This is our fourth blog on beginning wholesaling. If you haven’t read the earlier ones, make sure you go back and do so.

Before you start out on your first wholesale deal, there are some things that you should take into consideration. First is privacy. We touched on this in our last blog: keeping your wholesaling fee and final buyer private. Many wholesalers will use trusts for privacy purposes. We’ll discuss this more in the next blog.

You should also be aware of seasoning issues. FHA loans and some other lenders will look at title transfers occurring within three months before a retail sale (your post-flip sale). This could affect things if you do a double close (more on that below). If they see a couple of title transfers close together, they could ask questions or delay loan approval until the property has been in one owner’s name a certain length of time.

Also understand that your wholesale fee is an “add on” fee that your buyer will pay at closing, like paying an invoice. It is NOT an increase in the purchase price because that will also affect the price the seller is getting. This is a common mistake on the assignment part of a wholesale deal. Yes, the fe
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"Fear has a large shadow, but he himself is small.” -Ruth Gendler

When the dust settles on this year, chances are good that there will be a bunch of non-profits who have had to close their doors. Between lockdowns, massive unemployment, and general decreases in charitable deductions ... it's not easy out there.

Which is why it would be very wise for you to get "ahead of the game" if you are one of these organizations.

So, to do so, I suggest that you put these items on your "list" before Thanksgiving, so you're not caught in the flurry of holiday madness and year-end. Yes, we're already halfway through November...!

1. Have your staff update tax withholdings.
   Nobody likes to get hit with a big tax bill in April, or be unnecessarily "loaning" money to the US Treasury. Encourage your team to check on their withholdings and adjust as needed.
2. Get info for any individuals/contractors to whom you paid more than $600. 
   You'll need to file a
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Now that you’ve read the first two blogs on Beginning Wholesaling, you know what it is and some of the licensing issues. But if you want to become a wholesaler, you will need to understand the core transaction. In the simplest of terms, wholesaling is about “assigning” contracts.

Yes, you will need to learn how to market for properties, run number to determine the deal, negotiate with sellers and sign a purchase agreement. But that is something that all investors do and applies to just about any type of investment transaction. What wholesaling does is extend that one more step: assigning that purchase agreement to another buyer. You will then also need a list of potential buyers who will take the deal.

So, the process starts with you (or preferably, your wholesaling LLC) signing a real estate purchase contact (REPC) with the seller where your LLC is the named buyer. Your LLC will then “assign” that REPC to another buyer. This assignment is done for a fee. This fee is your compensation for finding and contracting the deal. In a common transaction, you will use an assignment addendum that transfers all the rights under the REPC from you to another buyer. Simply, this just swaps out the buyer so the new one can close and buy the house. It’s that easy, but let’s take a closer look.

First, can you assign all contracts? The answer is that all cont
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“When you know better, you do better.” -Maya Angelou

Ah, November. Cool weather, Thanksgiving, football. Even though 2020 still seems to be chugging along in all of its particular form of glory, we can at least get productive and distract ourselves from the political war games by making a positive impact on our financial world. Although, in Utah, Governor Gary Herbert is making Thanksgiving plans by Skype video.

Here are some things to consider as you do:

1) Look ahead to 2021. By that, I mean: what will your income potentially look like in 2021? For some, ANY income after a very rough 2020 would be welcome. But once you have that landed ... should I accelerate possible 2021 income into 2020 for tax reasons? Because the best of both tax worlds is to reduce your taxes in both years.
So take a look to see what you think your income will be looking like by the end of this year (including any investment year-end payouts, gig work, gambling winnings, etc. ) and what you expect it to be in 2021 (more, less or about the same). Next, check out the Read More...

"Every new beginning comes from some other beginning's end." -Seneca

There's a famous study, often referenced in business focused productivity/success books and podcasts that you probably have heard about in some form or another:

[Edited excerpt from Wikipedia]

Mischel's famous research study, "The Marshmallow Test," showed the importance of impulse control and delayed gratification for academic, emotional and social success.

In the 1960s at the preschool on the Stanford University campus, Mischel put marshmallows in front of a room full of 4-year-olds. He told them they could have one marshmallow now, but if they could wait several minutes, they could have two. Some children eagerly grabbed a marshmallow and ate it. Others
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Wholesaling! The big new (sort of new) real estate investing strategy. Wholesaling has, in fact, been around forever. Investors and non-investors have been able to assign contracts as long as there have been contracts. Many states (including Utah) have standardized forms to assign the contract. But it’s been more recently, in the last 4-5 years that wholesaling has become its own cottage industry within real estate investing.

Wholesaling is the strategy of finding a great deal and locking it up by putting it under contract. The wholesaler is the buyer and the property owner is the seller on that agreement. But then, instead of the wholesaling actually purchasing and closing on the home, she “assign” or passes the contract—the right to buy the house—to another buyer for a fee.

It is possible to assign a fix & flip project, a buy & hold project, a seller-financed deal, residential or multi-family deals, or a commercial deal. Wholesalers are generally very good marketers and negotiators. In other words, they are good at finding deals, negotiating great terms, and getting a signed purchase agreement. So that’s where they focus their time and energy.

Wholesaling is way you can get involved in real estate
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"Not only must we be good, but we must also be good for something." -Henry David Thoreau

Too many entrepreneurs are blind optimists. (And yes -- too many accountants are blind pessimists, I admit.)

Aside from the financials of a new venture, there are obviously other factors that play into its outcome. And my gut is that the people on your team already know what they are. They're probably not writing a book or preparatory articles about it (yet), but they probably have some good ideas.

Over 50% of U.S. businesses fail in the first four years. Many that linger past that point are alive in name only. Yet very few entrepreneurs actually believe they have a less than 50% chance of success. They are convinced that those statistics only apply to the other person's ideas.

The concept of a pre-mortem was designed to h
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OK, this is our fourth blog on understanding rentals. If you haven’t, go back and read the previous three for a better understanding. We covered the possible local laws restricting short-term rentals, how they are taxed at the federal level, how to hold title and how to save money on the self-employment tax.

This article is going to discuss another surprise tax that many investors don’t understand: sales and lodging taxes. These are the taxes all hotels have to pay, and they are at the city, county and state levels.

Short-term rentals, like those offered on services such as Airbnb and VRBO, have always been required to collect and remit sales and lodging taxes. Historically, the large vacation rental websites viewed these occupancy taxes as the responsibility of the host or homeowner responsibility, not the platform.

The platform was positioned simply as an advertising website or marketplace, and transactions occurred directly between homeowner and traveler. These taxes, however, were often overlooked and not well understood by homeowners and hosts.

As the short-term rental industry has continued to grow, these lodging taxes are increasingly part of the industry narrative and becoming much better understood. Short-term rentals are now ubiquitous, which has sparked pushback in some communities, with a new and heightened focus
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In the last blog, we learned that the rent from short-term rentals is considered ordinary income (like flips) and not passive income (like long-term rentals). That’s a big deal because ordinary income is subject to the self-employment tax of 15.3%. In this article, I’m going to teach you how to hold title to the short-term rental and how to save on the employment tax.

First, you want to hold title (who “owns” the property as listed on the county land records) in an asset-holding LLC, like a “series” LLC. If you’re unfamiliar, go back and read the blog, “The Series LLC” from September 18, 2020. This LLC is taxed either as a sole-proprietorship (single member) or a partnership (multi-member). It is NOT taxed as an S-corp. (no S-election!!)! This is important. And ALL your rental properties should be owned like this!

So, there is no difference in how you hold title or own your short-term rental. Own it just like all your other rental properties. But, because this rent is taxed differently than the rent you collect on long-term rentals, you going to structure the “renting” part differently.

The first thing you will need to do is set up a “property management” LLC. This is NOT the LLC that owns the rental! This is set up to do nothing more than manage the short-term rental (you can also use it manage your long-term rentals and deflect lia
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You might have seen some rumors on this already, but I wanted to help make everything clear for you...

A few weeks back I told you that there were some tax professional rumors circulating about “automatic PPP loan forgiveness” for loans under $150K. Remember that?

Well, they did it!Except it is for even smaller loans (under $50K).

And it's not "automatic", but it is very, very easy.Here is the simplified applicationif your loan falls in that category.

The borrower needs to make various certifications -- that the spending meets at least 60% of PPP loan proceeds and attach verification of payroll costs and non-payroll costs. But you don't have to perform FTE (Full Time Equivalents) or salary reduction calculations. Owner wage limitations still apply of course.

It's essentially an affidavit
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