Right now, we’re going to talk about successful real estate investment planning.
Bob Nelson, Eugene real estate investment broker
Marcia Edwards, Eugene residential real estate broker
Marcia Edwards: Let’s talk a little more about investment property. This is something that I want to be an expert in, because I want to be successful myself. And in residential real estate, we don’t have the exposure you do, Bob. You’ve done thousands of transactions using the 1031 Exchange on investment real estate.
Bob Nelson: Well, it’s interesting. It’s something that intrigued me in my very first year of real estate. I’ve been doing it for 51 years. It’s an extremely intricate transaction. It’s one that if you understand and you play it well, you do it well, play by the rules, it’s an extreme benefit.
I get to sell something, not have to pay tax on it, use all of my equity, forward it into the next deal and continue doing that until such time as I sell and don’t further exchange.
Marcia Edwards: Okay and doing that in the process of investment successes, what are the ways you can increase your probability for long-term success with your investment plan?
Bob Nelson: Well, I think the very first thing, identify what you own. Now, if you own one property that’s fairly easily done. But if you’re further along with your investment life and you own three or four or five or a dozen things, each quarter, take a look at how productive each of the assets in fact would be.
Is there one of them that’s lagging behind and is there anything you can do to fix it? If not, why not get rid of the runt of the litter, so to speak, sell it, do a 1031 into something that’s more productive or more fun to own or more whatever. But at least know what you have and adjust accordingly. In some instances of not selling, it may be refinancing.
Marcia Edwards: I was just going to say, you could look at many parts of the asset. It could be rate of return. It could also be what’s coming up as capital improvements needed and things like that, right?
Bob Nelson: Exactly. And you may not have the money to cover it so you sell it as a fixer, somebody will buy it and probably not penalize you as much as the cost would have been to fix it to begin with.
Marcia Edwards: It does no harm to look for better opportunities at any point in time. So knowing what would look better to you and seeking that out makes a lot of sense at least annually. Okay, so also there’s staying current with the economic changes and understanding when the opportunities and doors might close for example, as you mentioned, refinancing right now.
Bob Nelson: Exactly. A great time to refinance. Interest rates are hugely low and we can get long-term fixed rate for a term of 10 years with certain lenders. We can also share that information. Actually, Grant’s a great source.
Marcia Edwards: Well, these are great tools on improving the probability of your investment success.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30pm on KPNW for the “Real Estate Today” radio show.