Author: Raul Hughes

Finding Real Estate Private Investors

As a real estate investor.

You may feel like you sometimes take on the role of ‘teacher’, trying to explain passive investing, private lending and self-directed IRAs to prospective business partners. You probably have discovered that this concept is completely foreign to the average consumer. As a matter of fact, I can tell you that most “investment advisors” who work for mainstream firms have never been educated on self-directed IRAs and often even tell their own clients that IRA investing is fictional or even illegal.

One great marketing strategy.

One great marketing strategy is to build an email auto-responder series which will deliver small chunks of education to your prospective partners week-over-week, helping to build their knowledge level and confidence about your business opportunity. Emails provide that steady stream of information in a way that is professional and consistent (and without being pushy or overbearing).

Auto Responders.

Auto-responders are emails that are pre-scheduled for delivery on specific days based on the lifecycle of the subscriber. For example, “Module One” of a six part series can be sent on the first day someone is added to your email list. “Module Two” could then be pre-scheduled to be sent on the third day after the person is added to your email list. This series of emails can go on until all the modules are delivered, or you can create a series of emails that go on for as long as a year.

When educating prospective passive investors or investment partners, you want to share information and provide education that helps them decide for themselves that passive investing would work for them. You don’t want to bombard them the emails that scream, “please, I’m begging you!” or “act now, now, now!” Your goal is to become a trusted and loyal business partner and you achieve that goal through demonstrating your outstanding knowledge level and education on the topic. Becoming involved in passive investing or becoming a real estate private lender is a big financial step, and you want to demonstrate that they can have absolute confidence in you and your knowledge.

Most material about passive investing or private lending is written to teach active investors how to buy property with private money. But as an educated investor, you already know how valuable private money is…it’s the person you’re introducing the idea to who needs the education, right?

Mike Lautensack is a full-time real estate entrepreneur, coach and mentor in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE eBook go to Real Estate Investing Blog.

Categories: Investors

Health Care Reform Bill Guide for Landlords,Property Management Companies

President Obama signed a sweeping health reform bill The Patient Protection and Affordable Care Act on March 23rd. According to the Congressional Budget Office, it is expected to reduce the federal deficit by $124 billion.

Meanwhile its long term impact on landlords, property managers, property management companies and real estate professionals is not clear. If you fall into one of the above categories, you have to consider whether you are an independent contractor, employee or employer as it has different impact on you.

How Health Care Reform rolls out and what happens to who and when:
In 2010

1. Insurance Companies
1. Insurance companies have to remove life-time caps on illness costs, cannot drop you if you fall ill and cannot deny coverage to kids with pre-existing conditions
2. Independent Contractor Property Managers, Real Estate Professionals and Employees
1. Children up to the age of 26 can stay on their parents plan.
2. Medicare D participants receive $250 credit
3. Retirees between age 55-64 are offered re-insurance program
3. Employers Property Management Companies
1. If you own a property management company that offers health insurance, you get a 35% tax credit from premium paid
2. Small employers can get tax credit up to 50% of premium paid

In 2011

1. Insurance Companies
1. Insurers cannot raise premiums without providing justification or will be taken out of state insurance exchange pool
2. Independent Contractor Property Managers, Real Estate Professionals and Employees
1. Medicare D participants receive 50% off brand name drugs while in doughnut hole
2. Employees contributions to Flexible Spending Plans are capped at $2,500 limiting the amount that can be used to purchase health care with pre-tax dollars.
3. Penalty for non-qualified withdrawals from Health Savings Account (HSA) increases from 10 to 20 percent and 15 to 20 per cent for Archer Medical Savings Accounts (Archer MSAs)

In 2013

1. Independent Contractor Property Managers, Real Estate Professionals and Employees
1. If you are single filer and earn at least $200,000 per year or a joint filer earning at least $250,000 you will pay additional Medicare tax of nine-tenths of one percent called Hospital Insurance tax on income above these amounts.
2. Itemized deductions for unreimbursed medical expenses rises from 7.5 to 10 per cent. It has an impact on individuals who itemize deductions.
2. Employers Property Management Companies
1. New Medicare tax is to be withheld by property management companies

In 2014

1. Independent Contractor Property Managers, Real Estate Professionals and Employees
1. All individuals are required to carry health insurance or pay an IRS penalty of $750 per individual or 2% of income whichever is greater
2. Subsidies for payment of insurance cost are offered and family of four earning up to $88,000 (four times the federal poverty level) will get a subsidy.
2. Employers Property Management Companies
1. Employers or property management companies with 50 or more employees are required to provide health insurance or pay a penalty of $2000 per employee per year. State exchanges enable employers like property management companies to purchase insurance at rates similar to employees of big companies.

In 2018

1. Insurance Companies
1. All insurance plans offer preventative care with no co-pays and no deductible

This blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies is brought to you by Simplify Pay Rent Online and Property Management Software.

Categories: property Management

Real Estate Investing Tips

1.The original prospect of increasing the profit on the sale of your property by eliminating the use of a real estate professional is not a very attractive alternative. There are so many activities and requirements that must be completed, a FSBO (For Sale By Owner) course of action is usually a financial and emotional disaster. Retaining an experienced real estate broker to manage all of these items normally results in higher selling prices and higher profits to you.

2. How will you maintain control of your buyer and their search for financing? So you found a qualified buyer, you hope. How will you help control your buyers financing and other activities? You have two basic choices: 1) Stay out of it and just let them do whatever is necessary to get their financing and get to the closing in a timely fashion. 2) Attempt to exercise control by helping and closely monitoring their financing and closing activities. Once again, you may encounter severe resistance from your buyer, who often considers this an unwanted intrusion.

3.Who will negotiate the final selling price for your property? Are you comfortable, experienced, and knowledgeable enough to effectively negotiate an advantageous final price for your property? This can be a very difficult and possibly costly (to you) requirement of the sale.

4.You need to locate a buyer. After you tell your family, your friends, all of your co-workers, your bowling league, and everyone else you know, historical data indicates you still will not have found a buyer. You will need to spend money for advertising to let the buyer market know your property is for sale. Regardless of where your property is located (city, suburbs, rural, waterfront, etc.), advertising is expensive. Even just reasonably sized ads in the local newspaper, which is probably not sufficient, will cost you a great deal of money.

5.We all want to make as much money as we can when we sell our home. Whether the property is the home we have enjoyed for years with our families, or an investment property which has provided us both income and a tax shelter, we hope to maximize the profit we generate on its sale. That is both natural and admirable. The largest expense involved in selling a property is normally the fee paid to the real estate professional for arranging and orchestrating the sale. There is a strong temptation to eliminate this cost and manage the sale yourself. However, history proves this option proves to be more expensive for the seller in most cases. Remember, it is impossible to sell a property yourself without incurring significant expenses.

Categories: investment tips

Real Estate Landlords

Often, these benefits make the difference between losing money and earning a profit on a rental property. Here are the top ten tax deductions for owners of small residential rental property.

1. Interest
Interest is often a landlord’s single biggest deductible expense. Common examples of interest that landlords can deduct include mortgage interest payments on loans used to acquire or improve rental property and interest on credit cards for goods or services used in a rental activity.

2. Depreciation
The actual cost of a house, apartment building, or other rental property is not fully deductible in the year in which you pay for it. Instead, landlords get back the cost of real estate through depreciation. This involves deducting a portion of the cost of the property over several years.

3. Repairs
The cost of repairs to rental property (provided the repairs are ordinary, necessary, and reasonable in amount) are fully deductible in the year in which they are incurred. Good examples of deductible repairs include repainting, fixing gutters or floors, fixing leaks, plastering, and replacing broken windows.

4. Local Travel
Landlords are entitled to a tax deduction whenever they drive anywhere for their rental activity. For example, when you drive to your rental building to deal with a tenant complaint or go to the hardware store to purchase a part for a repair, you can deduct your travel expenses. If you drive a car, SUV, van, pickup, or panel truck for your rental activity (as most landlords do), you have two options for deducting your vehicle expenses. You can:
* deduct your actual expenses (gasoline, upkeep, repairs), or
* use the standard mileage rate (51 cents per mile for 2011; up from 50 cents per mile in 2010). To qualify for the standard mileage rate, you must use the standard mileage method the first year you use a car for your business activity. Moreover, you can’t use the standard mileage rate if you have claimed accelerated depreciation deductions in prior years, or have taken a Section 179 deduction for the vehicle.

5. Long Distance Travel
If you travel overnight for your rental activity, you can deduct your airfare, hotel bills, meals, and other expenses. If you plan your trip carefully, you can even mix landlord business with pleasure and still take a deduction.

However, IRS auditors closely scrutinize deductions for overnight travel — and many taxpayers get caught claiming these deductions without proper records to back them up. To stay within the law (and avoid unwanted attention from the IRS), you need to properly document your long distance travel expenses.

6. Home Office
Provided they meet certain minimal requirements, landlords may deduct their home office expenses from their taxable income. This deduction applies not only to space devoted to office work, but also to a workshop or any other home workspace you use for your rental business. This is true whether you own your home or apartment or are a renter.

7. Employees and Independent Contractors
Whenever you hire anyone to perform services for your rental activity, you can deduct their wages as a rental business expense. This is so whether the worker is an employee (for example, a resident manager) or an independent contractor (for example, a repair person).

8. Casualty and Theft Losses
If your rental property is damaged or destroyed from a sudden event like a fire or flood, you may be able to obtain a tax deduction for all or part of your loss. These types of losses are called casualty losses. You usually won’t be able to deduct the entire cost of property damaged or destroyed by a casualty. How much you may deduct depends on how much of your property was destroyed and whether the loss was covered by insurance.

9. Insurance
You can deduct the premiums you pay for almost any insurance for your rental activity. This includes fire, theft, and flood insurance for rental property, as well as landlord liability insurance. And if you have employees, you can deduct the cost of their health and workers’ compensation insurance.

10. Legal and Professional Services
Finally, you can deduct fees that you pay to attorneys, accountants, property management companies, real estate investment advisors, and other professionals. You can deduct these fees as operating expenses as long as the fees are paid for work related to your rental activity.

Categories: Landlords

Real Estate Style

Welcome to real estate style!

I am a design loving wife, mother of two Whippets, & real estate broker. Working as a real estate agent in historic Newnan, Georgia, I started to appreciate homes & architecture. After four years, I married Charles, and moved to Griffin. Shortly after moving, I started Griffin Realty. About a year into real estate here in Griffin, I started real estate style. I needed an outlet to share design ideas, & things that have inspired me. In turn, I have been inspired by all of the great design blogs that I read.

Writing real estate style has helped me discover new interests. I love all things involved in homes, & their design. Also, through-out this process, I have learned a lot about furniture. This leads me to my newest venture-chestnut lane.

Categories: Real Estate Style