VRS373 - The Art of Story Telling To Attract Guests And Owners
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The Remote Real Estate Investor
The Remote Real Estate Investor
Roofstock
Why the Owner Occupant Sales Exclusion Strategy Is So Powerful
Authors of The Book on Advanced Tax Strategies, Amanda Han and Matt MacFarland explain the owner occupant sales exclusion strategy. Amanda & Matt's website: https://www.keystonecpa.com/ Suggest a topic for the podcast: https://linktr.ee/remoterealestateinvestor --- Transcript Michael: Hey everybody, welcome to another episode of the remote real estate investor. I'm Michael album and today I'm joined by my co host, Tom Schneider, and two very special guests, Amanda Han and Matt McFarland, two very distinguished notable authors, CPAs, tax experts and real estate investors. And in today's weekend wisdom, they're going to be talking to us about the owner occupant sales exclusion, that can really boost real estate investors gains. So let's get into it. So one thing I want to make sure that we highlight for for listeners, and a question that I want to ask too, is about the owner occupant sales exclusion. Can you talk to us a little bit about what that is? And how folks might be able to utilize it? Matt: Yeah, it is actually a great strategy. And, you know, again, why don't we use the word incentives that they provide people out there in the tax world, essentially, homeowners, if they own and use a house for at least two out of the previous five years, and they go and sell the property, they a single person can get up to $250,000 of gain tax free married couples, $500,000. So that's just by itself, you know, if you're a homeowner, you're not even, you know, investing in rental properties. And that's great. If you're looking to sell your property, and you, you know, lived in the last five years, you've got some game, you know, good chances are, you know, a good chunk of if not all of it can be totally tax free. Now, the cool thing is, we've actually seen this coupled for real estate investors. So and you know, and a good example would be somebody lives in a house for two years, they move out for whatever reasons, but they don't sell it right away, they rent it out for up to three years. So let's say they sell it right before the end of the year five, they say if they're looking back, they meet the two out of five rule, they can actually still exclude the 250 or $500,000. Again, even though it's been a rental property at the time of sale. So that's we've seen clients take advantage of that. Now, if you will, you know, you want to totally supercharge it, we've seen clients take advantage of that. And then also, maybe their gain is more than the 250 or 500, then they do a 1031 exchange to defer the rest of the gain because they're selling a rental property and buying another rental property, you know, so there's a lot of different ways that you can use it to your benefit. Michael: So question for you both if I if we want to string a couple of these concepts and tactics together, could I buy a owner occupant house live in it for two to five years, rent it out for just under three years, then when I go to sell it for a gain of more than 500,000? Maybe called 750? I do a 1031 exchange and get the owner occupant exclusion so that I get that 500 tax free. And then I can 1031, the additional 250 on top of that, go buy an investment property and then have it be an investment property for a little bit and then do a refinance to an owner occupant primary mortgage. Is that possible? Matt: Yeah. So on the front end, they're selling your property, there's a primary they're gonna, you know, probably pay some taxes, whatever the exit the gain, it was an excess of 500. Yeah, what you do with the money doesn't matter with respect to those rules. So you can still utilize exclusion if you're buying an investment property on the on the back end. But yeah, you can always buy an investment property and change it into a primary, but there's definitely things you want to be aware of. And there's things you can do with a 1031 exchange, if you're selling a rental buying another rental, and then you move into that rental later on, then you can do that. But I think that the key is you want to give it enough time as a rental property that if it ever got question is not that, hey, my intention all along was to move into it for four months, you know, Amanda: Yeah, there's always facts and circumstances that come into play. So we actually had a client who did a 1031 exchange, a very large transaction, he bought a rental property, but because of fires where he was living at the time that volcanoes erupted in Hawaii, he decided to move. And you know, the best placement to move into was that replacement property for the 1031 exchange. So he ended up doing it. But you know, that's a kind of an extreme scenario where we thought, well, you can clearly demonstrate a change in facts where, you know, it was supposed to be a rental, but he moved into it shortly after it because of the location and things like that. But the key like Matt, what Matt was saying, the key is at the time of the exchange, your replacement property should be a rental, or at least the intention of it should be that it's going to be a rental, that you move in thereafter. You know, that's not that big of a deal. Michael: So what you're saying is that you should get your tax professional involved on the front end and not after the fact and tell them Oh, hey, by the way, I sold this property Matt: Ahead of time! Tom: Proactive, not reactive, Amanda: We had a client who use that, you know, primary home exclusion rule, not as rentals, but just as primary home. They just use that over and over again, you know, so they move into a house, they do full rehab, they live in there for a couple years, they sell it, you know, 500,000 tax free gain and move into another house and do that whole thing again. And so you know, that's a strategy to you know, that's you know, if you're not really looking to to rent it out, but just continue to get that tax free gain, that's also a possibility Matt: as long as you like moving and rehabbing properties and you can totally take advantage of that. Amanda: Exactly. If you have spouses or kids they have to be okay living in for two years. Michael: Yeah, that's a pretty amazing strategy. I mean, if you just think about the pure math behind that every two years, you could be generating an additional $500,000 in tax free gains that that's a million bucks every four years. It's pretty unbelievable. Matt: Yeah, for sure. Amanda: Yeah. Exactly. of waiting federal and state taxes, right. I mean, that could be as high as 40%. Michael: Hey everybody that was our show. Thanks so much again to Matt and Amanda. So such a such a pleasure having you both on looking forward to doing it again soon. If you liked this episode, please please feel free to leave us a rating review and subscribe wherever you listen to your podcasts. And if you have any comments or ideas for episodes that you'd like to hear, please leave those in the link tree in the show notes of this episode. Thanks so much for listening and happy investing.
6 min
Apartment Building Investing with Michael Blank Podcast
Apartment Building Investing with Michael Blank Podcast
Michael Blank
MB 244: A Hands-On Approach to Asset Management – With Daniel Simpson
In real estate school, they teach you that the money is made when you buy. But that just isn’t true for apartment buildings. Yes, you have to buy right. But in the multifamily space, the money is made in the execution of your plan to increase revenue and reduce expenses. And the asset manager is responsible for making sure that happens. Daniel Simpson serves as Asset Manager at Nighthawk Equity, the investing arm of The Michael Blank organization. He has nearly 30 years of experience in multifamily, residential and commercial property management, developing an expertise in strategic business forecasting, budget allocation, complex data analysis and property financials. Daniel has an impressive track record of acquiring, renovating and repositioning C-class value-add properties in as little as 18 months. On this episode of Apartment Building Investing, Daniel joins me to share his hands-on approach to asset management, describing what he does on his monthly site visits and how he helps property managers optimize revenue and reduce expenses. He walks us through the metrics he uses to identify property management issues and explains why all problems come down to people. Listen in for Daniel’s insight on the limited role property managers should play in construction projects and learn when you should consider hiring a full-time asset manager! Key Takeaways Daniel’s insight on the fundamentals of asset management * Ensure investors’ goals met, returns on target * Provide guidance to property managers How often Daniel meets with property managers * Speak with regional manager once/week minimum * Unannounced visit to site managers once/month When to take a hands-on approach with property managers * High turnover rate * Higher than normal vacancy rate * Lack of success in leasing units * Collection issues * Move-outs not entered timely Daniel’s take on why all problems come down to people * Tenants rent from STAFF vs. apartment itself * Asset manager’s job = find breakdown in system What metrics Daniel watches closely as an asset manager * Consistency in NOI * Occupancy (physical and economic) * Delinquency * Live PNL * Closing ratio How to identify problems with property management * Look at comps and communicate that with staff * Secret shops to evaluate leasing staff’s performance Daniel’s process for optimizing a multifamily business * Start with maximizing revenue (add $5 to $10/unit) * Minimize expenses next, reevaluate contracts How Daniel thinks about managing expenses * Ask questions about potential overspending * Audit line items to keep property managers honest What Daniel does on his monthly site visits to a property * Walk vacant units, talk with property manager * Visit with leasing agents and maintenance staff * Verify that move-in files match what’s in system Why property managers should not handle construction * Distraction from filling units and collecting rent * Better to hire GC or specialist (local or in-house) The role a property manager should play in construction * Go to early meetings, input on scope and timeline * Hand GC keys needed to carry out project What an average syndicator can do if they can’t afford a GC * Use construction manager (part of management co) * Build 5% in budget for specialist to oversee project When it’s time to hire an asset manager for your business * Depends on skill set of investors in joint venture * As soon as you can afford it Connect with Daniel Simpson Nighthawk Equity Email daniel@nighthawkequity.com Resources Learn More About Michael’s Mentoring Program Join the Nighthawk Equity Investor Club CLASS Leasing Podcast Show Notes Michael’s Website Michael on Facebook Michael on Instagram Michael on YouTube Apartment Investor Network Facebook Group
44 min
Wealth Labs with Garrett Gunderson
Wealth Labs with Garrett Gunderson
Garrett Gunderson
160. Paying off your mortgage early - Answering Your Questions / Ask The Money Nerds
Do you have a financial question you'd like one of our Money Nerds to answer? Submit your questions at https://askthemoneynerds.com and watch for our response on an upcoming episode! In this episode of Ask the Money Nerds, Garrett and Amanda respond to YOUR comments from a previous video about paying off your mortgage. People are FIRED up about mortgages! Should you pay them off? And if you don't are you making the right choice? Today's Ask the Money Nerds episode is going to be a little different as we look at some of the comments from an older video where I talked about how paying off your mortgage early can destroy your finances. You can find the video where the comments came from here: https://youtu.be/8UQmqi9zj4w Compound Interest Video: https://www.youtube.com/watch?v=M6MG9cbgh6c&t=202s *** If you enjoy the podcast, consider leaving a short review on Apple Podcasts/iTunes for us. It takes less than 60 seconds, and it really makes a difference. I also love reading the reviews! Check Out Garrett's Books: Killing Sacred Cows - https://amzn.to/2lMbX1i What Would Billionaires Do - https://wlth.co/yt-garretts-billionaire-book Connect with Garrett: Facebook: https://www.facebook.com/garrettbgunderson Twitter: https://twitter.com/GBGunderson Instagram: https://www.instagram.com/garrettbgunderson LinkedIn: https://www.linkedin.com/in/garrett-gunderson-651359b3/ Website: https://wealthfactory.com/
38 min
Real Estate Investing for Cash Flow with Kevin Bupp
Real Estate Investing for Cash Flow with Kevin Bupp
Kevin Bupp
#311 Commercial Real Estate, Retail, and So Much More! -with Jay Several
Jay Several is a real estate investor and developer. Jay is the Principal of Several Properties Group, a Cherry Hill, NJ-based developer and asset manager of value-add retail properties. Several Properties develops and manages properties in Pennsylvania, New Jersey, and New York. Jay is involved in every aspect of the development process for each property including location logistics and metrics, acquisition, financing, entitlement, leasing, construction, tenant fit-out, and asset management. Since 2007 Mr. Several has been totally responsible for creatively re-developed vacant, obsolete, and abandoned properties into vibrant retail assets valued at over $ 40.0 million. Quotes: “Everything is about relationships. You can feel like you know what you’re doing, but to be able to confirm that, you have to have lots of friends in the industry. People that know you, they know what you can do. And when they have something, they will come to you.” “Listen, watch, and do as much homework as possible. Start small and think big. If you have a lot to lose, put it on the line.” Highlights: 3:38- Jay tells us about his background, how he got into real estate, and what he does 6:13- Jay talks about what point he made the transition from family housing to commercial projects 11:56- Jay shares how he knows he has found a strong candidate 17:30- Jay tells what his typical business model looks like 21:06- Jay gives his opinion on if new opportunities will arise from the pandemic Guest Website: https://www.severalpropertiesgroup.com/ Learn About Investment and Partnership Opportunities with Kevin and His Team
41 min
Real Wealth Show:
Real Estate Investing Podcast
Real Wealth Show: Real Estate Investing Podcast
Kathy Fettke - Real Wealth Network
Real Estate Investing: Raising Money Through Real Estate for Yourself and for Charity (Audio)
Building wealth is something that we do for ourselves and our family, and for some, it’s also a way to “give back” to people in need. In today’s episode, we’ll hear from someone who started his real estate career so he could raise enough money to help orphans around the world, as well as his family. He’s truly a good, good soul. If you think investors are more self-serving than that, this interview might change your mind. Our guest, Whitney Sewell, became a federal agent after serving in the military at a very young age. When he got married, he and his wife, Chelsea, decided to adopt at-risk children but realized they needed more time and money to fulfill their charitable dreams. Whitney had heard that other people could build wealth through real estate, so he thought he could too. He and his wife bought two triplexes. They also lost a lot of money on those initial investments but learned a lot, as well. Today, they personally own more than 250 units and their company, Life Bridge Capital, has invested in more than 900 doors worth more than $120 million. Inspired by their desire to help orphans and their families, the Sewells founded the Life Bridge Foundation, and donate 50% of their profits to the foundation. Whitney is also the host of the Real Estate Syndication Show. Links: www.RealWealthShow.com https://lifebridgecapital.com/ https://lifebridgecapital.com/podcast/
22 min
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