Real Estate Rookie BiggerPockets

Amanda Han is a familiar face to the BiggerPockets audience. She’s been featured on the BiggerPockets podcasts before and has written multiple books published by BiggerPockets (The Book on Tax Strategies for the Savvy Real Estate Investor & The Book on Advanced Tax Strategies). Amanda has worked with lots of real estate investors and invests in real estate herself, so she’s answering some common questions that rookie investors have about taxes.

We run through a mix of topics such as deductions, depreciations, home-office write-offs, expenses, legal entities, and when you should get a CPA. Amanda also talks about some of the most common deductions that rookie investors miss. She also talks through different software for tracking your business expenses, recording your mileage, and keeping your business finances up to date.

It may seem like a lot of information to keep track of, especially when you’re in the middle of a rehab/flip or even just managing your rental. Amanda stresses how important it is for you not only to find a high quality, real estate friendly CPA, but also that you keep them in the loop. If you’re thinking of buying, selling, or transferring property, it’s incredibly important to keep your CPA notified on all things related to your real estate business. That way, you keep more money in your pocket and are able to grow your portfolio even faster!

In This Episode We CoverThe most common tax mistakes that rookie investors makeThe best way to track your expenses (and your different options)When you should consider, interview, and hire a CPA The best questions to ask a CPA if you’re interviewing themHome office deductions, mileage deductions, and moreWhen the best time to form a legal entity is (if needed)What to write off when you’re house hacking And So Much More!Links from the ShowReal Estate Rookie Facebook GroupBiggerPockets ForumsAshley's InstagramTony's InstagramQuickbooksExcelAppfolioBuildiumRookie Podcast 75: From Working on Oil Fields to Passively Investing in Real Estate with Travis WattsBiggerPockets Pro and Premium MembershipBiggerPockets Pro Perks (Exclusive deals like Amanda's Course)Jumpstart Your Tax Savings as a Real Estate InvestorCheck the full show notes here: http://biggerpockets.com/rookie77

Before cooking at Michelin star restaurants, Ellen Bennett worked as a lottery announcer, an English tutor, and a “booth babe”. All of these jobs taught her to be comfortable in uncomfortable positions. When her head chef told her that he needed new aprons for all the cooks, Ellen took to the challenge, with no business plan, no connections, and no experience designing aprons. The deadline, uncomfortability, and challenge pushed her to deliver the aprons on time, and start Hedley & Bennett.

Now, Ellen runs this multi-million dollar business that delivers to Michelin star restaurants and at-home cooks alike. Ellen talks about the necessity of committing to something scary, even when you don’t know how to handle it. She used the same approach when buying 3 rental properties nearby her home in Los Angeles, all of which have appreciated dramatically.

The mantra used in creating a successful business, investment, or anything else is Dream First, Details Later, which also happens to be the name of Ellen's new book! An entrepreneur can get bogged down so easily with the details of any venture, so much sometimes that it could push them away from accomplishing something great.

In This Episode We CoverHow Ellen accidentally started an incredibly successful apron business Using the pandemic to think differently about products and needsLooking at challenges as a gift and an excuse to growHow to plan when you know that things won’t go as plannedSetting your employees up for a failure-first mindset (so they succeed!)And So Much More!Links from the ShowReal Estate Rookie Facebook GroupBiggerPockets ForumsMySpaceWalmartFordAshley's InstagramTony's InstagramCheck the full show notes here: http://biggerpockets.com/rookie76

Travis Watts grew up with frugal parents. They taught him about coupons, buying the off-brand products, and basic financial 101, but never taught him about real estate investing. In 2009, as the market was hitting unprecedented lows, he decided to start investing in real estate. He purchased a single family home to start, then started house hacking, moved on to some fix and flips, bought some vacation rentals, and before he knew it, he was a very active real estate investor.

There was one problem though. Travis was working 90+ hour weeks in the oil industry, often working overseas for long periods of time. Travis was trying to run his active investing with his hectic schedule, but often found it hard to put a high level of effort into his rentals when so much of his energy was being exerted from his job. In 2015, Travis made the decision to become a passive investor.

Passive investing isn’t for everyone, especially for those who want to be making the big decisions. Luckily, Travis didn’t mind having general partners make decisions for the syndications he invested in, if anything, he preferred it. Travis walks through what you need to look at before putting money into a syndication, including the general partners, the market, and the deal. He also talks through how to identify whether or not a syndication is being run well, and other passive investing strategies like investing in REITs.

Many real estate investors will find themselves with lots of projects, lots of experience, lots of money, but little to no time. If you feel like this, it may be a good idea to start balancing some of your active investing with more passive cash flow opportunities!

In This Episode We CoverThe benefits of passive and active real estate investingSyndications and who they’re meant for506(b) and 506(c) syndications and the differences between the twoHow to identify good general partners running syndicationsBecoming an accredited investor REITs (real estate investment trusts) and other passive income strategies How much money passive investors can makeAnd So Much More!Links from the ShowReal Estate Rookie Facebook GroupBiggerPockets ForumsCharles SchwabJanus HendersonBiggerPockets Podcast 227: From Single Family Houses to $130,000,000 in Multifamily with Joe FairlessAshley's InstagramTony's InstagramCheck the full show notes here: http://biggerpockets.com/rookie75

This week’s question comes from Jennsey on the Real Estate Rookie Facebook Group. Jennsey is asking: what’s the next step after your first property, as far as financing and steps to scale to a larger portfolio.

If you’ve gotten your first property, congratulations! Now you have the momentum and experience to go get more! The next steps that are most important are finding the money for your next deal, getting your systems and processes in place, and letting others know you’re a real estate investor looking for deals.

Here are some suggestions:Save up for a conventional mortgage, link up with a partner, find a hard money lender, or find a private money lenderUnderstand the fees and structures in each of these types of financingPut together a binder showing your past deal, your experience, and your goalsKnow how many doors you want to acquire and lay the foundation for that goalEvery time you do something with financing, tenant management, or underwriting, make sure you document how you’re doing itAnd More!If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE).

Check the full show notes here: https://www.biggerpockets.com/rookie74

Believe it or not, Tony and Ashley haven’t met each other in real life...until now! They’re recording from the BiggerPockets headquarters in Denver, and they brought their partners! Tony’s wife Sarah and Ashley’s business partner Joe are here to answer the most common questions about partnerships and investing with someone else.

What makes a great partner? Tony, Sarah, Ashley, and Joe all agree that a good partner has to have complementary strengths to you. Do you know how to do financing but are terrible at design? You should find a partner who loves design but doesn’t want to touch financing. Although it may not be the easiest task, one of the best ways to find a partner is to look at your weaknesses, your strengths, and look within your circle to find someone who could be the yin to your yang.

Ashley also talks about the “partner presentation”. You may have heard this term before on the show. A partner presentation is essentially a binder including a bank statement, credit report, personal finance statement, and past deal history. This helps you show a potential partner that you’re coming from a position of strength and that you possess the competence to tag team a deal.

Ashley, Tony and their partners also go over things like goal setting, partnership structures, LLCs, life insurance policies, and more. While many rookies feel they don’t have the experience to bring to a partnership, it’s important to know that you running the numbers, listening to the podcast, and having interest in real estate already puts your skillset above many others!

In This Episode We CoverWhat Ashley and Tony look for in their partnersWhat a good partner looks like and what you should avoid when partnering upPreparing your “partner presentation” for a prospective partnerSetting goals and staying on the same page as a partnerHow to structure your partnerships so everyone is on the same pageUmbrella policies, life insurance policies, and other partner protectionsAnd So Much More!Links from the ShowReal Estate Rookie Facebook GroupBiggerPockets ForumsBiggerPockets CalculatorAirbnbAsanaBiggerPockets EventsLearn the In's and Out's: How to Structure Partnerships as a New InvestorCheck the full show notes here: https://www.biggerpockets.com/rookie73

This week’s question comes from Ricky on the Real Estate Rookie Facebook Group. Ricky is asking about the pros and cons of using a cash out refinance vs. using a HELOC (home equity line of credit), especially since you can pay down a HELOC and use it over and over again.

Many real estate investors take advantage of HELOCs since you can get them for your primary residence or a rental property. That being said, HELOCs can come with variable interest rates and can be closed once up for renewal. 

Here are some points to consider:First see if your primary home qualifies for a HELOC, if not, go the commercial routePrimary residences will get better interest rates compared to commercial HELOCsCash-out refinances are a great way to get equity that's been built over time with a low interest, long-term loanHELOCs may require you to take out from them every year, or be penalized You may be able to get HELOC closing costs waived, unlike on a refinance And More!If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE).

Check the full show notes here: http://biggerpockets.com/rookie72