Archive for 'Buying RE'

Question from Stephen:   (mike’s reply in blue)

Hi Mike, I am putting together some cheat sheets to use when entering HUD1’s. I would like to forward them to you when finished for your opinion.
Sure

One thing I finally grasped is that you don’t enter a hud1 the same way, it depends on whether you are bringing a check to settlement or taking money home from settlement.
BINGO!!

 If you are bringing a check the the mortgage is a negative, but if you are bringing home money the mortgage is a positive. And all other items are reversed whether it’s a check or a deposit. Is that correct?

i am clueless on negative and positive, however, Please think about what you will be doing as an investor, let’s keep it “brain-dead simple” makes it harder to screw up….

it does NOT matter if you are buying, selling, or trading…
Click to Access Video or Read More

Question:

Another question Mike.

I bought an REO last Aug. from the bank with a hard money loan.

I tried to go in and enter all my receipts this year and show the purchase process and all that for this years taxes, as I sold it this year in April.

I got it all fouled up as how to show the purchase with my Hard money Lender funding the Cash purchase from the bank.

Then I fouled it up even more trying to zero out the loan after a Sold it.

I don’t know if I’m over thinking the whole process of making a Cash Purchase from the bank with a Loan from my private lender.

I use 12% interest only loans for 6 months.

I’ve watched all the videos with my wife repeatedly and I’m just fouling it up.

Please help! thanks,

K.W.

Answer from Mike:

Another question Mike.  OK

I bought an REO last Aug. from the bank with a hard money loan.

so far, so good, but let’s step a moment and take a look at the big picture.

1. S-L-O-W Down and carefully review the Accounting Basics using the “Post Office Box Concept” to understand the basic fundamentals of Mike’s Accounting 101

here is the link for the short video explaining the Post Office… Click to Access Video or Read More

Question From Steve:

Hello Mike,

I looked through the Investor Books Manual and did not see this …

When doing a flip, the repairs will be a capital expense versus an ordinary expense.

How are you booking the repairs?

                                  Steve

 

ANSWER: Great Question Steve!

Yes, it is in the manual; however, you will not find the word “FLIP.” (I hate that word and back in the day, the term “flip” was also used to describe a fraudulent real estate transaction. And before the downturn of the economy, the Feds were targeting “flippers” of real estate even though they did not understand ethical investors used the term for a legal transaction.

All right, i am off my soapbox.

Therefore, replace your word “FLIP” with Click to Access Video or Read More