Monthly Archives: June 2017

Bloomberg: The Hottest Industry Right Now Is Storing All Your Stuff


A new report from Bloomberg highlights the growing storage industry. According to the article, “industry insiders say the ongoing self-storage building boom traces back to the financial crisis, when funding for new construction of any kind dried up. Builders are still catching up with a backlog of demand from those fallow years; investors, meanwhile, noticed that the assets performed well through the recession, and started buying storage centers as a hedge against future downturns. ”

Read the full article at

Bloomberg: The Hottest Industry Right Now Is Storing All Your Stuff2018-12-19T12:43:36-08:00

1031 Exchange & Investing in Properties Sight Unseen


You may be already well aware of the benefits that come with a 1031 Exchange, but you may not know that investing remotely is an excellent way to apply them.

To be sure, once you’ve considered the many appealing real estate markets nationwide, you’ll see that limiting yourself to your own immediate area can cost you money. Therefore, you’ll want to avoid the assumption that you need to see a property in-person in order to determine if it’s a good fit.  

Of course you can’t just blindly trust that a remote property will be right for you after seeing a picture or two online! So, here are some tips to help you choose a viable, out-of-area investment property.


Perform Proper Market Research

While you would never buy a property based solely on an online description, there are a number of online tools you can use to help determine if an estate would be a good fit.

Start by looking at a potential property’s surrounding real estate market. Is it attractive? Lucrative? How profitable is it? Then, follow up with questions such as: Where has the market been? Where is it now (and likely to be in the immediate future)? Then, consider factors such as the area’s overall economic growth (or lack thereof), current job statistics, and housing market stability levels.


Trust Local Experts

In a venture of this type, some trust becomes necessary — the test is in knowing who to trust. Putting together a team of qualified local experts is a good start in this regard.

Note that “qualified” here means professionals with a proven track-record in real estate investing. Knowledge of the property’s local area and proficiency with technology are also key…

Don’t forget: make sure to ask for video walk-throughs of properties and/or video chats with your team. The function of your team is to vet potential investment properties in-person and report their findings back to you.


Utilize a Local Property Management Company

Let’s assume that the above groundwork has all been laid and you’re now ready to move forward with the purchasing of a property. Your next step is to find and enlist a dependable, local property management company.

Once you’ve performed thorough research regarding your options, hire the one you’re most comfortable with.  

Remember: the property management company will be responsible for running your investment’s day-to-day operations; therefore, it’s this partnership that largely determines if your investment stays financially viable.

Establish a partnership based on respect, trust and communication from the very start… and don’t forget the well-drawn contract agreement stating each side’s responsibilities!  


1031 Exchange, Remote Investing, and Our Office

Once you’ve decided on a remote investment property, our office can execute your 1031 Exchange. Remember how we said that trusting the experts is key?

To schedule a consultation, call us today at 562-296-1362.

1031 Exchange & Investing in Properties Sight Unseen2018-12-19T12:43:36-08:00

Dynasty Trusts & Philanthropy


Dynasty trusts ensure that wealth gets passed down to successive  

generations. The special tax provisions in this wealth-building vehicle allow you to amass a fortune relatively quickly — so much so that $1 million can turn into roughly $20 million over the course of only three generations (assuming that the trust’s balance grows by a net of 6%, annually).

However, with so much wealth going to such a (potentially) small clique of future progeny, you may be wondering how non-family members can also be made to benefit from your fortune-accruing efforts. We’re referring to the philanthropic considerations so common among the truly noble wealthy.  

For those thinking along these lines, there’s good news: charitable beneficiaries are also allowed to be included within your dynasty trust.


Charitable Beneficiaries and Dynasty Trusts

The charitable beneficiary option that comes with dynasty trusts is less about avoiding your descendants becoming “too rich” and more about ensuring that those less fortunate are also taken care of.

To ensure the latter, you have a few options:

Option 1: Assuming that the assets in your dynasty trust are designed to avoid transfer taxes upon the death of one generation (which is a safe assumption to make), you could require that a portion of the money saved due to this tax break — say 10% — be given to charity at such times (i.e. upon the death of one generation).  

Option 2: Your dynasty trust could require either

  1. more frequent distributions of the 10% figure mentioned above       to charity


  1. a higher outright distribution percentage of the  money accrued from transfer tax savings be given to charity.

For instance, if your trust is required by law to terminate after about 90 years, it could be set up to distribute 20% of its transfer tax savings to charities in predetermined yearly intervals. This amounts to (potentially) millions of dollars going to specified charities .


Charitable Lead Trusts

A charitable lead trust (CLT) can be connected to your dynasty trust as a way of carrying out points one and two mentioned in the previous section. CLTs ensure that both charity and private beneficiaries benefit from your financial planning. Here’s a brief overview of how it works:

  1. Once established, cash or other assets get transferred to the CLT.  
  2. The charity you designate in the CLT agreement then receives payments from it annually for a term you select. (Note that these payments must be a stated percentage of the CLT assets, which are valued annually).  
  3. When the term of your charitable payments terminates, the remaining CLT assets get distributed to a non-charitable beneficiary (i.e. private person such as a relative) of your choosing.
  4. The assets contained within the dynasty trust then serve to benefit your heirs in perpetuity.


Ensuring Your Legacy

The investing options in this article have by no means been described in their fullest detail. Furthermore, as establishing a dynasty trust is intertwined with leaving a legacy, you’ll want to make sure it’s done effectively. Let’s ensure this by discussing your options.  


Dynasty Trusts & Philanthropy2018-12-19T12:43:36-08:00

Spiraling Debt? Here Are Some Options


Some people may think, “Do I really need to declare bankruptcy in order to escape my dire financial situation? After all, aren’t there other alternatives to choose from?” This type of attitude isn’t uncommon.

However — contradictory to popular belief — bankruptcy isn’t a bad word. In my many years of experience advising clients, I’ve actually found it to be an effective way of managing financial hardship, yet a healthy dose of skepticism and / or outright doubt is forgivable.

However, once we’ve shed more light on the bankruptcy process, it may be easier to let these aforementioned attitudes go. So, in the spirit of meting out sound financial advice, we compare the bankruptcy process to its other available alternatives below.

Bankruptcy vs. Alternative Options


Scenario 1: Debt Settlement / Negotiation

Are you thinking that debt settlement / negotiation with creditors (an alternative to bankruptcy) is the solution to your seemingly insurmountable debts?

While it is possible to work with creditors (and even debt collectors) in order to try and make your financial situation more manageable, you’re relying on your negotiating skills. The problem here is that creditors may or may not lower the total debt owed to them i.e. there are no guarantees.  

Even worse is how debt negotiation, settlement, consolidation, or elimination companies who offer to “help” might actually be trying to scam you.

Remember, even if you’re an excellent negotiator and / or you give creditors (or a debt relief agency) a lump sum of money up front, you may still end up making things worse on yourself thanks to the steep fees and unkept promises of the other party.


Scenario 2: Borrowing Money From Relatives

While it makes sense to ask help of relatives or friends who are more financially well off, this approach comes with its own set of complications.  

For instance, will you be able to pay back those closest to you in time? How do you decide on an interest rate? Will there be any lingering resentment on either side?

Yes, mixing business with one’s personal life always comes with the possibility of damaging your closest relationships.  

So, while I wouldn’t advise you to overlook this money-borrowing approach, I do encourage you to consider the possible long-term, unintended consequences.  


Scenario 3: Ignoring Your Debt

Under the stress caused by your debts, you may simply decide to ignore your creditors for as long as possible. Of course, this approach comes with its own perilous consequences.

If your debt is secured (i.e. collateral was used to guarantee it) assets such as your home or vehicle will simply be seized by creditors. On the other hand, if your debt is unsecured (i.e. not tied to a particular piece of property) you are likely to be sued in court for your wages and/ or property as forms of repayment.

Clearly, ignoring creditors in order to buy yourself more time or brainstorm a plan of action is unproductive— and even worse, it’s hazardous to your future financial health!


Obtain a Bankruptcy Consultation Today

Rather than attempting to take debt relief into your own hands via dubious alternatives, it’s best to explore your bankruptcy-declaring options. For a consultation, call me at 562-498-3395 today.


Spiraling Debt? Here Are Some Options2018-12-19T12:43:37-08:00

The 1031 Exchange: Qualified Intermediary Requirements for California


In previous articles, we’ve detailed the benefits associated with performing a 1031 Exchange, such as how it affords you the opportunity of differing capital gains taxes when selling your investment property, for instance.

However, the flip side to this is that you must carefully follow all of the rules and regulations it requires.

Of course the first step toward doing this involves knowing which rules and requirements are being placed on you, the investor.  

For instance, among these rules and regulations, there is something called the qualified intermediary clause.  

So let’s go over it in detail below. But first: What is a qualified intermediary?

The Qualified Intermediary Function

The concept of a qualified intermediary is built on the premise that a well-trained third party serves to ensure all required documentation is properly executed.

A qualified intermediary is: not the taxpayer (or other disqualified person). Rather, they are someone that enters into a written agreement (called an exchange agreement) with the taxpayer.

The qualified intermediary’s responsibilities include:

  • Acquiring the relinquished property from the taxpayer
  • Transferring the relinquished property to the buyer
  • Acquiring the replacement property from the seller
  • Transferring the replacement property to the taxpayer


Qualified Intermediary Requirements for California

California has legislated additional rules regarding qualified intermediaries. Rules for qualified intermediaries that are specific to the Golden State include, but aren’t limited to:

  • Maintaining an errors and omission policy of not less than $250,000 (or depositing cash, securities or letters of credit in an account designated for the same purpose)
  • Being required to withhold an amount equal to 3 and 1/3 percent of the sales price of any California property as contingency should the exchange not be completed
  • Maintaining a bond in the amount of $1 million, depositing an amount of cash or securities or irrevocable letters of credit in an amount not less than $1 million, or depositing all exchange funds in a qualified escrow account or trust account


Other 1031 Exchange Rules Specific to California

1031 Exchange rules specific to California aren’t limited to the qualified intermediary function. For instance, the state has a “clawback” requirement for California property sold in a 1031 exchange and replaced with an out-of-state replacement property (per California FTB Publication 1100 Irev 2007, section F). It states that non-residents are required to file a nonresident income tax return in the year the replacement property is sold in a taxable disposition.


1031 Exchange and Inco

With so much fine print, it’s best to contact professionals who can guide you throughout the entire 1031 Exchange process. After all, it’s your money! For expert guidance, give the solution managers at Inco a call today at 562-296-1362.


The 1031 Exchange: Qualified Intermediary Requirements for California2018-12-19T12:43:37-08:00