Should You Buy, Sell, or Exchange Up?
Below you’ll find two quotes extracted from a white paper for brokers and agents with Coldwell Banker Commercial entitled “The Evolution of the Commercial Real Estate Industry – How Key Changes Throughout the 20th Century Created the Industry We Know Today.” In these quotes is, for all intents and purposes, the answer to the question of whether you should buy, sell or exchange up.
1. Studies show that development opportunities today may be greater than any time since the end of WWII. Looking ahead as the nation’s population grows to approximately 400 million people in 2050, there will be ample development opportunities in the years ahead. By 2030 alone, the nation will need to provide 50% more commercial, residential and industrial space!
2. The home-based workforce has grown 23% over the past decade according to the U.S. census and this trend will likely have a sizeable impact on future development patterns. Clearly the “extra room” critical for such businesses tends to be found in suburban and opposed to urban settings.
We are clearly living in exciting times where you can decide to be rich or poor … there will be little middle ground.
Despite all of the Wall Street blather about a housing bubble, the market in the southern part of the United States is moving ahead at a 3-6% annual increase (10% down on a $265,000 is a $26,500 investment that returns 30-60% on down payment and gives you shelter and tax advantages). These numbers work for all price ranges of income property.
So, the answer to the question posed by the title of this article is:
a. Buy and get into the deal stream now.
b. If you sell a property you should exchange up for tax deferred growth.
At REMS, Inc., we have many clients that follow the formula. Buy it, fix it up, refinance, refinance exchange, exchange, exchange and put in trust, and die rich!
Now, in the Phoenix metro area you have the opportunities to make your financial dreams come true. For further questions and answers related to this or any other subject, please contact Tom Loegering Sr. @ Ask the CPM or tomsr@vel.net.
