Building Your Assets, March 2008

Right now is truly a great time to buy. Smart investors take advantage of market conditions and market cycles. At this point, there are multiple factors in place that make it the ideal time to purchase real estate. What are they?

After the huge gains and massive amount of new construction for years, especially in the residential market, the growth needed to slow down to keep pace with demand. Now that the market has slowed down, subcontractors are looking to stay busy, so are offering great prices. This is an opportunity for you to buy or to complete your custom construction projects at discounted prices. There is also a large supply of quality properties that also lead to good deals. Mortgage rates are very low. Long term appreciation in real estate looks solid. With all of these factors, now is a great time to buy. We are ready to assist you in this process. Contact us for details.

Noted industry leaders are saying the same:

Click here to see the article on “Law of Supply and Demand says: Buy a Home Now” in the Atlanta Journal-Constitution by David Ellis, Executive Vice President of the Greater Atlanta Homebuilder’s Association.

Click here to visit www.atlantarealestate2008.com featuring Dan Forsman, President and CEO of Prudential Georgia Realty, explaining why 2008 is the right time to buy.

Outstanding Opportunity for Construction Projects at Tremendous Value

Have you or anyone you know been thinking of building a custom home? Renovating your existing home? Finishing you basement? Building a commercial building? Renovating your office building?

There truly has not been a better opportunity for custom construction in recent history. With the combination of factors listed in the above section, this is the time to take on that project you have been thinking about.

Some of these price discounts are so attractive, they provide over $250,000 in instant equity. Should you or a friend of yours be interested in custom construction, you should not let this window of opportunity pass you by. Contact us for details.

Make Money Four Ways with Investment Real Estate

You may be familiar with making money from real estate you own when the value goes up through appreciation. This is especially true when owning your own residence since the gains are tax free when you live there for two years. Appreciation is not the only way to make money with investment real estate. What are the four ways?

In addition, to gains from appreciation, when you properly purchase investment real estate, you always make money in four ways:
1) Income from Cash Flow (rent and other income),
2) Income from Equity Build-up (paying down the mortgage)
3) Income from Depreciation (Phantom Cash Flow, or paper losses for tax savings to offset income)

4) Income from Appreciation (the value of the property increasing over time)

Click here to see more in Robert Kiyosaki’s article on Entrepreneur.com

In this article, he goes on to say, “Do you pay rent for your business’s location? Both Donald [Trump] and I own the buildings that house our companies. Maybe you should, too. As tax time approaches, entrepreneurs become more aware of how taxes affect their bottom line. You may want to consider real estate an investment opportunity to increase your business success and accelerate your wealth. If you missed out on the last real estate boom, don’t miss the next one.”

Contact us to review your acquisition criteria to see if buying investment real estate would be right for your situation.

Meet Your Investment Goal – Retail Store Example

As mentioned, real estate can help you reach your goal – whether it is building equity or cash flow. The numbers were changed in this example for simple math, but the concept is true. A real estate investor was tired of relying on the stock market and wanted to have an income stream of over $100,000 per year for retirement in 10 years. Working with her Realtor, she found the property and set-up the loan so the income will be $120,000 per year in 10 years. How?

The property was a retail building at a great location in a good area of town. There was a 15 year NNN lease on the building by Dollar General. (A NNN lease is referred to as a Triple Net lease where the tenant is paying rent plus taxes, insurance and maintenance, so the building owner is not responsible for these costs). The buyer was able to purchase the property at a price point that allowed for a 10 year loan to be placed on the property. After paying all expenses, including the mortgage, there was still a positive cash flow on the property. After the tenth year, the loan was paid off and the building was owned free and clear. Now, she owned a building that was worth over $1,000,000 and the lease was continuing and generating a cash flow of $120,000 per year. Please let us know if you are interested in purchasing a property to provide you with this type of income. We are ready to assist in the process.

Meet Your Investment Goal – Office Building Example

It is amazing how many business owners have recently shared conversations with me regarding owning their office space. Each year they had a profitable business, but in many cases, over time, the biggest gain came from owning the property where their company operated. For example a business owner went from paying rent to making $30,000 a year in rental income which will grow to over $100,000 per year, and he will have the option to sell and make nearly $2,000,000. How?

Here’s an example. Again, the numbers were changed for easy math, but the concept is true.
A business owner had been renting for years, paying about $5,000 per month in rent or $60,000 per year to the landlord. He decided it was time to buy and worked with his Realtor to identify the right property. He formed a LLC to purchase the office building for $800,000. The LLC renovated the space to increase its value and leased the space to his business and to other businesses. After all expenses and mortgage payments, the property generates a cash flow of $30,000 per year. The value of the building has increased to $1.2 million. When the 15 year loan on the property is paid off, the cash flow will be over $100,000 per year and this is extra revenue in addition to his business income. He also would have the option to sell the building that would have appreciated to an estimated $2,000,000 by this time. He could use the proceeds however he chooses, including doing a 1031 tax deferred exchange to buy another property.

Wellness tip to help you take care of your most important asset – You: Strength Training

While real estate is certainly an important asset, you only have one you, and taking care of your mind, body and soul is essential to a complete life. This section highlights a tip to help you do just that.

Want to look good – and feel even better? Strength training helps you become stronger, leaner and healthier. You will build strength, improve your muscle tone and boost your self esteem. Click here for an article on how.

Using your assets to give back to others: Operation Smile

We have a firm belief that we have been blessed in this life and feel it very important to use our assets and abilities to serve those who need it most. This section highlights an organization, cause or initiative that is doing just that.

A person very dear to us passed away last year after devoting much of her professional life to Operation Smile. As a nurse with this fabulous organization that “changes lives one smile at a time,” she traveled to Brazil, Kenya, China, Russia, and other corners of the world as part of a team of doctors and nurses who surgically repair facial deformities on children and thus restore their smiles. The before and after pictures that she shared with us from her travels are truly inspiring and provide a very real example of how people can share their love and their talents to make such a dramatic difference in the lives of others throughout the world.

For more information or to donate, you can visit their website at www.operationsmile.org

Should you choose to donate to this worthwhile organization in honor of the nurse very dear to us, you can give in memory of Elsie Mae Tercha, Philadelphia, Pennsylvania volunteer nurse.

Operation Smile was one of the recipients of a 2007 donation from our foundation, The Light the Future Foundation.

We stand ready to assist you

For all of your custom construction and commercial and investment real estate needs, we stand ready to help you in meeting your goals.

A portion of every dollar earned in commissions is donated to the Light the Future Foundation to help those who need it most.

Wise Words – A quote to inspire

This issue is filled with reasons why the time to act is now and includes success stories showing how buying real estate can help you reach your goals. Now all you have to do is make it happen. We believe that everyone has what is needed to be successful in life – it already lies inside of each person. Therefore the perfect quote for this issue’s “Wise Words” is a quote from a letter that my grandfather wrote to me before he passed away…

“I will tell you that God should be a major part in your life, and you should ask His help in handling your life with a good and happy heart to help you know the direction you wish to go and to help you achieve your goals… Use your many excellent qualities to help make your country and the world become a better place for all… You have everything you need to be successful. Just put yourself in God’s hands and make it happen.”

Patrick O’Donnell

Direct: (404) 824-5542

J. Patrick O’Donnell, Inc.

Office: (770) 449-5798

patrick@odonnellhomes.com

www.odonnellhomes.com

Prudential Georgia Realty

Office: (770) 393-3200

podonnell@prudentialgeorgia.com

www.GaREinvesting.com

Disclaimer: With any investment, risk is involved, and it is always advisable to check with your legal and tax professional before making investment decisions. This communication, including any attachments, is not intended or written to be used for the purpose of providing tax or legal advice. Prudential Real Estate brokerage services are offered through the independently owned and operated network of broker member franchisees of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Prudential is a registered service mark of The Prudential Insurance Company of America and is used herein under license. Equal Housing Opportunity. If your property is currently listed with a real estate broker, please disregard this offer, it is not our intention to solicit offerings of other real estate brokers. We cooperate with them fully.