In this month’s Gathering, the group starts off with sharing their Personal Development wins in the Report Card segment. Today’s special guest is business coach and mentor Trevor McGregor. If you missed the event live, watch and take notes now!
In this month’s Gathering, the group starts off with sharing their Personal Development wins in the Report Card segment. Today’s special guest is business coach and mentor Trevor McGregor. If you missed the event live, watch and take notes now!
Rob Rowsell’s personal CPA is here to explain why property investors should form a real estate investment LLC. There are so many tax advantages built into this method of incorporation. Limiting liabilities, using cost segregations, and other investor tax tricks are just a few advantages to forming a real estate investment LLC. Rob also adds a few tips, and reminds us that the government needs to know we spend at least 750 hours on our property business in order for them to consider us a real estate professional.
Why Should Property Investors Form A Real Estate Investment LLC?Rob’s CPA Kevin Bassett of Bassett and Associates joins the call. His first order of duty is to explain why we should form a real estate investment LLC. An LLC, or Limited Liability Corporation, is a great protection for your business, especially if you invest in multi-family rental properties.
One advantage of an LLC is the ability to use Cost Segregation. This strategy front loads your tax depreciation, but it only works if you have an LLC. Hire an inspector to come in and survey your apartments. If you have a $10 million complex, your inspector could break the units into components, possibly finding up to $2 million worth of accelerated depreciation. Fixtures, parking lots, and electrical items needing repair or updating. You can write this off right away, instead of over decades. This can wipe out some or all of a year’s income, saving you huge on taxes.
Kevin then lists other tax advantages to forming an LLC. These tax strategies include 1031 exchanges and long term capital gains rates, as well as installment sales.
Next, Rob adds the two reasons real estate investors should form entities. First, as we’ve discussed before, is for asset protection. Second, a Real Estate Investment LLC provides anonymity for you and your investors, if you set up your LLC to be managed by another party. This allows you to maximize your tax savings with the variety of deduction strategies Kevin mentioned. This benefit is available in many states, but not all, so consult your legal team and CPA before taking action.
Finally, Rob asked Kevin to outline the requirements one must complete in order to be recognized by the US government as a Real Estate Professional. We must verify that we spend 750 hours per year working in the industry. This means managing, acquiring property, and even long term holds. Construction contractors may also qualify for the real estate trades. In order to be certified, you also must prove that you spent more time working in real estate than any other trade. We discuss how to log these hours in another post.
Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the ATL Inner Circle Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!
One of Rob Rowsell’s guests on our Inner Circle call was told by FOUR PEOPLE in the same day to read a Proverb a day in the Bible. Do you think God was trying to tell him something? If you want wisdom, do yourself a favor and crack open your Bible to the Book of Proverbs! Who knows what you’ll learn?
Why Read a Proverb a DayOur friend David started off the clip admitting that he had hit an emotional low in recent weeks. Apparently, God was allowing him to experience hard times in order to get his attention. No less than four people in one week, including Rob, encouraged David to read a Proverb a day and meditate on it.
This should come as no surprise. David felt as if God was not speaking to him in his life. The challenges David experienced revealed to him that he was seeking God’s voice for selfish reasons. If you will recall, God gave King Solomon a choice of anything he wanted. Solomon could’ve chosen great wealth, but he chose wisdom. Because of that choice, God blessed him with greater wealth than anyone in history. Solomon’s writings, the Book of Proverbs, are a result of that wisdom.
Rob responded with his own experiences in hard headedness. God used no less than 50 people to persuade him to write Addicted to Life. When Rob finally relented, the Lord used the book to change countless people’s lives.
Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the ATL Inner Circle Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!
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