1031 Tax-Deferred Exchanges

Investing for Dummies: Investing in San Diego Income property

Paying Capital Gains Tax on the sale of your San Diego income property could defeat the purpose of your investment strategy. If you have to give back the profit to Uncle Sam, consider this:

You can defer the entire gain by purchasing a property (or entity used for business) of equal or greater value ~within a specific time frame and adhering to specific rules~. That’s right! The I.R.S. says go ahead, sell your income property and if you do this within the guidelines we have stipulated “you don’t have to pay us a dime”. Well, you may be thinking “What if I don’t want to be a Landlord anymore, I have other areas of my life that keep me busy? I’m sick of all the headaches. If I sell my income property, then what?”

Here are some “1031 Tax-Deferred Exchange”  ideas :

Purchase a condo for your child to live in while they go to college.

Buy a future retirement home in an area of your choice (U.S. only) and rent it out until you are ready to retire.

Buy into a TIC investment.

Downsize your life to a multi unit dwelling,live in one apt. and you will be able to defer a percentage of the gain.

Buy a Farm

Buy a vacation condo/house you use less than 2 weeks/year. (this does not include a time share).

Purchase raw land.

Purchase a Corporate Jet used for your business.

There are many more legal ways to reinvest the gain from your income property using a 1031 Tax-Deferred Exchange.

Disclaimer: Always consult with your CPA before undertaking a 1031 Tax-Deferred Exchange or other tax strategies.



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What’s Property Damage?

What’s Damage?

Messy junk in  junkyard.I’ve been asked by my clients who act as their own property manager, what is considered damage after Tenant moves out? The laws in every state differ, so I am not addressing CA laws specifically.

 When a tenant moves into a dwelling, there’s a Move-In Checklist that is given to them. I allow 7 days, giving the tenant some time to settle in. I explain this is simply a “statement of condition”, not a “request for repairs”. BIG difference.

 If the owner would like to take photos, that’s fine. But unless you have a commercial grade camera with zoom lens, dirt on the carpet or wear and tear on the floor is not going to be visible. My advice: get the place in great shape, maximizing your ability to attract quality tenants and insuring your property value stays high.

 Wear and tear: this is something you can’t expect your tenant to pay for. If you have a 10 year old carpet and tenant leaves a small stain that is barely visible, forget it. If the carpet was brand new and  the cat urinated on it, you can have them pay for the entire carpet replacement. If you have screens that were torn by cat (and I have yet to see any catAngry cat not participate in this creative past time)or blinds that were bent by a curious child, then that is damage. They need to pay for replacement, but I’d be very lenient with the cost, since kids and cats act like….well, kids and cats. I delineate between “malicious” damage and accidental or “wear and tear” damage.

 Carpet cleaning is a sticking point since my personal feeling is if the carpets were cleaned before move-in, than tenant’s dirt is on the carpet, and they need to pay to remove it. This is a gray area, since it’s believed to be “wear and tear” but I always deduct for this.

Handsome man painting wall.Repainting is just a fact of life when you own property, but do you expect a freshly painted unit to be filthy after a 6 month lease? Absolutely not, and that is not normal “wear and tear”. After 2 years, I sometimes only wash walls with TSP and touch-up scuffs, but that’s after a really good tenant.

 Lightbulbs: Yes, this has been an issue, since I have properties with recessed lighting and bulbs can cost $6.00/each. Should tenant replace burned out bulbs after move out? Absolutely, or they get the cost deducted from their security deposit.

Being fair is the name of the game….there are just some things that as owners, we have to write off as business expenses. And inappropriate security deposit deductions will many times land you in court.

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Investing In Real Estate: 4 “No-Brainers” No Book Will Ever Tell You

First Time Investor: 4 “No-Brainers” No Book Will Ever Tell You


Now is a great time to purchase a Real Estate investment in San Diego, CA. Prices are fair, rates are reasonable and inventory is high. If this is your very first investment and you are still on the fence, I would like to share with you some sage advice.

Suppose you found a great house or condo, price was right and with a bit of work the numbers could work. What else should you consider?


Start Small

There is nothing wrong with starting with a $150K condo or less. And you can still call yourself an investor. This way you “cut your teeth” on a small project and learn the ropes. You do not have to worry about the roof, landscaping or flooding–your HOA takes care of that.Your success will allow you to move forward to the next purchase. One BR units are easy to qualify for and there’s a lot to choose from.

Would You Live There?

If you don’t think the place is in a pleasant environment and up to your standards, don’t buy it. Being close to a park, good access to a major freeway and curb appeal are all things that add up. Chances are your tenants will feel the same way that you do. If you wouldn’t ever consider living there, don’t buy it.

Bread and Butter Units

When money gets tight, $2000/month condos are sitting empty. But reasonably priced houses, condos and duplexes are filled up all the time. Forego the “smoke and mirrors” and recession-proof your investment. Well located units commanding $800-$1300 month rents in San Diego, CA that cover costs are your best bet.


Near a Hospital, University or Major Freeway: Think Urban

Location couldn’t be more important in an investment property–you maximize your monthly rental income from tenants who want to live in a convenient location. Universities and hospitals notoriously require convenient well priced units, and you have a constant stream of tenants. Rural property can be a good investment but for the new investor, think urban. 


If you need advice, I offer a FREE consultation!



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Rentals-So Easy Even A Caveman Can Do them-WRONG!

Finding tenants is so easy—all you do is run an ad on Craigslist, answer the e-mail, show the home and BAM—you got a tenant!

 I wish it were that easy!

 For the uninformed owner, finding tenants, getting all the right documentation together, and managing the property seem like a “no-brainer”. I’ll tell you a little secret: it’s not.

The landlord tenant relationship is adversarial at best, so knowing this from the start alleviates making some very dumb decisions.

 Example #1

 Henry owns a home. He works a day job and decides he’d like to “save some money” by finding his own tenant. He runs an ad, finds a tenant, signs a 6 month lease and thinks he has done his job. 3 months later, the place is trashed, and rent hasn’t been paid. Henry thought she was so nice, so didn’t get a security deposit, or even a credit report (where he would have found out she had a previous eviction). When on month 2 the rent was 2 weeks late, the “tenant told him she would pay.” 3 weeks went by, no rent. Henry called the tenant (NEVER beg for rent) and she gave him a “sob story”. He finally called his Attorney and $3000 later, got her out.

 Example #2

Annette owned a lovely large, sprawling home. She wanted to take a year sabbatical and find tenants to rent her home. She ran an ad and found a nice couple, agreed upon a rental amount and drew up “her own lease”. The tenants said they “loved to garden” so Annette left the landscaping and watering up to them. BIG mistake! Upon Annette’s return, the landscaping was overgrown, or dead, poorly maintained and not watered for months (water was too expensive). Since this was a gray area in her “homemade” lease, she could not hold tenants responsible.

Paying property management to maintain your property is worth every cent. The above scenarios would never have happened if I managed the property. I LOVE single family homes. Call me for a FREE consultation.


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Things To Give Up After 50—-OH, Really??

—–Things to give up after 50—Oh Really?

 Yes folks, I am over 50——hard to believe, with the spring still in my step and the “don’t trust anyone over 30” attitude, Woodstock just a memory (from my older sister of course). A recent edition of the AARP Bulletin had this to say in the following Ridiculist.

Words To Ax: Whatever (ok — whatever) Sick! (really?) Smashed (overserved or hammered…hmmm I think smashed still works well in some situations) Hot (except when referring to flashes?) Kick it (nope, can’t lose this one, I still like to kick it with some old pals.)

 What Not To Wear: Miniskirts, low-rise pants, super tight skinny jeansT-shirts that say “sexy grandma”, purses with dogs, gold chains. (oh jeez, I got to rethink my entire wardrobe?)long hair past your shoulders (mohawk time), piercings and tatoos (aw come on– that’s no fun)

 Things Never To Do Again: Jell-o shots, Karaoke after Jell-o shots (darn–got to change my plans on Friday night), Drinking champagne from your son’s girlfriend’s shoe (I don’t have a son—phew)

 Anybody have anything to add to this Ridiculist?


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Why People (even Realtors) Need to Travel more:

I have made international travel a part of my life since I was 19. It started  with “Spring Break” (not the ~girls gone wild kind~ …oh…ok it was) in Bermuda. As the plane left the airport on our return to Boston, I looked out the window and saw the turquoise waters, in differing hues fade slowly from sight as we ascended into the clouds. My thoughts were: travel is going to be a huge part of my life forever.

A 6 month backpacking trip to Europe, Greece and Israel in my early 20’s followed, with trips over the years back to Europe, the Caribbean, the Middle East and North Africa. I just returned from 2 weeks in China.

What does it say about the Swiss, whose streets you could eat lunch off of, or the Chinese
who think traffic signals are merely “suggestions”  but  where it is illegal to own guns and there is virtually no violent crime? Or the Italian culture where mom, dad, kids, grandparents and great grandparents are together on week-ends sharing a meal? Or a poor Berber in Morocco who would welcome a stranger into his home with open arms and offer them mint tea when they had little else?


I loved every place I have been, because I took my cultural “eyes” and left them at home. I “saw” people through different lenses.  

I will make a confession: I don’t like sightseeing. You may be shocked to hear this. “Than why in the heck do you travel”? you may be thinking.

I travel because it makes me a happier, more grounded individual. I return from a trip with an appreciation of what freedom means, especially to a woman. I travel to witness a culture completely different than mine with language and food I may know nothing about. I observe the differences in shops, café’s and traffic and get insight into the psyche of a culture. I am more empathetic, content and open-minded. I can be friends (or feel comfortable with clients) who have diverse backgrounds and who think differently. I appreciate my country in a more profound way and try not to “knit-pick” our political process and legal system.

So next time you are thinking of going to a Therapist, save the money for a trip to a foreign country. You might just get a whole lot more out of it. 





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10 Pointers for the NEWBIE Landlord

Maybe you already own income property, or perhaps you are thinking of buying an investment for your retirement portfolio. Did you know the number one reason income properties do not succeed is due to poor management?

That’s right! So why not learn to “self-manage” and reap the rewards of extra cash flow and peace of mind. It really is not that difficult or time consuming. I wish I had someone tell me the following things before I became a Landlord 25+ years ago.

1.Treat your tenants fairly. They are paying your mortgage and it is because of them you are going to have a successful investment.

2.Never ask for rent. Everyone knows their rent is due on the first of the month, and asking for it just sets up a “Landlord as Beggar” scenario.

3.Always do credit checks. You never know who is hiding an eviction or worse.

4.Don’t micromanage your property. Or if you do, don’t make it obvious. No one wants to see a “nosey” landlord on a daily basis. It makes for animosity and distrust.

5.Accepting late rent even once without a late fee just because you are a nice guy sets up a bad precedent. After 2 late rents, I have it in my lease the tenant will be given a 30 day notice to leave.

6.Accepting dogs can be a disastrous decision. Not only can some dogs be noisy and bite, but some Insurance Companies do not allow some breeds and will not pay for a claim if there is an incident. You cannot imagine the problems many Landlords have from dogs. It’s just not worth it.

7.Be “friendly” with your tenants but never “friends”.

8.ALWAYS have tenant fill out a “Move-in Checklist”. This is the single best protection for you in case you have to go to court. Take photos if necessary.

9.Empower your tenants by allowing them to make some decisions. For example, I do not assign parking spots in one of my 4 plexes, I let them figure out amongst themselves who parks where.

10.Cats may not be your favorite animal, but 75% of the renting population has a feline. A cat cannot bite neighbors, is quiet and doesn’t chew wood work. An extra pet deposit can be taken on top of the security deposit.







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Tips On Management:Guidlines To Follow When Rent Is Not Paid


  1. If you are in this business for respect, get out asap. Tenants don’t pay rent out of 
  2. respect, they pay to avoid the pain of late fees or eviction.
  3. No pain, no gain! Just like kids tenants won’t do what you want until there is some kind of pain to avoid or eliminate.
  4. Tenants lie and landlords tend to be gullible. We WANT to believe in people.
  5. If they didn’t pay because they don’t have the money, you can’t get blood from a turnip. No amount of letters, talk or threats will make a bit of difference. If they can’t pay, they need to go.
  6. Stick with the system. Rent, late fees, eviction. Both your life and the tenant’s life will have less stress. Don’t reinvent the wheel for every resident excuse. We ADAPT the
    system to unusual circumstances, but the system stays in place.
  7. Stay in control. The landlord is in charge, NOT the tenant. Losing this control will cost you big time in aggravation and legal fees.
  8. Don’t micromanage your property—-or don’t make it obvious .Seeing your landlord on a daily basis will only cause resentment and anger. NEVER rent to people you don’t trust.
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Tiny Houses, Shipping Containers, under $100K?

read on…


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Tips for the Tenant: How to stand out from the crowd…

I have some advice for anyone interested in      renting a home with less then stellar credit in a very tight rental market in San Diego. Don’t get discouraged and automatically think the agent/owner will reject you if there are alot of prospects. Smile, be sincere, be yourself AND:

1. Be punctual. When I think of tardiness I think LATE(rent).

2. Be honest. Explain to the agent (or owner) that you have had a past bankruptcy, credit issue etc. and bring proof of it. One of my best tenants brought a “discharged” bankruptcy form with her when she came to see the home I had for rent. She explained she did some dumb things when she was younger. I rented the home to her and she was never late with the rent and it was immaculate when she left. She turned out to be one of my best tenants in the San Diego rental market.

3. Bring a copy of your credit report, phone #’s of your employer, copy of your driver’s license etc. ANYTHING that will make filling out the application easier. Blank spaces left on applications, and even illegible applications have been tossed by me, when I have 10 other prospects. It shows lack of respect or fear of disclosure.

4. Be polite and non-confrontational! Leave your bad attitude at home.No owner wants to deal with a disgruntled tenant from day #1. What will the tenancy be like in 3 months?

5. Wear clean clothing. Casual is fine but neatness is important. The owner will assume if you show up in tattered clothing, that is the way the apt. will look when you live there.

6. Watch your language. Profanity is not acceptable and most owners will be turned off.

7. Don’t be afraid to follow up if you have not heard from the owner. Expressing your enthusiasm about a house in the San Diego rental market always helps:(“we have always wanted a pool and this is one of the loveliest I have seen” or “I love the kitchen, we enjoy cooking”). I like to choose tenants who LOVE the property. Passion is contagious.

8. Don’t badmouth your present landlord. The San Diego rental market is a tight community and word gets around.

9. Don’t leave your checkbook at home. The one with the check for the application fee or first month’s rent is always seen as a more serious tenant.

Remember, you are going on an “interview” and first impressions are lasting. Put your best foot forward and I bet you  that home you want in the San Diego rental market will be yours.

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