Are appraisals usually below the actual home value?

Question: “I want to know what my home is worth. I had it appraised for $1,200,000 in June. Aren’t appraisers usually conservative?” Answer: One of the longest-running myths in the history of real estate is that appraisals are usually conservative, meaning below the actual value. I can tell you from repeated personal experience that, on
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The problems of owning an investment property with a partner

Question: “What do you think about investing with a partner?” Answer: It can be a great idea to help you invest in something you otherwise couldn’t. And at the same time, while most partnerships go just fine, I’ve also heard many stories of problems. For example: One party doesn’t fulfill their end of the bargain,
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How can I buy a rental property in San Diego for 20% under market value?

Question: “I’d like to get a good deal on a rental property, like 20% under market. What do you recommend?” Answer: I recommend changing your goal! Having invested in real estate for 35 years, how many properties do you think I’ve bought 20% or more under market value? ZERO. I’m not saying it never happens.
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Are tax-deferred 1031 exchanges difficult and complicated?

Question: “Hi Gary. I’d like to sell our rental condo and buy another property. I’ve heard about tax deferred 1031 exchanges, but they sound difficult and complicated. What do you think?” Answer: You’re right, they sound difficult and complicated. But the good news is that they’re easy and simple! Here are the most common fears
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Can I use tax-deferred exchanges on fix and flip properties?

Question: “I’m going to get into house flipping and do tax-deferred exchanges to roll my gains into the next flip and avoid paying taxes. My tax person said that will work…” Answer: I always defer to tax professionals…except when they’re DEAD WRONG! The IRS says that a property must be “held for investment or used
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What is the minimum down payment for an investment property?

Question: “I’m thinking of buying my first investment property. How much will I need to put down?” Answer: Almost certainly 20% or more. Anything below 20% down is virtually unheard of.
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Do I need a property manager?

Question: “I plan to buy an investment property and am curious, do you recommend hiring a manager or doing it yourself?” Answer: Great question. And like many, it depends… Do you have the time to manage the property?You can go for long stretches where all you do is collect rent. But then you can have
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How do 1031 exchanges work?

Question: “Hi Gary. My wife and I want to sell our rental condo in Mission Valley and buy a triplex or fourplex in North Park. I know I can avoid taxes by doing a 1031 exchange, but I don’t know how they work. Can you enlighten me? “ Answer: Happy to… There are 3 common
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What’s a capitalization rate?

Question: “What’s a cap rate?” Answer: Cap rate is short for “capitalization rate.” Cap rate is the rate an investment property earns money, as a percentage of the value of the property. It’s similar to an interest rate on a CD. And it’s also your % return if you buy the property for cash. You
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Do you pay taxes on a 1031 exchange?

Question: “I’m going to be selling my rental and buying another using a 1031 exchange. A realtor told me that because it’s not my home, the state of California will withhold money from the sale for taxes. Is that correct?” Answer: That agent gave you some incorrect advice. The state will require a 3 1/3%
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