While Go Zone accelerated depreciation is a great reason to buy real estate investments on the Mississippi Gulf Coast, it is not the only on. While every home buyer and investors needs are different, the one thing everyone wants to see is appreciation in their investment. Looking for emerging real estate markets is one of the key factors for investors who want to see their real estate investments grow in value.

The Mississippi Gulf Coast is a truly under-valued area in terms of real estate in general. Part of this is due to other states’ overall view of Mississippi in general, but we all aren’t toothless slobs that can’t enunciate – just the ones they show on the 6 o’clock news. The rest of us are at home with our families or working

Whether you believe it or not, the Mississippi Coast is a true emerging real estate market and more investors are realizing that now. If you want to be an early mover, contact me and let’s analyze your investment strategy.

So What Makes the Mississippi Coast so Special?

The MS Coast has numerous economic engines which include:

1. Federal Dollars. Keesler Air Force Base (Biloxi), Naval Construction Battalion (Gulfport), Camp Shelby Army Base (Wiggins), Stennis Space Center (Hancock County) and the Coast Guard station (Gulfport) which are all within about 40 miles of each other. Keesler Air Force Base is home to the Cyber Command Training Center as well as the Hurricane Hunters. These bases keep a steady flow of military personnel moving in and out of the area which helps to balance the housing market even when national housing statistics are very gloom.
2. Local Economic Influences. Most strong real estate markets have at least one driving force to the economy – the MS Coast has many. Not only does south Mississippi have the military installations, but it also happens to be a major gaming destination. Billions of dollars have come to the Coast through the gaming industry. A “Vegas on the Beach” if you will, major casinos in Biloxi, Gulfport, and Bay St Louis, with more planned in other areas such as D’Iberville (a truly growing area) as well. Other economic engines include seafood, ship building, tourism (beaches, islands, fishing) and a growing container port. Gulfport is expanding its already large container port to be one of the largest in the country and will be state of the art (see Port of the Future – outside link opens in new window).
3. Prices. The Gulf Coast of Mississippi is one of the most undervalued areas in the country as far as what you get for the money and what its potential is. With the exception of a surge immediately after hurricane Katrina that had to balance itself out, homes have shown very steady appreciation historically. Currently, new homes can be bought in the $120k+ range but inside subdivisions, I recommend going a step above to the $130k-$140k range. The initial cash on cash looks less appealing, but these subdivisions usually offer a much better exit and less chance of “going downhill”. There are many very nice subdivisions that offer smaller homes in this range that would appeal to investors, but most agents do not show the potential. For those comfortable with buying older homes and doing some upgrades, it is very feasible to see positive cash flow and equity almost immediately in 10+ year old homes. Want to take the development route? There are an abundance of quality properties to start on.
4. Tax Incentives. Tax incentives are a great reason to look at an area, but there is so much more to it. Many investors who bought under the first part of the Go Zone got took in by unscrupulous builders and real estate agents that sold properties at above (in my opinion) market value in order to reap the rewards from those sales. Go Zone is an awesome incentive – when you are talking to someone who wants your repeat business in the future and not just a fly-by-night company looking to make a buck. If you are considering taking advantage of Go Zone, time is drawing near. Don’t wait until “later” because you may lose out on your ability. Pickings are slim and the best properties go to early movers. I can help you get great deals if you contact me in enough time. Don’t let Go Zone be your only reason for investing here though – there are so many good reasons.
5. Location. Location, Location, Location, right? The Biloxi/Gulfport/D’Iberville/Ocean Springs areas are located on the beautiful Gulf Coast. If I didn’t have you before, let me say it again – waterfront communities! Everyone loves being near the water. Well, maybe not everyone, but a LOT of people do. We also happen to be approximately an hour from New Orleans, LA and Mobile, AL. Both of these cities can be identified as emerging markets on their own, but the MS Coast is better than either due to federal spending, diversified local economy, gaming, tourism, and the in-progress port expansion.
6. Growth Potential. The MS Coast is comprised of several cities including Bay St Louis, Pass Christian, Diamondhead, Long Beach, Gulfport, Biloxi, D’Iberville, St Martin/Ocean Springs, and other smaller areas surrounding. In many cases, there is no clear definition between these cities other than the corporate lines that divide them. This makes for a huge growth potential in these areas producing one large city base rather than several smaller communities. There is also plenty of room for expansion in the northern parts of these counties which has already started due to lower insurance rates north of the Interstate, however, the bulk of the population is in areas south of the Interstate with the exception of North Gulfport and the outstandingly fast growth in the D’Iberville area.
7. Quality of Life. As a “military brat” myself, I have lived in numerous place. I was born in Biloxi and moved back in 1999 to help my grandmother, who’s health was diminishing. I have found no where else that I really could say that I loved as much as here. There is always something going on, the people are great, the dining is just as good as the people, and when you simply don’t know what else to do – a simple walk on the beach or day on the water will put your mind at ease and really help you appreciate life.

This is my home, one of the best emerging markets in the country, and I enjoy it daily. An investment on the MS Coast is a great one indeed, provided you are talking to the right person. I look forward to discussing your needs with you and working on your portfolio. When you are ready to move here yourself, I look forward to relaxing with a fishing pole in hand, and enjoying what the Mississippi Coast has blessed us with.

Go Zone accelerated depreciation is in its final year without any anticipation of being extended again. This means that if you are serious about doing anything with Go Zone property – you need to start acting now.

There are a lot of agents out there that are selling properties, saying they qualify for Go Zone under a “developer’s option”, but from the tax professionals I have spoken with, this is very murky water. I have had one broker tell me that they have been able to make this work, but two tax attorneys said no way. My philosophy is that if you go by the book, you won’t be heartbroken later when some IRS auditor tells you that you tried to game the system and lost.

The inventory for truly qualifying Go Zone property is declining. There is almost no multi-family properties that qualify and there are few single family properties that really make sense from an investment analysis. When I look at any real estate investment, I feel that it is important to make sense before tax incentives – otherwise it is not really an incentive, it just becomes a tool to sell.

There are a handful of single family homes being built that will qualify and make good sense from an investment standpoint.  If multi-family (duplex, triplex, fourplex or more units) is what you are most interested in, I have builders ready to get you a top-quality product that will make sense financially AND you can get the Go Zone depreciation.

Contact me today for more information or if you are ready to get started.

The Go Zone offers 50% accelerated depreciation in the first year of acquiring an eligible property. While the ins and outs need to be discussed with your tax professional, I have been working with Go Zone since its inception and not only can I assist you with the information, but also the properties.

I take a little different approach than many agents. Many agents are pitching overpriced junk because it makes sense as an investment after the go zone depreciation is applied. I look for properties that are good investments before the depreciation. This makes the Go Zone icing on the cake instead of just a way for builders to make more money on their work.

It is no secret that waterfront properties are typically in higher demand and make more money as rentals. What if you could build waterfront developments, be in them for about the same cost as inland properties, and create a higher cash flow?

Some investors may shy away from this proposal because of the risk of waterfront properties in a hurricane area. If you do not feel comfortable with the fact that flood insurance should take care of this for you, I can assist with many other Go Zone viable properties as well.

Contact me today. Time is running out and it has been posted in good faith that there is no reason to expect Go Zone to be extended again beyond the end of this year.

The MS Coast won another victory when the Go Zone bill was extended last month, providing for accelerated depreciation on real estate property put into use during 2011. The prior extension [2010] was a bit “thrown together” and extended the “put into use” part, but did not extend the expenditure date. What this means is that if you bought real estate in the Go Zone for the tax credits, you had to purchase something that was built on or prior to December 31, 2009 – this has changed.

The new extension will allow for any new property that has not been put into use. So, any property built since the Go Zone was enacted and not put into use will qualify.

What does this mean to you? Anyone looking for Go Zone property during 2010 had to find property that was built before the end of 2009 and never occupied (put into use). As you can imagine, the later in the year it got – the harder it was to find good, viable property as all the good ones were already sold. This left mostly bad investments or really high-dollar investments that only a handful of people could qualify for.

After a few hours tracking down information on the extension, I was able to get in contact with two attorneys that are well-versed in Go Zone. One of which I have referred before, and the other was very prompt in response to my inquiries and based on some papers he has authored/co-authored, seems extremely knowledgeable.

John Harral with ButlerSnow stated to me in a phone conversation that ultimately, any property built after Katrina and put into use during 2011 would qualify, although he also said that any specific questions should be directed to him or another Go Zone familiar attorney and your tax adviser.

Michael Haun with Paul, Hastings, Janofsky & Walker LLP, stated:

The recent extension pushed back both the placed-in-service date and the construction date to January 1, 2011.  Consequently, with respect to nonresidential real property or residential rental property that is placed-in-service by December 31, 2011, the adjusted basis of such property attributable to construction before January 1, 2012 is now eligible for the additional first-year depreciation.

What does that mean? In as simple terms as possible – anything that has been built and not put into use will qualify. There are an abundance of opportunities in existing properties as well as building new ones that would qualify for this. Use this CONTACT ME link to email or call me to help you find viable investments for your needs.

Attorney John Harral can be reached at (228) 575-3038
Attorney Michael Haun can be reached at (404) 815-2279
I (Damion Flynn, Broker) can be reached directly at (228) 365-1883

This Go Zone post is deprecated.

Go Zone was extended through December 31, 2011 and offers some more encouraging opportunities. Please see all Go Zone posts to get the most up to date information on Go Zone or contact me for the best deals.

Haley Barbour signed the tourism bill which will allow significant tax incentives to Casinos which build non-gaming attractions/amenities such as hotels, theme parks, convention centers or other venues that would give tourists more to do when visiting the Mississippi Gulf Coast.

The new bill will create many more opportunities for our area, both in recreation, jobs, and real estate. The Tourism Bill, House Bill 1467, will provide tax incentives to gaming institutions who build non-gaming establishments with a minimum investment of $10 million or hotels with a minimum investment of $40 million.

My predictions are that this bill will help stimulate casinos to build other attractions which would help the overall desirability of the area and produce numerous entry level jobs as well as a good portion of management level positions. Things that many residents miss from our area are things such as go-cart tracks, putt-putt golf, and similar smaller attractions which can now be done on a larger scale – I still miss Fun Time USA, which I can remember spending all day when I was a kid on the beach in Gulfport.

The easy access of the new Hwy 605 corridor that stretches from Gulfport through Tradition as well the Hwy 67 which creates a direct commute from Saucier (Hwy 49) to D’Iberville are my predictions for some projects. While some of the northern portions of these roads may see further growth times, you should expect to see something happening around the interchanges closer to I-10 and potentially in the Tradition area, where Hwy 605 and Hwy 67 meet, especially now that Mason Trendsetters is building in Tradition and bringing an affordable house plan to the community at a great value.

Investors:
Not only is our area the top-forecasted market for appreciation over the coming years, but with incentives like these, it makes it an even smarter investment. We are currently looking to investors who have a vision of the future on the Mississippi Gulf Coast, and want to get great properties in one of the strongest markets – which just so happens to contain some of the most under-valued real estate in the country.

Whether you are looking for immediate cash flow properties or are a little more financially able and looking to land-bank properties for future return – give us a call!

Casino Operators:
If you are looking for some great ideas to capture some of these incentives – I am open for discussion

CALL OR EMAIL US TODAY for more information on investing on the Mississippi Coast!