Monday, August 22, 2016
The Bureau of Economic Analysis recently released a report recording all the states’ gross domestic product (GDP) growth for the quarter of 2016. Of the fifty states, three tied for first at 3.9%: Washington, Oregon and Arkansas. Colorado was fourth at 3% and fifth place was split between Arizona and Michigan at 2.6%.
Arizona’s GDP exceeded all expectations in place for the 2016 first quarter, leading the entire Southwest region in growth; as a whole, Arizona, New Mexico, Texas and Oklahoma have a 0.5% growth rate.
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Friday, August 19, 2016
As of late July, those who are supported by welfare are able to purchase manufactured homes using federal rent vouchers. Signed into law by President Obama, this bill allows low-income families to not only pay rent with their Department of Housing or Urban Development Section 8 vouchers, but to make mortgage and insurance payments on mobile homes, as well as pay property taxes.
Many see this as an incredible opportunity for low-income families to be able to own property, including senior vice president and chief lobbyist for the Manufactured Housing Institute Leslie Gooch: “the legislation is an important step in helping low-income families achieve home ownership.”
Wednesday, August 17, 2016
The residents of St. Anthony Mobile Home Park are about to lose their homes! The owner of the park, Lowry Grove Partnership, decided to list the multi-family community for $6 million and specifically structured the transaction to deny the tenants their right to buy the property first; instead, The Village was to buy the property.
According to a Minnesota 1991 state law, the residents reserve their right to first refusal of the property beneath their homes before the landowner can decide to sell to a third-party. Obviously these requirements were not met.
Finally, on June 10, the residents were able to persuade an affordable housing nonprofit organization, Aeon Management, to match the $6 million offer on their behalf, but the property was sold the next business day. The buyer, The Village, plans to remove the 97 mobiles to renovate and redevelop the property; but maybe they shouldn’t be too quick to act.
Now suing both the buyer and seller, the residents of St. Anthony Mobile Home Park have asked a judge to undo the deal and let them buy the property with the help of Aeon Management. Minnesota Attorney General Lori Swanson has taken the case and the side of the tenants!
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Friday, August 12, 2016
In the world of real estate, a 1031 Exchange is not an uncommon ordeal, but still many do not know what it is exactly. The term “1031” comes from the Internal Revenue Code (IRC) 1031 (26 U.S.C. § 1031) which allows for the deferral of capital gains when buying and selling like kinds of property. What this means is when one person sells a type of property (e.g. apartment complex) and then buys a similar piece of property (e.g. hotel building), the payment of taxes on the gain from the sale of the first property is delayed. The catch is that the second property must be of equal or greater price than the first. Also, both pieces of real estate, the one bought and the one sold, must be held for reasons of investment, production of income or for use in one’s business; residential real estate is non-applicable.
The primary reason many investors decide to go along with a 1031 Exchange is to not get stuck with a large tax bill; the only objective of the investor is to upgrade the real estate while simultaneously not paying all of the profits from the sale immediately. A general example is an expanding business who sells their current office building to move into a larger office that accommodates their growth. As long as the second office is of the same value or greater, the building owner can delay tax payments on any gains from the sale of the old building by following the rules of the 1031 Exchange.
There are other requirements of the 1031 Exchange as well, including a 45-day and a 180-day time limit (could be shorter depending on the tax return due date) and the use of a Qualified Intermediary to hold profits from the sale. Within 45 days of the sale of the first property, the owner must identify all properties that he/she has intentions to buy in writing and sign the document. That document must either be given to the sellers of the new property or the Qualified Intermediary (within that 45-day period); if a third party is given the document (e.g. the investor’s attorney or real estate agent), the 1031 Exchange becomes void and the capital gains from the sale of the first property sale are immediately available for taxation.
The second property must be purchased within 180 days of closing the first (including extensions) or by the tax return due date for the period that covers the sale of the property, whichever is earlier. Extensions aren’t available for either time limit and missing any of the timeframes specified results in the 1031 Exchange becoming void.
In the end, a 1031 Exchange is an effective way to trade real estate without getting hit with capital gains taxes.
Tuesday, August 9, 2016
The well-known Murex Properties from Fort Myers, Florida has made a new acquisition to their real estate portfolio: a 278-site manufactured housing community in Haines City, Florida. The 55-plus community, Heartland Estates, was sold for $12,525,000 and was purchased through an exclusive association with Northwestern Mutual. Burrowed up on a ridge and overlooking Lake Hester, the property is located about one-half mile west of US-27 in central Florida.
Murex Properties owns and manages several premier manufactured housing communities throughout the nation with Heartland Estates being the fifth to be purchased in association with the $203.5 billion, AAA-rated company Northwestern Mutual Life Insurance.
According to Murex Properties President Steve Adler, “Heartland Estates provides its residents an outstanding active-retirement lifestyle, and is a good fit with our corporate culture which counts the satisfaction of our residents as a measure of success. It is one of Florida's premier communities with a well landscaped, low-density setting that allows for large lots."
Because of its amenity-rich foundation, Heartland Estates furnishes a beneficial-culture with a 5,000-square-foot clubhouse, with a verandah overlooking both the heated swimming pool and the lake. The clubhouse and amenities include a ballroom, fitness center, kitchen, library, billiards, shuffleboard courts and horseshoes.
Friday, August 5, 2016
Every January, Barrett-Jackson Auction Co. holds one of the world’s largest collector-car auctions in Phoenix’s Scottsdale. According to a study that was released Tuesday, more than $167 million will flow back into the economy, including $10 million in tax revenue!
Elliot D. Pollack & Co., a consulting firm in Scottsdale, was nominated by both the city and Barret-Jackson to calculate the economic-impact analysis for the auction; costing approximately $9,500, the report was the first of its kind in more than a decade.
Several tourists from all 50 states and at least 15 countries showed up at the weeklong auction from January 23-31 spending $70 million on local hotels and restaurants. An additional $61 million was roundup up at the auction itself, summing to a total economic impact of $131 million!
The Pollack Study also included Barrett-Jackson’s annual operational income (only at its Scottsdale Headquarters) which incorporates the construction of a 41,000 square-foot showroom in the Valley for non-auction sales.
All-inclusive, Barrett-Jackson Auction Co., according to the study conducted by Elliot D. Pollack & Co., is responsible for more than 1,400 jobs in tourism, construction and operations as well as supplying an economic impact of $167.8 million in 2016.
Tuesday, August 2, 2016
June proved to be the month where America broke its housing market low-streak; homes were sold at the fastest rate since the market crash 8 years ago, insinuating stability from a solid job market and low mortgage rates. As of Tuesday, the new home sales rate rose to 592,000, 3.5% over the last month: an all-time high since February 2008 according to the Commerce Department. Regardless of the wavering sales on a month-to-month basis, new home purchases have risen 10.1% year-to-date!
Residential real estate is supported by the robust job market and low mortgage rates, continuing to revive from the hard hits of the last decade. Because of the high demand and lower supply of homes, prices are rising, leading to indicators that the overall economic growth could upturn from the housing market!
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