Ethics (not morals) and Loopholes. Which ones have you used and why?
With all the creative R/E investors here on BP lets chat and share about the loopholes you have used. Maybe loopholes is considered "taboo" to some so lets call them rules that seem to "favor" those educated (My new favorite word) in real estate investing to gain and maintain wealth. Try not to get to technical and explain the reason you used them (the loopholes ummm the rules that is). NOT TO BE CONSTRUED AS LEGAL OR ACCOUNTING ADVICE.... Ugh lawyers
1- I shall start... 1031 exchanges - I was able to defer/eliminate/suppress profits I gained on a property sale of one property to purchase additional passive income properties. (went from one property to 3 and paid not cap gain taxes)
2- Create LLC's to Protect my properties. If I am sued for an issue at one property (slip and fall) as long as I follow the rules of an LLC the claimant would have a very difficult time attaching any compensation award against me or my other properties.
3- Found properties that were being used as residential use properties only in a commercial/mixed use zone (per the dusty zoning map at the townships office) and converted them all to mixed use. It afforded me two streams of income one from the business at the location and one from the residential tenant. Also a huge plus some tenants are employees of the businesses (to fit the rules need to create some professional use mixed use rules) and some businesses I even own. Now the locations even offer signage of my REI business and others as well as well. Some properties went from on revenue stream to 4 different ones...
4- I use the business of REI and created an LLC to defer some of the profits through to family members to help pay for their college as they are "employees" of my REI business and I can deduct (pay for their college) As i can use about 5k a year as education expenses.
5- Since my siblings are employees of my businesses and are in sales and marketing for the business they use a wrapped (lettered in advertisement) company vehicle going back and forth to school and other business related venues. Kills to birds with one stone. Provides them a way to get back and forth to school and advertises the business while driving and heading to venues that are company related. Side note: Oh and lets me know where my siblings are as we get calls often from people saying "I saw your marketed vehicle at such and such PARTY" which happens to be the BOYFRIENDS home you want her to keep away from... Instead of the Small business seminar they were supposed to be attending. LOL but true!
ANYONE ELSE!