What Everyone Should Know Before Investing in Real Estate

Investment property is a proven way to build wealth over the long term. The key is selecting the right property, structuring the deal correctly, and knowing how to take advantage of opportunites the IRS gives you. While I was somewhat dreading it, I went to a tax seminar on investment properties this week and came away surprised with how interesting and useful the information turned out to be. When approaching real estate investments, many people simply pick a property they hope will go up in value and then try to negotiate the best price possible. Over the long term, real estate will appreciate, but the property had better 'cash flow' in the meantime. Cash flow is the net operating income being greater than the mortgage. Obviously, this it critical for being able to hold on to a property year in and out, but it's only the first step in evaluating a property. An important question to ask is what is the return on the investment. To answer that, you need to take pre-tax cash flow, add in the principal reduction and the taxes saved (through writing off interest payments and depreciation) and then divide that number by the actual cash invested in the deal. This can give you a fairly comprehensive number to compare and contrast with other properties. Capitalization or "cap" rate is always a popular percentage to toss around when evaluating commerical and/or investment properties. The formula to determine the cap rate is the net operating income divided by the purchase price. There are a lot of questions about what the cap rate should be: 7%, 8%, 9%, or more if you can get it. Since this number doesn't take into consideratin the interest rate on the loan, ultimately the real question is whether the cap rate is high enough to pay for your financing - with a little left over to pay yourself. "Cash on Cash" is another formula that simply looks at the pre-tax cash flow and divides it by the cash invested. That number will give you a quick analysis of how well you are putting your money to work. Once you find an investment property that meets the criteria you are looking for, the next step is buying it in the right way. Most people know to depreciate, but they simply divide the property into land and the rental building at 20% and 80% respectively - or whatever the tax records tell them. The building depreciates at around 3.5% a year, while land doesn't depreciate all. More sophisted investors will 'bifercate' by including two often overlooked catagories into their offers: 'personal property' and 'land improvements.' Appliances qualify as 'personal property' and depreciate at 20% the first year; 32% the second year. Land improvements include anything that doesn't service or need the main building (pool, shed, fence, landscaping, etc.) and depreciates at 5% the first year; 9.5% the second year. These numbers add up quickly and can help to offset any gains, making the property more valuable on an after tax basis. What IRS giveth, it also taketh away - and it taketh away (or 'recaptures') at a tax rate of 25% for any deprecriation that was taken on the property. The way to avoid this is to use a 1031 tax deferred exchange and buy another property equaled to or greater than the original property. There are more rules regarding 1031 exchanges, bifercation, and the rest, so make sure you consult a real estate expert and/or an accountant before acting. Feel free to respond if you have other tips regarding real estate investing, or contact me if you have any questions about investment properties. Whether you're looking for a duplex or home in Franklin to invest in, or a condominium in Nashville TN, I will be glad to help you find the right property for you and your budget, as well as help you buy it the right way. You can always reach me at jeff@jefffulmer.com, 615-545-8611 or through Facebook or my Greater Nashville Real Estate Investor web-site.

Sea Trucks gets Hyundai contract

The Sea Trucks Group has announced a contract award from Hyundai Heavy Industries (HHI) for Total in Nigeria. The project comprises the charter of a DP3 accommodation support vessel and associated services for 430 company personnel at the USAN FPSO, located 100km offshore Nigeria inwater depths of 750 m to support the mooring, hook-up, commissioning, and start-up activities of the FPSO. One of Sea Trucks' DP3 offshore construction/ accommodation vessels, with fleet number Jascon 30, will be used for the project with a new custom-built portable accommodation block installed on deck to provide extra facilities for 184 people. After Akpo in Nigeria and Girassol and Pazflor in Angola this is the fourth accommodation services project the group will execute for Total.

Portable Buildings – Some Unique Advantages

portable buildings are also known as demountable buildings or modular buildings. They are specially designed structures that can be demounted and transported to another site without the full processes of deconstruction and reconstruction.

Yet it all holds together -- kind that lung of really love its crepes.

Fork within the Alley, the brick stove tavern which liberated in South Roanoke last yr,. Furry friend. At present its possessor, Roanoke mental health expert and Vice Mayor-elect David Trinkle, has liberated a 2nd eatery within the oft-occupied white abode after door. Spoon on the Ave may very well be the small sibling, but she's unquestionably matchless, with a caffeine pub, smoothies, savory crepes and unwinding out of doors dinning. Best of all, this bistro lastly brings brunch about the Star City, and i am not speaking of the sort with buffets or conventional breakfast fare served unti midday astute. This is enjoyable brunch. With refreshments, if coveted. The vibe With its laid-back ecosystem and cordial workforce, Spoon on the Ave is quite enjoy a sleeping quarters and breakfast without the sleeping quarters. Diners could sip a smoothie within the hue of an umbrella on the grass or grasp a cappuccino and sink into a rocking stool on the learn more here over the top balcony.

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As the Economy Recovers, the Stars Align for Investment in Industrial Energy Efficiency

[From aceee.org/blog] The economy took center stage at times during this year’s presidential debates, but scant attention was paid to the manufacturing sector, which remains an important driver of economic growth as well as energy use. Evidence of a resurgent, domestic manufacturing sector has strategic implications for energy policy as well as the economy. Understanding Industrial Investment

The Romney Camp's Take on Energy Efficiency

Consider this Romneyism: "Energy efficiency is a solution looking for a problem... if it saved money, people would do it on their own." (Source)

The assumption that consumers make "rational decisions" relies on an unstated assumption, to wit: the consumer has complete custody of every step in the decision-making process. This means that the consumer (1) detects some lapse of utility, (2)

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TEN QUESTIONS YOU SHOULD ASK...

Before Accepting an Energy Manager Position




Hopefully, you have already read "What Does an Energy Manager Do." The employer will probably ask you some probing questions. What will you ask them? Here's what I suggest:

1. What are the organization’s reasons for wanting energy management?
Does top management perceive energy as a resource or as a cost of doing business? Do they want to save

Toward an Advanced Manufacturing Policy

NASEO Annual Meeting Keynote Address Focuses on Key Role for States in Advanced Manufacturing

[from NASEO.org, Sep. 11, 2012] Ro Khanna, author of "Entrepreneurial Nation: Why Manufacturing is Still Key to America's Future" and former Deputy Assistant Secretary of the U.S. Department of Commerce, highlighted the State government and State Energy Office role in advanced manufacturing during his

White House Announces Executive Order on Industrial Energy Efficiency, including Combined Heat and Power

Today, President Obama signed an Executive Order to accelerate investments in industrial energy efficiency, including combined heat and power (CHP). Accelerating investment in industrial energy efficiency in a way that benefits manufacturers, utilities, and consumers can improve American manufacturing competitiveness and create jobs while improving our nation's energy system and reducing harmful

Do You Want Industry to Improve its Energy Efficiency?

Do you want industry to improve its energy efficiency? Two things need to happen:

1. Address energy in terms of outcomes that are important to industrial leaders. That would be MONEY. It's pointless to frame the discussion around electricity or gas. It's also misleading to perceive energy efficiency SOLELY as a one-time capital investment project. Energy viewed through the prism of fuel or

Energy Management: What Do You REALLY Expect to Get?

Energy management is technically simple to accomplish. It can be, however, extremely difficult to get others in an organization to comply with an energy manager’s agenda. In all organizations, long-standing behaviors and priorities prevail. Changes suggested by an energy manager will often threaten many people’s range of authority. An energy manager will:
• Encourage alternative workplace

Seven Facts about Energy that All Business Leaders Should Know

1. Without energy, you have no business.Fuel and power are inescapable ingredients of all business activity. Without energy, there’s no production, and without production, there’s no revenue. End of story. 2. You can either control your energy, or it will control you. Understand this: energy is never neutral. When it is not working for you, energy is working against you. Think of this the

Energy Solutions Q&A

Here's a question from a reader: What is the best approach to engage an organization to participate in an energy efficiency program, when there is not a direct relationship to upper management?And here's my reply:I guess you know that your question raises a subject that I’ve written about many times. I’ll recommend a few of my blog posts:1. Scenarios for Energy Management2. From Energy to Cash

From Energy to Cash Flow

What would be at the top of a business leader’s wish list for the new year? Would it be greater sales volume, easier credit, lower taxes, streamlined regulations, or all of these? These wishes are really different means to the same end: improved capital recovery. In simple terms, capital recovery is the “velocity” at which an investment creates new wealth. From a shareholder perspective, it