Rancho Grande is looking for someone to carry the torch

This iconic restaurant in Durand, Mi is going up for sale. The seller is interested in staying on for six weeks to make sure the authentic Mexican recipes are passed on and stay in the community. If you have had the pleasure of dining in or taking out you truly know how authentic the food can be. The food from Rancho Grande takes me back to when my wife and I first moved to Durand (she grew up in Durand). I love food and I especially love food from other cultures. Rancho Grande checked all my boxes with their authentic nachos. If you are interested in purchasing this restaurant with it’s recipes from Old Mexico, 6 weeks of hand on training and a studio up stairs, at $75,000 call 810-908-7155 and ask for Ben Anderson or you can call the listing agent at 810-241-3533 The Drury Group.

Top 5 Reasons to use real estate as a tax shelter or as an investment opportunity.

First of all… what is a tax shelter? A tax shelter is a legal and safe place to put your money where it is kept from being taxed (1. Josephson). A tax shelter is not to be confused with a tax haven. A tax haven is where money is moved out of the United States to avoid paying taxes and is illegal. In a 401k plan you may be exempt from paying the taxes while the plan is active but you do pay taxes on it when you retire.

Reason number one for using real estate as a tax shelter is that the IRS exempts the first $250,000 ($500,000 if you have a spouse) from personal home sale profits from the capital gains taxes. You read that correctly – you and your spouse could make $500,000 off of home sale profits and pay no taxes (1. Josephson). To be clear, the home sale profits need to be from a home you have been living in for at least five years (please double check with your accountant). That doesn’t make this a practical short term investment, even though you could do it every five years.

Reason number two is that you can build up personal equity. In short, if you purchase a house in a desirable location using a standard mortgage, you are increasing your personal equity. Then if you fix it up, and rent it for more than costs (or even at cost) it would be paying for itself. Now, if you flip the house you get a short-term profit, but if you get a nice renter who stays there for the length of the mortgage, you have a house that is paid for and you can sell for a full profit. This is a bit more complicated and I would highly recommend speaking with a financial planner (for example, Merrill Lynch). There are other tax benefits to renting a house but my editor told me to keep it short (2. Carson).

Reason number three would have to be appreciation. Real estate goes up at about the same rate as inflation, 3-4% annually. If you put your money into real estate, your money should increase at the same rate as inflation (2. Carson). With that in mind, one might wonder about what happened to the real estate market in 2007. There are no guarantees, but smart investing is always best. When the market turned upside down in many places, properties by water or other really desirable locations didn’t take much of a hit. I know of a beach town in Texas where the real estate market was booming and hasn’t stopped. When my family bought a house there , the lots were going for $40,000. Even during the worst of the real estate decline, those same lots were going for $80,000. My advice to anyone interested in having their retirement funds appreciate over time is to speak with a professional agent or a financial advisor (example Merrill Lynch).

Reason number four: It will diversify your portfolio (Harris). The old saying “don’t have all your eggs in the same basket” still applies to your retirement. No one wants to get to their glory days and have their stock portfolio take a dive. To be clear, I am not a stock broker but I have seen people lose a considerable amount of money from their portfolio just before they retire and it is not fun. I would highly recommend speaking with a money manager before liquidating any of your stocks to putting them in the real estate market. However, a healthy dose of common sense can do wonders for your portfolio. Blue chip stocks fluctuate with the market as does real estate, but diversity is the key in a successful retirement portfolio (Harris).

Reason number five is that it is a tangible investment (Harris). When you buy a stock, the best you can have that is tangible is a piece of paper showing you are a share-holder in a company. When you invest in real estate you have actually acquired a piece of land that you can see and visit. It is a location that you own exclusively. The opportunities for your tangible investment are only limited by the imagination. I did an article a while back on ways to make money off land in Michigan and it illustrated how anyone could use trees as a crop/ revenue source. One section of the article specifically mentions working with the World Tree Organization and how you can simply plant, maintain, and work with their team to earn up to 500k over a 10-year span. That plan depends on the market value of the tree, but the investment is something tangible. Other opportunities for investment include flipping houses, development of personal property, owning rental properties, farming a variety of crops (trees), and on and on. In each area, there are sub-areas. For example, some institutions acquire several houses (typically 4) as cheaply as possible, then sell them individually for a profit to people who flip houses.

As a real estate agent, caring human being, and educator, I encourage my clients to do their research. When it comes to a retirement plan I would not only urge research but would also ask they speak with their money manager and a licensed real estate agent before diversifying their portfolio. The opportunity created by investing in real estate is only limited by your imagination.

“Imagination is everything” ~Einstein

Thanks for taking the time to read my blog.

Sincerely,

Ben Anderson

  1. Josephson, Amelia, published 9-14-18, found on 1-18-19, https://smartasset.com/taxes/what-is-a-tax-shelter
  2. Carson, Chad, Found on 1-18-19, https://www.madfientist.com/tax-benefits-of-real-estate-investing/

    3. Harris, James, found on 2-11-19, published on 11-16-17 https://www.entrepreneur.com/article/304860

 

 

 

Full description of reason number two (these are some of the tax benefits I alluded to in the article above):

Reason number two is that you can build up personal equity. Let’s use an example of a  residential rental property to illustrate this. If you bought a house as an investment and rented it out for just for the cost (monthly mtg payment utilities etc), over time you would gain more equity in the home as it gets paid off. Now, if you were to make $5,000 profit off the home you would be subject to a 25% federal income tax and would owe $1,250. Now if you took off the depreciation value off the profit ( -$3,000) you would only get taxed on the $2,000 remaining. Then you would only owe $500 in taxes and save $750. Depreciation on an asset means that the government agrees things get old over time. The rate at which something depreciates is 27.5 years. You can divide cost by the 27.5 and you would get the yearly rate (2. Carson).

 

Thinking of becoming a snowbird?

 

Thinking of becoming a snowbird?  Check out this gorgeous  home in sunny Port Charlotte, Florida!  Lovely split floor-plan. Open feeling but also allows for guest privacy. 3 Bedrooms, 2 full Bathrooms. New roof with dimensional shingles 2018, new pool heater, and new granite kitchen countertops are all recently made improvements. Sparkling clean, newly resurfaced (2018) 30’ sport pool!

IMG_E2041.jpg

Fresh paint – neat and clean and ready for you to move in!  Enjoy your favorite beverage while relaxing on the spacious lanai.  Best of both worlds – located in quiet neighborhood but close to conveniences.  This gem is a 5 minute drive to Charlotte Harbor where you can dine on the water, enjoy parks, go fishing, and launch your boat.  35 minute drive to the gulf.

Below are links to the house on:

www.zillow.com

www.realtor.com

 

 

Top way to make money off of 10 acres

 

This is a follow-up to my previous article about how to make money off of an acre of land. I have since done more research on the subject, including speaking with World Tree Organization.
The Empress Splendor Paulownia tree is part of a tree program offered by World Tree. They provide guidance, the trees, experts, soil tests, buyers, a mobile mill, and shippers. They take away half of the profits; you get the other half. To be part of the program you must have a minimum of ten acres. They do offer a trial acre program for $550. The link below shows the figures per board foot based on three projected numbers, all at or below what they are getting right now per board foot. You could make 45k an acre (once World Tree takes its cut) after ten years (before taxes, but even that projection was on the low end). You could make $450,000 for letting these trees grow on your property for ten years. Once harvested the first time (which World Tree takes care of), the trees then regenerate using the same root system, causing them to grow faster. The wait for the next harvest will be shorter, making you that same money, but sooner. The link below gives more detail about this organization and what you can do it you want to get started.
farmers guide 2018-19 web 

 

Top Five Things To Do Before Listing Your Home

 

The top five things to do before listing your house on MLS are find a quality real estate agent, locate property records, declutter, clean, and stage.

You want to find an agent (1. Ericson) who best suits your needs. It is easy to think the one who sells the most is the best, but that is not always the case. You want someone who will work for you and take the time to make sure you understand the process. You can look at real estate agents’ listings online (2). Read the reviews – they speak volumes. It is tempting to go it alone, but you can make more money and save time using a dedicated licensed real estate professional (1. Ericson). Here is a good link for finding a quality agent (I apologize for the ads) https://www.forbes.com/sites/forbesrealestatecouncil/2018/07/12/13-tips-for-finding-the-best-real-estate-agent-for-your-housing-needs/#1099a1282403

Locate property records like the deed, home owners insurance records, tax statements, any warranties (appliance or windows) that may remain with the house, and any other paperwork pertaining to the house (3. Gerhardt). If you cannot find the deed to your property it can be located at the court house. Most real estate agents can access deeds through their MLS, in some cases even get it for free. However, if you have any of these documents at the ready, it will speed up transaction. The following link has directions on how to locate property records https://www.wikihow.com/Do-a-Deed-Search

When decluttering your house it is very important to remove (to storage) any personal items, such as photographs. Try to keep the look of your home simple.  Potential buyers want to be able to envision it as their place, and this is difficult to do when looking at items that make it look like your home.  Sometimes it is best to store your valuables in a secure storage locker. This can be a challenge when you are trying to live in the house you are selling. Personally, I found storage containers to be very useful. At the very least, I was able to remove clutter from the house and store it in the trunk of my car during showing times. To paraphrase the late George Carlin, “My house is a place to store my stuff while I go out and buy more stuff,” (4. Carlin). If prospective buyers can’t see themselves in the house they are less likely to make an offer. They want to see an empty space where they can store, to use Mr. Carlin’s terms, their “stuff.” My wife and I decluttered by creating four piles for your “stuff”: need, want, pitch, and stage. We put our valuables in storage bins then sent them to a storage locker, and our need pile also went into storage bins in the back of our car during closing. It seems crude… but it worked.

If the top three necessities in real estate are location, location, location, then the top three things in selling a house are clean, clean, clean! If you have pets or kids this can be difficult. Over time, our noses adjust to odors to keep the limbic system from overloading. Novel smells still enter the nose but, over time are not passed along to the brain (5.Mag). Painting a house in neutral colors can do wonders for all the senses and the pocket book. My starter home’s prior owner was a smoker. I learned this instantly when viewing it the first time because of the tiny brown dots on the walls and an overwhelming smell. It took a little sand paper, primer and paint to help get rid of the odor. Another thing that helped was replacing carpeting.  Flooring can be easy and inexpensive to replace. If you are not prepared to put in new flooring, then steam-cleaning is highly recommended.  When it comes down to it, make sure everything is clean (spotless), all screws are tightened down, all outlet covers are covered, all half-finished projects are completed, and the doors all function as they are intended.

To stage a house is like putting an catchy label on a flavor of ice cream; which is more interesting – Cherry Vanilla, or Ben and Jerry’s Cherry Garcia? Highlight your home’s best features to make it more interesting! We all have a friend whose decorating taste we admire – pick their brains for suggestions. The goal in staging is to make a house appear stylish but also simple enough so anyone could make it their perfect style simply by adding their stuff. I believe it’s done with neutral tones and open space. Large tiles in a small room make the room feel smaller, and vice versa. Removing bulky furniture and/or adding up-lights can create the feeling of more space. In any house, you want walking-around room. Minimizing the furniture makes more space and that’s good for selling your house. A few strategically placed plants or fresh flowers can give a fresh look. Additionally, curb appeal can make a house feel like a home before setting foot inside. Fresh plants appeal to our naturalistic side (even real-looking fake plants). Plants improve economics and perceived value according to timber press (6.Timber). When staging a house I start outside with a commercially cut lawn, fresh mulch, and flowers. I also suggest a good power wash for the deck, siding, concrete seams, and windows. We all wake up every day, shower, and go to work – it’s good idea to do the same for your house when putting it to work for you. The following link provides staging tips with minimal ads https://www.moving.com/tips/10-best-home-staging-tips/

To be proactive please visit your real estate agent top get a

  1. Located on 12-21-18, Ericson, Cathy, published on Nov 2, 2017, https://www.realtor.com/advice/sell/home-selling-checklist-things-to-do-before-selling/
  2. Located on 12-21-18 https://www.realtor.com/realestateagents/flint_mi
  3. Located on 12-22-18 Gerhardt, Nick 2018, https://www.familyhandyman.com/smart-homeowner/34-important-things-to-do-when-planning-to-sell-your-home/view-all/
  4. Located on 12-22-18 Carlin, George, third paragraph, https://scrapsfromtheloft.com/2017/06/29/george-carlin-carlin-campus-1984-full-transcript/
  5. Located on 12-22-18 Mag, The, published 12-20-18, http://mentalfloss.com/article/53526/how-do-our-noses-adjust-bad-smells
  6. Located on 12-22-18 Timber published 5-27-2016 https://www.timberpress.com/blog/2016/05/what-plants-contribute-to-interior-design/

Top 5 reasons to hire a real estate professional

1. Agents are bound by law to act in their clients’ best interest (1. Struyk).  In Michigan we have what is called an Agency Disclosure Agreement, which clearly states the person who the agent is representing.

2. Make more money, and save more time.  According to a graphic in an article by economist Amanda Riggs, agent-assisted homes sold on average for 250,000 and all FSBO (For Sale By Owner) homes’ median sale price was 190,000 (2. Riggs).   It seems logical that one would typically get more value from utilizing professional services of one who makes it their business to help people in real estate.

3. Their reputation depends on it.  Real estate professionals are required to pass a real estate exam and continue to educate themselves further every year. If they make a mistake, they are held accountable and could potentially lose their license or spend time in jail if they do not live up the real estate code. If they are not concerned about the integrity of the profession, they should be concerned about losing their license.  It is in their best interest to do the best they can for you.

4. Market trends and research are available through your agent.  Any agent using the Multiple Listing Service or MLS has access to real-time information. It isn’t free and it isn’t public in real-time for non-real estate agents.  Your searches and comparisons are much more likely to be accurate with the resources your real estate agent can provide.

5. A real estate professional will handle the paperwork. When making a real estate transaction, it is hard enough to find all the documents that were supposed to be on file, let alone locating ones like Seller’s Disclosure form or a Lead Paint Disclosure form. An agent cannot fill out the forms for you but can provide insight as to what you are filling out and why. They will also be able help explain the process as it is being carried out. A full cash offer might be handled differently then a HUD transaction. There are many variables that can change the speed and/or depth of the transaction.

 

Purchasing a home is a process, not an event. It is easy to get carried away because turning a house into your home is a big moment. It is worth sharing that moment with someone who always has your best interest in mind, like a real estate professional. #realestateinvestment #realtor #realestateprofessional

1.Tara, Struyk as seen on 10-31-18, posted on 5-25-10, https://www.forbes.com/2010/05/25/why-you-need-real-estate-agent-personal-finance-commission.html#4cc0091d4496

2. Amanda Riggs found on 10-31-18 posted 7-9-18, http://economistsoutlook.blogs.realtor.org/2018/07/09/selling-your-home-solo-to-save-money-youll-actually-make-less-than-you-think-2/

3. Cathie Ericson found on 10-31-18, posted on 8-8-2017, https://www.realtor.com/advice/sell/why-fsbo-sales-fail/

 

Top 2 Months to Sell Your Home

According to the cited Forbes Article, the best day to sell your house differs from the best month to sell. May proved to be the top-selling month overall, however research shows the single best day on average to be June 28th. The data appears to be collected from 2011 to 2017. According (ATTOM) to the data posted on the citation, more homes were sold in June but the seller’s premium was 0.1% higher in May (1. Morad).

 

 

  1. Renee Morad posted 4-20-18, observed on 10-13-18, https://www.forbes.com/sites/reneemorad/2018/04/30/the-best-month-and-day-to-sell-a-home/#22a280ff2fa3

First Time Home Buyers

I wanted to do the top 5 reasons to purchase a home but then I came across this article in the research phase of my writing. It is amazing what the internet can do these days. Purchasing a home should be done for the right reasons (practicality). This link has a detailed list of reasons, ideas, and citations. The website is a dot com (so it is a commercial website) but it reminds me of things I wish I knew when I purchased my first home. Here is the link. Please give me feedback if you have any questions or suggestions.

https://www.moneyunder30.com/first-time-home-buying-guide

4 ways make money off of 1acre of land in Michigan

Residential farming is the latest craze. The cited video clip illustrates how to effectively manage 1/3 of an acre in residential farming (1. Stone). Most towns in America have a farmer’s market offering a place sell your local yield. The number of farmer’s markets has increased in this country to 8,268 (3. Bell). #BackyardToYourBelly

It’s a good idea to utilize local resources to maximize land potential. You could create an orchard with animals like free range chickens, along with apple trees (2. Knights). Plant Paulownia trees with berries because the tree grows fast and puts nitrogen into the soil for a nice berry crop (2. Knights).

Another idea is a long-term plan, like planting Black Walnut trees. I know people who have done this, and if they are planted close enough together they compete for light and grow straight and tall. Ginseng goes well with Black Walnuts and can be harvested five years after planting (2. Knights). Tree farming can be very lucrative and with the plans presented we have different speeds at which profit margins can be met. #RealEstateInvestmentIdeas #RealEstate #CountryLiving

It is important to do your research, especially for long term investments. One variety of the paulownia tree is an invasive species and it is called tomentosa. For more background on the farming paulownia trees see the following link: http://worldtreecop.com/paulownia-scam/

 

  1. Curtis Stone, found on 9-24-18, published on 9-15-15, https://youtu.be/adW3GCQGHug
  2. Apocalyptic Knights, found on 9-24-18, published on 12-18-15, https://youtu.be/UdaeDG0qq1Y
  3. Randy Bell, found on 9-28-18, published on 8-5-2015, http://www.canr.msu.edu/news/urban_and_farmers_markets_have_a_long_history_in_these_iconic_cities