Tax Consequences of Investing in Real Estate
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As part of my series, "How to Safely Invest in Real Estate", I wrote about the importance of surrounding yourself with great people who were leaders in their respective fields. One of the most important people to have in your Mastermind Group, MMG, is a competent real estate accountant.
I asked Monica McDonald of Busby & Co. in Southern Pines, NC, write about some tax issues.
Monica earned her Bachelors Degree in Accounting from The University of North Carolina at Pembroke in 1988, where she double majored in Business Management. She has been in the accounting industry and employed... continue reading >>
How to Safely Invest in Real Estate Part 9
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We know why we’re here. Part 6 of our series covered the reasons for investing in real estate.
We know whether the numbers work. Part 7 took care of that.
We know this particular property meets the three basic criteria—curb appeal, fitness for use, and structural integrity—that we outlined in Part 8.
Now all we need is a little money, and this Dollar bill printing press will be ours. But, oh, the woes of obtaining financing. How can I get my hands on some more money? I am assuming, of course, that everyone reading this series has... continue reading >>
How to Safely Invest in Real Estate Part 8
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Now that we have narrowed down the field somewhat, we can begin to look at the actual houses. Our financial analysis isn’t bulletproof. Some houses might look good on paper, but when we see them, we realize they are total dogs that only need a good coat of firewood and gasoline to fix. Like one of my old girlfriends who looked good from afar, but far from good. Some houses are diamonds in the rough, that simply need to be polished and refined by a wily investor.
Before you step foot into the first house, however, re-read “How to... continue reading >>
How to Safely Invest in Real Estate Part 7
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Please give me comments on these blogs. I really want to provide quality information. Now that we’re ready to start looking at houses, we need an objective method of eliminating the possibilities. I like to use Excel spreadsheets to evaluate properties before I even look at them. This eliminates a lot of properties and saves you time driving around. For the purposes of this blog, I will be writing about residential rental properties, but the same basic criteria apply for commercial and industrial properties as well. I have used these same methods in evaluating mini-storage, office and retail... continue reading >>How to Safely Invest in Real Estate Part 6
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Now that we have narrowed our search down to a specific neighborhood (Part 5), we need to start to look at specific properties. I will be using rental houses in my examples, but the same logic applies to mini-storage, office space, retail, etc.
Finding properties that meet your general criteria is easy enough to do. Simply contact the Realtor in your Mastermind Group (Parts 2 & 3), or do the work yourself by cruising the neighborhoods, searching the local papers, surfing on Realtor.com, etc. The best, and in my opinion, easiest way to eliminate properties is using financial spreadsheets, which... continue reading >>
How to Safely Invest in Real Estate Part 5
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This blog starts to really dig into the real estate investing process. The first step is to create a Property Masterlist, moving from very broad categories to a specific house. Create lists that get progressively narrower.
The first level in the Masterlist is the County/City. An ideal situation is one where there is a strong job market with a mature housing market and little new construction. This creates a lot of positive upward pressure in the housing market, because demand is high and supply is low or fixed. Another good situation is a county into which many people are... continue reading >>
How to Safely Invest in Real Estate Part 4
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Here are some questions that I have heard in the past.
Do the people in my Mastermind Group (MMG) need to know they're in my Mastermind Group?
No. I have dozens of people in my MMG, but most of them don't know it. MMG's can be very informal, and they don't necessarily meet together. Mine never does. Usually I take someone to lunch and pick his brain. I try to offer something of value to that person as well. MMG's are just intentional relationships. Kimberly George, a life coach in Massachusetts,... continue reading >>How to Safely Invest in Real Estate Part 3
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In How to Safely Invest in Real Estate. Part 2, I mentioned starting a Mastermind Group (MMG). Here are some quick points about that:
Who?
Realtor
Attorney
CPA
Builder
Financial Planner
Property Manager
Banker
Others?
What?
They need to be real estate investors. You shouldn't take advice on the stock market from your unqualified neighbor. Don't listen to them about real estate investing either.
Why?
Provide unique perspective on real estate investing
Give advice Help shape strategy
Possible source of financing
How?
The easiest way... continue reading >>
How to Safely Invest in Real Estate Part 2
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Form a Mastermind Group. Napoleon Hill saw the wisdom in linking arms with others when he wrote Think and Grow Rich. Find people who understand real estate investing from different perspectives, such as an attorney, accountant, Realtor, builder and a banker, who would be willing to give you advice and guidance.Eliminate Personal Debt. It is very difficult to invest in rental real estate if credit card bills and car payments are eating up your available credit and your resources. Suze Orman has some great information on how to do that. http://www.suzeorman.com/.
Create... continue reading >>
How to Safely Invest in Real Estate Part 10
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I have a strong back and a weak mind. I’m not handy at all. My whole family is. My granddaddy, dad, brother, sister and uncle are all in or have been in construction fields. Somehow I wasn’t swimming when that particular gene was in the pool. The local Lowe’s Hardware has my picture on the wall warning everyone to alert authorities if I step into the power tool area. It’s just not my strength, OK?
Negotiating. Now that’s me. When it comes to working out a deal, I am a cold-blooded killer. I am completely emotionally detached, like a... continue reading >>