Real Estate Investing Techniques from CashFlowInstitute.com

A married couple who own their home can sell it and the first $500,000 of gain is tax free.  Folks, that is one of the last great "tax loop holes" available to we ordinary guys.  The wonderful thing is that it is available to everyone.  You don't need high priced financial or legal advice.  It is dropped right in your lap without a lot of strings attached.

Well, there is one string.  To get the tax free windfall you must have lived in the home for at least two of the last five years before you sell.  Not much of a "string" is it?

If you are an unmarried home owner your profit is limited to just one quarter of a million dollars instead of half a million.  Still very sweet.

There's no restriction on what you do with that tax free cash.  You can buy another home, invest in the stock market or date Paris Hilton.  Just blow it any way you wish.

It is a bit more complicated for investors.  If you sell a home that you've been renting for income you are going to have to pay tax on any gain.  You also have to deal with the recapture of depreciation and maybe even the Alternative Minimum Tax. 

The best bet for an investor is to use the other great real estate tax loop hole.  That is the 1031 exchange.  Oh, boy is it nifty.  You can avoid paying tax on any profit almost forever by trading for other properties.  You will need some expert help in the beginning, but there's nothing you can't handle yourself after you understand the rules.

To learn how real estate investors pay zero taxes...

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Let's get to the bottom line.  In the first article you ran across the possibility that real estate values were peaking and they could begin to head down.  The following takes a bit of careful reading, but one of the people who sets this country's monetary policy seems to think certain assets (real estate) are over priced. 

In a January 11 speech by New York Federal Reserve President Tim Geithner (essentially the #2 man at the Fed) he said “even if we had more confidence in the forces behind past movements in asset values, we would still face substantial uncertainty about their future behavior. The relatively low compensation for risk priced into asset markets today does not necessarily mean the future will justify that confidence."

In plain English that means he thinks there could be trouble ahead. 

Look no one knows your financial situation better than you do.  If these two articles do nothing more than to get you thinking about the near future they have done their job.

> > If you're serious and would like to sneak a peek at what we offer at our Real Estate Investor Base Camp just go to...


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