| |
| |
|
Real Estate |
|
|
|
Articles and Information about Real EstateNetFinancial | Institutions | LoansColleges and Universities | Search Engines Why Commercial Real Estate is the Hottest Retirement Asset
For small business owners, commercial real estate investment is the hottest new retirement asset. If your mind has already jumped to "REITs" - or shares in Real Estate Investment Trusts - think again. I'm referring to the ownership of the commercial facilities small business owners currently lease, or new commercial facilities they can buy or develop. Small business owners can thank the U.S. Small Business Administration for this rather substantial opportunity. The SBA sponsors a specialty lending program designed to assist successful small business owners who want to acquire or develop their own facilities. The SBA did not design the program as a vehicle for creating superior retirement assets, but it doesn't take a financial genius to connect the dots - and the business owners who have done so already are profiting enormously from their decision. It's called the SBA 504 program and it's been around, though not well promoted, for nearly twenty years. If a banker failed to mention it as an alternative, don't be too dismayed. Traditional lending institutions prefer conventional financial instruments because they offer traditional lending institutions greater profit margins. The SBA 504 program is clearly intended to benefit small business owners, not necessarily the financial community. Here's what SBA 504 loans offer qualified small business owners: below market fixed interest rates, longer terms and with a cash investment as low as 10 percent of the total project cost. Typically, small business owners can reduce real estate expenses by up to 40 percent while building an asset that benefits them long after they've sold or shuttered their business. As an investment, this type of financing offers the highest cash-on-cash return available for commercial real estate, which means not only does their capital work harder for them, but they keep more of it to grow their business too. You can't find a traditional lending product that can beat this. Next to home ownership, being your own boss is the number one American Dream. That's why most small business owners started (or acquired) their own business. And their success is almost entirely dependent on their drive, ambition, innovation and attention to detail. Eventually, however, they'll sell their business or pass it along to their children or shut it down (very few small businesses go public). With SBA 504 financing, they can turn that drive and ambition into another long-term asset that offers immediate and significant tax advantages, as well as makes great sense for long-term financial planning. It's important to take an innovative approach to commercial real estate ownership. For most clients, it is beneficial to establish a separate real estate holding company to own the real estate asset - it separates their operating company - the one they may eventually sell or pass on to their children - from this new and important real estate asset. The result is that, in 10 years or 25, when a small business owner sells their business or gift it to their children or shutters it, the real estate asset will retain important appreciated value in a separate holding company. They will also have been paying themselves rent instead of some faceless landlord, effectively growing their real estate asset, building their equity and benefiting from the tax advantages all at the same time. And once they sell their business, they'll still have an income-generating asset that is one of the soundest long-term investments anyone can make. Small business owners can continue to be landlords in their retirement, or they can sell the asset - typically at a rather significantly appreciated value. Even if they gift the business to their children, the new owners will have to continue paying rent. Who would make a better landlord their children than themselves? The value of the SBA 504 lending program is clear. Most business owners that are educated about this financial planning strategy adopt it. For successful small business owners, this is almost a no-brainer. If they haven't already done so, it's time to stop paying rent to someone else and consider owning for all the right reasons. * * * By Christopher Hurn (Ed. Note? Hurn is president and chief executive officer at Mercantile Commercial Capital based in Altamonte Springs. His company handles commercial loans and specializes in 90% financing for small business owners who want to acquire or develop their own facilities. The company, in business for 19 months, has closed some $30 million in loans already and opened offices in Miami, Tampa and Chicago.)
MORE RESOURCES:
Real-Estate - Google News |
|
|
|
RELATED ARTICLES
Tax Deferred Exchanges of Investment and Business Real Estate The Primary Residence taxation, the Residential Replacement Rollover, Sec. 1034 exception is gone. Real Estate Investment 2005 - The Hottest Countries for Investment in 2005 Whether you are a real estate investor looking for a steady and 'safe' investment in a proven market or a real estate speculator willing to gamble on the unknown and undiscovered in the hopes of gaining a significant ROI (return on investment), this article covers the real estate investment hotspots for 2005.A recent UK government report discovered that there was a 250% increase between 2000 and 2004 in the number of Britons buying property abroad solely for investment purposes, and this trend does not seem to be limited to the UK nor does it seem to be slowing down!The global stock markets seem to be in decline, there is a worldwide pension crisis looming and we have uncertainty in the Middle East, in the UK the housing market is unaffordable, possibly over inflated and unlikely to bring significant returns for investors late in on the game and so more and more of us are looking further a field for our investment opportunities. Sell Your Income Property For More Selling income property isn't like selling a house. You can paint a house, and get a little more because it looks nice. A Singles Game of Real Estate This discussion leans toward answering questions asked most often by our youthful men and women in there early twenties. They often begin to ask themselves the question, "Should I consider buying a home, condo/town-home or some other type of real estate that I can call my own?" Due to the fact that housing has up to this point always been provided for or lived in on a rented basis we tend to find that our newest contributing members of society find themselves at a loss for the most beneficial and advantageous way to enter this next phase of self-sufficiency. Raising Money For Property Development In addition to finding the right property, one of the most difficult aspects of property development is being able to fund the purchase and re-development of the property before putting it back on the market.Many would-be property developers have the skills and flair for property development, but lack the financial clout to put these into practice. Join the Bulgarian Property Boom With Confidence An Irish property investor in Sydney, Australia has created an investment kit that provides potential buyers with all of the relevant facts, figures and information to confidently buy Bulgarian property, which grew an average of 30% in 2004. "Bulgarian Property - The Overseas Buyers' Kit" contains a complete guide to the tax and ownership laws, calculators and various information-gathering templates. How You Will NOT Make Money in Real Estate We all have seen some book called "How I Turned my last dollar into $1 Million by buying real estate in my spare time". Some of us even bought such books on an impulse with high expectations. Real Estate Investing - Protect Your Privacy An irate tenant or disgruntled home-buyer, with the help of a willing attorney, can readily prompt a property search for a property owner in public records. The target of the search becomes someone who has deep-pockets as reflected in real estate assets. Understanding the Escrow (Closing) Process 1. What is an escrow?Escrow is defined as a process where parties deposit instructions and funds with a "disinterested" third party until conditions of the instructions are met. Understanding Opportunity Cost When Investing In Property While most investors have got involved in property investing because they understand the opportunities to make money through leverage and capital growth or high yields, I still see and hear of many who do not fully understand opportunity cost.Remember anyone that gets into property is usually in it to generate money or income - how many deals/properties you own is insignificant. Real Estate: Financial Considerations $$$ Raw land as opposed to improved property is much more difficult to finance through traditional lenders. The main reasons are that it generates very little income, development costs can be expensive, there are no buildings or improvements that can be used as collateral, and it is often considered speculative. Four Reasons To Offer Seller Financing An example of seller financing: Years ago I bought a rental property, and nine months later sold it for 15% more, without fixing or improving a thing. The easy terms are what sold it. Juggling The Day With A Deal Doing deals with sellers is why you went into lease purchasing. Again, using organization and time management is very important here. Find Bucks in Yucks! 20-Year-Old Woman Turns Doghouses into Dollars! Do you dream of making money in real estate? Do you realize how easy it is to make big bucks? Even a young inexperienced person can transform houses for great profit.How to Fix, Flip, and Laugh All the Way to the BankAt the age of twenty, our family friend Dawn made her first fortune flipping houses by herself. Rental Properties: 10 Ways To Increase Income What if you want better cash flow from your rental properties? You can't just raise the rents arbitrarily. If tenants leave, income goes down, not up. Property Investing Secrets 1 When property investing, pay the seller their asking price but negotiate the terms under which you can buy property. You'd be absolutely surprised when property investing at how many sellers will help fund you into their property. What is a Foreclosure? A foreclosure is an action taken against a property owner by seizure of his/her real property. It can be for many reasons. How Not To Blow Your Build Budget Most people who complete a self build will go on to make a profit if they decide to sell afterwards, but what steps can you take to ensure that you don't totally blow the budget?There are lots of advantages to a totally unique self-build but most important is sound financial planning before and during the self-build, to ensure you stay within budget and make worthwhile savings.Research all your costs carefully and get as many perspectives and quotes as possible. Selling Your Home Quickly, Even if You Have No Money For Repairs Do you need to sell your home quickly? If so, don't be tempted by the ads you see that say "We Buy Houses" or "Sell Your Ugly House in 9 days for Cash." Those types of ads are placed by real estate investors who are looking for sellers under duress, and they'll only pay up to 70% of the low end market value for your home. A Difference Between Appraisal, Assessment, Home Inspection Every one should have a home inspection before purchasing any property, including new construction. You may think that's rediculous but there are too many cases that prove otherwise.
|
|
Currency Trading | Investing | Leadership | Negoatiation | Real Estate | Stocks and Mutual Funds | Taxes home | NetFinancial | Institutions | Loans | Colleges and Universities | site map Search Engines | EZmatic | 0pops | GetSonic | TrafficFish | Health |
| © 2006 |
