The Wealth Elevator Podcast: Real Estate, Taxes, Investing

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Article Link: Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word "ebook" to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar - I'm an Engeneer, Enginere, Engenere... I'm good with math!

________Here are the Show Notes________

Graham Parham: New Awards:

• #1 in units at Highlands Residential Mortgage for 2017
• #11 in state of Texas and 92nd in the US according to The Scottsman Guide and
• Mortgage Executive Magazine – 1% top originators in the US
• Top Ranked – Ask A Lender

Discussion today is 1-4 unit income properties, not owner-occupied.

• 20% down on first ten financed properties? 25% for 2-4 units?
• DTI considerations when using HELOC from primary residence to invest?
• Credit scores down to 620. Max. credit score that helps?
• Reserves?

New Fannie Mae Reserve Requirements for Investors with Multiple Properties Owned

The Old requirements were six months Principle, Interest, Taxes, and Insurance (PITI) on the subject property and two on all other properties up to 4 leveraged 1 – 4 family properties excluding the primary residence. Properties 5 – 10 would require six month PITI on all properties.

The New requirements are based on a percentage of the unpaid principal balance on each loan excluding the primary residence.

• If a borrower has 2-4 financed properties, the reserves of 2% of the unpaid principal mortgage balances are required, excluding the principal residence and the subject property.

1. If a borrower has 5 - 6 financed properties, 4% of the unpaid principal mortgage balances are required, excluding the principal residence and the subject property.
2. If a borrower has 7 to 10 financed properties, 6% of the unpaid principal mortgage balances are required, excluding the principal residence and the subject property.

The aggregate UPB calculation does not include the mortgages and HELOCs that are on

•               the subject property,
•               the borrower’s principal residence,
•               properties that are sold or pending sale, and
•               accounts that will be paid by closing.

The subject property will still have monthly reserve requirements based on the total mortgage payment (PITI). Reserves are funds that you have access to liquid or non-liquid. Reserves are funds you need to have after the closing your transaction. Funds for reserves cannot be your funds for down payment or closing cost.

Fannie Mae now will allow for 100% of the Non-Liquid funds, not 60%

Non-Liquid funds can be used for reserve requirements.”

• IRA’s

• 401K’s
• SEP Funds

Gifts are NOT allowed on an investment property.

•      Investor interest rates how much higher than owner-occupied?
•      Mortgage sequencing. Example: if buyer wants to buy in Memphis today, Jacksonville next month, how should they plan?
•      Overall, lending climate more lose or tighter than 1 year ago? 5 years ago?
•      What should a prospective borrower do before contacting you?
•      1031 exchanges Cost and funding
•      What cost are covered in the exchange

What is UP with interest rates?

4 Factors that determine your mortgage interest rate:

1. Credit Score

Credit Scores Adjustments

•   740 +
•   740 – 720
•   720 – 700
•   700 – 680
•   680 – 640
•   640 – 620

1. % of down payment 20% or 25%
2. Loan Amount Adjustments
3. Property Type

What about the 15 Year fixed?

Does it make since to pay points?

What is the difference between Mortgage Brokers and Mortgage Bankers?

What are overlays?

Does Fannie Mae have a black list?

Are Appraisals regulated and by who?

Is there an appraisal black list?

What happens if the appraisal does not come in a contract price?

Closing cost differences between lenders

Should I pay cash for my investment properties or use leverage?

The next example will show the benefits of using 20% down leveraging for properties versus buying one property and paying CASH.

If you pay $150,000 in cash for one property, your net cash flow is $1245.00. By putting 20% down with an 80% loan to value and a 5% interest rate, your net cash flow is reduced to $600.81. Let’s not stop there. Keep in mind that 20% down payment on a $150,000 home is only $30,000. If you bought FIVE $150,000 homes and put 20% down on each with the same loan terms and monthly rents, you could increase your return on investment by $1759.05 a month to $3004.05. Invest your money wisely.

The net cash flows do not take into account the annual city, county and state property taxes and the annual hazard insurance. The numbers may vary considerately by the taxing authorities. You will have to include that information in your bottom line.

Graham W. Parham has been a Mortgage Loan Officer for over 18 years with 25 years

in sales and marketing. He is a leader of financial expertise in the North Texas

residential real estate market, developing a significant following among homebuyers

and investors. Known and respected industry-wide, Graham’s production consistently

ranks him as a top producer in this market place. According to Scottsman Guide

Graham ranked 92 nd in the US loan originators.

Graham offers invaluable insight into a purchaser's likely requirements, providing an

exceptional business ethic of customer service and respect, catering to their needs from

pre-qualification to closing. He is a truly dedicated person, who strives to ensure that

each transaction is handled in a timely and stress free manner. By employing these

standards, Graham has established a solid reputation for going the extra mile to put

together the absolute best financing available for his clients. Graham prides himself on

staying ahead of the curve, keeping up to date with the latest products and industry

trends.

As an active investor himself, Graham has a strong insight on what his investment

buyers are looking for to accomplish their short and long term goals. Knowing that

investment loans strongly scrutinized, it is up Graham his team of underwriters who

understands rental property loans versus that of an owner occupied residence. His

general knowledge of REO properties and Turnkey providers coupled with a strong

operational staff allow his loan closings to be seamless and “On Time Every Time”

Highlands Residential Mortgage, LTD. is completely submerged in the real estate

investing industry and has access to many lenders nationally. Our clients benefit from

up to date guidance on all conventional investor loan programs, and less known

creative financing strategies. Knowing that an investment loan will be far more

scrutinized, it is Graham Parham and his team of underwriters who understand a loan

processed for a rental property versus that of an owner occupied residence.

Just as you would not seek legal counsel from someone who does not have a law

degree, nor should you trust a loan originator for your investment property loan from

someone that is not an investor themselves. Highlands Residential Mortgage, LTD. is

an unparalleled mortgage lender whose delivery sets us apart!

Graham Parham’s team mission is to consult every investor based on those

individualized situations and goals. Whether you are buying your first home or

investment property, we carefully look at your options that will give you the best

opportunity for success. Because we know how important your investment financing

strategy is, our extensive research and knowledge of those programs will be brought

forward in educating you as an investor, throughout the lending process.

“My goal is to continue assisting my clients for life and help them meet the ever-

changing needs life throws our way!”

Hosted on Acast. See acast.com/privacy for more information.

Article Link: Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer 

For a free electronic version of my bestselling book in 12+ categories text the word "ebook" to 587-317-6099. 

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347 

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club 

Pardon the grammar - I'm an Engeneer, Enginere, Engenere... I'm good with math! 

________Here are the Show Notes________ 

Erin Lowry is the author of Broke Millenial, a book about how to stop scraping by and start getting your financial life in order.

She talks about how she learned about finances at a young age, how she gave up her dream school so she could live her dream life, and how living in New York inspired her to write her book, Broke Millenial.

"Invest your spare change," may be a catchy line but you really can't invest your spare change to wealth. It has to be more than spare change.

In the financial world, you are above nothing. Just because you have a college education doesn't mean that is your way out of financial difficulty. You also need to be prepared to take non-professional jobs or jobs that might be below you.

Just like in any financial goal you have to figure out how to take a high-level idea and break it down into smaller parts. Think of whatever your long-term financial goals are and work backwards to break it down into something that is actually more achievable. A lot of people in their early twenties have beautiful, lofty dreams but no tangible steps on how to get themselves there.  

Podcasts are great sources of information.

Saving is important but earning more is bigger. To earn more is a key part of building wealth. 

The biggest thing when it comes to feeling in control of your money is that you have to identify what you truly value. Don't allow other people to dictate where you should spend your money.

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Full article - SimplePassiveCashflow.com/ring

I recently got engaged and here are some of my experiences when buying a diamond ring.

Full article - SimplePassiveCashflow.com/134diamond

The top three diamond providers online are Blue Nile, James Allen, and Rare Carat.

The Big 5 C's of grading for Diamonds: Carat weight, Color, Clarity, Cut, and Confidence.

Size is the most important factor in diamonds.

Rare Carat offers the best selection of diamonds but lacks in ring selection.

James Allen offers the best prices among the three diamond providers.

As you grow your net worth, it is okay to buy something for your happiness even if it is non income-producing assets. Consider it as a milestone for growing your net worth.

I originally planned to buy a Honda CRV and pop the question at a car dealership. 

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David from Military to Millionaire

Currently still enlisted in Army and spent some time as a recruiter

Don't blow you money on a nice car

VA Loan - 0% down home loan for a primary residence with no private mortgage insurance (PMI)

You can buy up to a 4 unit

Move and buy at each difference duty station

Generally, 410K loan is the max with exceptions for high price areas like Hawaii

Relocation benefits

Do you stay enlisted in the military

Don't underestimate the tax-sheltered allowances and perks

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I did some research on this new Opportunity Fund Zone tax benefits. Below are some notes and ideas.

Note: I’m not a CPA or attorney just putting it out there to help inspire some ideas.

An Opportunity zone (OZ) is a tax-favored investment for people with capital gains.

6-pages in the tax document in the new 2017 Tax Cuts and Jobs Act

Goal to encourage long-term investments in low-income communities across the US.

Every major city has some OZ.

Most of Detroit is an OZ plus large portions of Baltimore.

Allows investors to sell their appreciated assets and invest their realized capital gains into one or more designated OZ.

EVEN STOCKS! Non-like kind assets are OK!

After your selling your appreciated asset you have 180-days.

The longer you hold the more benefit you get (up to 10 years).

1) Defer your original capital gain tax obligations until 2026 or until you sell your OZ investment.

2) Discount of 10% or 15% on the taxable amount of your original gains. If you hold more than 5 years your original cap gains decrease 10%

3) If you hold 10 years or more. You will pay NO capital gains tax on any appreciation.

You can self-certify so you do not need an intermediary like in 1031 exchanges.

No investment minimum.

There are some items that get a little unclear… where you should really consult your CPA.

Check out the IRS opportunity comes frequently asked questions page and additional resources below.

Resources to Google: community development financial institutions fund, CDFI Fund map.

Note: Spending $100 dollars to save $20 dollars is not a wise idea. Just like buying a rental next to Grandma’s house because your travel there. A lot of specifics are still being played out but something intriguing to augment an already good investment.

Other ideas: Look at the OZ map and try to find the smaller slivers of OZ. This is called “buying on the line” whereas areas improve on the edge of development you greatly benefit.

I would ask your CPA if they know about these opportunity fund zones. If they don’t you might need a new CPA. If you are a current Hui Deal Pipeline Club member I would be more than happy to refer you to some people and then you can see if you work well together.

There is a lot of rumors floating around how this tax will be implemented later this year. One of these rumors suggests that we might not qualify for the Opportunity Zone Fund. See second to the last page of the attached where they state that we have to do improvements that is the same as the basis in order to qualify.

Resources: Article on Opportunity Fund Zones – https://drive.google.com/open?id=1F8wDToyb9olvq52U9LRMD8cBrJILm8q_

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YouTube Link: https://youtu.be/rG5QlGF5so8

Article Link: Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word "ebook" to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar - I'm an Engeneer, Enginere, Engenere... I'm good with math!

________Here are the Show Notes________

Just got back from FinCon2018!

What's that?

A pretty impressive event. Its where 2000 financial bloggers, you-tubers, and podcasts this year gathered around all this money.

In 2006, I started reading financial blogs. Sole of my favorite was getrichslowly, Wallet Hacks, and of course mr money mustache. FinCon started in 2011 with just a couple hundred people.

Real estate investing is a minority. 95% of people are debt adverse and about the 4% rule. Buying cash so so debt. Living small is selfish? Make 150k a year and retire when you are 35...

The Millionaire Next Door book is not the type of lifestyle I would like to live.

A lot of financial advisors which I don't really like.

I am cool with how it is enough to be happy and content.

Other Findings:

New investment account that incorporates mobile interfaces and suto-AI. Mint app has click to invest and banking apps have click to refi. It’s a little dangerous.

A cool 5% instant liquidity online savings bank that invests in inventory loans. Let me know and I can connect you with that as I try to do more due diligence on my own.

Liberty health share - religious-based health insurance

Side gigs - consistent theme from high performing growth mindset W2 employees who are not getting fulfillment at their bureaucratic day jobs.

Interviews to follow in video...

Please share this with friends because if you don't soon you won't have any friends to have mid-day lunch with when you not doing anything

Interview 1: Michael - Financiallyalert.com

Interview 2: Spendlessgreen.com

Interview 3: Rocky from RicherSoul Podcast - http://richersoul.com/ep-0030-richer-soul-real-estate-mindsets-lane-kawaoka/

Interview 4: Alex - http://dailybs.com & nguonline.com

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YouTube Link: https://youtu.be/SkY5izkbkoQ

Article Link: Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word "ebook" to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar - I'm an Engeneer, Enginere, Engenere... I'm good with math!

________Here are the Show Notes________

I worked with Matt's team way back when in 2014 buying turnkeys. Simplepassivecashflow.com/turnkey Since then it is interesting as times change how his strategy has changed.

We just completed the last deal for an Mobile home park. Which is a little different than apartments.

Please leave an iTunes review - Help fight negative one-star review

Earning $30,000/mo through single-family homes and seller-financed notes.

Epic Real Estate started selling turnkey properties in 2009.

Built successful portfolio, but returns lowering. However, real estate always a good purchase to buy and hold long-term.

Amortization, depreciation, appreciation, and leverage (wealth multiplier) all make real estate investing attractive.

Focusing more on lease options now for C- and D-class properties to rent properties and eventually sell them to tenant.

Went from 7-figure year as a musician to bankrupt at 34. Found real estate mentor at grocery store and life changed.

Real estate is the final frontier for the average person to have a legitimate shot a creating wealth.

Paid $22,000 for mentorship in 2006. Everyone thought it was insane, but helped him get started.

People who made it were ready for it. "Move faster than your doubts."

Find the deal first and then the money will find you.

Authored book "Do Over" that chronicled struggles and how he built his real estate empire.

Be intentional with who you surround yourself with. Peer pressure works.

Always be looking for a coach and outgrow them. Results accelerator.

Spends $100,000/year on masterminds - worth being around the right people of doers.

Goal was to increase passive income and decrease expenses. In 4 years became "retired," but wants to be wealthy; not just financially independent.

Bookkeeper should be the first role you should outsource. Transaction coordinators and marketing person also helpful.

Hardest part of the business is to find the deal and get into contract.

Visit www.epicrealestateinvesting.com to check out the Epic Real Estate Investing Podcast.

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YouTube Link: https://youtu.be/vjMF0jYqpHg? sub_confirmation 1

Article Link: Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word "ebook" to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar - I'm an Engeneer, Enginere, Engenere... I'm good with math!

________Here are the Show Notes________

SimplePassiveCashflow.com/qrp

I have been having a lot of calls with listeners having exhausted their liquidity and have money in their 401K or IRA's still in Wall Street Investments.

One of those ways to get the money out is via a QRP or Solo401K.

Today's guest Damion Lupo with discussing - SimplePassiveCashflow.com/qrp to get a free copy of his book

I cashed out my 401k because I figured I was going to pay the taxes anyway and my tax load would be a lot higher in the future and I wanted access to my money before retirement age.

Visit CrowdfundAloha.com - a website dedicated to helping hard-working middle-class people build real estate portfolios.

$26 trillion in retirement plans. You have all sorts of money that can be tapped into, but fear holds you back.

As an investor, Damion has purchased 150 houses in 7 states ($20 million portfolios).

2008: went from $20 million to -$5 million. Had to start all over.

Beyond money, find out your why. Read Simon Sinek "Find Your Why."

Mission Statement: Free 1 million people from financial bondage.

I.R.S takes 70% of the average person's money.

The QRP (Qualified Retirement Plan): "The Ferrari of 401(k)'s."

You probably haven't heard of QRP as Wall Street tends to control your stuff.

QRP allows you invest in many real estate options (syndications, lands, rentals, apartments, commercial, international deals, HML, etc.).

Total control, fixed fees, endless choices, and FAST with QRP v. Self-Directed IRA. 10X contributions and control with no custodian.

SDIRA will lose 1/3 of profit as UDFI triggered. QRP - Roth has no UDFI - keep 100% profit.

Can keep 401(k) at W-2 and sign up for QRP. Max contribution would be $55,000 in combined plans - $28,000 in the QRP.

QRP can hold other non-real estate investments, such as gold, silver, Cryptocurrency, etc.

Build-in credit line in a QRP. Up to $50K in cash.

Investors, self-employed, and family members are all qualified.

Properties you have or use right now cannot be placed moved in a QRP.

To fund, can rollover any IRA, 401(k), +TSP, 403b, 457.

66% people are worried about not having enough money for retirement.

Free copy of QRP book at www.simplepassivecashflow.com/QRP

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YouTube Link: https://youtu.be/zaHW3_OEU8Y? sub_confirmation 1

Article Link: Text “simple” to 314-665-1767 to download the Hui Google Drive files and the 2018 Rental Property Analyzer

For a free electronic version of my bestselling book in 12+ categories text the word "ebook" to 587-317-6099.

Please help the show by leaving a review: http://getpodcast.reviews/id/1118795347

Join the Hui Deal Pipeline Club! SimplePassiveCashflow.com/club

Pardon the grammar - I'm an Engeneer, Enginere, Engenere... I'm good with math!

________Here are the Show Notes________

Estate planning

Guests I have are giving insights but always hire your own person because these things require personalization

I try to bring guests on and ask the questions that I think you folks would ask.

I believe you need to have a basic level of knowledge before engaging with a professional

For those of you who are in the Mastermind and my current investors you will hear about my Fort Knox strategy which makes LLC enitites creation look like childs play

Email me any questions to feature on the next ask Lane podcast or monthly email newsletter

Andrew L. Howell is the Co-Founder of the law firm, York Howell, with a focus on asset protection.

Many useful tools out there, but where do you as an investor fall on the asset protection spectrum?

Two fundamental risks: 1) Asset-based risks 2) Direct-based risks

Real estate considered as "hot" assets because liability risks are greater - more than equity.

Liabilities both inside and outside the asset.

Typically form a holding company to hold limited liability companies to abate asset- and direct-based risks.

Holding properties in one LLC basket is good, but still risks if something happens in one property.

Concentrate on family protection first (trust, wills, etc.). Then move to next level of asset protection planning.

If own property out-of-state, advise on setting up a parent LLC in states with charging-order protection.

Tough LLC rules and taxes for poor California residents!

Need to do your due diligence on reviewing PPM's - especially who you are doing business with.

Asset does not create liability risk for LP's; only GP's.

If you get personally sued, can go after your MFH syndications and other assets even as LP.

6% of current generation feels obligated to give back to kids. Instead of giving, create a bank.

Create purpose when setting up your trust.

Please reach out to [email protected] and visit www.yorkhowell.com.

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