Capitalizing on Tax Time for Real Estate Investors

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on Friday, 17 February 2012
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Tax season may not always feel like the best time of the year for real estate investors as they figure out the huge amount of money they really made and how much they may owe in taxes but it is one of the sweetest times of the year for reeling in extra revenues.

While full time real estate investors have had the advantage of keeping the extra money in their pockets all year long almost everyone else is receiving their big tax refund checks. This means that all of a sudden almost everyone out there, even part time, single parent families have the cash to put down enough down payment to qualify for an FHA loan and those whose credit histories or income is too far gone can choose to either clean up their credit with your guidance to qualify in a few months from now or at least upgrade to renting one of your investment properties.

The flip side to this which many real estate investors are overlooking is that this extra cash also makes it much easier for sellers to move out and relocate. It may not be enough money for them to reinstate far delinquent home loans but it is enough to get into a new rental or at least make them feel richer so that they aren’t so hard to negotiate with.

Investors who recognize this perfect combination of circumstances can kick off the year in a big way by using transactional funding to finance their flips and turn over a large number of properties in an incredibly short amount of time.

Obviously it may be a little late in this year’s tax season to capitalize on this tax money windfall but allow this to be a lesson to start planning your marketing earlier and timing your advertising pushes a little better. That means starting now for next year or let your competitors run ahead of you throughout 2013, cherry picking the best deals and only leaving you the overpriced scraps they don’t want.

On the point of forward thinking, note that meeting with your CPA or tax preparer now is a great opportunity to plan ahead and develop strategies for minimizing taxes due for 2012, versus panicking at the last minute and paying far more than you have to.

Lastly, one more innovative tip for real estate investors with brick and mortar offices can cash in on is allowing a tax preparer to set up shop in their offices. This can possibly add an additional tax deduction, make sure your own taxes get the attention they need, offset your overhead and create new revenue streams as well as giving more control of what local consumers decide to do with their tax refunds.

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The Silent Profit & Time Killer All Real Estate Investors Need to Avoid

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on Sunday, 12 February 2012
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With the housing market decidedly turning around in many areas of the country more and more investors are jumping into real estate every day. The problem is that many overlook this one factor that kills profitability and sucks your free time dry. Are you prepared?

Real estate investors are getting into the business to make great money and chase more free time so that they can enjoy life more and retire earlier and more comfortably. Unfortunately while many real estate investment books, programs and gurus are great at pumping people up and providing information on finding deals few address the elephant in the room who likes to wreak havoc on even the best laid plans and ideas - property management.

Buying and renting out properties can be very rewarding and profitable but few new investors realize all that property management really entails and how trying it can actually be. For a start the money and time required to polish the property, market it for rent, show it and screen tenants can be considerable, immediately decreasing the ROI of the entire deal if not already accounted for.

On top of this daily property management can be far more challenging and time consuming than anticipated. Between rent collection and dealing with middle of the night and weekend maintenance calls being a landlord can quickly mean more hours a week than a regular 9-5. Worse it can mean being chained to your rentals and unable to take off and travel or really enjoy the time off you hoped to realize from getting into real estate investing in the first place.

If all this wasn’t bad enough the liability that comes with DIY property management can be astronomical. Tenants will pressure you for repairs and upgrades, threaten to sue you for injuring themselves or for hassling them too much for the rent they owe. Most of these attempts at law suits probably won’t go anywhere but they can become expensive and it only takes one vindictive tenant to say that you threatened them on the property to find yourself spending the weekend in the slammer and facing huge compensation agreements that can bankrupt you.

Finally, with the rise of the Occupy movement and increasing trend of squatters taking over homes keeping them vacant for long periods of time may not be any better either.

Yes this is scary but it shouldn’t dissuade you from investing in real estate. There are few other opportunities for building wealth and crafting your dream lifestyle than real estate investment can provide. Just be prepared and educated on what you are really up against.

So before going out there and signing a contract on another foreclosure deal, sit back for a minute and contemplate your real goals. What is it that you really, ultimately want real estate to do for you? Lots of money and freedom?

Then you will definitely want to consider bringing in professional property management and budgeting for it from the start. Or perhaps switching your strategy to flipping houses, using flash funding so that you eliminate these risks altogether is the best move for you?

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The No.1 Lead Generation Opportunity 99% of Real Estate Investors Miss

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on Wednesday, 01 February 2012
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Real estate investors are throwing away 100s of real estate deals a week without even realizing it...

Customer service seems to have become extinct in the real estate business today. Any investor who has ever called or emailed about a property and failed to get a response knows this all too well.  If that agent, builder or wholesaler would have gotten back to you in a timely manner you may have ended up purchasing 10 or more properties from them every month.  Unfortunately, they will now never get a shot at that business.

The reverse is true too and is the source of hundreds of lost real estate deals every year.  You never know the value of a single prospect or inquiry, but it is often a lot more than most think. That lead could be someone who will not only come back for several transactions throughout their lifetime themselves but be able to directly refer dozens of friends and family members and indirectly be the source of thousands of additional contacts for your real estate investment business.  Even if you made a minuscule $5,000 per home flipped, property acquired and rented or deal you assigned to someone else the total value of every lead is incredible.

Real estate investors may be busy and they may not believe that every email or call is a perfect fitting lead for the properties they are try to flip in the moment but they will never know and never get the shot at the future business unless they at least make an effort to return messages. Perhaps you don’t have time to talk to anyone else in your day, perhaps the home they called about is already sold, maybe you don’t need any extra money this month but what about next month and next year.

If these leads are too much to handle why not at least set up a recorded message, funnel them to an email system which follows up with auto-responders or even hire a virtual assistant for a few dollars an hour to take calls, screen and record them.  Real estate investors should then work to capture as much contact information as possible from cell numbers to address, to email and social media profiles for ongoing marketing to and through them.

Referrals are the cheapest leads which provide the maximum ROI that any investor could hope for while flipping homes.  Don’t throw them away...

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Will Lender Settlement Take More Distressed Home Off the Market?

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on Tuesday, 31 January 2012
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A massive settlement between mortgage giants and the states is being ironed out to penalize banks for fraudulent lending practices and help borrowers but could it do more harm by killing off deals on distressed homes?

The settlement potentially worth up to $35 billion is anticipated to offer a three pronged compensation and assistance program as punishment for foreclosure fraud and predatory loans which have resulted in lost homes and homeowners trapped in underwater mortgages. Clearly any smaller company or individual caught committing something similar would be closed down or in jail. Still more money for homeowners is good news for real estate investing right?

Well may be not. The proposed settlement would give checks of $1,800 to some homeowners who were victims of the robo-signing scandal, though the little of this money which actually reaches displaced ex property owners is more likely to be spent on disposable items rather than provide any direct boost to the housing market or provide new housing for those who need it most.

Billions more are pegged for use to reduce selected borrowers principal mortgage balances by $20,000 and reduce some interest rates down to 5.25% through refinancing. Obviously not the most attractive terms that could be offered, not even in touch with today’s market rates by a long shot or near to what others are receiving in relocation funds for short sales or through loan modifications. However, it may be a move that is enough to make more homeowners hold off from walking away from their homes or pushing for short sales just yet. Ultimately these homeowners which are already on the brink will likely slip back into default but what will this do to the housing market in the short term?

An artificially propped up housing market with fewer homes on the market and fewer distressed homes, short sales and foreclosure properties available to investors could mean slowing down the much needed turnover of these homes. It could temporarily lift housing prices due to limited supply setting us up for a quadruple dip in home prices after election time. However, even in the short term the consequences could be devastating with more jobs lost which have been created by real estate investors flipping houses and rehabbing neglected homes.

Smart investors will go to work educating homeowners on the folly of trying to stay in homes which will still be lost or missing out on the best opportunities for short selling while banks are still offering big payouts.

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Good News in Real Estate Interview

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on Sunday, 13 November 2011
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We were interviewed in Good News in Real Estate, all positive all the time, 950 ESPN with host Mark Cumberland. This is a Philadelphia-based radio show airing on Sundays from 8am-9am. The show below was aired on Sunday, November 14, 2010. BestTransactionFunding.com's transactional funding segment is about half-way through the radio show. You can jump to that point if you wish.

http://www.975thefanatic.com/lifestyle/blogentry.aspx?BlogEntryID=10162864

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