Blog Archives

Creating Habits for Financial Independence

10/23/2014

Updated January 21, 2015

"The chains of habit are too light to be felt until they are too heavy to be broken."
-Warren Buffett

---This article is a short 9 minute read.---

There are so many intelligent people, hardworking people, and accomplished people, that don’t know how to become financially independent. Are you one of those people? Are you on the right track to reaching financial independence? Believe it or not reaching financial independence is simpler than you think to achieve.

Financial independence is reached when your investments earn enough money for you to sustain your lifestyle without needing to work. For example, if you work a job and you make $50K per year and you spend $40K for the year, the goal would be to invest enough money that you begin to earn at least $40K or more per year from your investments. Notice the goal isn’t to drive the latest nice car or buy the dream house. The goal is to create a system of habits that result in your current financial lifestyle being paid for without having to work a job. Once you master this, you will be ready to begin creating a system for generating wealth to get all of the “toys” and “non-essentials” (e.g. nice cars, dream homes, boats, planes, etc.).

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Property Taxes - What You Need To Know

10/20/2014

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Property Tax season is here. This is a time to celebrate that you own real estate. In the words of Louis J. Glickman, “the greatest investment on earth is earth”, so be sure to give yourself a pat on the back, and do something fun! Paying your property taxes is simple. Here are few common questions that come up during property tax season that may help clarify things:

1.) Did you buy your real estate as an individual, entity (Corporation, Trust, LLC, etc.), or as an IRA?

You must pay your property taxes from the same source as when you purchased your property in order to avoid “commingling of funds” which ultimately can lead to a loss in tax advantages. For example, if you bought your real estate using an IRA, you must contact your IRA and have the IRA pay the property tax bill.

2.) Do you have partners or did you purchase your property alone?

If you have partners that means you own a certain percentage of the property. The percentage that you own is the same percentage of the tax bill you are responsible for. For example, if you own 30% of the property and the total tax bill is $300, you are responsible for paying $90 [$300 x 30%].

Note: All partners should send their bill together in one envelope to the tax collector. The tax collector does not accept partial payments so it is important that all of the partners put their checks into one envelope. Simply designate one of the partners to collect all of the checks and send to the tax collector. For example, if you purchased 30% with your IRA, John purchased 40% with his IRA, Suzy purchased 20% with her corporation, and Michelle purchased 10% as an individual; then you would contact your IRA and have them make a check payable to the tax collector but mail it to your address, John would contact his IRA and his IRA will make a check payable to the tax collector but mail it to your address, Suzy would have a check written from her corporation payable to the tax collector but mailed to your address, and Michelle would write a personal check made payable to the tax collector and sent to your address. Once you receive all of the checks, be sure they all add up to the amount owed and put them in one envelope and send it to the tax collector.

3.) What do you need to include on your check to the property tax collector?

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$420 Million Land Deal

10/7/2014

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Robinsons-May in Beverly Hills prior to July demolition. (Anne Cusack / Los Angeles Times)

"The opportunity to sell the land, though, was too attractive to pass up."
-W.L. Yiu of Joint Treasure

In 2010, Joint Treasure International bought the former Robinsons-May department store site on Wilshire Boulevard in Beverly Hills for $148 million. Joint Treasure intended to construct a mixed-use development comprised of 21,000 square feet of shops and restaurants, underground parking for 876 vehicles, and 235 condos designed by Getty Center architect, Richard Meier. Demolition of the Robinsons-May structure was completed in July 2014 in preparation for the new community of luxury condos.

On September 10, 2014, Wanda Group, China’s largest property developer, stepped in and purchased the eight acres of land for $420 million.

“Things have changed in the past two years [in California]”, said Thomas W.L. Yiu, senior adviser at Joint Treasure. Demand for condos has recovered from a plunge after the economic downturn. “We still believe very much in the opportunity to sell the property on a condominium basis.”

The opportunity to sell the land, though, was too attractive to pass up, Yiu said.

Demolition of the Robinsons-May on Wilshire Blvd in Beverly Hills. (Anne Cusack / Los Angeles Times)

As a developer and a nationally recognized speaker, I explain that the value in real estate is not in the end item [house, condo, mall, etc.]. The value is, and always has been, in the land itself. Structures become old, outdated, and obsolete, while the land continues to grow in value. A successful developer simply knows how to unlock a piece of land’s maximum value.

The evidence is clear when you look at a property tax bill. Every property tax bill in the U.S. has the property’s value broken down into two values: improvement and land. Improvement is the structure, or the end item. Few people know that for a luxury home or properties in an affluent neighborhood, the land value significantly outweighs the improvement value. For example, I recently looked at an estate in Beverly Hills, valued at over $4 million, where the land was $3.3 million and the massive home only worth $800,000 of the total value. Don’t think this only applies to Beverly Hills, in Hawaii I once looked at a modest $850,000 home that had a land value of $650,000!

Successful developers unlock land values. Successful land owners understand how to work with the right developer that will make such a large return that it becomes negligible to pay the land owner hundreds if not thousands of percent more than what the land owner paid. Putting aside hundreds of millions of dollars in profit, in the Robinson’s-May deal, the land owner made a 300% return in 4 years. Many of our clients have done better than a 300% return in 4 years. Investing in land the right way becomes consistent and predictable. Learn how to properly invest in the world’s most profitable real estate…land.

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Author

Christopher Meza, a Los Angeles native, has over 15 years of investment experience. With a Bachelors of Science in Computer Science and Electrical Engineering, he has worked for Fortune 100 companies like IBM and The Boeing Company. Due to his remarkable investment savvy he has retired at a young age and now spends his time investing and teaching others how to achieve financial security.

Christopher Meza is a nationally recognized speaker and Land Banker. He was chosen as one of the world’s leading experts in land investing to keynote the “Success In The New Economy” conference with Steve Forbes, Chairman and Editor-in-Chief of Forbes Magazine. Christopher is also a co-author of the Best-Selling book “SuccessOnomics” with Steve Forbes.

Christopher Meza has also been interviewed on the Brian Tracy Show hosted by the legendary Brian Tracy. Christopher's feature interview can be seen on ABC, NBC, CBS, and FOX affiliates across the country.