4
VOLUME 14, I SSUE 7 © NHREIA does NOT render legal, accounting or other professional advice. It is your own responsibility to seek professional advice for any specific transaction or investment from those licensed to render such advice. NHREIA does not endorse vendors or speakers. NHREIA P.O. Box 5962, Manchester, NH 03108 [email protected] ww.nhreia.com 603-318-1330 Facebook.com/ New-Hampshire- Real-Estate- Investors- Association @NHREIA Linkedin.com/ groups/New- Hampshire-Real- Estate-Investors Dennis Prue 603-559-2100 www.oplhotels.com J ULY 2019 Top Tips from Service Providers, Networking and Pizza! Real Estate Development Company specializing in hotels and resorts as well as office parks and shopping centers. 1031 Exchange: What Investors Should Know About Closing Costs By Dave Foster When planning for a 1031 exchange, it’s important to have a target reinvestment amount. Why? Because to defer all tax in a 1031, you must purchase at least as much replacement investment real estate as your net sale. But… what is the net sale? Well, the easy answer is the contract price minus closing costs and commissions. So which closing costs count in this equation? 1031 Exchange Eligible Expenses Fortunately, the IRS provides examples of qualified 1031 exchange expenses. Referred to as exchange costs, the IRS allows payment with exchange funds. That’s because these costs are considered typical closing costs related to the sale of property. As a result, using exchange funds to cover these costs won’t result in tax penalties or the disqualification of your exchange. Exchange costs include: Escrow fees Broker’s commissions Mandatory appraisal costs (purchase contract only) Attorney costs related to the sale Recording fees Title insurance costs Transfer taxes Prorated taxes Qualified intermediary fees Expenses Not Covered by 1031 Exchange Funds While there are some expenses that you can clearly use exchange funds to cover, there are others that are not eligible. 6:30 PM, Wednesday, Ausust 14, 2019 Best Western Executive Court 13500 South Willow St., Manchester Cost: Members are free; $25 for not-yet-members

Top Tips from Service Providers, Networking and Pizza! · 2019-08-12 · leverage virtual assistants. Marketing Using VAs in your marketing department is highly effective. If you

  • Upload
    others

  • View
    1

  • Download
    0

Embed Size (px)

Citation preview

VOLUME 14, ISSUE 7

©

NHREIA does NOT render legal, accounting or other professional advice. It is

your own responsibility to seek professional advice for any specific transaction or

investment from those licensed to render such

advice. NHREIA does not endorse vendors or

speakers.

NHREIA P.O. Box 5962,

Manchester, NH 03108 [email protected]

ww.nhreia.com 603-318-1330

Facebook.com/New-Hampshire-Real-Estate-Investors-Association

@NHREIA

Linkedin.com/groups/New-Hampshire-Real-Estate-Investors

Dennis Prue 603-559-2100

www.oplhotels.com

JULY 2019

Top Tips from Service Providers, Networking and Pizza!

Real Estate Development Company specializing in hotels and resorts as well as office parks and

shopping centers.

1031 Exchange: What Investors Should Know

About Closing Costs

By Dave Foster

When planning for a 1031 exchange, it’s important to have a target reinvestment amount. Why? Because to defer all tax in a 1031, you must purchase at least as much replacement investment real estate as your net sale. But… what is the net sale? Well, the easy answer is the contract price minus closing costs and commissions. So which closing costs count in this equation? 1031 Exchange Eligible Expenses

Fortunately, the IRS provides examples of qualified 1031 exchange expenses. Referred to as exchange costs, the IRS allows payment with exchange funds. That’s because these costs are considered typical closing costs related to the sale of property. As a result, using exchange funds to cover these costs won’t result in tax penalties or the disqualification of your exchange. Exchange costs include:

Escrow fees

Broker’s commissions

Mandatory appraisal costs (purchase contract only)

Attorney costs related to the sale

Recording fees

Title insurance costs

Transfer taxes

Prorated taxes

Qualified intermediary fees

Expenses Not Covered by 1031 Exchange Funds While there are some expenses that you can clearly use exchange funds to cover, there are others that are not eligible.

6:30 PM, Wednesday, Ausust 14, 2019 Best Western Executive Court

13500 South Willow St., Manchester Cost: Members are free; $25 for not-yet-members

603-666-8534

www.elmgrovetrealty.com

Matthew Lefebvre

Jessica Stevenson

Investment and Commercial Realty Brokerage

5 Eastpoint Drive

Hooksett, NH 03106

www.soilaway.com

After Hours/Emergency: 603-657-4851

Expert Water, Fire, Smoke, Odor & Mold Restoration

Professional Cleaning Services

IICRC Certified Firm 75871

Neil Mishkit

Business Development Manager

[email protected]

603.641.6555

Exchange funds do not cover:

Costs of financing

Prorated rent

Security deposits

If you use exchange funds to cover these types of costs, then the IRS treats them as cash taken out of the exchange. This is known as “boot.”

As a result, this boot portion of your proceeds becomes taxable. Consulting with an experienced qualified intermediary (QI) will reduce the likelihood of simple mistakes like this being made. Also, you should avoid using exchange funds to cover:

Property taxes

Appraisals required by a lender

Insurance premiums These are typically expensed

costs and therefore not included on a closing statement. In addition, take care not to use exchange funds to pay for anything between the sale of your property and purchase of your reinvestment property. This avoids a “constructive receipt” of funds issue. Instead, pay these out of

pocket. This includes lender lock-in fees. Exchange funds and loans do not mix! The Bottom Line With this in mind, take advantage of every allowable 1031 exchange cost at closing. Involve your tax professional and qualified intermediary in determining which costs may be paid with your exchange proceeds. They will be able to tailor their guidance to your particular situation.

Got a property with pet odors,

smoke odors, mold mildew?

Call Nano Coating Technologies, LLC

[email protected]

www.nctnh.com

631-672-4655

Hire a Virtual Assistant for These Tasks (&

Supercharge Your Productivity!)

by Marcus Maloney

Time is the most precious resource, and many of us trade time for money, which is a terrible philosophy. Trying to save a buck can cost you more than what you’re trying to save. So how can we accomplish our goals, be extremely productive, and maintain efficiency? The answer is to leverage others. To keep costs low, you don’t even need to hire someone locally anymore. Instead, find a virtual assistant, or VA. This is a mutually beneficial agreement. Pay for services rendered while you work on tasks that are more profitable. That said, let’s break down the most effective ways to leverage virtual assistants.

Marketing Using VAs in your marketing department is highly effective. If you have multiple marketing tasks like I do—be it seller marketing, buyer marketing, agent marketing, graphics, video editing, podcast editing, website design—there are many ways to leverage virtual assistance in this area. It’s good to be able to assign a task and see what you envisioned come to life while exerting little time, effort, and money. Administrative Tasks Administrative tasks are always important, but you have to ask yourself if sending mailers or following up with a tenant is this the best use of

Brenda Douglas 603-801-2283

Michael Perrella

603-645-8128

[email protected]

www.bccu.org

Wil Georges

603-657-5863

www.georgesheatingandcooling.com

your time. I would think not. As an investor, or entrepreneur your most profitable task is closing deals. So this is the area of focus that needs to be a priority. Never could I have imagined the small tasks that were taking me away from completing things far more important. But I was challenged to write down all the activities I do on a daily basis, and I was shocked. Although I was doing important things that needed to be completed, I didn’t need to be the one completing those tasks. One area I am currently looking to utilize a VA is to handle inbound calls. When I have something pressing to do, the calls will be routed to this individual. Someone else may not see the need for this, but personally I can’t help but

to answer a call or email when I receive a notification. I just have to. I know it’s simple enough to turn notifications off, but when I do, I feel like I’m missing something. Knowing I have someone taking care of these tasks in my absence will ease my mind. Here are 10 additional administrative tasks a VA can accomplish for you:

Data entry

Accounting

Bookkeeping

Transaction coordinating

Social media management

Scheduling

Database management

Proofreading

Photo editing

Content writing

Automation How could we ever live without automation? In the 21st century, if it’s not automated in some capacity, it’s often not efficient enough. Here are a few tasks VAs can help you automate:

Emails

Database management

Lead mining

Customer relationship management (CRM) development and integration

Web site and social media updating

Creative/Design Creative/design is another area where numerous

investors use VAs. There are a lot of talented VAs in this field. Here’s how to leverage VAs for creative/design:

Website development

Graphics/art

Logos

Videography/video production/editing

Animation

Audio production/editing

Where to Find Quality Virtual Assistants Finding a network of VAs is not difficult. There are many services offered online. Here’s where to look:

Upwork.com

MyOutDesk.com

Freelancer.com

Tony Joyce

603-882-4244

www.joycecool.com

TimeEtc.com

ReferralExchange.com

Fiverr.com

Zirtual.com The Bottom Line I do want to caution you: you get what you pay for. If you always hire the most affordable assistant, you will be disappointed. Also, be aware that there are instances where managing assistants can create more work. To avoid this, have a

clearly defined job description that outlines the roles, responsibilities, performance measures, outcomes, and deadlines you require. I could go on and on about the tasks VAs can do to make your life a little easier. The possibilities are endless. If you’re looking to streamline certain processes or need a little help with day-to-day assignments, make VAs a go-to resource.

If you own rental property, you need make sure you and your investment are properly protected. The right protection means finding an insurance policy that will cover property damage, liability, and lost rent if the property becomes uninhabitable. As a landlord, your insurance is a bit different than homeowners insurance and typically includes two types of coverage: property and liability protection. According to the Insurance Information Institute, landlord policies generally cost about 25 percent more than a standard homeowners policy to pay for increased protections. Remember that insurance premiums are tax deductible for investors. To better understand the options available to landlords, here is a breakdown of landlord insurance policy options to discuss with your provider:

Created by Nathan Miller

LANDLORD INSURANCE