FOR INVESTORS

Guidelines For Cape Fear Area Investing

Investing in Cape Fear area real estate can be a relatively low risk venture with the potential for excellent returns. The guidelines for success in our area differ from larger metropolitan areas. Whatever their reason, our rental market remains strong and you can expect decent gains when it’s time to roll your equity into the next investment.

The same features that attract renters also attract buyers. Because you will eventually sell the property, you need to evaluate your options with resale in mind. Evaluating your competition and using resalability as your compass is an excellent way to go. Renters in our area will likely be swayed by great locations and proximity to the beaches. Location has always been at the core of any solid real estate investment.

Newer is better for maintenance reasons but some of our hottest areas are somewhat established and “established” sells and rents well. Staying within 10 years new is desirable and budgeting for the eventual paint and carpet is smart. A well maintained ten-year-old house can often be a better investment than a five-year-old neglected house. Before an offer is made you will be presented with a full market analysis to determine how well the house is priced and advised on the best course of action. A full structural and mechanical inspection will be performed once a contract is formed and all repair negotiations will be finalized prior to closing.

Deciding what type of loan best serves your needs and whether to hire a property management company are among the last decisions to be made. Local investors can often manage their own property but this can get tricky from another state. You will be provided with lenders and property managers in the Cape Fear area that understand your needs and are always available to discuss your best options.

WHY INVEST IN WILMINGTON?

Year after year, the superlatives continue to pour in about Wilmington, North Carolina, and the quality of life in the Cape Fear area. It’s a great place to live.

Wilmington is experiencing tremendous growth. The price of property is still lower than many Atlantic coastal regions. Wilmington, nestled between the Atlantic Ocean and the historic Cape Fear River has broad appeal. The unique mixture of natural beauty, culture, and rich history, combined with the economy, make Wilmington a premiere investment opportunity. We enjoy a four season climate, a vibrant downtown, a blend of oceanfront resorts, and many fine golf communities.

The endearing charm of the Wilmington area is also reflected in the communities that spread from corner to corner. You’ll find restored historic homes, eclectic urban settings, pristine suburban neighborhoods, golf course communities, and fabulous waterfront estates. There is a setting for everyone and place you’re sure to feel at home in the Wilmington area.

I can assist you with building your real estate investment portfolio. Call for details.

1031 Tax Free Exchange
Long Term Rental Properties
Pre Construction Purchase
Vacation rentals

1031 EXCHANGE

Capital Gains Calculator (www.ipx1031.com/cap_tax_form.cgi)

Under Section 1031 of the Internal Revenue Code, owners of real estate held for investment or use in a trade or business can swap their property tax-free for “like-kind” real estate. Exchanges are made for people wanting to stay invested in real estate, increase their leverage and to avoid paying hefty taxes upon the sale of property.

Like Kind

Non-Qualifying Properties

Reason to Exchange

Restoring Depreciation that will soon expire – by exchanging one property for another of greater value.
To upgrade size and/or quality of investment: An exchange can be utilized to combine the equity of one or more properties into a larger singular investment.
To change investment location: An exchange can be executed in anticipation of market trends to maximize appreciation potential.

7 keys for a Successful 1031 Tax Deferred Exchange

Key 1

Consult with your tax and financial advisors to determine if a tax deferred exchange is appropriate for your circumstances and compatible with your investment goals.

Key 2

List the relinquished property for sale with a licensed real estate broker. During the first step the Exchanger will list the Relinquished Property with a real estate broker. The broker/agent will disclose the intent to complete an exchange in the listing agreement.

Key 3

The seller enters into a contract with a buyer for the sale of the relinquished property and notes his intent in the purchase agreement.

Key 4

The seller notifies a “Qualified Intermediary” who prepares the exchange agreement and coordinates with the escrow holder. The exchanged documents must be prepared and signed by all parties prior to close of escrow. The Qualified Intermediary must hold all money to be transferred.

Key 5

After closing escrow for the sale of the Relinquished Property, the Exchanger must identify all Replacement Property within 45 days from day after close of escrow.

Key 6

After closing on the Relinquished Property the Exchanger has 180 days to close on the Replacement Property. In the contract to purchase the agent discloses the Exchanger’s intent to complete the exchange and obtains the Seller’s cooperation.

Key 7

Title for the new property has to be in the same name as the old property. To defer all capital gains tax, you must purchase a property of equal or greater value than the one sold.

Identification of Replacement Property

Regardless of the number of relinquished properties transferred by the Exchanger as part of the same exchange, the maximum number of replacement properties that the Exchanger can identify is as follows:
3 Property Rule: Three properties without regard to the fair market values of the replacement properties.

Or

200 Percent Rule: Any number of properties as long as their aggregate fair market value as of the end of the identification period does not exceed 200 percent of the aggregate fair market value of all the relinquished properties as of the date the relinquished properties were transferred by the Exchanger.

Exception

95 Percent Rule: Any number of replacement properties identified before the end of the identification period and received before the end of the exchange period, but only if the Exchanger receives before the end of the exchange period identified replacement property the fair market value of which is at least 95 percent of the aggregate fair market value of all identified replacement properties.

For details on 1031 Exchanges, it is recommended that you seek the advice of your accountant, financial advisor, attorney, or qualified intermediary. This article is for general information purposes.