Baby Boomers - Many Purposes of Estate Planning for Real Estate & Trust Planning
Especially for Baby Boomers - Many Purposes of Estate Planning for Real Estate & Trust Planning
As many people are getting: A) Older at a very rapid rate B) retiring or C) passing away, advance and early preparation & strategy with proper Real Estate Planning for Trusts and Estates is much needed that includes strategic formulation and implementation for decision makers - Family members, partners and investors.
Depending on ideal goal structure and timeframes: 1) Short term vs. 2) midterm vs. 3) long term, an up front and also continual, ongoing game plan that is highly focused is crucial for family members, partners and investors.
Much needed timely and professional advice is required in order to dramatically save on taxes paid if properties are:
A) Held for the long haul for optimal cash flow receipt at market rent levels (not below market lease rates or are underperforming below par as much real estate owned out there is not at market levels for owners) from income producing real property investments or
B) Immediately Sold and sale proceeds are distributed as an exit strategy.
Select Current or Retrospective Date of Value Planning Purposes:
1)Partnership or family Separation / Allocation or Buyout
2)Gift Tax or Property Tax reduction
3)Bankruptcy, Divorce or Death.
In the past, for families, historically parents were the ones who purchased or acquired many years prior or sold properties, have leased up and provided property management for buildings in the portfolio and were the key person handling affairs.
Currently, many of the trustees or inheritors of Commercial Real Estate or Industrial Property are much younger as the sons and daughters are now being passed the torch or soon will own the family property. The trend is that although many children are highly educated in college, they typically do not:
1) Have real estate property management experience and skills or
2) no longer want to own or have the future responsibility of managing family property and would prefer in disposition in order to move on with their life, using the money from the sale, many times for investment in their companies or businesses or to buy properties that have lower capitalization rates of return or are generating superior investor required rates of return due to superior location or property type.
To ensure the best combination of Internal Underwriting, Asset Monitoring & Decision Making guidance, a highly qualified team of specialists are needed:
1) Attorney or Lawyer for counsel on well worded agreements or contracts that are highly protective
2) CPA or Accountant to accurately report & advise on constantly changing tax laws and tax liability ramifications to greatly reduce taxes paid
3) Business Valuation / Financial Advisor for Appraisal of Business or Company Goodwill, FF & E’s - Furniture, Fixtures & Equipment to tie in with Real Estate Valuation Appraisal
4) Real Estate Consultant or Real Estate Appraiser to guide on maximization of receiving Fair Market Rent Lease Rates when leasing and Fair Market Sale Price when selling &
5) Real Estate Agent or Real Estate Broker to obtain the highest achievable rents for lease up in the shortest timeframe and maximum sale price when selling so there is no unnecessary downtime or extended marketing periods.
6 Major Types of Commercial Properties & Industrial Properties: A) Retail B) Office C) Medical or Healthcare D) Multi-Family Apartments of 5 units or more E) Vacant Land & F) Industrial Property.
4 Buyer Types of Properties to consider: 1) Full Owner User 2) Partial Owner User 3) Investor 4) Developer.
Conclusion: As seen above, early & continual Trust & Estate Planning for Real Estate is absolutely crucial. If an important strategic program is not utilized on a timely basis, and the right team member experts are not in place, huge amounts of taxes can be unnecessarily paid, money wasted and unneeded liabilities created. It is extremely important to know if your property is performing at par or if it is underperforming from a cash flow basis.
Are you a Real Estate Expert that would like to share your Expertise or Knowledge with everyone?
Or do you have Specific Requests or Questions for Discussion or Needed Insight for any Real Estate Services related items that you would like to see posted?
Potential Suggestions for Feedback, Comments or Subjects for Real Property:
1)Locations in Los Angeles County or locales in 5 other Southern California counties: Ventura, Orange, San Bernardino, Riverside or San Diego?
2)General Property Types: Commercial Real Property or Industrial Real Estate?
3)Specific Property Types: A) Retail B) Industrial C) Office D) Medical / Healthcare E) Multi-Family Apartments or F) Vacant Land?
Possible Topics:
4)Fair Market Rent Lease Rate or Rents Comparables or Fair Market Value Price or Sale Comparables
5)General or Specific Market Trends & Conditions
6)Lease Up Marketing Periods or Sell Out Absorption Periods
7)Vacancy Rates & Collection Loss, Operating Expenses, Capitalization Rates of Return or Investor Required Rates of Return
8)Leasing Activity, Direct or Sublease or Sales Activity, Below or Above Market Level Negative or Positive Factors related to Deferred Maintenance, Distressed Buyer or Seller Sale Motivation such as REO Foreclosure or Short Sale
9)Highest & Best Use(s), Ideal Tenant Mix
10) Net Effective Rent Occupancy Cost Analysis for Major Cost Savings
11) Internal Underwriting, Asset Monitoring & Decision Making, etc.
I can post for All to Benefit based upon wanted information related to requested Location Advice:
1) Tenants or Occupants that are National Credit, Regional or Local
2) Landlords or Owners that are Full or Partial Owner User Occupiers
3) Buyers 4) Sellers 5) Investors of Income Producing Leased Investments
6) Developers of New Construction Developments or Contractors of Redevelopment or Renovation Projects
8) Private or Hard Money Lenders or Nationwide Banks for Purchase Money Loans or Refinance or 9) Mortgage Brokers
10) What to look for in Real Estate Appraisals
11) What to look for in choosing professional and credible Real Estate Appraisers
12) What to ask when retaining Real Estate Agents or Real Estate Brokers, etc.
Decision Making for Buildings or Projects:
A) Stay at Current Location & Reset New Fair Market Rent: Lease Rates, Concessions and Terms & Renegotiate prior or existing Lease Contracts in place for Upcoming or Soon to Expire Agreements for Options and Renewals to Stay or Renew Lease at existing location
B) Relocate to a Different Location: Move to a Replacement site
3) Expansion into Additional Submarkets: Open Other Multiple Locations for units or office suites