Class One The four primary “asset types”: Multi Family, Retail, Office, and Industrial Bank REO departments have typically been the best place to find foreclosures, of late it has been difficult to find these properties. The best opportunity in real estate right now, is finding properties where other people don’t see the value in the building. There are advantages to buying properties in an LLC, it can be the best insurance on a building. $800 a year Comparables cost a brokerage about $7000-$8000 a month Property Taxes and the Interest on Mortgages are tax deductible expenses One way to get a 0% interest loan is to get a traditional 80/20 loan, and then get a home improvement loan for 20% of the value of the home 1031 Exchange Sell 180 Days Later • Money must never be in the hand of the principal. • Identify 3 properties in the first 45 days • Accommodators handle the money and help in the identification process of the new properties • Close one of the three properties in the next 135 Days Home Capital Gains If you live in the house for 2 years and are single, $250,000 in capital gains is tax free If you live in the house for 2 years and are married, $500,000 in capital gains is tax free * This applies to any primary residence 4 units and under Seller Financing is one strategy for sellers to avoid capital gains taxes. Identification Period – 45 Days to find properties – must use an accommodator 135 Days to Close on one of the 3 identified properties Galvanized vs. Copper Plumping – copper plumbing is better because it does not rust, it is much less expensive 70% of all capital expenses (new roof, landscaping, plumbing) can be passed on to the tenants and amortized over 7 years. Class Three Buyer Buyer’s Agent Sellers’s Agent Seller On a $3,000,000 commercial sale, Escrow fee will typical be $2500 to $3500 and are split by the buyer and seller. This fee is paid at closing. Specific Performance Lawsuit – usually filed by buyers when sellers back out of a contract “Lis Pendens” Lean – once filed the principal can not sell his property or borrow against it. Class Four Attorney’s Property Inspectors Environmental Inspectors Phase I Phase II Phase III Roof Inspectors Attorney’s Tax Consultants 1031 Exchange Co Gas Retrofitters 9A Retrofitting (water flow) Title Officers Appraisers Escrow Officers