Wednesday, July 25, 2007

Capital Gains

The capital gains exclusion for a married couple is $500,000 ($250,000 for a single person)if they have lived in the home two out of the last five years. In many expensive neighborhoods of the San Francisco Bay Area, this still leaves someone with a large capital gains bill. A solution is to convert the property into a rental for at least a year. Then, sell the property, take the exclusion and 1031 exchange the rest. This shelters all of the capital gains that remain and with the right planning, you can avoid the gains in the future too.

FICO credit scores and how to improve them

I just answered a question on about FICO credit scores:

"There are many ways to raise your credit score if you know what the formulas are that calculate FICO. One valuation is based on what your total debt is compared to your total credit lines on credit cards. If her aggregate credit line is $10,000 and she owes $10,000 then she's at 100% debt - which does not rate well. If she can request a credit line increase to $20,000. She quickly goes to 50% debt - which is a much more favorable FICO score."

My guru on credit scores and how to improve them is Robert Childs in the city of Walnut Creek in the San Francisco Bay Area. His website is
For some reason the link is not going through tonight. He can also be reached at 925-551-4990.

Stunning Duplex Sunnyvale Just Listed

Perfect owner occupant quality duplex just listed in Sunnyvale at 382 S Bernardo Avenue, Sunnyvale, CA 94086. Offered at $955,000. The building includes a 3 bedroom, 2 bath owner unit and a 2 bedroom, 2 bath 2nd unit. The larger unit is vacant and shows incredibly well. Location is excellent. North Sunnyvale on the Mountain View border. Great access to 85. Close to both Castro Street in Mt View and Murphy Street in Sunnyvale. Check it out.

1031 Exchange Strategies

45 days is not 45 days. Prior to putting your investment property on the market, please see what is realistic to trade in to. I educate my sellers on what is available with their sales proceeds in the investment market they are trading to. If they want a NNN property, then I provide them a list of conservative, good quality properties. These may not available when they come to write offers in the future, but similar properties will be. This base line confidence of what they can purchase, helps them move forward with the marketing and sale of their relinquished property. Once we have a buyer in escrow, and let's assume a 45 day close of escrow, we start making offers on replacement 1031 exchange properties. This gives my clients approximately 90 days to be in escrow. More so, it allows multiple offers to be made and due diligence to be accomplished way before anyone starts sweating. When you fill out the identification form for your intermediary, I want you to have one rock solid property in escrow with contingencies removed and two available back ups - just in case. That's how to manage an exchange.

Commercial Real Estate & Cheap Dollar

The Euro just hit $1.40!!!! This trend is not going to change for a while. That makes US real estate very attractive to those with Euros. Read Pat Kitano's blog for more info on how this affects commercial and high end residential real estate ( On a personal note, I bought a Spain condo back in 2001 when the Euro was $.85!!!! I should have bought a whole block. Oh well, next cycle.