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REAL ESTATE Go Zone Investing

Runum

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Just a tip to my fellow fast laners... If you are looking to invest in RE, you may want to check out investing in the GoZone(Katrina recovery zone). There are some great federal tax breaks and some great investment opportunities. Most of the tax breaks end at the end of this year though. Also, please do your due diligence. Good luck.:cheers:

Greg
 

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hakrjak

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I went to:
http://www.gozoneguide.com/

But it looks like most of the incentives ended in 2007. I didn't see anything that knocked my socks off and made me want to relocate my flipping business down there for a year or anything, but if I had already lived in the area -- I would have been taking advantage for sure.:smx7:

- Hakrjak
 
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Runum

Runum

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Thanks for posting hakrjak. I disagree about the tax incentives expiring. You get 50% depreication the first year until the end of 08. Here's the link.

http://www.gozoneguide.com/story_4.html

You also get an extension to carry back net operating loss back on your taxes for 5 years and forward for 2 years.
 

Edge

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I definately see how the depreciation can reduce the risk, especially with a preconstruction type investment, but I can't convince myself of the demand.

It's been almost 2 years since I attended the first "invest in Biloxi" presentation, but it still seems to me that the only people buying are speculators taking advantage of the depreciation.

I keep hearing about how it is the next Las Vegas, but how much development can really come to the area in the next few years because of a couple casinos being built? A lot of what I have seen lately is priced like it is already Las Vegas rather than an emerging market.

If anyone is actively investing in the area, please tell me why i'm wrong, but how are you going to fill all of these 750k condos? I may have to hop in my car and drive down there to check it out for myself.
 
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Runum

Runum

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Edge, the more I investigate this the more I agree. When i first heard about it I was really stoked. After reading further it does appear to be spec. My concern is where will it be in 2-5 years after the incentives have run their course. Everyone will be dumping their property on the market for sale. I do have one more area that sounds promising that I want to check in to. If it pans out I will relay what I know.

Greg
 

andviv

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Yes, I posted a thread about this many months ago.

Same reasoning for me. A half a million condo that may miss the date (what if the delays in construction make the thing be put in service after the end of the year? they couldn't guarantee anything about it) so your depreciation will go out the window. Also, rents can't cover a third of the mortgage. And then thousand of people trying to sell at the same time, triggering another downtown-Miami effect.

I decided to pass on this one.
 

venom

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Yall are not reading into this fully
Not all areas are expiring at the end of the yr.
Some expire in 2010
The companies I look at are giving deals and will pay the rent if not rented for the first 2 yrs.
Being able to write off all that depreciation at once has to be worth something.....:)

I was thinking about doing this with 1031 monies if that property sold.
 

andviv

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Wel, the project I was looking at (Algiers Crossing) offered the same things, but still was not convincing for me. Which one you looking at?
 

Edge

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The companies I look at are giving deals and will pay the rent if not rented for the first 2 yrs.
Lots of companies were making these types of deals, especially in the preconstruction arena, and especially in Florida over the past few years. The problem is when these companies turn their lights off and quit answering their phones they quit paying your rent.

I’d love to convince myself that these numbers make sense because I’d like to have some props in “the next Las Vegas†that I could go kick the tires on during these cold mid-western months. I haven’t completely talked myself out of the area yet. I just think a lot of people could end up being upside down in negative cash flow situations because they got excited about Federal tax breaks and builder incentives that artificially pumped up the bag before the lights went out.
 

Cmbilt

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I was asked to post a reply to this thread because I have a condo high rise on the beach next to the casinos. My partner and I am splitting it up into fractional ownership.

I could show you a hundred articles and professional money managers or real estate experts who say Biloxi is going to be the next "Vegas." But I wont waste your time on that. We bought our condo pre-construction, as we do almost all our real estate investments. The tax breaks are not what drove us to Biloxi, rather the potential of the city itself. Theres Vegas in the West, Atlantic City up North, and Biloxi in the South. Legit casinos, Atlantic City and Vegas, have strips. What people want to see is lights, camera, action, so to say. Biloxi is in the midst of building their strip(Before Katrina all the casinos were on the ocean, and this is no longer allowed). Follow the money. Follow the money. Follow the money. They are also required for all new buildings to withstand Katrina like winds and storms of this nature, but there are insurance protections included in most buildings. I believe there are already 4 or 5 Casinos there on the strip, and they are in the middle of building 5 more. Americans like to gamble(One reason I wanted a place in Biloxi is to cut down on the airfare to Vegas and or Atlantic City). Once the strip is complete, I believe it will be a steady renting unit. Geographically Biloxi is the featured casino in the South. Now, cash flow is starting slow, but in all real estate you must be able to hold. Biloxi is not your type of investment if you do not have money to spend. This is one reason we are breaking up our condo and offering owner financing, because we would like to have some cash flow and limit our liability. In the same sense, we would have never bought the condo is we didnt think it would appreciate in value(which it already has - appraised for $49,000 more than our contract price). Our condo is very posh because as I said earlier, you cannot go into this area cash strapped looking for a deal(They are over populating the condo area down there anyway, that is why you have to go big). The major corporations have already snagged up most of the good real estate as well( One company from Vegas, Im not sure of the name - maybe Hard Rock, has bought up around 100 miles of coastline to develop). Follow the money. Follow the money. Follow the money. My last point I want to make is this: Almost anything on the ocean will go up in value. Now when you combine these factors, Biloxi looks to be appreciating as we type. However, this is just my opinion. Hope this helps some.

Tyler
www.cmbilt.com
 

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