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End of Year Planning for Investment Real Estate

10/24/2016

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​As the end of the year approaches, this is a perfect time to start thinking about taxes and how to best maximize value.  Many folks that own investment real estate often love the tax benefits.  BUT, if you're thinking of selling your investment property within the next 3 years, it may be wise to really consider some of those "property expenses" you have the accountant write off against your rental income.  

Lets face it, many folks expense as much as they think possible against their rental income.  This reduces the net operating income (NOI) for the property, and thus the tax liability you owe.  This could be a big mistake if you're thinking of selling at any time during the next 3 years.

For example, lets say you expense an extra $1000 against a property with expenses that may be a little questionable.  If you're in the 33% federal income tax bracket, this will save you $330 ($1000 x 33% = $330) on taxes you owe Uncle Sam.  BUT, at the end of the day, your taxes show the property NOI is $1000 less.  

When buying, most investors want to see the last 3 years of property tax returns, since these are the most reliable and verifiable.  In addition, investors often base the purchase price on the net operating income (NOI).  

When selling, we want to maximize the NOI.  If we sell a property at a 7% capitalization rate (similar to a rate of return), then $1000 of increased NOI is worth $14,286 ($1000/7% = $14,286) in increased sale price.  If we take into account selling cost of 7.5% and assume we didn't write off that extra $1000 in expenses for 3 years ($330 x 3 of increased taxes), we would net $12,224 more for the property.  

In summary, for every $1000 of increased NOI (i.e. fewer expenses), you will make an additional ~$12,000 when you sell.  Now that's a good investment!
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CWI Announces Bond

10/19/2016

3 Comments

 
​Since the purchase of the old Bob Rice Ford property earlier this year, CWI has been busy planning how to best serve its students with an Ada County campus.  After numerous community input sessions and completing a master vision for their new campus, CWI has announced plans for a $180M bond in November which will enable it to expand its services both in Canyon and Ada County to meet the needs of its students.

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West End Stakeholder Meeting

10/13/2016

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​Several large stakeholders in the West End met to update the group on their plans and discuss possible shared parking strategies.  If all these projects happen, we will see ~$150M of new development in the West End by 2020 and the need for ~1500 parking spaces.  If some shared parking strategies are not determined, we could see ~10 acres of the Main/Fairview corridor paved as surface parking.
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Jerry’s Market Neighborhood Meeting

10/10/2016

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​A developer is proposing to build a mixed use neighborhood scale development at the former site of Jerry’s Market.  In addition, they are in the process of purchasing the Islamic Center and have 5 townhomes planned for that site.  The development is likely to contain ~7000 square feet of commercial space and ~20 condominiums above the commercial space.
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Possible Downtown Housing Development Holds Neighborhood Meeting

10/6/2016

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​The City of Boise has put considerable effort into spurring downtown housing, and it is working.  A neighborhood meeting was held in August at the vacant lot just west of the former Twin Dragon.  The developer presented some preliminary site plans and renderings and is anticipating a development of ~41 housing units.  No time frames were given, so stay tuned for more information.
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CWI Lays out Vision for Boise Campus

10/4/2016

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​CWI unveiled its plan for the Ada County campus at the old Bob Rice Ford property during August.  These plans call for a 3 phase development that could last up to 40 years and ultimately have approximately 600,000 square feet.  The planned initial phase is ~150,000 square feet.  As one of the fastest growing community colleges in the nation, it is exciting to see the plans for this catalytic project coming together.  
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Greenbelt on South Side of  Boise River Opens

10/1/2016

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​After months of work, the Greenbelt on the south side of the Boise River is connected between the Riverside Hotel and Ann Morrison Park.  This new connection will complete the Greenbelt on that side of the river and allow pedestrians and cyclists another route from the west into our downtown.
Idaho Statesman Link
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104 s capitol blvd suite 201
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