Real Estate Wholesalers: How to Turn Taxes Into A Profit Center
Few real estate investors love taxes, especially wholesalers pulling in large lump sums of cash. So how is it that savvy real estate wholesalers can effectively turn this factor which creates so much fear among others into one of their top performing areas of profit?
The Awesome Tax Benefits of Real Estate
Operating a real estate investment business offers plenty of tax breaks, as does direct investment in real estate. With the help of a good accountant, and smart tax planning wholesalers could well find they are paying a fraction of the income taxes of those making 10% of what they are each year.
Tax Free, Compounded Returns
Self-directed IRAs offer real estate investors tax deferred, and tax free returns. That mean the additional boost and high cash on cash returns of that extra net investment capital year after year. There are few real estate wholesalers that are going to be in anything less than a 25% income tax bracket. Many will be pushing 50%. A self-directed IRA can then deliver the equivalent of a 25% plus bump to net profits and gains.
Accept Real Estate Donations
Some real estate companies have found a way to leverage in-kind donations of property. For those still undervalued, or with properties they can’t afford to move, they could donate them and enjoy sizable tax breaks, while the receiving entity enjoys acquiring real estate at deeply discounted prices.
Catch the Windfall of Tax Rebate Cash
No matter how much money tax filers receive in their rebate checks this year you can bet they’d like more next year. Billions of dollars are going to be floating around in the next few months. That can be blown on frivolous retail items and entertainment, or invested in real estate. Those getting rebates can use that money to buy homes, set up self-directed IRAs, and invest in income properties. That is all business for real estate wholesalers that put themselves in the right position.
Catch the Windfall of Referrals
Consider working with tax preparers and accountants to gain more referrals. From December through April they are looking for strategic referral partners, and are spending a lot on advertising. Help them add value to clients and refer them business, they’ll send you deals and investors with cash.
Authored by Best Transaction Funding
BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.
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