All Forum Posts by: William Allen

I want to show you how you can get paid to buy a vehicle for your business under tax deduction Section 179.

You can potentially write off the entire price of a business vehicle depending on the cost and strategy used. Section 179 is a deduction set up for large business machinery, as well as furniture and office equipment. In this article, we are going to focus on vehicles.

The most important key is that the first use of this vehicle needs to be for business. In other words, you can’t ‘transfer’ a personal vehicle into your business vehicle and get this tax deduction. You have to purchase a vehicle specifically for your business and prove that it’s first use was for business in order to qualify.

I used to think you had to pay cash for these items, and they had to be new.

Interestingly enough, it doesn’t have to be a new vehicle, it just has to be new to you. You can also finance the vehicle new or used and still write it off.

How much can you write off?

Here is where we get into strategy. What you can write off depends on the type of vehicle you buy, the percentage you use it for your business, and what tax bracket you fall into.

The Type of Vehicle:

For cars and light trucks (less than 6,000 pounds) you can write off up to $11, 1060.

For trucks or SUVs over 6,000 pounds like a Hummer or a Ford F150, you can write off up to $25,000 of the purchase price.

Because you don’t have to buy the vehicle brand new, there is an opportunity to write off %100 percent of the cost. What is important in this case is for the vehicle to have characteristics that make it obvious there is no possible way it could be used for personal use.

(Imagine here a passenger van with all the seats taken out).

When you are looking for a vehicle, talk to your CPA and get their opinion. Bring some options considering the weight and uses, and see what deductions you can use it for.

The Percentage of Business Use:

The percentage that you can prove you use this vehicle for business is imperative to the amount you can write off. If you are claiming to use the vehicle 100% for business you have to have a personal vehicle that proves that you aren’t using this vehicle for anything personal.

Keep a log and document that you are using this for business. Make it crystal clear.

The Tax Bracket:

Let me paint a scenario for you.

You are going to buy an SUV for the business over 6,000 pounds and you are going to use it fully for business or claim a 100% use.

You buy a used Chevy Tahoe, it weighs over 6,000 pounds which means you can get $25,000 dollar deduction on your taxes. Let’s say you buy it for $25,000 used. You get 100 percent financing on the car and write off all $25,000. Let’s say you fall in the 25% tax bracket. The deduction you get on your taxes is 25% or $6, 250 cash back in your pocket.

If you play it smart and pay attention to the details you can get paid to buy a vehicle.

In addition, a used vehicle won’t depreciate very fast and you have the opportunity to maintain the value.

Here are a few ‘Gotchas’ or Details that Could Trip you Up:

1. You can only deduct the percentage you use for business. So if it is 80% business and 20% personal use, you can only deduct 80% on your taxes.

2. When you sell the vehicle, there is capital gains only tax. So if you sell it you will pay taxes on all the money you make. For example if I bought a new vehicle for $200,000 and I sell it for $150,000 I will be paying capital gains taxes on the $150,000.

3. Depreciation recapture also applies if you convert your business vehicle from 100% business to 50% personal. You will pay the capital gains to recapture on the 50% you wrote off when you claimed 100% use.

4. You can’t use this deduction to create a loss in your business.

Here is my final piece of advice: If you don’t need it, don’t buy it.

Just because you are depreciating 100% of something, doesn’t mean all that money is going back in your pocket. It's determined by the equation:

type of vehicle + percentage of business use + your tax bracket = Tax Deduction

Example: If you buy a $100,000 vehicle you are not getting $100,000 back if you are in the 25% tax bracket, only $25,000 comes back (and you are deferring some of that in the future because when you do resell you will pay capital gains tax on it).

I always say, ‘don’t finance something if you can’t really afford it.’ I will choose to finance something at a really low interest rate if I know I have the cash to pay it off if need be. The truth is if I am paying .9% financing, I know it’s worth it because I can get a higher than 1% return on my money invested somewhere else.

This is just one of the hacks I am going to share on tax deductions. I hope this is valuable to you!

I want to give you one of my hacks that will help you beat out the competition and close on a deal sometimes for even less than your competition.

There is a section you can add to a contract called Escrow holdback.

What is an Escrow holdback?

An Escrow holdback is when we sign the contract and buy the house, but hold back some money to allow the sellers of the house to stay in the house for some time after the contract is completed. When they move out, they get the remainder of the money.

Why is this so important?

We often work with distressed sellers that have a very specific need. If you listen to them and find out what this need is, you can use an Escrow holdback to offer a solution only you can provide. If you can solve their problem you are going to win the deal.

Some common concerns we often hear are:

“I don’t have money to move”

“I have to buy another house before I can sell”

“I am completely broke, I can’t buy another house”

“I don’t actually have the money to make a move right now”

These sellers typically don't have a lot of cash on hand; their house is the one asset they have. They are often considering selling because they have a specific monetary problem that needs to be solved such as medical bills, facing foreclosure, or a need to downsize. Selling their house will help solve this problem but they generally don’t have a place lined up to move to, and therefore the stress of an immediate move out is enough to inhibit the sale.

How does Escrow holdback provide solutions?

Based on the unique need of the seller, you structure a contract that benefits and protects you while simultaneously meeting their needs. It’s all in the negotiation with the seller.

Let’s look at an example of the problem ‘I need to buy another house and currently have nowhere to go.’ They are selling for $200,000 and want to buy another house for $120,000. They need to close the sale on this house to buy their new home. We tell them, ‘we can help you work this out.’ We ask the question ‘How much do you need to move?’ If the answer is $120,000, we agree to give them that money and leave them in the house for an agreed amount of time in which they can buy another home and move out. We hold back $80,000 in Escrow. Say it takes two weeks for them to find and close on their next home, we give them a week after the contract on their new home is closed to move out. It saves them a whole host of headaches including having to find a storage to put their stuff into, stay in a hotel during the crossover time, and all those other factors that are stressful and inconvenient in the moving process.

Let’s look at the problem ‘I don’t have any money to move,’ (I hear this all the time).

Say we are buying the house for $100,000, to close on the contract we give them $10,000 to move and keep the other $90,000 in Escrow. When they are moved out, the title company wires them the remaining $90,000.

I’m going to give you one final example. This was a deal we closed that perfectly illustrates how everyone can win with an Escrow holdback.

We had a family, an older husband and wife that had just bought a brand new house. They discovered an apartment building was going up adjacent to their home and decided they didn’t want to live there anymore. They owned their house outright. The house was probably worth $170,000. They had an asking price of $120,000 which we agreed to. They wanted to immediately buy another home for $120,000. All they needed was to find their new home and have a little time to move out. We gave them an Escrow holdback. I held 10,000 back so they had to come up with 15,000 for a downpayment on their new home, which they had. We structured the deal so they had a week after signing on their new home to move into their new place.

I then connected them with one of my realtors who worked with them to find the new house they bought. The realtor found them a new home they loved and I got a referral fee from the realtor. They actually closed on their new home the same day we closed on their former home. Because we used the same title company for both contracts, when they were fully moved out of their old place the title company released the final $10,000. It was such a smooth win/win situation. Everyone was incredibly happy. We used our knowledge and connections to make it incredibly easy for the sellers. We worked with them to become a part of the solution.

Escrow hold-back can provide a major convenience factor that is really attractive.

If you understand how to use this tool and other buyers don’t, it’s a game-changer.

We have purchased property for less money than our competition because we understood how to work Escrow holdback.

How you structure the holdback in the contract is important and this is why.

The Gotchas:

(Because we’ve done a lot of hold-backs really right, but we’ve done a few wrong and learned from them).

1. 1. Sometimes seller’s will overstay past the agreed-upon move out time.
2. 2. Sellers can do something damage to or destroy the house.
3. 3. Sellers can refuse to move out and squat.

We’ve navigated a few ways to solve these potential hiccups.

1. Have them sign a lease for another property you own for zero down, zero cost worked into the sale contract. What this does is work as protection. If they refuse to leave and you have to take them to court, a judge doesn’t tend to look favorably on ejecting people who have been long time owners of property. However, if you have proof that they have agreed to go to and have another address to land at, it makes it considerably easier to Evict. It’s a built-in safety net.

2. Put a dollar amount per day if they overstay in the contract. You can assign an amount per day $300, $1,000, you could even put in if they stay even one day over they forfeit the remainder of the money. I personally like to put an amount where it is painful for them to pay it if they stay, and I don’t mind if they do because it is say $1,000 a day if they do. There can be up to $100-150 a day in holding costs. If they overstay but I have put the penalty well above that, I am actually making money the longer they take to move out.

3. If you are going to wholesale the deal, make sure the buyer who is lined up to buy the property knows that you have an Escrow deal going on the property. Communicate up front, so everyone is one the same page regarding timelines, especially in the event one of those timelines is not met.

4. Make sure that it states in the contract that the home must be in the same condition it was when the contract was signed. People can do serious damage to homes in this time period; put holes in the walls, rip out appliances, you don’t know what is possible. Have the mandatory condition of the house listed in the Escrow with photos of the house at the time the contract was signed.

5. Insurance: the minute you sign the contract get insurance on the property even if the seller’s will not be out for a week or two. If the house burns down in that extra week they have an agreed stay, it is you that has lost your asset. With insurance you are now covered.

In general, we hold back as much money as possible so we have a ton of leverage to make sure the seller moves out and the house remains in good condition. We provide them with precisely what they need to move or handle their problem, and hold the rest back contingent on them meeting the specifications of the contact. It’s all about how you structure the deal!

Utilizing Escrow holdbacks has been huge for us. It has helped us close on hundreds of contracts beating out the competition. Remember, you can give the seller what they need in a way that no one else can! Work that angle and the deal is yours.

 3 hacks I used to grow my profit from roughly $6,000 per deal to $20,000 per deal in the same markets over the past few years.

Reverse Bandit Signs

So you just bought a house and you are trying to figure out how to move it. The first thing you do is place 5 or 6 “reverse bandit signs” in front of the house and around the neighborhood on street corners, intersections, etc.

These signs can say things like ‘CASH ONLY, Investor Special, 555-5555’

Sometimes I will even put a low price on there like $25 or $40 thousand as well as a number to text or call (not a personal number but one you set up to route people to your business).

Cash buyers will call or text and ask to be added to your buyer’s list. I have also found that local people that live in the neighborhood often want to move a family member in and are willing to buy a fixer-upper quickly and at a much higher price than investors!

Facebook Groups

When you move into a new market, one of the first things we do is look for the local Facebook REA groups, local interests, meetups etc. especially in areas where there are a ton of investors. We join the groups and post ‘Hey I’m a new wholesaler in the neighborhood would you like to be added to my buyer’s list?’ That’s step one.

The next step is - and you can do it yourself, but I highly recommend hiring a VA for a few bucks an hour-to go into these Facebook groups and look for posts like the one I mentioned above.

Other wholesalers will have made similar posts you can find, sometimes as far back as two or three years, with responses from interested people leaving their email addresses in the comments. In one group I got nearly 1,000 new email addresses with a couple hours of a VA's work. These are people that want this type of information and they have already put their information out in a public forum to receive it.

This last hack is overlooked by so many wholesalers.

Get on Every single other Wholesalers Buyers List

I get on other wholesaler’s buyers' lists. Don’t worry I am not stealing their list, this is fully ethical. I save every deal they send me. The address goes into a spreadsheet. A month or two later I search the address and see who bought it. Those are TRUE Cash Buyers. It is simple and very cheap to skip trace them in white pages or county records and send them a card, give them a call, and quite simply ask them if they are interested in getting on your buyers' list. This method was a game-changer for us!

We increased our profit because we built a list of hungry, true cash buyers.

Using these 3 hacks and a bit of your time, you can watch your profit grow quickly in the early stages of your business. 

I hope this helps!

@Alan Zee, the price went up on Sep 10th unfortunately but if you use this promo code (BP) I can hook all of you up with the last 4 years recordings of the event and a 4 hour seller finance training we did!  I'll create that promo code today for you so give me an hour or so and it will be active.  Using that will bring up a "secret" ticket and you can get all the bonuses! 

And we just launched our behind the scenes Facebook group today so the event starts now!  The speakers will be answering questions in there and we will have exclusive content just for the ticket holders. 

The prices will go up every few weeks as we get closer to the event too. 

@Nicole Holcomb, how did it go? 

Here! Mechanical engineer undergrad and Aeronautical engineering masters. Never used it as I went to fly for the Navy right after school and I’ve been a full time real estate investor the last 3 years! 

I get this questions all the time, how do you build your buyers list?  So, here are my top 3 ways to build your buyers list fast and CHEAP!

When I first started wholesaling, I needed to find ways to grow my buyer’s list cheaply and quickly. Here are three hacks I used to grow my profit from roughly $6,000 per deal to $20,000 per deal in the same markets over the past few years. I hope this helps you out!

1. Reverse Bandit Signs

Let's say you just bought a house and you are trying to figure out how to move it. The first thing you do is place 5 or 6 “reverse bandit signs” in front of the house and around the neighborhood on street corners, intersections, etc.

These signs can say things like ‘CASH ONLY, Investor Special, 555-5555’

Sometimes I will even put a low price on there like $25 or $40 thousand as well as a number to text or call (not a personal number but one you set up to route people to your business).

Cash buyers will call or text and ask to be added to your buyer’s list. I have also found that local people that live in the neighborhood often want to move a family member in and are willing to buy a fixer-upper quickly and at a much higher price than investors!

2. Facebook groups

When you move into a new market, one of the first things we do is look for the local Facebook REA groups, local interests, meetups etc. especially in areas where there are a ton of investors. We join the groups and post ‘Hey I’m a new wholesaler in the neighborhood would you like to be added to my buyer’s list?’ That’s step one.

The next step is - and you can do it yourself, but I highly recommend hiring a VA for a few bucks an hour-to go into these Facebook groups and look for posts like the one I mentioned above.

Other wholesalers will have made similar posts you can find, sometimes as far back as two or three years, with responses from interested people leaving their email addresses in the comments. In one group I got nearly 1,000 new email addresses with a couple hours of a VA's work. These are people that want this type of information and they have already put their information out in a public forum to receive it.

This last hack is overlooked by so many wholesalers.

3. Get on Every single other Wholesalers Buyers List and Follow the Buyers!

I get on other wholesaler’s buyers lists. Don’t worry I am not stealing their list, this is fully ethical. I save every deal they send me. The address goes into a spreadsheet. A month or two later I search the address and see who bought it. Those are TRUE Cash Buyers. It is simple and very cheap to skip trace them in white pages or county records and send them a card, give them a call, and quite simply ask them if they are interested in getting on your buyers list. This method was a game changer for us!

We increased our profit because we built a list of hungry, true cash buyers.

Using these 3 hacks and a bit of your time, you can watch your profit grow quickly in the early stages of your business. I hope this helps!

4 years ago I was interviewed on the BP podcast shortly after I started my real estate company.

Today, we were honored to receive notice that the company I started and grew in my home office while I was flying for the military, got ranked #206 on the INC 5000 list.

If you are just getting going, you can get to places you never thought you would go and even faster than you think! My best advice, go one deal at a time and you will eventually look back and be wowed by how far you’ve come!

And get on the BP podcast if you can, that will drive you to live up to that title! Thanks for all the content and support from everyone on here and the rest of the crew at BP! You are helping to produce the future leaders in REI.

Here is the story below about how Flip Hacking Live went VIRTUAL this year.  I hope you will join us as it's easier than ever to attend an AMAZING event this year with us.  October 15-17, 2020 www.fliphackinglive.com
I want you to imagine something with me.
Think through what it would take to attend Flip Hacking LIVE (our flagship 3-day event for house flippers and wholesalers) in person. You’d spend 5 days traveling. You’d have to take time away from work or family. You’d pay for flights and food and hotels.
And it would all be worth it, of course...
But what if it was even easier?
(And even more affordable?)
What if you could experience the SAME live event inside your home… without having to travel, leave your house, or disrupt your life in any way?
Instead of you coming to Flip Hacking LIVE…
...what if we could bring Flip Hacking LIVE to you? Planning this event, I had to make a huge decision.
With the COVID-19 situation, continued shutdowns, social distancing, cases rising in Florida, and everything else going on, I was still holding out for an “in-person event” this October. My #1 concern has always been keeping our attendees safe.
And yet… I just didn’t see how we could deliver the same value, the same transformative experience, the same networking, the same level of relationship and connection, without being physically present together in an auditorium. I lost a lot of sleep trying to figure this out.
After talking with our event planner (who handles events for people like Tony Robbins, Russell Brunson, and others… so she KNOWS what she’s doing), I knew what we had to do. And now it’s official... Flip Hacking LIVE is going virtual.
We WON’T be meeting in person. Instead, we’re rolling out a ”virtual experience” unlike anything we’ve ever done before. How Will This "Virtual" Event Work? First, let me tell you what it’s NOT...

It’s not going to be a Zoom meeting or an extended 3-day webinar.
We’re planning something completely new and different.
We’re building a studio.
We’ve investing in $100,000 worth of new tech to pull this off.
- There will be a live soundstage. - There will be networking. - There will be digital breakout sessions. - There will be audience participation. - There will be on-on-one interactions. - There will be conversations. - There will be connections. - There will be energy and transformation.

This will be the SAME event we’ve always held…
The same intensity… the same impact... only BIGGER.
Going virtual means we can bring in MORE people for you to meet and learn from and connect with.

It means we can go beyond one conference room in one hotel in one city and do something truly unprecedented. For the First Time Ever, We’re Bringing Flip Hacking LIVE to You... ...and we have the opportunity to make it better than ever. The outpouring of support and excitement we've seen already since making the shift has been incredible.
I'm going to miss seeing everyone in person this year.
I'm going to miss the hugs, handshakes, and high-fives.

But we have plans in place to bring the connection and networking and relationship aspects of the event into the "virtual" realm too (not just the speaker presentations)... which means Flip Hacking LIVE 2020 is going to be JUST AS AWESOME AS EVER streaming in this new format.
I hope you'll join us.  www.fliphackinglive.com

@Alexander Felice, if you need any help finding some folks in the area let me know.  I would be happy to help point you to a few I know, I grew up there.