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Wednesday, December 23, 2009

A Word On The Economy

Recently the president of our national franchise Kevin Maggiacomo of Sperry Van Ness sent an open letter summing up his thoughts and reflections on 2009 and the coming new year. I thought it would be good to share a few of his comments with you as I greatly value his perspectives. As follows:

The Economy At the year’s close, it is apparent that our worst fears for the economy and our industry have thankfully not been realized. Instead of a protracted period of economic malaise, the weight of evidence now shows that the economy returned to modest growth in the third quarter. Temporary employment numbers (a leading indicator of permanent employment conditions) have improved and job losses have eased substantially, narrowing to a small fraction of the cuts reported at the beginning of the year. As anxiety over record job losses has subsided, consumer and business confidence has improved.

Looking forward, the consensus amongst economists and industry leaders calls for measured growth over the next year. Lagging the stabilization in the health of businesses, and barring any unexpected shocks, sustainable job growth is anticipated towards the end of the 2010. This is, of course, welcome news for the commercial real estate industry, since improvements in demand for space depend critically on new jobs replacing the millions that have been lost.

To read the rest Kevin's article go to : http://www.maggiacomoblog.com/new-years-message

Saturday, December 12, 2009

Can USDA Help You Get Your Deal Done?

The answer may be a resounding YES if you are looking to do a transaction in a rural community. I recently interviewed Dave Chestnut and Matt Harris from the local USDA/Rural Development office in Champaign, Il. Wow! All I can say is that they blew my socks off when it came to the shear number of programs that they have in the USDA playbook to help you get a deal done. Oh and another important point THEY HAVE MONEY! and THEY HAVE A MANDATE TO LEND! That's right in addition to their normal adequately funded budget they have been given an additional $45,000,000.00 to help spur economic development, facilitate the purchase or sale of a business, help a farmer or agribusiness expand or even just help you sell that gas station on the corner! No kidding they have what one might might be tempted to call a "best kept secret" type of thing going if it weren't for the fact that they are doing everything they can to get the word out. Besides all of this they are easy to work with. You start by talking to your banker. That's right your personal neighborhood banker can help you navigate the paperwork and process. The program works best that way simply because there is some paperwork involved which is about the only downside to working with USDA. So if you can handle that (which your banker will help you do) and your deal is not in a community with a population over 50,000 people then USDA may just be the answer to getting your deal done! The entire interview with Dave Chestnut and Matt Harris can be heard on the radio show Central Illinois Business in January. The program airs Saturday mornings at 11:00a on 1400A.M. video

Wednesday, December 2, 2009

New episode of One on One with Alex Ruggieri featuring Rich Siemer

I hope you enjoy my latest interview as much as I did. Rick Siemer and his family have run a very successful milling operation in Teutopolis (near Effingham) for over 125 years. I was very interested to learn why. After all at the turn of the century there was a flour mill in just about every town. There were literally thousands of them! Today that number has been diminished to just over 100 operating mills in the country. And guess what? Siemer Milling is number 15 in the entire country! Right here in our area we have one of the most successful milling operations in the nation. The interview reveals Siemer's management philosophy and gives insight to the corporate culture that allowed them to endure through two world wars and the great depression. They really have a story to tell and its rich with a history of the mid-west, with a people and an outstanding family. Its worth the time to watch! Watch now!

Tuesday, December 1, 2009

Is there a 1031 Exchange in Your Future?

That is a question that I have heard an awful lot lately. Why 1031 exchanges and why now? I would like to share a few thoughts with you on this topic. As many of you know Section 1031 of the IRS tax code contains provisions which allows deferral of taxable gains when the proper conditions are met under the code. I am by no means a tax attorney or an accountant but in layman terms what it amounts to in its simplest form is a tax deferred event when you sell real property, provided that you purchase another property of equal or greater value and you do it according to the rules set forth by IRS to qualify for the deferral. The implications of this are staggering and can mean the difference of thousands of dollars in taxes and possibly millions in equity when even a little planning is done in order to qualify for this aspect of the tax code. Let me be the first to say that this kind of thing is highly technical and the details of any given transaction should properly be reviewed by your tax advisor, your attorney and the other professionals who make it their business to protect your interest and guide you in such matters. Having said that the 1031 rules are something that you may want to learn more about. I see this aspect of the tax code becoming more and more important in the future. For instance, if I were to ask your opinion of the direction of capital gains taxes in the future what would you say? Do you think they will go down? Stay the same? If you are like me you might believe that they have a very good chance of going up. Even if the legislators do nothing the sunset provisions under existing law will take affect within the months ahead and capital gains tax will automatically revert to 20%. I happen to think that there is pressure to drive it higher than that depending on the economy and political climate next year. All the more reason to learn how to use the provisions of Sec. 1031 of the revenue code. I had the privilege of sponsoring a series of webinars for my clients recently hosted by Bill Exeter of EXETER 1031. He did an amazing job of explaining many aspects of the code that allows for tax deferral on all types of transactions not normally thought of as qualifying transactions. If you would like more information about the opportunities provided under this provision of the tax code give me a call I will be happy to make a personal introduction to Bill Exeter, a consummate expert in his field and a man I admire as a true professional.