January 10, 2017

Education & Financial Planning

When most people calculate their Net Worth (Assets – Liabilities), they usually find that their personal home contributes more to their wealth than any other asset they have acquired and the best part was all they had to do was live there and make their mortgage payments. So the question that needs to be asked is :”If your house was the single best investment you have ever done in your life, why don’t you have two and rent one out?”

The answer to this question is often quite defensive and rooted in fear, lack of knowledge or lack of recognition of the possibility. MBN Realty Professionals is here to remove those obstacles and perhaps move you forward towards another terrific Real Estate purchase.

At MBN Realty Professionals, we take great pride in educating our clients and members alike so that we can help them achieve their maximum wealth potential through Real Estate.

There are 4 phases of building wealth through Real Estate:

The first phase is the ORGANIZATION phase which centers around how you should take title and hold on to your properties. The goal is to create the best structure to hold your investments. For example, we need to determine if you should carry the properties in your personal name or use an LLC, S-Corp, C-Corp, Trust, Land Trust or some other structure.

The second phase is usually the fun part and is the ACQUISITION phase. The acquisition phase starts out with determining the market conditions and direction, the best neighborhoods, the desired leverage position, down payment, carrying costs, type of mortgage, type of contract (standard, agreement for deed, option contract, etc.), taxes, inspections, required capital improvements, and renovations, and closing costs… just to name a few of the important items.

The third phase is the holding/MANAGEMENT phase. What is your goal with this investment? How long will you hold on to it. While you are holding it, what is your management structure? What revenue will the property generate and who will ensure that it stays rented and performing to its potential. Who vets the tenants and collects rent? Who looks after the maintenance and repairs as well as the accounting? When do you do a cash out refinance? When do you sell?

The forth phase of the wealth cycle is the DISPOSITION/sale of the property. Will you roll the property into your estate for the benefit of your heirs? How can partnership insurance be used to create liquidity? Will you roll your capital gains into a 1031 exchange to delay the taxes or will you pay the capital gains tax on the sale? There are so many things to decide upon and MBN Realty Professionals and our affiliates will be right beside you guiding you through these choices.

If we have peaked your curiosity, then you should join MBN Investor Training and learn the essentials.