Selling an Inherited House With Siblings? Here's What To Know

Are you selling an inherited house with your siblings?

Dealing with the death of a parent or guardian is already tough, but the administrative and legal tasks that go hand-in-hand with settling their estate can make it tougher. If you're inheriting a house with siblings, there are also financial and sentimental challenges to navigate—especially if your brother or sister refuses to sell or has other ideas for the property.

What your loved one intended to be a gift can become a burden if this process isn't handled properly. That's why families opt for selling an inherited home as-is to minimize the timeline and see the financial returns as soon as possible.

Types of Home Inheritances

Inheriting a home may seem pretty straightforward. However, different types of inheritances can impact how you handle the sale of the property: deed inheritance, will inheritance, and trust inheritance.

A deed inheritance works similarly to a life insurance policy. Also known as a "Title by Contract," this applies to mortgages that have a beneficiary or beneficiaries listed to receive the property in the event of the contract holder's death. The beneficiary is listed as a "remainderman."  A remainderman is a person who inherits or is entitled to inherit the principle of a trust once it is dissolved.

A will inheritance is a bit more complicated to manage. This type of home inheritance is what most people envision when they consider an inheritance. The property owner leaves the house to you and your siblings in the will. However, as the will is not a part of the original ownership contract, you must use the will to go through probate proceedings to secure the property. This process delays the sale of the home by months.

Finally, a trust inheritance indicates that you and your siblings are entitled to the home after a certain age. This type of inheritance typically doesn't apply to adult children or siblings.

Determining the type of inheritance you've received will help you understand the timelines and legalities involved. It's worth hiring an attorney to navigate these processes.

Selling an Inherited House? Understanding Inherited Ownership

When you inherit a house with your siblings, state law dictates that you share ownership equally. In addition to sharing the asset, you're also equally responsible for any outstanding liabilities and debts (i.e., the mortgage and property taxes) and for claiming income from the property.

This means that you and your siblings will be equally responsible for paying debts— especially if there's no life insurance to cover the outstanding mortgage— even if you have different income levels. Additionally, you'll all have taxable income from the sale to navigate with the IRS. It's worth getting professional legal and accounting advice as individuals when navigating the process.

It's also important to note that selling an inherited house can't take place without agreement from all of the listed beneficiaries. If a sibling is pushing back, you may require legal intervention before listing the home.

It should be no surprise that handling the administration of dividing debts and income and listing the home is a significant undertaking. If one sibling handles the majority of the work, they are legally entitled to additional compensation for their time from the estate. Again, having legal counsel in place to assist is beneficial.

Dealing with an Outstanding Mortgage

Getting mortgage insurance is one of the best things a homeowner can do to protect their family should death occur— unfortunately, many opt out of this coverage. When mortgage protection is in place, the costs are covered, and the beneficiaries don't have to worry about paying it off.

So what about those cases when the parent didn't have mortgage insurance or life insurance, and a mortgage is still outstanding?

Rest assured that under federal law, a mortgage lender cannot demand the entire mortgage in a lump sum from the beneficiaries of inheritance. In some states, there are even protections in place to give beneficiaries the right to walk away from an inheritance with a mortgage without the bank being able to go after their personal assets.

The process of transferring a mortgage after death is contingent on each lender's policies and procedures. Generally, it's a lot of tedious paperwork, but not too difficult. Inheriting a mortgage does mean you'll be required to make those payments until the house is sold. When the home sells, the profits will be applied to paying off the mortgage before being divided between the beneficiaries.

Home Inheritance Taxes

When you inherit a home, a policy called "stepped-up basis" comes into effect. This policy ensures you only pay gains on the selling profit versus the home's value today rather than the original value. Suppose your parents bought the home for $50,000, and it's now worth $200,000. You sell it as-is for $220,000. You and your siblings would be taxed on the gains of $20,000 rather than $170,000.

It's important to understand this concept, as many parents mistakenly "gift" the home to their children before their death. In that case, you would be taxed for the $170,000 gain.

Selling a House As-Is

Selling an inherited house as-is means that you're listing the property in its current state with the understanding among buyers that you won't be making any repairs. Buyers still retain the right to have an inspection completed, negotiate the price, and access a full property disclosure from the sellers.

The advantage of selling a house as-is is that you won't have to put any time and money into the property before selling. This streamlines the process of paying off the mortgage, potentially getting extra money, and moving on with your lives.

As inheriting a home with siblings can be complex, it's important to hire a professional attorney and consult with a skilled accountant.

Key Takeaway

Spare loved ones the pain of probate and ensure that your assets are distributed exactly according to your wishes by having a professional estate plan put in place. This can be accomplished through a 3-part strategy that involves a Living Trust, Pour Over Will, and power of attornies for making medical, financial, and managerial decisions. By not having a proper estate plan, you are at extreme risk of losing up to 1/3 or more of your estate to probate court and attorney fees. To learn more about Royal Legal Solution's rock-solid estate plan service, visit Estate Planning for Real Estate Investors.

Does Your Real Estate Business Need An Employer Identification Number (EIN)? 

Launching a new real estate business is an exciting and rewarding way to build your path to financial freedom

However, as with any business, you have to pay taxes (womp womp).

And a primary way that state and federal governments keep track of what you owe in taxes is with identification numbers.

One of the first questions you'll encounter when registering your business involves your Employer Identification Number (EIN). In this article, we'll discuss what an EIN is and help you decide if you need to apply for one.

Does Your Real Estate Business Need An Employer Identification Number (EIN)? What is an EIN?

An Employer Identification Number—abbreviated on forms as EIN—is a nine-digit number that the IRS assigns and uses to identify businesses and individuals for taxation. An EIN is also known as a Federal Tax Identification Number.

As an individual taxpayer, you identify yourself with your Social Security Number (SSN). However, as the owner of most business entities, you need an EIN to apply for your business license and file your tax returns.

That's right; we said "most" business entities. If your real estate business is a sole proprietorship or single-member LLC, you can use your SSN to file your taxes.

On the other hand, the IRS requires your business to have an EIN if you do any of the following:

However, even if the IRS does not require your business to have EIN, many investors apply for one anyway.

Why? As you can see from the above list, having an EIN allows you to make more business moves than you are able to make as a sole proprietor. Some banks will even refuse to allow you to establish a business account or apply for business loans or credit cards without an EIN.

Some investors also feel that using an EIN can make your real estate business look more professional in business dealings. In a competitive real estate environment, an EIN can show that you take your new business seriously.

Also, using an EIN allows you to keep your SSN more secure from identity theft. For example, identity thieves can use stolen SSNs to file fraudulent tax returns. All business EINs are considered public information, but if someone looks for credit information, your EIN will be the only identification number they will find.

Does Your Real Estate Business Need An Employer Identification Number (EIN)? Does a general partnership need an EIN?

Although your general partnership may appear to be a simple agreement between two or more business partners, the IRS sees it as a separate business entity. Therefore, all partnerships—including general and limited partnerships—must have a separate tax identification number.

This requirement remains true even if your partnership has no employees. In addition, all partners must report their profits and losses on a Schedule K-1 when they file their personal income taxes.

Does a sole proprietorship need an EIN?

If you have a sole proprietorship with no employees, you may be able to file your business income taxes along with your personal tax return. You will use your SSN as your business taxpayer ID on your tax forms.

However, an EIN for a sole proprietorship is needed when you do any of the following:

Does Your Real Estate Business Need An Employer Identification Number (EIN)? How do you obtain an EIN?

Fortunately, unlike many aspects of launching a new real estate business, applying for an EIN is easy, and it's free.

The quickest way to apply online, using the IRS EIN Assistant tool. The process takes less than 10 minutes, and you will receive your new number immediately upon completion.

If you'd rather go the old-school route, you can download Form SS-4 and send it by U.S. mail to the IRS. The processing time for an EIN application received by mail is four to five weeks, according to the IRS website. Please note: The IRS warns business owners to beware of fraudulent online services that offer to apply for an EIN for you.

What if you already have an EIN?

If you already have an EIN and your business goes through some standard changes, you may be able to keep your old EIN. For example, if you change your business name or move to a different address, you can continue to use the same EIN.

However, you'll need to apply for a new number if the ownership or structure of your real estate business changes down the line.

Short-Term Rental Cost Segregation Study Helps With 2025 Taxes

Rental Property Depreciation is a killer strategy for reducing taxes.

And short-term-rental (STR) owners need a cost segregation study to reclassify parts of their property from a standard 39-year life to shorter lifespans (say, 5 or 15 years.)

Even as bonus depreciation phases out to 0 percent by 2027, a cost segregation study can still maximize your property’s depreciation benefits.

Let’s take a closer look.

How to Use Rental Property Depreciation to Your Advantage

Rental property depreciation can be a game-changer when it comes to reducing taxes for your short-term rental (STR) business. 

By leveraging strategies like accelerated depreciation, you can take larger deductions in the early years of owning a property, freeing up cash flow and lowering your tax bill. Here’s how it works and why it’s worth considering.

What Is Accelerated Depreciation?

Accelerated depreciation allows assets to lose value more quickly in the earlier years of ownership, rather than spreading the deductions evenly over the property’s lifespan.

Why does this matter?

How Does A Cost Segregation Study Fit In?

The IRS typically allows residential rental properties to depreciate over 27.5 years and commercial properties over 39 years. However, not every part of a property needs to follow this timeline.

Look at it this way. When you buy or construct a property, it includes more than just the building itself. Think about:

If purchased separately, these items could be depreciated over 5, 7, or 15 years. A cost segregation study helps identify these shorter-life assets and accelerates their depreciation, giving you more tax savings upfront.

How Does a Cost Segregation Study Work?

A cost segregation study breaks down the purchase price or construction cost of your property into categories with different depreciation schedules. Here’s the process:

  1. Identify short-life components: Examples include electrical outlets for appliances (5 years) or landscaping improvements (15 years).
  2. Reallocate costs: On average, 20-40% of a property’s components can qualify for accelerated depreciation.
  3. Calculate tax savings: By writing off these assets sooner, you significantly reduce your taxable income in the early years.

What’s Involved in a Cost Segregation Study?

A high-quality cost segregation study includes:

When Should You Conduct a Cost Segregation Study?

Timing matters!

How Much Can You Save?

Let’s crunch the numbers with an example:

Imagine you own a short-term rental valued at $800,000.

Without cost segregation:

With cost segregation:

Now, instead of a flat $800,000 depreciating over 39 years, you allocate $300,000 for accelerated depreciation. This leads to significantly larger tax savings in the first year and beyond.

DIY Cost Segregation Studies—Are They Worth It?

While you can identify some short-life assets on your own, working with a tax professional ensures you get the full benefit of a cost segregation study.


There are two main approaches:

Bonus Depreciation is Phasing Out: Act Now to Maximize Savings

Rental property depreciation, especially when paired with a cost segregation study, is a powerful tool for STR investors. By accelerating depreciation on certain components, you can:

Reap significant tax savings in the early years of ownership

As the saying goes, all good things must come to an end. Under current law, bonus depreciation is being phased out:

If you’re an investor looking to take advantage of this tax-saving strategy, now is the time. The sooner you act, the greater your potential savings before bonus depreciation disappears entirely. 

Want to unlock these benefits? Reach out to a tax professional to see if a cost segregation study is right for your property. The savings could be substantial, so don’t miss this window of opportunity to optimize your cash flow and reduce your tax burden!

BONUS: 12 Common Questions About Cost Segregation Studies

1. What Is a Cost Segregation Study?

Every property is made up of a variety of assets, and each one has a different expected useful life. For instance, tile flooring is much more durable than carpet, right? 

Tax law accounts for these differences and guides how capital expenditures should be depreciated. Using the Modified Asset Cost Recovery System (MACRS):

Without a cost segregation study, all assets in a property would default to these timelines, even though it doesn’t make sense for shorter-lived components like carpet. Cost segregation adjusts this, giving you more accurate depreciation timelines—and better tax savings.

2. How Are Building Assets Categorized for Depreciation?

A cost segregation study breaks down a property into individual components, assigns costs to each using IRS-approved pricing guides, and places them into different categories based on their depreciation timelines. Here are some common categories:

3. Is Cost Segregation Worth It For Rental Property Investors?

Yes, cost segregation can offer a significant return on investment! While the cost of the study depends on the size and complexity of the property, the benefits often far outweigh the expense. Beyond accelerated depreciation, cost segregation can:

4. What Types of Real Estate Qualify for Cost Segregation?

Cost segregation isn’t just for office buildings or hotels—it can be applied to nearly all types of commercial and residential real estate, including short-term rentals. Popular property types include:

5. Does Cost Segregation Create New Deductions?

No, cost segregation doesn’t create new deductions. Instead, it accelerates existing deductions by shifting them to earlier years of ownership. This lets you take advantage of the time value of money by getting tax savings sooner.

6. Can I Do a Cost Segregation Study Myself?

While cost segregation may seem straightforward, a quality study requires expertise. A professional will conduct a detailed forensic analysis of the property, breaking out assets, assigning costs, and ensuring compliance with IRS rules. This level of precision is key to maximizing your tax savings and minimizing audit risks.

7. When Is the Best Time to Perform a Cost Segregation Study?

The best time to perform a cost segregation study is right after a property is purchased or constructed. This ensures the study accurately reflects the assets in place when the property is first put into service, maximizing your tax benefits from day one.

8. How Far Back Can You Do a Cost Segregation Study?

You can conduct a “look-back” cost segregation study for properties purchased in previous years. This allows you to claim missed depreciation without amending past tax returns by filing Form 3115 to catch up on deductions.

9. Can Cost Segregation Studies Be Used as a Planning Tool?

Absolutely! Cost segregation can be integrated into your tax planning strategy before a property is purchased or constructed. For example, you can:

10. How Does Bonus Depreciation Relate to Cost Segregation?

Bonus depreciation allows you to take an additional write-off for assets with a class life of less than 20 years. It’s a powerful tool that complements cost segregation, as the study identifies assets eligible for bonus depreciation. Under the Tax Cuts and Jobs Act, the bonus depreciation rate was 100% for assets placed in service between 2017 and 2022. This rate dropped to 80% in 2023 and will phase out entirely by 2027. Despite the reduction, cost segregation still provides significant tax benefits.

11. Is Cost Segregation Useful for Renovation Projects?

Yes! While cost segregation is commonly used for newly purchased or constructed properties, it’s also valuable for properties undergoing major renovations. By quantifying and categorizing assets before they’re retired, you can take advantage of the partial asset disposition (PAD) election to write off the remaining value of disposed assets. Renovated assets classified as Qualified Improvement Property (QIP) may also qualify for accelerated depreciation or bonus depreciation.

12. What Is Qualified Improvement Property (QIP) and How Is It Connected to Cost Segregation?

QIP refers to interior improvements made to nonresidential buildings after they’ve been placed in service, excluding structural changes, expansions, or upgrades like elevators. Thanks to the CARES Act, QIP now has a 15-year recovery period, making it eligible for bonus depreciation. Cost segregation helps identify and categorize QIP assets, ensuring they are accurately valued for depreciation purposes. This is especially beneficial for landlords providing tenant buildout allowances, allowing for faster tax savings on these investments.

The Short-Term Rental Tax Loophole: What Investors & High W2 Income Earners Need to Know About a Popular Tax Reduction Strategy

The Short-Term Rental tax loophole is a powerful tool for high-income earners looking to reduce their tax burden. 

This loophole specifically applies to properties rented out for short periods. Unlike long-term rentals, which are usually classified as passive income, STRs are often treated as active businesses

Platforms like Airbnb and VRBO have popularized this strategy, making it accessible for more people to leverage it for tax savings. As a specialized deduction our clients can leverage on top of standard deductions, it’s one of the ways Royal Legal solutions helps people achieve financial freedom.

Let’s take a closer look.

How the STR Tax Loophole Works

The STR tax loophole allows property owners to classify their rentals as active businesses if they have rental periods averaging less than seven days. By doing so, owners can use the losses from these rentals to offset their earned income. This can be particularly beneficial for high W-2 and 1099 earners, who are subject to higher tax rates. 

This loophole essentially allows you to treat the income differently than passive rental income, giving you an opportunity to reduce your tax burden.

Comparing STR Tax Loophole and Real Estate Professional Status

While both the STR tax loophole and Real Estate Professional Status (REPS) offer ways to use rental losses to offset earned income, there are key differences. 

REPS requires that you spend more than 750 hours and over half your working time on real estate activities. 

For those who earn high W-2 income but can't qualify as real estate professionals, the STR loophole is a great alternative. The STR loophole offers a simpler route to offset income through shorter participation requirements.

If you actively manage your properties and meet certain participation thresholds, we can show you how to leverage this loophole to significantly reduce your tax liability by offsetting a portion of your taxable income through material participation

What is the Material Participation Test for the STR Tax Loophole?

To take advantage of the STR tax loophole, investors need to pass the material participation test. This involves meeting one of seven criteria designed to show active involvement in the rental business. 

Key benchmarks include spending 500+ hours on rental activities, being solely responsible for business activities, or dedicating more hours than anyone else involved in the business. Each criterion offers a unique pathway to proving material participation.

Qualifying for the STR loophole requires more than simply owning a rental property. You need to actively participate in managing the property, keep thorough records, and meet one of the material participation requirements. 

To qualify under the material participation rules, activities that count toward your hours include property maintenance, marketing, communication with guests, and general property management. 

The required criteria for material participation include:

  1. Spending 500+ hours on your STR business.
  2. Being the sole participant responsible for STR activities.
  3. Spending at least 100 hours more than anyone else on the business.
  4. Combining significant participation activities to reach 500+ hours.
  5. Involvement in the activity for 5 out of the last 10 years.
  6. Participating in the activity for 3+ years if it is a personal service.
  7. Continuous, regular engagement in the business.

Meeting any one of these criteria can enable you to use the STR loophole to offset your active income with rental losses. Note: Hours spent on investor activities like arranging financing do not count.

Depreciation for Your Short-Term Rental Tax Strategy

Bonus Depreciation allows property owners to immediately deduct a large percentage of the cost of certain assets. Bonus depreciation is an IRS tax code that lets you “depreciate” the value of certain assets that make up a rental property more quickly than normal.

Instead of getting a tax write off over the useful life of a property, you’ll be able to get a larger deduction in the first year the asset was placed in service. By depreciating the cost of eligible assets up front, you can free up cash flow, reduce the tax liability for your business, and possibly even qualify for a lower tax bracket.

For the STR it allows the taxpayer to take a large depreciation in year one, which lowers their taxable income.

Rental Property Depreciation, on the other hand, enables you to deduct the cost of the property itself over time. This becomes a key strategy for reducing taxes, especially for STRs.

A cost segregation study helps to reclassify parts of your property from a standard 39-year life to shorter lifespans like 5 or 15 years. This allows for accelerated depreciation and can result in significant tax savings. Even as bonus depreciation phases out to 0% by 2027, conducting a cost segregation study can still maximize your property’s depreciation benefits.

Additional Strategies to Reduce Taxes on Short-Term Rental Properties

To further reduce taxes on your STR properties, you should maximize all property-related deductions. You can leverage depreciation not only for the property but also for furnishings and equipment. 

Self-managing your short-term rentals not only helps you qualify for the loophole but also maximizes the time you spend on active participation. By handling the day-to-day operations yourself, you ensure that your hours count toward the material participation requirements.

Meticulous tracking of all STR expenses, such as repairs, utilities, and home office costs, can ensure you take advantage of every deduction. Royal Legal will provide you with a financial team, including a real estate CPA and tax advisor, to optimize your tax strategy.

Properties with Multiple Units

If you own properties with multiple units, qualifying for the STR loophole can be even more beneficial. Managing multiple units means additional opportunities to accumulate hours that count towards the material participation test. 

The rules remain the same, requiring careful management and documentation of each unit.

When to Avoid Qualifying for the STR Loophole

The STR loophole is not always the right fit for every investor. If you have low or moderate income, or if you do not have the time to meet the material participation requirements, it might be best to explore other strategies. 

Overcommitting to the loophole without the ability to follow through could lead to noncompliance issues with the IRS.

Challenges & Considerations: What's Changing About Depreciation for STRs?

The depreciation rules for STRs are changing, particularly the phasing out of bonus depreciation. By 2027, bonus depreciation will be reduced to 0%, limiting the immediate tax advantages previously available. 

This change requires careful planning to ensure compliance and to maximize benefits before the phase-out. Staying up to date on tax laws and consulting with a CPA are crucial for navigating these challenges effectively. Royal Legal will guide you through the process.

Final Thoughts: Tax Strategies for Short-Term Rentals

Short-term rentals offer substantial tax advantages if approached strategically. The loophole provides opportunities for high-income earners to offset their active income, but it requires careful planning and adherence to IRS guidelines. Engaging with knowledgeable financial professionals and using property management tools can help you stay compliant and capitalize on the available benefits. As the landscape of STR tax strategies continues to evolve, staying informed and adaptable is key to long-term success.

Seeking Anonymous Company Ownership? Here's How To Hide Your LLC

The main reason you might want to know how to hide ownership of a company is to prevent lawsuits.

I'm going to talk about the concept of anonymity, and one of the most effective tools for maintaining your status as a real estate investing ninja is the Anonymous Trust. When set up correctly, the anonymous trust can be extremely effective at hiding ownership of your corporation/LLC—which in turn prevents you from being sued.

Here are three simple steps you can follow to hide company ownership and prevent lawsuits.

Step #1: Form an Anonymous Trust For Your Business

The Series LLC reduces your liability exposure, which effectively limits the potential damage a lawsuit can do to you. What it doesn't do is stop the lawsuit from happening in the first place. On the other hand, an anonymous trust can. If you truly want to make your company litigation proof and protect your assets, you need an anonymous land trust.

The probability of a lawsuit happening is based on three separate components: legal, factual, and financial.  An anonymous trust will attack each of those motivating factors. What this does is reduce the chance of a lawsuit happening in the first place.

Step #2: List Your Anonymous Trust as a Member of Your LLC

Yes, believe it or not, you can do that, at least in America. (You have several options when it comes to structuring your business assets.) Anyway, this tactic targets the financial component of a lawsuit.

Why? 

Because lawsuits only happen when a plaintiff believes they have a reasonable case for seizing assets to cover damages. If there's nothing they think they can seize from you, they won't sue you. 

The anonymous trust structure enables you to hide company ownership by listing your company as a member in your LLC’s Articles of Incorporation. Another advantage of an anonymous trust is that you don't have to file it with the state. This means the people who want to sue you won’t be able to access your ownership information in the public records.

There will be nothing to associate the assets with your name, shielding you from potential legal action.

Note that you can use this strategy with any type of LLC, including the Series LLC.

Step #3: Allow Uncertainty to Work Its Magic

People sue you because they want your money. Most of the time the people suing you have little to no money in the first place. And if they don't have enough money they can't pay a lawyer to sue you.

People usually get around this obstacle by offering their lawyers part of the settlement. This means it's up to the lawyer whether or not you get sued.

If a lawyer is uncertain about whether you own assets worth anything, they won't waste their time trying to sue you. After your anonymous trust is in place it will be next to impossible for someone to determine what you own. 

No lawyer is going to spend months or years trying to figure out what you own, period. I would know, I'm an attorney myself.

I hope you enjoyed this article. If you want to hide company ownership, make sure you do it right. To learn more about setting up an anonymous trust, visit our Land Trust hub or take our investor's quiz and find out if engaging with us is a good option for you.

Land Trust Mortgages: How To Borrow Money Using a Land Trust

I’ve been harping on for years about the importance of setting up a land trust for your real estate investments. Today I want to touch on one of the issues many real estate investors struggle with – how to borrow money using a land trust.

There are times when you may want to borrow money to make improvements or preserve assets held in a land trust. There may also be a need to refinance the property at some point. You need to make sure that the trust has the power to borrow money. It may not always be the case and this is normally covered in the trust deed.

Let me get right into the mechanics of it all.

What Do I Need to Get a Mortgage Loan Using a Land Trust?

The first step you’ll need to take is to have the trustee sign the mortgage or note. However, you will need to apply for the loan and sign the guarantee or the note since the trustee won’t be signing personally.

Alternatively, if you have your property in a land trust already and want to borrow money against the beneficial interest, then the lender will need to serve a Notice of Collateral Assignment on the trustee. The trustee will then write an acknowledgment of the assignment.

When this happens, the trustee is no longer able to transfer title of any property held in the trust or encumber or mortgage the property without the lender’s written consent.

Here are the five things the lender will be looking for when granting the loan:

  1. The lender will need to review the trust instrument.
  2. The lender will need to confirm the grantor and trustee identities.
  3. The lender will need to establish whether the trust grants the trustees power to borrow money and pledge or encumber trust assets.
  4. The trustees may be required to sign a trustee certificate reciting some key terms of the trust and confirming the authority of the trustees to take out a loan.
  5. The bank will need evidence that the property is actually owned by the trust. For this, you will be required to provide the deed on record for review.

If you’re seeking to obtain a loan against trust assets, you need to consult with an expert trust administration attorney. You do not want to take any action that might potentially harm the assets of the trust. 

You may also be interested in our article that answers the question, "Can I take a loan from my S Corp?" 

Syndication: SEC Compliance

Syndication SEC compliance involves various rules and regulations investors must follow. Real estate syndication put simply is a group of investors pooling their money together. They use the capital to purchase and manage real estate that is usually beyond their ability to acquire independently. 

The investors form a legal entity like an LLC to buy and manage the real estate. Investors receive profit in proportion to their investment from the following: 

Watch the Royal Investing video featuring securities attorney Stephen Slawinski who specializes in helping real estate sponsors raise capital and stay compliant with the SEC. 

What Is SEC Compliance?

The U.S. Securities and Exchange Commission (SEC) sets regulations and laws that investors must follow. The laws protect investors from fraud and ensure that publicly traded companies provide accurate financial information. Companies file reports with the SEC to demonstrate their compliance. 

Rules And Regulations For Syndicates Under The SEC

The SEC requires syndications to comply with laws concerning securities selling. Syndications remain compliant by following the regulations controlling private placements found in SEC Regulation D

Rules And Regulations

Strict rules control a syndication's organization and property transfer. Additional SEC rules for real estate syndicates include the following: 

Syndication: Securities And Non-Securities 

Securities represent financial value and can be traded on a public exchange: stocks, bonds, and options. Non-securities are investments not typically sold on a public exchange, like art and some real estate.

The syndicate's structure determines if your investment is a security or a non-security:

The significant difference is that securities must follow SEC regulations, while the same rules do not bind non-securities.

SEC Compliance: Registration, Exemptions, And Deal Structures

Four acts affect syndications. We'll discuss each and how to avoid the implications of each act. 

Securities Act Of 1933

Under this law, it's unlawful to sell or offer to sell a security without registering the security with the SEC unless the security is exempt from registration. 

Avoid the implication by:

Exemptions under Regulation D, Rule 506(b):

Exemptions under Regulation D, Rule 506(c):

Securities And Exchange Act Of 1934

This law makes it illegal to "effectuate" the sale of a security or accept compensation for the sale of a security as an unregistered broker-dealer. 

The implication is difficult to avoid because selling interests to your company or passive investors is probably "effectuating" the sale of a security. 

Exemptions to this rule appear in Rule 3a4-1.

The Investment Company Act Of 1940

This law stipulates that a company "engaged … in the business of … trading securities" must register with the SEC. 

Avoid the implication:

The Investment Advisor Act of 1940

The law dictates that acting as an investment adviser is unlawful without registering with the SEC. 

Avoid the implication with a direct ownership interest in real estate.

Exemptions:

SEC Compliance: Syndication Structure

JV Structure

Property owned by

 The structure might not be a security if each partner has an active role. If it isn't a security, no other security laws apply. 

Basic Deal Structure

Property owned by 

A basic deal structure helps with the acts in the following ways:

Watch the video to learn more about the Fund of Funds structure.

SEC Compliance Key Takeaways

Deal structure impacts SEC legal compliance requirements. The SEC has a specific definition for what constitutes security and non-security. When investing in a real estate syndicate, you'll want to:

Ready to learn more about real estate investing? Join Royal Investing for weekly meetings to level up your investing education.

Compound Your ROI With The 1031 Exchange

Are you a real estate investor looking to increase your return on investment (ROI)? A 1031 exchange may be the answer. 

1031 exchange, a like-kind exchange, is a tax deferment strategy that allows investors to swap out an investment property for another and defer capital gains or losses. Instead of paying taxes on the sale of your property, you can reinvest the proceeds into another property and continue to compound your ROI.

At our Royal Investing Summit, Dan McCabe, Co-founder and President of Exchange Resource Group, shares his 40 years of experience in handling 1031 exchanges and how they work as an investment strategy. 

In this blog post, we'll discuss what a 1031 exchange is, how it works, and what rules you need to follow to take advantage of this powerful tax deferment strategy. 

How Do You Defer Capital Gains Tax With A 1031 Exchange?

When selling an investment property, a 1031 exchange allows you to defer capital gains tax by reinvesting the proceeds into a similar type of property:

What Are The Rules And Regulations For a 1031 Exchange?

A 1031 exchange, a like-kind exchange, is a tax deferment strategy that allows investors to swap one investment property for another and defer capital gains taxes. 

Here are the rules and regulations of a 1031 exchange:

Imaginative Ways To Use A 1031 Exchange

There are more imaginative ways to use a 1031 exchange than a traditional one.

Reverse 1031 exchanges, Reverse Improvement Exchanges, and Reverse Construction Exchanges are all viable options that can help you maximize your gains while minimizing your taxes.

Reverse 1031 Exchange

A Reverse 1031 Exchange is a tax deferment strategy that allows real estate investors to trade one investment property for another without incurring capital gains. 

Here are important points to consider when looking into a Reverse 1031 Exchange:

Reverse Improvement Exchange

A reverse improvement exchange is an advanced exchange that allows taxpayers to acquire their intended replacement property before selling their current property.

It combines a reverse 1031 exchange and an improvement 1031 exchange. 

Here are some key points about this type of exchange:

Reverse Construction Exchange

A reverse construction exchange is a combined strategy that allows an investor to acquire their replacement property first and improve it before selling the relinquished property. 

It involves the following steps:

Key Takeaways

A 1031 exchange is an excellent tool for real estate investors to defer capital gains tax and free up more capital for investment in the replacement property. It's essential to remember that exchanges must be appropriately structured and adhere to all IRS rules, but when done correctly, they can provide significant tax savings.

For those looking to learn more about 1031 exchanges, Royal Investing Group Mentoring offers resources and guidance on how to take advantage of this powerful tool. Join us and start taking control of your financial future!

Connecting Private Lenders With Borrowers

Investing in real estate can be challenging. It's a harsh industry, especially when it comes to securing capital. Connecting private lenders with borrowers may be a solution for real estate investors. 

Private lenders aren't for everyone. But, in certain circumstances, they may be right for you. Chris Naugle, Founder and Owner of The Private Money Club, explains in a Royal Investing Virtual Summit how his company and other private money lenders connect with borrowers and provide them the capital and solutions they need. 

What Are Private Lenders?

Private money loans, more commonly known as private money, are loans offered by a private organization or even a wealthy individual to another person or company. These individuals and organizations providing such financial help are called private money lenders.

Private lenders allow you to secure funds outside traditional banking or lending qualifications. However, due to relaxed regulations, these loans can be risky for both parties, so due diligence is required. 

Who Can Be A Private Lender?

Since a private lender is anyone who has money to give you that isn't a bank, a private lender can be any of the following: 

If you're looking to buy a property, attend to much-needed renovations, or prep a home for reselling- private lenders might be the perfect fit.

How Do Private Lenders Evaluate Borrowers?

Guaranteeing a solid return on investment is of the utmost importance - and that means mitigating any risk involved. Before providing capital to potential borrowers, they analyze various factors such as:

A Borrower's Choice: Private Lenders vs. Banks

Why would you choose a private lender over a bank? 

Banks and credit unions typically don't lend to rehab projects or other investments for flippers - the property must be in good standing to receive conventional financing. That might kill a lot of deals for you. Private lenders are usually more than willing to fund these activities.

Advantages

In most cases, private lenders have lower borrower requirements than a bank. For instance, you may enjoy the following:

There are also some drawbacks when you work with a private lender that you should know. 

Disadvantages

With a traditional lender, you can secure a 30-year mortgage. Private lenders are flexible but usually want their money back sooner than 30 years. 

Another issue is that you may have to pay a higher interest rate than what you'd find at a bank.  

Before taking out a loan, it is essential to vet the source of funds and ensure that those funds are legitimate. Typically, these lenders comprise several individual investors who expect a return on their investment; thus, verifying that your loan won't abruptly collapse is critical for borrowers.

How Do Borrowers Connect With Private Lenders?

Understanding the kind of private lender you seek is integral to beginning your search. Finding the right person may be time-consuming. But don't worry - there are a few approaches out there that can help you connect with a private lender. 

Use your network

Establishing connections through networking is a reliable method for locating private lenders. Use it to find accredited investors, individuals, and financial institutions who can provide your funds.

Look for places you can grow your network:

If you're open to seeking out private individuals, your search options become almost infinite.

Google private lenders

If you're searching for private lenders near you, it's as easy as Googling them. Additionally, dedicated sites such as Private Lender Link can help to locate the right lender for your needs quickly.

Keep in mind, however, that lenders obtained through these searches will most likely receive more offers than lenders found organically. 

What If I Want To Be A Private Lender?

Private lending may be a solid strategy if you're interested in earning passive income. As opposed to investing directly in real estate or business ventures, which require purchasing property and managing the day-to-day operations of a company, private lending allows you to reap the rewards without any of these hassles.

You'll need the required capital to become the bank for borrowers to turn active income into passive income.

Key Takeaways

Connecting private lenders with buyers is a people business. As a real estate investor, you must massage your network to find a private lender. You'll see distinct advantages of working with a private money lender. 

Some of those include: 

There are drawbacks, so you must do due diligence when looking for a private lender. 

Do you want to know more about connecting with private lenders or learn how you can become a private lender? Sign up for our FREE Royal Investing Group Mentoring, where we cover all types of real estate investing topics. 

Digital Marketing Tools for REIs

The internet has revolutionized business, especially for real estate investors. Web presence, SEO, and Google Ads are handy and powerful digital marketing tools that you must use to stay relevant in an increasingly competitive field. 

Dr. Adam Gower builds best-in-class digital marketing platforms for real estate developers interested in online syndicated deals. He stopped by and shared his expertise on generating leads through your web presence, optimizing your homepage, and how SEO and Google Ads can generate business. 

What Is Online Real Estate Syndication?

Online real estate syndication is a process of pooling money from individual investors to purchase and manage income-producing real estate. Private investors can participate in the deal by buying shares in the entity that owns the property, typically organized as a limited liability company (LLC) or limited partnership. The entity will manage the investment, collect rent, pay expenses, and distribute profits to the investors based on their ownership percentage.

The syndication structure allows real estate owners to raise capital from multiple sources without giving up complete property control. It also allows individual investors to diversify their portfolios by investing in professionally managed real estate assets with high potential returns.

Why Does Digital Marketing Matter To Real Estate Investors? 

Digital marketing starts with your online presence. Crafting a professional online presence through your website presents more than just an opportunity to publicize your brand and gain trustworthiness. It also gives potential investors easy access to discover what you offer - all from the comfort of their homes.

A marketing funnel is a visual representation of the customer journey, from first contact with you all the way through to purchase. It comprises distinct stages, each representing a step in the process. You can use different tactics and strategies at each stage in the funnel to draw customers further down until they reach the conversion.

Quality content that addresses a customer’s pain points can effectively draw customers through the funnel. Content should not just focus on selling but on educating and providing solutions to your potential investors. High-quality, informative content will draw people in and eventually lead them to become investors.

How Does SEO Impact A Real Estate Investor?

SEO stands for Search Engine Optimization, which is optimizing a website to increase its visibility and traffic from search engines. 

By using a combination of on-page and off-page optimization techniques, such as: 

Keyword Research

Keyword research is the process of finding and analyzing keywords that are relevant to your business or industry. 

This process involves conducting keyword searches using tools such as Google Adwords, Keyword Planner, and other keyword analysis tools to identify popular search terms related to your business.

Link Building

Link building is acquiring links from other websites to your website. The links help search engines understand that your website is reputable and authoritative in its industry, resulting in higher rankings on search engine result pages.

Build links through:

Content Optimization

Content optimization is the process of optimizing existing content for search engines. Optimizing ensures that content has relevant keywords, is well-structured, and is optimized for search engine crawlers and readers. 

Content optimization also ensures the website is easy to navigate and provides a good user experience. Additionally, you should regularly update content with new and relevant information to keep readers engaged and boost visibility. 

SEO helps websites rank higher in search results. This increased visibility brings more potential customers to the website, increasing revenue.

Real estate investors can benefit from SEO by improving their visibility in search engine results and reaching more potential customers. 

Real estate investors can increase their website traffic and target specific audiences by optimizing their websites for relevant keywords related to their industry. Link-building and content marketing strategies can also help real estate investors build authority among potential partners. 

Why Are Google Ads Important To Digital Marketing?

Google Ads is a paid advertising platform that enables businesses to create and display product or service ads on search engine result pages. With Google Ads, companies can have their ad appear at the top of search results when customers search for relevant keywords, allowing them to reach more potential customers. The ads are an effective way to drive more traffic and leads to your website. 

Google Ads is an essential tool for real estate investors because it allows them to reach a wider audience and drive more qualified leads. 

With Google Ads, investors can target potential buyers with relevant keywords, allowing them to capture the attention of motivated partners likely to convert. 

Digital Marketing Key Takeaways

The internet has revolutionized how real estate investors reach potential buyers, tenants, and sellers. It has changed the game by:

Web presence, SEO best practices, and using Google Ads are potent weapons in your marketing arsenal. The people leveraging those tools are the most effective in an ever-changing real estate investing landscape. 

Do you want to learn more about best practices for real estate investors? Yes! Join our Royal Investing Group Mentoring to unlock the secrets to success from real estate investors like yourself.

Buying Real Estate Notes To Build Wealth

Are you a real estate investor who likes the idea of building wealth? Buying real estate notes might be right for you. 

We invited Paige Panzarello, CEO of Cashflow Chick, to share her expertise about building wealth with notes when inventory is low, and property prices are too high for any good deals. 

Panzarello draws on her 20 years of experience and $150 million in real estate transactions completed to explain the fundamentals of buying real estate notes and how they generate profit. 

Keep reading to learn more about building wealth by buying real estate notes. 

What Does Buying Real Estate Notes Mean?

To understand what buying real estate notes means, you need to understand what a note is. 

What Are Notes? 

Notes are a promise to pay or a debt instrument. The note's debt can be secured or unsecured: 

Also, notes can either be performing or non-performing:

Advantages

An advantage of buying real estate notes is that you become the bank

Another advantage is that by not buying hands-off investing--you're not a landlord. Instead, you own the promise to pay, not the property.

What Types Of Notes Should I Buy?

The type of note you buy will depend on your risk tolerance and investing strategy. But, Panzarello prefers to invest in non-performing real estate notes. 

Why Non-Performing Notes? 

Non-performing notes provide good value for a real estate investor. When you buy a non-performing note: 

How Do You Find Deals Buying Real Estate Notes? 

Building a network is the best way to find deals for buying real estate notes. 

Through your network, you may find deals buying real estate notes from the following: 

How Do You Make Money Buying Real Estate Notes?

How do you make money buying real estate notes? Usually, you'll buy the non-performing note at a discount on the unpaid principal balance. 

The following example uses figures for educational and illustrative purposes only. The figures are not a guarantee of performance. 

Here is an example of how you might make money buying real estate notes: 

Since it's non-performing and the person who has the note is not paying anymore, you can buy the note at a discount. 

In this instance, let's suppose that the discounted note price is 50% of the current market value of the property: 

 You are all in for $45,000 but have equity of $35,000. The equity is the home's current market value minus the cost of buying the note: $80,000 CMV - $45,000 note = $35,000.

But how do you tap into that equity? 

The way to make money buying real estate notes is through one of the many flexible exit strategies. 

4 Money-Making Exit Strategies For buying real estate notes

Foreclosure 

When you invest in notes, you need to be aware of the difference between judicial and nonjudicial foreclosure states.

In general, you want to avoid judicial foreclosure states because they take more time and money to foreclose. 

Foreclosure is usually the last resort, but since you're in the first position: 

Here is an example of how foreclosure may work out. 

Short Sale

A short sale usually takes 3-6 months. An example of a short sale looks like this: 

Deed In Lieu Of Foreclosure

This exit strategy generally lasts 3-6 months. You get the property instead of foreclosing, which acts as complete repayment of the loans. 

Once you have taken possession of the house, you can:

Establish Reperforming Loans

Getting the loan reperforming can take between 6-12 months. You can use $120,000 to work with borrowers to get them reperforming on loan by forgiving some debt to get them performing. It makes sense because you were never going to see that money anyway. 

You might give the borrower a $20,000 discount: 

You make money by:

Or, when they become performing notes, you can sell them to a performing note investor. 

Key Takeaways

As with all deals, buying real estate notes requires you to perform due diligence

The fundamentals of buying real estate notes include the following: 

Do you want to learn more about real estate investing? Join Royal Investing Group Mentoring, where our expert investor community discusses opportunities and real estate investing best practices.

Why Residential Assisted Living Investing May Be Profitable For You

People age. And as those people age, they will need a place to call home. Our aging population’s demand for homes may make residential assisted living investing an attractive addition to your portfolio.

As Isabelle Guarino-Smith, COO of Residential Living Academy, notes, 76 million Baby Boomers are entering the marketplace for assisted living. As a result of the Boomers' entrance into the market, Guarino-Smith argues that now is an ideal time to invest in residential assisted living.

The world is in flux, but the more things change, the more they stay the same. 

People will still get old and still need a place to stay. Consider this, the fastest growing demographic is people aged 80 and older. We have better medicine, technology, and healthcare. And it's making people live longer.

Those longer-living people may need some help with their day-to-day life or medical attention to preserve their quality of life. Our aging mothers and fathers still need a safe place to call home. 

In this article, we'll discuss the following: 

Residential Assisted Living Investing: Marketplace Truths

A residential assisted living is a group home that helps with the activities of daily living for the seniors who live there. 

It's not:

Instead, a RAL is a residential home in a single-family home residential neighborhood. Typically, an owner or operator renovates these homes with age-appropriate furniture and furnishings, especially the rooms and bathrooms. 

Common Myths and Misconceptions

Ways For You To Get Involved In Residential Assisted Living Investing

There are three primary ways you can get involved in residential assisted living investing.

#1 Own The Real Estate And Lease To An Operator

You would be known as a preferred real estate provider. You would need to purchase a home, renovate it, and get it licensed and ready for the operator. 

Some advantages of going this route include the following: 

#2 Own The Real Estate And Be The Operator

You work in the home and operate the business. Being an owner-operator means you'll help each senior with their day-to-day activities, including but not limited to: 

You can save money by doing this, but you will invest a lot of sweat equity. 

#3 Private Lending Or Partner

As a private lender, you provide the capital for an interested borrower who wants to operate a residential assisted living facility. Private lending is the most hands-off approach to breaking into the RAL market. 

Residential Assisted Living Investig: Model ROI

For these education examples, we will use an assisted living facility's average monthly cost of $4,500. For illustrative purposes, we'll use ten residents, which is typically the maximum number of residents that you can house:

________

For a more detailed breakdown of how much money you have the potential to make, check out Isabelle Gaurino-Smith's in-depth discussion of different earnings models.

Key Takeaways

There is a silver tsunami upon us composed of aging Baby Boomers. More than 76 million boomers are aging and are looking for places to live that are conducive to their lifestyle. 

One possible place that boomers will call home is residential assisted living (RAL) homes. 

RAL properties have several advantages that may make you want to include them in your investment strategy: 

The demand appears to remain strong as people live longer, so now may be an opportune time to invest in the emerging RAL marketplace. 

Do you have questions about how to get started in residential assisted living investing or real estate investing in general? 

Join our FREE Royal Investing Group Mentoring, where we meet weekly to discuss the nuances, challenges, and solutions involved with your real estate investments. 

Deal Vetting for Real Estate Investors

Deal vetting in real estate is essential to any potential investor's due diligence. The process ensures that the investment decision follows sound economic principles and an understanding of its risks. 

It can also help uncover hidden issues or opportunities to negotiate better terms.

By taking time to vet a real estate deal carefully, investors can make sure they make informed choices to protect their financial interests. It also helps to ensure that any purchase aligns with their long-term objectives.

What Is Deal Vetting?

The process of vetting a real estate deal involves an in-depth analysis of the property, its current condition, and any potential red flags. 

This due diligence includes assessing factors such as:

It also involves researching the seller's history and scrutinizing financial statements to ensure everything is accurate.

Ultimately, the goal of vetting a real estate deal is to identify potential risks or opportunities associated with the purchase. By doing so, investors can ensure they get the best possible deal and avoid surprises down the road.

Importance Of Knowing the Local Market

When vetting a real estate deal, it is essential to understand the local market. Deal vetting includes researching the area's economic trends and demographic makeup to understand the potential future value. 

Additionally, understanding the nuances of local zoning laws and regulations can give insight into what kinds of projects are allowed in the area.

Significance Of An Area's Economic Trends

Researching an area's economic trends involves looking at factors such as:

You can find this information in government reports or other published resources. It is important to note that trends tend to move in cycles, so it is important to analyze potential future value over a more extended period.

By researching an area's economic trends, investors can better understand the potential future value and compare it to the asking price. This due diligence helps ensure the deal is reasonable and worth pursuing.

How Do I Recognize A Good Deal?

The vetting process can help identify a good deal. As previously mentioned, due diligence should include researching the area and analyzing potential future value.

It is also important to thoroughly inspect the property for signs of structural damage or other issues that could affect its value. Additionally, investors should review contracts closely and negotiate better terms.

Deal Analysis

It is also essential to consider the cost-benefit of a real estate deal. This means looking at the potential return on investment (ROI) and weighing it against the risks involved. 

Factors such as market volatility, tenant turnover, legal fees, and property maintenance can all affect an ROI.

Deal Vetting Key Takeaways

Real estate investing carries risk different from other investments, so extra care is needed.

The importance of due diligence in real estate investing, specifically rental properties, should not be underestimated. The objective is to have a positive cash flow each month and own a property that will rise in value over time.

One unfortunate decision or mismanaged rental property could cost you instead of contributing to your wealth. By doing proper research upfront, you increase the chances of achieving your goals significantly.

If you want help vetting a real estate deal, join Royal Investing for free group mentoring. Our experienced team can provide invaluable advice and guidance to help you make the best investment decision.

Resourceful Investor's Guide To Structuring a Short-Term Lease

You've decided to get into the short-term rental industry. As a result, you need to know how to structure a short-term lease. 

A whole host of situations and challenges come with this type of property. One of the primary challenges is the level to which your state regulates the industry. There are many laws and regulations that may apply to your city. 

As with any real estate agreement, you want to protect yourself with an enforceable contract containing legally binding terms. Your agreement must encompass the landlord's and tenant's rights and outline essential details concerning the local occupancy laws. 

To help you, we will review the 9 essential items you should include on a short-term lease agreement.

What is a short-term rental?

A short-term rental is an investment property that is rented for a short time. These properties, sometimes called vacation rentals, are an alternative to hotels. They have seen their popularity rise since AirBnB emerged in 2008. 

Owning a short-term rental comes with some distinct benefits, including the following: 

Before Creating A Short-Term Lease, Do Your Research 

First, you must ensure you can have a short-term rental in the property's location.

Local laws

As a real estate investor, you must check local laws and regulations. Laws vary between jurisdictions: in some places, there are no regulations, and in others, short-term rentals are outright banned. 

Protect yourself

Short-term rentals have more tenants shuffling through them. An increase in the number of people coming and going on the property increases your potential liability. 

We've long championed the usefulness of an LLC to shield yourself from liability; without an LLC, you may be liable (sued) for incidents that occur on your short-term rental. And a lawsuit can be costly. 

In addition to an LLC, it's a good idea to work with an attorney to create a short-term rental agreement. A legal professional can advise on safeguarding yourself from potentially problematic tenants who steal from or damage your investment property. 

Screen your tenants 

Screening your tenants is incredibly important. You will run into fewer issues and save time and money if you thoroughly vet your tenants. Make things easier on yourself by having a platform that lets you directly communicate with your tenant. 

After you've done due diligence, you should establish a short-term lease agreement. 

Short-Term Lease Agreement: The Essential Ingredients

As a real estate investor, you may ask yourself, "what should I include in my short-term lease agreement?" The answer depends. Local laws and regulations may stipulate precisely what you have to include, and the rules may apply at the granular level. 

In general, every short-term lease should have the following 9 elements included.

#1. Property details

The first item on a short-term lease should be a clear description of the property. Your description should include every item inside your vacation rental. Also, be direct and to the point, and do not leave any room for misinterpretation or ambiguity. 

#2. Tenant information

Your short-term lease agreement must include relevant information about the tenant. At a minimum, you should have the following: 

#3 Tenancy period

The tenancy period is a critical portion of the lease agreement. The length of the stay starts on the day (down to the hour) that the tenant enters your rental property. The period ends the day (and hour) the tenant departs. 

Suppose you fail to list the tenancy period. In that case, you may run into severe legal issues-like a tenant refusing to vacate the property.

#4 Payment

This potion should include everything that has to do with payment. You will want to include the following: 

#5 Tenant duties

You must define the tenant's obligations in the short-term rental lease. The duties might include maintaining the property and paying the agreed-upon amount at the agreed-upon time. 

#6. Cancellation process

This section explains how the tenant should cancel the rental agreement. Typically, you'll want a written cancellation request from your tenant. 

#7. Amenities 

You can use this section to add more details and information about the property and what you have available. You can include information about AC, TV, and a pool. 

#8. Additional clauses

Consider including additional clauses that limit your tenant's acceptable activities. A standard additional clause is the prohibition of pets from entering the premises. 

#9. Signature 

Your contract is legally binding only if both parties sign it. Consequently, you need to leave room for signatures. 

Key Takeaways About Crafting Your Short-Term Lease

A short-term lease agreement is critically important because it protects you. As a result, you should always remember to have one for yourself and your tenants' safety and protection.

This legally binding contract makes it so that you can enforce the terms of agreements and ensure that your rights are safe. 

Stop Bleeding Leads: How Virtual Assistants Help REIs

Virtual assistants are a necessity for real estate investors. 

You wear a lot of hats. On any given day, you might find yourself generating leads, securing financing, chasing down deals, dealing with tenants and toilets, and more. That many responsibilities can stretch you thin. 

Sound like you? If so, you're in luck.

Today, we'll talk about how leveraging a virtual assistant enables you to delegate burdensome tasks, spend your time on more profitable endeavors, and scale your business accordingly. 

Why Should I Use A Virtual Assistant?

A virtual assistant has the potential to help you scale your real estate investing business. They will allow you to do more deals more efficiently, save on expenses, and reduce your workload.

A virtual assistant enables you to pass on some of the toils while improving the efficiency of the processes that make your business operate. The key is to have a dedicated, trained virtual assistant who understands the different nuances that accompany your specific industry. 

Virtual Assistants Save You Time

Time is your most valuable asset; virtual assistants protect that asset by taking on lead generation. 

Cold calling is among real estate investors' most effective lead generation methods. While it is effective, it is also challenging to stay consistent because of the time sink and the amount of burnout. 

A dedicated, trained virtual assistant can make 400 to 600 cold calls daily. VAs: 

Virtual Assistants Consistently Follow Up

A consistent follow-up to your leads usually means money. 

Most deals are closed by following up, but sometimes this is left by the wayside because of other equally pressing matters in your business. That costs you deals and money.

Bob Lachance at REVA Global puts the importance of follow-up in perspective:

All in all, 92% of people are done trying to convert a lead by the 4th rejection. You can automate your follow-up through the use of a virtual assistant. It takes several touches to close a deal. 

Optimal Tasks For Virtual Assistants

Another task that you can have your VA do is the property and lead research. While you are out looking for deals and securing financing, your VA can vet the properties by: 

Once you train a virtual assistant on how to do these processes, you'll be free to spend your time doing activities that matter the most to you. That could be anything from finding deals to spending time with your kids. 

Secrets To Scaling: Virtual Assistant  

There are several tasks that you can delegate to your VA. These tasks are essential but may not necessarily be the best use of your time. As a result, it might be ideal to leverage the skills and expertise of a virtual assistant. 

The most common tasks for scaling that a VA can assist you with include, but are not limited to: 

Save Money With A Virtual Assistant

As you grow your real estate investing business, you'll need help. A VA can provide you with that help efficiently and for less money than hiring an in-person or in-house assistant. 

Bob Lachance at REVA Global breaks down the savings: 

Virtual AssistantIn-Office Hire
- 20 hours: $212 per week 
- 40 hours: $424 per week
- Benefits: 
Paid time off
Health insurance
Company paid training
- Technology and equipment are provided by VA
- Office space provided by VA
- No state or federal taxes
- Average Salary for College Graduate: $35,000 to $45,000
- You pay for the benefits package
- Technology and equipment are your expense
- Office space provided by you
- State and federal taxes

Key Takeaways

Running your real investing business takes a lot of energy and time. It often requires you to take on several different responsibilities. You have to grow and maintain your business through steady leads. 

You can reduce the time you spend generating leads by leveraging the skills of a virtual assistant. A VA can handle the following tasks with accuracy and ease: 

Generating leads is a time-consuming process for one person. The time sink and attention to detail it requires can cause even the best of us to miss leads or burnout. If you're not working efficiently, you may let leads languish, pile up, and ultimately lose those opportunities. 

Are you ready to speak with an expert? Learn about our comprehensive solutions you can use to achieve financial freedom, reclaim your time, protect your assets, and build your legacy. Book a FREE discovery call now.

How Do I Collect Rent From Renters That Have Moved Out?

You have to collect rent that is past due. That's not fun, but it's sometimes necessary. This whole process can be a sticky situation for any real estate investor. 

Maybe you disagreed with your tenant over their excessively late rent. Or maybe they broke the lease and added another pet without your knowledge. Maybe their kids dropped a firecracker in the toilet, and it exploded. 

For whatever reason, either you had to evict, or your tenant packed up and moved out, denying you the ability to collect back rent.  

That's not an ideal situation. It's an unpleasant annoyance that a real estate investor contends with as part of doing business. But it doesn't have to be. 

In this article, we'll cover three practical and actionable strategies that enable you to collect back rent for the services you rendered. 

Collect Back Rent From The Security Deposit

You can't control that your tenants violated the terms of their lease, broke it, and left. You can control how you respond to their actions.

Suppose your tenant left without paying rent. Their violation is a situation in which they surrender the security deposit to you. Being behind on rent or breaking the lease is probably enough for you to collect back rent. 

Check with your real estate attorney to be safe. You never know when your absent tenant might demand the security deposit back. 

Use The Courts To Collect Back Rent

Even if your tenant left, they still have the responsibility to fulfill the terms of the lease agreement. First, you should try communicating with the tenant to explain their financial obligations. That doesn't always work out.

A lease is a legally binding contract. In other words, your tenant signed a legally binding contract stipulating that they would pay rent to live on your property. Once they violate the terms of the agreement, you have legal recourse in the form of your state's small claims court system

How Does Small Claims Court Help Me Collect Back Rent?

Small claims court is a relatively cheap and time-efficient way to collect back rent. The process differs from state to state, but in general: 

You'll get an enforceable judgment if you win in small claims court. With that enforceable judgment, you can collect back rent from your tenant via:

Use Other Legal Remedies to Collect Back Rent

Another excellent, straightforward legal remedy to collect back rent is to sue in assumpsit. 

When you sue your former tenant in assumpsit, all you're doing is asking the court to get them to pay what they owe you. That's it. Some states don't believe you're entitled to just back rent but also interest on the unpaid rent. We're fans of such landlord-friendly statutes.

It's always a good idea to check local laws and retain counsel if you plan to go to court. The court may be a worthwhile endeavor for large enough sums that the tenant could plausibly pay. Others may prefer to negotiate directly, arbitrate the dispute, or seek small claims damages as alternatives.

When Is Suing Worth it?

Your mileage with success in court will vary. The most significant considerations are their likelihood of success and the value of their own time. State law largely determines the former, how much you can recover, and in what venue.

The second consideration--about the value of your time and how you wish to spend it--is far more personal. Lawsuits are lengthy, often painful affairs. Most people will go well out of their way to avoid one. The reward and chances of victory need to be sufficiently high for the stress to be worth the trouble for most of us.

That said, court remedies exist for a reason. They're there when all your other, more straightforward solutions to your problems fail. When diplomacy, asking nicely, raising your voice, lowering your voice, offering to solve it between yourselves, offering to "release" from or any won't do anything. 

If you've lost money from nonpayment, you can be made whole financially. Just understand that with anything court-related, there are never any guarantees.

Key Takeaways

It's never fun to have to collect back rent. It's time-consuming for you and takes you away from running your business. Unfortunately, collecting back rent is a necessity sometimes.

You have several options to collect back rent that we covered. You can use each or all of the following strategies to get your money:

Royal Legal Solutions helps real estate investors protect their assets. Secure your financial future, and register for your FREE Royal Investing Group Mentoring Wednesdays at 12:30 pm EST! 

Why Millennial Homeownership Is At A Record Low: What Real Estate Investors Should Know

Millennial homeownership is historically low. According to the most recent Census data, about 49% of millennials own homes. It's become a national pastime or running gag to blame the millennial generation for killing different industry types. Or they are chalking up the low millennial homeownership to avocado toast and overpriced pumpkin spiced lattes. 

In this article, we give an overview of the struggles that millennials face. Also, we cover how you, as a real estate investor, can benefit from understanding their plight. 

Millennial Homeownership Is Historically Low

Millennials want to own homes but can't afford the price tag. More than 75% of millennials still view homeownership as part of the American Dream. But, a growing number (more than 20%) believe they will never own a home and will be eternal renters. 

Millennial homeownership is much lower than the rate of 26-41-year-olds of the past. There are reasons beyond any person's control for that. 

Several factors characterize the low rates of millennial homeownership:

All these factors combined are squeezing millennials as they enter the financial prime of their lives. But the issues are forcing many millennials to delay marriage, kids, and homeownership. 

First-time home buyers are in a disadvantageous position; home prices are to the moon; mortgage rates are spiking. Low wages and debt make wealth generation more difficult. These realities form the perfect storm for low millennial homeownership rates. 

America has become a much more difficult place to secure an affordable mortgage. "First homes" (single-family homes, even multis under $250,000) make up less of the market than ever before.

After the 2008 crash, real estate investors scooped up hot deals on all kinds of properties, enjoying a single-family budget property free-for-all. By now, most investors have upgraded these homes, upsold them, or maintained them to be competitive in today's market.

That means the homes are worth more than appreciation alone. Yet, it's the same asset investors got cheap after the crash. Millennial tenants are now more likely to become lifelong tenants instead of purchasing their own homes. It's bleeding down into Generation Z too. They're the generation with the most people in crisis. As a whole, they're the generation struggling to transition from renters to buyers. 

Yesteryear's Stats Don't Apply to Millennials: What REIs Need to Know About This Population

Even assuming 18-35 years olds are still the "homebuying age group" is foolish and inaccurate. Ask any 18-year-old how likely they are to own a home soon. Seriously. Any college student, even. The American Dream of homeownership isn't dead, but it's on life support.  

Millennials faced a different world: 

These factors present difficulties and challenges that prevent millennial homeownership.

Renting is often tricky. Millennials are more likely to move in with their parents than any other generation. Many in their 20s and 30s move home under financial duress, while others lack that option and live with housing insecurity.

These problems are natural barriers to home ownership. We haven't even delved into this generation's many cultural crises. Everything from later marriage age to the ongoing opioid crisis that continues to rage through mid-2019 can affect how this population rents and buys.

Why Millennial Homeownership Trends Matter for Real Estate Investors

Most investors count Millennials among their tenants or desired demographic. Single-family investors and those starter homeowners can stand to benefit in a seller's market. While the housing market has cooled somewhat, there are still ways to benefit from understanding your tenants. 

Millennials as tenants

As millennials learn that homeownership is just one path to building wealth, their preference for renting may align with your investment goals. Attracting and keeping these tenants is essential. 

You want consistent rental income, spend less time preparing a unit for rent, and avoid uncertainty with a new tenant. To keep your millennial tenants, consider: 

In general, Millennials are well-educated and tech-driven. For them, home prices, supply chain issues, and low cash reserves have made renting a certainty for the foreseeable future. Typically, a well-educated, employed tenant is an ideal tenant for you to have. 

Millennial homeownership as an exit strategy for you 

Millennials want to buy a home. That desire may provide you with an exit strategy. It's not all doom and gloom. A NAR report from March 2022 shows that millennials make up 43% of home buyers. Instead of McMansions, they are looking for good deals on properties and efficient use of indoor and outdoor space. 

If you have a property worth under $250,000, you're sitting on a high-demand property. Millennial buyers are competing, and investors can play fair while profiting.

Key Takeaways

Millennials sometimes turn to real estate investment to "escape" debt or employment barriers. Knowing this group's challenges helps you relate (or understand the real estate issues if you're a Millennial) to life and business. All real estate investors benefit from understanding their Millennial tenants, partners, and fellow investors' struggles. 

Come strategize with us. Secure your financial future, and register for your FREE Royal Investing Group Mentoring Wednesdays at 12:30 pm EST!

How Renting Can Be Profitable For Astute Beginner Real Estate Investors

Starting in real estate isn’t easy. It isn’t easy. The challenge is why most beginner real estate investors struggle to build their business regardless of the blood, sweat, and tears they invest. 

Sound like you? Good news, you’re in precisely the right place! 

This article doesn’t list out a million mindless strategies. 

What we’ll show you instead are targeted strategies that work. These strategies are easy to replicate for your real estate journey. These strategies help you grab onto the bottom rung of the property ladder and climb your way to financial freedom. 

Surprising Path To Financial Freedom For Beginner Real Estate Investors

Renting is a solid option for beginner real estate investors. I know it seems counterintuitive, but let me explain. 

Should I rent, or should I buy a home? That question is especially salient now with interest rate hikes and inflation. Despite the projected drop in home prices, interest and inflation may make purchasing your first property too expensive. In other words, beginner real estate investors find it tough to get on the property ladder. Tough, but not impossible. 

The reality is that when you buy a home, you take on debt. Taking on debt is always a risky proposition, no matter how secure it seems. Renting enables you to mitigate that risk. 

I want to disabuse you of the notion that renting means throwing your money down the drain. That’s a lie. In exchange for rent, you get a place to live. No matter where you live, it’s going to cost money.

Indeed, you aren’t building equity in a home with rent. The thing is, not all that money goes to building equity in the house. For instance, mortgage interest eats up a large chunk of the cash a homeowner pays in the early life of the loan. 

Also, there are many associated costs that a property owner incurs that a renter never sees. A few of those costs include: 

The landlord typically covers most or all of these expenses when you rent. That means you have an opportunity to keep more cash in your pocket. As you build a nest egg, you should look into the following so that you can get on the property ladder as a beginner real estate investor: 

The ultimate goal is to transition from renting to owning a property.

How Do I Start As A Beginner Real Estate Investor?

To start as a beginner real estate investor, you must plan. Some of the more immediate options include:

Another way to invest in real estate is through a Federal House Authority Loan

An FHA loan is typically for home buyers who do not meet the requirement of a traditional loan. These loans have low credit scores and down payment requirements. Also, FHA loans are for buyers who intend to use a property as their primary residence, also called the occupancy requirement. 

If you decide to use an FHA loan, you must possess the home within 60 days and use it as a principal residence for one year. 

As with all things, some exceptions apply. You can use an FHA loan to help you start your real estate investing business by buying a multifamily property.

Here is how it works. The FHA allows property owners to buy homes with up to four units (fourplex). The only rule is that the owner has to live in one of the units as their primary residence. That way, the owner can rent the other three units for income. 

Here is an illustration of how that might work: 

Suppose you use an FHA loan to buy a multifamily home for $250,000. The mortgage for that home will be about $2,000 per month. You have to occupy one unit, but three units are available. 

The average renter pays about $1,330 per month in rent. That means you could potentially live in your unit and charge three other renters $1,330 per month (or more, depending on market forces). In this case, you will earn $3,990 per month, have a place to stay, and a way to progress up the property ladder as a beginner real estate investor. 

No matter what step of this process, you need to protect yourself. Royal Legal Solutions offers expert advice and proven strategies to help secure and keep your assets safe. Take our FREE 5-minute quiz to get powerful wealth-building insights. 

Key Takeaways 

Renting is not throwing your money away. Remember, you get a place to live and don’t have to deal with the pesky taxes and costs associated with home ownership. For beginner real estate investors, renting is an opportunity to save money and reduce your debt. 

While renting, you can consider subletting out (if you’re allowed) or dabbling with REITs to increase your cash flow. Ultimately, you will want to transition to your first property. An excellent way to do that is with an FHA home loan, provided that you meet the requirements. 

Want to learn more about how to get started in real estate investing? Register for FREE Royal Investing Group Mentoring Wednesdays at 12:30 pm EST.

Residential Assisted Living Facility Investing

Why would you be interested in residential assisted living facility investing when you could stick with single-family and multifamily homes?

Residential assisted living facilities have the potential to provide a greater return on investment than other types of properties. Also, the country is aging and needs a place to live its golden years. This type of investing should be pretty lucrative in the coming years. 

Below you will find a simplistic guide that explains the fundamentals of this emerging investment opportunity. Keep reading to see if residential assisted living facilities are a promising addition to your portfolio. 

Check out our video replay with residential assisted living facility investment expert Isabelle Guarino Smith. 

What Is Residential Assisted Living? 

Residential assisted living is a group home for seniors that helps the residents with their daily lives. The help runs the gamut from hygiene, eating, and physical therapy. These are typically in single-family home neighborhoods with homes made accessible for seniors.

These are not nursing homes, nor is it independent living. It's somewhere in between.

Is Residential Assisted Living Facility Investing Feasible?

Yes, residential assisted living facilities are a reliable investment. The facilities are a reliable investment because of demographics. Like Bob Dylan says, "The times they are a-changin'."  

Let me show you how times are changing. To put a finer point on it, let me show you how the US is getting older. There are more than 73 million baby boomers in the United States aged 70 or older. By 2030, all boomers will be at least 65. In general, US citizens are living longer, and in 2034 there will be more older adults than under 18 children for the first time in history. 

More elderly means increased demand for certain goods and services. One of those goods and services might be a residential assisted living facility. You can take advantage of this inevitable shift in the country's demographics by investing in a facility. After all, aging boomers will need a place to stay.

As with all real estate investments, you want to be protected. Please look at how we provide asset protection strategies in all 50 states for all asset classes. 

Debunking 7 Common Residential Assisted Living Misconceptions

If you're anything like me, you hear "assisted living facilities" and think of bed sores and elder abuse. It doesn't have to be like that, though. Here is a list of 7 common misconceptions. 

#1 You have to work at the home

The facility is an investment that is similar to your other assets. But it's also a business. As with any business, you will need to dedicate time to the front end to become operational. One aspect of this involves hiring staff. You do not have to work at the home.

#2 Liability insurance is expensive

Insurance does cost money. However, if you shop around, you'll be able to find the appropriate amount of coverage for the right price.

#3 Seniors all died from COVID

Seniors did not all die from COVID. While they were the most at risk and constituted the most deaths, many older people still need a place to retain their dignity and call home. Also, aging boomers are entering this market, so there will be plenty of residents on the horizon.

#4 Good employees are hard to find

Good employees might be hard to find for huge nursing homes. Those types of homes have a 50 to 1 resident-to-employee ratio. With that many people, it's hard for anyone to give the required level of care and attention. In contrast, a residential assisted living facility has a much lower resident-caregiver ratio, meaning better care.

#5 You don't need medical experience

You didn't need to be a contractor or real estate agent to invest in real estate. It might have helped, but it wasn't a requirement. Likewise, you don't need to have medical experience. It might help, but it is not a requirement. 

#6 HOAs can't prevent you from creating one

The Federal Fair Housing Act outweighs and supersedes any complaints. 

#7 Seniors can't afford the service

Since the pandemic began, boomers have a combined wealth of $71 trillion. This means they have the money to spend on dignified housing for the final stretch of their lives. 

3 Simple Routes To Investing

Here are the three ways to invest in residential assisted living: 

  1. own the real estate and lease it to an operator
  2. own the real estate and operate the business
  3. private lender or partner

#1 If you own the real estate and lease it to an operator, you are a preferred real estate provider. That's important for you as a real estate investor because you potentially:

#2 You own the real estate and operate the business. Owning the real estate and owning the company might be profitable. Here's why–the average cost of care in an assisted living facility is $4,500 per month. There are no standard configurations for a residential assisted living facility. Still, anywhere from 6-16 people can stay on your property.

#3 You act as a private lender or partner. Maybe you have cash, and you invest in someone who is going to be an owner and operator of the business. 

Key Takeaways

Residential assisted living facility investing might be a solid investing strategy for you. Here are the key takeaways from the discussion today: 

Are you ready to speak with an expert? Learn about our comprehensive solutions you can use to achieve financial freedom, reclaim your time, protect your assets, and build your legacy. Book a FREE discovery call now.

Due Diligence: 6 Tips for Notes Deal Vetting

Due diligence involves investigating, auditing, or reviewing circumstances and facts around a deal. As a competent real estate investor, you’ll want to conduct due diligence so that you have a clear understanding of the financial ramifications of any agreement. 

Doing your due diligence is especially important when you consider note deals. Suppose you want to invest in first-position non-performing notes backed by real estate. Non-performing notes are when the borrower has stopped paying. You want to ensure that the investment you are committing to is fiscally sound, right? 

After all, notes are an asset class with growth potential. Like all investments, note deals carry some risk. Royal Legal Solution mitigates the risk to your property with our asset protection strategies in all 50 states, for all asset classes–including notes. 

This article outlines six factors you should consider when vetting your note deal. Continue reading to get a primer on due diligence best practices.

#1 Property Valuation

Property valuation is essential when looking at what notes to buy. You can analyze the property using online research tools. The next step is to have someone who is boots on the ground do an inspection and value the home for you as well. 

The property valuation is the basis for your discounted purchase price. You won’t necessarily pay the unpaid principal balance. 

#2 Verify The Property 

Sometimes note investors can get into a sticky situation by only doing online searches. You need to follow up by sending someone to see the lot and verify that a structure is on the lot. 

If you don’t do your due diligence here, you might buy a note and end up with an empty lot. That’s a devastating oversight!

Here are the things that you will want to get verified: 

If you choose to get into note investing, you’ll want a good return on your investment. Reasonable due diligence maximizes your profit and minimizes your risk. 

#3 Inspect The Asset

The bank might tell you that the property is a single-family home. What might happen is this–it might be a mobile home or a condo. Those types of structures might not be in your plan. Trust but verify because the banks get it wrong sometimes. 

#4 Check For Unpaid Taxes

Make sure that you know how much delinquent property taxes are. When someone stops paying a mortgage, they usually stop paying their taxes. In this case, you will want to know when and if a tax sale is scheduled. 

Steps to take when checking for unpaid taxes: 

#5 Research Liens Or Judgements

You will want to verify any liens, judgments, or junior lien holders. Knowing about other lien holders is vital if you accept a deed instead of foreclosure. 

For instance, suppose you receive the deed as payment in full for the loan from the borrower. Even though you are in the first position, someone with a lien, HELOC, or judgment against the property will move ahead of you. That means you become responsible for those liens. That could be costly.

#6 Follow Chain Of Ownership

You have to follow the chain of ownership with notes. Make sure you are intimately familiar with where the loan originated and all the subsequent note holders.

The county courthouse will have records of all assignments of mortgages for each transfer of the mortgage to subsequent note holders. These records will be in the correct order, so you should be able to follow the chain of ownership. 

Due Diligence Key Takeaways

Suppose you decide to get into note investing. Don’t you want a risk-free return on your investment? You’re in luck because doing due diligence maximizes your profit and minimizes your risk. Here are six critical factors in doing your due diligence when vetting notes: 

Are you ready to speak with an expert? Learn about our comprehensive solutions you can use to achieve financial freedom, reclaim your time, protect your assets, and build your legacy. Book a FREE discovery call now.

Note Investing: You Become the Bank

What options are available when inventory is low and priced too high to be profitable? You become the bank with note investing!

For a real estate investor, note investing might be an excellent option for you. With this type of real estate investment, you won’t have to manage property or deal with other types of transactions actively. It’s passive income. 

As with any asset, you need asset protection. We provide asset protection strategies in all 50 states for all asset classes, including real estate notes. 

Use this guide to start you down the right path. Are you in the market for an investment that provides passive income without the dregs of property ownership? If so, note investing might be the answer to your prayers. Keep reading to evaluate the feasibility of this investment for your financial situation.

Note Investing Explained

Note investing is when you purchase real estate notes. The idea is that you change the terms of the note by reselling it, or you foreclose on the property to generate cash flow. 

What’s A Real Estate Note?

Simply put, the real estate note is two things. The first is the promise to pay or a promissory note. The second is a lien. A real estate note is the same thing as your mortgage note. 

In other words, it’s a written promise to pay money plus interest for a predetermined time. The mortgage places a lien on the title of real property to secure the written contract. If you default on your mortgage, the property may go into foreclosure. Defaults and foreclosures provide unique opportunities for real estate investors. 

When you start note investing, you know the difference between performing and non-performing notes:

Why Should I Invest In Performing Notes?

Performing notes provide passive income. There is less risk in note investing with performing notes because the borrowers are keeping up with their mortgage. That means they make on-time payments. Those on-time payments provide a source of relatively reliable passive income. 

Why Should I Invest In Non-Performing Notes?

Note investing has several advantages. They are: 

Cheaper: The non-performing real estate is secured by the equity in the property. If the borrower defaults, the real estate is more affordable to buy. You can purchase these notes from .38 to .62 on the dollar. 

Income potential: Another advantage is that depending on how you resolve the note, you could experience an excellent return on investment or create ongoing passive income. 

Secured by real property: Inflation. Stagnant wages. Whatever the reason, people are increasingly defaulting on their homes at a higher rate. For instance, there has been a 24% increase in foreclosures post-Covid indicates. Those homes represent a tremendous opportunity in this note investing space.

How Do I Get Started? 

You will need to find someone who will sell real estate notes to you. Typically, you will be able to buy notes from banks, other investors, note investment funds, and real estate brokers. 

Risks of Note Investing

No investment is without risk. Before making any financial decision, you should consult a qualified financial advisor or attorney to decide what’s right for you. There are a few perils associated with note investing:

Rewards of Note Investing

Note investing has several rewards if you decide it’s the right investment strategy for you. Number one is it might make you a lot of money if you do it right. 

The first step, you have always got to cover your assets. You don’t want your assets exposed, so protect them. 

After that crucial step, you could potentially enjoy the benefits, including: 

What Does It Mean To Become The Bank With Note Investing?

When you buy a note, you become the bank. As the bank, you have complete control over your exit strategy. As a real estate investor, that will bring some peace of mind. 

Key Takeaways

There are several things to consider when deciding whether note investing is right for you. Here are the primary takeaways from this guide:

Are you ready to speak with an expert? Learn about our comprehensive solutions you can use to achieve financial freedom, reclaim your time, protect your assets, and build your legacy. Book a FREE discovery call now.

Pro Tips to Acquire and Manage Real Estate Remotely

Why would you want to take the time and effort to acquire and manage real estate remotely?

Due to the demand, legislation, or tax laws, investing in your local real estate market is not always feasible. Remote real estate investing provides some distinct advantages that we discuss below. These advantages may provide the right mix of value and autonomy that you desire as you balance your investment strategy.

We featured this topic of discussion in a recent session of Royal Investing Group Mentoring. This session featured guest host Chris Weiler, who spoke in-depth about his experience investing in real estate opportunities outside of his immediate geographic location. Watch the Royal Investing replay.

Why Invest in Real Estate Remotely?

When you invest in real estate remotely, vast swaths of markets become available. You are no longer looking at markets in your state but all 50 states. In some cases, you may be looking globally for deals. That means you will have more chances to find properties with favorable terms.

Suppose you live in California. Typically, an investment property in California will cost more than one in the South or the Midwest. For instance, California's median sales price is $505,000; in Ohio, the median sales price for a home is $145,700.

In reality, people in Ohio also have to find a place to live. If they can't buy, they will need to rent. As a California resident, you may want to stay local and purchase a single-family home for the median sales prices.

Or it might be financially sound to shift your investment to Ohio, where you could purchase three homes for the less. Then you could convert each of those homes into rental properties.

An unintended benefit of remote investing is that it's more passive. You won't be there to contribute your sweat equity. Instead, you will be able to find better and more profitable uses for your time–like finding more deals.

How Do I Find Deals With Remote Investing?

Here's the thing, you don't find the deals. To successfully invest and manage real estate remotely, you must establish a strong network of trusted partners. Networking is a critical step in increasing your net worth.

Partners include, but are not limited to:

Your partners should have skills and core competencies that you can leverage. Also, offering your partners an incentive to work with you is essential. It can't be a one-way relationship that only benefits you.

Another way that you could potentially find real estate opportunities is to look where you vacation. Investing where you enjoy visiting can be advantageous because:

How Do I Track My Remote Investments?

All the day-to-day considerations are the responsibility of your partners. In other words, they are your boots on the ground. Preferably, you will provide strategic decisions and capital while your local network will handle the operational decisions.

Delegating requires a lot of trust and communication, which is why having a solid network is crucial to your success.

One thing that is non-negotiable for your success is following accounting and bookkeeping best practices. At a minimum, you and your network will need accounting practices to know:

Detailed and dedicated bookkeeping provides an accurate assessment of your ROI. It enables you to make the best decisions for your future. Since you are working remotely, you will need to do online accounting and bookkeeping. It's just more convenient.

Here is a list of accounting and bookkeeping products that may work for you:

How Do I Split Profits?

When it's time to decide how to split the profits, everything is negotiable. There is so much fluidity because every situation is unique to you and your partner. A potential way to divide the profits is to structure the partnership based on each party's value to the deal.

One key fundamental is to get everything in an ironclad contract. A contract provides clear expectations about how the business should operate, who is responsible for what, and how you split profits. As an added protection, you might consider including an anti-embezzlement clause.

Can I Scale Investing In Real Estate Remotely?

Scaling is entirely possible, but you have to make sure you delegate responsibly and appropriately. It's much easier to scale with a reliable and solid network.

What Are My Exit Strategies For Remote Investing?

In remote real estate investing, you exchange control for an opportunity. Protect yourself by being flexible and having multiple outs. You may decide to have plans to do the following:

Your decisions will rely on the market conditions and your discussions with your network of trusted professionals.

Real Estate Investing Remotely Sounds Good. What Are Some Drawbacks?

Some things may give you pause. You may not have the risk tolerance that remote real estate investing requires. After all, you may experience fear from being so far away to be on-site and control what's happening.

Another thing is that you have to be reliant on others and trust them to do their job right. That's tough because finding the right team can be challenging. When you find the right people, you still have to incentivize and grow the team.

Key Takeaways

If you have an internet connection, risk tolerance, and an ability to delegate, remote real estate investing might be right for you. To be successful, you will want to:

For more education about opportunities for real estate investors, join our Royal Investing Group Mentoring on Wednesdays at 12:30 p.m. EST. We meet weekly for an hour as a large group to learn, share, and collaborate on relevant topics in a fun and friendly format.

Multi-Family Real Estate Investing Benefits and Nuances

Are you ready to move beyond single-family home investments? If this sounds like you, multi-family real estate might be a good investment.

Before you invest in any asset, you must consider the pros and cons of each move. Also, you need to know what you specifically want as an investor. For each decision you make, there will be a variety of outcomes.

Here is a list of 4 multi-family real estate investment tips and tricks.

These tips may be just the thing you need to make an addition to or transition from single-family home investments. You'll enjoy these tips if you're ready to move in a new direction on your real estate journey.

Tip #1: Passive Income: Sensational Value!

A multi-family is any residential property that contains more than one housing unit. These properties include, but are not limited to:

With more units come more tenants and more rent. Keep in mind that in the United States, the average rent is $1,326 per month.

For a real estate investor, that means more sources of cash flow.

Maybe you don't want to deal with finding deals, securing financing, and hiring a property manager. You still want to invest in multi-family real estate. A real estate syndication might be best for you.

With syndication, you pool your money with other investors and invest in a property. You get to spread the risk and responsibility among multiple investors.

Finally, multi-family real estate investing is an excellent way to create a diverse portfolio. When you diversify, you collect a variety of asset classes. A combination of assets reduces your risk. Any single asset class's performance doesn't tank the rest of your portfolio.

Tip #2: Professional And Reliable Team Fundamentals

When you invest in multi-family real estate, you need a reliable team to help you.

Multi-family is different from single-family home investments. It's both real estate and a business based on net operating income. So part of your team needs to be a mentor who has experience in the industry of multi-family real estate. Also, a mentor can find the sweetest deals and craft a safe exit strategy.

Next, you'll need a person to manage the asset. Your management might be a local person who can handle the property's day-to-day operations. For instance, you might employ a property manager who oversees the maintenance, finding and managing tenants, and emergency repairs.

Generally, people struggle with multi-family real estate investments when they mismanage the property. This type of investment takes a team and reliable partners.

It helps to increase your net worth when building your team. Part of growing your net worth is networking. You enter into a mutually beneficial relationship with someone who shares your vision.

Tip #3: Colossal Profits From Scaling

Economies of scale provide advantages when the cost of business spreads over a large number of units. With multi-family real estate, math and the law of averages works in your favor. Keep this in mind; people need a place to live regardless of market conditions.

You might have started with a single-family home and had success with your tenant. That's the limitation of your single-family home; you will only ever have one tenant. You can't scale that rental income.

With a multi-family property, you can scale exponentially. When you have more units in a property, you get more benefits, including:

Tip# 4: No Compromise On Due Diligence

When looking for the right place to buy multi-family real estate, you must do your diligence. At a minimum, you need to research:

The population needs to be growing. Typically, people want to live in a safe area of town, so you have to know the crime statistics for your investment area.

The economy needs to be both strong and diverse. For instance, Killeen, TX, is home to an Army base called Ft. Hood. The entire economy revolves around the base. In most rental properties, you will find a soldier renting. The thing about soldiers is that they move or get deployed. When that happens, you are subject to the Servicemembers Civil Relief Act.

Find areas where the economy and renters are not homogeneous to avoid being stuck with empty units in the case of deployment or an economic downturn.

Good school districts are attractive to tenants with children. 32% of renting households have children, so you should keep that large chunk of the market in mind when doing your due diligence and research.

Key Takeaways

If you are ready to change your investment strategy or are looking for additional investment opportunities investing in multi-family real estate might be for you.

When you invest in multi-family real estate, you should:

For more education about opportunities for real estate investors, join our Royal Investing Group Mentoring on Wednesdays at 12:30 p.m. EST. We meet weekly for an hour as a large group to learn, share, and collaborate on relevant topics in a fun and friendly format.