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Six months to go..Maybe eight
Old 07-01-2006, 01:02 PM   #1
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Six months to go..Maybe eight

Hi! Found the board about 6 weeks ago and can't stop reading.*

About me.* Long time divorced/no kids, jut me and my Dog.*
Bought my first place in Hawaii in 1978. My gross was $800 mo.* P&I $329.64 and maintenance $105 on top of that.* Good training for LBYM.* Never took work too serious but was always concious of the "future".* Worked in the hospitality industry because I liked it and allowed some freedom of movement.* Since then I have purchased property in CA (1986) in Vegas (1994) Hono (2001 & 2002) Despite being a REALTOR in college I could never bring myself to sell so I have over $2M in properties with a 20% LTV.* Until recently I was looking to buy more so that I could be that one level richer but decided that being richer costs too much.

I've been a government worker for the last eleven years and can retire with a fake retirement of about $1000 mo AND full medical dental.* Eight more years would get me a real retirement....(carrot)Have been purchasing long term care insurance thru CalPers.* Having spent the last eight years caring for my Father I know all too well how quick money is spent down paying for care.* He spent 6 months in a SNF when I first got him and then 71/2 years of daycare while I worked.* Have about $100K in deferred comp (ING account stability earning a big 4.5%) and may work a couple of months after the first of the year just to put another $20K pre tax into it.* I can access it anytime after I retire.* Have about $100K cash that I'm doing nothing with (needed to be liquid for that next real estate purchase) Net under $2K in rents (Mom living free in the Vegas Property).* Figure I can sell three of the properties over the next 10 years and still have a paid off condo on the slopes of Diamond Head with a Waikiki rental paying all my bills.* I figure my expenses under $2K,* and I anticipate having spend down money in excess of $100K a year for about 20 years.* Just found out that I can rent my Ca home and sell in 2 years and pocket my basis and the 250K exclusion* then 1031 the excess into another income producing property to avoid capital gains.* Once I start to sell properties I need to get educated on earning money on money.* I hope to learn that from the Board and my ING account representative.* Have thought of 1031ing* properties to office TIC's but need to get educated on that also.* Looking at doing monthly trades of my condo in Hawaii for places around the world.* Have not seen that being discussed as a way of traveling cheap on the Board.

So,* hope to get educated here about money and giving up the dream of wondering what I want to be when I grow up.
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Re: Six months to go..Maybe eight
Old 07-01-2006, 01:25 PM   #2
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Re: Six months to go..Maybe eight

Welcome to the board, Bob.

Quote:
Originally Posted by honobob
Looking at doing monthly trades of my condo in Hawaii for places around the world.* Have not seen that being discussed as a way of traveling cheap on the Board.
I don't think you'll have too much trouble persuading people to let you house sit their place while they watch your Hawaii condo...
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Re: Six months to go..Maybe eight
Old 07-01-2006, 04:22 PM   #3
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Re: Six months to go..Maybe eight

Hi Honobob,

Sounds like you have a great life going for you. One good thing about working for the state is the great health/dental benefits upon retirement. Makes the low pay (in my case) somewhat more palatable. Have you considered buying up to 5 years service credit that is available to state employees? Check to see if it applies to your position if you are interested. It can be a chunk of change but it almost doubled my pension and it works out to about an 8% guaranteed return for the money it cost (as long as I live 20 years). Food for thought....
practicalpat
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Re: Six months to go..Maybe eight
Old 07-01-2006, 06:32 PM   #4
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Re: Six months to go..Maybe eight

Get married and get another 250k of tax breaks on that home.
You might also look it doing a private annuity with the california home. The costs are higher than the 1031 but its more flexible. Its something I have been considering with some of my real estate.
You dont say what the "real" retirement would get you.
Although it sounds like it would have to be a really big carrot. Although maybe if they had great medical benefits it might be something to think about.
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Re: Six months to go..Maybe eight
Old 07-01-2006, 09:18 PM   #5
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Re: Six months to go..Maybe eight

Thanks PracticalPat I'm actually City & County and you can only buy prior government time or military service but I'll double check.

Spideyrdpd* I just looked this up real quick.

Here the taxable event is exchanged with a trust-held Private Annuity Agreement providing you the opportunity to sell such assets to this unique Trust in return for a Private Annuity contract, which provides a fixed payment stream of income over ones life allowing all of your money work for you today with taxes only due on the payments you receive from the Trust. Each payment will consist of a return of cost basis, capital gain and income tax. Such calculations are made per precise IRS tables, guidelines, ratios, and rates.
* * * I don't like the term fixed payment.* My experience with fixed payments are mortgages and my Dad's retirement,* Huge when they started but I couldn't* rent a room in someones house here in the Bay Area for the amount of my current mortgage.* My way I'll have to deal with my house as a rental for a couple of years but will walk with $350K tax free and turn $250K into another rental in Honolulu with a positive income stream and continued appreciation.* My thought is when I get serious about selling off properties I'll do the two year move in to claim the 250 capital gains exclusion.* I really don't need to sell but I wouldn't want to deal with long distance rental for more than two years plus even though CA is worth over $600K it would only rent for $1700-1800 whereas Waikiki at $400K grosses $2500 a month and actually over long term both have appreciated equally mostly due to recent Hawaii surge, the 90's were bad.* I don't see the advantage for me but I'll definitely look into it more.* Maybe if the payment was LARGE now. What's your thinking?

Marriage?* Six years with the wife, a ten year live-in, did I tell you I've had dogs for the last 16 years?* Mom married four times and I have a sister married 3X plus assorted dramas.* I* thought I would check it out again in my forties but Dad's arrival put a big crimp in my love life plus his wife showed me how a selfish person and wicked adult children (hers) could ruin a reasonably well planned retirement.* I did entertain thoughts of how attractive I'd look at the bars with my Huge Full Medical Benefits until I found out I have to be married BEFORE I* retire for them to benefit.*

I'd have to stay 6 years at work to get the vested retirement...ain't gonna happen plus my buddy keeps computing telling me it ups a $1000 a month every three years after that so I see that trap coming.* BUT I don't need the money. I'm going to have a hard enough time not accumulating more as it is. I just want to be smart about what I have NOW and not give too much to the government or inflation.* Thanks for the input!

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Re: Six months to go..Maybe eight
Old 07-01-2006, 10:12 PM   #6
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Re: Six months to go..Maybe eight

Hi
Its just something I was told to look at as an alternative to the 1031.
I was advised to look at the borrowing money comment back out if I needed cash now. I would think going with the TIC would also put you on a fairly set income.
* * * * * * * I have done a few 1031's and didnt like it to much. To put it mildly .
I havent done one these yet though . So its more of a me sharing an idea then me saying you should do it.
From the
www.privateannuity.com site



Quote:
question I-10: What if I need to receive more or less money in addition to my
structured income payments? Can anything be done to accommodate this?
Answer I-10: Yes. Several options are available to the Annuitant:
a. The Trust may lend money to the Annuitant. The loan should have formal loan
documents with a fixed and enforced repayment schedule that includes applicable
interest rates, and the loan also may be fully secured.
b. The Annuitant also may receive a loan from a bank or other lender in the
amount needed.
c. If the Annuitant knows that he/she may need more money before retirement and
prior to setting up the Private Annuity, then two annuity contracts could be set up
in the Trust. One set up to pay immediately for needed cash-flow and one to
support the deferral term you desire (so long as you are under age 70 ˝).
Question I-11: Can I sell my assets before they go into the Private Annuity Trust?
Answer I-11: No. In order for the Private Annuity Trust to comply with IRS regulations,
it is imperative that the assets be placed into the Trust and the Trust sell the assets. At The
National Private Annuity Trust™ we will not be party to any other Trust design.
Question I-12: If I need cash from the sale, may I keep some out of the cash sale?
Answer I-12: Yes. You may allocate a portion to go to the Private Annuity Trust. In this
case the Annuitant will be immediately responsible for the proportionate share of capital
gains taxes on the cash he/she received, and thus will have a taxable event due on that
amount. This taxable amount must be paid in the tax year received/realized.
Question I-13: How should the assets be invested, and who does it?
Answer I1-13: The Trustee will oversee administration and determine the suitability and
prudence of such.
Question I-14: What does it mean to receive money through my estimated life
expectancy?
Answer I-14: Payments from the Trust are received until the Annuitant’s death (or joint
Annuitant’s surviving spouse). Life expectancy (per the IRS life expectancy tables) is one
of the components used in determining the payment amount.[quote/]
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Re: Six months to go..Maybe eight
Old 07-01-2006, 10:56 PM   #7
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Re: Six months to go..Maybe eight

spideyrdpd
Thanks I emailed the site to see if I could get a monthly estimate. What didn't you like about the 1031? The fact that you weren't freeing money or just the complying with the rules and deadlines? My understanding with the TIC's is that you are an equity holder so you participate in appreciation. Here in the Bay Area office properties used to be purchased for their income stream but now anticipated appreciation is further driving prices up. Not an expert on them but see them as an option down the road when I'm tired of tenants/toilets/trash. I realize our goals may be different but by picking your brain I may see what you consider a disadvantage may be an advantage to me or may make me realize I haven't considered all aspects. As I've pointed out in my introduction I've only bought and only recently have considered selling and am aware generally of tax avoidance/deferment plans so I'm interested in hearing what/where/why of other peoples actual transactions.
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