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I’m not sure I had ever been that scared in my life…

…and it all started with a simple LLC!

Despite being a letter from the government, it was clear as could be: I was being charged a nearly $10,000 penalty from the IRS.

What was I going to do? I didn’t even have $10,000!?

And why was I being charged this?

After several panicked hours of research, I finally realized why I was being hit with this fee:

Because I was stupid.

OK, being stupid isn’t technically the reason why I was being charged $10,000.

Maybe “over zealous” is a better term — and it’s a simple mistake anyone could make.

Including you.

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It Started With An LLC…

Here’s the deal:

When I first started investing in real estate, I heard a lot about LLCs.

I needed one, right? At least, that’s what I thought.

I had just purchased a triplex with some good friends of mine, so of course, we wanted to becool “official.”

So I went to my Secretary of State’s website and paid the $300 or so for an LLC. I printed out the documents, made a nice file folder for it, and put it in my file cabinet.

Related: 5 Reasons I Do NOT Invest in Real Estate Using An LLC

Now I was official, right?

(In reality, because I never transferred the property into the LLC, the LLC wasn’t doing anything. I assumed I would get the property transferred in soon, but never had the time. Besides, the “Due on Sale Clause” made it a little sticky if I wanted to transfer the property into an LLC anyway. More on that here.)

So the LLC was formed, and the LLC just sat there.

Maybe a mistake — but definitely not a $10,000 mistake. Sure, I wasted $300 on an LLC that I didn’t use.

But the real problem didn’t start until tax time.

The Fateful Mistake

A year later, I started working on my taxes.

Back then, I did all my own taxes using a popular online tax planning software, which was relatively cheap and easy to use.

Because my LLC had absolutely no activity (due to me never transferring the property into it), it didn’t make a profit. So, total taxes owed on that LLC would be $0, of course.

So I just ignored it.

I mean, the IRS wouldn’t care if I mentioned it on the taxes because it made no money, right?

WRONG.

Here’s the problem: The IRS requires that every non-single member LLC (in other words, any LLC that you have that is not you alone or you with your spouse) must file a business tax return (Form 1065) every year — even if the LLC makes no money.

(click to continue reading on BiggerPockets)

Have you ever received a nice, handwritten letter from a friend or family member?

Of course you have!

My guess is that you DIDN’T throw it away without reading it.

Am I right?

People don’t throw away handwritten notes or letters without reading them first.

This is why when investors use direct mail marketing to get leads from motivated sellers, handwritten letters generally have a much higher response rate.

In other words, more people call you, wanting to sell you their house!

But I’m guessing you don’t have time to handwrite hundreds or even thousands of letters. You’d spend all your time writing and forget what your spouse looks like.

Bad idea.

Instead, many investors (myself included) turn to “handwritten font.”

What is Handwritten Font?

Handwritten font is exactly what it sounds like: computer font that looks just like handwriting.

I’m sure you’ve seen examples before, as your computer gives you a lot of options.

But let’s be honest: Most of them look terrible.

Just because the font is slanted a little doesn’t mean it looks handwritten.

Of course, you could find some good free fonts online through websites like FontSquirrel.com, but even those can look fake.

Instead, what I do is turn MY OWN HANDWRITING into a computerized font that I can use in Microsoft Word, Photoshop, or other programs on my computer.

Related: The Simple Reason Most Direct Mail Campaigns Fail to Produce Leads

Yes — that means you can TYPE, and it will look just like you wrote it by hand!

Pretty snazzy, huh?

So, how do you create handwritten font?

Here’s how.

How to Create Handwritten Font For Free

Step One: Head to www.MyScriptFont.com and download the template PDF.

(click to continue reading on BiggerPockets)

Sometimes a team can accomplish far more than a group of lone individuals. For example, cyclists in the Tour de France take turns riding at the front of their group, decreasing the wind for those behind them. Wolves hunt in packs to take down animals 20 times their size. And for those of us who were children of the ’90s, we all rememberDucks Fly Together.

This brings up another team that can accomplish amazing things — not a team of people, but a team of benefits which, when combined, can help you achieve your greatest financial goals. Specifically, I want to talk about real estate.

I’m a real estate investor, and I firmly believe that real estate is the best traditional investment on Planet Earth today. However, just because you buy a piece of real estate doesn’t mean you’re going to make money.

As I explain in The Book on Rental Property Investing, big wealth is built through real estate investing by capitalizing on something I call “the four wealth generators of real estate.” Alone, each of these benefits can help you make more money, but together they’ll make you rich.

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1. Cash flow

Cash flow is the extra profit left over after all of the expenses have been paid on a property. For example, if my rental property produced $2,000 in income and my expenses came to $1,700, my cash flow would be $300 that month.

Related: One Simple Habit the Vast Majority of Wealthy People Practice Every Single Day

Now, I know a lot of you are saying, “Three hundred dollars is not going to make me a millionaire.”

Probably not. But remember, we are just talking about one of the wealth generators. There are still three more to go!

Additionally, that $300 might be from just one property. If I owned ten similar units with the same cash flow, that’s $3,000 per month. If I owned 100 units, that’s $30,000 per month. This cash flow can go a long way toward helping you quit your job — or helping you save for a future big purchase, or retire wealthier.

(click to continue reading on BiggerPockets)

Despite what you might think, I was not born knowing how to invest in real estate.

I know, I know. Shocking, right?

Of course, no one knows how to invest in real estate innately! They must learn.

Now, if you’ve been around the real estate investing industry for any length of time, no doubt you’ve heard the term “mentor” before.

No, I’m not talking about some paid coach or guru course.

I’m talking about real-life, local individuals who can help a new investor on their journey toward success.

A mentor can show you what’s working for them, what is not working for them, share the lessons and mistakes they’ve made, make introductions to others in the real estate market, and provide real-time feedback.

Having a mentor can truly be life-changing — and today I want to introduce you to one of mine.

Kyle is an airline pilot who started investing in real estate almost by accident. Over the years, he’s acquired a number of properties and made a lot of money from real estate.

In this video interview (with Mp3 version and text transcripts as well!), Kyle and I talk about how he got started (almost on accident!), how he transitioned from flipping to rental properties, and why he decided to help out a young, dumb kid named Brandon. :)

If you are a fan of the BiggerPockets Podcast, I think you’ll love this interview and will learn a lot.

So without further ado, here’s my interview with Kyle:

 

(click to continue reading on BiggerPockets)

 

The 7 Seemingly Innocent Habits Holding You Back From Success

What big things do you want to accomplish this year? Are you going to start a new business? Double the revenue in your existing company? Write a best-selling book? Lose 50 pounds?

Goals are great, and you should definitely have them. But goals can easily be sidetracked when something bigger comes into the picture: habits.

Now, of course there are plenty of good habits that an entrepreneur should have . . . but what about the bad ones? We all know some habits are obviously bad, like smoking or excessive drinking. But for entrepreneurs, the distinction between “good” and “bad” habits is often blurry and situational.

Therefore, I want to lay out seven habits that, although seemingly innocent, can actually hurt your chances of achieving your goals this year.

But first…

***Hey, you! Yes, you! If you are reading this post, you’re likely interested in growing your business and building wealth. If so, I want to invite you to this week’s BiggerPockets Webinar, How to Use BiggerPockets to Become a Rockstar Real Estate Investor. We’ll be talking about how to harness all the tools BP has to offer in order to find partners, lenders and sellers, build your reputation as an investor, and much more! Hope you can make it! And now back to the post!***

1. Checking email

How many times a day do you check your email? More than once? That’s probably too much.

Email tends to be the thing people do when they don’t want to do what they should be doing.

I know you think you need to be in your email throughout the day, but chances are, your addiction results in your putting off the one thing in your life you really should be focused on right now. So, make an effort to reduce the amount of times you check your email.

Related: 10 Seemingly Harmless Habits That Sabotage Ambitious Millennials

Set up smart “filtering” criteria, unsubscribe from email newsletters you no longer need to read (I just unsubscribed from over 1,000 newsletters, using Unroll.me), and get people used to your responding just once a day.

2. Logging onto Social media

Let’s be honest: We all spend way too much time on social media.

Whether your social media habit leads to your sitting “in the john” a bit too long, or to a quick status update that turns into 35 minutes of mindless scrolling through your newsfeed, this habit can quickly take over the limited time you have to be productive.

So, do yourself a favor and limit the time you spend on social media.

For me, Facebook is my “go-to time-waster.” That’s why I installed theFacebook Newsfeed Eradicator, which essentially shuts off the Facebook newsfeed on my laptop. This alone has saved me several hours per week.

3. Procrastinating

Yes, procrastination is a habit. It’s often much easier to say “tomorrow” than “now.” But the things we procrastinate about are often the very things that most need to be done now.

So, instead, make it a habit to “time-block” your most important things to ensure they get done on schedule today, not tomorrow. For more on-time blocking ideas, don’t miss “This Productivity Hack Completely Changed My Life, and It Can Improve Yours.”

(click to continue reading on BiggerPockets)

Want to Lose All Your Money & Cry Yourself to Sleep? Make These 4 Newbie Mistakes!

You know that I love you, right?

Maybe not the “I want to have your baby” kind of love, but the “I’m about to yell at you, and I’m doing it because I care” kind of love.

Don’t you feel special?

Now, as the title suggests, this post is geared toward newbies.

But what’s a newbie?

I would define “newbie” as anyone who doesn’t feel like they “know it all” in real estate yet.

Yes, that means you. And me. And of course, Ben Leybovich. (But not Brian Burke, ’cause that guy really does know it all.)

So, really, this post is for anyone who is trying to build their real estate empire.

That means you! So keep reading.

These are the four mistakes newbies can’t seem to help making — but not if I have anything to say about it!

1.) “I Can Do It All Myself! I’m Superman!”

As a real estate investor, you wear a LOT of hats. giphy

One day you are a home inspector. The next day a master negotiator. The next a marketing wizard. Then a manager. Sometimes a plumber.

And that’s not a bad thing, necessarily. When you first start, you don’t have a lot of cash to use to hire other people, and you need to use what you have.

However…

The problem is newbies tend to stay in that state for FAR too long.

Like, years.

If you are trying to build a real estate business, begin thinking NOW about the systems you can outsource. Can you hire someone to clean toilets while you look for deals? Can you hire someone to answer phone calls and pay them on a per-deal basis? Can you buy such great deals that the cash flow covers management?

(And yes, Ben, you can buy properties that cash flow enough to cover management! You just gotta look harder!)

(click to continue reading on BiggerPockets)

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