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Real Estate Investors, Stock Traders, and Business Owners guide to preserve their wealth, protect their assets, and prosper in the future.
Episodes
Thursday Nov 04, 2021
Thursday Nov 04, 2021
Real estate syndications involve taking down larger deals, using other people's money, and bringing in partners for deals. Be careful because the last thing you want to do is break the law, or you’ll be wearing an orange jumpsuit. There are no second chances when it comes to joint ventures with other people if it borders on syndication.
Today, Clint Coons of Anderson Business Advisors talks to Kim Lisa Taylor from Syndication Attorneys, PLLC, about creating syndications.
Kim is the author of How to Legally Raise Private Money, hosts the “Raise Private Money Legally” podcast, and teaches at real estate trading events. She started Syndication Attorneys, PLLC, to help entrepreneurs create sustainable, successful real estate investment companies.
Highlights/Topics:
- Joint Venture vs. Syndication: What's the difference? Whether or not you're selling securities. In a joint venture, all members play an active role in generating their own profits. In a syndicate, passive investors rely on the promoter to generate profits.When passive investors rely on you to generate profits, you're selling an investment contract.
- What is an investment contract? Investment contracts are securities. The Securities Act of 1933 created a definition of what constitutes securities.
- What is the friends and family exemption? It's called Regulation D Rule 506(b). It's the federal exemption, but each state has its own securities agency. Most people follow the federal rule because it preempts all these individual state laws.
- How are investors sophisticated? If they are interested in being in the deal that you are proposing, whether or not this is a good fit for them, you have to document that conversation before you even tell them about a deal.
- When should you get a syndication, operating agreement going? Kim recommends three things: A deal under contract, review of the financials, and physically visit the site. By the time you've done those three things, you're 90–95% likely to close.
- How long does it take to generate legal documents? About 140–180 pages of legal documents are generated and you have to review them until 100% correct. Then, you're ready to start raising money. The whole process takes two to three weeks.
- What's the appropriate structure and what's going to pass with the lender? Draft the securities compliance documents (a private placement memorandum that describes all the risks of the investment), and a subscription agreement, where investors certify to you that they read the private placement memorandum, understand the risks, can afford to take the risks, and how much they're going to invest.
- With a non-recourse loan, how could they still be a guarantor? There are things called carve-outs for anything illegal that happens at the property that causes the loss.
- What are some common mistakes that people make? Drafted documents are inconsistent and incorrect. Sometimes, starting over costs less and is necessary.
Resources
https://syndicationattorneys.com/
Free Ebook: How to Legally Raise Private Money.
https://syndicationattorneys.com/how-to-legally-raise-private-money/
Raise Private Money Legally Podcast
https://podcasts.apple.com/us/podcast/raise-private-money-legally-for-real-estate/id1553530036
https://www.investopedia.com/terms/s/securitiesact1933.asp
U.S. Securities and Exchange Commission (SEC)
https://www.sec.gov/
https://www.sec.gov/smallbusiness/exemptofferings/rule506b
https://www.sec.gov/about/forms/formd.pdf
https://www.irs.gov/businesses/small-businesses-self-employed/bank-secrecy-act
https://andersonadvisors.com/clint-coons/
https://andersonadvisors.com/
Tuesday Nov 02, 2021
Tuesday Nov 02, 2021
While Congress is busy planning changes before the end of the year, such as taxing unrealized gains for the wealthy, Toby Mathis and Jeff Webb of Anderson Advisors talk about how to protect your Turo car rental business and other tax topics. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- If I invest in a Turo car sharing business, should I put the vehicle inside the business (cleanest) or own individually and let the business use it every weekend? If the business owns it, am I restricted from using the vehicle for personal use, or might it be covered by the 14-day rule? Keep track of the mileage because a Turo business is the rental of personal property where you lease out a vehicle you own to other people unrelated to you - it’s like Airbnb for cars
- During the pandemic, I have been using our boat as well as our house as an office. Would I be able to claim the time on the boat as a legitimate business expense? You are only allowed to have one admin office, and the boat does not meet the exclusive use test
- What is the difference between “Admin Office” and “Home Office” deduction? Home Office is reported on Schedule C, but the Admin Office follows different rules - for your business but not owned by your business
- I want to employ my daughter to help with my business, where do I start? I have an LLC, but do I need it to be an S Corp? No, any entity including a sole proprietorship can have a payroll
For all questions/answers discussed, sign up to be a Platinum member to view the replay!
Go to iTunes to leave a review of the Tax Tuesday podcast.
Resources:
Tuesday Oct 19, 2021
Tuesday Oct 19, 2021
If you are a real estate investor, Toby Mathis and Carl Zoellner of Anderson Advisors talk about how to fill out your tax returns. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- Can you speak about conservation easements as a way to decrease taxes in the correct and legal way? Conservation easement is donated property for a specific purpose
- Can an LLC buy back member units from individual members? Technically, your LLC as a whole could buy back member units, but usually when looking at member units in an LLC, ownership’s dictated as a percentage
- Is doing this when members are IRA accounts, a prohibited transaction? It depends
- What line numbers on tax returns are the most important when trying to qualify for funding as a self-employed sole member LLC as a real estate investor? Refer to schedules A, C, E, and K-1 on Form 1040
- If I want to establish an Airbnb from my timeshare, how do I structure my entities? What is the best way to operate that to save tax? Depends on timeshare rules and then refer to IRS’s Publication 925
For all questions/answers discussed, sign up to be a Platinum member to view the replay!
Go to iTunes to leave a review of the Tax Tuesday podcast.
Resources:
https://taxfoundation.org/tax-basics/salt-deduction/
https://andersonadvisors.com/asset_protection_trusts/
Gene Guarino - Residential Assisted Living Academy
https://residentialassistedlivingacademy.com/meet-gene/
https://andersonadvisors.com/category/shows/coffee-with-carl/
http://tobymathis.com/about-toby-mathis/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Oct 05, 2021
Tuesday Oct 05, 2021
How do you use a 1031 Exchange to sell real estate? Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- Is the Section 1031 option applicable on personal-use property in case the same property is sold less than two years of use by the owner? This option is not applicable to personal-use property (primary residence or second home) unless it is converted into some type of investment or rental property
- Who would you get a 1031 Exchange from when getting ready to sell property? If you are planning to do a 1031 Exchange, you need to start talking to a qualified intermediary before starting the sale
- I have a second home in my personal name in a different state. It has appreciated. If I sell the property, how would it be taxed? The entire gain would be capital gain - there’s no 121 exclusion, no 1031 (unless made a rental property first); gain will be taxed at the federal level and the state it is in and in which you reside
For all questions/answers discussed, sign up to be a Platinum member to view the replay!
Go to iTunes to leave a review of the Tax Tuesday podcast.
Resources:
https://andersonadvisors.com/entity_formation/
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center
Section 121 - Capital Gains Exclusion
https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0
https://www.irs.gov/pub/irs-news/fs-08-18.pdf
http://tobymathis.com/about-toby-mathis/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Sep 21, 2021
Tuesday Sep 21, 2021
How do you set up an LLC for your home or administrative office? It’s important to know the differences between the two, which to choose, and why. Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- How do you set up a home office under a corporation or LLC? Depends on the type of entity, but if it’s a corporation or S Corp, set it up as an administrative office for that entity where you are being reimbursed for the expenses of using that office
- Is it advisable to have the house you live in under an LLC? Preferably, do not put your house under an LLC because of homestead and capital gains exclusion issues that arise
- When do I switch from wholesaling under my name to wholesaling as a corporation? Sooner than later; do not wholesale under your personal name in case you get sued
- How do I get credit approvals under the business entity? It takes cash, collateral, or credibility to get business credits, so you will need personal guarantees
For all questions/answers discussed, sign up to be a Platinum member to view the replay!
Go to iTunes to leave a review of the Tax Tuesday podcast.
Resources:
https://andersonadvisors.com/entity_formation/
https://www.irs.gov/forms-pubs/about-schedule-c-form-1040
https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0
https://www.irs.gov/pub/irs-news/fs-08-18.pdf
http://tobymathis.com/about-toby-mathis/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Sep 07, 2021
Tuesday Sep 07, 2021
Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions, including which business structure is best for real estate agents. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- What is the 1031 exchange? How is it used and is there any concern that it may go away? Section 1031 allows you to sell an investment property through a qualified intermediary (QI) and then replace that property; there’s no logical reason for the 1031 exchange to go away because it is a tax deferral not a tax avoidance technique
- As a new wholesaler, what is the best way to set up my business structure? Through a corporation because a wholesaler is somebody that gets a property under contract and then sells the contract with a right to close on that property
- How does the tax work on rent-to-own? The non-refundable deposit, monthly cash flow, and the backend? IRS views non-refundable deposit as a lease-purchase option or sale
For all questions/answers discussed, sign up to be a Platinum member to view the replay!
Go to iTunes to leave a review of the Tax Tuesday podcast.
Resources:
Infinity Investing Workshop (Free virtual event on September 11)
https://aba.link/IIW
Infinity Investing: How The Rich Get Richer And How You Can Do The Same by Toby Mathis
http://aba.link/infinitybook
https://www.irs.gov/pub/irs-news/fs-08-18.pdf
https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=A%20step%2Dup%20in%20basis%20is%20the%20readjustment%20of%20the,for%20tax%20purposes%20upon%20inheritance.&text=The%20asset%20receives%20a%20step,of%20property%20transferred%20at%20death.
https://andersonadvisors.com/entity_formation/
https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act
https://www.investopedia.com/terms/d/depreciationrecapture.asp
https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0
Section 121 - Capital Gains Exclusion
https://www.irs.gov/taxtopics/tc701
Real Estate Professional Requirements
https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf
Thursday Sep 02, 2021
Thursday Sep 02, 2021
Are you a landlord who has their fair share of horror stories? Do you need help evicting tenants, or finding and placing the best tenants? Who should you be renting to so that you don’t bring tenants in and then have to kick them out later? Applicants can be nice or be nightmares.
Today, Clint Coons of Anderson Business Advisors talks to David Pickron, President of Rent Perfect, an investigative screening company that helps clients onboard tenants from the initial background check to leasing and payment collection.
David is a licensed private investigator and landlord who manages several short- and long-term rentals. Also, he hosts the Rent Perfect Podcast, which offers the latest industry news and provides expert tips on how to manage properties.
Highlights/Topics:
- How much is a good tenant worth? The key to managing your own cash flow.is to have stable tenants.
- What’s going on with moratoriums to collect rent? The government wanted to pass another one, but it did not go through. Landlords are partners with the government right now because they can’t evict someone or take their property.
- How do landlords protect themselves? They want long-term renters and holds to set it, forget it, and let them go.
- What can landlords do to find the right renters? There are still a lot of regulations stacked against landlords, and there are a lot of courts that are withholding data.
- Why did credit bureaus pull off all evictions, judgments, and liens? They were getting sued for putting the wrong data on the wrong people's files
- Have you heard of that new Experian Boost? They're realizing that they're not giving us all the information we need on those credit bureaus. They're allowing consumers to start reporting their own credit to their own credit bureau.
- If you are screening a tenant, can you find out if they were evicted because they weren't paying rent during the pandemic? There's an eviction moratorium, but some people could be or were evicted because of set parameters.
- Why ask tenants for 12 months of bank statements? It shows if they paid their rent or prioritized spending money on other things, such as a new boat.
- What are detailed criteria? Exactly who qualifies for your property so everybody's treated the same. Don't allow anybody with a felony record within the last 5 years or misdemeanor within the last 3 years; or collections against landlords for the last 2 years.
- What is fair housing? If they have a criminal history, do an individual assessment - How long ago did the crime occur? How old was the person when they did it? Have they been in any rehabilitation that they can prove? Does this affect your property?
- What does Rent Perfect offer? No more waiting for checks in the mail, no more dropping off checks. It's a complete platform and helps you find that right renter.
- How much does Rent Perfect cost? There’s a one-time $4.95 signup fee. Applicants pay for everything else, such as $39 for the background and credit checks.
Resources:
Rent Perfect Landlord Registration
Sample Criteria: Email info@rentperfect.com.
Rent Perfect: 877-922-2547
National Real Estate Investors Association (REIA)
Arizona Multihousing Association (AMA)
Paycheck Protection Program (PPP)
Tuesday Aug 24, 2021
Tuesday Aug 24, 2021
Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions related to retirement plans, partnerships, real estate, wills, and trusts. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- Are there any restrictions on being a real estate professional (REP) during retirement? No, if you are retired, not working anywhere else, and spending a substantial amount of time working on rentals; depending on amount of losses, you may not have to be a REP
- Why would someone invest in a Publicly Traded Partnership (PTP)? How are they taxed? Is PTP a good option to invest in for diversity? Be careful, some PTPs are complex, but as far as traxation, there’s nothing special about PTPs - look at them from an investment, not a tax perspective
- I have converted my primary home to a short-term rental (STR) this year.If I complete 100+ hours of material participation and more than anyone else, can I deduct the losses from my W-2 wages (active income)? Yes, but if it’s rental income and you accelerate depreciation, you could lose your REP status
- I plan to donate my timeshare. Does that relieve me of my maintenance fee yearly? There are two types of timeshares - right to use and for deed; the nonprofit may use them personally, within the entity, or sell it to a third-party - know who is taking over the liability/responsibility of the asset
For all questions/answers discussed, sign up to be a Platinum member to view the replay!
Go to iTunes to leave a review of the Tax Tuesday podcast.
Resources:
Free Tax and Asset Protection Workshop - Aug. 28
https://aba.link/AP
Infinity Investing: How The Rich Get Richer And How You Can Do The Same by Toby Mathis
http://aba.link/infinitybook
https://andersonadvisors.com/living_trusts/
https://andersonadvisors.com/entity_formation/
https://andersonadvisors.com/retirement_plan/
Real Estate Professional Requirements
https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf
https://www.airbnb.com/
https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act
https://www.investopedia.com/terms/d/depreciationrecapture.asp
https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0
Section 121 - Capital Gains Exclusion
https://www.irs.gov/taxtopics/tc701
https://www.congress.gov/bill/116th-congress/house-bill/1994/text
https://www.irs.gov/tax-reform
https://www.irs.gov/charities-non-profits/charitable-organizations
Coronavirus Aid, Relief, and Economic Security (CARES) Act
https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf
https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=A%20step%2Dup%20in%20basis%20is%20the%20readjustment%20of%20the,for%20tax%20purposes%20upon%20inheritance.&text=The%20asset%20receives%20a%20step,of%20property%20transferred%20at%20death.
https://www.irs.gov/forms-pubs/about-schedule-k-1-form-1065
https://www.irs.gov/pub/irs-news/fs-08-18.pdf
https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes
Old Age, Survivors, and Disability Insurance (OASDI)
https://www.ssa.gov/policy/docs/progdesc/sspus/oasdi.pdf
https://costsegauthority.com/
https://www.irs.gov/forms-pubs/about-form-3115
https://www.irs.gov/forms-pubs/about-form-8949
https://www.law.cornell.edu/uscode/text/26/469
https://www.irs.gov/forms-pubs/about-schedule-a-form-1040
https://www.irs.gov/forms-pubs/about-schedule-d-form-1040
http://tobymathis.com/about-toby-mathis/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
Anderson Advisors Tax and Asset Protection Workshop
https://andersonadvisors.com/asset-protection/
Anderson Advisors Tax-Wise Workshop
https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/
Anderson Advisors Infinity Investing Workshop
https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Aug 17, 2021
Tuesday Aug 17, 2021
If you don't qualify for a home loan because you don’t make enough to pay the mortgage, there are ways to creatively do it. Creative landlording is essential to gain maximum personal satisfaction and financial profit.
Today, Clint Coons of Anderson Business Advisors talks to Danielle Villegas, an artist and landlord who shares some of her real estate investing strategies, including how she takes investments and maximizes their value.
Danielle spent years struggling as a film and theater artist. She set her sights on home ownership and managed to become a landlord. Over time, Danielle developed a unique housing model for an underserved growing population.
Highlights/Topics:
- First Home: Make sure it includes rental rooms to earn extra income
- House Hacking: Don’t pay your own rent or mortgage if you don’t have to
- Financial Adviser: Danielle learned how the rich get richer and other tricks/tools
- Creative Financing: Refi made all the difference and cut mortgage in half to be profitable
- When selecting renters/tenants:
- Priority #1: Make sure they have at least one job to pay the rent
- Priority #2: Offer furnished rooms/rentals because it’s easier to move them out
- Weekly, monthly, or longer? Danielle rents out space weekly to make more money
- Private vs. Shared Space: People need own space, common space is wasted money
- Where Danielle tends to find tenants - she advertises mostly on Craigslist
- Potential Tenants: Let them tell you what you want/need to know to minimize risk
- Used or Not: Make money with rooms not used, won’t be used, used for something else
- It’s not just about the money: Make a difference - it's very rewarding
Resources:
mailto:artoflandlord@gmail.com
https://artoflandlording.com/
https://www.craigslist.org/
https://andersonadvisors.com/clint-coons/
https://andersonadvisors.com/
Anderson Advisors Tax and Asset Protection Event
https://andersonadvisors.com/asset-protection/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Tuesday Aug 10, 2021
Tuesday Aug 10, 2021
Can you sell your rental property as a 1031 exchange? It depends. Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- Can I offer my condo as a rent-to-own rental for six months and sell it as a 1031 exchange? If you’re offering the condo as rent-to-own, you’re contemplating the sale of that property, so it becomes a sale property, not a rental property, and taxed differently
- Should I invest into limited partnership (LP) multifamily syndications with the same LLC as I have active personal rentals? Ideally, everything should be in its own LLC or you may be at risk for outside liability
- I am a co-founder of a startup (C Corp). Can I establish a self-directed Roth IRA and put my company share in it? Yes, you can, but it depends on how you go about doing it - Rollover as Business Start-ups (ROBS)
For all questions/answers discussed, sign up to be a Platinum member to view the replay!
Go to iTunes to leave a review of the Tax Tuesday podcast.
Resources:
Infinity Investing: How The Rich Get Richer And How You Can Do The Same by Toby Mathis
http://aba.link/infinitybook
https://www.irs.gov/pub/irs-news/fs-08-18.pdf
https://www.irs.gov/pub/irs-drop/rr-14-17.pdf
https://www.irs.gov/newsroom/irs-issues-guidance-on-section-179-expenses-and-section-168g-depreciation-under-tax-cuts-and-jobs-act
https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act
https://www.investopedia.com/terms/d/depreciationrecapture.asp
https://andersonadvisors.com/entity_formation/
https://costsegauthority.com/
Real Estate Professional Requirements
https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf
https://www.airbnb.com/
https://andersonadvisors.com/retirement_plan/
https://andersonadvisors.com/living_trusts/
https://www.investopedia.com/terms/t/taxreformact1986.asp
https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes
Old Age, Survivors, and Disability Insurance (OASDI)
https://www.ssa.gov/policy/docs/progdesc/sspus/oasdi.pdf
https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0
Section 121 - Capital Gains Exclusion
https://www.irs.gov/taxtopics/tc701
https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=A%20step%2Dup%20in%20basis%20is%20the%20readjustment%20of%20the,for%20tax%20purposes%20upon%20inheritance.&text=The%20asset%20receives%20a%20step,of%20property%20transferred%20at%20death.
https://www.fanniemae.com/
http://www.freddiemac.com/
https://www.irs.gov/forms-pubs/about-schedule-a-form-1040
https://www.irs.gov/forms-pubs/about-schedule-c-form-1040
https://www.irs.gov/forms-pubs/about-schedule-e-form-1040
https://www.irs.gov/forms-pubs/about-schedule-k-1-form-1065
Unrelated Business Income Tax (UBIT)
https://www.irs.gov/charities-non-profits/unrelated-business-income-tax
Unrelated Debt-Financed Income (UDFI)
https://www.irs.gov/pub/irs-tege/eotopicn86.pdf
Rollover as Business Start-ups (ROBS)
https://www.irs.gov/retirement-plans/rollovers-as-business-start-ups-compliance-project
https://www.law.cornell.edu/uscode/text/26/469
https://www.congress.gov/bill/116th-congress/house-bill/1994/text
http://tobymathis.com/about-toby-mathis/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
Anderson Advisors Tax and Asset Protection Workshop
https://andersonadvisors.com/asset-protection/
Anderson Advisors Tax-Wise Workshop
https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/
Anderson Advisors Infinity Investing Workshop
https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/