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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
Wednesday Jun 26, 2019
Wednesday Jun 26, 2019
How do you identify real estate markets to invest in? If you’re a real estate investor who doesn't know where or what to look for, you won’t make much money. Instead, you’ll lose money by making bad investment decisions. Do the math and run numbers to make the right investment. Or, don’t get into the marketplace because everything is priced for perfection. Today, Clint Coons of Anderson Business Advisors talks to Neal Bawa, founder and CEO of Grocapitus, a commercial real estate investment company. Also, Neal is the CEO of MultifamilyU, an apartment investing education company. He’s known as the Mad Scientist of Multifamily and uses the power of numbers to acquire properties and create profit for investors.
Highlights/Topics:
- 10 months of trial by fire and two hours of sleep: How to build a 27,000-square-foot campus from scratch to learn about real estate
- Two years later, larger campus, more money: Neal discovered how to raise capital by asking investors for help
- Becoming addicted and buying real estate: 10 years ago, Neal bought 10 single-family homes and now charges twice as much rent
- Learn a lesson: What truly is the secret sauce of real estate? Teach it to others
- Top things to consider when buying property:
- Population growth (about 1.25% increase per year)
- Income growth (minimum of 1.5% per year for inflation and to raise rents)
- Home price growth (greater than 2% home value increase per year)
- Crime rates
- Data, analytics, and logic: System for buying the best, avoiding the worst real estate
- One city, one neighborhood: Services to select to be successful in real estate markets
- Corridors of Opportunity: Arizona, Florida, Idaho, and Utah
- Future of real estate, interest rates, and economy: Presidents and Congress members come and go, but federal reserves stay to cut interest rates and do quantitative easing
- Outsourcing is the new economy: Hire high-quality, full-time virtual assistants overseas for $6 an hour
Resources
Saturday Jun 22, 2019
Saturday Jun 22, 2019
As you get older, instead of doing nothing, keep going. Your life begins when you get involved in an ongoing charitable organization. The concept of not being productive is anathema.Today, Toby Mathis of Anderson Business Advisors talks to Frank Cottle, who believes the concept of not being productive is anathema. Following in his father’s footsteps, Frank found a way to give back to the community by starting All Good Work and All Good Coffee. Frank is also the owner of Alliance, one of the largest office suite providers in the world.
Highlights/Topics:
- Service Office/Coworking Industries: Market value depends on company size based on revenues and square footage for customer service capacity
- Land Banking: Build buildings using smallest amount of bricks and mortar to generate the greatest amount of revenue to hold onto land with excess entitlement
- Business Model Changes: Alliance started as property company doing land banking to leasing spaces to selling spaces to network and software model
- Giving Back via Vacancy Factor: Put unused space to good use by creating All Good Workspace Foundation; space is second highest cost, after efforts to raise capital
- Old-fashioned Church Charity Mentality: Feed, house, and cure through education
- Recruitment and Referrals: Non-profit world is very helpful to one another
- Workspace is workstation with desk, chair, bandwidth, and coffee; everything needed to get the job done
- All Good Coffee: Company created to sell coffee to host facilities giving space
Resources
https://allgoodwork.space/
https://allgoodcoffee.org/
https://alliancevirtualoffices.grsm.io/AndersonPodcast
https://www.wework.com/
https://www.regus.com/
https://www.hq.com/
https://www.blackstone.com/
Real Estate Investment Trust (REIT)
https://www.reit.com/what-reit
Unrelated Business Income Tax (UBIT)
https://www.irs.gov/charities-non-profits/unrelated-business-income-tax
https://en.wikipedia.org/wiki/The_Gospel_of_Wealth
From Traumatic Brain Injury To Nonprofit VICTORY!
https://andersonadvisors.com/podcast/starting-your-own-nonprofit/
http://tobymathis.com/
https://andersonadvisors.com/
Anderson Advisors Tax and Asset Protection Event
https://andersonadvisors.com/asset-protection/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Wednesday Jun 19, 2019
Wednesday Jun 19, 2019
Are you and your friends getting the runaround from accountants, attorneys, and others charging for tax advice? Toby Mathis and Jeff Webb of Anderson Advisors set you straight and answer your tax questions. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- If somebody inherits property through a probate, how can you avoid capital gains? When someone dies, capital assets step up to fair market value and costs $0 in capital gains
- What are typical percentages of improvement value for the cost segregation of personal property for 5, 7, and 15 years? About 20%, if property is less than 20 years
- If someone sells inherited real estate for less than appraised value, can they take a tax loss? Depends, but usually not on personal use property
- What constitutes being a real estate professional? 750 hours of professional time in real estate and material participation in real estate activities
- If I move to a different state, does my LLC need to be registered in new home state? Depends, if LLC is separate entity/location, it doesn’t need to be registered in new state
- Does a home-based business help with lowering taxes and need to be incorporated? Does allow some deductions, if business is profitable; doesn’t need to be incorporated
- Can I change my LLC taxes from one year to the next? Yes, but some limitations exist
- Can an LLC be recategorized from a sole proprietorship to C or S Corp in mid-year? Yes, but there are rules to follow and tax forms to complete
- If you’re doing an online business, such as an app, does LLC need to be in your own home state? No, if only doing interstate commerce
- Is equity stripping a necessity in real estate asset protection? Yes, stops lender and others from getting entire equity from your property
- What is the 199A deduction? 20% deduction on qualified business income
- If I start private lending to individual investors, is it possible to take the 199A deduction? Yes, maybe; if designated as specified service
- What’s the definition of dealer? What are the ramifications? Depends on your intent when purchasing the property; dealer buys something to sell it, investor buys and holds it
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
Using Cost Segregation in Residential Real Estate
Modified Accelerated Cost Recovery System (MACRS)
How to become a Real Estate Professional for Tax Purposes
1031 Exchanges: 10 Things to Know
Anderson Advisors Tax and Asset Protection Event
Infinity Investing Workshop (use code: freetax)
Saturday Jun 15, 2019
Saturday Jun 15, 2019
Every day, about 4,000 people become 85 years old. Every year, thousands of them need help. Many people are turning to residential assisted living (RAL). Not only entrepreneurs and business professionals who see it as an opportunity to make money, but for those needing help as they get older. Today, Toby Mathis of Anderson Business Advisors talks to Gene Guarino of Residential Assisted Living (RAL) Academy. Gene’s interest in RAL became real when his mom needed help. It was no longer all about a business opportunity to invest in and make money, but creating a perfect place for mom and making a community and worldwide impact.
Highlights/Topics:
- Entrepreneurial path that led Gene down the real estate road to RAL
- First property purchase as a real estate professional: No money down, no credit, no clue
- Keeping-it-all-for-myself mentality vs. willingness to share, teach, and answer questions
- What is RAL? Converted single-family homes that provide aging population with basic or advanced care, depending on their needs
- Moving in with your adult children, or going into a nursing home aren’t the only options
- Perception vs. Reality: Nursing home is 24x7 medical care; most don’t need such care
- Taking care of aging parents isn’t practical for most families; caregivers can suffer significant health consequences due to added pressure and stress
- Nursing home provides 24/7 medical care via doctors, nurses, and gurneys; RAL offers 24/7 assistance from qualified caregivers for basic, non-medical help
- Average cost for RAL is $4,000 per month, per room; what matters most is the quality of care, location, and price
- Three most common mistakes made when looking for RAL property: Wrong location, wrong type of real estate, and trying to do it all - instead of hiring others
- RAL Academy: Educates and connects investors, operators, and owners interested in senior housing projects
Resources
Residential Assisted Living Academy
Insiders Guide to Investing in Senior Housing (Amazon)
Wednesday Jun 12, 2019
Wednesday Jun 12, 2019
How can you insure your property using a limited liability company (LLC)? What’s the best type of insurance to obtain? Today, Clint Coons of Anderson Business Advisors talks to Drew Maconachy of Maconachy Stradley Insurance. Drew discusses the importance of insurance and provides information on planning for multifamily, commercial, and other policies.
Highlights/Topics:
- Insurance Policies: Understand intrinsic value of what and why you’re buying
- Teach and Preach: Drew generates organic growth by spreading his gospel on insurance
- Be proactive and make it a priority to get an insurance policy; don’t wait until it’s too late to solve a problem
- How to avoid biggest mistakes made with insurance policies for properties:
- Find in-the-know industry experts who understand your needs; don’t go to a family member or representative who sells auto insurance
- Only buy what you need; not sripped-down policies that don’t offer adequate protection and coverage
- Make sure insurance policy handles most common claims, including ordinance and law, business interruption, and water backup coverage
- Consider purchasing the following coverage through insurance policies:
- Commercial package that includes:
- Property coverage to insure buildings, their contents, and loss of rent.
- General liability coverage if someone slips, trips, or falls on your property
- Additional coverage and insurance policies:
- Umbrella policy for additional liability coverage
- Pollution coverage for older buildings or that have increased exposure to moisture because mold is usually excluded in most policies
- Directors and Officers (D&O) coverage if accepting money from outside/third-party investors that could file a lawsuit against you
- Commercial package that includes:
- Ask the right people, the right questions:
- Do you cover loss of rents? Is there water backup coverage on the liability side? Is there assault-and-battery coverage included? What about dog bite coverage?
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
Saturday Jun 08, 2019
Saturday Jun 08, 2019
What do you want to be when you grow up? Do you dream about making millions of dollars and driving luxury vehicles? That’s a great goal; unless you “major in” student loan debt. Today, Toby Mathis of Anderson Business Advisors talks to Clay and Evan Manship. They’re the owners and founders of Mainstay Property Group, which exclusively sells Indianapolis real estate and offers consulting, coaching, and advising through the process. They’re also familiar with figuring out life and a way to deal with their six-figure student loan debt.
Highlights/Topics:
- Mainstay’s mantra is to provide value via equity through wholesale transactions: Clay and Evan have completed about 1,200 property transactions
- Rich Dad Poor Dad transformed how they looked at life; instead of working 100 hours a week as investment bankers, they could own buy and sell houses
- Bought first house in 2013 for $2,400, put $1,000 down to make monthly mortgage payment $94, leased it for $650 a month, and selling it now for $120,000
- Graduating from negative net worth, going door-to-door to raise private capital, living in their parents’ home to owning several homes and a successful real estate business
- 270 rejections for 23 year olds who didn’t know what they were doing; then, along comes Jeb (#271) on BiggerPockets.com with $30 grand
- Lesson Learned: Build a portfolio and niche by identifying a service to procure investment opportunities to help build other people’s portfolios
- Cafeteria Service: Evan and Clay’s “secret sauce” is procuring properties
- Wholesaling isn’t about waiting for deals, but going out and finding them; keep business model moving by starting the process
- First Faceplant on First House Flipped: Bought house for $125 and put $125 into it, but made newbie mistake of over-leveraging money and lost $36,000
- Tuition and Textbook Mismanagement: Paid a lot of money for a college degree, but paid a lot less for one year to flip property degree
- Evan and Clay’s communication process with people who buy properties from them: What are you looking for? How can we customize a solution that achieves those goals?
- Advice for getting into real estate: Know the game you’re playing before you can get good at it, get to First Base, don’t be afraid to swing the bat, and build the best team
- Why do you need a degree? What’s the return? Millennials are renting, not buying houses because of so much student debt
- Passionate about non-profit organization to implement financial education into high schools and lead students down the path of financial independence or wealth generation
Resources
Rich Dad Poor Dad by Guy Kiyosaki
Wednesday Jun 05, 2019
Wednesday Jun 05, 2019
Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions and provide the psychology behind it all. They help you understand why the laws are written the way they are, so you can be a better steward of your money. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- When can I pay family members employed by my corporation - annually or regular intervals? Depends on federal and state laws, but no IRS rule regarding pay schedule
- Should an LLC or individual lease car used primarily for business; what are the tax consequences? Brings liability to business; have appropriate and adequate insurance
- What are bookkeeping and tax implications of LLC being taxed as C Corp? Bookkeeping is the same for all business structures; LLC is state designation, but doesn’t have stock
- Should I use Quicken or QuickBooks for bookkeeping? Software doesn’t always need to be purchase; go with QuickBooks or use spreadsheets
- Can I deduct my real estate training seminar costs? Depends on where you want to deduct it (if on Schedule C, then no) and if you’re already in the real estate business
- Are you a real estate professional, if you have a property management company? Possibly, if you have 750 hours of real estate professional time and material participation
- What’s the best way to utilize a 1031 exchange? Sell and buy real estate
- Can income from self-employment be offset by Tesla tax benefit/credit? Yes
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
Self-Employment Tax (Social Security and Medicare Taxes)
What business type is right for you?
Delaware Statutory Trust (DST)
Real Estate Investment Trust (REIT)
Using Cost Segregation in Residential Real Estate
Tesla Electric Vehicle and Solar Incentives
Anderson Advisors Tax and Asset Protection Event
Saturday Jun 01, 2019
Saturday Jun 01, 2019
A 1031 exchange lets you defer gain on the sale of real estate. However, many variables are involved that can go wrong and leave you without a property to close into. Then, you’ll have taxable gain. Today, Clint Coons of Anderson Business Advisors talks to Scott Hendrix, wealth manager at Upstream Investment Partners. Scott shares the perfect backup solution to save 1031 exchanges.
Highlights/Topics:
- Fastest growing area of Scott’s business: Real estate investors who want to sell property that’s gone up in value above what they originally purchased it at
- Delaware Statutory Trust (DST): Legitimate replacement property recognized by the IRS, but relatively unknown option for real estate investors doing a 1031 exchange
- Tax Cuts and Jobs Act (TCJA): Rules out all appreciated assets, except real estate, as eligible transfer under Section 1031
- 1031s don’t work without a qualified intermediary (QI) that holds and sends funds for specific time periods
- Similarities and differences between DST and Real Estate Investment Trust (REIT):
- Both are passive real estate ownership
- REITs are not eligible as replacement properties
- REITs are not legally structured as actual property under management
- DST owns the real estate that qualifies as legitimate reinvestment of tax-deferred gains under 1031 exchange; REIT may or may not own it, so it doesn't qualify
- Find and Identify DSTs: Work with advisors/brokers to look at available open trusts, find trusts that meet your needs and goals, and use them as a backup:
- Investors have only 45 days from closing date on property being relinquished to identify where they intend to reinvest their proceeds
- If intended deal doesn’t work after 45 days, IRS makes you liable for capital gains tax and depreciation recapture tax (if applicable)
- DSTs offer classes of real estate assets to give investors an opportunity to passively own a class of real estate without any expertise, but interest in additional diversification
- Return Rate: 90% of net operating cash flow comes back to investor on a monthly basis at an annual rate; rates vary depending on prevailing conditions
- 1031s can be repeated; sponsor provides notification about selling property and can tax defer it again under Section 1031 or take their gains and incur tax liability
- Sponsors usually liquidate their entire portfolio at one time; but they could choose to sell only a portion, depending on current condition of real estate market
- Biggest Risk with DST: Once you're an investor in a piece of property, you can’t get out of it until a buyer comes along - could take years
- Three reasons real estate investors use DST as a backup plan:
- Can be named backup property during 45-day identification period
- Taxable boot (a.k.a. leftover cash)
- Still want to own real estate, but don't want to do the work; done being a landlord and dealing with tenants, plumbers, contractors, and building inspectors
Resources
Scott Hendrix’s Phone Number: 512-861-0523
Delaware Statutory Trust (DST)
Real Estate Investment Trust (REIT)
Clint Coons’ Webinar on Qualified Opportunity Zones
Wednesday May 29, 2019
Wednesday May 29, 2019
If you make a mistake and don’t have the proper title insurance policy in place to protect you and your assets when transferring real estate, you can blow it. Title insurance is an important part of real estate investing. Today, Clint Coons of Anderson Business Advisors talks to Latra Szal, attorney and chief operating officer (COO) of Texas National Title. She describes all the critical aspects of title insurance.
Highlights/Topics:
- A day in the life of Latra: Work with clients, real estate agents, and investors to help them navigate transactions and get them through closing
- Piece of the Pie: Title insurance is tiny piece of real estate transaction that can go wrong when processed improperly
- Common mistakes made:
- People take title in their name because it’s easier and faster, but haven’t created their LLC; altering warranty deeds may change/end coverage
- People want to get into individual financing arena by loaning their money to other investors to purchase and renovate a property to resell it without title insurance
- Additional Insured Endorsement: Moderate fee for investors to transfer or change name on insurance policy from individual to their LLC to extend coverage
- Title Commitment: Identifies owner of property and prior existing liens
- Differences between American Land Title Association (ALTA) states vs. states with other insurance regulations could change or end coverage
- 50/50 Split: Lenders either don’t care about transferring title from individuals to their entity, or have an issue with it; depends on how the loan is structured
- Avoid do-it-yourself (DIY) approach to deed preparation; an attorney or someone specialized should handle it to prevent mistakes
- Two ways to title Series LLC: Deed it directly into name of series, or deed it to parent LLC with notation at bottom of deed
- When loaning money on real estate, get the right title insurance policy to protect your interest and have quality escrow company conduct data research
- Real estate investors should ask the right questions and use keywords to make sure title company understands particular model and transaction
Resources
American Land Title Association (ALTA)
Saturday May 25, 2019
Saturday May 25, 2019
People are often drawn to real estate after watching TV shows that focus on flipping houses to make money. Today, Toby Mathis of Anderson Business Advisors talks to Aaron Adams, CEO of Alpine Property Management and Alpine Capital Solutions. Also, Aaron’s working on writing another book, Tips Tricks Foreclosures & Flips: Secrets of a Millionaire Landlord.
Highlights/Topics:
- From Carleton Sheets to Robert Kiyosaki: Captivated by concept of real estate education
- Pieces of Property: Aaron has 3,000 single family homes in five markets, a handful of apartment buildings, six mobile home parks, and 20 Airbnbs
- Process of purchasing properties, inheriting tenants, and rehabbing/renovating
- Learn by doing and have a general understanding about construction to be in real estate;
- Rule of Thumb: For most construction jobs, a contractor’s costs for materials and labor should equal each other
- Active vs. Passive: Make no mistake, flipping is active income, but passive income can change your life
- Turnkey Investing Model: Buy properties that generate at least 7% net on rent
- Nation of Renters: 70% of Americans can’t afford to buy a home where they live
- Tool turned Crutch: Student loan debt has gone from millions to trillions; 300% increase
- Killing millennials’ ability to buy property; rents are going up, homeownership is falling
- Secret Sauce Ingredients: Follow light rail plans, focus on first-generation Hispanic neighborhoods, and find public/private partnerships
- Biggest mistake Aaron made was lack of financial control; he waited too long to hire an accountant/bookkeeper and trusted people who ended up stealing money from him
- Aaron’s Biggest Gamechanger: Don’t limit opportunities; disconnect your ego from staking a flag and saying, “This is what I do.”
- Investors typically buy houses via annuities, savings accounts, and retirement money
- Key to Real Estate: Follow the feds, builders, and trends; achieve education with action
Resources
Alpine Capital Solutions on Facebook
Carleton Sheets’ No Down Payment Infomercial
Rich Dad Poor Dad by Robert Kiyosaki
Average Americans can't afford a home in 70 percent of the country
Federal Housing Administration (FHA)