HOW THE RICH GET RICHER

 

Jump in and learn all you can about Real Estate. Become a broker, not just an agent. It gives you the appearance of more credibility. (Remember you get to write off all fees for being a Real Estate agent/broker/salesperson.)

It is better if both husband and wife go into this together as one might pick up on something that the other misses.  Also, while one is out showing houses the other can be manning the phones at the office, greatly increasing the chance that they will be the one who gets the calls from the distressed sellers.

Distressed sellers are those who are going through a divorce, bankruptcy, death and must get out quickly. Many times due a death in the family the home is inherited by the kids who have to pay heavy taxes on it and must sell it to come up with the money to pay the taxes.  You simply, offer to buy their homes, saving them the thousands of dollars they would be paying you and your broker, if you were to just sell it for them. 

Make sure the distressed seller  buys a home warranty so if anything that is covered should fail to work you aren't out any money. Also if you flip the house while it is still under that one year home warranty it will still be good for the next buyer. And buyers LOVE those!)

Quickly fix it up and "flip" it. (Look for ones who have been in the home for a very short time so it was inspected recently.) That way when it comes time to sell it and make your big profit, you aren't  surprised with expenses like having to lift the water heater. It is your profit and you don't want anything eating into it. 

All the profit you make off of the house is TAX FREE! Can you handle a few thousand dollars in a couple of months? You can also take off your expenses for fixing it and if you have a kid or two "hire them" so you can also write that off of your taxes. This is certainly a no-brainer. You have to give children money anyway but before it was never a write off. ANOTHER GOOD WAY TO OUTSMART THE EX-SPOUSE but that is on a different website. ) 

Keep investing in  bigger and more expensive houses each time and you will have more profits.

Brilliant idea.... Leverage the real estate. You might be making $500 house payments each month on it and may have only $1500 in it at the end of the 3 months or whenever you sell...but that $1500 and elbow grease may have made you several thousand dollars in 2-3 months! You will want to properly stage a home and make sure the yard looks great.....it isn't Rocket Science!!

Remember profit made in Real estate  is tax free up to $500,000!! More on  real estate investing for great wealth

 


A few more thoughts on taxes and money-

Fund college accounts. Under a 529 account which with very little money invested will outgrow any money the kids will ever need for college....and it is totally tax free profit! With what is left over after they graduate, you can buy house or  new car for the kid when he/she graduates or maybe there will even be enough to set them up in business! (If they enroll at a local college and board at home you will have even more money left over to  spend...but again that is on another website.)

Don't forget you can also throw money into an IRA each year to  shelter it from taxes so you won't have to pay taxes on dividends either!  If you have been diligent and "sheltered from taxes" enough money over the years you can use this money in your IRA to buy real estate. The only caveat is you cannot leverage real estate purchases inside of an IRA. You must buy the house outright and it cannot be used for your personal residence. 

 


To get around that ....go ahead and start small, buying homes (outright with your IRA money) to fix up and sell to  "beef up" your IRA. Soon there will be so much money in there that you can purchase a personal residence and start drawing on your IRA (using the 72T) to make a personal house payment. 


Making real estate investments through a self-directed IRA can re-build your savings and could provide a financially secure retirement.  

You can actually make a commission on the purchase or sale if you act as the agent!  Make sure that the people you setup your Roth IRA with are familiar with using it for real estate purchase.

If your financial planner isn't familiar with the real estate aspect, (rolling in the commission) check with another company or an attorney who is well versed in real estate and taxes.

Realtors, pay attention here....if you partner with an attorney who specializes in taxes and/ or real estate (to help people use their IRAs for  real estate investments) you can both profit.



Buying a house can cut your taxes significantly. You can deduct mortgage interest from your income tax and you can deduct real estate tax from your annual financial filings. 

Example of how this can cut taxes: A homeowner in the 28% tax bracket that pays a monthly housing expense on a $150,000 loan will receive a credit that will reduce annual income taxes by about $3,600. That's about $300 a month.

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So now you know the secrets of how to  become wealthy while paying very little, to no taxes! 


START WITH A 5 YEAR PLAN. (It is important to write down your goals so you have a clear vision on what you need to do to get there !)

One last thought...if you have a 401K at work, MAX IT OUT. This is an incredible tax savings for those who have their homes paid and don't have a tax break. This can save you thousands of dollars and allow your savings to grow faster! 

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