Sunrise Communities - Jan/Feb/Mar 2019

Jan/Feb/Mar 2019

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Part 1 of Our Ongoing Series: Solutions for Mobile Home Park Owners Struggling With Capital Gains Tax • Do you want to be able to buy back into L et’s face it: Capital gains tax and depreciation recapture are serious problems facing individuals who want to sell their highly

and back out of real estate, loan the funds for business purposes such as a real estate loan, buy into a business, or develop RE on your own timing — all capital gains tax deferred, without having to follow any timing guidelines?

appreciated assets. According to the American Bankers Association, $17 trillion in assets will pass from one generation to another over the next 20 years. This is the largest generation in the history of the planet, known as the “baby boomers.” 77 million are starting to retire in the U.S. alone, with 10,000 baby boomers turning 65 every day. The top 3 percent of wealth in America owns commercial real estate. Current state and federal capital gains tax rates plus depreciation recapture collectively add up to 37–50 percent of their gain, so it’s no wonder many owners are reluctant to sell. But what choice do we have, other than a 1031 exchange or Delaware Statutory Trust? Is there another way to deal with the capital gains tax deficits that so many investors experience when they sell their business or real estate assets that does not require them to purchase a new property and start all over again with new management, new tenants, and new liability? • Do you want to trade your property and/ or business, toilets, trash, management, and liability for time, travel, liquidity, diversification, and retirement? • Are you selling your property or business and want to defer your capital gains tax instead of paying it to Uncle Sam or have to do a 1031 exchange and start over with a new property, new management, and new liability? • Are high capital gains taxes around 37–50 percent of your gain and restrictive 1031 laws holding you back from selling your commercial real estate?

There is another way, and for some, it’s a better way. It’s called a deferred sales trust (not to be confused with a Delaware Statutory Trust). Most mobile home park owners struggle with capital gains tax and depreciation recapture when they sell their properties or businesses. We use a deferred sales trust to help them gain tax deferral, freedom, flexibility, liquidity, and diversification with their funds so they can create and preserve more wealth. What is a deferred sales trust? It is a manufactured installment note. The basis of this is the “seller carry back” IRC 453 tax law, which goes back to the 1920s. The process starts when a property owner sells their property to a trust owned by a third-party company. The trust sells the property or business. Next, the trust "pays" you. The payment isn't in cash but with a payment contract called an "installment contract." The contract promises to make payments to you over an agreed period of time. There are zero taxes to the trust on the sale since the trust "purchased" the property from you. The payment is made with an installment contract, which makes payments to you over an agreed period of time. The options for when and how payments can be made are flexible, as are where the funds are invested and who manages the funds. The tax code doesn't require payment of the capital gains until you start receiving installment payments. If you would like to learn more about the deferred sales trust and how it is different from a 1031 exchange or Delaware Statutory Trust, you can attend a free live webinar that will walk you through the strategy and the step-by-step process every Friday at 10 a.m. PST. Visit our website to register at or call us directly to learn more at 916-886-2986 Bonus: I was recently on Kevin Bupp's podcast, "Real Estate Investing for Cashflow," if you would like to learn more about the deferred sale trust here: Episode 190: The Little Known Secret to Legally Defer Your Capital Gains from Real Estate and Preserving Your Wealth via the Deferred Sales Trust – with Brett Swarts

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Embracing ‘Spendophobia’ You’ve spent your entire life being told to save, save, save. Now you’re finally retired, so it’s time to spend some of that money — but you’re scared! This is only natural because it means breaking a lifelong habit of socking away money and refusing to touch it. 3Ways to Invest in Yourself After Retirement

in-ground pool or a private tennis court might be outside your budget, but new kitchen countertops or a deeper tub will add a touch of luxury to the space you spend the most time in. Upgrading your home is almost always a good investment because it adds equity, which will pay off down the road. That extra cash will come in handy if you decide to sell later on in order to downsize or you plan to enter assisted living. Don’t forget to set aside money for ongoing maintenance, such as a new water heater or roof repairs. Go Back to College It might sound counterintuitive to go to college when you’re not planning to go back to work, but continuing your education after retirement offers many benefits. Many individuals find themselves with more time on their hands than they’re accustomed to, and without a plan to fill this time, it’s easy to become depressed or isolated. Numerous studies have shown that continuing to exercise your brain has a positive impact on cognitive function, so taking a few classes can be the perfect way to stay busy and keep your mind sharp. Attending school late in life is also a great

The first step to a healthy community is a proper screening process. Being able to suss out bad actors and unreliable tenants before they have a chance to move in will always be more beneficial than simply giving everyone the benefit of the doubt and paying the price later. Maybe 30 years ago, business could be done based on the power of a handshake alone, but these days, it pays to add a few more layers to the screening process. Check Those Credit Scores One of the best factors to gauge a tenant’s reliability is their credit score. In running a national credit check, you aren’t necessarily looking for someone with a picture-perfect record; rather, you are looking to spot good habits. More than just giving you a number, these checks show you how their score has changed over time, letting you piece together how financially disciplined a prospect truly is. Verify References It happens more often than you think: Unwilling to let their last landlord vouch for them, a prospective tenant lists a friend or relative. Thanks to the internet, these ruses are easier to spot than ever before. By simply Googling “[the county your prospect last You’re not alone. A recent study of retirees’ spending habits showed many people actually spend less than they can afford to. They’re scared of the “what ifs” that come with living on a fixed income. However, at age 70 1/2, you have to start taking the required minimum distributions (RMDs) from your traditional IRA and 401(k) whether you want to or not. Instead of stressing over the fact that you’re pulling money out of these accounts, embrace the opportunity to do something for yourself. Travel It can be tempting to hold off spending money as long as possible. After all, who knows how long you need your savings to last? Travel, however, is one thing you can indulge in early without feeling guilty. Even the most leisurely trips can be physically demanding, so it’s better to see the world at 70 rather than wait until you’re 90. To keep yourself on track financially, use the bucket system to set up a separate savings account just for travel. Invest in Your Home Once you no longer have to work five days a week, you’ll be in your home more often, so why not make it amazing? An Know Before You Rent Screening Best Practices

opportunity to indulge your passions and learn more about subjects you’ve always been interested in. Many colleges offer free classes or reduced tuition to seniors, so check with your local schools and see what classes or programs they have available.

lived in] property records” you can access a database of property owners from that area. If the name of the owner of your prospect’s last residencs doesn’t match the landlord they’ve included as a reference, chances are they've provided you with false information. Run a Deep Background Check The last thing you want is to shelter people with outstanding warrants or a history of making trouble. Thankfully, there are plenty of companies that offer comprehensive investigative services for a fee. These kinds of deep background checks will alert you to any past criminal activity by a prospect and pick up on any evictions or lawsuits made against them in the past. Why It Matters Good screening pays for itself. Why risk renting a space to someone who may fail to pay rent, damage property, or skip town altogether? That’s why effective screening is the very first thing we implement when taking over the management of a property. In one case, we saw a park’s revenue go from $38,000 to $163,000 through this one simple change.


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The 5-Second Rule Will Make You Sick

We live in the golden age of information. The answers to many of life’s questions are just an internet search away. Despite this readily available wisdom, we still have a bad habit of believing health-related myths. Here are three popular health “facts” that are total works of fiction.

filtered tap water. The same effect can be achieved with a home filtration system. Of course, if the tap water in your area has been contaminated, bottled water is a safer alternative. However, in most circumstances, bottled water is no healthier than tap water.

The 5-Second Rule Keeps Food Safe

Obviously germs and bacteria don’t really wait five seconds to pounce, but snatching your chip off the floor fast keeps most of the germs away, right? Not according to a 2006 study published by Dr. Paul Dawson. He found conclusive evidence that when food comes into contact with a contaminated surface, bacteria are transferred immediately. Even one second spent on tile, wood, or carpet is enough to infest your food with salmonella or another serious contaminant.

Cracking Your Knuckles Causes Arthritis

The connection between knuckle-cracking and arthritis came from studies where participants self-reported their habits. Modern medical research has shown these results to be false. The official stance from the John Hopkins Arthritis Center states, “There is no evidence that cracking knuckles causes any damage such as arthritis in the joints.” Still, chronic knuckle-cracking can lead to reduced grip strength, so you might want to break the habit anyway. You’ve probably heard these myths for years, but just because something is common knowledge doesn’t mean it is true. With information so easily available, always take the time to research the facts, especially when it comes to your health.

Bottled Water Is Safer Than Tap Water

People seeking out safer water alternatives increases the sales of bottled “spring water” each year. However, bottled water is more expensive, bad for the environment, and, as Dr. Morton Tavel of the Indiana University School of Medicine pointed out, over 50 percent of bottled water is just

The Value of Curb Appeal DRESS FOR THE TENANTS YOU WANT On Page 2, we talked about how you can screen out bad tenants, but this is just half the battle. To reduce churn and keep those lots full, your property also has to attract the right crowd. If you’re able to show potential residents a safe, clean, vibrant community, you’re more likely to attract renters who share those values. Here are a few aesthetic changes that we’ve found make a big difference.

A Sign for Sore Eyes

New signage can make an incredible impact on your property’s overall curb appeal. From welcome signs making a good first impression to directional signage giving new visitors a sense of place, these inexpensive guides are well worth the investment. Branded signage (using the same fonts, color schemes, etc.) is a subtle but effective way to showcase the professionalism of a park’s management.

Renovate Common Areas

Good Greenery

It’s important that public spaces, such as your park’s front office, laundry facilities, or mailboxes, are well-maintained and welcoming. After all, if these spaces look neglected, what message does that send to potential residents? Show these visitors that you’re proud of your property, and put in the effort to keep these spaces clean and welcoming. This will attract quality tenants and improve the quality of life for those already living in your community. The result is higher retention rates and fewer tenant issues.

Some simple landscaping can give your park a facelift. Using mulch, trees, and edging, you can transform vacant areas of your property into vibrant, welcoming green spaces. This helps attract new residents and gives current tenants a greater appreciation for their surroundings. People are more likely to maintain the outside of their own homes if the surrounding area is cared for.

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Get More Life Out of Your Windshield Wiper Blades When was the last time you replaced your windshield wiper blades? If you’re like most people, you may not remember. As a general rule of thumb, you should replace your wiper blades about once a year, assuming they’ve been through a normal level of wear and tear. However, with a few easy steps, you can make your blades last longer without compromising visibility. • Keep your windshield and wipers clean of debris, dirt, dust, and other particles. Anything on the window or the blades can cause damage. Simply wiping them off with a microfiber cloth can go a long way. • In cold weather, always clear your windshield of ice and snow before activating your wiper blades. Ice can shorten the life span of most wiper blades significantly. • Every time you gas up your vehicle, take a moment to clean your windshield and the wiper blades. You can run the squeegee sponge over the wiper blade or use a paper towel.

Get Physical Taking care of our physical health has also been shown to help brain function. According to a study by Sydney University in Australia, aerobic exercise is particularly good at jogging our memory. The researchers note that “aerobic exercise acts by preventing the usual decrease in neurogenesis associated with aging, thus resulting in greater retention of neural matter — particularly in the hippocampus.” In short, exercises like swimming and running keep the part of our brain responsible for memory from shrinking. Spend Time With Friends and Family Humans are social creatures. Many studies have shown that being a part of a supportive social group can significantly benefit our physical and mental health. In fact, the American Journal of Public Health reports that people who have daily contact with friends and family cut their risk of dementia and mental impairment almost in half. Our mental diaries may be longer and fuller than they were in Wilde’s day, but if we fill those pages with hobbies, exercise, and close friends, our memories will remain sharp and vivid for the rest of our days. Tips to Keep Memory Sharp and Improve Cognitive Function Strength of Mind • Watch your washer fluid levels and top it off regularly. When you run a cleaning cycle without washer fluid, the wiper blades deteriorate. How do you know when it’s time to replace your blades? The first sign is when they start streaking. However, in some cases, streaking may be caused by dirt or other grime stuck to the blades. If they continue to streak or skip after cleaning, they need to be replaced. Thankfully, wiper blades are typically the least expensive and easiest car part to replace. With this in mind, remember that you get what you pay for, and it pays to do research. There are many different blades on the market. Some are suited for icy conditions and some are designed for sunny weather. Take your time to read product descriptions to ensure you install blades that are right for your vehicle.

Irish poet Oscar Wilde once called memory “the diary that we all carry about with us.” Of course, in Wilde’s time, the average life expectancy was less than 50 years old. As modern medicine continues to enable people to live longer, these “diaries” tend to become muddled. Fortunately, there are ways to counteract the natural dulling of our memory that comes with time. Puzzle Yourself Just like any other muscle, our brain needs a workout in order to stay strong. As Dr. Celeste Robb-Nicholson of Harvard Medical School writes, “Challenging your brain with mental exercise is believed to activate processes that help maintain individual brain cells.” Activities like solving puzzles, learning a musical instrument, or picking up a new hobby work wonders to keep your mind active and your memory sharp. These mental exercises are especially important after retirement, often to make up for the loss of stimulating challenges that work used to provide.


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21st Century Property Management 3 Tools to Let You Maintain Your Park From Home

We Purchase Mobile Home Communities

Nationwide Quick and Confidential Closing References Available Upon Request

For park owners who don’t live on site, keeping an eye on your property can prove to be difficult. If you’re having to make monthly commutes just to check in on your property manager, we have an alternative solution that can save you time and money. Today's digital tools make it easier than ever to check in on your property remotely. Here’s a look at the tools we use to monitor our own mobile home parks from afar.

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Joanna's Recipe Corner Spicy Salmon Tartare

There are many video cameras available that are built to be mounted to vehicles — the GoPro being the most famous. At Sunrise Communities, we provide each of our property managers with one of these cameras and a suction cup mount they can fix to the dashboard of their car.

Inspired by Epicurious



• 1 8-ounce boneless, skinless salmon fillet • 1 tablespoon fresh lime juice • 1/4 teaspoon lime zest • 1/4 cup cucumber, seeded and finely diced • 1 1/2 teaspoons jalapeno peppers, seeded and minced • 1 1/2 teaspoons shallots, minceda • 3/4 teaspoon fresh ginger, peeled and finely grated

On the same day each month, we have our property managers drive through the community they are in charge of and hold to an agreed-upon pattern. They record the drive using their mounted camera and upload the footage to a file- sharing site such as DropBox. This way, we can review the footage from afar, spotting potholes, rule violations, and any trees that may need trimming.


• 1 1/2 teaspoons fresh cilantro, minced • 1 1/2 teaspoons fresh chives, minced • 1 1/2 teaspoons grapeseed or vegetable oil • Salt and freshly ground pepper, to taste • Crackers or chips, for serving

Unfortunately, not every property manager can be trusted. If you implement this remote video technique and feel like you aren’t getting the whole picture, we recommend bringing in third-party assistance. The gig economy works great in these situations. Posting an ad on a site like Craigslist can quickly connect you to amateur videographers in your park’s vicinity. For $75–$100, one of these freelancers can be hired to videotape specific aspects of your park you want to keep a closer eye on or believe your manager surreptitiously failed to capture. Using these tools, we’ve been able to ensure our community standards are being met in parks across the nation without ever having to buy a plane ticket. If travel is wearing on you and your wallet, we highly suggest investing in these low cost, easy-to-use digital tools.


1. Place salmon in freezer for 20 minutes to make slicing easier. 2. Meanwhile, prepare other ingredients for mixing. 3. Thinly slice salmon into sheets and cut sheets into strips and strips into cubes. When finished, you should have 1/8-inch cubes. 4. In a mixing bowl, combine salmon with all other ingredients. Season with salt and pepper. 5. Garnish with chips or crackers and serve.

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200 9th ave N, Suite #220 Safety Harbor, FL 34695 727-216-7903



P1 The Deferred Sales Trust

P2 3 Ways to Invest in Yourself After Retirement

Tenant Screening Best Practices

P3 Joanna's Recipe Corner

21st Century Property Management

P4 Get the Most out of Your Windshield Wiper Blades

3 Ways to Improve Your Memory

P5 Let’s Retire These Health Myths

The Value of Curb Appeal

P6 Prepare for an Adventure in Lapland

If you’re eager for a new adventure in 2019, you’ll surely find it in Swedish Lapland. As the northernmost region of Sweden, this unique area is home to national parks, glaciers, reindeer, the beguiling midnight sun, and spectacular night skies. Though it’s cold this time of year, one benefit of traveling to the region in winter is to catch a glimpse of the night sky. In late winter, the northern lights are visible from a few remote locations like Abisko National Park, one of the first established national parks in Sweden. Traveling to Abisko is an adventure in and of itself. From Stockholm, the fastest option is to take one of only two airlines that fly into Kiruna, then travel by train to Abisko. Despite the challenge of getting there, adventure-seeking visitors from around the world arrive each winter to experience the beauty of the Arctic. Winter attractions include ice skating, snowshoeing, and the Scandinavian sauna — though this is a must-visit any time of the year. Befriend a Scandinavian and you might be treated to some pickled herring or even a princess cake, a raspberry- filled dessert covered in marzipan. Scandinavians cherish their public lands, and the trail systems are well taken care of. Hikers and backpackers can enjoy the stunning Into the Arctic Circle Adventure in Swedish Lapland

beauty in both late spring and summer, as well as have a chance to see the midnight sun. Because of its far-north location, Swedish Lapland receives close to 24 hours of sunlight from June through August. Between the boulder fields, mountains, and stunning glacial lakes, hiking here is a treat. While hiking, you may spot some reindeer herds or lemmings (a small rodent similar to a hamster) racing around rocks. The Sami people have herded reindeer for thousands of years through this very land. In the summer, keep an eye out for blueberries, lingonberries, and the brightly colored cloudberries. Because of the Arctic climate, weather conditions can change quickly from sunshine to rain and heavy fog, so it’s best to dress in layers and bring wind and rain protection if you plan to venture into the backcountry. The fantastic scenery of Swedish Lapland awaits you, no matter when you decide to take your trip. What are you waiting for?


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