Real Estate Investment Loopholes and Tips In Orange County

As a savvy investor, it is important to know about the real estate investment loopholes you can use to maximize returns. Learn more in our latest post!

Loopholes, as defined by Merriam Webster: a loophole is “an ambiguity or omission in the text through which the intent of a statute, contract, or obligation may be evaded.” Or as we are using it in this article, perfectly honest and legal ways to keep more cash in your pocket as a real estate investor. We will discuss quirks in the tax code, which will allow you to lower your overall liability. We will also talk about some tricks to finding the right properties for your needs.

1031 Exchange

To defer capital gains taxes on your property, you can choose to utilize a 1031 exchange. This allows you to sell one property and reinvest the funds while deferring the capital gains taxes. When taking advantage of a 1031 Exchange, there are a few criteria that need to be met. First off, the property must be of “like-kind.” This isn’t as binding as it sounds. You can exchange a single family home for land, an office for a multi-family dwelling and so on. The value of the new property must be equal to or more than the old property. Any extra profits not reinvested will be taxed. The new property must be identified within 45 days and the process must be completed by a qualified intermediary, who has no relation to you or interest in either property.

Deduct Business Assets

Under the new tax bill, you will now be able to take a 100% bonus depreciation on any asset (think computers or appliances for your business) that was purchased after September 27, 2017. This means you can write the item off right away as opposed to claiming depreciation on it over time. You can also deduct some vehicle expenses with certain limitations.

Real Estate Professional

If you have excess losses on your investment property, you might be able to qualify for the tax benefits available to real estate professionals. These benefits include deducting things like interest, management fees, repairs, advertising, travel, your office and casualty losses. In order to do so, you must first qualify as a real estate professional. No license is needed, rather you must spend 750 hours per year on real estate related activities and spend more time doing this than your other business activities.

Finding The Right Property

Finding the right properties take a fair amount of research. One trick many investors utilize is to simply work with other investors. When you work with another investor, you will share common goals, property standards and will be on the same page overall. Buying from an investment company such as H&M Realty Group will save you the hassle of doing all of the research on your own. We have done the financials, we know what the property brings in as well as the future potential and how to get there. This means you are able to buy without any of the guesswork.

Hire A Pro

There is no better investment than hiring the right CPA to help you meet your financial goals. They will know the ins and out of the tax bill and be able to guide you so you are able to make the right decisions. Before you make an investment decision, it is important to speak with your accountant, financial planner and lawyer to make sure you are making the best decision for your situation. The right CPA is worth their weight in gold.

Are you ready to buy or sell Orange County investment property? We can help! Send us a message or give us a call today! 949-625-4533


Broker/Realtor/Investor/Mentor (41 years experience) Specialties: Buyer's Agent, Listing Agent, Foreclosure, Short-Sale, Property Management, Landlord I'm a Full Time Real Estate Professional, house flipper and mentor to many of my clients. I am here to help you get top dollar for your home or get you the best price for a home that you are going to live in. I have over 40 years of real estate experience for you to draw on and actively list and sell over 20 homes a year. I have sold over 600+ homes in the last ten years alone. I am a very skillful negotiator and will work diligently to help you realize the best possible price when buying or selling your home. With my Exclusive Home Acquisition & Sales System, I can find the Right Home for You! I have access to homes no other Realtor will show you. I can show you how to save an average of $10,000.00 on the purchase price. We will find a home that fits your needs, in a neighborhood that suits your style. If you are selling your home then I can bring all the professionals to you. I always include professional photos in ALL my listings. I have contractors standing by to assist with those upgrades if needed. I can also quickly get you ALL CASH offers for your home if you desire. My marketing surpasses all other agents. It begins with extensive internet advertising to hundreds of websites throughout the world. I do direct mail marketing for you home and also knock on doors in your neighborhood when I am holding an open house. I hold you home open to expose it to as many buyers as possible. My Exclusive program is designed to sell your home for Top Dollar in Any market. I am an experienced flipper here in Orange County and therefore can offer you my over 40 years of real estate experience. The information is available to you at no charge! If you like what you see, please call me and setup Your Free Consultation.

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