Q: Why Invest in Real Estate?
A:  4-prong Money Advantage

1. Cash Flow	3. Appreciation	80% of all millionaires accumulated their wealth through real estate
2. Equity	4. Depreciation	Real estate offers great leverage, tax benefits and offers intrinsic value

Q:  Why Invest in Apartments over other Real Estate Investments?
A:  Apartment advantages include

1. Economy of Scale - More rentable units in 1 location
2. Less Dependent on Business Cycles - Everyone needs a place to live!
3. Shorter leases thereby greater protection from inflation.
4. Pool of tenants is much greater for apartments than other type of property.
5. Depreciation schedule is greater on Residential rental property such as Apartments =27.5 years vs. Non-Residential rental property (Office, Retail, Industrial etc.) =39.5 years.  So a property that has $2,750,000 of depreciable value = $100,000 in depreciation per year if it is a Residential rental property vs. $70,512 in depreciation per year.

*Always consult your tax advisor before making any investment

Q:  What is my "job" as a real estate investor?
A: 1. Locate Deals, 2. Locate Money to do the Deals, 3. Manage the Asset

Q:  How do I find a "good" deal?
A:  A "good" deal is subjective to every individual.  The best results are usually derived from being prepared when an opportunity presents itself.   Knowing what you want and recognizing it the moment it presents itself usually produces the greatest benefit.  National Income Property is committed to your success.  Take the first step in allowing us to help you is by taking a moment to tell us your acquisition criteria, just click here.   If you have questions, feel free to contact us

Q:  How do I increase the chances that my offer will be accepted?
A: Include the following with your offer...

1. Have a reputable Real Estate Broker representing you such as National Income Property
2. Furnish a Loan Pre-Qualification Letter from a reputable Mortgage Broker or lender (preferably local in the area you are purchasing the property) who specializes in apartment financing.
3. Furnish Proof of Funds
4. Furnish a Financial Statement
5. Provide your Track Record
6. Cover Letter
7. Earnest Money Deposit Check made out to Title Company
8. Make the offer in writing as a Letter or Intent or Contract
9. Offer the Seller a Quick feasibility and close timeframe

Q:  As a first time buyer, what kind of apartment property should I buy?
A:  No matter what the amount of capital you have to invest is, we recommend that your first deal be something that is Manageable and Conservative that means it has.

• Historically stable occupancy
• Relatively high occupancy
• Stable management in place
• Screened tenants
• Low deferred maintenance

Remember that managing the asset after you purchase is critical to your success.  Knowledge and experience in property management does take training and time so the less project management you have to take on in addition to the property management which is continuously ongoing should result in much more manageable experience as you build your real estate empire.  There are only so many hours in a day, a property that needs extensive project management is both time and capital intensive.  Learn the basics, stick with it and you should do well.

Q:  What other questions should I be asking myself in order to have a realistic expectation of what I want to gain before I invest in real estate?
A:

Q:  What is the best way of working with a broker? 
A:  There is a BIG difference between knowing the path and walking it!
Only work with specialists that focus on apartment transactions who also have ownership experience.  No one does everything well.  You wouldn't hire a Doctor or Lawyer that claims they do "everything" and investment property is no different.  National Income Property focuses 100% on apartment transactions; all of our associates have apartment ownership and/or management experience.  Apartments are our only business; acquisitions, financing, management, disposition, 1031 exchange and all the resources for you to succeed are right here.  If you haven't already taken the first step in allowing us to help you, please tell us about your acquisition criteria, just click here.

Q:  What should I be doing right now as I am searching for a property?
A

Once National Income Property has received your acquisition criteria a custom search can be created and e-mailed to you on a regular basis.  We are a turnkey apartment brokerage offering guidance from planning stages through closing.

Q:  What is the best way to secure really good financing? 
A:  Remember, quoting is not lending and a lot of things can change from the time you receive an initial verbal quote to when you receive a loan commitment letter so again, be sure to only work with specialists that focus on apartment transactions.  Be sure that the mortgage broker or lender you work with has a strong track record for closing deals that fit your specific apartment deal (size of loan, condition of property, credit, income, etc.) and provide more than one option for you to choose from.  We are happy to refer lenders that specialize in apartment financing for our clients.

Q:  What is a Non-Recourse Loan?
A:  Non-recourse loans are secured by collateral, which is usually property. If the borrower defaults, the issuer can seize the collateral, but cannot seek out the borrower for any further compensation, even if the collateral does not cover the full value of the defaulted amount. This is one instance where the borrower does not have personal liability for the loan.

Q:  What are some good property management tips?
A:

After closing - Don't fix what isn't broke! Prepare a Good Management Plan that includes leasing and eviction policy Answer your phone! Screen your tenants thoroughly Lease, Lease, Lease Have units made ready to lease right away

Improve Physical Appearance Increase Rental Income Reduce Operating Expenses Keep your Management & Maintenance team happy if they are doing a good job and get rid of them quickly if they are not performing.  Reward the performers and don't wait too long to eliminate dead weight! Offer a resident referral program and make sure the tenants are reminded of it monthly.

Q:  What do I need to do in order to sell my property for the best price?
A:

• Good records
• Monthly trailing income and expenses statements
• A current rent roll with tenant move-in, move-out dates, security deposits, identify units that receive any type of rent assistance or government programs
• A list of any major capital improvements made or needed to property
• A very good broker that specializes in apartment transactions and is willing to co-broker their fees.

Q:  Why is Co-Brokering so important?
A:   National Income Property believes that if a seller want the best price, from a strong buyer, with competent representation then it is critical to cast the widest net possible to the market, that means to both investors and brokers.  A vast majority of serious buyers rely on competent brokers and in order to attract as many prospective buyers possible for you, we gladly state on all our listings the co-broker fee and that we are 100% co-broker friendly. Any other means is counter productive and limits your universe of potential buyers.

Q:  Doesn't everyone Co-Broker?
A:  Unfortunately for a lot of sellers, the answer is no.  Ultimately, this hurts the seller and eliminates a lot of prospective buyers.  If you are a seller who has a property currently listed and your listing agreement states there is a co-broker fee, we recommend you get a copy of the marketing package and check to see if a co-broker commission advertised.   Another tip is to have a friend call or e-mail the listing broker and request the co-broker fee.  If a broker is saying one thing and do something else in respect to co-brokering - you may end up paying the price in time and money!

Q:  What should I expect from National Income Property when I list with them to sell my property?
A: Our represented sellers have enjoyed rewarding experiences from National Income Property because we list to sell "makeable" deals that underwrite financially.  When the time comes to sell your investment, National Income Property has the resources to find the right buyer and assist you in your next move. We are committed to your success and a smooth closing of your transaction by executing our 4-step sales plan.

1. Property Evaluation - Determine the market value by evaluating capital improvements, historical performance and financing options for a prospective buyer. Our custom sales methodology has produced great results to secure the best sales price and terms for our client.
2. Marketing Package includes financial, photo, video & web based content assembled into a detailed informational brochure including the co-broker fee to assist prospective buyers and brokers nationwide make quick, well-informed decisions.
3. Pre-Qualify every prospective buyer & broker. Your property's confidential information will be given only to qualified buyers.
4. Close your transaction smoothly. We will take every proactive measure possible to ensure a smooth closing.
   Receive your broker opinion of value. We will evaluate the property, contact you and give you a price recommendation and strategy for the most effective course of action to sell your property. ALL INFORMATION SHALL BE KEPT CONFIDENTIAL

Q:  What is a 1031 Exchange?
A:  The tax deferred exchange, as defined in Section 1031 of the Internal Revenue Code of 1986, as amended, offers investors one of the last great opportunities to build wealth and defer taxes. By completing an exchange, the investor (Exchanger) can dispose of their investment property, use all of the equity to acquire replacement investment property, defer the capital gain tax that would ordinarily be paid and leverage all of their equity into a replacement property.
Two requirements must be met to defer the capital gain tax:

(a) the Exchanger must acquire "like kind" replacement property and
(b) the Exchanger cannot receive cash or other benefits (unless the Exchanger pays capital gain taxes on this money).

In any exchange the Exchanger must enter into the exchange transaction prior to the close of the
relinquished property. The Exchanger and the Qualified Intermediary enter into an Exchange Agreement, which essentially requires that:

(a) the Qualified Intermediary acquires the relinquished property from the Exchanger and transfers it to the buyer by direct deed from the Exchanger and
(b) the Qualified Intermediary acquires the replacement property from the seller and transfers it to the
Exchanger by direct deed from the seller. The cash or other proceeds from the relinquished property are assigned to the Qualified Intermediary and are held by the Qualified Intermediary in a separate, secure account. The exchange funds are used by the Qualified Intermediary to purchase the replacement property for the Exchanger.

Q:  What important considerations should I factor in for an Exchange?
A:   Exchanges must be completed within strict time limits. The Exchanger has 45 days from the date the relinquished property closes to "Identify" potential replacement properties. This involves a written notification to the Qualified Intermediary listing the addresses or legal descriptions of the potential replacement properties. The purchase of the replacement property must be completed within 180 days after of the close of the relinquished property. After the 45 days has passed, the Exchanger may not change their Property Identification list and must purchase one of the listed replacement properties or the exchange fails!

To avoid the payment of capital gain taxes the Exchanger should follow three general rules:

(a) purchase a replacement property that is the same or greater value as the relinquished property,
(b) reinvest all of the exchange equity into the replacement property and
(c) obtain the same or greater debt on the replacement property as on the relinquished property.

The Exchanger can offset the amount of debt obtained on the replacement property by putting the equivalent amount of additional cash into the exchange.

The Exchanger must sell property that is held for income or investment purposes and acquire replacement property that will be held for income or investment purposes.

IRC Section 1031 does not apply to exchanges of stock in trade, inventory, property held for sale, stocks, bonds, notes, securities, evidences of indebtedness, certificates of trust or beneficial interests, or interests in a partnership.

Q:  What is a Tenant In Common real estate investment?
A:  Tenant in Common is a form of holding title to real property. It allows the owner/owners to own an undivided fractional interest in the entire property. In addition, it has become the preferred investment vehicle for real property investors who wish to defer capital gains via a 1031 exchange and own real property without the management headaches. A popular choice among real estate investors seeking replacement property for their IRC Section 1031 tax deferred exchange is Tenant-in-Common Ownership also known as fractional ownership. Under this co-ownership structure, you will own an undivided fractional interest in an entire property and share in your portion of the net income, tax shelters, and growth. Further, you will receive a separate deed and title insurance for your percentage interest in the property and have the same rights as a single owner. Because Tenant-in-Common opportunities are often "packaged" with management and financing in place, Tenant-in-Common investments offer superior efficiencies in the identification, acquisition, financing, closing, and operating stages of real estate ownership. Furthermore, fractional ownership provides you with the ability to diversify your 1031 Tax Free Exchange into more than one property and to participate in potentially larger, institutional-quality properties. Thus, small investors in one area of the country may participate in large industrial, commercial, and residential property investments all around the country with professional management. Tenant-in-Common investments provide simplicity by eliminating active property management headaches. Individuals who are tired of the day-to-day burdens of being a landlord or who own land and would like an income producing property will appreciate the following benefits of a Tenant-in-Common investment:

Cash flow is generally paid monthly and is tax-sheltered via depreciation pass through and interest deductions. You may also share in the appreciation of the property when sold.

Minimum equity requirements as low as $100,000 allow you to invest in high quality, institutional grade properties. Otherwise, it may be prohibitive for you to acquire property with a billion-dollar credit-worthy tenant guaranteeing a long-term lease. These low minimums also allow you to diversify, which can reduce your risk by allowing investments in different locations, with various property types, tenants, industries, etc.

National real estate companies called Sponsors structure these Tenant-in-Common programs acquire (identify and locate, evaluate, arrange financing, etc.), manage (maintain, lease, collect rent, service mortgage), and sell the Tenant-in-Common properties. They have a vested interest in the performance of the property. These companies have strong track records and extensive experience in all sectors, types, and locations of real estate.

Tenant-in-Common investments enable you to replace the required debt on the 1031 when needed. Accredited investors assume non-recourse (no personal guarantee) financing on the existing property. You can invest in properties that have no debt or in ones with up to 75% leverage.

Tenant-in-Common investments provide the flexibility to avoid the taxable boot if your preferred real estate doesn't allow you to meet the full debt and equity requirements. A ready inventory of Tenant-in-Common properties allows individuals to easily identify properties within the 45-day identification period, acquire within the 180 days, or have a "back-up" property in case their preferred real estate falls through.

Benefits of Tenant-in-Common s To Real Estate Investors

• Realize built in appreciation of real estate holdings
  
• Defer up to 100% of long term capital gains
  
• Invest in larger, institutional grade properties leased to credit-worthy tenants
  
• Diversify real estate investment portfolios
  
• Increase net cash flow and current income
  
• Access to nation's leading real estate providers
  
• Access to extensive due diligence & complete investment disclosures

Q:  How are Tenant-in-Common offerings structured?
A:  Each of the Investors holds a direct legal interest in the real estate, and holds a separate deed.

Every Investor of a Tenant-in-Common interest has a total "veto" right with respect to the property in which the Co-Owner has a fractional interest.

The general, a Tenant-in-Common structure cannot alter the allocation of income, gain, loss, deductions and holder credits, whereas other structures (such as Limited Partnerships) can.

Q: Why is a Tenant-in-Common investment considered a security? Does that endanger my exchange?
A: Tenant-in-Common s are classified as securities based on how they are offered for sale. This does not endanger exchange requirements. The Howey Test is a three point test that determines whether an investment is a security or not. The three points are:

1. A common investment or enterprise
2. The intent to make a profit
3. Profits derived from the efforts of others

The Howey Test stems from the 1946 Supreme Court Case (SEC vs. Howey):
Howey sold investments in orange groves to vacationers in Florida.
Howey sold these groves based on:

• Previous high annual returns
  
• Ability to participate in a passive investment
  

"Own land in Florida, I'll manage it and you'll receive a good return."

Over time, the investment did not meet expectations, and based on the poor returns, a lawsuit was filed against Howey by the Investors. The prosecuting attorney used the fact that Howey sold a security without a securities license as one of his main arguments.

After appealing to the Supreme Court, Howey was found guilty of offering a security without a securities license. The main point is that Tenant-in-Common Investments, having the same attributes as Howey (meeting the 3 points described above), are classified as securities and are required to be offered within the rules and regulations of the SEC and FINRA.