WIAcademy EducateBlog

Most experts agree that the rising rate of foreclosures across the United States is being driven in large part by the creative financing packages lenders have been offering in recent years.

So what’s the status of these types of loans now? Interestingly, they’re still very popular. According to Realty Times, lenders are paying more attention to the collateral by scrutinizing appraisals, home inspections, market conditions, and other property value indicators, but the “alternative loans” are still popular and being made at an increasing rate.

Click here to read Broderick Perkins’ article on this hot topic.

Jackie
Chief Blogger
Wealth Intelligence Academy

Posted 10:14 AM | Permalink | Comments (0)

Our goal at Wealth Intelligence Academy is to give you the training and tools you need to build wealth, achieve financial freedom, and keep what you’ve earned. That last point is known as asset protection, and we believe having a solid asset protection in place before you need it is critical. That’s why we offer advanced training taught by qualified attorneys on asset protection and tax strategies.

What’s important is that you learn to recognize effective, legal, and ethical asset protection strategies and know how to differentiate them from scams. Here are some scams you should be aware of:

Abusive Trusts. These shams go by a variety of names – Pure Trusts, Patriot Trusts, Contract Trusts, Freedom Trusts, and more – and the scammers claim they are based at least in part on some bizarre constitutional interpretations which have never held up in court. One asset protection expert called these “Con Trusts” and another said that “Pure Trusts are pure fraud.”

Transfer your assets to a spouse or family member. No matter how much you trust this person, you’re giving him or her total control of your assets—not a great idea. And if you do it when you know you’re facing a problem, it will likely be considered a fraudulent conveyance.

Fake loans. Yes, they’re easy and cheap – and ineffective and silly. A judge will quickly see what you’re trying to do, so don’t bother.

Offshore accounts. This is a tired, worn out approach that doesn’t work. The IRS will find out about any money you’ve stashed offshore and they know all the techniques you might try to get your hands on your cash.

Remember that old cliché: if it sounds too good to be true, it probably is. If you try to cheat the U.S. government, you’ll probably get caught and go to jail.

Get your asset protection advice from a competent attorney that you’ve checked out. Then get your CPA involved. Yes, you’ll have to pay some professional fees, but it’s worth it. The easy and cheap solutions are generally ineffective and almost always illegal.

Jackie
Chief Blogger
Wealth Intelligence Academy

Posted 01:15 PM | Permalink | Comments (0)

When you invest in raw land and/or commercial property, be sure you know what environmental issues you might have to deal with.

John Brennan, president of Brennan Environmental, Inc. in Summit, New Jersey, offers tips on how to complete environmental due diligence prior to closing on a commercial property. He says the environmental firm you hire should gather as much information about the property’s past by doing the following:

- Records on file with the local municipality and the DEP should be reviewed.
- Interviews with past and present owners, operators and occupants of the facility should be conducted in order to determine previous uses of the property and how they may have changed over the years.
- Historical sources since the property was first developed, including chain of title, aerial photos and land-use records should all be reviewed as well.
- Federal, state, tribal and local government records need to be reviewed to learn about any spills or releases that occurred on the property.
- Searches of recorded environmental liens against the facility that are filed under federal, state or local law should be conducted to examine any unresolved issues.

Finally, Brennan says, visual inspections of the facility and adjoining properties should be conducted in order to learn about potential impacts from existing use and off-site sources that may contribute to environmental issues on the subject property.

Jackie
Chief Blogger
Wealth Intelligence Academy

Posted 04:41 PM | Permalink | Comments (0)

The foreclosure rate is climbing and that trend is expected to continue over at least the next few years. Experts agree that a major driver of this trend is the creative financing packages (or nontraditional mortgage products) that lenders have developed in recent years. These loans include adjustable rate mortgage loans, often with various payment options; interest-only mortgage loans; and extended maturity mortgage loans (that is, loans with terms longer than 30 years).

If you’re interested in focusing on foreclosures as part of your real estate investment strategy, you will want to read what Sandra L. Thompson of the FDIC said when testifying before a U.S. Senate subcommittee on the risks to both borrowers and lenders of these nontraditional mortgage products. Click here to read her remarks.

Chief Blogger
Wealth Intelligence Academy

Posted 04:03 PM | Permalink | Comments (0)

Not long ago, a real estate agent working at an open house in McKinney, Texas was brutally murdered. It is a sad fact that many of the activities necessary for successful real estate investing, such as showing properties to potential buyers or renters, have some degree of risk. You may often be alone with people you don’t know, creating a potentially hazardous situation.

But this should not deter you from building a profitable real estate investing business. Click here to read an article by Jordan Taylor on the simple precautions you can take to protect yourself.

Chief Blogger
Wealth Intelligence Academy

Posted 10:22 AM | Permalink | Comments (0)

One of the most common and costly mistakes investors make is to get emotionally involved with their investments, whether they be real estate, stocks, or something else. When the investment tanks, they can’t let it go.

No matter how skilled you are or how much you know about investing, not every deal will be a winner. When you realize you’ve got a loser on your hands, the best strategy is to cut your losses and move on. Get rid of the bad investment and focus on adding profitable ones to your portfolio.

Carla Fried with Money Magazine puts it well: “If it isn't a good investment, sell. Period.” Click here to read her article, then take an honest look at your holdings.

Chief Blogger
Wealth Intelligence Academy

Posted 04:03 PM | Permalink | Comments (0)

A fundamental asset protection strategy is to keep your assets that might generate liability separate from each other. The challenge with that is the expense and hassle of setting up separate ownership entities. For example, if you decide that the best ownership entity for your situation is an LLC and you have 20 income-producing properties, you could conceivably need 20 LLCs.

Some states have passed legislation creating a Series LLC which allows multiple units to be created under one LLC umbrella. Each of those units is separate, with its own assets, purpose, managers and members.

This sounds like a great idea for real estate investors but there are a couple of issues that require caution. First, the Series LLC is new and there is no case law to back up the statutes. We know what the legislation says, but we don’t know how the courts will interpret it. Second, the Series LLC has been adopted by only a few states so far, and we don’t know if a non-Series LLC state would honor this entity in the case of a dispute with parties in multiple states. As more states pass Series LLC legislation, that will become less of an issue.

Your best strategy right now is to talk to your attorney to find out if a Series LLC should be part of your asset protection plan. Or contact Anderson Business Advisors, PLLC.

Jackie
Chief Blogger
Wealth Intelligence Academy

Posted 05:55 PM | Permalink | Comments (0)

The recently passed Pension Protection Act of 2006 requires individuals and companies making non-cash contributions (such as real estate) to charitable organizations to attach a valuation report performed by an appraiser to an estate or gift tax return. The law also provides for new sanctions (including penalties) for appraisers for valuation misstatements in tax matters, giving the IRS new ammunition to discipline appraisers and taxpayers who do not provide support valuation opinions when making non-cash contributions to charities.

Essentially, this means that it will be easier for the IRS to identify taxpayers who try to fraudulently inflate the value of a contribution to reduce their tax liability.

We support the concept of making cash and non-cash donations to charities both to support the mission of the receiving organization and as part of your tax strategy. But the method by which you make the contribution and calculate the value should be both legal and ethical.

For more information on this issue, check out the IRS web site at: http://www.irs.gov/charities/contributors/index.html
To find a CPA/Accredited Business Valuation professional, visit:
http://www.aicpa.org/credentialsrefweb/ABVCredentialSearchPage.aspx

Jackie
Chief Blogger
Wealth Intelligence Academy

Posted 10:20 AM | Permalink | Comments (0)

Ever heard someone say that foreclosures only occur in poor areas that you’re afraid to go into? Or that trying to work out a deal when a property is in the preforeclosure stage is a waste of time because lenders would rather foreclose than negotiate?

These are myths. The fact is that foreclosures occur in all types of neighborhoods, from modest to opulent. And lenders much prefer to avoid foreclosure, which is expensive and time-consuming, even if it means taking a small loss on the loan to do so.

Read Top 10 Foreclosure Myths to learn the truth about these and other foreclosure myths.

Jackie
Chief Blogger

Posted 04:24 PM | Permalink | Comments (0)

In many areas, we are seeing developers backing off from earlier ambitious plans. A number of factors are driving their decisions, including a slowing rate of home price increases and a dramatic rise in construction costs.

Another big factor is neighborhood opposition. Developers come in with a grand plan and the neighbors fight it. Sometimes the resistance is valid; sometimes it’s not. In any case, some developers are deciding that certain projects just aren’t worth fighting for and they’re taking their marbles (and their dollars) elsewhere.

Realty Times columnist Al Heavens has an interesting perspective on this issue. Click here to read his observations.

Jackie
Chief Blogger
Wealth Intelligence Academy

Posted 07:48 AM | Permalink | Comments (0)

You’re going to see some changes to the Wealth Intelligence Academy blog. Our goal has been and will continue to be to give you information and advice you can use to build your real estate investing business. As the newly-appointed Chief Blogger, my job is to provide commentary that is contemporary and relevant, and to work with our trainers and mentors to share their insight and wisdom with you as well.

I’m looking forward to the challenge and I hope you’re looking forward to the change.

Stay tuned,

Chief Blogger
Wealth Intelligence Academy

Posted 07:45 PM | Permalink | Comments (0)