{"id":1015,"date":"2007-02-09T12:06:38","date_gmt":"2007-02-09T19:06:38","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=1015"},"modified":"2007-02-09T12:06:38","modified_gmt":"2007-02-09T19:06:38","slug":"small-but-helpful-tip-practical-use-of-after-tax-analysis","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1015\/small-but-helpful-tip-practical-use-of-after-tax-analysis\/","title":{"rendered":"Small But Helpful Tip — Practical Use Of After-Tax Analysis"},"content":{"rendered":"

You’re a married couple in your mid-30’s living in your first home, bought five years ago. You’ve discussed your future, especially as it relates to retirement, and agree that real estate provides a much more predictable potential for capital growth. You have about $20K in your company retirement plans combined. Your cash savings amount to about $8K, held as a cushion and for peace of mind. You realize you have enough home equity to pull enough cash out to begin your real estate investment portfolio. However, you’re not sure about much else. You decide buying a small duplex in your area makes the most sense because they seem to be priced about the same as your home, which is now worth about $300K or so. You contact your buddy Fred who sold you your home way back. He asks what you want to buy and where. Before you know it Fred has half a dozen duplexes ready for your inspection.<\/p>\n

\"mens<\/p>\n

This approach should raise a giant red flag, as you’ve now been designated by your buddy Fred, as knowledgeable investors. If that doesn’t scare you, you’re truly fearless. \ud83d\ude42 You have stumbled upon what I call the Nordstrom’s Shoe Salesman Syndrome, or NSSS<\/em>. Of course, Nordstrom’s approach is wildly successful as perceived by its very loyal customers — as far as selling shoes is concerned. They don’t sell income properties. I’ve discussed this before<\/a>.<\/p>\n

Your ‘analysis’ of these properties will be superficial at best because you’re looking at money in, money out, and your budget. Nothing wrong with that, as far as it goes. But as a first time investor you should also understand just how important after-tax analysis is<\/em>. It can go straight to your weekly paycheck if you understand how it works.<\/p>\n

If you guys are in the federal tax bracket of 25% and state bracket of 5%, every dollar ‘lost’ through the use of depreciation will act as a producer of positive cash flow. “What?” you ask.<\/p>\n

If you purchase one of those duplexes for say, $300K you’ll be able to show depreciation of roughly $12K which will include both the Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

You’re a married couple in your mid-30’s living in your first home, bought five years ago. You’ve discussed your future, especially as it relates to retirement, and agree that real estate provides a much more predictable potential for capital growth. You have about $20K in your company retirement plans combined. Your cash savings amount to […]<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,5],"tags":[],"class_list":{"0":"post-1015","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-investment","7":"category-real-estate","9":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1104,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1104\/retire-retire-early-retire-wealthy-unthinkable\/","url_meta":{"origin":1015,"position":0},"title":"Retire? Retire early? Retire wealthy? Unthinkable!","author":"Greg Swann","date":"March 2, 2007","format":false,"excerpt":"Who wants to think about retirement? I really love to work, and it seems probable that I will continue to churn away until the hardware fails. But I know that at some point I want to stop having to worry about money. I want to write books and explore ruins\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10681,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10681\/real-estate-investing-for-retirement-2-schools-of-thought\/","url_meta":{"origin":1015,"position":1},"title":"Real Estate Investing For Retirement – 2 Schools of Thought","author":"Jeff Brown","date":"December 22, 2009","format":false,"excerpt":"There surely are more than just a couple schools of thought when it comes to using real estate as a vehicle to get them to an abundant retirement. The two that almost always garner most of the attention are Buy & Hold for cash flow from Day 1, and Capital\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1376,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1376\/real-estate-investing-for-retirement-the-human-factor\/","url_meta":{"origin":1015,"position":2},"title":"Real Estate Investing For Retirement — The Human Factor","author":"Jeff Brown","date":"May 2, 2007","format":false,"excerpt":"In the real estate investment side of the biz, everyone wants to talk endlessly about where to invest, how to invest, the best way to analyze the various investment factors, what needs analysis, and the rest. However, the most common factor left out of the process is the human factor.\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1591,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1591\/jeff-brown-hits-the-big-time-copyblogger-praises-brown-and-browns-give-to-get-white-paper-strategy\/","url_meta":{"origin":1015,"position":3},"title":"Jeff Brown hits the big time: Copyblogger praises Brown and Brown’s give-to-get white-paper strategy","author":"Greg Swann","date":"June 27, 2007","format":false,"excerpt":"From Brian Clark's Copyblogger.com, guest contributer Mike Stelzner writes:Mistake #2: On the flip side, how often do you see a white paper that is instantly displayed with the click of a link? While this provides immediate access to a reader, it fails to capture any information or make it easy\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":602,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/602\/ask-the-broker-who-is-responsible-for-the-mortgage\/","url_meta":{"origin":1015,"position":4},"title":"Ask the Broker: Who is responsible for the mortgage . . . ?","author":"Greg Swann","date":"November 4, 2006","format":false,"excerpt":"Holy smokes! I get questions for appraisers, for inspectors, for real estate attorneys, for everyone involved in a real estate transaction except the ding-dong Realtor. Here comes a question for mortgage lenders, who are entreated to chime in with better answers:Generally speaking, are homeowners personally liable for their mortgage? If\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":645,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/645\/home-buyer-always-liable-for-mortgage\/","url_meta":{"origin":1015,"position":5},"title":"Home buyer always liable for mortgage . . .","author":"Greg Swann","date":"November 17, 2006","format":false,"excerpt":"This is my column from today's Arizona Republic (permanent link). No fireworks, today, just real estate. Home buyer always liable for mortgage I got a great question by e-mail. It's really a lender question, but it introduces a number of interesting topics. \"Are homeowners personally liable for their mortgages? If\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1015","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=1015"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1015\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=1015"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=1015"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=1015"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}