HOMEVANTAGE REALTY 949-545-8486 
Summary of our Services- A detailed consultation to understand your investment goals and provide you with a detailed explanation and handout on how to optimize your real estate investment from a financing, tax, and risk perspective
- Financial Modeling & Detailed Analysis
- Syndication - formation of legal entity
- Financial Statement and Tax Preparation through our affiliated CPA Firm
- Assistance in pooling investor money
- Property Management
- Transaction Services - leasing, purchase and sale
- Advertising and Marketing for the sale and leasing of the property
- Optimizing the value of your asset through improvements and upgrades
- Access to our preferred vendors, such as general contractors, architects, and much more.
How to Protect Yourself and Optimize Your Return on Investment Property
"The tax benefit and ability to leverage rental property is a great way to Diversify your investment portfolio"
Expenses are Tax Deductible
-
Expenses that may be deductible: mortgage interest, property taxes, property management services, repairs and maintenance, insurance, depreciation (27.5 years for residential property)
-
While you may have positive cash flow on your property, you may actually have a tax loss which can be used to off-set other passive income (i.e. dividends, interest income); or a maximum loss of $3,000 per year can be written off against ordinary income (i.e. W2 wages, self-employment income) with any additional loss being carried forward to future years
Offset Capital Gains Tax through a 1031 Exchange
- 1031 exchanges allow you to sell your rental property and buy another like-kind property without having to pay capital gains tax
- If you have not lived in your property for at least two years, you may use it to complete a 1031 exchange into other investment property as a wealth-building mechanism
- If you have not occupied a property for two years that was acquired through a 1031 exchange, you may convert it into your personal residence without any tax implications
- You may sell your personal residence to move inot the property that was acquired through a 1031 exchange and enjoy no capital gains tax up to $250,000 if single or $500,000 if married
Financing / Leveraging Real Estate Enhances Your Return on Investment
- Investing $50,000 in the stock market at a 7% annual return will net you a $20,000 return in 5 years
- If you invest $50,000 in a $500,000 property that breaks-even each year on a cash flow basis and appreciates at California's historical rate of 7% per year, you will net $200,000 return in 5 years or an 80% return per year. This is the beauty of leveraging real estate as part of your investment portfolio - your return is on the $500,000 value of the property, not the $50,000 you invested.
Consider Putting Each Rental Property into a Legal Entity (i.e. LLC)
- To protect against any legal liability from your rental property resulting in your own personal assets being at risk, consider putting each investment property into its own Limited Liability Company (LLC). While forming your own LLC can cost about $2500 through a lawyer, there is a website called LegalZoom.com where you can form your own LLC for approximately a $300-$400 one time fee + a small annual state fee. This is a completely legitimate site as you will see and has been used by many companies to cut down on legal costs. Once you have this set-up, you can open the LLCs own bank account dedicated to that rental.
- If you form an LLC, you will ultimately place the property into the LLC during escrow as title of the property will reside with the LLC. A lender, however, will typically not lend directly to the LLC, so the mortgage would be in your name. Having title reside with the LLC, nevertheless, will protect you against any liability beyond your investment property.