9 Real Estate Investing Tips for a Better 2018

9 Real Estate Investing Tips for a Better 2018

4 min read
Dave Van Horn

Dave Van Horn is a veteran real estate investor and CEO of PPR Note Co., a $150MM+ company managing funds that buy, sell, and hold residential mortgages nationwide. Dave’s expertise is derived from over 30 years of residential and commercial real estate experience as a licensed Realtor, real estate investor, and private lender.

Experience
Beginning his career in construction and as a Realtor, Dave bought his first investment property in 1989. After years of managing his own construction business, Dave became a full-time real estate investor, specializing in fix and flips, buy and holds, and eventually commercial projects, before moving into note investing in 2007.

Over the past decade, Dave has also invested his time into becoming a connector and educator, who helps others achieve success. He focuses jointly on helping accredited investors build and preserve wealth with his group Strategic Investor Alliance and with general audiences through the annual MidAtlantic Real Estate Investor Summit.

Dave has also shared his strategies and experiences with real estate and note investing via hundreds of articles published on the BiggerPockets Blog and with his acclaimed book Real Estate Note Investing.

Press
Dave has been featured on the BiggerPockets Podcast twice (shows 28 and 273), as well as episodes of familiar podcasts, including Joe Fairless’ Best Ever Show, Invest Like a Boss, Cashflow Ninja, and many others. He also has been a guest of Herb Cohen’s on Executive Leaders Radio, which airs nationwide.

Accreditations
Dave is a licensed Realtor with eXp Realty with CRS and GRI designations.

Follow
Dave’s LinkedIn
PPR on LinkedIn
PPR on Facebook
Twitter @DAVIDAVANHORN

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Last week, I was fortunate enough to be on a panel at my local real estate club meeting, where I was asked to share a few tips with real estate investors on how to be more successful in the coming year. It was fun, and the tips could really be anything somehow related to real estate, whether it was how to save time and money, avoid aggravation, or even increase yields.

The beauty of it was there were four panelists sharing ideas, so I walked away with 32 new tips on everything from designing and staging rehabs, to working with contractors.

The least I could do is share mine.

9 Real Estate Investing Tips for a Better 2018

1. Use tax strategies.

Let’s face it—every dollar saved on taxes is another dollar freed up to invest with. This is one of the main pillars of building true wealth.

There are many ways to save on taxes, whether it’s depreciation, all the write-offs the real estate business can offer us (mortgage interest deductions, taxes, maintenance, etc.), or even becoming an agent to take advantage of unlimited passive losses. My personal favorite is probably investing through qualified plans like self-directed IRA accounts, HSAs, ESAs, etc.

This year in particular, it would be wise to meet for a planning session with your accountant about all the new tax law changes to avoid any surprises. That said, the biggest advantages didn’t really go away, as they stem from things like providing housing, creating jobs, or helping charities.

No one said you have to choose just one either. For example, my buddy’s non-profit owns an apartment building that leases units to disabled veterans. Perhaps you can incorporate a similar strategy into your business model.

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Related: How to Let Your Mission, Vision, and Goals Drive Your Business

2. Be focused and disciplined.

Sure, focus and discipline can be applied to things like sticking to a budget and having your financial house in order, but what I’m referring to is a little more philosophical. As Jim Rohn puts it, “We need to work harder on ourselves than we do at our jobs.” Many of us could use more work on our soft skills—things like time management, sales, negotiations, public speaking, or even just reading more.

3. Set goals.

Earl Nightingale, an author and successful insurance broker, best known for The Strangest Secretir?t=biggerpocke0a 20&l=am2&o=1&a=1603865578, put it best when he asked the question, “Where do you see yourself based on the actuarial statistics for 100 men at age 65?” At the time (1950s), the statistics were that one was very wealthy, four were very well-off, five were still working, 54 men were dependent on others, and 36 were deceased. What he noticed was not so much that 36 of the men were deceased, but that there was a common trait in the top 5%—they all set goals!

4. Plan purposefully.

We should all try to be more strategic in our investing this year. For example, you should know your exits before you invest. Maybe you could plan to purchase your first owner-occupied place with the intention of keeping it as a future rental. As my buddy Jeff Brown always says, “You should have one goal in life, to have as much passive income, as soon as you can, by retirement at the latest, and have as much of it tax-free as possible.”

5. Utilize leverage.

You can leverage many things, like relationships, time, etc. What one thing could you really leverage this year to take your business or your  investing to another level? Maybe it’s utilizing your equity better by incorporating more arbitrage? Maybe it’s accumulating more assets with good debt or eliminating all your bad debt?

6. Source OPM (other people’s money).

I’ve always said that your money list is more valuable than your buyer’s list or contractor’s list. Some of the best ways to raise capital involve teaching it, whether that’s teaching about how to invest or the parameters of your investments themselves. One of the best ways for me to raise capital is to actually teach raising capital. There are probably too many ways to mention, but another favorite strategy of mine is working with charities, or having a charity component to your business.

7. Pay down debt.

If you’re not in accumulation mode and you’re thinking of how to accelerate the pay down of your properties, try to do it in a fashion that considers all the risks, including the use of asset protection and/or estate planning. One of my game plans as I approach retirement is pay off a rental home, move it to a family trust, then when the values and interest rates rise, sell it with owner financing to a real estate investor’s LLC, and place the loan into servicing for collections. Now, I’m cash flowing without the headaches of ownership.

So, whether you do a biweekly mortgage, send in next month’s principal with this month’s payment, or if you’re using a more advantageous strategy like utilizing sweep accounts, there are plenty of ways to shrink your debt service and increase your cash flow.

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Related: 7 Questions to Help Make Your Financial or Real Estate Investing Goals Reality

8. Build in asset protection and liquidity.

Obviously, the use of debt can be an inexpensive form of asset protection, especially property that’s held in your own name. This is why I like using HELOCs on properties with substantial equity because not only does it act as asset protection but gives me liquidity too. Equity loans were off the table for a while but seem to be coming back and in a rising market, with good employment, it may be a good year, with still fairly low rates, to put some of those in place.

Another area we can look at in 2018 is how we can take business or investment risk off the table. Maybe that means pulling excess capital out of our businesses and putting some into more diversified, safer investment vehicles such as other qualified plans, insurance contracts, etc.

9. Have your assets pay your liabilities.

This is probably my favorite. Whether it’s income from my rentals paying for my vacation home or buying a note to have the payment pay the payment on my wife’s car that costs twice as much as what I paid for the note, I just love this strategy.

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Well, no one says this is the complete list of things you could do to make 2018 your best year ever, but I would sure love to hear some of your tips!

Share below.