How Hungry Are You?

So… how hungry are you?

I’m not talking about getting up and grabbing an ice cream bar or munching on dinner…

… I’m talking about your hunger for a better life.

Too many people I talk to always say how “bad” they want out of their rut and how “bad” they *want* to live a better life.

But, when it all comes down to it… *most* people talk a good game but deep down inside… like in the pit of your being… aren’t all that hungry quite yet.

Anyhow, my buddy Brendan (he lives up here in Oregon… not to far from me) shot a really great video about becoming successful and becoming THE expert in YOUR area.  Whether it’s real estate… or whether you’re really passionate about something else… if you really want to be successful you’ve got to check out this video.

Great stuff Brendan!

If you’re really hungy about making it in real estate… here’s a little test for you tonight.

Are you struggling to get money to close on your deals?

Yes?

Are you really hungry to get your deals closed (even apartment buildings) without using your own money or credit?

Well… join us for an encore of our “7 Ways To Make Money As A Multi-Family Syndicator and Advanced “Private Money Getting” for 2010″ web workshop w/ the full PMBP team TONIGHT (wednesday) at 6pm PST:

Register here:

https://www1.gotomeeting.com/register/601554112

It’s Go Time for the US Economy Again!

by Tim Krulia – Private Money Blueprint CFO

As part of our quest here at PMBP to give you the single best resource on the financial aspects of growing your real estate investing business (aka, we help people find private money quickly, easily, and abundantly)… here are some stats I found that helps explain the economic recovery…

If you’ve been following my little weekly article updates the past few months, you’ve read about how I think we as an economy have past our worst days a while ago. The leading indicator is certainly in my mind still the unemployment rate but other contributing factors make me feel stronger and stronger that we’ve bottomed out and are on the up swing. Check out the stock markets:

http://www.nasdaq.com/aspx/chartingbasics.aspx?symbol=IXIC&selected=IXIC

New York Stock Exchange – Last 12 months:

http://www.nasdaq.com/aspx/chartingbasics.aspx?symbol=NYA&selected=NYA

Heck the Dow hasn’t been this high since before it started taking a dive before the 2008 presidential election.  Some say that you can look at the markets and they will tell you where the economy is headed six months or so in the future.  If that’s a good rule of thumb to go by, then we’re in for a good ride for the rest of the year!

Let’s take a peek into the mortgage market.  Interest rates for lending are incredibly low.  The average 30 year fixed conforming mortgage rate is averaging 5.14% this week.  Historically, they say that anything under 8% is good.  These rates are basically the same as back in the huge refinance boom in the early 2000’s.  These great rates may translate into lower interest payment requirements by your private money lenders too.  You could say, “Well, if the banks are only getting 5% for their borrowed funds and I can offer you 8%, that’s pretty good, isn’t it?”

Heck, there are little stories of hope and prosperity popping up all over the place now.  Here’s one that I though was pretty cool.  Florida, arguably one of the hardest hit states from the real estate bust is starting to show signs of rejuvenated real estate life.  Check out this video.

Comments spoken in the video by the builder’s executive includes:  
“Push of 1st time buyers & move up buyers,” “Picking up,” “People are coming down from other parts of the country again,” (meaning – they are seeing home buyers relocating to Florida again which they said hasn’t been the case since a few years ago), “Increased growth.”

Increased construction does translate to increased jobs and thus lower unemployment.  It also shows that there is new life getting breathed back into the real estate market right now!

Here’s our updated unemployment rate chart with March included.

As you can see, our actual rate is holding below the 270 moving average again this month and the Unemployment rate had another steady month holding at 9.7%.  It’s true it didn’t come down this past month vs. Feb. & Jan., but it didn’t increase either.  This marks 5 straight months without the unemployment rate increasing.  We haven’t had that happen since late 2006!  Any month now, let’s expect to see it start ticking downward.  We’re all hungry to read about real economic growth and just wait till the media gets smart to that fact.  They’ll start reporting all the good that’s sprouting in the economy and the avalanche will start!  Who wants to bet me on it?

First Foreclosure and Now a HUGE Tax Burden! What’s Next?

by Tim Krulia – Private Money Blueprint CFO

As part of our quest here at PMBP to give you the single best resource on the financial aspects of growing your real estate investing business (aka, we help people find private money quickly, easily, and abundantly)… here’s an article I found that helps explain why forgiven debt is considered income and taxed accordingly…

This article is great because it gives a clear explanation of some of the ways that the IRS does and doesn’t forgive tax liabilities that can come from foreclosures and short sales.  Since we are in the real estate world, I think it’s great to at least be knowledgeable about some of the tax laws that are out there affecting real estate.  After reading this article, when you’re talking to a client, friend, customer, etc. and the topic comes up over whether or not someone is going to get a big tax debt from their foreclosure or short sale, you’ll have something intelligent to tell them.

The article’s author did a great job listing 4 big exceptions to the rule of the IRS allowing a lender’s forgiveness of debt not to be considered taxable income.  He also mentions that even if an individual does unfortunately fall into one of the 4 categories where the tax liability isn’t erased, that he/ she could still get off the hook so to speak.  One route mentioned was bankruptcy.  That’s an “ouchy” one that can hopefully be avoided.

The other one he mentions is insolvency.  Insolvency, as I understand it, basically is just someone who can’t meet their debt obligations.  I know that this is a better fit question for an experienced CPA or tax attorney to determine who is or isn’t legitimately insolvent per the IRS, but wouldn’t just about anyone who had to let their house go to short sale or foreclosure do so because they couldn’t meet their debt obligations?  It sounds like there’s a lot of grey area in there, and if you’re talking to someone who is faced with a possible big tax debt from losing a house it may be nice of you to tell them to dig into it a bit before giving up and accepting the nasty tax debt.

Here’s something else that of course is specific to each individual’s situation and again, definitely something that an experienced CPA or tax attorney should counsel someone on (and I’m not either one), but I would suspect that there is one other BIG way erase a bundle of the tax debt of forgiven debt that has to be considered as income in the eyes of the IRS.  Follow me here…

It seems like most investors have a business that they run and it seems like most are legally structured as LLC’s, right?  Since an LLC is a flow though entity for taxation, wouldn’t an investor be able to show the loss on their books for the difference between where they bought the property and “sold” it?  I’d assume, yes.  If so, that’s pretty great because let’s say someone lost their property to a short sale for example, and the lender ended up loosing say $50,000 from all the chaos.  If you’re situation falls into one of the 4 criteria that the IRS won’t let you off the hook reporting that as income, you’ve just added $50,000 to your adjusted gross income (yuck!).  If the house took a loss of let’s say $40,000 from where you bought it to where you sold it, then that should be a write off, right?  If so, the taxable income would only be $10K!

Maybe I’m making this sound too easy in my head, but it seems pretty obvious to me.  At least I’d pose the question to an experienced CPA or tax attorney.  It could be a pretty darn clean and easy way to eliminate what could be an ugly tax bill as the article discussed.  Anyone know someone who’s been faced with this situation and how it worked out for them on their taxes?