Accredited Income Property Investment Specialist (AIPIS)

If you are using your buy and hold properties as short term rentals, through a company like Airbnb, you may be required to pay an additional 15.3% self-employment tax. Although it may seem like a gray area to you, the IRS considers it an active business and will take note of which schedule you are filing. Short term rentals require more of your labor and your time, which rarely gets accounted for when calculating costs. Considering all the aspects of short term rentals versus long-term buy and hold properties will shield you from future surprises.

Key Takeaways:

[2:34] Airbnb investors are running an active business, so the IRS imposes a 15.3% tax on the income.

[6:38] Maintenance on Airbnb properties are more time and labor intensive than a buy and hold property.

[13:18] Should Airbnb owners file a Schedule E or Schedule C at tax time?

[17:08] Are you able to depreciate the furnishings in an Airbnb rental and what is the De Minimis Safe Harbor?

[23:31] How many units do you need to qualify for the 500 material participation hours?

[27:11] Using segmented depreciation can help to depreciate your assets at a quicker rate.

[30:16] Cost segregation feasibility studies can run anywhere from $5,000 to $20,000.

[32:21] A home office is beneficial as it opens the door to many tax deductions.

Mentioned in This Episode:

Jason Hartman

[email protected]

Hall CPA LLC

Technological changes may give real estate investors better tools to access previously unavailable markets, but no level of technology will ever replace a human’s need for shelter. As long as investors keep their eyes looking forward to the future and stay on top of the increasing number of research tools available, they will successfully build a diverse, long-term wealth strategy based upon single family home investment properties.

Jason and the Real Estate Guys take a break from their real estate conference speaking engagements, to discuss predictions for the future of the real estate investment market, the influx of tenants looking for rentals and how technology is changing investors’ ability to see beyond their own backyard and experience the benefit of geo-arbitration.

Key Takeaways:

[2:25] No matter what the statistics say, real estate investors have more tenants than ever before.

[5:13] There will always be a need for single-family housing.

[7:02] The labor participation rate is the lowest it’s been over the last four decades but you can’t keep the U.S.A. down for long.

[9:41] Real estate investors sometimes miss megatrends but they need to change with the market.

[12:18] How will technology change the way houses are built?

[15:00] Real estate is becoming a mature, less fragmented industry and when big money comes in, it will push prices up.

[18:44] Sophisticated investors use tools so they don’t get stuck investing in their backyard.

[21:23] Owning single family homes in 3-5 markets is a good diversification strategy

Mentioned in This Episode:

Hartman Media

Real Estate Guys

Technological changes may give real estate investors better tools to access previously unavailable markets, but no level of technology will ever replace a human’s need for shelter. As long as investors keep their eyes looking forward to the future and stay on top of the increasing number of research tools available, they will successfully build a diverse, long-term wealth strategy based upon single family home investment properties.

Jason and the Real Estate Guys take a break from their real estate conference speaking engagements, to discuss predictions for the future of the real estate investment market, the influx of tenants looking for rentals and how technology is changing investors’ ability to see beyond their own backyard and experience the benefit of geo-arbitration.

Key Takeaways:

[2:25] No matter what the statistics say, real estate investors have more tenants than ever before. 

[5:13] There will always be a need for single-family housing.

[7:02] The labor participation rate is the lowest it’s been over the last four decades but you can’t keep the U.S.A. down for long.

[9:41] Real estate investors sometimes miss megatrends but they need to change with the market. 

[12:18] How will technology change the way houses are built?

[15:00] Real estate is becoming a mature, less fragmented industry and when big money comes in, it will push prices up.

[18:44] Sophisticated investors use tools so they don’t get stuck investing in their backyard.

[21:23] Owning single family homes in 3-5 markets is a good diversification strategy

Mentioned in This Episode:

Hartman Media

Real Estate Guys

Dr. David E. Goldberg is an Emeritus Professor of Engineering at the University of Illinois and a pioneer in genetic algorithm. He is the founder and president of Big Beacon and he also hosts the radio show, Big Beacon Radio. He believes that the future is more optimistic than many people think it will be and that engineering is the key to enhancing education reform.

Key Takeaways:

[2:22] Evolutionary computation is the idea of combining Darwinian survival of the fittest and ideas from genetics.

[7:49] What impact does evolutionary engineering have on humans, the economy and the systems we use?

[11:53] The future can be more optimistic than what people assume it will turn out to be.

[14:06] Engineers used to be rock stars, just look at the ebb and flow of the popularity of historical engineers.

[16:14] After World War II, we turned engineers into ‘worker bees’ and now we want them to be charismatic leaders, like Steve Jobs.

[19:58] One of the interesting things we found when researching ‘A Whole New Engineer’ is that Asia may no longer be a breeding ground for engineers.

[24:12] Contact information for Dr. David Goldberg.

[25:10] Empower students with trust and they will find the courage to take the initiative which leads to real learning.

Mentioned in This Episode:

Jason Hartman

Big Beacon

A Whole New Engineer

Dr. David E. Goldberg is an Emeritus Professor of Engineering at the University of Illinois and a pioneer in genetic algorithm. He is the founder and president of Big Beacon and he also hosts the radio show, Big Beacon Radio. He believes that the future is more optimistic than many people think it will be and that engineering is the key to enhancing education reform.

Key Takeaways:

[2:22] Evolutionary computation is the idea of combining Darwinian survival of the fittest and ideas from genetics.

[7:49] What impact does evolutionary engineering have on humans, the economy and the systems we use?

[11:53] The future can be more optimistic than what people assume it will turn out to be.

[14:06] Engineers used to be rock stars, just look at the ebb and flow of the popularity of historical engineers.

[16:14] After World War II, we turned engineers into ‘worker bees’ and now we want them to be charismatic leaders, like Steve Jobs.

[19:58] One of the interesting things we found when researching ‘A Whole New Engineer’ is that Asia may no longer be a breeding ground for engineers.

[24:12] Contact information for Dr. David Goldberg.

[25:10] Empower students with trust and they will find the courage to take the initiative which leads to real learning.

Mentioned in This Episode:

Jason Hartman

Big Beacon

A Whole New Engineer

NeighborhoodScout is an online data tool you can use to make real estate evaluations a breeze. It conducts simple searches, which serve up quality information. The information is used by government agencies, real estate investors and individuals alike. Today’s guest Dr. Andrew Schiller, the creator of the site, has a Ph.D. in geography, focusing in sustainable development.

Key Takeaways:

[1:54] Dr. Schiller has a Ph.D. in geography and uses data for projects on sustainable development.

[4:34] Predicting crime risk at the individual address level is possible with this software.

[5:55] The search engine component of NeighborhoodScout allows an investor to build their ideal neighborhood.

[7:35] The vacancy rate information that NeighborhoodScout delivers, is based on baseline nationwide statistics.

[13:55] Communities with good schools and low crime rates maintain their values during tough financial times.

[21:36] What is the tipping point for communities to ensure stable rentals?

[25:49] NeighborhoodScout’s information on crime is very telling. For example, Oakland, CA is both the most expensive and the most dangerous city in the U.S.

[31:00] Where can an investor buy a $100,000 house in a great neighborhood in the U.S.?

[36:17] How much is a subscription to NeighborhoodScout and how do I use it?

[37:13] The Federal Reserve and HUD use NeighborhoodScout for tax credit information.

Mentions:

NeighborhoodScout

NeighborhoodScout is an online data tool you can use to make real estate evaluations a breeze. It conducts simple searches, which serve up quality information. The information is used by government agencies, real estate investors and individuals alike. Today’s guest Dr. Andrew Schiller, the creator of the site, has a Ph.D. in geography, focusing in sustainable development.

Key Takeaways:

[1:54] Dr. Schiller has a Ph.D. in geography and uses data for projects on sustainable development.

[4:34] Predicting crime risk at the individual address level is possible with this software.

[5:55] The search engine component of NeighborhoodScout allows an investor to build their ideal neighborhood.

[7:35] The vacancy rate information that NeighborhoodScout delivers, is based on baseline nationwide statistics.

[13:55] Communities with good schools and low crime rates maintain their values during tough financial times.

[21:36] What is the tipping point for communities to ensure stable rentals?

[25:49] NeighborhoodScout’s information on crime is very telling. For example, Oakland, CA is both the most expensive and the most dangerous city in the U.S.

[31:00] Where can an investor buy a $100,000 house in a great neighborhood in the U.S.?

[36:17] How much is a subscription to NeighborhoodScout and how do I use it?

[37:13] The Federal Reserve and HUD use NeighborhoodScout for tax credit information. 

Mentions:

NeighborhoodScout

Managers of organizations typically inherit the team they are responsible for leading. Strategizing on how to effectively manage the new team can require an overwhelming amount of resources. Jason’s guest, Victor Prince, is the author of the book “Lead Inside the Box”; and he talks about a tool he created to categorize employees so that focus can be given to areas that will increase profitability without sacrificing efficiency. Victor also shares some techniques that can be used during the interview process to assist human resource departments with hiring the right individuals for the job.

Key Takeaways:

[2:20] The Leadership Matrix!

[5:00] Categorizing different types of employees.

[6:16] More often than not, leaders inherit an existing team.

[7:28] How to keep employees continuing to produce for your organization.

[10:24] Managing your peers and succession planning.

[12:31] Know who you are talking to during the interview process.

[14:40] Insightful questions to ask during an interview.

[16:21] You want people to produce the results you ask of them.

[17:54] Filling the gap about the proper way to invest in people.

[18:54] Lack of leadership is the biggest issue in Washington, DC.

[20:15] Contact information for Victor.

Mentions:

Hartman Media

Victor Prince

Lead Inside the Box

Myers-Briggs

Managers of organizations typically inherit the team they are responsible for leading. Strategizing on how to effectively manage the new team can require an overwhelming amount of resources. Jason’s guest, Victor Prince, is the author of the book “Lead Inside the Box”; and he talks about a tool he created to categorize employees so that focus can be given to areas that will increase profitability without sacrificing efficiency. Victor also shares some techniques that can be used during the interview process to assist human resource departments with hiring the right individuals for the job.

Key Takeaways:

[2:20] The Leadership Matrix!

[5:00] Categorizing different types of employees.

[6:16] More often than not, leaders inherit an existing team.

[7:28] How to keep employees continuing to produce for your organization. 

[10:24] Managing your peers and succession planning.

[12:31] Know who you are talking to during the interview process.

[14:40] Insightful questions to ask during an interview.

[16:21] You want people to produce the results you ask of them.

[17:54] Filling the gap about the proper way to invest in people.

[18:54] Lack of leadership is the biggest issue in Washington, DC.

[20:15] Contact information for Victor.

Mentions:

Hartman Media

Victor Prince

Lead Inside the Box

Myers-Briggs

Syndicated deals are complex negotiations between multiple partners or investors. This type of deal has a special title because it involves more than one buyer and sometimes more than one lender. Jason’s guest, Joe Fairless, chooses to invest along with other investors to show his conviction for the preferred deals. He says that the most important rule of investing at this level is to know and trust the other general partners involved in the transaction. Large deals of this nature may net ongoing cash flow or may include opt-out clauses for investors who wish to make their own terms.

Key Takeaways:

[4:01] What “closing the deal” means to Joe Fairless

[6:44] Raising capital for syndication deals

[11:52] Formats, general fees and rules for raising money for specific deals

[17:46] Acquisition fees

[19:45] Asset management fees for the general partners

[20:51] Investing alongside other investors

[22:30] The importance of knowing who you are dealing with

[23:44] Ongoing cash flow

[25:18] Refinancing, long-term debt and tax implications

[27:42] A 5-7 year time horizon between deals, but an investor can opt out early

[30:10] Joe’s daily podcast is “The Best Real Estate Investing Advice Ever”

Mentions:

Hartman Media

Joe Fairless

Best Real Estate Investing Advice Ever

It’s a Whole New Business