Saturday, November 24, 2007

GO-Zone?! What's is that?

As a Realtor in the Biloxi and Ocean Springs area's of the Gulf Coast, I've heard the term "GO-Zone" thrown around A LOT!! I never really paid too much attention to it because it seemed that everyone who was talking about it was doing commercial real estate and represented investors. NOW... that's me. So I had to do throw on the old pack, lace up the boots, hit the ground running and do a little recon. Like all good intel, it's useless if it isn't shared with those who need it, so here's what I have learned about the GO-Zone (also known as the Gulf Opportunity Zone).
Well first I can now say I see why Real Estate Investors love this opportunity, man can you make some serious dollar bills with this. The GO-Zone was created to help revitalize the areas affected by Hurricane's Katrina, Rita, and Wilma. The map to the left shows the areas in Mississippi that are GO-Zone areas. The key thing with the GO-Zone is it allows you to accelerate your depreciation of your investment assets. Where as before you have always had to write depreciation off over a 26.5 yr period, now you can take a 50% depreciation the very 1st year. In order to do this you must be a "real estate professional." If you want help with that term feel free to email me.
Here's the thing though, your asset must be "in-service" during that year, not just being built or land just purchased or whatever. Also, you can only take the 50% deduction on the "improvements" not the land, or if you bought an already existing property, you can only take the 50% deduction on the amount of the rehab cost.
Another great thing is this, usually depreciation is added in as income and is therefore taxable, GO-Zone deduction is not. It allows you to lower your income, thereby reducing your tax liability, every investor loves that don't they.
Please keep in mind I am NOT a tax professional and this is merely an overview of this program as I understand it, if you are looking to buy a property I would suggest you do the proper research to ensure it's eligibility (which I will gladly help you with) and also the tax benefits associated with it. And finally I'll leave you with this, as a Real Estate Investor, I wouldn't use the tax incentive to be the determining factor in my purchase choice, if the deal doesn't make sense without the GO-Zone incentive, don't do it. The GO-Zone tax incentive should just be a little extra icing on the cake, sorta like... when you buy a new car and they throw in floor mats for free.

Friday, November 23, 2007

Sergeant Real Estate goes Commercial.

Well I've done it!! I've entered the shark infested world of commercial real estate. Lucky for me, and all of my current and future clients, I've teamed up with one of the TOP PRODUCING COMMERCIAL REALTORS on the entire Gulf Coast. (Yes he has the awards to proof it)

So what does this mean? It means that I am learning about all kinds of new and exciting things such as GO-Zone, Investor principles, and project planning just to name a few. I will be sharing information on these items as the days pass.

What does this NOT mean? This does not mean that I have turned my back to my military families or anyone looking to buy and sell homes. I still LOVE to do that and will continue to do so for a long time.

I'll stay in touch, so don't be a stranger.