All Forum Posts by: Corey Dutton

These loans are nearly impossible to get.

This may or may not work depending on the unique circumstances of the seller. Most sellers want to get out completely and thus would not likely have the luxury of doing a subject to with you.

Welcome @Curtis Fergus let me know if you need any hard money loans in Utah. We are the best priced hard money around. I also attend both SLREIA and UVREIA and I'm a member of SLREIA. Hope to see you at a meeting next year.

It is not necessary to become an agent. How are you financing your purchases? All cash or loans?

The Blackstone Group, a global investment and advisory firm, has reportedly purchased over $50 billion in real estate assets in 2015. Many real estate investors have been watching Blackstone since it began its buying spree of single family homes in 2011, turning thousands of foreclosures into rental properties. So what other property types were added to Blackstone’s portfolio this year?

- 36 apartment properties consisting of 11,000 total units in various states throughout the U.S.

- 2.8 million square feet of office space, and the tallest office building in Chicago - Willis Tower

- A shopping center REIT with a portfolio of 38 properties

And these are purchase contracts with hefty sales prices too. For example the 36 apartment properties were purchased for $1.7 billion, Willis Tower was purchased for $1.3 billion, and the shopping center REIT was purchased for a whopping $2 billion!!

And it's not just real estate assets that Blackstone has been busy acquiring. Blackstone also acquired a majority stake in a non-bank mortgage lending company this year called Stearns Holdings. It also purchased a stake in PMI Group, a provider of private mortgage insurance to the credit union industry.

Posted by Corey Dutton, Private Money Lender

There are companies that actually want their employees to use Facebook at work. Facebook’s newest reach for another stream of revenue, cleverly named “Facebook at Work,” is a business version of its social media site that is essentially a workforce communication tool. So why would a bank want to experiment with a business version of Facebook?

RBS hopes to leverage its employee’s familiarity with Facebook in a secure, closed medium. According to the Financial Times, the goal of RBS with Facebook at Work is to improve overall communications among the company’s approximately 100,000 employees. During its pilot testing phase with Facebook at Work, the bank saw increased efficiency among teams, faster response times in its customer service, and many other positive results.

And what is the business model behind Facebook at Work? Currently Facebook at Work is free, but paid subscriptions are available that integrate with other business tools. Instead of an ad-based revenue model, Facebook at Work is based on service subscription revenue. Look at the success of so many other SaaS companies that are offering monthly or annual subscriptions for their services and have billion dollar valuations. It’s no wonder Facebook so badly wants to get in the service subscription business. 

Capital gains taxes can take a huge bite out of a real estate investor’s profits on the sale of an investment property. This is because an individual, who has capital gains income, is subject to both federal and state capital gains taxes. Pay attention to the state capital gains tax in the state where a property is located. For example, in California the state capital gains tax rate is 13.3%. When you combine the state rate with the federal rate, a real estate investor could pay as high as 33.3% in capital gains on the sale of an investment property in California!

Real estate investors who want to defer capital gains taxes on the sale of investment real estate may utilize the well-known, “1031 Exchange.” This is called such because it’s under IRS Section 1031. But in order to “exchange” one property for another, and thus defer paying capital gains taxes, the new real estate investment property purchase must meet certain criteria. For buy and hold real estate investors, as long as you've held the property for at least one year, the federal capital gains rate in effect as of 2013 was 15%.

The U.S.’s top marginal tax rate on capital gains, combined with state rates, far exceeds the average rates in the rest of the industrialized world. By proposing to increase taxes on capital income, as suggested in a recent budget proposal, it will prohibit U.S. consumers from saving and will lead to reduced levels of investment activity which will then slow economic growth. By lowering capital gains taxes, the result would be increased investment and economic growth. If you’re a beginner in real estate investing, don’t forget about capital gains taxes, which can take a huge chunk out of your profits! Also, find out the state capital gains tax rate in the state in which your property is located so your estimated numbers will be more accurate.

Yes unfortunately NJ levies a state income tax on your capital gains. A whopping 9%!!! Once you factor in federal capital gains, NJ flippers can be subject to a combined capital gains tax rate of 30.4%!!! Not as high as California's at 13.3 percent, with a combined rate of 33%, but still high. 

As long as you've held the property for at least one year, the federal capital gains rate, as of 2013, was 15 percent. But most flippers aren't holding properties for "at least a year." Not sure if NJ's state income tax is a lower percentage if you hold a property for at least a year? This may be something to ask a CPA in Jersey about.

Yes this can be a factor in a FHA loan decline. Always talk to a mortgage broker friend about these types of things before you make assumptions. Seasoning issues are another things that many people forget to consider when buying properties that they want to later refinance. Every loan type has its own set of requirements so always ask a mortgage broker friend first!

Thanks for your comment @Marcus Svehlak, so true! Sometimes you just go, 'huh?'