All Forum Posts by: Jim Wineinger

In order to deprogramme the guru mindset all you need to do is programme in the responsibility mindset.

Personally I think it all began with the "recognition" of the "pysicology" being legimate. This led to the government (and courts) letting people off easy because "its not their fault".

This has led people to the mindset that "its not my responsibility, I have a disability, and because of my disability society owes me".

Now dont get me wrong as there are true disabilities, but most of what the government has classified as disabilities are nothing more than bad choices that if you were forced to take responsibility for we would find those decisions almost dissappear.

This nonresponsible/disability midset has led to those that are able to be taken advantage of the mentality now of "why sould I work so hard when there is easy money availble just for the taking?"

Deprogramme the guru mindset by teaching RESPONSIBILITY for all actions and reactions and reactions.

This is so very true. I believe that the name was created by the guru's to sell their programs, which do not really teach you anything about how to make the most money in RE. It actually only creates a group of people looking for the "easy money" when they bring them more and more deals.

Dont forget that the bird half of the birddog can not exist without the dog half to rely on.

Start by making a list of what type of properties an investor wants and what their "criteria" is.

Do the same thing with people that you know that want to buy.

Then each property that you have an opportunity to get can be compared to the buyers list and the investors list. You do not have to worry about the investors, if you meet their criteria they will buy from you, or anyone else, that is why they are in business. Concetrate on the buyer who will be the end owner. He will be the finicky part of the deal. If you "sell" him on the house you now have to act quickly.

You have a choice to "partner up" with any investor who will gladly give you the money (or purchase it themselves giving you a "finders fee") or you can contact an HML or PML and obtain a loan from them for the short period of time that it will take for you to get your buyer into the home.

A finders fee for putting the investor and buyer together gives you a smaller amount and you will have to do many deals to get to the point where you can do one on your own without the investors assistance.

Going the HML route is more risky because if the buyer backs out you will end up with the property and the payments to make. But if you are successful then you will have more than enough in that short period of time to repay the HML and you are left with the equity from the house (minus the HML cost) in your pocket for the next transaction.

The route that you wish to go should be put down clearly in your business plan so that you absolutely know which road to take and do not get sidetrackked.

If you make a bad decision you will end up paying for it, COUNT ON IT, that is business!

Go down to the local (or main) IRS office in your area and talk to a supervisor. Give them the information that you have on the exact property (owners name, parcel number, ect.). And ask them directly that if you bid upon this property and purchase it what it would take for them to release the lien upon it?

Sometimes you can get one property released for next to nothing no matter what is owed to the IRS. This is totally up to them. They do not have to give you the information, but if you are not confrontational and get up the chain of command to the right person, you can usually make something happen.

Sorry, but your understanding of things is not according to the letter of the law, which is what the courts go by as to what is legal and illegal. Depending upon the state and the actual statue birddogging is not illegal and has been decided that way in the courts. Reference the "old grey fox" senerio if you would like to.

There are several (most states in fact) that have a section in their real estate section of laws that state something similar to "if you do 8 or more deals than you are considered to be "in the business" and therefore are required to have a liscense".

That stipulation alone states that anyone can do a deal or even 7 deals and are not required by law to have an real estate liscense and has been decided that way in court. And I have yet to see any statue that actually says "birddoging is illegal".

By the way, you can secure an interest in any property by having the owner sign an properly worded NCND. This does not give you the right to sell the property, it just gives you the sole right for a period of time to market the property to a potential buyer. The payment required is subject to you bringing them qualified potential buyers and not upon the property being sold. This is selling your services as a bird dog and is not illegal in most states.

Most people who start doing this also have another job and forget that this income will be added to the other income at the end of the year. The regular job will only take out the taxes as if that is your only job at the lower tax rate so you will have to make up the difference between the lower tax rate and the higher tax rate from the income that the higher income self empolyment job produces. You will also be responsible for the employers share of social security taxes as well as those state taxes and liscensing fees and association fees and local (county) business taxes.

This is why I said go to a CPA for assistance in figuring out all those type of expenses, bucause you may be required to file quaterly or even monthly with proof of funds in a depository account.

But dont forget to read some of the great posts about the 50% rule in the beginning of the landlord section as it will give you a clue to some of the other expenses that you may want to think of such as interest expenses during the holding period before you can sell or assign a contract.

I am not saying to not do anything. Far from it. Jump in as soon as you can knowing that you will make some bad decisions in the beginning and be prepared for the consequences of them so you do not end up as one of the many who just disappear.

Just dont forget, that if you do sell it within one year (as mentioned in one of your posts) or rent any space of it out it becomes a rental unit and does not qualify as your main residense and therefore would put you into the catagory of those that have to repay the 8K.

Your statement that there may be homeless people inside worries me a little because even if it burns down, or gets condemned, you have to repay the 8K.

This
includes situations where you sell the home, you convert
it to business or rental property, or the home is
destroyed, condemned, or disposed of under threat of
condemnation.

So please be sure that you check with the local codes personnel about the approiate inspections that have been done. And you might find all the indformation you need about value and current status from the appraisers office and or building inspecters office. These steps should be done before you submit that bid. If you dont get enough information through them then by all means get it from those other sources.

How do you qualify for the 8K firstime homeowners credit? And how will that figure be a part of your number crunching?

If you do qualify, you will not recieve that 8K until you file your income tax return in 2010. And that is only available for someone who occupies that home for 36 months after purchase. So rental units are out!

An excerpt from the IRS site:
Q: When must I pay back the credit for the home I purchased in 2009?

A: Generally, there is no requirement to pay back the credit for a principal residence purchased in 2009. The obligation to repay the credit on a home purchased in 2009 arises only if the home ceases to be your principal residence within 36 months from the date of purchase. The full amount of the credit received becomes due on the return for the year the home ceased being your principal residence.

Q. If I claim the first-time homebuyer credit for a purchase in 2009 and stop using the property as my principal residence before the 36 month period expires after I purchase, how is the credit repaid and how long would I have to repay it?

A. If, within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full amount of the credit is due at that time the income tax return for the year the home ceased to be your principal residence is due. The full amount of the credit is reflected as additional tax on that year's tax return. Form 5405 and its instructions will be revised for tax year 2009 to include information about repayment of the credit.

And the actual wording of form 5405 instructions about 2009 state:

Homes purchased in 2009. You must repay the credit
only if the home ceases to be your main home within the
36-month period beginning on the purchase date. This
includes situations where you sell the home, you convert
it to business or rental property, or the home is
destroyed, condemned, or disposed of under threat of
condemnation. You repay the credit by including it as
additional tax on the return for the year the home ceases
to be your main home. If the home continues to be your
main home for at least 36 months beginning on the
purchase date, you do not have to repay any of the
credit.
If you and your spouse claim the credit on a joint
return, each spouse is treated as having been allowed
half of the credit for purposes of repaying the credit.
Exceptions. The following are exceptions to the
repayment rule.
c If you sell the home to someone who is not related to
you, the repayment in the year of sale is limited to the
amount of gain on the sale. (See item 8 under Who
Cannot Claim the Credit for the definition of a related
person.) When figuring the gain, reduce the adjusted
basis of the home by the amount of the credit.
c If the home is destroyed, condemned, or disposed of
under threat of condemnation, and you acquire a new
main home within 2 years of the event, you do not have
to repay the credit.
c If, as part of a divorce settlement, the home is
transferred to a spouse or former spouse, the spouse
who receives the home is responsible for repaying the
credit.
c If you die, repayment of the credit is not required. If you
filed a joint return and then you die, your surviving spouse
would be required to repay his or her half of the credit.

Lets see now. One deal a month @5K is equal to 60K a year. That should put you in the 35% tax bracket not to mention the SE taxes. This could reduce your income to only 30K per year or 2.5K per month if you put away what you should for those taxes.

In other words you may be forgetting to include your expenses in your calculations. Best see a good CPA for how you might be affected when you add that income to any other income you might also have.

Slow down a little more and think things thru totally to the final conclusion so that you can include everything.

What strings? The only string I know of for the 8K credit is that the buyer must retain the property for at least 3 years.

So you can see that you have this statement backwards. You can not have owned any home for the previous three years and in the next 15 years if you convert the home to a business, rental, or sell it then the whole amount is added to that years taxes due.