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Real Money Talks

As an entrepreneur, small business or practice owner, or high-level executive, do you ever find yourself wondering if you’re using all the tax, entity and wealth strategies available to you or if your investments are truly producing all they could be? Happily, you don’t have to put up with that any longer. I have the solution. Real Money Talks! We're having the right conversation about money.
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Now displaying: March, 2018
Mar 29, 2018

It's tax time, and I have my partner and tax expert Weldon Wulstein here to share with you everything you need to know to get the most out of your money and tax savings. A lot of people are underserved, because they don't ask their accountants the right questions. Weldon is here to share some of the questions that you should ask your accountant.

A lot of people assume that the accountant will just take care of everything. That is not always the case, so you need to know these questions. Even worse, if you're doing your own taxes, you really need to know about these concepts. We also talk about incorporating and tax entities.

You can find Weldon here:

Ask Loral
Wulstein Financial Services
Weldon Wulstein on Twitter

Show Notes

  • [01:37] Weldon has been in the tax world since 1989. He cut his teeth in the oil and gas industry.
  • [01:59] He moved up to Tahoe as a lifestyle choice. Using technology he converted his practice to an international practice.
  • [02:22] Weldon loves the puzzle aspect of tax strategy.
  • [03:04] The US tax code is upward of 80,000 pages.
  • [03:13] Weldon is also it's experienced in cross-border taxation.
  • [03:26] This is not just the US-based podcast. In principle, even though, the company names are different they operate very similarly.
  • [03:56] How all of the tax deductions are not in TurboTax. You need to set up an entity and a strategy that fits your situation.
  • [04:11] Why do accountants tell people not to get incorporated?
  • [05:07] The problem to having a certain number before you incorporate is that some people are never fully focused on their business.
  • [05:24] Treat your business like a company, and your mind will start treating your expenses like business expenses.
  • [05:37] There are processes to write off business expenses as legitimate expenses.
  • [05:59] When you incorporate, you do have to have an annual meeting and do some administrative work.
  • [06:03] This work is minimal for the benefits that you will get out of it. There are so many strategies that you are missing if you are not using a corporate or entity structure.
  • [06:32] When you have income in your company it is time to set up the entity. If you wait, you will have to redo all of your contracts.
  • [07:57] When you start your company that is technically the first day you are in business. So if you've been a sole proprietor for 10 years and then you incorporate it's like starting over when you apply for credit.
  • [08:27] Put your money in the right account because companies make money and individuals get taxed.
  • [09:11] Keep in mind, there is a big difference between tax compliance and tax strategy. Tax strategy happens now for the year.
  • [10:10] Guidelines for filing an extension.
  • [11:46] You can wait until your extension date to fund your retirement plan.
  • [12:41] Writing off the home office is not a red flag for the IRS. If your expenses are ordinary and necessary and directly related to the production of that income then you can take that deduction.
  • [13:28] As long as you're documenting what you are doing getting audited isn't that big of a deal.
  • [13:40] Have a business person's thought process not an employee thought process.
  • [13:57] You now can't write off entertainment expenses.
  • [14:36] A mistake people make is not doing their bookkeeping for last year until now. It's a lot harder to remember stuff from last year.
  • [15:17] Don't cheat yourself out of deductions by not keeping good records.
  • [15:40] Things that are going to affect people this new tax year.
  • [15:55] If you have a W-2, you cannot deduct your employee expenses.
  • [16:35] The limitation of income and property taxes. Property tax deductions are now limited to 10 grand.
  • [17:00] New mortgage write offs are now limited to $750,000.
  • [17:18] You can still write off rental property mortgage interest.
  • [17:37] Flow-through of business income. You will get a 20% deduction off of this taxable income. Convert your business into an S corporation so you can run your income through your company and get that big 20% deduction.
  • [18:25] Sole proprietors get the deduction, as well but they have to pay the Medicare and Social Security tax.
  • [19:42] This tax law was designed for high income real estate moguls.
  • [21:35] The first thing you need to do is set up your entity.
  • [21:43] Get your ID numbers, get a bank account, and get a credit card account that is used only for your business.
  • [22:05] Then get bookkeeping in place.
  • [22:12] Your monthly profit and loss information is key to help plan your future strategy.
  • [23:05] Get your stuff done now. Don't wait until the last minute.
  • [23:25] What do you do if you haven't filed your taxes in years? File your current year's taxes. You can order what has been reported to the IRS and reconstruct the tax documents.

Links and Resources:

Ask Loral

Mar 22, 2018

The economy is soaring, and the real estate market is hot. According to our surveys, 83% of the people surveyed not only want to learn how to do real estate but also want to invest in it. Justin Bennett is someone who I do real estate with in the Kansas City market. 

I brought Justin here today to talk about his real estate market, and why he decided to get involved in real estate. He also owns a carpeting and flooring company, and he is an entrepreneur at heart. Justin realized that a corporate job wasn't for him. After starting his business, he discovered the value of real estate and hasn't looked back. 

You can find Justin here:

 

Show Notes

  • [01:34] When Justin started out, he had a great corporate job working for 3M. It was a good job, but it felt like there was no end in sight. 
  • [01:51] He found a great business partner and started the floor restoration company, and things just took off from there. He then began investing in real estate. 
  • [02:04] His partner had a construction company, and they invested in real estate on the side for a while. Then they decided it was time to do things the right way. 
  • [02:38] There is serious money being made through all of the different aspects real estate every year. 
  • [02:47] Justin became involved in the investment side of real estate because there's so many different strategies you can use. You can buy properties and flipped them for fast cash. You can buy properties and renovate them and rent them out for cash flow. 
  • [03:09] You can also invest in properties to hold not only for cash flow but also for appreciation. 
  • [03:24] There are so many different ways to invest in real estate. The possibilities are just endless. 
  • [03:57] The Kansas City market is so investor friendly because the economy is booming right now. Justin understands the neighborhoods and the market and doesn't have to waste any time on his investments. 
  • [04:44] There is also an affordable cost of living and middle-class families can thrive. 
  • [05:07] Justin likes to invest in the buy and hold side of real estate. 
  • [06:02] The city is going through a huge revival and tons of jobs are being created in Kansas City, TN. There is even free streetcar service. 
  • [06:55] The strong economy and the projected growth make it a no-brainer to do business there. 
  • [07:15] Justin's favorite play is the single-family residence where they fix and hold them. 
  • [08:40] He loves to target neighborhoods that have multiple homes for sale. That way he can control the quality of several homes on the same street. 
  • [09:10] If you can control your rent you can increase cash flow. 
  • [09:41] When you buy a block of real estate you can completely change the community. 
  • [10:12] Kansas City is the top five in the country for out of state investors because they understand the kinds of deals you can get here. 
  • [10:31] They rate properties on a level one to five. They usually focus on the level three properties. These are three-bedroom one or two bath houses. That will rent for $600 to $800 a month.They will also hold their value and appreciate each year. 
  • [11:21] They also pick up level four homes at auctions. These homes are one step down from the level three homes. 
  • [12:17] They will also get the level two duplexes. These properties appreciate even though they have less cash flow. 
  • [13:11] Forced appreciation by adding enhancements. Millennials want to live downtown. Fix these properties up according to what the millennials want. The difference between a tile bathroom and a laminate floor can be $200. Yet, it can get a higher rent. 
  • [15:43] Rejuvenating neighborhoods and improving the value of homes is also a great form of advertisement for your real estate investment business. 
  • [16:31] The diverse kinds of deals that you can do. There are multiple options from debt positions, equity positions, joint venture opportunities, and more. 
  • [17:43] Justin's team is usually able to offer double-digit returns to his investors. Justin has investments starting at 10% and up. 
  • [18:31] There are also multiple things in place to protect the investment or the investor.

Links and Resources:

Ask Loral

 

Mar 15, 2018

Linda Cain is an event specialist. She has been involved with presenting live events for the past 20 years. Event dynamics have shifted over the past few years. There are more coaches and transformational leaders looking for event audiences, and the Internet has been a game changer.

Today, we talk about current trends when it comes to filling a room for an event and how to keep your event in the black. We talk about online methods including video series, webinars, and Facebook Live. We also talk about keeping costs down, creating a one sheet, collaborating with like minded speakers, and sharpening your speaking game.

You can find Linda here:

BluDiamond Event Management
Linda on LinkedIn

Show Notes

  • [01:10] Linda has been doing live events and corporate events for over 20 years. She started with corporate, legal, and international.  She has spent the last 12 years working in the live event industry. 
  • [01:56] Linda and I both know how to lock in an event so you are in the black. 
  • [02:15] Marketing and strategies for packing a room. 
  • [02:28] Twenty years ago it was a lot easier to fill a room for corporate people, coaches, and transformational leaders. 
  • [02:41] You just send out a flyer or make an announcement and people would show up. It was that easy. 
  • [03:09] An event host or producer could count on the speaker to bring 50 or 60 people. 
  • [03:27] Things have shifted. Coaches have large lists, but the people on the list don't go out to events. 
  • [03:39] A really cool new trend is that more people are coming together in Internet rooms. 
  • [04:11] People are able to do workshops and get their information out and sell to people in those smaller 50 or 60 group Internet rooms. 
  • [04:41] The new trend of getting people into rooms. 
  • [04:49] The engagement process. You have to hard market within three months of your event and keep your prospects engaged the entire time 
  • [05:53] With the engagement process, you can send your prospects information each week. You can send them a video one week then a blog post the next week. Whatever it takes to keep them engaged. 
  • [06:48] You can also do joint projects with speakers and guests you're going to have. Use things like podcast interviews and Facebook Live. 
  • [07:28] Facebook Live needs to be structured and organized. 
  • [07:46] The key to Facebook Live is the engagement process and having a regular schedule. Also have substance and personality. 
  • [08:24] Video series - it works well to have a series that keeps people engaged during the process. Do short 20 minute hits where people can get in and then get out. The same thing works for webinar series. Putting the same webinar series out 10 different times will start to drive traffic. 
  • [09:59] Speaking engagements. In the beginning of the speaker's career, they need a speaker sheet. It needs a great bio with a great picture and two or three topics they speak about plus testimonials. As you grow, you can even add ROI. 
  • [11:21] Have a really good signature topic and presentation. 
  • [12:11] Perfect your presentation skills and have a really good one sheet. 
  • [12:56] You have to do your homework and know your audience. 
  • [13:21] You can also approach other speakers that talk about similar topics and approach a company as one speaking body or program. 
  • [15:32] The pay to play model. This is great when you're first starting out. You can also pay a little upfront and then do a split of sales on the backend. 
  • [17:27] How to get sponsors. To get a sponsor, you need to give them time on stage or space in a vendor section. 
  • [20:34] When having your event in a hotel, put a nice banner up and have a theater style room. You do a catering contract with the hotel. This means you look for space that is not being used for other events. 
  • [23:13] Get out and speak.  
  • [24:50] Get creative and innovative and have people invest in themselves to come to an event. 

Links and Resources:

Mar 8, 2018

A topic that comes up over and over when we are doing business is Canada. My husband is Canadian. There are a lot of Canadians that want to do business with us here in the US. Here to talk about doing business with Canada is Dave Hare who is a licensed CPA both in the US and Canada.

Dave is a cross-border CPA. He has done corporate business both in the US and Canada. Then he decided to leave the corporate world behind and venture out on his own. He owns 5 multi unit properties and is a successful real estate investor. He recently signed a 5 million dollar deal. Daves talks about the differences between US and Canadian tax entities and cross border investing to maximize your money.

You can find Dave here:

DHare77@gmail.com

Show Notes

  • [01:24] Dave got his degree in Michigan. Then he worked for several years for public accounting firms. After he became a CPA, he went over to the Canadian side and work for companies like Caterpillar and Volkswagen.

  • [02:01] Eventually, Dave decided to branch out on his own and do his own thing instead of working for corporations.
  • [02:18] Dave approached Loral about investing in real estate about a year and a half ago. He signed up for the big table. Now he has five multi unit properties.
  • [03:10] Dave learned how to raise money through Loral, and he became pretty good at it.
  • [03:26] Dave became part of Loral's team in September. Dave drove 37 hours to get to Tahoe and begin working with Loral.
  • [03:47] They have been working on some solid deals including the marina deal and major renovations. He also recently signed a $50 million contract.
  • [04:31] Dave surrounded himself with the right people and the right team. Build a diverse team that will provide you the expertise you need.
  • [05:09] It's tough to find it's cross-border team members.
  • [05:21] Three business structures that apply in Canada are partnerships, limited companies, and sole proprietors.
  • [05:50] Partnerships are where you join with someone to set up a business. You will have a partnership return. Each partner does their own taxes. The tax write offs go to your personal tax returns. Any money you make on the partnership returns go straight to your taxes.
  • [06:20] You have to be careful because of liability issues and tax issues.
  • [06:36] Sole proprietorship's in Canada give you write offs towards your T4 income. This is a great tax strategy from that standpoint.
  • [07:57] You want to make sure you protect your personal assets like your house and your vehicle. You have to be careful with liability issues with a sole venture.
  • [08:55] As a sole proprietor, you may be able to write off 10 to 20% of your house if its use for your business. If you use more than that you might be able to use it as a carryover.
  • [10:12] With the company, the carry forward losses can be used now and in the future.
  • [10:29] If you have T4 income and you start making more money your taxes will be high, so you might want to look at other entities at that point.
  • [11:12] You might want to move into a limited company. You will have more flexibility on write offs.
  • [12:04] If you work from your house, your business will take a 10 to 20% of your house expenses.
  • [13:05] In Canada, you can now write off entertainment expenses if you take out the entire office. You can now write off 50%.
  • [13:56] For business driving, you can use electronic tracking and write that off. You need to be very careful about your record keeping and the rules.
  • [14:36] As a sole proprietor, everything is questioned.
  • [15:05] The benefits of setting up an entity in getting Incorporated. Set up a limited liability company to protect your assets. You will also have more right off opportunities. You can also protect yourself by having an operating agreement or contract.
  • [16:23] If you have a company in Canada, you can also set up a US structure like a c corp.
  • [18:55] Be careful of withholding taxes when setting up entities for businesses that are cross-border.
  • [19:59] Make sure you set things up right from the beginning.
  • [20:21] You can avoid exchange rates by keeping your money someplace where the tax rates are lowest like the US and then using a US credit card.
  • [22:42] To talk to Dave,you need to think about trusts, whether you have children involved, whether you can send money down to the US, and possible insurance products. The plan needs to be individually tailored to you.

Links and Resources:

Mar 1, 2018

Jesse Brewer who is one of my partners in teaching off Wall Street investing is here today. Jesse grew up in Northern Kentucky, and he built a multi-million-dollar real estate portfolio. Jesse grew up in the real estate business, and he shares his real estate investing strategies in this interview.

We talk about the difference between equity and debt investing, and why Jesse prefers multi family investing. Everyone who is a millionaire invests in real estate. This episode will show you some ways to up your real estate investing game.

You can find Jesse here:

DHare77@gmail.com

Show Notes

  • [01:37] Jesse has been involved in real estate since he was 22 years old. He basically grew up in the business.
  • [01:58] His dad owned real estate and have some investment properties. Jesse was a police officer who started buying rental properties.
  • [02:42] After five years, he had 30 rental properties. That's when he decided to go full-time into real estate.
  • [03:06] 83% of Loral's community is interested in real estate.
  • [03:12] There are so many different types of real estate strategies.
  • [03:36] Jesse started off in the single-family racket. It was a grind. Logistically it was a nightmare, because he had to drive all over the place.
  • [04:48] He had never really looked at multi family because there was a lower barrier to entry was single-family.
  • [04:49] Then he started doing some multi family deals.
  • [05:12] His niche is the 4 to 20 in a properties. This is his sweet spot because it weeds out some of the competition from all the single-family buyers and then the big institutional buyers who like the larger unit properties.
  • [06:09] Jesse's market is a cash flow market. Where he invested, property values didn't shoot up really high, but they also didn't crash.
  • [08:52] To have a property management company you have to have a real estate broker license. Jesse has a real estate brokerage which has a sales and acquisition arm and a management arm.
  • [09:13] It's one big company but he runs it as two separate divisions.
  • [09:25] The third arm is the project management arm where they do renovations and repairs.
  • [09:50] There is a marketing arm on the brokerage side because they are looking for deals.
  • [10:35] When people want to invest in real estate, but they don't want to be landlords they can invest in one of Jesse's deals or funds.
  • [11:14] The last deal they did was an equity fund where they raised $500,000. With an equity fund you get part of the returned such as you own 10% and no matter how well the deal does you get 10% of the profits.
  • [11:36] They also do debt funds where you get a fixed rate of return such as 8% no matter how well the fund performs.
  • [12:28] A lot of sponsors prefer debt funds because you know how much are going to get. Jesse prefers equity funds can seize along for the ride.
  • [12:44] With the equity fund they purchased several different properties. All of these properties were in disrepair. They purchased the properties for cash because they aren't leveraging the buy.
  • [13:43] Then they renovate the properties. The properties are usually in disrepair, mismanaged, and have bad tenants.
  • [14:12] They do a full-blown renovation on the property and bring them up to date and make them look nice.
  • [14:41] It's important to know your market. You need to be able to look at the deals and know what value you can get after your renovations.
  • [15:16] After the renovations, they get new tenants coming in and cash coming in. Because this is an all cash buy and renovations are done, you don't usually get any money back the first year.
  • [16:04] Jesse likes urban properties. He likes to be in an area where boutique shops and bars are opening up. This is where the millennial's want to be. The people approximately age 24 to age 34.
  • [17:42] It's important to understand them as renters because there's such a large sector of the population. There are as many millennials as there are baby boomers.
  • [18:16] they try to cater to the millennial's with location and amenities. Things like butcher block counter tops and USB ports make the difference.
  • [19:04] When buying a single-family home your appreciation is tied to what the neighbors appreciation is.
  • [19:21] In a multifamily property you can force appreciation by increasing your cash flow.
  • [21:53] The benefits of staying in one area. You need to know your market. If you're in seven different areas there's no way you can know the market unless you have a staff and then there are extra fees involved.
  • [23:05] By sticking with one area, you will know the sub market.
  • [23:40] You can maximize your value by knowing your market.

Links and Resources:

 

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