Wealth Creation – An Opportunity to Build Wealth Through Ownership of ASC Real Estate

In today’s economic environment, a greater number of physicians are becoming aware of the potential to build wealth through commercial real estate investments. Nowhere is this trend more pronounced than in the ambulatory surgical center industry. With reimbursements shrinking and costs rising, it is sound and prudent business sense to look to alternative ways of supplementing those declining revenues.

The following portion of this article will outline a few of the benefits of owning the real estate where you operate your ASC.

I. Cash Flow: One of the biggest advantages of owning real estate is its ability to produce positive cash flow month after month. In its simplest form, this means that more revenue is collected than it takes to pay for and operate the property. The end result to the Physician/Investor is that income is created passively each month and this income grows with time as mortgage debts are reduced and rents are raised. With time, these cash flows should be large enough to invest in other properties, donate to the charities of your choice, or spend more time with family.

II. Appreciation: In many circumstances a Physician/Investor will see immediate appreciation in the real estate asset that they acquire. If they have negotiated properly for a property or if they work with a skilled developer, they will bring significant value to the property by the rents they will pay from their ASC operations. The price they pay to acquire or build the real estate should be significantly lower than the market value of the property after the business entity begins making rental payments. This is an economic benefit in addition to the monthly cash flows.

III. Tax benefits:

A. Depreciation: Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for wear and tear, deterioration, or obsolescence of the property. This can be used to the Physician/Investor’s advantage come tax time. The end result is that the amount of yearly taxable income will be substantially lower than the property’s actual cash flow. In practice, a portion of the yearly cash flows would be tax free further improving the investments return.

B. 1031 Exchange: Without going into the very specific details, a 1031 exchange allows an owner of property to defer paying tax on the sale of their investment property by rolling the proceeds into the purchase of another investment property. This technique can be used to purchase larger more valuable properties on an ongoing basis while limiting the equity investment to the initial amount made to purchase the original property. The key here, from a wealth building perspective, is that the 1031 tool allows for the investor’s capital to compound tax free over time resulting in expedited wealth creation.

C. Refinance: One more advantage of this investment over other investments is the ability to refinance and withdraw cash from the property. This is a tax free transaction that restructures mortgage debt based on the added value of the property. The withdrawn cash can be used to pay back the equity investors, provide a return on invested capital, or invest in another property.

IV. Control: The ability to control your investment is of particular relevance in today’s economic environment. While many investors today are feeling that they have little to no control over their investments in the stock market, commercial real estate investors have a tangible asset that they are able to control operationally.

V. Leverage: The central point here is that a Physician/Investor can minimize the amount of capital they need to purchase real estate by using other peoples money. Typically the additional capital would come from a lender but there are circumstances where equity partners can be brought in to substantially minimize the amount of equity required of the Physician/Investor. Not only does this tool free up cash flow for the Physician but it also substantially increases the return on investment for the Physician. The reason for this is that the appreciation of the property’s value is based on the total value of the building and not just the equity portion. This cannot be done with other traditional investments.

VI. Hedge Against Inflation: Since real estate is a tangible asset-a good-it’s value will generally rise either at the rate of inflation or much higher. Today, there is a very serious inflationary concern caused by the feds need to print more currency to cover the costs of our increased national debt. In times like these, it is prudent to look at investments that will hedge this risk.

The foregoing are just a few of the main benefits that Physicians should consider when contemplating whether or not to invest in the real estate they use for their surgery center operations. If done properly, this investment can be a powerful tool to aid the Physician/ Investor in creating sustainable long term wealth.

San Diego Real Estate Market Brimming With Luxury

A beautiful city filled with excitement, San Diego is located in the Southern section of California. Known for its beaches, culture, and stunning real estate, San Diego has been celebrated as America’s Finest City. Those hoping to invest in San Diego real estate can rest assured that their initial purchase will supply many rewards. With a strong economy and booming real estate market, San Diego is on a financial high. Despite the national housing slump purchasing a piece of San Diego real estate remains an extremely smart decision.

Nature Supplies Numerous Benefits to San Diego Real Estate

With 70 miles of gorgeous coastal area, and an almost perfect climate, San Diego owes much of its prestige to nature. With warm, sunny weather throughout the year, outdoor activities have become prominent in San Diego. Some of these activities include, water sports such as surfing, fishing, and swimming, professional sports, annual festivals and community fairs, and numerous hometown parades. Because of the close distance to the Pacific Ocean, San Diego is also known for topnotch produce production.

San Diego Real Estate Filled with Extravagant Homes

San Diego real estate has an extensive selection of housing options available to potential home buyers. The San Diego real estate market offers apartments, condos, charming oceanfront cottages and bungalows, and of course, the luxury estate. An exciting city with much to offer, the homes of San Diego can satisfy any real estate elitist.

The city of San Diego has a population of almost 1.3 million residents, while countywide, the number reaches a staggering 2.8 million residents. Many experts project that as the population continues to expand in the area, the San Diego real estate market will remain prosperous. San Diego real estate prices widely vary with listings ranging from $450,000 to more than $12 million. San Diego real estate demands a higher price depending not only on the elegance of the home, but also the quality of the neighborhood and strength of local housing markets.

San Diego Real Estate Offers Several Popular Landmarks

San Diego real estate is surrounded by culture, history, and tons of entertainment. A section of San Diego named Old Town is known as the largest free tourist spot in California. This famed attraction details the history of San Diego and California. Located near downtown San Diego, and scattered over more than 13 acres, Old Town displays the culture of San Diego’s Spanish influence through restaurants and museums.

San Diego real estate featured in the downtown area includes restaurants, theaters, hotels, and a baseball stadium. Downtown San Diego also provides transportation by way of trains, planes, buses, trolleys, and boats. The heart of the business side of San Diego, the downtown area is home to several businesses. Whatever section of San Diego you are visiting, it is sure to be a trip you will never forget.

Luxury Real Estate Marketing Essentials – Involve Your Clients in the Community

As a luxury real estate marketing expert, come up with something that can get your clients involved in the community. It feels wonderful for all who participate as well as those who benefit from your actions. Here are two exciting ideas to start you thinking in this direction.

The Ritz Carlton

The Ritz Carlton chain of hotels has found a novel way to contribute to the communities where their hotels are located. On designated days, guests and hotel staff contribute a half day to a local community experience in a humanitarian or environmental project. Unique to each destination “the program is designed to make a lasting contribution and create an enduring impression.” All profits are donated to the participating organization.

For the guests, it is a fine opportunity to join the locals and enhance their experience of the cities in which they are traveling. What a wonderful way to meet people and create new friendships! This is social networking without computers. It is the best way of playing a part in the global village, spreading culture and generating good will. The venues are varied and interesting. You can plant trees in Beijing, preserve monuments and memorials in Washington D.C., or participate in music therapy for children in Istanbul.

FreeRice.com

For those luxury real estate marketing professionals who like to play games on the Web, here is a site that is amazing. Go to FreeRice.com. It is a vocabulary game. For each word you get right, they donate 20 grains of rice. It is free, it is fun, and hunger is on its way out. You improve, and life improves for someone hungry. So far, since its debut in October of 2007, 39,541,334,330 grains of rice have been donated. How do they do it? You can advertise on the site, and those dollars buy rice.

A terrific marketing idea for luxury real estate professionals would be to donate some rice in your client’s name and include that in an advertisement. This is a great return on investment, and think of all those eyeballs viewing your ad while learning a new word.