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August 29th 2005, not a great day if you happen to live on the gulf coast states of Mississippi, Alabama, and Louisiana. On that day, arguably the worst hurricane to hit the gulf coast came ashore. Hurricane Katrina roared in with 150+ mph winds and a tidal surge that towered over the buildings that it was about to crush.

So the cleanup began. The American Red Cross, the Southern Baptist Disaster Relief, the national Guard, and thousands of huge hearted volunteers arrived. The chore of clearing debris made even more difficult by the knowledge that as the next remnant of a home or vehicle unturned may reveal another who didn't get escape.

In the months that followed, government officials began addressing the issue of rebuilding. Ideas of housing, grant programs, architectural styles all were set in motion and the reconstruction began. Or has it?

Biloxi is being rebuilt from the ground up, basically creating an entirely new waterfront city. An estimated 55,000 new homes will need to be built in the next few years, and less than 10,000 (less than 18%) of these homes have already been built. While the dollar value of building permits has exceeded one billion dollars in the Biloxi market, less than fifty two million dollars has been spent on new home construction. That is 341homes. (Source:The Journal South Mississippi Business)

The state of Mississippi has determined that there are still 40,000 homes to be rebuilt in order to bring its six southernmost counties up to their pre-Katrina count.

Based on a (2005) pre-Katrina population of 445,375 individuals in the six coastal counties of Pearl River, Hancock, Stone, Harrison, George and Jackson, this figure places the number of standing homes before Katrina at about 110,000.

State estimates indicate that 2+ years later, the 40,000 are still not livable - they remain either as slabs from water damage or crippled by excessive wind damage to walls, ceilings and roofs.

Why the slow going? After all the GO Zone act allowing the 50% accelarated depreciation was swiftly put in to place, laws were changed allowing casinos to be built on shore, the Mississippi gulf coast was the 6th fastest appreciating maket in the country according to Forbes.com, jobs were increasing. As another writer has so crassly put it, this was the "perfect storm." Try telling that to the hundreds of thousands of suddenly homeless.

Two things happened. First there was the news media. The coverage from the networks and the news channels riveted us with footage and stories of the destruction of New Orleans. They gave us captivating speeches by the politicians from that city who promised to be their savior. Then, the celebrity bandwagon started, with prominent entertainment figures shown walking the streets and asking everyone else to help. In the meantime, Mississippi was digging out.

Secondly came the "programs". Prior to Katrina, Mississippi was a 30%+ rental population state, but landlords are either still waiting for their insurance checks or they have received teir checks and decided not to rebuild. So as an incentive, the Mississippi Rental Assistance Program was introduced. The purpose of this plan was to entice private investors to build badly needed rental housing.

For doing this, the investor was to receive a forgivable loan for up to $40,000 for a single family home or $73,000 on a duplex. This was conditional on the home being rented for a period of 5 years at a rent set by the governing bodies. This rent would mean a negative cashflow for the investor, and would be made further negative if the investor did not cover utility costs therefore providing the tenant with a utility credit. This is also conditional on the property not being vacant for a period of time.

Vacancy exceeding a certain period triggers repayment.

• Sale of the property before the end of 5 years triggers repayment
• The loan appears as a lien on the property during the 5 years
• The loan is an application/selection process not "guaranteed" as some claim
•  

So how does all this tie in to the greed factor? It's simple, groups all around the country have marketed this program to investors with a "100% certainty" that they will get this money or they don't have to do the deal. Here is how this has hurt. Katrina hit August 29th 2005. The deadline for this program was October 31, 2007. To this date no money has been disbursed!

This means investors haven't built any new homes, and to compound the problems the temporary housing for victims is making them sick. Literally! Investors all want this forgivable loan so that the new 328i, or the once in a lifetime cruise become reality, forgetting about the $400+ a month that they are negative in a property they can't sell for 5 years.

In closing, take a good look at the 50% bonus depreciation, weigh in on the growing market that is the Mississippi gulf coast and help this region get back on track. You may profit more than just financially.

Neil G. Blair-Bennett *GOZonehomes.com*

PASCAGOULA --

But a priority will be to recruit workers. "We need to be able to find, recruit and retain a good work force," Edenzon said. "We need more people. And how do we make sure the ones that are here stay and continue doing a good job? And how do we go into the community and into the state to recruit people to come here to work? "I'd be guessing, but I could use 400 to 500," he said

"In an appeal to business and government leaders in Jackson County, Northrop Grumman Ship Systems President Philip Teel said the Ingalls shipyard needs workers to keep up with the $9 billion backlog of Navy ships it has slated. "At the highest levels of government there are questions of whether we will be able to get that work done in the time frame they need it to be done," Teel told members of the Jackson County Area Chamber of Commerce at its annual membership meeting in Moss Point Tuesday. Teel said the Ingalls yard is short 400 craftspeople and 250 salaried positions. He blamed housing and insurance as two big problems. He said the yard has a three-year plan to solve the work force problem."

The insurance issues are being addressed, but what about the housing? Biloxi is being rebuilt from the ground up, basically creating an entirely new waterfront city. An estimated 55,000 new homes will need to be built in the next few years, and less than 10,000 (less than 18%) of these homes have already been built. While the dollar value of building permits has exceeded one billion dollars in the Biloxi market, less than fifty two million dollars has been spent on new home construction. That is 341homes. The creation of an almost entirely new oceanfront city is unprecedented in modern American history, as most oceanfront real estate was developed years ago. This is a rare chance to create a brand new community, with none of the problems and disadvantages of real estate that was developed during and for the 19th and 20th centuries, instead of the 21st.

In short, this is one of the most viable markets in the country, and the outlook for the next several years is strong. Read more about the GO Zone and other projects at theMoneyTREIN.com

You can fing groups posting, blogging, webinars, seminars, e-campaigns, tours, rallies, media blitzes, faxes, carrier pigeons, smoke signals, drums, intelligence briefings, and virtually any other king of media summit all talking about the "GO Zone". But does it make sense to the average person? 

The IRS has all kinds of incentives and tax breaks such as bigger education credits, extended tax deadliines, bigger charitable giving deductions, and much more. But... the one that you as a real estate investor should pay attention to is the whopping bonus 50% depreciation allowance for investors purchasing property (not just real estate) after August 27, 2005.  As long as the property is either "nonresidential real property" or "residential rental property" (which pretty much means just about everything you would want to invest in) you can partake in this rare IRS "gift".

What does this mean to you and your bottom line?  It means a huge tax deduction in the first year and possibly a huge tax return. 

What are the requirements you need to meet?

• Place the property in service after August 27, 2005 but before 2009 (for real property) Note: The GO Zone depreciation has been extended until Dec 31, 2010 for Hancock, Harrison, Jackson and Pearl River Counties in Mississippi 
• Can be:  tangible property depreciated under MACRS system, water utility property, computer software readily available to general public, qualified leasehold improvement property, and.... NONRESIDENTIAL REAL PROPERTY AND RESIDENTIAL RENTAL PROPERTY.

Some people have been saying that it is just a 50% depreciation in the first year... but it is an additional 50% depreciation in year 1.  You can depreciation your standard rate plus the 50%!

Just don't get too carried away.  Just like with any IRS "gift" there is a slight catch.  If you choose to take the 50% depreciation and the IRS removes the "Go zone" designation for the area you now own in, you may have to "recapture as ordinary income any excess benefit you received from claiming the special allowance". 

Either way, this bonus depreciation could mean big ROI from the outset. 

So what kind of property works best in the "GO Zone"? See our outstanding cashflow properties at gozonehomes.com.