Apart from maximizing profits, an exit strategy can also help a real estate investor in Maryland cut losses if anything falls out of place. An investor can make an exit strategy for all contingencies like slump in the real estate market of Maryland, not finding the right buyer or tenant.

Various factors can affect the selection of the right exit strategy. The first thing that an investor needs to select the right exit strategy for his real estate investment in Maryland is clarity of goal. The investor must decide the nature of income he wants from his property and the time when he wants to cash his real estate investment in Maryland. External factors that affect the selection of an exit strategy include local infrastructural development, market behavior, nature of investment etc. Depending on these factors the investor can consider all options available to exit a real estate investment in Maryland. Some of the exit strategy options could be tax deferred exchanges, creating trusts, joint ownerships, installment sales etc. Let us see using an example how an investor can choose from these options.

Consider an investor who had invested in real estate in Maryland and has sold a property now. The sale has given him huge profits, but after making some calculations he realizes that he might lose a huge chink of this profit in tax. In this case the investor can opt for internal revenue code (IRC) section 1031. This exchange can be used for “property help for productive use in business”. Under this exchange the investor has the advantage of tax deferral on capital gains earned from the sale if he exchanges the property for a “like kind” property. This way the investor is not liable for paying the tax on his profit and can use his money to invest in other properties.

The investor can even plan for his heirs to inherit the property. He can gift it to them in portions don’t exceed the limit of annual gift tax exclusion, i.e. $12000 or even set up a Family Limited Partnership (FLP) and gift limited partnership interests to his heirs.

Let’s study a case where the investor is not looking for immediate liquidation of his real estate investment in Maryland. The investor has the option of opting for ‘tenancy in common’. Usually, investors opt for tenancy in common when they want to own a portion in a fast-developing high-end commercial property. It could be a multiplex, mall or even an office building. This way they also get rid of the liability to maintain the property and are free to sell it whenever they want.

An investor looking to create a regular stream of income from his property in Maryland can opt for installment sale options. This way he also ensures that the tax due on his sale is not payable at once and is divided on a yearly basis.

Another way of avoiding lump sum payment of tax is creation of trusts such as Annuity Trust (PAT) or Charitable Remainder Trust (CRT). These options also ensure a regular stream of income and the investor can also earn interest of the tax deferred over a span of time.

These are just a few examples. A real estate investor in Maryland can opt for various other exit strategies, alone or in combination. But he must take financial advice from an attorney and a tax advisor while selecting a strategy.

With years of experience down in Mexico in ensuring safe real estate transactions through their services such as title insurance, escrow services and closing coordination activities, the Stewart Title group has now opted to include a strategically complimentary product being that of Mexico mortgages.  “Loans obtained by Americans, Canadians, and Europeans have represented less than 10% of the purchases for second homes in Mexico. If you include to this scenario the current U.S. credit crisis, the access to financed capital has reduced substantially across the board” states

Ivan Castillo regional manager of Stewart Title of the Yucatan Peninsula, but quickly adds “Financing in Mexico using the Mexican property as guarantee has become more readily available through the services that we offer, with interest rates that have become very accessible in the last several months.” 

The program has been designed to ensure a simple and efficient process for the American, Canadian or European to obtain approval for loans with clarity and with ease of mind.  Working with several lenders, the group is able to find various programs that best suit the borrower and his needs with an increased probability of qualification for the Mexico home mortgage.  “This is where our network of offices and years of expertise comes to play” added Ivan Castillo.

Mexico mortgage loan options

Mexico Home Purchase Loans

Refinancing your Mexico Property

Property cash out (raising cash on a percentage of the total amount qualified from your property)

Construction Loans

Lot loans are also available

The loans are offered against the collateral on the property in Mexico and the lenders are located in either the United States or from Mexico.  Fico scores of 680 or above with the requirement of making a down payment of 25%.   

There are estimates that nearly one million Americans have already purchased a home or future retirement property down in Mexico.  This amount is projected to increase as more Canadians and Americans begin retiring in the next decade.   New services and tools to help this expanding market obtain and maintain their Mexican homes will become more accessible with the years.  This can be seen with companies such as Stewart Title whose new program has been introduced with their adjustment to the market and projection of substantial increases in the amount of Mexico Real Estate property acquisitions that will begin utilizing these new channels and sources of financing. 

The focus is usually on specific strategies and the step-by-step process by which to execute that strategy. The idea is that this gives you a repeatable, easy to understand process that you can learn and implement quickly.

But after years of learning about real estate and then years of teaching and consulting I have realized that this approach can inhibit your ability to understand how real estate investing works at the most basic, fundamental level.

It is sort of like teaching a kid how to play baseball by saying:

1. Get a hit.

2. Get on Base.

3. Score a Run.

While this is an easy “strategy” for scoring, it leaves the player with no understanding of the fundamental skills necessary to get a hit.

It’s exciting to think about scoring the winning run, or making $50,000 on one real estate deal. However, most people who can do that on a regular basis have been working at their craft, diligently practicing and mastering fundamental skills.

These fundamentals are really the keys that unlock the door to investing success.

Home run king Hank Aaron’s success was in his mastery of the fundamentals of a proper batting swing. That swing gave him the ability to break the most famous record in all of Baseball.

A real estate investor faces the same challenge when trying to “hit a home run” and make big money with real estate.

Like star athletes, you must master the fundamental skills of your craft, and learn to apply those fundamentals to every prospective deal. The bottom line is if you want to be a star in the “game” and make the big money you have to be good at the right things. But strategy based training tends to divert our attention away from the fundamentals.

Back in the early 1990’s I heard Carleton sheets saying that rental property was the way to go. I went to a seminar and heard another guy named Russ Whitney saying that I should be finding houses that were in bad shape and fixing them up.

Then I saw another guy on TV talking about how he got cash back at a closing, and actually made money by buying a house! It certainly seemed that there were plenty of ways to make money in real estate. Still I had what some people refer to as “Analysis Paralysis “.

Today I realize that my “analysis paralysis” was caused by a lack of understanding. The plain fact was that I simply did not know the fundamentals of real estate investing. You might say I knew I needed to “get on base”, but I simply did not know how to “swing the bat properly”.

After a few months of reading articles, searching real estate websites, buying books and tapes, and going to seminars, I piled in the car and started looking at houses. But every time I looked at a house, I felt confused and unsure about what to do and how to know if this really was a decent investment property. For some reason, I just could not seem to connect all the dots

It seemed like my “career” was going nowhere. I went from one seminar to another hoping that each one would be the one that would clear up all my questions. Finally, out of sheer frustration I decided to get my agent’s license. As a new agent I was required to take some classes on Real Estate Finance.

We learned to calculate net profits on a sale, buyer’s payments, and how to do comparable market analysis. These calculations were not such exciting stuff at the time, but several years later, when I made the jump to become a full time buyer for an investment company, this gave me the ability to adapt to the investment market quickly.

Using my baseball analogy, you might say “I was working on my swing.”

I did not know it at the time, but I was honing those fundamental skills that would later enable me to get involved in bigger deals with higher level investors.

Looking back on all this experience I can’t help but notice that the most successful investors, the ones who are truly financially independent as a result of their real estate activity, are those who have mastered these fundamental skills.

Every property has a value, location and character all its own. Mastering the fundamentals means being able to obtain key pieces of information, and then let that information dictate the investment strategy options based on that information.

The greatest single problem facing most investors in the current market is a lack of adaptability to changing circumstances. I believe that this lack of adaptability is primarily the result of not understanding the fundamentals of Real Estate Economics. It sounds pretty highfalutin’ but all we’re really talking about are the Real Time Market Value, income potential, and costs.

Each property will dictate to you what your best investment options are if you can gather those key pieces of information.

Your starting point is to understand your market well enough to define an average of property values by the square foot – NOT house to house, as with comparable market analysis.

In a stable to improving market as we had from 1995 to 2005, it is easier to avoid mistakes when calculating value. But in a changing market where prices are tending to shift down because demand is changing or slowing, it is essential to be aware of what I call the Real Time Market Value. Learning this fundamental skill is critical for hitting “home runs” with real estate deals.

Fundamental Skill number one: Know Your Real Time Market Value, and use this value to calculate your offer price.

When you pay too much going in, few, if any, strategies will keep you from losing money.

To begin with, in order to be truly successful, or in other words to emulate the behaviors of truly successful people, there are a few key principles you must understand and apply to your daily practices.

The first and most important of these principles is that your life is and will be EXACTLY what you make of it. It sounds over-simplified, I know, but hear me out. The world functions down to the smallest atom on certain unchangeable natural laws. What goes up must come down, objects in motion tend to stay in motion, and so forth. But the most profound of these laws is that of cause and effect, a principle which simply states that a process must be initiated in order to carry itself out to completion. A similar concept which springs forth from cause and effect, and the core of what we’re talking about here, is called the law of attraction, or manifestation, or any other name it has been called by. It is simply the force which carries an idea from its initial intent to its final result. What this means to you and I is that whatever intent or attitude we place into being has the full potential to be made manifest, like a message sent out to the universal order that will, in fact be answered in one manner or another. So getting back to the simple, what we think is what we will become, simply because we have started its creation by thinking of it.

Given this reality, it becomes paramount to discipline our ways of thinking toward the positive and productive. The mind is like a muscle, and flexing it can be difficult at first, but given some time and excercise, positive thought can become second nature. Meditation, or simply making a daily ritual of affirming your goals to yourself can be excellent starting points on this evolution. There are, of course, more advanced steps, however those are bridges you will want to cross when you get to them. My seven step program, referred to at the bottom of this article covers those advanced techniques in detail. Now that we’ve established the need to affirm your principles of action and personal goals, let’s take a look at some of the most important of those principles.

1. Abundance is a Function of Natural Law:

Inherent in nature’s laws of cause and effect lies the universal truth that abundance is always present in our world, needing only to be claimed by those willing to initiate their own cause, within the boundaries of time tested methods.

2. Net Worth Begins With Self Worth:

In any free market transaction, true value must be demonstrated in order to attain rewards. Therefore, one must create superior worth and directly associate that worth with every action he or she takes. Because all people will inevitably act to their own benefit first and foremost, you must respond in kind by elevating your own value to a level of superior market worth.

3. With Freedom Comes Responsibility:

Having personal freedom means, above all, that you are given a choice of whether to act as master of your own destiny, or be acted upon haphazardly by those who are looking out for their own best interests. In order to be truly prosperous, however, one must be willing to live by true principles. For some it goes without saying, but one of these can easily be summed up by the Golden Rule. Positive goals can never be accomplished with any lasting result through harm or deceit. But the most profound implication of this pillar is that YOU DO have the ability to live abundantly whenever you so choose.

4. Intent Manifests as Reality:

In This principlehas been referred to by various scholars and luminaries by such names as “The Law of Attraction,” “The Principle of Manifest Intent,” and even “The Power of Prayer.” It is simply the act of making your will known to the universe, and contributing the necessary effort to bring that will about. Because this principle is so far reaching and powerful, it becomes paramount to discipline one’s thoughts toward the positive.

5. You are Your Own Best Asset:

The fundamental difference between the mindset of a CONSUMER, once termed ’sucker’ by famous American entrepreneur P.T. Barnum, and that of a CREATOR is that a consumer believes material possessions to be the only source of value. Whereas, a creator views human life as the only true source of value. Thus consumers primarily drain the marketplace, while creators primarily add to it.

6. Your Life Has Profound Impact:

Reaching even beyond the infinite value of your own life, you can gain boundless significance, simply by remembering those whose lives you deeply desire to change for the better. Your loved ones, children, friends, and colleagues will all benefit tremendously from the positive actions YOU take. As Thomas Jefferson once so eloquently penned, “All men [and women] are created equal.” Realizing this wisdom, it becomes imperative to achieve your duly endowed potential by creating value for yourself and others.

7. Money is Granted Value by Transactions:

Because the amount of money you make is always directly proportionate to the value that you bring to the table, your value is legitimized by profit. If sufficient value is not present, no transaction can possibly be performed. This principle serves to protect and benefit both parties.

8. Success is the New Normal

As Rupert Murdoch, one of America’s greatest moguls has said, “The world is changing fast.” No longer is it normal for prosperity to remain exclusive to the select few of society’s elite. One need only watch the evening news to see fast acting and energetic individuals making leaps and bounds every day toward leveling the playing field of American business.

9. The Path of the Herd is NOT Always the Correct Path:

The fact that all of the other dogs are barking up a given tree does not make that tree the right one. Enough said?

10. Ownership Equals Freedom:

True freedom is only possible through independence. As long as one must rely upon an outside source for survival, he or she is not truly free. As Alexander Hamilton said, “Power over a man’s subsistence amounts to power of his will.”

To view more information on these and other key concepts to wealth creation, including a full 7 step wealth training program, visit http://www.groundinstone.com