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Blog :: 2011

New Map Based Search - Interactive with GPS!

We are excited about the launch of our new interactive Map Based Search on our website!  The map feature can also be used on your cell phone.
  • Shows you homes near you in one click from your phone
  • Allows you to draw the area you want to search on the map
  • Updates results and shows local points of interest as the search is adjusted
  • Helps you narrow your search based on any MLS criteria
From our Website: www.LipVT.com click on the Interactive Map Search Headline below the title bar on the right had side. Once the MAP page is up you can scroll around,  zoom in or out on the map to change your search area as well draw shapes for specific streets or parts of town.  Want to narrow your search even more? On the right hand side above the pictures of the properties you can narrow your search by price, newest listings, or number of bedrooms. You can also display your results by price,  newest to oldest  and MLS number.  If you click on Advanced Search you can narrow your search even more. Want to just show Multi Family listings? On the Advanced Search just click Multi Family to only search the Multi Family properties in the location of your choice! Play around with the Map search and let us know what you think. Feel free to pass this link to the Interactive Map along to your friends. Thanks, Steve & Luke

Does Your Investment Property Still Measure Up?

The purpose of this blog is to help Investors evaluate the current benefits of owning their Investment Properties, and to help you decide if its time to roll your current equity into a bigger (and better) property. When you first bought your Investment Property you probably made a great investment. But have you owned it too long? Depending on how long youve held your property, it might not be a good investment anymore. I didnt say not a good property; I said not a good investment. Read on to find a simple way to determine if your property is still measuring up. You may be in for a surprise! First, lets quickly review the four financial benefits of owning investment real estate: 1.            CASH FLOW: After you pay all expenses and loan payments, cash flow is the money left over. 2.            PRINCIPAL REDUCTION: The loan is paid down with money collected from tenants. 3.            INCOME TAX SAVINGS: IRS rules allow property owners to take depreciation deductions, which shelter the cash flow and principal reduction. Any leftover depreciation creates a paper loss, which, in many cases,     can be used to shelter other income such as salary from your job. 4.            APPRECIATION: Typically over time, the property increases in value. These four benefits are powerful! You earn tax-sheltered cash flow, your tenants buy you the building, you get to tell the IRS youre losing money, and all-the-while, the property goes up in value. What a country! So why am I challenging you to reconsider whether your property is still a good investment? Simple! Your return on equity is probably low and getting lower by the year! Let me show you an example. Dont get all tangled up in the numbers. Just concentrate on the big picture and how it applies to you. Return on Equity Drops from 18% to 7%! Assume you bought a rental house 16 years ago for $70,000. You invested $10,000 and borrowed the rest. Your goal is to retire in another 15 years and use the rental house to provide retirement income. (A great plan!) So, how good was your investment 16 years ago? Lets total your benefits. Assume the cash flow, principal reduction and tax savings added up to $1,800 that first year. You were earning 18 percent ($1,800 divided by $10,000) on your investment. Not bad. Plus the rental house was appreciating. Youre an investment genius! Fast-forward 16 years to the present. Lets assume the following: Your yearly cash flow has increased to $5,000 and the principal reduction is $2,000; a total of $7,000 just from the first two benefits! In addition, lets assume the net value of your rental house has appreciated over the years so its now worth $120,000 and your loan has been paid down to $40,000. However, because youve owned the property so long, the depreciation deductions (assume theyre $3,000) are no longer enough to shelter the $7,000 of cash flow and principal reduction. That leaves $4,000 of unsheltered (taxable) income. Instead of saving tax, you have to pay tax. If you're in a 35-percent bracket, (combined federal and state), you pay $1,400 tax. So, your benefits from the rental house now look like this: $5,000 cash flow, plus $2,000 principal reduction, minus $1,400 tax paid. A total of $5,600. This is all summarized on the Return on Equity Worksheet below. (The blanks in the right column are for you to use on your own property.) Its no wonder you consider yourself an investment genius if you measure the $5,600 against your original $10,000 investment: thats a 56 percent return. But thats where most people go wrong! Your Original Investment Has Nothing to Do with Todays Rate of Return! Your investment is not the amount you originally invested years ago. Youve got way more than $10,000 tied up today! Your investment is the amount you could get out of the property if you sold it today. Thats called your net equity. Over the past 16 years, your property has increased in value and your mortgage has been paid down. The current difference between the propertys net value (after selling expenses) and your mortgage balance is $80,000. In other words, if you sold the property today, you could walk away with $80,000. However, if you keep the property, in effect youre re-investing the $80,000 into the property. Now, how does your investment look? Not so good. Youre earning $5,600 in benefits on an $80,000 investment thats only 7 percent! What if I called you up and said, Ive got a great real estate investment for you. Youll earn a measly 7 percent. Youd hang up on them! Well, you already own it! If you wouldnt buy a property like that, why would you continue to own it? What if you did this instead? Use your $80,000 equity as the down payment on a different property one that produces 18 percent again? With that down payment you could probably afford a $400,000 rental property. Once youve owned that property for a few years, your equity will have grown again (and your rate of return fallen), so you repeat the process. The goal is to maintain the highest possible rate of return, which will make a huge difference in your future wealth. Youll maximize your wealth by wisely moving your equity from your current property to another as soon as your rate of return would be greater in the next property. Just for fun, take out your calculator and figure how much money youd have in 15 years if you leave the $80,000 invested at 7 percent. Then calculate what $80,000 invested at 18 percent grows to in 15 years. I could give you the answer but you might not believe me check for yourselfits gigantic! Three Ways to Move Your Equity Heres a key point. If you decide its time to move your equity, be sure to explore all your options. There are three common ways to move equity: 1.            SELL: You could sell your current property and buy another. The problem with selling is you have to pay capital gains tax. 2.            REFINANCE: You could refinance your property and use the loan proceeds to buy another property. The problem with refinancing is youre probably not able to borrow the entire $80,000 equity. 3.            EXCHANGE: The third, and best, way to move your equity is to exchange. Exchanging allows you to move your entire $80,000 net equity to another property without paying tax. Its wealth buildings most powerful tool. We discussed many of  the benefits and nuances of 1031 Like Kind Exchanges at our last Investment Seminar. (Please let me know if you would like a print out from the seminar.) So, what does this all mean? Well, if you own rental property, congratulations. Your investment brilliance shines brightly. However, the longer you own that property your glow begins to fade. The wise thing to do is re-evaluate your property every year. In essence, make the decision to re-buy the property. As soon as the rate of return on your equity could be higher in another property, its time to take action. I am happy to meet with you to help evaluate your current Return on Equity, and discuss opportunities in the current market. Just give me a call at 802-846-9575, or send me an email: steve@lipvt.com and dont forget to check out our website: www.lipvt.com The proceeding article was written by one of my mentors, Tom Lundstedt, CCIM. He's a former Major League Baseball player who has gone on to write numerous articles and has conducted some of the most entertaining seminars on

Invitation to Investment Property Owners

Join us for Part II of our Investment Series:

The Best Strategies for Facilitating a Tax Deferred Exchange (1031 Exchange) 

 What we'll cover:
  • Are Capital Gains Keeping You from Selling?
  • Create more cash flow
  • Ways to re-position, and trade up, your real estate holdings
  • How to preserve your equity
  • How property owners use 1031 Exchanges to meet real estate portfolio objectives
Patricia Flowers,Assistant Vice President for Investment Property   Exchange Services, Inc. (IPX1031) of Boston, has been facilitating IRC Section 1031 tax deferred exchange transactions for investors and their advisors since 1998.  Patty has been in the real estate industry for over 18 years. A member of various industry associations, she has been awarded the  Certified Exchange Specialist (CES®) Designation through the Federation of Exchange  Accommodators, Inc.
Additionally, she has authored a number of articles and is an accredited educational speaker, frequently lecturing throughout New  England on IRC 1031 exchange procedures and guidelines. Additional "Ask the Experts" On Hand: - Daniel Werme, Vice President of Merchants Bank to discuss the current lending climate and opportunities. - Leading Real Estate experts to discuss local market conditions. Free Seminar by Invitation Only. Monday, November 14th at The Burlington Country Club Registration starts at 5 p.m. | Seminar 5:30 - 7:30 Register Now! When Monday November 14, 2011 from 5:00 PM to 7:30 PM EST Add to my calendar

Where

Burlington Country Club 568 South Prospect Street Burlington, VT 05401 Driving Directions
Register Now!

Space is limited. RSVP by November 10th

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Bad Housing Market???

If you have been watching the news, reading the paper or listening to the radio you have probably heard nothing but bad news about the real estate market.  Fortunately Real Estate is a local business and the Burlington Area Multi Family Market remains strong. Check out the Summer 2011 Northwest Vermont Report provided by Coldwell Banker Hickok & Boardman.  This report looked at the months of May through August and broke the report down by towns, areas and segments of the market. In the multi family sector the average sale price in Chittenden County for Multi Family properties increased 17% from $267,485 in 2010 to $314,017 between May and August in 2011.  The average days on market also decreased from 97 in 2010 to 78 days in 2011. Contact Us if you are considering buying or selling or if you would like to learn more about the local market.

Benefit from the Increase in Renters!

In Freddie Mac's 2011 Economic Outlook they reported an increase in households across the country that are choosing to rent rather than own.  This article in Housing Wire talks about how the rise in rentals is positive for the Multi Family market. "In the year ending June 2011, the Census Bureau reported a net increase of 1.4 million households that moved into rental housing, a 4% rise in the number of tenant households." With this increase in households moving into rentals and the low vacancy rate in Chittenden County, now may be a great time to purchase an investment property.  While many people immediately think about Multi Family properties when they hear about rentals, single family homes and condos can also be a great investments. Contact Us today to talk about some of the advantages of owning an investment property and capitalize on the increased demand for rental housing.

3rd Quarter Multi Family Stats

Each Quarter we will try to update you on the market activity in Chittenden County for Multi Family Properties.  Below are some stats as well as Multi Family properties we have sold so far in 2011.

Current Active Listings: 58 New Listings in the Last 9 Months: 92 Sold Listings Past 9 Months: 46 Average List Price: $336,663 Average Sale Price: $318,335 Currently Pending Listings: 11 Of the 46 closed sales: two were 5 units, seven were 4 units, twelve were 3 units and 25 were duplexes. Of the 46 sales Steve Lipkin was on 14 of the sides, more than three times any other agent, either representing the purchaser or seller. If you are considering buying or selling a Burlington area Investment Property put Lipkin Investment Properties 12 plus years experience to work for you!

Enjoy the Burlington Waterfront!! Multi Family Property with Year Round Water Views!

 Weve had a great summer in Burlington with some fantastic events and festivals down on the Burlington Waterfront. Everything from the 4th of July Fireworks to the Dragon Boat Festival to the recent Concert Series including Grace Potter. We are very fortunate to have such a wonderful place to hold these events; the waterfront park is such a huge asset to Burlington.
From the boat launch & docks at Perkins Pier to waterfront drinks and dining at Breakwaters and Splash the Burlington waterfront is truly a magical spot.
 For Buyers wanting to be a short stroll to the waterfront park or downtown; with great views of the breakwater and Moran plant; look no further than our very Affordable Duplex listing at 50-52 North Ave. Live in one of the 3 bedroom apartments and collect rent from the other 3 bedroom apartment! A terrific investment with a wonderful waterfront view!
 

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Do the Numbers Work?

http://www.youtube.com/watch?v=HC0R7hA57sU

Steve Lipkin of Lipkin Investment Properties discusses some of the aspects involved in the analysis of Multi Family Properties. Whether you are considering buying a duplex or a large apartment building, one of the most common questions both first time buyers and seasoned investors ask is "Do the Numbers Work?" Steve looks into some of the questions investors need to ask when considering buying a multi family property.

Buying or Selling Multi Family Properties

Buying or selling a multi family property in today's environment poses a unique set of challenges above and beyond those of selling a single family property.  Most municipalities have requirements that investment properties meet certain codes and minimum safety standards before title can convey.  Some of the other issues we have seen come up lately include: - Appraisal Issues - Fire Safety - Building Inspections - Tenant Relations - EMP/Lead Paint Compliance Here is testimonial from one client relaying her experience while working with us to overcome some of these obstacles. http://www.youtube.com/watch?v=Zp9nR_u766A If you are considering buying or selling an investment property why not work with the team that specializes in multi family salesClick here to see what other clients have to say or search the current multi family inventory.

Year to Date Multi Family Stats

As we hit the midpoint for 2011, here are some year to date Multi Family Sales statistics for Chittenden County. Current Active Listings: 58 New Listings in the Last 6 Months: 62 Sold Listings Past 6 Months: 25 Average List Price: $354,048 Average Sale Price: $334,617 Currently Pending Listings: 9 Of the 25 closed sales: one was a 5 units, five were 4 units, nine were 3 units and ten were duplexes. Of the 25 sales Steve Lipkin was on 8 of the sides, representing the purchaser or seller. If you are considering buying or selling a Burlington area Investment Property put Lipkin Investment Properties 12 plus years experience to work for you!