Minnesota Real Estate Investors Association, Inc.

Seller financing is a term that covers a lot of different things. But it basically is a process to purchase or control a property without needing all cash of getting a loan to pay the seller off. Seller financing can be a useful tool in a tight credit market. It allows sellers to move a home faster and get a sizable return on the investment. And buyers may benefit from less stringent qualifying and down payment requirements, more flexible rates, and better loan terms on a home that otherwise might be out of reach.

In a seller financing transaction, the seller takes on the role of the lender. Instead of giving cash to the seller, the seller extends enough credit to the buyer for the purchase price of the home, minus any down payment.

Seller financing can be done in many different ways and with multiple options in the same transaction. The most common form of seller financing is with a Contract for Deed (AKA Agreement for Deed or Land Contract), but there are many alternative options available, including lease options, Subject-To and wrap around mortgages.

A Contract for Deed is simple to understand, you make monthly mortgage payments to the seller directly rather than getting a loan from bank or private lender. Let’s say you agree to pay the seller $100,000 and they agree to a Contract for Deed at a 6% interest rate with a 5 year balloon payment. You would pay the seller $599.55 PI (Principle & Interest) per month for 59 payments an on the 60th month (5 years) you make a lump sum payment of $93,054.36 and the seller would sign over the deed to the property. When you were making the payments, you were the owner, but the seller retains the right to cancel the contract and get the property back if you are in breach of the contract including but not limited to making the monthly payment on time. Read More...

Anytime (like now) that there is a rollout of government assistance, you can count on two things:

1)    Bumps in the road (it's hard to manage many millions of people needing help)

2)    SCAMS

I haven't yet heard of any of my clients or friends being taken in by this stuff, but I did want to alert you to this dynamic.

How to make sure your check is the right check.

Most of the Economic Impact Payments (i.e. stimulus checks) have been direct deposited by now. So if you have NOT received it, you might want to check the status using the tool the IRS has set up here:

https://www.irs.gov/coronavirus/economic-impact-payments

Some who did not set up direct deposit, or for other reasons, might receive a check instead. That said, a couple things to note: Read More...

I'd like to simplify things for you today.

There is so. much. noise. right now about how to survive (even thrive) in the midst of this very difficult season.

"Pivot" they say.

And yes, if you are running a business, these times call for a bit of a shift. Only a very small amount of businesses haven't been affected in some serious way by this ongoing crisis, and if you need somebody else to tell you to pivot at this point, chances are good that you are already in trouble.

I've already been writing to my clients a great deal about this dynamic, and I hope you have been finding these messages helpful. We will continue to be out in front on these matters, simply because things are constantly changing, and we are uncovering new information and new benefits (and how to receive them).

It's all getting very complicated.

That's why I hope you see why I'm working so hard to be in communication with you right now.  Read More...

This program allows a lender (such as a bank or credit union) to provide small business owners with a loan that then is "forgiven" when you show that you spent the money on "qualified expenses."

• Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. The loan amount is capped at $10 million. AS OF YESTERDAY: The payroll calculation no longer includes 1099 contractors in the formula
• Loans will be forgiven up to the loan amount for a borrower's payroll, rent, mortgage, and utility costs incurred and paid during an eight-week period after a loan is originated.
• Loan forgiveness will be reduced to the extent of a) any reduction in employee headcount during this period (as compared to the prior year), and b) any reduction in pay of an employee by more than 25% (as compared to their prior year compensation). Borrowers that rehire workers will not be penalized for paying them less when they are rehired.

"Qualified expenses" include: Read More...

Imagine this scenario… 

You find a good piece of real estate that you decide to buy. 

You have little money to buy it, but you decide to use whatever money you have as part of your down payment. 

You get qualified for a 90% LTV loan. 

You call around and you are able to raise the remaining money you need for the down payment from your close friends and family. 

You promise to pay them a generous interest rate of 8% for lending you their hard-earned money. 

The following month, you find another good real estate property that you want to buy.

You have no money to buy it, but you know you can raise the money. 

You have great income and credit and once again you get qualified for a loan with 90% LTV.

You call around and you are able to raise some of the money from your close friends and family. Again, you promise to pay them a generous interest rate of 8% for lending you their hard-earned money. 

This time, you remember about a line of credit you have, and so you decide to use all of it to close the deal.

You’ve now raised all the money to buy this property and you couldn’t be more excited. You start feeling like a successful investor.  Read More...

"No man was ever wise by chance." -Lucius Annaeus Seneca

Sometimes there are things you can fix, and sometimes there are the business problems that you just have to take on the chin.

But golly ... the worst are those that are self-imposed and done in ignorance.

Which is what we're here to help you fix, before it's too late.

Year-end is a great time, simply because of the impending deadline of 12/31 to do something that will serve to fix things for 2019.

Here are a couple examples of the sort of things we should fix, if they apply to you, specifically if your business is set up as an S Corp (or is an LLC operating as such).

An S Corp is a pass-through entity. That means the income and losses of the company pass through to your personal return. The entity itself files a tax return but doesn't actually pay tax (except a state tax in a couple of states).  Read More...

"You have to set goals that are almost out of reach. If you set a goal that is attainable without much work or thought, you are stuck with something below your true talent and potential." -Steve Garvey

Consider the following story...

Alison, a young girl running a lemonade stand,  last summer, in Bountiful, Utah. Pretty typical, right? But this ten-year-old girl was exceptionally bright. She had been watching other ten-year-olds run their lemonade stands with one qualm: they let customers slip away without a sell.

Determined, the girl enacted a new selling strategy. Instead of asking customers, "Would you like any lemonade?" like the other kids did, this girl decided to ask, "Would you like lemonade or a cookie?"

From that point on, customers rarely walked away from her stand without AT LEAST lemonade or a cookie to consume. Read More...

To build a long-term, successful enterprise, when you don't close a sale, open a relationship." -Patricia Fripp

I know that there are businesses who are doing extremely sophisticated, enterprise-level things with their email marketing. And they are most definitely worth studying.

But I prefer to live in the land of what is actually possible for a small business owner. And if you're like me, you like things simple.

So, I suggest you start by cutting out two bad habits, rooted in some mythology about the email medium:

1) Branded headers and clean graphics make your emails look more "professional".

So I ask you: how do you want your emails to be received? As a "professional" email -- with similar content that can be otherwise found through a simple internet search? Read More...

 Just yesterday - almost literally, the news was that House Flipping is Down.  Now, the news is that House Flipping is strong! What gives? 

After reading an article published by Housing Wire, and written by Jessica Guerin, I want to share with you the statistics show that house flipping is strong again.  The number of homes flipped in America is approaching its high of 2006, just before the crash.

The latest data from CoreLogic reveals that 10.9% of all home sales in the fourth quarter of 2018 were flips, or homes that have been occupied for two years or less. This is the highest rate since the housing bubble days of 2006, when flips comprised 11.4% of home sales. (See chart below)

House Flipping accounts for close to 15% of the current home sales in America

The overzealous speculation of house flippers in the months leading up to the crisis is often cited as a contributing factor to the housing bubble. So should we be worried now that houses built on spec appear to be making a comeback?

No, says CoreLogic, citing evidence suggesting that the business practices of flipping is far better than what it used to be. Flippers are much more educated today, then they were 13 years ago. Instead of flipping homes based solely on price speculation, investors are flipping with a focus on adding real value to properties. Read More...

"Tax complexity itself is a kind of tax." - Max Daucus

A, B, C, D, E, F, G ... something, something ... T, C, J and A.

Remember when the alphabet meant singing songs in class? We don't really either...

But now, thanks to those last four letters, it means small income tax rate reductions for individuals, and larger ones for corporations. The Tax Cuts and Jobs Act (TCJA) was signed on December 22nd, 2017 and brought many new provisions with it.

As far as Salt Lake County businesses are concerned, the new law is worth looking into. If you have yet to do so, my goal below is to highlight some specifics before your eyes glaze over ... I do remember that from school. Read More...