The seller had an ‘owner occupant’ policy, so if we continued to use that policy and made any insurance claims, they could be denied!

So it’s important to get a new ‘non-owner occupant’ policy. To facilitate that, we get a Limited Power of Attorney, signed by the seller, authorizing us to take care of the property and to deal with the insurance company and the mortgage company.

Even though the seller’s policy may be paid up for several months, usually we immediately get a new policy naming the seller, the lender and our trustee as the beneficiaries. We then attempt to get a refund from the seller’s original insurer. If the seller’s original insurer wants to write that new policy, fine. But most of the time, the original insurer will simply stonewall our efforts and avoid giving us a refund.

Naming the three beneficiaries isn’t a problem should we need to collect on a claim, since we have the seller’s POA.

All these forms are available in our home study materials and in Bob Talks Forms.
Visit http://www.GetTheDeed.com/BTF for a special offer

For example, you really can’t put that much cash into an IRA each year.
Then, there’s the custodial fees,
Then, the custodial restrictions on what you can invest in.
Then, the potential for making a PROHIBITED TRANSACTION, or dealing with a DISQUALIFIED PERSON.
Heck, the entire IRA can be polluted and there’s no ‘statute of limitations’, so the IRA can be penalized as an astounding rate.

But wait.
Can’t we still find an investment method that minimizes or eliminates nearly all these issues?

Several years ago, we set up an Individual 401(K) Roth Pension Plan.

Sounds complicated, but it was pretty simple.
It’s our company’s program…just me and my wife.
I’m the trustee.

We can invest pretty much as we see fit.
We don’t need a custodian.
We have virtually no tax filing requirements.
We can put away about $45,000 per year into this account…oops, I mean Qualified Benefit program.

You don’t need to know what I did, you need to look at these programs.

Just Google, Solo 401(K) and examine for yourself.

To your continued success,
The Get The Deed folks

Since most folks would be borrowing from someone that’s not officially in the lending business, it should be called Private Lending.

Anyhow, we got scads of questions after the webinar.
Then we presented at the local investors group.

Scads of questions there too.

We’ve got a home study course coming out in about 10 days.
It’s set up for both borrowers of private funds and lenders of private funds.

You see, the ‘baby boomers’ are entering retirement age…so they have money to lend…but they don’t know how to package a deal.

And investors are being deluged with bank owned properties that can be purchased for 20 to 50% Loan to Value…great deals…but the investors don’t know how to package themselves of the deal.

Our materials cover both…and they cover some exciting new ways to finance these deals…like no payments for 36 months!

Stay tuned.  We’ll keep you posted.

Bob

This has been an underhanded  issue ever since it was originally enacted.

 The cost and time-consuming new reporting requirements would have been a
significant burden on real estate investors.

If not for the repeal, real estate owners would have to file a 1099 form with the IRS for every vendor to whom they paid more than $600 in a year.

After the repeal, only non-corporate vendors will need to be sent a 1099…same as old
law requires.

Note that LLCs are NOT considered corporations. 

A 1099 is a form that’s supposed to be sent to the feds and to anyone that you paid over $600 to during the previous calendar year.  There are some exclusions:
For example, you don’t have to send them to Corporations…like Lowes, Home Depot, Sears, etc.
Also, you don’t have to send them where you purchased less than $600 worth of labor or services, like buying $1000 worth of salt but the delivery charge was only $100.
(It’s all snow and ice when I’m writing this!!).

The reason this issue was coming up was that under the ‘Obamacare’ law, everyone was going to have to comply with this reporting.  It was thought that the amount of revenue that wasn’t being reported was quite high and that this 1099 reporting would bring in substantial revenues to help pay for the increased health care costs.  So the increased 1099 reporting was included in the law.
Somehow, small businesses were able to squeal loud enough that the old 1099 reporting rules remained in effect and the newer, expanded rules were squashed.
We heard of a gold dealer that made over 10,000 transactions per week!  It would have been a reporting nightmare.

So in summary, you will issue a 1099 to anyone who provided you with a service $600 and over (and is not an S or C Corporation) at the end of each year.
To get the correct info for the 1099, have the service provider fill out a W-9.
They are available on-line at:
http://www.irs.gov/pub/irs-pdf/fw9.pdf

If a claim is filed, it would be wise to have the trustee listed as the additional insured.  However, the trustee could endorse a check made out to the ABC Trust, by signing ‘Susie Smith, Trustee for the ABC Trust.

I wouldn’t make a big deal out of it, but I would try to have the additional insured listed as the trustee on future policies.

http://www.getthedeed.com/AF-AL_SoftwareUpdate.htm

PS…AutoProfit has always worked with Vista and Windows 7

Congratulations on your graduation.
There sure are a lot of different techniques to become involved in Real Estate Investing.
I’d recommend something that doesn’t consume your time (like 8 to 10 hours per day).
We like the technique of using ‘seller financing’ because we don’t have to invest our own money into the system .
Likewise, we wanted a system that built up ‘momentum’.  You know, work for a little while and continue to reap the benefits for years and years.
We also wanted involvement that let us take off time from our investments and still have a substantial income.
Finally, we didn’t like the idea of dealing with run down properties or homes where there wasn’t any ‘pride in ownership’.
Take a look at our home study course…Profits While We Sleep…it measures up to the goals described above.
Lots of folks have proven that ‘subject to’ is the way to go, especially when dealing with motivated sellers that have pretty homes.

Some pretty good questions.
Here’s the structure that we propose:
For long term holds…set up an LLC.
Then when your LLC is going to purchase a property, set up a land trust for each property and have the seller as the initial beneficiary.  Then the seller assigns his beneficial interest to your LLC.
The deed will identify the name of the trust…one trust per deed and the deed is recorded.
The trust agreement will identify the seller and the assignment will identify your LLC.
The trust agreement isn’t recorded so no one knows that your LLC owns and controls the property. 

The purpose for doing this is to shield the ownership from public view.  Properties in a Land Trust can also avoid probate.

We’re not trying to avoid using insurance or having an umbrella policy, we’re keeping our name out of public view so that no one wants to ‘hassle us’ or ‘shake us down’ because they discover that we’re the owners of many properties.

For example, your 16 year old child gets involved in an car accident. An attorney does a search on you and your LLCs.  He puts a freeze on your checking accounts pending a settlement from you insurance agent.  Woops! That’s a problem.

How about a tenant slips and falls.  Tenant hires one of those attorneys on the back of the magazine that says, “If you’ve been harmed, we’re here to help!”  Same hassle, same freeze on accounts, same shake down.

The effort needed to establish an LLC is minor.  The cost in most states is less than $100 per year (Indiana is $30 per year).  Creating a Land Trust is simple and included in several of our courses…no attorney needed.  Creating an Assignment of Beneficial Interest is a one page document, also included in our materials.
So the effort is minimal.  The advantage is substantial.  The cost is virtually zero.