Building A Strong Foundation

Kandas and Laeey discuss how to build a good foundation for your real estate business.


Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Welcome to brag radio which is all about being rich and generous. Every week your host Kansas and best selling author Larry going to show you how to be rich and generous by investing in real estate. Broadcasting around the world on the brag radio network from the flagship station W BT and beautiful uptown Charlotte. Here are your host the rock stars of real estate Candice and Larry. Yeah you don't it muscle pose little rock star I'm glad there must. Anything but right. And this is bragging. We'd be Bragg and we shall we at the church would we be Brighton and. Note we have censured in the works now actually. And we're suppose he would what does it out not tenth year and England's. Yes we're supposed to get those there's been. Next week. Actually its way into that. That. They're freezing into the we'll take all I'm is on and implored them that's great obviously now a free ride it again. That's good that's good slow. I'm. Dear man near where you know well in January right. Yeah. I. You mean it's like in January 1 I didn't they are you that you look that. It. And eat in. Like a pack it in. The thing that's a scary place at. The. All right so while we're gonna talk about January's almost half over foundations. And it. Not a house the only candidate really. Wanna slow start everybody again restart with everything in. In and you've got to have a solid base. On pan Asian. And I. You know it'll stuff I mean you just bring this stuff only to report about foundations. But thought about it. I don't know whom rules. Are ready to build these raw uncle think that this. Business. Hey there and. We have rules that business. Right so we thought about foundations today apparently took a yeah daddy now what they eat great idea I think it's a great idea you know on your ideas. Well you know. Anyway. So. Gas when your starting out in real state it's like any other business. You do need to build your business a strong foundation and there's a lot of things that you need those rules state. Just like any other business for example the very first thing. You need to think about. These were entity structure okay. You don't wanna be blind children by the sound flippant houses or keep general properties. In your personal name or even in what's called sole proprietorship. Sold for partnership. Is an entity. That like let's say you have may be convenient store for us who's. Accountable part of the post in the sole proprietors. But let's say you were home by lakers a guy. Or you. And that and I operate I'm Anthony off my cousin used to have. And but Georgia Tech and then my daughter just text is that a minute back and shot. She voted to optimize. I don't know any. Anyway let's have a vacuum cleaners. Are you know you can Wear it's Oprah platters. Because not a lot of risks. And you know people coming in and tripled over can stop right cheek and one that is missile privacy because as with sober partnership means you. Operating in your old personal thing right. And it like let's say you rental property personal. I and let's say. There was shot while. That there's a break in the sidewalk and froze us open and created the trip right. As concrete. So. You concede that. To create a trip has. Been slow so basically. What happen is if if they tripped and though you had it in your own personal. And the problem is. It is that it's in person. It's you personally. Because it's in your own personal name they tripped and oh may be buses maybe who knows maybe they're alive and what can. In the. Bonilla and sidewalk that care at all. OK let's they warn your tennis Rowland a crock party. What is that. Is it's such that they got about. Counterpart Chad. You did you all I don't know what is that that's such a thing I've ever been to one. I'd let's say what are your temperatures and it is not a party. That. Actually Wear your tennis is throwing a party today. And somebody. You know maybe there's like twenty or thirty people there and they all go out on the deck in the deck is built for life. And people in his twenty or thirty people on the debt. And the debt falls in prices. And hurt. So now what you feel. If it was in your own personal name that concern you parsley they come up your car home. You call your personal assets they can get personal judgment against you. All of that stuff right so you wanna make sure you build your business a strong foundation. And have entities. Right of the Reich and there's corporations. There's a lot. And then they can be taxed different ways. I in in real state to slackening of the business you need to make sure you have the right persons and entities. We have people that we work with. That we can refer you to. Help you with that help us and help our students but. For example if your buy and sell out sell about robots injured Wednesday training like the book store rules that day trading at. It. So it's at. That's a good book to Los Angeles. So anyway. Walls off. It's okay if you have about showbiz. You wanna keep that. Business and a separate entities that your blind old does it undermines hold but he really does it's it's it's at its best right. You wanna do business and one entity and have investments in another it. Right there's a lot of risk at about sell about sell right. There's liability for different reasons and there's also liability. Four. Year. Olds. That. You can only have two minutes this thing with the death. The media will regroup and. A. Anyway. So. You wanna have your buy and sell business in a separate entity that nearby and hold investments okay. And also depending on the kind of ash that you have. The pit and on the current assets you have you may wanna have multiple entities because let's face it if you owned a mobile home community right. Or in my case a trailer park. The fuel the trailer park okay you wanna have that in a separate entity than you would have your other single family houses or multifamily properties. Or even commercial real story. And if you do have commercial rules that you want half of those an absolute separate entities each one of them just like our office building. It's and a separate entity from everything else that rank right as we occupy some of the space and we ran out some respite it's and they can come take a tour as well right. And another plot here on the entire amount of experience. The office tiller that means I'm running out of work. The last fifty seconds we. We did you have the ability fiesta Clement in opera story if you give me 877 Larry go. I can get you out a copy of the investors kits here in now. Or if you're close enough to the office which is in Lake Wylie can come by and pick up the physical version of that it got that they trader book. Ion couple dvds CDs and things like that it's the digital version minister links to all of that stuff. Same thing in the kids. Just physical version available at the office in digital version of album email 877. Larry. Put them back brag radio. Missing emails they did beer can dinners this in this and Laird. Yes I was this for the first segment of the show industry and is now we're talking about. I don't think restore. Frat parties them they. Oh let me get out I think there isn't about both made at that party here in the house right now. Now. That the correct part I have not had in the report card. And. And it's cash. Not at. That's a joke people that's a joke please Gholston hate mail today. I understand it's illegal again it all right. I. That's about it and is these are you allowing Larry. As Muslim groups have been leery dogs so we're supposedly got him out. A strong and they can bring your statement. That's true and that's what we're talking about a strong foundation. And start with asset protection and that its restructuring that's the number one thing you'll start with asset protection. An end to construction and when you call that number 877 where ego and talked to Candace. And you were investor's kit visible in there all about asset protection and into destruction as well Raikkonen sharing. Absolutely hit me. Anyway. So we were talking about it that you won't have a separate entity for your bombshell business as you do for your investment. Business I. Hereby hole right and also you wanna separate her assets now. As far. Half of that. Coma and on an island. With a. The camera bug right now. It look easy. With. Him anyway. Where were we. We're talking about shepherd at the annual separate your asset as well. So let's say you have a hundred houses you know you can have all 100 houses in that won it you might have tin houses. And one entity in another in different entity another opinion because someone trips and falls. April party. And so. And her nature. Right. And so money is tired and exactly exactly. And then right. So they can only the house's in if the house isn't one entity with and other. Passes it can only affected out one entity correct so even though you own. All of these different entity and maybe can carry out any line. The problem generate new ex governor three like that. Musically you're weary thing stop anyway so how even you aren't all of them cap in Elena after the one. Well because there has the other one has nothing to do with. It has absolutely nothing to do with that. You know let's say you own convenience store but she also owned a vacuum cleaner shot. If someone gets hurt at the convenience store. They can't sue the vacuum cleaner shop cause us to separate businesses aren't different is loans are in different entities right same difference. As as will state. Right so you wanna keep on separate and separate your assets. As to your comfort level. Then how would think that. I would think. If that's the case went. Being he's been able to happen as far as I'm so maybe an able to see you in an affecting out entities are only one into the at a Concord. That taxes would be the same but that's not happen. Well different entities are going to be taxed differently the way you set them up for example. A business. And LLC is a business that's that's for limited liability company. It's typically is a business you're gonna set that up to be taxes what's called an S corporation. Which means it is a pass through it at the OK it is a pass through entity. A right. But it's going to be taxed differently. Than say what's called a disregarded. It okay. And I am a disregarded entities typically will be used that I can be an LLC also. But it will be taxes and disregarded duty for tax purposes which means the LLC that is taxes and escort that will follow attacks occur okay. But the taxes actually flow down to the owner of the entity international their percentage ownership. I like they disregarded entity. There's no tax eternal. And it is reported on the individual's personal return in the income as reported there's well just like we do a lot of lending. We also have investments. We have law hold notes. And and rental property commercial and residential. And all of those would be disregarded. Entity. Deal right Brett. And your business Bob sell about sell like our education company. Right the goings group and it is an LLC. But it's hard to taxed as a corporation he does it's a business. Right so they're taxed like you visit them up could be hacked. Different ways but what I'm talking about is the cash vs accrual basis. Likewise it doesn't there's no there's no separation of that as long and you're the owner where the attack they cash arsenic rule. Yes and we just went through this so what can assist talk about. Is the way you're counting works. Which basically leads us into the next thing you need a good account Coca-Cola ad and now I'm at that and you really yeah. You know it's just my segue. To make it work in those now. At a minute and a year. Mound in the camera on the line. Have to witnesses limit actually yeah yeah. So. What you wanna do is we'll have a good a count took person that understands and knows real state. And the nose small business okay that's very very important certain tax rules and laws and rules and rags. Right that you can take advantage of elicit that the reason for tax walls all right the reason for tax rules the the government. Needs to tax everything and everybody but calls taxes. Goose that lays the golden right I mean we all hate to pay more taxes that was supposed to right right. You have to pay your fair share. But you don't wanna pay more. The never really hard right. And you know it taxes pay for things like roads. And schools. And things like that and I use roads every day. Like. Their day. And it roads and and hurled you've roads area and noticed the school everyday but I. Yeah you can go to private school one mind at a house and I lost a little tired and they will have to. Pay for the public school right a still have to pay for the public school so anyway. So you gotta pay your Fisher taxes but the way your business is there's there's a certain thing out there called method of accounting. And once you start you were method of accounting that you have to stick to it every year after that Kenya I. This disliked approved it would sell or Favre it's hindered due notes you can pick what's called it's almost sell for tax purposes. Or if you do enough of them considered a dealer as a business and then you can take the install on the cell you have to pay taxes on the gains. Right then and there that same year right right. Mania in anything of saint mere. And once you reach a certain level if these 3000005. Million dollars in sales you'd then have to go from your method of accounting. From the cash basis meaning. You pay taxes based on the it was you pay literally pay. And you count your income. When you receive it. Once you hit three to five million in sales. In you have to go to what's called the rule which means it's. That's good about me. It really does it because you could invoice someone. You can invoice someone. And then. Even the actually a bit of a boy admitted. You. And it did. And it anyway. So and I don't pay attention in an incident so what happens is once you once you hit that accrual method. Even if you invoice somebody let's figure was somebody for 50000 dollars. And they don't pay you until the following year you still have to report that 50000 is if you received and in come back in the end don't get it until the next year at exactly right and because it's horrible business so but it's now passionate about it. So but anyway. It is what it is and we don't make the rules we just have to play Bob doubtless call campus. Right now these are message 877 days ago she is sort of the two reputed from the office she UB three investors here what else. Taxi at the very day events that are coming up I mentoring programs that are available. Pretty much do anything and everything answering questions at you got going on or take any share recommendations or were you like to hear more of 877 Larry go our info at Bragg radio dot com. Welcome back Gregory AM what's happened. Are the real world. This is still the same show we just let them affect nature of them here and I think. We're talking about foundations. Of the. Well it. A little bit. Linda lane and king. So. The people. Or quarter. Of my oldest car. It. Like yeah I didn't miss it finishes that urge the land but in the I don't know if you know through. Saturday and our world. You. One of the least technical people in the Arab. All right so anyway. Build your business on a strong foundation. Institute structuring. Asset protection and next this tax planning we talked about tax planning and a we talked about what you wanna make sure you do. Is. You wanna make sure that you have a good CPA good account we have an account that we worked with for years he was great I liked him I think we just outgrew home. And that we just outgrew them is all. And maybe you know as he specialized in making so many different people specialize in different things could be right everybody needs that are on their net that specialize in different things. But don't. I'm now. Luckily we found a group that they specialize in rural state and they also were doing educating as well right so they know that industry that knows the business and you know it's oh. We got that cool foursome right. Yeah I mean I really leave their mark and that's prefer. IE about a year now the end. I don't think. I don't mean being negative policy about him. But they have really helped us restructure and streamline a lot of stuff Alice time. Disorganized than our accounting methods disorganized was light term is an understatement in his third and ninth that was there was yet. But we got that out straight now now I feel a lot better matter books about our our accounting met that in about our. And it's it's Simpson to as far as the accounting department. Within your business and nine and how accounting just goes in general on the net you've got to keeper really close eye on. His thinking squarely thinking here that's you even realize and in the end. It takes a lot. To undo. Now. After a certain amount of time. That is so true that's so true now so we've got into restructuring asset protection. We've got tax planning attacks structuring in Munich at CPA which we recommend that for you as well mr. yeah exactly. And next we need to talk about. When you when you're starting your business OK when you're starting a business. Every business I don't care what it is I have capital right as I've capital. Mom me right I mean after yours has got to have money. You gotta have money right. It's very poor access. Minding your exit there's two things you need to start rules okay unique deal flow that means I have deals governing and and you need access to capital. It doesn't have to be your capital but you have to have capital. Okay doesn't have to be your capital but yet to have access to capital all right. There's a lot of people out there that our active investors were won't be active investor you'll flip houses and by how to fix it up to sell it for you wholesale that are it was a stellar finances. Or rent it now that's an active investor right there right. That's an active investor here active year we get in the business you wanna do physical work okay. And I don't mean necessarily we have a house that you wanna do physical work as far as. You won't be active in the in the deal together yet I'm Ian and the British acres that make it happen right you are the deal flow you are the deal flow. So having said that. There's also the passion the vast right. That's the person who. Is. Maybe they're retired. Maybe there professional maybe there doctor. Chiropractor. A dentist. Engineer. A business shoulder of some kind maybe they only if I can store. Right maybe they'll convenience store. And they have don't have capital. Or maybe it's not your money Democrat party and maybe. Don't know what we're talking about Google back at the salute early this segment war that no one. Me anyway. Anyway. So. So basically. Neutral you know put a plug. Network and you're gone at that scene at capitol. Give me your capital. It dozens of those parents and investors out there and active investors and the pass and maybe you all the business. Now that's what. Or. Make it bag and it did and we don't think it back in some are in the line. Anyway. Anyway. You you might have some money settlements outlets may be your 401K has turned into one of one. In your tired your tired of the volatility of the stock market. Right. It. You know it you don't wanna put your money in silver or gold you know you know and people's you know gold is its. Ers over his it's and everything. Goes bad people put their money in gold but people who go to barber. That's what they did so anyway. There's people out there that would like to write a check those people that work with some. If for example we we had a couple opportunities recently where. We were able to help some investors. At eight and maybe a little bit more percent return on the money and we outlined. Right which in an email to our list that flooded whole sector and believe but is still available please old people what they were good. I'm monies earned atlas from 1% right now. It. And and well we do as we go and negotiate DT this council properties we properties. And I'm gonna bring it back. We farm properties. And in somebody shall put up the money. And then we manages that we can split the profits or wicked rule or situation that's right Sunderland and I am so. Haven't said that in the deal flow in you need money. The money doesn't have to be right I mean yes we do use our money. You can use opium especially in other people's. It and that's that's very simple so you gotta have money. And you gotta have deal flow right and there's active in this passive investors. See got to decide am I going to be active investor. And I'm gonna talk about the deal flow you wanna be passive investor atom and religious right to check them out which right. And the end. And the hand you know. The next you have to do is you have to start you have to determine your model what am I gonna do and lists of what Americans do about rules that. Am I going to be to have money to work wit. And I'm Stuart just investing my whole in my going to be active and passive and hours and notified of the deals myself. And use my own money or or one. And wholesale they trade it and you know Portugal. You'll do. So what are you gonna do you know wholesale. You Nabil landlord pretty good lease options reduce financing or you can fix it flips to a couple of vendors get over it. It is seller financing are you gonna do commercial residential multifamily. You know what kind of lead sources are you work hard. Which we wrote the book that two are you gonna do. MLS properties are you do. Hurry to market your business are gonna have a enterprise business. Or lifestyle business and when we come back from the break we'll tell you about that. The slow and it got better at a dragon and do it right so enterprise business basically. That's an office with employees a lifestyle business this Starbucks on the laptop. And that's it. The territory is not if you can't give me a call looking until all of them and it's now about those things that you are in and out. That the bird out and have a Breyer. And segment. You mean 877 Larry goes in any mounts in back radio dot com. You into account that pass you know our pads on brag radio dot com as well. But then you meet clocking an investor's kit out see your email here not close enough to the opposite a quiet this thing that got the physical virgin. 877 Larry again. We'll be here at. From from from from from from from from from from from then. From different people from different for different different. I mean I think they act. It doesn't planet Venus and an opulent. I give credit some out of are now this coming back our. Hear me there for a minute. The double him that's been done and yet there I think they've current fifth. Right couldn't. You know it's you know. So I thank Susan. For a segment. Brag radio investing real estate beer too generous about it. Our favorite I love the analysts are the students that are actively doing real estate and able to. Have you begin their lack cannon in order but today's gas as a bin at that position where he's gotten a plant in order and he's able to. Sorry given it back campaign for an Indian dinners in different ways that lets our timlin they're about real thing in the NC has in dinner. The man the legend in the myth alive and in person brought you there let's. I am here I'm saying it beyond the call they think you. The radio play in Canada. It does not as good as chads that yeah tabloids and a does. Not need that. So. It's there. We know up to where would you like me to start. Well why don't you first start and tell us a little bit about yourself about your rules state business and how much we have helped you grow. Up the. All right very well glad to do that yet gets a bit about my back and realistic yet activists are aware bit. Whole life idea. When I was a kid my parents the couple's four Alexis said. They didn't believe in paying me that we allow its virtual wars they thought that was eighty. Part of being a family member but. The let's go to Q I was trying to cut the grass into of the units in read the pipes and all that sort of thing and. Now that I'm out and. It was kind of a power in a lot of fodder mean. What to movies I was sick you know the DoubleTree by reference to the movies if they could go toward a dairy queen or whatever happened to be so. So that this sort of developed a lifelong love with this business and it's. About fifty years ago those two holes chilling part of the residential real statement this said. Yet it was just kind of opened a hole Lu yeah. Perspective on how to buy and sell real estate in a way that there's never even dreamed was possible. And I'd just it was to me was like this finding bodies in streets. I was this kind of amazing well buy it so I got involved in. And that buying a lot of distressed property and selling it as is or fixing it reselling it. And ago where I gotta coordinate with with the bill and group. Who got you tickets. Goes back a hole should be about six months ago torso but. In the past I had always had the idea. Buying and this immediate resell what we're and other a lot of a lot of what I would buy it myself. Was it as it is and in Beverly dog and I cannot tell you why. But the Philippine richest concept never really dawned on me until I was exposed to it by getting weary scores were put in that didn't really take long. They get it. 2222. Do something with that and if it makes makes something happen with that I. At a property if the dollar came to me and he. It was an you know a lower income area. If he needed. Bless his heart he had fallen to some some health challenges he was going to relocate to the southwest art state the Phoenix area. And he. He is needed somebody could come and close quickly and invited house and help them move on and so we'd have the cash to cash to do that so. I've by west property in my first inclination was to derive wholesale but it was the first decent shape it was livable. Is if you talk area and of course and if it indeed work as far as that was dated. NG but it was certainly a livable and I've found a fellow who. But the other side of the equation. He couldn't exactly get a banquet right now but he. He did have the cash to put down the place he was responsible guy. Saturday he was so we arranged and the make payments and he's been. I tell you I mean he calls me every every month that let me know he's put the put the money directly deposited my account and he's been that's been going on about three months now it's been a great arrangements have agreed arrangement for me. Now I have if you will that do would be in cobalt has properties it will. The last I suppose that the ten years about that if it goes that far so. I'm really excited about. About this just a lot being. I guess putting more like. Quiver so to speak a different way to do deals and in two ways to make things happen in and help people get it on the would be able to get it or otherwise. That is awesome you know and and I think it's really really great that your your doing the filter is is model. You're helping somebody become a homeowner but one thing that really stuck out to me. Rod is that. Where you've got the house to see a lot of people out they're listing that aren't involved in rules state investing. They really think that rule state investors are sharks they're taken advantage of people when they're down. But this guy you've got the house from yet you've got a good deal on it. But you helped him home out of a bad situation right. Exactly exactly. It could help Kimberly more importantly where to move on to a place where he can enjoy the remaining years of his life I mean needs. It is kidney failure he was kind of in Detroit failing health. Go to replace you know that southwest United States with the joy a little bit of sun and fraud. If life. And you helped him do that that's great that is absolutely clear that if bank doesn't. Thank you that it's exciting part of it so I think LSU that I talked about will revel in it together was. You know this could be the order relief foundation and in a way that kind of came about Larry woods. You in this business especially two years ago and rarely a lot. Lot worse they are now I would have properties that would come across and unfortunately people radioed too much in taxes or they just were so dilapidated. It worked and capital. The off I gave was so low people would say the you know. If that's the best I can get for justice soon. This give it away. The thought occurred to me well why not put something in place people donate their property. Take your tax deduction for doing that. I can turn around and and I don't believe in. Giving giving in the property because I had an alert on a light that people have to pay something. To a big get so big appreciated and have to beat the market value even depressed state and at least get some something an exchange that property. And intolerance that I would use that that property can be deleted so the toothpicks and up to live in it or even more importantly. With it and turn it would income property put themselves you know there's been a lot of people out there I think it's a shame that in our country such vast abundance. That more people are. Able to support themselves and sustain this just hit. Just to meet the basic needs of life. So to the extent that I can help them. Tough property toward the income property of lower in this business and learn how to become self sufficient. And eventually to the point what they can get back to others too and just kind of build that cycle. That go with excited so we formed the foundation we've had people donate properties to its we've helped others get these properties in the big discount. Well coached him through out to Allah to exit and a way to put it but the income property for them. And generally. I. I have. About people that I have that have come back to me and it just thank me time and again it and for helping them get started real estate that they've never. Thought that they could do it gala but it was strictly. Yet have a lot of means to do it so I admit it that exciting due west to. That is awesome that's awesome soaked through your foundation you've been able to help a lot of people both sellers of property. And people were buying property it in you're doing a model very similar to habitat for humanity and you know they don't give houses away at the people are making payments on those houses. And then other people donate houses or donate. The labor and material and that sort of thing for the houses where the land they're going on so it's really great thing you're able to do and I value and how low but the conversation. About the foundation that you have started and that's really a good idea to Gaza's a lot of lot of ways you can do rule states when you get to the level that that we aren't that rod is you can create your own foundation and help people. Even more survived thank you so much for being you know we really appreciate it. Why malaria was providing the end. What you. What you. And that is gonna wrap things up for today's brag radio leading the world to be rich and generous. More information about what Larry Candice talked about on today show or to get a free investors get. Call 877 Larry golf that's 8775277946. You can also go to brag radio dot com. Make sure to tune in every Saturday for brag radio leading the world to be rich and generous Larry in Kansas we'll show you how to invest in real estate and the many ways real estate creates the ideal investment. Your news 1110993. WBZ.