All Forum Posts by: Joshua Loh

1) Yes you do. You report it by recording all your rents and expenses and then giving that to your CPA at the end of the year to file your taxes. You can create yourself an excel sheet or use software like rentecdirec.com or stessa.com (stessa is free) The IRS doesn't know how much you are receiving unless your tenant reports the payments to you for some reason or the IRS audits you. However, any profit you have in rental is usually offseted by depreciation so you almost never pay taxes on rental income.

2) You can always rent out parts of your primary residence. If you are asking because you have a mortgage on it, almost all mortgages only require you to live in it one year. You can rent it out afterwards.

Hi Polo,

Thanks for the reply. I have an acquaintance who is also a landlord and he told me the only property he is renting out is his primary residence and he told his tenants to tell everybody that they are his relatives and that they are staying there rent-free. Sounds really shady to me and extreme if the taxes are either non-existent or negligible.

If I get a property manager, will they also be responsible for reporting on taxes on the property or is that my responsibility?

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Hi guys, have a couple of questions as a first time landlord.

1) Do I need to pay taxes on my rental income? How do I report it? How does the IRS know how much I am renting my property out for?

2) Can you rent out your primary residence?

Thanks.

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Originally posted by @Joe Homs:

@Zenas Lam I would separate your two goals.

1st If you want to live in Orange County then your goal would be to buy somewhere that "You and Your Family" want to live. You can buy a fixer and fix it up with "Your Taste" as I recommend that you live in it for two or more years to take care of the best tax advantages you can. You will probably not be able to turn this into a rental after that time, but you can sell it, buy something else and not have to pay any capital gains.

2nd If you are going to invest here locally, for the most part you will not cash flow at all. Most of us are flipping properties and making money that way.

P.S. If you think that prices will not ever go down then please think again. I have experienced three downturns in my lifetime and I am waiting for number four soon.

Good Investing...

No cash flow meaning holding and rent is not a good strategy in California? Is it because the state is more tenant friendly or due to the current pandemic?

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What types of systems do you use for automation in your REI business? Besides just CRM, do you use a website scrapper? VA? Bots on your website for auto reply?

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I thought of getting a SFH in OC myself but looking at the current situation in the state, I have decided against it. My plan is to get a SFH in a cheaper state (probably TX, NC, TN), remodel it, then rent it out first before deciding if I want to make the move out of CA. That will give me some cashflow. Don't get me wrong, OC is a beautiful county and I love it here but the prices and the policies being pushed in the state is making it harder to live comfortably.

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Originally posted by @Devin Browning:

Originally posted by @Skip Collins:

Before anyone blasts me for not having a profile - I just bumped into AstroFlipping webby and found this thread so I created an account to chime in hopefully to save someone from paying that much for coaching. Nothing new here. KeyGlee is just a master wholesaler with a mac daddy buyers list. And their "AstroFlipping" program is just a way for them to collect several thousand dollars from you to teach you how to be a Wholesaler #1 and feed them deals etc It's all about the LIST. If you have the biggest and best list of buyers - other wholesalers will bring their deals to you to liquidate fast. So as wholesaler #2 you have non-stop supply of wholesaler #1s feeding you deals. You don't do any marketing or deal with sellers because you don't have to. You are the man that has the list that sells it fast and that is what wholesaler #1s want. So that is how you can "astro flip" so many deals etc. Back before the last real estate crash when everything was humming, we worked with a really big wholesaler #2. He had a monster list and it was just magic. He would instantly sell our deals so we sent all our wholesale deals to him. Most of time he was selling to buy & hold landlord types who were happy with just a little bit of a discount under market value as they were playing long rental game. So even on tight deals he would make lots of money. But let me say this. To make a statement that wholesaling is dead or is going extinct is just nonsense. they talk ibuyers and tech trying to scare everyone but they don't know ****. the truth is - the ibuyers and big tech funds don't want to deal with PROBLEM properties. That is not the slice of pie they are targeting. Problem properties are where wholesalers thrive. Wholesalers FIX PROBLEMS. They are problem solvers and because you will always have homeowners with problems - you will always have wholesalers. The other thing is EQUITY. You need to be able to find DISTRESSED SELLERS WITH EQUITY. If no equity you can't astro flip anything. here is free tip for everyone thinking about paying all that money for coaching: what we do and have always done is buy dead people estate homes in real time. I'm not talking about chasing probate court filing junk that happens seven months after the death which is so competitive you can't even get a deal. I'm talking about Dad died last week and we are talking to family to work out the "problem home" they all inherited and put cash in their hands. What "probate lead sellers" will never tell you is it usually takes the family several months to get around to finding a probate attorney and filing probate. So from the date of death you have a seven month window of opportunity to grab that deal because nobody knows it is even there. The other thing probate lead sellers won't tell you because they don't study the data is that upwards of 50% to 70% of estate homes have prior estate plans where they completely avoid probate. So these homes NEVER get to a courthouse probate filing. So if you're working probates and battling thousands of competitors - know that you are missing out on 70% of estate homes that never go there. Another tip: 95% of estate homes are F&C (because by the time mom and dad check out they are usually well past their 30 yr mtg amortization and have paid off the home) and usually the home is a brady bunch timewarp from the 1970s that need updating. But mom and dad liked it that way because of all the memories with kids so they didn't change anything. They usually have 3-4 relative heirs (kids) who are all usually broke and don't want to fix up mom and dad's home. They just want and need their inheritance money fast - so they are already preframed to sell to an investor at a discount. This is how to do monster equity flips. Like high 5 and 6 figures doing wholesale double close deals. This is what we've done for years. We were crushing it during the last real estate crash in 2008 because we always knew how to find equity because equity lives in dead people homes etc. We don't do ads either. And we don't even use social media. This is getting kind of long but bottom line is if you are Wholesaler #1 - find distressed dead people homes with lots of equity to get deep discounts from the heirs. The best are real time dead people homes. (not probate. probate is too late) and then continue to build up your own buyers list to eventually become Wholesaler #2 so you can have other Wholesaler #1s feeding you deals. There you go. that is all you need to know.

How would I go about finding "dead people homes" without chasing probates?

Great question. That is exactly what I wish to know too.

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Originally posted by @Gary Leonard:

Originally posted by @Devin Browning:

Originally posted by @GARY LEONARD JR:

Originally posted by @Paul Fournier:

What’s up BP!

Recently, I came across a wholesale strategy called Astro Flipping, which seems to be a way to get multiple deals out of one property. This seems to be the new craze.

Have you done these kinds of deals before? What’s the process for successfully completing deals like these? And Is it worth it?

Thank you BP!

Astro Flipping is just a fancy way of selling online coaching. If you wholesaled before you probably Astro Flipped and didn’t even know it. It’s when ( you) partner with (1) investor and complete deal- Usually latching onto the Dispositions side of the spectrum.

1) Wholesaler Gets property under contract tract with motivated Sellers

2) Ensure due diligence and makes sure the numbers work.

3) Then Partners with another investor who gains equitable interest of the property and lines the deal up with a prospective buyer -

4)Secures buyer then reassigns back to wholesaler for a $2000 to $3000 fee-

5) Wholesaler now has equitable interest back and a buyer ready to close- Buyer closes and wholesaler gets their assignment fee LESS exit fee of either $2000 - $3000 to partner who provided buyer.

So imagine doing this with 20 wholesalers who don’t have a solid buyers list and come to you because all your business focus is on direct to buyer/flipper/ landlord with airtight contracts on a national platform. While those 20 closings are scheduled 15 more investors come with their contracts and dropping them off by transferring equitable interest securing a buyer, and existing for a fee - You charging the wholesaler a fee of usually $2000-$3000 because you’re delivering the deal back to them with a secured, willing and able buyer.

Has nothing to do with a rehab team -

It's having one wholesale get the deal, you don't JV nor daisy chain you actually take control of the property through getting deal fully assigned to you. Once you now have equitable interest you market for a buyer AT THE SAME PRZICE POINT as the wholesaler, after securing a buyer, you reassign to wholesaler with buyer attached to the deal. Have a stipulation that although you are assigning the contract to the buyer, you are not given them full assignment until day of COE (usually so they don't back out of the deal and try to go over your head as well as allowing you to reassign back to wholesaler.

I would really like to learn more about this process. Would you be willing to provide a slightly more detailed walkthrough?

Sure But the more details the more confusion.

here are the players:

Wholesaler # 1

Wholesaler # 2

Cash Buyer

Motivated Seller

Wholesaler #1 Through marketing get property under contract with motivated seller- therefore (see below)

Wholesaler # 1 signs P&S with Motivated Seller

Wholesaler # 1 has equitable interest in the property. Traditionally he would then market for a cash buyer correct ? But wholesale .#1 doesn't- here’s what he does (see below)

Wholesaler #1 assigns to Wholesaler # 2 instead of a cash end buyer.

This allows Wholesaler # 1 to focus on acquisitions and get more deals under contract to assign over to wholesaler # 2

Wholesaler # 2 usually has a rotund viable buyers list(s). They market there newly assigned deal to a cash end buyer

Wholesaler # 2 finds cash investors and assigns their interest in the deal to the final cash end buyer

Cash end buyer then closes with the motivated seller

Assignment fee is dispersed and paid in full to Wholesaler #2.

Wholesaler # 2 takes their share (usually 40% or whatever they agreed on with wholesaler #1)

After paying themselves, wholesaler 2 sends 60% or whatever the deal agreed upon ro wholesaler #1

Wholesaler 1 makes 50 to 60% of the deal and only need to work. about the acquisitions side of the business.

I hope that makes sense to everyone.

Like my business - I very rarely even deals with acquisitions or motivated sellers I have wholesalers dropping their assignments at my door step on a daily basis (doorstep figure of speech) All’s I need to do is ensure deal was formalized correctly and not a pie in the sky inflated or deflated figures- If it passed, ill market to my rotund buyers list where (if I did my job correctly which I always do) rapidly find a buyer to close deal with like clock work

Thanks for the detailed explanation. Sounds a lot like JV to me though.

One question I have is: Why would wholesaler #1 not want to find his/her own cash buyer? IMHO disposition is much easier than acquisition. If wholesaler #1 could do the marketing and negotiating with motivated sellers, they could easily advertise their properties on FB groups and Craigslist. There are many interested cash buyers in FB groups.

Reason why I am asking this is because I am looking at JVing, I have a list of cash buyers but I am thinking why would any wholesaler want to give me 40% of their assignment fee just for disposition when they can do it themselves?

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Originally posted by @Jonathan Greene:

@Joshua Loh let me tell you from a ton of experience, getting a ton of leads will sink your business, not help it sail. You end up spending so much time qualifying if you don't have an ISA team or VA that you lose some in the shuffle by over-automating instead of focusing smaller and building relationships.

Thanks Jonathan. I think that's great advice. The foundation of our business should be built on relationships.

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Thanks all for the replies.

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Originally posted by @Jonathan Greene:

If you are looking to use bots to generate leads, how good do you think those leads will be? If you want to get a batch of completely unqualified leads with no personal context, it sounds like a great idea. Leads can be anything, but you want warm to hot leads and the only way you do that is by building a funnel that gets them to you in the quickest way so you can add personal value.

Agreed. I was thinking of getting as many leads as possible before qualifying them. Currently, I am mailing and text blasting to get leads which cost quite a bit. It's going to take more work to build funnels, website, configuring the bots and of course a higher 1 time investment but was just thinking if that would be cheaper long term.

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All Forum Posts by: Joshua Loh

Joshua Loh has started 7 posts and replied 30 times.

Post: Questions as a first time landlord

Post: Questions as a first time landlord

Post: Suggestions to buying home in Orange County to build equity

Post: Anybody uses lots of automation in their REI business?

Post: Suggestions to buying home in Orange County to build equity

Post: Astro Flipping Wholesale Contracts

Post: Astro Flipping Wholesale Contracts

Post: Bots to generate leads

Post: Buying pre-foreclosures in CA

Post: Bots to generate leads