Author Archive

15
May

Common Metrics for Valuing Real Estate

Written by RSS News Feed. Posted in Finance

Many times, you will see triple net leases, and occasionally double net leases where the tenant is responsible for all the maintenance, tax costs, insurance and utilities. The landlord may have some remaining responsibilities – say the roof and structure, but by and large, the landlord can focus on being a financial owner rather than an operator of the property.

There are a few common metrics we want to explain to a budding real estate investor, or someone interested in evaluating the complexion of REIT portfolios. Learn more…

15
May

So you just received an IRS 5071c letter. What do you do?

Written by RSS News Feed. Posted in Finance

Could it be a scam? If it’s a phone call, or an email, then absolutely, it’s a scam. However, if it’s a letter, then it may be legitimate. Make sure though that you check the content against the content on the IRS website, and make sure that you are using the IRS website to verify your identity and not a website that looks like the IRS. If you have one, you may want to consult an accountant. Read more:

15
May

What do you do when you own bonds or stocks issued by a bankrupt company?

Written by RSS News Feed. Posted in Finance

Ok so you own securities in a bankrupt company. If they’re stock, you’re probably going to be wiped out. If you own bonds, you are a creditor in the bankruptcy proceedings. Depending on how the proceedings go, you may get shares or bonds in the company. Or you may get cash as the company sells off their assets. Often times, you will receive a good chunk (but not all) your par value in either new securities or cash. Generally financial companies have paid out less in default but this is not always the case. You may also be able to sell your bonds on the open market, the market offerings will give you an indication of when and how much the bonds are expected to pay off. However, people may lowball you, and you will probably have to vote on some of the deals in bankruptcy so you will want to work with an advisor.

Municipal bonds are a little different, and the paradigms of municipal bankruptcy proceedings are changing so I won’t go through those. However, many municipal bonds are insured, and the insurer will continue making payments on the issuer’s behalf if they do go into bankruptcy. Read more…

15
May

Crowdfunding Real Estate?

Written by RSS News Feed. Posted in Finance

Kickstarter and GoFundMe have made huge waves and created a new road for projects to take to get funded. A lot of bright individuals have had the idea to create similar sites for investments. Real Estate has been a natural target market for this because the large dollar sums and lack of liquidity in many private real estate investments has made it hard for mass affluent investors to access this asset class while still maintaining liquidity and diversifying their portfolio. Learn more:

15
May

Financial Engineering for Small Businesses?

Written by RSS News Feed. Posted in Finance

Large companies continually change the composition of their balance sheets to use their capital as efficiently as possible and to maximize their profitability. While small business owners can’t issue billion dollar bonds at 2% interest, there are a few things that small businesses can structure their assets. Read more:

15
May

Reverse Mortgages for Retirees – Boon or Bane?

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It’s a commonly quoted statistic that nearly half of American families have no retirement savings. For many people facing retirement, their homes may be the only asset they have to help fund their post career living expenses. Over the last few years there have been a lot of stories about reverse mortgages where retirees sell their homes to the bank in exchange for cash or income over the course of their life. There are several ways the homeowners can be paid out – a lump sum, a monthly annuity, or a line of credit.

Are these a good deal? They may be advantageous from an ease of acquisition, interest rate and from a planning perspective when compared with a home equity loan or a home equity line of credit against the homeowner’s house for an elderly individual with no income other than social security. They can be a good deal in a few situations – namely under very specific circumstances, if someone remains in their life for longer than their life expectancy, then they may be able to “beat” the bank, however this is a very rare occurrence. When distributed, the income or advances are generally not treated as taxable income, although they may be treated as assets against Medicare eligibility. Learn more…

15
May

Donor Advised Funds and Foundations

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Donating money to charities can be a great way for a family to make an impact on their community, and to create a lasting legacy.  Charitable donations can also make sense as a way to eliminate tax liability.

Many times, when a family is considering a donation to charity, the donation they will fund the donation with a gift of appreciated securities – stocks or properties at a low cost basis, which would create a large tax liability if sold normally.  Sometimes a family will make direct donations to a charity, whether its immediate or in the future through a charitable trust.  However, sometimes a family will want to create a general purpose charitable fund to make donations to different charities across many years, potentially even generations.  In these situations when flexibility and long giving lifecycles are desired, there are several vehicles a family can use.  Some of the most common are the donor advised fund (DAF) and the Private Foundation. Learn more…

15
May

Life Insurance: The Usages

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They say that when you’re a hammer, all the world’s a nail. It seems like life insurance salespeople will try to sell you life insurance as a solution to almost any problem you may have. We’ll give you a bit of a quick primer on some of the various ways life insurance is used.

These are a few of the main ways that life insurance is used for individuals, and there are others. However, in every instance, insurance policies are complex and sophisticated legal contracts, and they may not be right for you. You should definitely consult with an independent advisor before to make sure you understand what you’re buying.

Read more about life insurance here…

15
May

Side Businesses and Tax Deferral

Written by RSS News Feed. Posted in Finance

If you’re a small business owner who has a significant income, minimizing your taxes can do a lot to improve your income. There are a number of different shields people use – depreciation, and business expense deductions for example, we won’t go into these, instead in this article, we’ll talk about setting up other companies and some of the things this can do for your tax liability.

First of all – you can’t set up dozens of 401ks and contribute the maximum (currently $18,000) to each of them. The caps on defined contribution plans and deferrals are set at the personal level not the employer level. However, it may not work with the structure of your current business, but if have a stable and profitable new business with yourself as the sole employee, you could set up a pension plan for yourself and fund that. Depending on your age, you may be able to set aside considerable amount of money. Read more…

15
May

Setting Up A Corporation In New York State

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As long as your articles of incorporation meet these five requirements, and you pay the $125 filing fee, your application should be approved. Setting up a corporation is the easy part though — now that you have a small business of your own, you may need small business financial advice to avoid the pitfalls many inexperienced business owners face. Read more…