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Great News for Investors and Sellers FreeGiftComments

I received the article below in an email sent to me from National REIA.

My Short Version Summary of Your Benefits:

1.) Investors who have short saled properties where the lender accepts less than the balance owed, typically had to report the amount of the discount to the IRS as income and pay income tax on the discounted dollar amount. With this new extension, it prevents the IRS from taxing your cancelled debt or the amount of your discount. It appears this expired in 2013; however this new extension act now includes both 2013 and 2014 tax years.
SPECIAL NOTE: If you have short saled any properties in 2013 and 2014, you should verify and make sure your tax preparer knows all of the details on this. I will bet many investor’s tax preparers were aware of the original act, but not this extension.

2.) SELLERS: when buying investment property using “short sale” technique, you have a brand new benefit for your seller. Get it short saled and close before the end of 2014, and they will not get taxed on the amount the lender discounts.  HUGE Benefit for your Seller. Once again, remember your seller might check with tax advisor and they may not be aware of this new extension to the Mortgage Forgiveness Debt Relief Act Extension.

Below is the email I received this morning.


 

Mortgage Forgiveness Debt Relief Act Extension:

Over the course of the first two weeks in July, National REIA’s lobbying arm in Washington, D.C., in concert with National REIA board member and my good friend Tom Zeeb, met with the key sponsors of legislation to extend the short sale tax break retroactively for 2014 and through 2015.

The extension of this tax break, which prevents the IRS from taxing cancelled debt during the utilization of short sales, is critical to restoring the use of short sales.

Since the failure to extend the Mortgage Forgiveness Debt Relief Act into 2014, short sales have fallen dramatically since the passage of the tax break implementation in 2008 to 2013 and through the passage of FHFA’s National Standard Short Sale Program, another product of National REIA’s lobbying arm.

 


What are Your Comments On This New Extension? FreeGiftComments 
(please click on the “Leave Comments” button at top right of this article)

SigMikeButler

True Story, this just came in this morning on our Emergency Hotline

 

What Would You Do?   – please click the “Leave Comments” Button Above

 

Instantly, They HATE Your Guts!

 
I was totally shocked this morning and had to share this with you Mike. In case you did not know, my real estate company provides a “Tenant Finder Service” for rental properties owners in my town. Investors with 300+ units and more use our service on all of their properties. It works!
Our Tenant Finder Service markets their rental unit, shows it, takes and processes applications, and can also handle the entire Move In Process including signing all docs and collecting rent and security deposit.
Yesterday, Beth handled a move in process for a Tenant Finder Home. All was done properly for new tenant orientation and training, monies, docs, keys and owner knew in advance and was informed of his new tenant getting started.
Now SCHOCK and AWE Happened This Morning!
HIs New Tenant called our 24 hr Emergency Hotline reporting his home had no electricity nor any air conditioning. Keep in mind, this is a Saturday morning.
After receiving their 36 second emailed voice message, I was flabbergasted. I quickly forwarded the email voice message to the owner along with a few comments about how this behavior absolutely destroys everything we have done in orientation and training to get them off on a good start with owner.
(fyi, in my town, our electric company takes 3 days to transfer service and each new tenant is informed they have 3 business days to transfer utilities… yes, we used to have them do it before signing, but this is simpler.)
The Owner’s Email Reply:
“I Do Not Pay for Tenant Utilities”
LESSON LEARNED: Clearer Communication with owner is critical and just like a lease, we will be adding another paragraph in our Tenant Finder Service Agreement.
 

What Are Your Thoughts On This Subject?

Depreciation – IRS Tax Info

GrinnanMikeCPA  J. Michael Grinnan CPA

How do I Compute depreciation for tax purposes?

The simple concept of depreciation can get complicated very quickly when one is trying to determine the proper depreciation deduction for any particular asset. Here’s only a summary of some of what’s involved.

Identifying the asset

The modified accelerated cost recovery system (MACRS) is generally, but not always, used to depreciate tangible depreciable property placed in service after 1986. The MACRS deduction is computed on Form 4562, Depreciation and Amortization. Click Here for Full Video/Article (Members Only)

Real Estate Investor Deal Analysis Review Training Audio on Single Family Home

Jimmy Moncrief interviews Mike Butler to conduct a real “Deal Analysis Review” on a single family home that Jimmy wants to buy for a rental.

 

Back in May of this year, week of the Kentucky Derby here in my hometown, I had the great privilege and honor to meet Jimmy Moncrief and his sidekick and best friend Brad. Both are from Tennessee and were attending their first Kentucky Derby, a bucket list sort of thing I imagine.

Jimmy is one of my Gold Member and he had requested and scheduled a private one on one coaching/mentoring session, but in a very creative and unique way of doing it.

Jimmy wanted to record it as a live interview of a “Deal Analysis Review” on one of his pending leads on properties to buy. PLUS, Jimmy wanted permission to put it on his own website as a podcast thing. Here is the link to Jimmy Moncrief’s website http://realestatefinancehq.com/turn-landlording-autopilot/

I need your help please. A Little Feedback on the 2 questions below, thanks in advance.

QUESTION: Would You Like to Have Podcasts available from Mike Butler?
(please answer below by entering your answer and comments in reply area)

QUESTION: If you answered Yes, Do You Prefer Audio Only or both Video or Both?
(please answer below by entering your answer and comments in reply area)

 

Below is Jimmy Moncrief’s article and link to the podcast interview.

 


 Landlording on Auto-Pilot: A Simple, No-Brainer System for Higher Profits and Fewer Headaches

  Click Here for Full Video/Article (Members Only)

Fair Housing Do’s and Don’ts
19 min Training Video
(please allow 20 seconds for video to load)

 
 
 

 

GrinnanMikeCPA

 

 

 

 

 

   J. Michael Grinnan CPA

 

FAQ: What is the self-employment tax?

Taxpayers who are self-employed must pay self-employment tax on their income from self-employment. The self-employment tax applies in lieu of Federal Insurance Contributions Act (FICA) taxes paid by employees and employers on compensation from employment. Like FICA taxes, the self-employment tax consists of taxes collected for Social Security and for Medicare (hospital insurance or HI).

The self-employment tax is levied and collected as part of the income tax. Click Here for Full Video/Article (Members Only)


WDRB 41 Louisville News

LOUISVILLE, Ky. (WDRB) — Police have arrested 54-year-old Anthony Jecker for shooting and killing another man at an apartment complex on Fegenbush Lane.

According to police, around 3 p.m. Jecker and his landlord got into an argument outside an apartment. 

They say the altercation then led to the suspect pulling out a gun and shooting the other man.

The victim was pronounced dead at the scene.

Neighbors and police both tell us that the apartment complex here on Norbrook drive and Fegenbush Lane is in a family friendly neighborhood, and this is very out of the ordinary.

“Someone decided to do something that, obviously, killed someone else and could have put a lot of people in danger.” LMPD spokesperson Dwight Mitchell said, “thankfully that was not the case, but unfortunately there was one person who did die from this.”

Neighbors say Jecker does live in the apartment complex with his wife and a dog.

They say his wife left in a police car. 

Jecker is charged with murder and tampering with physical evidence

link to full article
http://www.wdrb.com/story/26016414/lmpd-arrest-suspect-in-shooting-at-fegenbush-lane-apartment-complex

 

Short from Mike Butler

My prayers go out to this landlord and his family. Although at this time, the media has not released the name of the landllord who was killed by his own tenant, this is real life about how dangerous people are in today’s world. Even Mayberry, USA is not safe.

This should be a huge wake-up call to all rental property owners in how you communicate and treat your tenants. Odds are, this landlord was working his butt off to build for true financial freedom with his wife and family.

Please remember this landlord’s family in your thoughts and prayers.

PLEASE SHARE YOUR COMMENTS BELOW

 

 

DODD FRANK FOR TODAY’s INVESTOR

by attorney Harry Borders

PART TWO- RESTRICTIONS ON OWNER FINANCING!!!

 

           

Here’s the GOOD NEWS… Investor buyers can STILL get financing from any source they want.

 

Here’s the TERRIBLE news… Owner occupant buyers now have lots of restrictions place on who they can get a loan from.

 

These new rules impact “contract for deeds” and “Land Contracts” as well as seller retained mortgages (and, of course, the ever present contract for deed in disguise as a lease-option) and private financing. 

So, assuming an owner occupant wants to obtain a loan from a source other than  a bank or mortgage company, here are the new rules.

If the lender only lends once in a 12 month period, the lender:

a) MUST be a “natural” person (i.e. not an LLC or corporation);

b) MUST have owned the property (i.e. no private financing, only owner financing);

c) MUST NOT have built the home in the ordinary course of his/her business;

d) MUST NOT have a negative amortization;

e) MUST be for at least 5 years, and if longer and adjustable, must be tied to an index rate, such as Libor   

 

If the lender lends 2 to 3 times in a 12 month period, the lender MAY be an LLC or corporation.  But the lender also:

a) MUST have owned the property (i.e. no private financing, only owner financing);

b) MUST NOT have built the home in the ordinary course of his/her business;

c) MUST NOT have a negative amortization;

d) MUST be FULLY AMORTIZED;

e) if the rate is adjustable, it must be fixed for at least 5 years, and it must be tied to an index rate, such as Libor; and

f) MUST determine in good faith that the consumer has a reasonable ability to repay the loan (similar to what a loan officer would do).

 

If the lender lends more than 3 times in a 12 month period,

all of the above requirements for a lender lending 2 to 3 times in a 12 month period apply and

IN ADDITION, the lender MUST BE A LICENSED LOAN OFFICER.

           

As you can see, navigating the waters of seller financing has again become tricky.

Please check with your real estate attorney before embarking on a seller financing transaction for a dwelling.

 

Until next time, peace,

hCapture

Harry Borders

Harry@HarryBorders.com

502.894.9200

P.S. Your simple solution to stay out of trouble is to never offer seller financing to any tenant / buyer or owner occupant. You can use Seller Financing to sell to other Investors, not owner occupants.

Download Your FREE Poster by filling in the blanks in the form below

PosterScamWhiteSAMPLE




 

Odds are, if you are in the residential rental property world, you have heard or know an investor who has been scammed by one of the internet dirt-bags.

This is nothing new. Remember the online scam where the victim is sent an email from who knows where, reporting they have won or inherited a billion dollars? But in order to claim it, the victim must pay for the processing fees and government stamps, etc.

You and I both say “there’s no way anyone with any sense would fall for this.” But Guess What? It is still happening every day with normal folks. These scammers would NOT be doing this if it did not work.

Here is how I know it is still happening and the scammers are still getting money from victims. My banker told me just a few weeks ago, he gets one or two customers a week who want to wire money to these scammers. Unbelievable. The scams continue.

Even as a retired Louisville Police detective, I have been scammed on several of my rentals. Let me share with you how it works.

The scammer surfs the internet for houses for rent. They find an unlimited supply of homes for rent on various websites from www.VistaKY.com, www.TenantFinderService.com, www.RentalHouses.com, www.Zillow.com, www.Craigslist.org and many more.

They find your rental house to target. The address is 123 Main St., Louisville, Ky 40207. It’s a 3 bedroom, 2 bath home with finished basement and 2 car attached garage. The rent for this home is $1200.

Here is what usually happens in this rental property scam.

STEP 1: After finding your target property, they download your all of your photos and details about this property from the online source they viewed. Think about this for a moment. The scammer has everything you have entered on the internet for the public to view. PLUS, most of the time they can use Google Maps to drive down the street, see what is on the corner (Walgreen’s, McD’s, etc) and the scammer can describe your rental and the neighborhood in great detail.

STEP 2: The scammer enters ALL of the information on your rental by “Stealing and Pasting” into a CraigsList.com Ad or any other website allowing investors to enter rental properties for free. The scammer lists the rent for your home at $899 which is a bargain for your rental home.

STEP 3: The Scammer’s ad will always have some kind of B.S. story about them being an “Out of Town Owner.” Some times they request a deposit up front and they will give them the key to see the home after receiving their money. They also inform the interested potential tenant that they have hired a local company to help get it rented and you might see their sign in the yard. Scammer tells them he is not satisfied with their service and he just decided to rent it himself or herself.

STEP 4: Unfortunately, many times the applicants actually send  money to the scammers and wait for the key to the house. After receiving no response, these folks then call the number on the yard sign and complain to the real owner (YOU) they want their money back. Don’t laugh, this is true.

You are totally blind-sided when you get this call. You are furious, ticked off, and want to find out exactly what is going on with your rental. Your jaw drops and you want to do something, take action now to stop it now.

What Can You Really Do? Think about it. Can you call the police? OK, what will the police do after hearing your story. First of all, you are NOT the victim. Your potential applicants are the victim. Who is going to pay for this? Who will get locked up and go to jail? Good Luck!

So what is a poor investor to do?

Here is your Best Tool To Prevent Your Leads from Being Scammed. It is simple and easy.

Your solution is shown below. Get some bright neon yellow paper and print.

Print 2 or 3 copies and place several on the inside of the front windows of your vacant rental and I promise, this will definitely get the attention of your prospective applicants.

To Your Continued $uccess,

Mike Butler

 

POWER LUNCH Chalk Talk Series

Back by Popular Demand!

00 PowerLunchTues15 – 20 minutes of “Meat & Potatoes” Training for Real Estate Investors

For Gold Members and Inner Circle Members Only
Gold Members are emailed the link to access Power Lunch Chalk Talk Series

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