1. You will need to set up an exchange account with an authorized 1031 exchange firm. The 1031 account has to be opened before the close of escrow on the property being sold. It can be done in a rush, but it is best to have this process planned in advance with the escrow company.
2. Write up the 1031 Exchange terminology in the sales contract or escrow instructions. The appropriate 1031 language should be added to the sales contract or escrow instructions for the property being sold. The exchange company can draw up the proper language.
3. Execute the exchange agreement with the escrow company and exchange firm with the necessary signatures and documents.
4. A like kind replacement property must be located within forty five days. A like kind property essentially means real estate for real estate. This like kind property must be located within forty five days per the IRS requirement. Once the replacement property has been identified then the sale and escrow must be completed within six months.
5. Forward the 45 day identification letter. This identification letter has to be submitted within forty five days, and the replacement property must be located and identified. This is typically the most difficult part since you need to secure the acquisition of a second property within this six week period.
6. Forward funds for deposits, this can be done from a 1031 exchange account. There is typically a form from the 1031 exchange company. It is also possible for the deposit to come from your personal account with a reimbursement later.
7. Then you must complete the execution of the escrow documents from both parties on your replacement property, and fund the purchase with your prior closed escrow funds. If the replacement property requires a loan, or it is an income property then other steps maybe needed. Thus identifying an experienced 1031 firm will assist in more complicated exchanges. Also additional funds may be needed if the replacement property has higher value then the prior sold property. Again the 1031 exchange firm can assist with these additional steps.
Sunday, July 18, 2010
Saturday, July 10, 2010
Solar Power Company Gets Approval to Implement Its Development Plan on Rural Residential Los Angeles County Land
A rectangular shaped parcel of just over 200 acres at 100th Street West and Ave H has won preliminary approval for solar development by the City of Lancaster planning commission. TA High Desert LLC (Tuusso Energy) plans to construct of a 20 megawatt solar photovoltaic electric generation facility on rural residential zoned land in Los Angeles County. This land has been typically vacant land or farm land, but the green energy economy has changed the future for rural Los Angeles land.
The location is designated NU (Non-Urban Residential) by the General Plan and is zoned RR 2.5 (Rural Residential 2.5 one dwelling unit per 2.5 acres), and this site is currently unused. This proposed project would operate year round with a production of up to 20 megawatts of renewable electric power during daytime hours. Tuusso Energy has a 20 year agreement with Southern California Edison to supply electricity generated by the proposed project. The project needs to clear a few environmental, biological, and mitigation steps.
The environmental review documents have disclosed no significant adverse impacts resulting from the proposed project after mitigation measures have been applied.
The photovoltaic panels and trackers are silent and low profile of six feet to eight feet depending on the position of the sun, so visual impact would be minimal. In order to further reduce any impacts, Tuusso Energy would install a line of trees along Avenue I and H, 100th Street West, and 97th Street West that would provide additional screening of the site. Additionally, two biological resource surveys were conducted for the location which found approximately 160 acres of potential foraging habitat within 10 miles of a hawk’s nest, thus the removal of the 200 acres of potential foraging habitat would be minimal. Also, mitigation measures are required to ensure that impacts to biological resources remain less than significant. Once these mitigation measures are taken the board found that the potential impacts to any special status species would be reduced. They also indicated that the projects construction and materials will not pose any environmental hazard to the local community.
This project appears to have met all the necessary requirements for implementation, and it was done in under a year. The landscape of Antelope Valley has been rapidly changing, and this exercise shows the potential for profits outside of typically residential building can be found in the valley as the State moves to green energy.
The location is designated NU (Non-Urban Residential) by the General Plan and is zoned RR 2.5 (Rural Residential 2.5 one dwelling unit per 2.5 acres), and this site is currently unused. This proposed project would operate year round with a production of up to 20 megawatts of renewable electric power during daytime hours. Tuusso Energy has a 20 year agreement with Southern California Edison to supply electricity generated by the proposed project. The project needs to clear a few environmental, biological, and mitigation steps.
The environmental review documents have disclosed no significant adverse impacts resulting from the proposed project after mitigation measures have been applied.
The photovoltaic panels and trackers are silent and low profile of six feet to eight feet depending on the position of the sun, so visual impact would be minimal. In order to further reduce any impacts, Tuusso Energy would install a line of trees along Avenue I and H, 100th Street West, and 97th Street West that would provide additional screening of the site. Additionally, two biological resource surveys were conducted for the location which found approximately 160 acres of potential foraging habitat within 10 miles of a hawk’s nest, thus the removal of the 200 acres of potential foraging habitat would be minimal. Also, mitigation measures are required to ensure that impacts to biological resources remain less than significant. Once these mitigation measures are taken the board found that the potential impacts to any special status species would be reduced. They also indicated that the projects construction and materials will not pose any environmental hazard to the local community.
This project appears to have met all the necessary requirements for implementation, and it was done in under a year. The landscape of Antelope Valley has been rapidly changing, and this exercise shows the potential for profits outside of typically residential building can be found in the valley as the State moves to green energy.
Saturday, June 19, 2010
Antelope Valley Groundwater Case Flows On…
There is a class action lawsuit, which is about a land owners right to pump groundwater in the Antelope Valley. This lawsuit addresses a property owner’s right to pump their own water beneath their property. Currently State Law allows property owners to pump and use groundwater beneath the surface on their land. In Los Angeles County, however, the naturally available supply of water in the Antelope Valley Basin may not be adequate to satisfy everyone who wants to use that water.
The suit is the Willis Class Action which requests the Court to rule that private landowners in the Antelope Valley who do not presently pump water on their properties retain the right to use the water underlying their properties. The Court has not yet ruled on these claims. This will affect land owners who wish to build custom homes on county land, but not city residents. Most of Antelope Valley is rural residential and agricultural land, so the ruling targets private land owners and farmers.
The Case Number is 1-05-CV-049053 at Santa Clara County Court under Judge Komar, with the next calendar date set for July 15, 2010. The schedule indicates that this will be the deadline for expert witness disclosure and exchange of expert witness information, including any reports prepared by such experts, and any party who intends to call non-expert witnesses to provide percipient testimony must file their statements listing such witness(s). The court calendar is set through Sept. 27, 2010 where the Court Trial Phase 3 takes place, (Status of Valley Aquifer and Issue of Overdraft)10 days with all discovery to be completed 30 days before trial and all motions shall be heard no later than 15 days before trial date.
The lawsuit has been dragging on for years now with the essential position by Los Angeles County claiming adverse possession, and rescinding property owner and residents' rights to their own water? We will keep you updated here as this litigation progresses.
The suit is the Willis Class Action which requests the Court to rule that private landowners in the Antelope Valley who do not presently pump water on their properties retain the right to use the water underlying their properties. The Court has not yet ruled on these claims. This will affect land owners who wish to build custom homes on county land, but not city residents. Most of Antelope Valley is rural residential and agricultural land, so the ruling targets private land owners and farmers.
The Case Number is 1-05-CV-049053 at Santa Clara County Court under Judge Komar, with the next calendar date set for July 15, 2010. The schedule indicates that this will be the deadline for expert witness disclosure and exchange of expert witness information, including any reports prepared by such experts, and any party who intends to call non-expert witnesses to provide percipient testimony must file their statements listing such witness(s). The court calendar is set through Sept. 27, 2010 where the Court Trial Phase 3 takes place, (Status of Valley Aquifer and Issue of Overdraft)10 days with all discovery to be completed 30 days before trial and all motions shall be heard no later than 15 days before trial date.
The lawsuit has been dragging on for years now with the essential position by Los Angeles County claiming adverse possession, and rescinding property owner and residents' rights to their own water? We will keep you updated here as this litigation progresses.
Friday, June 4, 2010
The Solar Land Grab Continues As Two Los Angeles County Solar Projects Have Been Purchased by First Solar
The San Fernando Valley Business Journal has indicated that First Solar Inc. recently acquired a current project undertaken by Nextlight Renewable Power LLC (a solar module company). First Solar is reported to have acquired the project in a deal worth $285 million. The purchase of NextLight Renewable Power project at 170th West at Ave D near Lancaster, Ca. is the latest by First Solar as part of its strategy to acquire companies with projects already in development.
NextLight’s project AV Solar Ranch One is a 230-megawatt photovoltaic solar panel facility west of Lancaster, which they only recently started in late 2009. This project compliments some existing solar facilities that First Solar has in Riverside County and in Blythe. According to First Solar’s press release the Riverside County project will produce enough power for 160,000 homes.
The Antelope Valley Press reported earlier this year that First Solar Inc. had acquired a couple of solar power projects in their early development by Edison Mission Energy, which is the power generation division of Edison International. These two projects acquired by First Solar are photovoltaic projects one near Lake Los Angeles at 240th East at Ave S and the other near Mojave in Kern County.
According to AVPress, Allison Gatlin’s report "They purchased the entire development pipeline," said Bob Steins, public affairs manager for Edison International. The 150-megawatt Gray Butte plant (240th East at S) is in the permitting process with Los Angeles County. These latest acquisitions are private land purchases on previously farmed land. The company has previously purchased public land under the Bureau of Land Management which has fast tracked the permit process. These two projects in Antelope Valley are only in the planning and permitting stages, so the plants can be built to suit First Solar’ project needs. These solar projects should compliment the landscape of Antelope Valley as they will be situated on Los Angeles County Land outside the city limits of Lancaster and Palmdale, Ca. and primarily be invisible to residents.
These solar companies have bought low priced land at the low end of the market paving the way for reduced prices for other land investors. Land investment has been a great hedge against inflation and over the years has proven to be a fantastic long term investment. Ideal developable parcels have been bought by housing and solar companies leaving great opportunities for IRA investments to buy land near these developments.
NextLight’s project AV Solar Ranch One is a 230-megawatt photovoltaic solar panel facility west of Lancaster, which they only recently started in late 2009. This project compliments some existing solar facilities that First Solar has in Riverside County and in Blythe. According to First Solar’s press release the Riverside County project will produce enough power for 160,000 homes.
The Antelope Valley Press reported earlier this year that First Solar Inc. had acquired a couple of solar power projects in their early development by Edison Mission Energy, which is the power generation division of Edison International. These two projects acquired by First Solar are photovoltaic projects one near Lake Los Angeles at 240th East at Ave S and the other near Mojave in Kern County.
According to AVPress, Allison Gatlin’s report "They purchased the entire development pipeline," said Bob Steins, public affairs manager for Edison International. The 150-megawatt Gray Butte plant (240th East at S) is in the permitting process with Los Angeles County. These latest acquisitions are private land purchases on previously farmed land. The company has previously purchased public land under the Bureau of Land Management which has fast tracked the permit process. These two projects in Antelope Valley are only in the planning and permitting stages, so the plants can be built to suit First Solar’ project needs. These solar projects should compliment the landscape of Antelope Valley as they will be situated on Los Angeles County Land outside the city limits of Lancaster and Palmdale, Ca. and primarily be invisible to residents.
These solar companies have bought low priced land at the low end of the market paving the way for reduced prices for other land investors. Land investment has been a great hedge against inflation and over the years has proven to be a fantastic long term investment. Ideal developable parcels have been bought by housing and solar companies leaving great opportunities for IRA investments to buy land near these developments.
Wednesday, May 12, 2010
Vacant Building Gets a New Tenant
Just last month Macy’s announced it will open a store in Palmdale, CA, beginning in the fall of 2010. The single story location is 110,000-square-feet. Now Macy’s will be located in the Antelope Valley Mall at the former Gottschalk’s location, and this will be Macy’s first presence in the Antelope Valley.
Macy’s press release indicated it will offer a full range of apparel and accessories for women, men and children, as well as housewares, home textiles and luggage, and the store will employ approximately 130 associates.
The previous department store chain Gottschalks Inc had stores in California, Washington, Alaska, Oregon, Nevada and Idaho, but put itself up for sale and then filed to reorganize in a Chapter 11 bankruptcy in January of 2009. The location has been vacant for over a year now, and caused a blight in the mall.
The other anchor stores are JC Penny’s, Sears, and Dillard’s with smaller national chains like Pier 1 Imports, Men’s Wearhouse, and 24-Hour Fitness.
The Mall opened in 1990 and it actually sits above a wash of snow runoff from the neighboring San Gabriel Mountains. Land in this area sold for under a thousand an acre because of the wash, while unencumbered land sold for much much more. The city devised a wash channel via pipelines which now runs beneath today’s Mall. Prior land speculators saw the opportunity back in the 70’s and 80’s as Macy’s has found a new location for their expansion.
Macy’s press release indicated it will offer a full range of apparel and accessories for women, men and children, as well as housewares, home textiles and luggage, and the store will employ approximately 130 associates.
The previous department store chain Gottschalks Inc had stores in California, Washington, Alaska, Oregon, Nevada and Idaho, but put itself up for sale and then filed to reorganize in a Chapter 11 bankruptcy in January of 2009. The location has been vacant for over a year now, and caused a blight in the mall.
The other anchor stores are JC Penny’s, Sears, and Dillard’s with smaller national chains like Pier 1 Imports, Men’s Wearhouse, and 24-Hour Fitness.
The Mall opened in 1990 and it actually sits above a wash of snow runoff from the neighboring San Gabriel Mountains. Land in this area sold for under a thousand an acre because of the wash, while unencumbered land sold for much much more. The city devised a wash channel via pipelines which now runs beneath today’s Mall. Prior land speculators saw the opportunity back in the 70’s and 80’s as Macy’s has found a new location for their expansion.
Saturday, May 1, 2010
160+ acres at 50th Street West & Avenue H, The Development That Didn't
This large swath of land in Los Angeles County has had a proposed amendment to the General Plan land use from rural residential agricultural land (one dwelling per 2.5 acres) to a proposal for R-7000 urban residential (one dwelling unit per a minimum net area of 7,000 square feet). It would entail a subdivision for 655 single family residential lots in the R-7,000 Zone. The Planning Commission undertook a resolution to adopt the recommendation to deny the General Plan Amendment of zone change. The Planning Commission sent a letter in January requesting a response to the property owner’s engineering department regarding their project. If there was no response then the commission would recommend denial of the project, which had originally begun in October 2004. As there wasn’t an environmental review of the project, hence the property owner’s inaction was the indication that they were giving up their plans. To date no environmental progress has been made, and it cannot move forward without the Environmental Impact Report (EIR). As the project requires the application payment and a redesign of the plans, thus the inaction by the property owner forced the planning commission to deny the zone change.
Many investors may have purchased land in this area in anticipation of the zone change and potential housing track of hundreds of homes. The real estate foreclose rate in Lancaster and Palmdale has been significant, and most of those foreclosed homes have been repurchased by investors for a fraction of their prior value. The outlook for new housing in the valley has curtailed plans by this developer and others as there has been a few mapper’s who have dissolved their plans to develop a number of parcels on the east and west side of Lancaster and Palmdale. A loss for some can be an opportunity for another.
As land prices have dropped then low priced pre-developed land opportunities become available. The most recent low prices in land came after the Internet bubble in 2000 to 2004. Prices increased dramatically after that to the highs of 2006 and 2007. Buying at the end of the recession and selling at the top of the next wave has proved to be prudent for a number of investors. Unfortunately, many investors buy at market highs and sell in desperation when the market is at its lows. This current time frame is a much better period to look into pre-developed land investment. Pre-developed land has the greatest increase in potential value, since undeveloped land is much lower in price. Once development occurs in the area then Commercial and Housing companies need the land based on its proximity to other development. These developers have the funds to buy at $100,000 or more per acre for the right type of property. Today an investor can pay less then half that price. If you are looking for an opportunity for your IRA, or 401k then contact us and we can locate prime opportunity low priced land options.
Many investors may have purchased land in this area in anticipation of the zone change and potential housing track of hundreds of homes. The real estate foreclose rate in Lancaster and Palmdale has been significant, and most of those foreclosed homes have been repurchased by investors for a fraction of their prior value. The outlook for new housing in the valley has curtailed plans by this developer and others as there has been a few mapper’s who have dissolved their plans to develop a number of parcels on the east and west side of Lancaster and Palmdale. A loss for some can be an opportunity for another.
As land prices have dropped then low priced pre-developed land opportunities become available. The most recent low prices in land came after the Internet bubble in 2000 to 2004. Prices increased dramatically after that to the highs of 2006 and 2007. Buying at the end of the recession and selling at the top of the next wave has proved to be prudent for a number of investors. Unfortunately, many investors buy at market highs and sell in desperation when the market is at its lows. This current time frame is a much better period to look into pre-developed land investment. Pre-developed land has the greatest increase in potential value, since undeveloped land is much lower in price. Once development occurs in the area then Commercial and Housing companies need the land based on its proximity to other development. These developers have the funds to buy at $100,000 or more per acre for the right type of property. Today an investor can pay less then half that price. If you are looking for an opportunity for your IRA, or 401k then contact us and we can locate prime opportunity low priced land options.
Thursday, April 15, 2010
Antelope Valley Weed Abatement Notice and the Responsibility to the Vacant Land Investor
Los Angeles County via the Dept. of Agricultural Commissioner Weights and Measures has increased its Annual Weed Abatement Notices. There have been a number of properties in Lancaster and Palmdale California which have gotten this notice for the first time. The Abatement Notice levied to properties when an abundant amount of weeds, brush, neglected vegetation or trash has accumulated on properties. This includes homes and vacant lots. In addition, properties were sited if these weeds are located near a house or structure as they create potential fire hazards to all homes. Specifically in Antelope Valley there is a special notice. If your property has a large amount of tumbleweeds, which can roll onto roads, damage agriculture crops or build up near homes and fences then your property can be sited. If you are sited then the responsibility of the property owner is to clear the dry weeds or brush within one hundred to two hundred feet from a home or structure, and ten feet from a road.
Some owners are getting this notice and they do not have an abundant amount of weeds on the property. It is because of the special information regarding tumbleweeds. Because of environmental factors, inspections and abatement of the current season’s growth of tumbleweeds on parcels in the Antelope Valley will not begin until Oct of 2010. We surmise the Department of Agriculture will wait until the end of the summer season to see if tumbleweeds have rolled onto your property.
There have been hearings in late February for property owners who wish to present objections to their notice. After April 1, 2010 the County will be inspecting properties for excessive weeds and brush. If property owners have not inspected their parcels and cleared bush per the notice then the county will begin enforcement of the notice and clear excessive weeds, and the cost of the county abatement will be assessed to the property tax bill. If the property owner has not cleared the property themselves by March 15, 2010 then the county abatement team is on its way. The county has already assessed an inspection fee of $45 even if the property owner cleared the brush themselves. If the county hires independent firms to enforce the notice then the abatement fee will be much more expensive then if the property owner were to maintain their own parcel. In addition, if you received the notice and sold the property then the sited property owner will be liable for the assessed abatement fees, and not the new owner.
These abatement notices may increase over the years as Antelope Valley grows, so it is important to view your property periodically and maintain any debris and vegetation. The debris issue is a separate issue as people have used remote parts of the valley as a private dump. The land investor has less issues then the home investor but still must invest with responsibility.
Some owners are getting this notice and they do not have an abundant amount of weeds on the property. It is because of the special information regarding tumbleweeds. Because of environmental factors, inspections and abatement of the current season’s growth of tumbleweeds on parcels in the Antelope Valley will not begin until Oct of 2010. We surmise the Department of Agriculture will wait until the end of the summer season to see if tumbleweeds have rolled onto your property.
There have been hearings in late February for property owners who wish to present objections to their notice. After April 1, 2010 the County will be inspecting properties for excessive weeds and brush. If property owners have not inspected their parcels and cleared bush per the notice then the county will begin enforcement of the notice and clear excessive weeds, and the cost of the county abatement will be assessed to the property tax bill. If the property owner has not cleared the property themselves by March 15, 2010 then the county abatement team is on its way. The county has already assessed an inspection fee of $45 even if the property owner cleared the brush themselves. If the county hires independent firms to enforce the notice then the abatement fee will be much more expensive then if the property owner were to maintain their own parcel. In addition, if you received the notice and sold the property then the sited property owner will be liable for the assessed abatement fees, and not the new owner.
These abatement notices may increase over the years as Antelope Valley grows, so it is important to view your property periodically and maintain any debris and vegetation. The debris issue is a separate issue as people have used remote parts of the valley as a private dump. The land investor has less issues then the home investor but still must invest with responsibility.
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