in a trade or business or for investment.	Exchange of property compulsorily or involuntarily converted as a result of eminent domain, destruction, or theft.
“Even and Up Rule” – Equity	Equity in the replacement property must be even to or greater than the net equity of the relinquished property.   Equity cannot be replaced with additional debt.	Cost of the replacement property must be even to or greater than the net proceeds received.   Equity can be replaced with additional debt.
“Even and Up Rule” – Debt	The amount of debt on the replacement property must be even to or greater than the amount of debt relieved on the relinquished property.   Debt can be replaced with additional equity (i.e. cash).	The value of debt on the replacement property must be even to or greater than the value of debt relieved on the property converted.   Debt can be replaced with additional equity (i.e. cash).
Replacement Property Criteria	Like-Kind	Similar or related in service or use
Notification Period	Within 45 days of the disposition, must notify the Qualified Intermediary of the potential replacement properties.	Identification of potential replacement properties is not required.
Timing	Within 180 days of disposition, escrow must close on all replacement property.	Within 2 years from the end of the first tax year in which gain is realized, escrow must close on all replacement properties. Special rules extend this period to 3 or 4 years.
Vesting	The same taxpayer that sold the relinquished property must purchase the replacement property.	The same taxpayer that sold the relinquished property must purchase the replacement property.
Improvements	Exchange funds cannot be used to improve land already owned.	Conversion proceeds can be used to improve land already owned.
Related Parties	In most cases, the replacement property cannot be acquired from a related entity.	In most cases, the replacement property cannot be acquired from a related entity.

Reverse 1031 Exchange

On September 15, 2000, the Internal Revenue Service issued Revenue Procedure 2000-37. This explains how to complete a “Reverse 1031 Exchange,” a scenario where an investor acquires the replacement property prior to selling the relinquished property. In this scenario, a QI (through a special purpose entity) will act as the Exchange Accommodation Titleholder, acquire and hold or “park” legal title to either the relinquished property or the like-kind replacement property during the exchange.  This structure is more expensive and complex than a traditional exchange and should be reviewed with a tax advisor to ensure the investor’s specific situation warrants use of this structure.

Tax Cuts and Jobs Act

Signed into law on December 22, 2017 The Tax Cut and Jobs Act took effect on January 1, 2018 and substantially modified the IRC. Specific to Section 1031, the act eliminated personal property exchanges, limiting the ability to exchange assets to only real estate. It is now titled, “Exchange of real property held for productive use or investment.” However, certain exchanges of mutual ditch, reservoir or irrigation stock are still eligible for non-recognition of gain as like-kind exchanges, if considered to be real property under applicable state law. 

State specifics and claw-back provisions

Particular care should be given to exchanges involving relinquished property and replacement property in different states. Many states have withholding requirements applicable to non-residents. Although most states allow investors to sell property in that state and exchange into property in another state and defer state taxes, some states have claw-back laws. Claw-back laws permit a state to recapture the state income tax when the out of state replacement property is sold.  To avoid potential double taxation, it is critical for an investor to research how the states they are dealing with treat these transactions.

This article is intended to be a primer on like-kind exchanges and highlight some of the nuances and considerations needed to successfully complete these transactions.  Nothing in this article should be considered tax or legal advice and any investor interested in learning more about exchanges should speak with their tax adviser and a Qualified Intermediary. 

About the Author: Matt Davis is a real estate broker with Cushman & Wakefield. He is based in San Diego, CA and assists clients with the disposition and acquisition of investment grade agricultural and transitional land assets. He is also founding member of the company’s Land Advisory Group and Agribusiness Solutions Team. Matt is a member of RLI and serves on their 2019 Future Leaders Committee.

The post Knowing The Difference Between 1031 Versus 1033s in Land Real Estate appeared first on REALTORS® Land Institute.

Source: https://www.rliland.com/knowing-difference-1031-versus-1033s-land-real-estate/

Top 5 Reasons You Should Be Starting Out in Multifamily

Starting out in small multifamily properties is the best use of your money as a new investor for a multitude of reasons. For one, it’s a great way to gain experience and put cash in your pocket. Discover several other benefits here of spending your time and energy investing in small multifamily real estate.

View the full article: Top 5 Reasons You Should Be Starting Out in Multifamily on The BiggerPockets Blog. This content is Copyright © 2017 BiggerPockets, Inc. All Rights Reserved.

Source: https://www.biggerpockets.com/blog/multifamily-real-estate-benefits-new-investors

Case Study: How to Generate $2,000 per Month Through Rental Investing

What could earning a few extra thousand dollars a month do for you? Have you considered using rental real estate as a way to get there? I’ll take you through three ways to build passive income with rentals, showing you all the numbers and demystifying how to piece it all together.

View the full article: Case Study: How to Generate $2,000 per Month Through Rental Investing on The BiggerPockets Blog. This content is Copyright © 2017 BiggerPockets, Inc. All Rights Reserved.

Source: https://www.biggerpockets.com/blog/rental-investing-earn-2000-month

8 Things Real Estate Experts Won’t Tell You About Hard Money

Hard money loans are one of the most overlooked sources of funding for real estate investors. So many looking to get into house flipping or other areas of real estate use the “I have no money” excuse. But there are many ways to do deals without using your own cash—and hard money is one of the best. Here’s why.

View the full article: 8 Things Real Estate Experts Won’t Tell You About Hard Money on The BiggerPockets Blog. This content is Copyright © 2017 BiggerPockets, Inc. All Rights Reserved.

Source: https://www.biggerpockets.com/blog/2014/06/29/8-things-real-estate-experts-wont-tell-hard-money/

6 of the Best Home Staging Strategies for Sellers

Home staging should help buyers visualize a property as a future home. Therefore, understanding ideal home staging techniques is essential. These six tips will help prospective buyers see the potential in your property and envision themselves living there.

View the full article: 6 of the Best Home Staging Strategies for Sellers on The BiggerPockets Blog. This content is Copyright © 2017 BiggerPockets, Inc. All Rights Reserved.

Source: https://www.biggerpockets.com/blog/best-home-staging-tips/

Knowing The Difference Between 1031 Versus 1033s in Land Real Estate

As real estate professionals, we have a fiduciary responsibility to help our clients achieve their goals relating to real property. Often times, these goals revolve around maximizing the return the client will achieve either during the acquisition or disposition of their real estate assets. A valuable tool in this process is the like-kind exchange. This tool could permit non-recognition of a gain for tax purposes, allowing our clients to invest ALL of the proceeds from a sale into a new asset.

As land professionals, many of us encounter owners of raw land assets that generate very little cash flow, or worse, don’t have potential to generate income. The ability to sell this passive asset without any tax exposure and exchange into a cash flow asset such as an apartment building or net leased shopping center is a power motivator that can in many cases, substantially increase our client’s income and positively impact their lives.

As investors, it is imperative that you seek the guidance of your tax advisor, a Qualified Intermediary (QI), and a real estate professional well before considering a disposition or acquisition to ensure the transaction is structured appropriately to achieve your overall financial goals.

What is a 1031 Exchange?

Since 1921, Internal Revenue Code (IRC) Section 1031 provides for the opportunity to defer payment of capital gains tax liability by reinvesting the proceeds from the sale of a relinquished property into another similar asset. There are many nuances to the code but generally, to exchange from one asset to another, the proceeds of a sale must be reinvested into a “like-kind” property. “Like-kind” refers to the character of the asset, not the quality. For example, property purchased and held for investment purposes may be exchanged for another investment property. The properties can be land, apartments, or different so long as they are both held for investment. Conversely, a primary residence being sold and exchange into an investment asset would NOT qualify. So long as the process is followed, the taxes are not eliminated but payment of the taxes is delayed until such time as the gain is realized when the acquired asset is sold, without being exchanged further.

This does not require an investor to trade their real estate straight across or sell their relinquished property and acquire a replacement property at the same time.  By using a QI, investors are given a certain period of time to complete the acquisition of their replacement property.

What is a 1033 Exchange?

Similar to IRC Section 1031, Section 1033 provides for non-recognition of gains and deferral of the tax liability. The primary difference is that a 1033 exchange can be used only when the property is being relinquished through a “forced-conversion.” Examples of “forced-conversion” would be taking by eminent domain or loss from a natural disaster, even if insurance proceeds are received.

While similar, there are distinct differences between the two.  Below are highlights of some of the rules and how they differ between the 1031 and 1033 exchange.

 

	1031	1033
Use	Exchange of real property held for productive use in a trade or business or for investment.	Exchange of property compulsorily or involuntarily converted as a result of eminent domain, destruction, or theft.
“Even and Up Rule” – Equity	Equity in the replacement property must be even to or greater than the net equity of the relinquished property.   Equity cannot be replaced with additional debt.	Cost of the replacement property must be even to or greater than the net proceeds received.   Equity can be replaced with additional debt.
“Even and Up Rule” – Debt	The amount of debt on the replacement property must be even to or greater than the amount of debt relieved on the relinquished property.   Debt can be replaced with additional equity (i.e. cash).	The value of debt on the replacement property must be even to or greater than the value of debt relieved on the property converted.   Debt can be replaced with additional equity (i.e. cash).
Replacement Property Criteria	Like-Kind	Similar or related in service or use
Notification Period	Within 45 days of the disposition, must notify the Qualified Intermediary of the potential replacement properties.	Identification of potential replacement properties is not required.
Timing	Within 180 days of disposition, escrow must close on all replacement property.	Within 2 years from the end of the first tax year in which gain is realized, escrow must close on all replacement properties. Special rules extend this period to 3 or 4 years.
Vesting	The same taxpayer that sold the relinquished property must purchase the replacement property.	The same taxpayer that sold the relinquished property must purchase the replacement property.
Improvements	Exchange funds cannot be used to improve land already owned.	Conversion proceeds can be used to improve land already owned.
Related Parties	In most cases, the replacement property cannot be acquired from a related entity.	In most cases, the replacement property cannot be acquired from a related entity.

Reverse 1031 Exchange

On September 15, 2000, the Internal Revenue Service issued Revenue Procedure 2000-37. This explains how to complete a “Reverse 1031 Exchange,” a scenario where an investor acquires the replacement property prior to selling the relinquished property. In this scenario, a QI (through a special purpose entity) will act as the Exchange Accommodation Titleholder, acquire and hold or “park” legal title to either the relinquished property or the like-kind replacement property during the exchange.  This structure is more expensive and complex than a traditional exchange and should be reviewed with a tax advisor to ensure the investor’s specific situation warrants use of this structure.

Tax Cuts and Jobs Act

Signed into law on December 22, 2017 The Tax Cut and Jobs Act took effect on January 1, 2018 and substantially modified the IRC. Specific to Section 1031, the act eliminated personal property exchanges, limiting the ability to exchange assets to only real estate. It is now titled, “Exchange of real property held for productive use or investment.” However, certain exchanges of mutual ditch, reservoir or irrigation stock are still eligible for non-recognition of gain as like-kind exchanges, if considered to be real property under applicable state law. 

State specifics and claw-back provisions

Particular care should be given to exchanges involving relinquished property and replacement property in different states. Many states have withholding requirements applicable to non-residents. Although most states allow investors to sell property in that state and exchange into property in another state and defer state taxes, some states have claw-back laws. Claw-back laws permit a state to recapture the state income tax when the out of state replacement property is sold.  To avoid potential double taxation, it is critical for an investor to research how the states they are dealing with treat these transactions.

This article is intended to be a primer on like-kind exchanges and highlight some of the nuances and considerations needed to successfully complete these transactions.  Nothing in this article should be considered tax or legal advice and any investor interested in learning more about exchanges should speak with their tax adviser and a Qualified Intermediary. 

About the Author: Matt Davis is a real estate broker with Cushman & Wakefield. He is based in San Diego, CA and assists clients with the disposition and acquisition of investment grade agricultural and transitional land assets. He is also founding member of the company’s Land Advisory Group and Agribusiness Solutions Team. Matt is a member of RLI and serves on their 2019 Future Leaders Committee.

The post Knowing The Difference Between 1031 Versus 1033s in Land Real Estate appeared first on REALTORS® Land Institute.

Source: https://www.rliland.com/knowing-difference-1031-versus-1033s-land-real-estate/

Do These Old Land Rules Hold Up?

The business of buying and selling land is one of the oldest known to man. Over time, certain rules and sayings were established as the keys to success in the land industry. Some of those rules about land have stood the test of time, and some have not. For all the new land agents in the industry, we’re going to look at some of the most popular rules in the land industry to see if they still hold up years later.

1. Land Is Always A Good Investment

Yes – But Only For Smart Investors  

Investing in land has always been a great way to diversify your portfolio. Plots of land are often passed down generation to generation as a reliable investment. There are lots of great investment options depending on your level of risk and timeline, such as the “buy and hold” method or . Vacant land can give huge returns if held onto for the right period of time or improved.

However, investing in land is not risk-free, especially for people that aren’t land experts. There are more factors impacting land value (such as international trade, , and new land laws) than ever before. Unlike other investment options, land is not guaranteed to earn interest. If the land isn’t transitioned to its highest and best use or is not in high demand when it comes time to sell, you will lose money.

Many old rules about land investing, such as the importance of timing and being familiar with the market, still apply. There is a lot to take into consideration with investing in land, such as zoning, topography, taxes, etc. If you are not a land expert, be sure to work with a land professional before investing.

2. In-Person Networking Is Key To Success

Yes – But It Doesn’t Always Have to Be In-Person  

Nothing can replace in-person contact. As Jonathan Goode, ALC, with Southeastern Land Group said in his article Ten Lessons For Land Agents From A Decade In The Dirt, “20% of what we do is about land, and the other 80% is dealing with people.” In an industry where trust and people skills are the backbone of success, networking remains as important as ever.

However, for the first time in history, technology allows us to network, socialize, and promote ourselves without leaving the house. Social media has made it easier than ever to connect with people from the comfort of your couch. Platforms like Facebook, LinkedIn, and Twitter let you meet other professionals, advertise to potential and current clients, and learn about the latest land news. In-person networking might still be essential to success in the land industry, but social media allows us to stay connected as well.

 3. Timber Is A Good Option for Retirement

Yes and No

While many people generally agree on the benefits and drawbacks of investing in land in general, the rules of land surrounding investing in timberland have been much less sure. A Washington Post article called “Thousands of Southerners Planted Trees for Retirement. It Didn’t Work” sparked a debate within the land industry. The article follows a farm owner who diversifies his family farm by planting pine trees. He lost millions when the 2009 housing crash hit and resulted in the decline in pine prices.

Some read this article as a declaration of the death of timberland investing. Others argued that the article ignored the fact that the recovery of the economy resulted in lumber prices returning to their pre-crash values.

In his article “Is Pine Timberland Still A Good Investment?”, Jonathan Goode, ALC, wrote that both sides had good points. He notes the glut of timber in parts of the Southeast and that people did lose significant money, but that no investment is foolproof. People that invested in the stock market around the housing crash would have also lost a ton of money. He mentioned that even in the worst market, there is room to make money off of timber.

“The good news for small to medium-sized investors is that you can avoid some of the problems that have plagued institutional buyers,” says Goode. “Timberland Investment Management Organizations (TIMO’s) are given the difficult task of going and Finding a large package of timberland to Purchase on behalf of their client, Manage the fund for 10-15 years, and then sell with guaranteed returns.”

The meat of the Washington Post story is less about the history of timber and more about the unpredictability of the market. There are things you can do to make sure your land is safe, such as and , but there is little you can do about the market. With any investment in land or other asset, there will always be risk.

 4. Working With An ALC Is The Best Way To Buy And Sell Land 

Yes!

A lot of things change in the land industry, but some things never do. Working with an Accredited Land Consultant ensures that you are working with the best in the industry. They are land experts with an incredible network of other professionals, years of experience, top-notch education, and some of the hardest working people you’ll ever meet.  The ALC Designation has been around for decades (under several different names) and has served generations of land experts with the tools for success in the land industry.

As years pass, even the most trusted rules about land can crumble and be replaced by new ones. However, some other land rules have stayed the same for centuries. Only time will tell which rules about land from today will still hold up tomorrow.

Interested in becoming an Accredited Land Consultant? Sign up for LANDU Education Week in Denver, CO, for the chance to complete the Education Requirement portion of the designation.

About the Author: Laura Barker is a freelance writer based out of California for the REALTORS® Land Institute. She has been with RLI since October 2017.

The post Do These Old Land Rules Hold Up? appeared first on REALTORS® Land Institute.

Source: https://www.rliland.com/old-land-rules-hold/

Dave Ramsey’s “7 Baby Steps” Are Flawed: Get Rid of Debt Quicker Like THIS

If you are only interested in getting out of debt and retiring in your 60s, go ahead and follow Dave Ramsey’s advice. It’ll get you there. But if you want to get out of debt, build wealth through real estate and other investments, and retire early, this optimized path is a better option for you.

View the full article: Dave Ramsey’s “7 Baby Steps” Are Flawed: Get Rid of Debt Quicker Like THIS on The BiggerPockets Blog. This content is Copyright © 2017 BiggerPockets, Inc. All Rights Reserved.

Source: https://www.biggerpockets.com/blog/biggest-flaw-dave-ramseys-baby-steps