Real Estate Investment

How Many Properties Do You Need To Own To Retire in Florida: An Investors Guide

How Many Properties Do You Need To Own To Retire in Florida: An Investors Guide

Michael Linton: Real Estate Investor | Founder Linton Global

Michael Linton: Real Estate Investor | Founder Linton Global

Do you have a goal to retire in Florida? Not too long ago I made the decision to retire in Florida (It was after moving back to the Chicago area for about 6 months) so I sat down and mapped out a plan that was designed to help me achieve this goal. I want to share this goal with you here. (Share this plan with your friends by utilizing the social media buttons above)

I first decided I wanted to get into real estate investment back in 1985 (only 3 years out of high school) after reading Financial Genius by Mark O. Haroldsen. From thereon, I was determined to become more erudite in the field of real estate. Since then, I have more than three decades experience in real estate analysis, financial modeling, mortgage banking, due diligence, real estate fund management, construction management and real estate brokerage. You may download my online resume here at HireMikeLinton.com.

After reviewing my resume, you can concur that I am qualified to assist you in your retirement aspirations here in Florida.

So back to the original question; How Many Properties Do You Need To Own To Retire in Florida?

How Many Properties Do You Need To Own To Retire in Florida?

How Many Properties Do You Need To Own To Retire in Florida?

The answer is …. it depends.

It really depends on your lifestyle. Do you want to retire with just your basic needs being met or do you wish to travel, play and enjoy the finer things in your golden years. But be careful not to become house poor. 

My wife Peggy and I always tell our customers that we do not want to run into our customers at the grocery store buying ramen noodles while we are buying steak.  Be careful not to over-extend yourself with debt. I got into trouble back in 2006. I should have exuded the wisdom of Proverbs 22:7 which simply states the borrower is slave to the lender.

Deciding on the number of properties to own also depends on your investing strategy. Today my strategy is much different that 2006. Back then it was about flipping properties. Investors were more like day traders in the stock market. I saw investors flipping condos in Daytona Beach and walking away with more than $80,000 after owning the property for about 10 minutes. This strategy worked well until the credit crunch and the financial meltdown of 2008. My strategy today is buy and hold, paying off properties and owning them free and clear. My sub-strategy is to think like a banker. My goal is to have 2 Million in assets working for me.

Give me a call and we will figure out a plan that works for you.

What Can Owning Rental Properties Provide You With?

Owning rental properties can provide you with:

  • Cash Flow
  • Fantastic Returns
  • Tax Advantages
  • Leverage

 

Increasing the Earning Power of Real Estate Investments with a 1031 Exchange

I wrote an article previously about increasing the earning power of real estate investments with a 1031 exchange, but let me summarize here.

What is a 1031 Exchange?

A 1031 Exchange is a tax shelter that allows an investor to defer their taxable event from the sale of their investment property. 

When completing a 1031 exchange, an investor can increase their portfolio of wealth.

The real estate investor can change the type of investment property. Maybe you want to change your investment from single family to commercial properties.

About Linton Global Real Estate Investing

Investing in high quality real estate is easy with the Linton Global Real Estate Team. We utilize the Mega Team expansion system that has allowed us to build a central processing hub located in our home base in Florida, while utilizing partner networks under the team brand, Linton Global. Currently we service the cities and suburbs of Orlando Florida, Daytona Beach Florida, and Miami Florida.

While the concept Mega Agent Expansion may just be entering the minds of many agents, Keller Williams is home to a growing group of mega agents who are already experiencing enormous success through expanding their businesses into multiple markets. – Posted on February 10, 2015Keller Williams Realty International 

 

 

 
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Chief Investment Officer – Daytona Beach Shores FL
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Is Retiring in Florida all it is Cracked Up to Be?

Now that baby boomers are reaching retirement age, Florida is being deluged by a new wave of retired residents. There are many benefits to living in Florida.

If you decide to move here for retirement some of the key factors will be what part of the state will you live in?

 

It is also a lot of fun to be with your peers and to be able to enjoy a lively retirement. If you are concerned about moving away from your family, rest assured that they will be eager to come and visit in the winter.

 

Florida Commercial Real Estate Investment – Basics

Florida Commercial Real Estate Investment – Basics

Get a List of of Top Ten Commercial Investments (312)612-1031

Mirabella Plaza

Mirabella Plaza (312)612-1031

Would You Rather Have 15 Million in Single Family Homes or 15 Million in Commercial Property?

That will be a lot of homes and tenants to take care of.On the other hand $15 million will buy only a very small number of commercial properties that will be comparatively easy to manage with much lesser overheads.Commercial properties include offices, industrial sheds, free standing retail shop, bulk retail, block of shops, medical centers, service stations, motels, hotels, back packers, health clubs, churches, funeral parlors, child care centers, car yards, convenience stores, shopping malls, to name just a few.

The income is also more stable because of the long leases.It is typical to have returns of around 10% net for a commercial real estate investment and any where from 7% to 9% net return for a prime property.

The value is also determined by the quality of the tenant and length of the lease.The value of a commercial property can drop substantially if it becomes vacant.

It is common to charge penalty interest on the out standing rent or lock the premises on continued default of rent.By far the biggest risk in commercial real estate investment is finding a new tenant in case of a vacancy.

In commercial real estate the requirement of each tenant in terms of size, location, use and rent payment capacity is so different that it is very difficult to get the right tenant for the right property. For the reasons mentioned above it is also difficult to sell a commercial property investment.
Michael Linton
Linton Global Real Estate Team
Chief Investment Officer
Get the Top 10 Commercial Investment Properties in the State of Florida
2422 S. Atlantic Real Estate
Daytona Beach Shores,FL
32118
US
Phone: (312)612-1031

 

How To Build A Cash Flow Model For Your Real Estate Investment Property

How To Build A Cash Flow Model For Your Real Estate Investment Property

Need Help With Your Model? Call (312)612-1031

How To Build A Cash Flow Model For Your Real Estate Investment Property

Financial Model For Real Estate Investment

Financial Model For Real Estate Investment

Here is an overview of the factors you need to take a look at in order to project your potential return on an investment.

Even if you expect to manage the property yourself, it’s best to budget in an allowance for professional property management.

Second, it ensures that you are covered if for some unanticipated reason you need to turn the management over to a pro at some point in the future.

For example, if you can earn 5% by keeping your money in the bank, you’re going to want a lot more than 5% for taking on the risk and time investments required by a rental property!

To determine this, you’ll need to estimate the building’s assessed value as a percent of the total purchase price.

Bank fees – how many points do you expect to pay, and what closing fees do you expect to incur if you will putting a mortgage on the property?

Now that you’ve got all the numbers laid out in front of you, you ‘just’ need to build a financial model which will allow you to project cash flow throughout your ownership term, and then use time value of money calculations to create a present value of those flows.

If the result is negative, it’s a red flag– you need to take another look, because this may not be a good deal for you.

Call Us To Help You Build A Cash Flow Model For Your Property – (312)612-1031

 

Michael Linton
Linton Global Real Estate Investments
Real Estate Professional
South Atlantic Real Estate Group
Florida Real Estate Financial Modeling Expert with over 30 Years Experience
2422 South Atlantic Real Estate Group
Daytona Beach Shores,Florida
32118
US
Phone: (386)312-1031

Mezzanine Financing – What Is a Mezzanine Loan?

 

Mezzanine Financing – What Is a Mezzanine Loan?

Here is the text book definition:

Mezzanine Loan and Commercial Real Estate

Mezzanine Loan and Commercial Real Estate

Mezzanine financing is similar to a second mortgage; the main difference is that mezzanine loans are secured by a fraction of ownership of the project, as opposed to the real estate.

They are similar to second mortgages, but make it far easier for the owner to maintain ownership of the property without actually losing holistic ownership of it to the lender in the case of default.

Since the property that was financed produces income, it is incredibly simple to use a portion of this cash flow to repay the mezzanine lender.

You Can Read More About Mezzanine Financing Here

A mezzanine loan is not a real estate loan. Instead, a mezzanine loan is loan that is secured by the membership interests (think of this as shares) of an LLC (think of this as a corporation) that owns a huge real estate project. If you own all of a company and the company owns all of the property, then you own all of the property. Let’s discuss below how a “mezz piece” forecloses. Mezzanine Foreclosure: A “UCC” (Uniform Commercial Code) process – Michael Linton – Chief Investment Officer

How Do “Hard Lenders” Make Money?

How Do “Hard Lenders” Make Money?

Have a “Hard Lender” Question? Give us a call at (312)612-1031

Hard money lenders are specific asset-based loans based upon the value of a property today such as an 80 unit multifamily apartment or some other type of commercial real estate, and are expensive because of the inherent high risk of the loan.

There is very little income documentation required on a hard money loan although, the more information that is available, the better chances you have of being approved.These hard lenders step in during a time of need and give you a quick answer and get you to the closing table fast.

The shorter the duration of your hard money loan, the better for you and the lender.

Or some other examples might include: The property may not be completely constructed, the retail or office space not leased or you may not have the necessary permits in place and your existing note is coming due.

Florida1031.com: 1031 Exchange Explained

Florida1031.com: 1031 Exchange Explained

Call (312)612-1031 For Your Florida Replacement Property

Florida1031.com: 1031 Exchange Explained

Florida1031.com: 1031 Exchange Explained

Investors can trade up, consolidate, diversify, leverage or relocate their investments and not be penalized by having to pay either capital gains or recapture (the amount deducted while owning the property is taxable if the property is sold) by using a 1031 exchange.

An example would be an apartment owner wanting to trade into net lease properties that do not require management.

What are the general guidelines for a 1031 Exchange?

The value of the replacement property must be equal to or greater than the value of the relinquished property less any selling expense.*

The equity in the replacement property must be equal to or greater than the equity in the relinquished property.

All of the net proceeds from the sale of the relinquished property must be used to acquire the replacement property. Constructive receipt of sales proceeds is prohibited during the exchange process.

Deadlines for identifying and closing on the replacement property must be followed. From the close date there are 45 days to identify the properties to be purchased and 180 days to complete the purchase (or the due date for your tax return-whichever is earlier). Property is properly identified only if you clearly describe it in a written document signed by you and hand delivered, mailed, faxed to the person obligated to transfer the replacement property to you (typical a Qualified Intermediary (QI) or to any other person “involved in the exchange” other than you or any one disqualified under Treasury Regulation 1.1031 (k)-1(K).

If there is debt on the property being sold that amount needs to be replaced by new debt or cash from the investor’s pocket.

How Many Properties May Be Identified as Replacement Properties?

Three Property Rule: Any three properties of any value.

200% Rule: Any number of properties not to exceed 200% of the sold property.*

95% Rule: Any number of properties of any value. 95% of identified properties must be closed in 180 days or the exchange will be disallowed.

Can Multiple Owners of a Single Property Exchange into Different Properties?

If the intent of varies owners of a single properties is to go their separate way it is important to first review with legal counsel the manner in which the property title is held before selling. Once the property being sold is closed and all exchange investors have entered into one exchange agreement the exchangers lose their options to divide the proceeds and buy separate replacement properties.

Does the Investor have Access to the Sale Proceeds During the Exchange?

Part of doing an exchange is that the investor does not take constructive receipt of the sales proceeds. The taxpayer may not receive the proceeds or take constructive receipt of the funds in any way, without disqualifying the exchange.

Is it too late to start a tax-deferred exchange after signing the sales contract before closing?

No, as long as title has not been transferred. The definition of like-kind for personal property and equipment is much narrower than for real estate.

What is the difference between “realized” gain and “recognized” gain?

Realized gain is the increase in the taxpayer’s economic position as a result of the exchange.

Linton Global Real Estate
Investors can trade up, consolidate, diversify, leverage or relocate their investments and not be penalized by having to pay either capital gains
2422 South Atlantic Ave
Daytona Beach Shores, Florida
32118
Phone: (312)612-1031

Florida1031.com: 1031 Exchange Explained

Investor Alert: S&P 500 loses $2 trillion in market capitalization

Investor Alert: S&P 500 loses $2 trillion in market capitalization

Florida Investor Homes 590 x 400 copy

Investor Alert: S&P 500 loses $2 trillion in market capitalization

In late August, the S&P 500 lost $2 trillion in market capitalization. When market volatility rises, savvy investors utilize diversification to insulate their portfolios from uncertainty. Bonds, precious metals, cash and other low-yielding vehicles are among the most popular diversification options, while real estate offers much higher returns and a broader range of advantages over other asset classes. In addition to regular dividends or rent, real estate is an inflation hedge, tax shelter, a tangible asset, and has a negative correlation with the stock market.

Tangible real estate is a diversification that should be a part of every investor’s portfolio. Although single-family residences (SFRs) were once considered a specialty asset reserved for wealthy insiders, Linton Global’s business model now offers all investors a reasonable entry point into real estate investing. SFRs have other advantages for investors.

Real estate is among the best-sheltered tax havens available, including the popular 1031 exchange. Section 1031 of the IRS code enables investors to allocate proceeds from a sale into a like-kind investment without paying capital gains taxes. Building a portfolio while delaying tax commitments is an effective path to generate a large portfolio.

If you’re interested in considering investing in rental properties to diversify your investment portfolio, please call Linton Global at (312)612-1031 to learn how our turn key process can make this possible. Investor Alert: S&P 500 loses $2 trillion in market capitalization

Mezzanine Loan and Commercial Real Estate

Mezzanine Loan and Commercial Real Estate

Mezzanine Loan and Commercial Real Estate In today’s commercial real estate environment, a typical capital structure for a real estate transaction may include mezzanine debt to fill the gap between a senior mortgage and the borrower’s equity in the property.

A mezzanine loan is not a real estate loan. Instead, a mezzanine loan is loan that is secured by the membership interests (think of this as shares) of an LLC (think of this as a corporation) that owns a huge real estate project. If you own all of a company and the company owns all of the property, then you own all of the property. Let’s discuss below how a “mezz piece” forecloses. Mezzanine Foreclosure: A “UCC” (Uniform Commercial Code) process

  • This is an administrative judicial process done in a court proceeding
  • The lender ‘instantly’ becomes the borrower
  • Unsecured liens are wiped out or ‘cleansed’ at the foreclosure process

The commercial real estate market is rapidly evolving. Often, traditional lenders are too bogged
down with red tape and stringent loan requirements to provide the necessary flexibility to handle
challenging financing solutions. At Linton Global, we recognize the importance of finding
creative solutions to non-conforming opportunities in an expedited manner. Feel free to contact
us at (312) 612-1031 to discuss any commercial real estate scenarios.

Mezzanine Loan and Commercial Real Estate

S&P 500 loses $2 trillion in market capitalization

Mike Linton

Real Estate Investment Trust Expert

In late August 2015, the S&P 500 lost $2 trillion in market capitalization. When market volatility rises, savvy investors utilize diversification to insulate their portfolios from uncertainty. Bonds, precious metals, cash and other low-yielding vehicles are among the most popular diversification options, while real estate offers much higher returns and a broad range of advantages over other asset classes. In addition to regular dividends or rent, real estate is an inflation hedge, tax shelter, tangible asset, and has a negative correlation with the stock market.

Most investors attempt to diversify into real estate by purchasing REIT stocks. The ease of acquisition, liquidity and low entry fee are among the reasons to own publicly traded REITs. Furthermore, REITs enjoy tax advantages only available through real estate investments and they pay a quarterly dividend. They also lull buyers into believing a real estate-backed security is insulated from market fluctuations. Over the past several days, the market has disproved this thought. There is very little diversification value in REIT stocks during market corrections.

Tangible real estate is a diversification play that should be a part of every investor’s portfolio. Although single-family residences (SFRs) were once considered a specialty asset reserved for insiders, they offer all investors a reasonable entry point into real estate. The formerly localized industry has given way to a national platform for investing. Big data, affordable professional management and institutional research help create an efficient market that supports nationwide investment. Additionally, the deliberate nature of real estate transactions removes panic selling from the asset class, relying more on supply and demand drivers. Chicago

SFRs have other advantages for investors. Real estate is among the best-sheltered tax havens available, including the popular 1031 exchange. Section 1031 of the IRS code enables investors to allocate proceeds from a sale into a like-kind investment without paying capital gains taxes. Building a portfolio while delaying tax commitments is an effective path to generate a large portfolio.

The long-term supply and demand fundamentals also support the future performance of the asset class. Homeownership has fallen to 63.4 percent and could decline to 61 percent by 2030, generating 9 million new households. Builders meanwhile, are focusing on high-end apartments in a few dozen submarkets rather than entry-level homes. As a result, the supply-demand imbalance is pushing rents and occupancy higher. The outlook for single-family rentals is bright and owning real estate is quickly becoming as effortless as owning stock.

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