Did you hear what Warren Buffet said a few months ago on CNBC. The actual quote from him was, “I’d buy up a couple hundred thousand single family homes if I could.”
He went on to explain that houses, if held for a long period of time and held with mortgages at low rates, will have better long-term appreciation than stocks.
If the emails and calls I’m getting about real estate are any indication, then a lot of people are taking that advice and jumping back into the real estate market with both feet. One of our USTaxAid Services CPAs bought a number of Phoenix area properties at the beginning of 2012 and has seen over $30,000 of appreciation per property in the few months since then.
There are others who are still struggling with properties that they overpaid for and others still dealing with investments they made in deals that never got completed.
I’ve never seen a market that has such wide diversities. But no matter where you are in real estate – getting in, getting out, building, maintaining or some combination – you need to pay attention to protecting your assets and paying less tax.
One of the common mistakes I see new real estate investors make is using every penny they have to get into a deal. They don’t have anything left, time or money, to protect the real estate. Or they buy the property in their own name and figure they’ll move it to an LLC later on. Then they discover that there are huge transfer taxes if they do that.
This is an amazing time to be investing in real estate, provided it’s the right property in the right area. There are some areas that still don’t cashflow well. And there are others that don’t have a rental pool. Plus, there are dangers with unfunded HOAs that could come back and bite you.
Great wealth is made by taking risk, but not stupid risk. You need to make calculated risks and protect what you’re building. Please go to http://www.RealEstateLoopholes.com to hear the webinar from this past week on the “Five Biggest Mistakes That Can Blow Up Your Real Estate Deductions.”