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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
Tuesday Aug 20, 2019
Tuesday Aug 20, 2019
Why use your own money, when you can use someone else's to invest in real estate? Become an informed investor. Today, Clint Coons of Anderson Business Advisors talks about hard money loans (HMLs) with Albert Bui, mortgage planning specialist at Avenue One Capital.
Highlights/Topics:
- Loan Types and Trends: Percentages and prices for conventional, portfolio, commercial, and hard money loans
- Hard Money Loan Issues: Shortage of contractors and property doesn’t sell quickly
- Tradesmen/Contractors turned Cons: Sell a bill of goods and require money upfront before rehabbing properties
- Project vs. Profit: Project must be completed before interest rate hikes and profit loss
- Experience-based Product: How many exits out of hard money?
- Exit Options: Plan ahead by considering assets, income, and credit to decide whether to sell, refinance, rent, or lease
- What’s the difference? Some say, ‘pre-approval’; Albert says, ‘purchasing power analysis’
- Qualifying for Loans: How much income do you expect to make and from what sources?
- Credit Card Debt: Everything you charge, changes debt into income
- With/Without Tenants: Use portion of rent to offset mortgage; qualify with your income
- Lender Qualifications: Level of service and time they’re willing to spend with you
- Terminology and Questions: What type of investors do you work with? How many real estate investors have you worked with? Are you a real estate investor?
- Three Legs of the Stool: Credit, income, and assets/cash
Resources
Albert Bui at Avenue One Capital
Albert Bui’s Phone: 949-514-5106 (California) or 425-951-5300 (Washington)
Federal Insurance Contributions Act (FICA)
Federal Housing Administration (FHA)
U.S. Securities and Exchange Commission
Tuesday Aug 13, 2019
Tuesday Aug 13, 2019
When you do things right, you don’t get sued, harassed, or audited. That’s why Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- I’m starting a real estate business. How should the LLC be taxed? LLCs choose how they are taxed
- Is there an annual amount you have to pay contractors that require 1099 and W-9 forms? Minimum is $600
- What is a quitclaim? Transfer of interest in county record of your interest
- What is the simplest software or way to log vehicle mileage? MileIQ
- What is a qualified business income (QBI) deduction? Deduct up to 20% QBI, 20% qualified real estate investment trust (REIT) dividends, and qualified publicly traded partnership (PTP) income
- Can you invest money earned through 501(c)(3) to invest in dividends and stocks? Yes
- Can you explain the 100% depreciation changes in the new tax code? Bonus depreciation allows 100% deduction as expense of asset
- Are you familiar with the Deferred Sales Trust concept? Yes, it works to sell a highly appreciated business under an installment note to spread out tax over a lifetime
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:
Individual Retirement Account (IRA)
501(c)(3) Charities and Non-profit Organizations
Howard Hughes Medical Institute
Modified Accelerated Cost Recovery System (MACRS)
Cost Segregation Audit Techniques
Unrelated Business Income Tax (UBIT)
Anderson Advisors Tax and Asset Protection Event
Tax-Wise 2019 3-in-1 Offer/2-for-Tuesday Bulletproof
Wednesday Aug 07, 2019
Wednesday Aug 07, 2019
What possibilities are available when you own rental real estate? Different strategies are available to maximize tax benefits. For example, learn how to take advantage of a tax saving tool that saves you thousands of dollars each year. In this episode, Clint Coons is joined by Brett Hansen of Cost Segregation Authority to discuss such benefits associated with residential real estate investments.
Highlights/Topics:
- When you buy property, you can depreciate it over time; Cost Segregation Authority accelerates depreciation to increase your expenses/lower your net taxable income
- If you pay less tax to the IRS, save that money to increase your portfolio and invest in things that get a return; it’s not a deduction, but reduced amount of taxable income
- Smart Tax Planning: Maximize depreciation deduction to reduce tax burden; re-classify assets of a property to identify components that can be depreciated faster
- For assets that you didn’t capitalize on (up to 20 years), you can bring them forward into the next tax return via the Section 481(a) adjustment tax form
- CPA must understand value cost set to use cost segregation for residential property
- Cost segregation studies meet IRS guidelines to protect clients from/during audits
- Changes in Tax Laws: Bonus depreciation - no longer need to purchase new equipment and bonus percentage changed to 100%
- Next Steps: To analyze your property, provide the total cost you paid for it, the year you purchased it, and the property’s address to get the projected benefit and associated cost
Resources
Brett Hansen’s Cell (801-884-8358)
Saturday Aug 03, 2019
Saturday Aug 03, 2019
When getting insurance for your entity, make sure to pay the least amount for the most amount of coverage. Today, Clint Coons of Anderson Business Advisors talks to Drew Maconachy of Maconachy Stradley Insurance about insurance inspections.
Highlights/Topics:
- Appearance is Everything: Do you look like a mom-and-pop or professional real estate investor to your insurance carrier?
- Fake it, til You Make It: You’re smart, knowledgeable, and know what you’re doing - even if you don’t - when carriers inspect your properties
- Matrix of coverage and cost determines which carrier is picked to insure your property
- Inspection Required: Insurance carrier may require an inspection within 60 days and has the right to cancel coverage due to the results
- Failed Inspection means: This isn’t a great operator, this isn’t a great building, or both
- Failing an inspection is worse than losing your policy; finding coverage won’t be easy
- Certificate of Insurance to Lender: If insurance company changes within annual term, notifying the lender is required
- 3 ways to prepare for inspection:
- Professional housekeeping and maintenance: Clean, clear, and repair general areas
- Management Summary Report: Aggregate maintenance and housekeeping records to show people are being held accountable for specific tasks
- Know your building/property: All the nuts and bolts from foundation to roof; be able to answer questions before being asked
- Cost-benefit Analysis/ROI: Spend a little money now, to save a ton later
Resources
Drew Maconachy’s Phone Number: 330-966-5170
Essential Elements of a Commercial Insurance Policy – Drew Maconachy
How to Win Insurance Inspection – Drew Maconachy
Insurance Planning For Multifamily & Commercial Real Estate
Wednesday Jul 31, 2019
Wednesday Jul 31, 2019
As Americans, taxes are one of our biggest expenses; even more than housing, food, and clothing combined. Taxes are overpaid by about a billion dollars every year. Toby Mathis and Jeff Webb of Anderson Advisors save you money by answering your tax questions. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- How many stock option trades must you make in a year to be considered a professional trader by the IRS? Activity has to be regular and frequent
- Is TurboTax comparable to using a certified public accountant (CPA)? No, because tax-based computer systems don’t ask the right questions
- How many rental properties should I own before creating a C Corp? It’s not about how many properties, but how much you’re making/earning
- Can you have multiple 401(k) plans? Yes
- Does a leasing real estate subsidiary pass-through have to pay self-employment tax? When renting real estate, nobody pays self-employment tax; it’s not earned income
- Can you explain the depreciation recapture for a property that was never depreciated? If you can deduct or depreciate, you must recapture (Publication 946)
- What’s the rule for claiming meals and entertainment; is it still 50%? TCJA took away entertainment write-offs, but writing off meals can be 50-100%
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:
Tax Benefits for Education: Information Center
Publication 15-B (2019), Employer's Tax Guide to Fringe Benefits
Tax Cuts and Jobs Act, Provision 11011 Section 199A - Qualified Business Income Deduction FAQs
The Ultimate Guide to Real Estate Taxes
Section 1250 Recapture
Form 4797
Anderson Advisors Blueprint/Strategy Session
Anderson Advisors Tax and Asset Protection Event
Tax-Wise 2019 3-in-1 Offer/2-for-Tuesday Bulletproof
Saturday Jul 27, 2019
Saturday Jul 27, 2019
Have you considered investing in residential assisted living (RAL)? Do you see it as an opportunity to make money in the real estate space? Did you know that there’s several ways to make additional revenue in this area? Then, you’ll need an attorney who specializes in RAL because of associated liabilities. You could be sued several different ways because you’re taking care of other individuals. In this episode, Clint Coons of Anderson Business Advisors talks to Michelle Pinkowski, an attorney, about RAL. Michelle actually developed a system for finding the perfect location for an assisted living residence and strives to impress upon people the importance of asset protection. She’s a big proponent of having enough insurance to handle risks.
Highlights/Topics:
- Unlike flipping and fixing single- and multi-family homes, real estate investors need to understand the underlying land use for RAL
- Fair Housing Act: When looking for a location, identify if it’ll be assisted living for seniors, disabled adults, or recovering addicts; each group has protected disabled populations
- State regulations govern limits on the care you can provide, but the state licensing agency doesn’t have the jurisdiction or power to make certain determinations
- Besides licensing statutes, you need to understand zoning regulations that define how many people you can put in your RAL home
- Each entity (HOA, county, city, etc.) has its own rules; don’t get discouraged/give up because one entity tells you that you can do something, but another says you can’t
- Don’t find a house first; find the path of least resistance – the locale that will be the best place to start your search
- Educate yourself and do research before calling a planning department – may or may not tell you the correct information; know what questions to ask to avoid getting bad advice
- People open RAL homes because they want to help people and make a difference; they don’t want to be litigating cases in court or facing zoning enforcement actions
- Utilize a professional who specializes in RAL to overcome obstacles and get your house open, up and running, and making some money off it
Resources
Zoning Hacks to Get You Started FAST Course
Michelle Pinkowski’s Phone Number: 303-803-4309
Wednesday Jul 24, 2019
Wednesday Jul 24, 2019
As we get older, most of us know we’ll need help and have to give up some control when it’s time to be spoiled and waited on hand-and-foot. Today, Toby Mathis of Anderson Business Advisors talks to Rocky McKay of Peak Care Assisted Living Homes about available options.
Highlights/Topics:
- What is residential assisted living (RAL)? Remodeled homes in residential neighborhoods that fit the needs of geriatric residents
- Activities of Daily Living (ADLs): Basic physical and mental tasks, including bathing, brushing teeth, laundry, and cooking
- Typical Age Group for RAL: 85 to 90 years old
- Why invest in RAL real estate? Need for good quality, high-end homes to provide great care; and strong margins rival any other real estate investment
- Typical Monthly Fee: $4,000 to $7,500 private pay per month, per resident for 24/7 assistance/care
- Three RAL Businesses: Real estate property/home, investor/money person, and operating actual business
- Biggest RAL Pitfalls: Not understanding operations side and daily involvement required
Resources
Peak Care Assisted Living Homes
Rocky McKay’s Phone: 1-800-906-1030 Ext. 101
Arizona Assisted Living Homes Association (AALHA)
Saturday Jul 20, 2019
Saturday Jul 20, 2019
What if you don’t make it home from work? Where does that leave your significant other? What if something happens to your financial or business partner? What about their spouse? Engineers usually don’t take time to think about such things. Today, Toby Mathis of Anderson Business Advisors talks to Dwain Blake of Canyon Ridge Group, a wealth management firm. Dwain is a buy-sell agreements and key man policies expert. Also, he specializes in partnerships for small business owners as a senior consultant at Anderson Financial Services.
Highlights/Topics:
- Like Father, Like Son: Dwain was a petroleum geologist and then an environmental scientist; his son took over the engineering side of the family business
- Progression of Business and Owner: Dwain sold his company in 1997 and signed a non-compete clause
- Opportunity Knocks: Dwain could do something different for a few years, or be sidelined and count the few dollars received from selling his business
- Financial Services World: Dwain invested the money from his business into Pittsburg markets with a Fortune 100 group
- Buy-sell Agreement: If something happens to a partner, it details how assets are distributed, bought, and sold to successors/spouses; one agrees to buy out the other
- Buyout: Set amount can be reviewed and revised, depending on company growth and profitability; partner(s) is contractually obligated to purchase stock at a set value
- Insufficient Funds: Partner(s) needs cash to buy out and continue to operate; if they don't have enough cash available, funding usually comes from life insurance
- Protect Partner and Investment: How am I going to keep the company going, if I'm only the investor? How am I going to make sure that I protect my investment? How can I make sure the company is transitioned?
- Key Man Policies: Specific internal/external people/managers in place to handle different divisions and extra life insurance to go to surviving partner(s) for buyout and hiring talent
- One Policy, Two Types of Coverage: What if your partner gets hit by a truck and becomes disabled or dies? Life and disability insurance can be combined
- Corporate Succession Planning: Traditional and obvious obligations depend on deeper partnerships, solid investors, hard money lenders, and others
- New Policies, Never Ends: Insurance doesn’t stop with the sale of the first policy; as business grows and moves, partners succeed their shares, sell their shares, etc.
- How much is recommended? $50,000 is minimum life insurance value with any company
- Document and discuss your desires before death or disability: it's easy when you're alive and healthy; don’t do this type of planning from the hospital bed when it's too late
- Retirement Planning: Prepare for the retirement you definitely deserve; but if something happens, make sure your family gets a big chunk of cash and your business survives
Resources
Dwain Blake’s Mobile: 912-856-5007
Wednesday Jul 17, 2019
Wednesday Jul 17, 2019
Toby Mathis and Jeff Webb of Anderson Advisors don’t get paid to answer your questions on Tax Tuesdays. They just want to give back by making sure you don’t overpay on your taxes. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- What’s the best way to transfer a title in real estate without increasing property taxes after joint tenant dies? This shouldn’t trigger an increase in property values; publish certified death certificate to warranty deed it into your own name
- My S Corp will only make about $20,000 this year. Do I still have to pay myself a salary? It depends; you didn’t make a profit, but did you make any distributions
- Where do I put real estate professional on my return? Real estate professional is an election you make every year; it’s not a form, it’s a statement included with your 1040
- When can I legally take money from a 403(b) and transfer to a QRP? Most plans won’t let you withdraw/take money out, if you’re still employed, except in hardship cases; roll to QRP anytime plan documents allow it
- What is different about filing taxes for option traders as opposed to stock traders? Not much difference; short selling works differently for stocks and options
- Can a husband and wife filing jointly take two separate Roth IRAs and contribute to each IRA annually? You can’t share an IRA; you must have separate IRA accounts
- How does real estate profession benefit me? Real estate profession allows you to deduct all real estate losses against your personal taxes
- Can an individual place Bitcoin in a Roth IRA account? Yes, if plan documents allow it
- Can I pay my life insurance or family dental insurance from my LLC? Can LLC fund my HSA? LLC is not a tax treatment, so determine what it is and if it’s taxable to you
- I learned that a property I bought and rehabbed is in an opportunity zone. Can I retroactively qualify for tax advantages from an opportunity zone? No, the fund must be set up before the purchase
- Is there still a mileage deduction, if I drive my personal vehicle for my business? Yes, your personal vehicle for your business gets $0.58 a mile
- Is the mileage and unreimbursed employee expense no longer deductible? Correct, miscellaneous itemized deductions under the Tax Cut and Jobs Act were removed
- How do we navigate the standard deduction in the business sector? There’s no standard deduction on any business return
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:
Franchise Tax Board of California v. Hyatt - SCOTUS
Family Owned Non-Corporate Entity (FONCE)
501(c)(3) Nonprofit/Charitable Organizations
Tax Cuts and Jobs Act, Provision 11011 Section 199A - Qualified Business Income Deduction FAQs
Uniform Gift to Minors Act (UGMA)
Anderson Advisors Tax and Asset Protection Event
Saturday Jul 13, 2019
Saturday Jul 13, 2019
If you’re a real investor, then you probably know what it’s like to go months without rental income coming in through no fault of your own. It gets a little scary. Today, Michael Bowman of Bowman’s Business Brief and Anderson Business Advisors talks to Aaron DiCaprio, CEO of Rent Rescue, about how the stop of rental income, even for just a couple months, can be detrimental.
Highlights/Topics:
- Does this strike a chord? Tenant loses everything, and you lose rental income
- Accidental Landlord: People who rely on rental income and cash flow
- Mailbox Money: Rent Rescue protects clients’ cash flow investment and provides peace of mind
- Risk Management: Insurance mitigates your risk of loss
- Perfect Tenant a.k.a. Bigfoot: You hear about him, but you never find him because he’s a figment of your imagination
- It’s not personal, it’s just business: You can vet your tenants (i.e., background checks, screenings), but life happens and sometimes they just can’t pay the rent
- Rent Rescue’s rent default insurance provides up to six months of loss when tenant defaults on long-term lease and $1,000 for legal expenses
- Rent Rescue doesn’t cover situations when landlord does something to create reason why tenant isn’t paying rent
- How much is Rent Rescue? About $300 annually for premium, and it’s tax deductible
- How does Rent Rescue work? User-friendly online platform offers quick and easy application and access process for insurance; file a claim, and get paid/reimbursed
- Insurance policy includes subrogation clause, where insurance company steps into landlord’s role when claim is filed and has rights to pursue collection against tenant
- Multiple Investment Properties: Rent Rescue is applicable for:
- Smaller, do-it-yourself, accidental landlords who have a few investments
- Larger career investors with big portfolios
- Pay it forward and give back: Autism Speaks and Multiple Sclerosis Society
Resources