Trusts have been used as an entity to hold assets, such as real estate for hundreds, if not thousands, of years. Obviously, it’s old stuff. But, with each generation’s trials and tribulations, trusts evolve to meet new challenges.

High Taxes and aggressive litigation are today’s motivators. Tax risks range from income tax to draconian death taxes that consume up to 55% of the assets a person leaves behind. Trusts are often used along with more modern adaptations of other old entities, such as partnership aberrations, to include family limited partnerships and limited liability companies. The quest is to keep what you have accumulated and to have some extended control of it, even after death.

A perfect example of using ingenuity to keep one’s assets away from the grips of the tax man was a trust established by Maria Cristofani in 1984. Maria established a trust and transferred to it real estate with a value of $70,000. The primary beneficiaries were her two children and, as contingent beneficiaries, 5 grandchildren should the two primary beneficiaries die within 120 days of Maria. All was fine until Maria died and the IRS audited her estate tax return. Read More→

Of all the creative financing techniques I use to build my business, the one that made me the most money and will make you the most money is the art of being valuable. Creative financing is one of the fastest ways to get started in the real estate business. This can include things such as seller financing or a master lease option. No matter what tactics you use, it always comes back to creating value for your buyers.

The first thing you want to do when you are getting into business is to decide what it is you bring to the table. What things do you have that others will value? Once you figure out where your worth is then you must decide how you will trade that worth for what you want. In most cases you are trying to trade your value for entry into a real estate deal but remember, the real estate business is more than just closing a deal. There is partnerships, private money, experience etc. All of these things have value and you will want to focus on gaining as many of these skills as you can. Read More→

A lot of people ask me a lot of questions about Back to Back closings and so I thought I would share some of what I have seen over the past 15 years or so on them. A lot of lawyers will tell you that they are flat out illegal, and this is generally untrue. I will explain how to do a Back to Back closing and make it work for you.

The first question is whether to do a Back to Back closing or an Assignment Closing. In an Assignment Closing there is only one closing fee, so you save about $1000 on your lawyer fees.  The main reason to avoid an assignment closing is that the Buyer and the Seller both will see exactly how much you are making on the closing and either side may freak out and kill the deal if they know you are making more money than they think you should. It can be worth that $1000 to have a smoother transaction where no one gets their feather’s ruffled over your fees. Read More→

You’re prepared right?

The first step is one that many real estate investors have already taken care of…drafting a Last Will and Testament. So, you have it all spelled out…you have met with your lawyer and carefully drafted a Will that details who inherits all of your assets right down to your great great grandfather’s pocket watch. While this is an important first step, if you are an active real estate investor, the fact is that you have some additional preparation needed in order to allow your loved ones to continue to maximize the benefits of all your hard earned investments.

The Real Estate Investors Portfolio

Drafting a portfolio is critical when you own multiple real estate holdings and other investments. The portfolio should detail: Read More→

It is the goal of this column to answer questions about QuickBooks and how it is used in the REI arena. Know how to record transactions in the proper way and have your set of books in good shape when it comes time for taxes. It is our intention to do this by you the members submitting questions to Karen@smallbusinessadvisor.biz, and getting answers here in this column.

Q: Does QuickBooks 2013 Integrate with Other Software?

A: Yes, in the following areas

• Microsoft Word and Excel integration requires Word and Excel 2003, 2007, or 2010 (including 64-bit)
• Synchronization with Outlook requires QuickBooks Contact Sync for Outlook 2003, 2007, and 2010 (including 64-bit) (downloadable for free at: www.quickbooks.com/contact_sync)
• Email estimates, invoices, and other forms with Windows Outlook, Outlook Express and Mozilla Thunderbird, as well as web mail services such as Gmail, Yahoo! Mail, and Hotmail
• Compatible with QuickBooks Point of Sale version 8.0 and later Note: Other Point of Sale Programs may or may not work well with QuickBooks

Read More→

Lenders like to argue that when a homeowner gets behind on the mortgage the issues involved in foreclosure are cut-and-dried.  The homeowner owes on the mortgage, they have not been able to catch up over many months, so they should pay and/or lose the house.  The reality is far less clear-cut.  In many cases homeowners do not argue in court that they don’t owe on a mortgage; the real questions are who does the homeowner owe the loan to and does the party bringing a foreclosure action really have standing to file for foreclosure?

An audit ordered by San Francisco assessor, Phil Ting, of about 400 foreclosures was reported in a New York Times article by Gretchen Morgenson showing pervasive irregularities in how mortgages are written and how foreclosure filings are carried out.  While the study was specifically of problems with San Francisco area foreclosures, similar findings could be made nationwide.  For example, a recent whistleblower report on Wells Fargo exposed the systematic fabrication and alteration of mortgage documents nationwide.  Their fraud was so rigorous that they even took loans that were endorsed properly and altered them as well! Read More→

Last month, Kim and I were part of a panel discussion at Dustin Griffin’s Atlanta REIA monthly meeting.  The topic was about how we’re structuring our deals in the current real estate market.  A lot of time was spent answering questions about hedge funds and how they’re driving up home prices.

Because hedge funds are gobbling up an ungodly number of properties – and are willing to pay at or above a property’s CONSERVATIVE fair market value – many “investors” are no longer able to be high bidders at the foreclosure auction.  And because many of these so-called investors know of no other way to buy property, they simply quit showing up – or worse yet, pay WAY too much for a property.

Frankly, Kim and I don’t give hedge funds much thought – other than thinking they’re making one giant mistake that’s gonna bite them in the butt one day soon!  Sure, these days we’re rarely the high bidders on the steps, but that doesn’t mean we’re not doing deals.  Just the opposite is true! Read More→

Many real estate investors dealing with foreclosures, pre-foreclosures or foreclosure workouts are familiar with the case Reese v. Provident Funding Associates.[1]  In Reese, the Court of Appeals of Georgia held that failure to follow a notice requirement identifying the foreclosing lender was fatal to the foreclosure process.  Many real estate law scholars believed this ruling was correct and provided consumer protection.  Additionally, many real estate professionals saw this ruling as an opportunity to level the playing field in foreclosure and pre-foreclosure negotiation.  This ruling, however, is no longer good law.  It has been overturned.

Georgia law requires that a foreclosing lender give notice to a homeowner 30 days before foreclosing.[2]  It also requires that this notice correct identify the “secured creditor.”  In Reese, the Court of Appeals of Georgia interpreted this in a technical fashion.  It found that notice sent by a loan servicer which did not identify the lender was “fatal” to the foreclosure: “While a loan servicer may be permitted to send the notice on behalf of the secured creditor, [the servicer’s] fatal mistake was in sending a notice that failed to properly identify the secured creditor.”[3] Read More→