From: Brandon Yeager, Founder of the Real Estate Rocks Newsletter.
Location: HouseRock Headquarters, Greensburg, PA
Saturday 7:21 AM
Dear Friend,
This email may keep anywhere from $5,000 to $1,000,000 in your pocket. Or more. No joke.
If you are somebody who likes to keep your:
Hard earned. Borne out of blood, sweat and tears “George Washingtons” working FOR You and Not AGAINST You…
Please…I need You to read every word of this email.
This concept I’m referring to, some of you astute-on-the-cutting-edge peeps of mine, are already harnessing.
For the rest of you, please accept this gift I’m sharing with you. (I will also tell you why I am sharing this secret at the end.)
Imagine this:
You own a duplex. (Or any other investment grade property.)
You have nurtured it for years. You have maintained it well, screened dozens of tenants over the years, deposited countless rental payments into your bank account, and allowed the 8th Wonder of the World (remember our newsletter on Principal Paydown?) to work for you.(PS…Sorry, I keep referring to old newsletters…I’m going to put them on the HRR website to link to in the next week or so). This stuff builds on other letters to You.
I digress…the duplex You owned…
Times change.
New Beginnings are on the horizon.
And you decide it’s time to sell.
But, you don’t really need all the money right now.
I’d like to introduce You to the:
1031 Tax Deferred Exchange
Imagine the pain of this scenario:
You sell your sweat-produced investment and you are set to walk away with $100,000.00 in proceeds.
In your mind, you have it already spent:
-
$20,000 towards the garage You built last summer.
-
$38,000 towards your RV setup at your private getaway up in the Allegheny National Forest.
-
$7,600 for the R&R you deserve at Punta Cana. (You’ve earned it.)
-
And then…
Tax time arrives and your accountant tells you:
“Yoooo, Houston, We have a problem!
I need you need to write a check to the IRS for $32,000.00“
Couple days later…after the trauma subsides…You look down at the check. You inhale deeply and exhale hoping those Tony Robbins videos were right about releasing anxiousness through your breathing. Unfortunately…it doesn’t help!
Your hand barely scribbles the words:
$ Thirty-Two Thousand and 00/100 dollars…
Wow. Your mind begins to race…thoughts ping-ponging inside your cranium.
What could You have done with that $32,000?
ANYTHING is the answer you tell yourself. And, that, is true!
I have to share with You:
You did NOT need to write that check to the IRS.
It is truly one of those cases where You did not know what you do not know. And it’s ok. The past, is not your fault. Moving forward…Your trusty guide, “BrandSquanto” is here to help You.
Instead of the pain of writing the $32,000 check…
I want you to imagine this pleasure:
Imagine writing YOURSELF a check.
Pay to the Order of….You, my dear Friend.
$ Thirty-Two Thousand and 00/100 dollars.
Long Story Short…
This is the “jist” of what is happening when you sell your investment properties without doing a 1031 exchange.
You are basically writing a check to the IRS for an OBSCENE amount of money that YOU DO NOT HAVE TO.
In fact, moving forward. If you have read this, and you do it, and do not need every drop of the proceeds, Know this:
You are doing yourself AND, Your family, a disservice.
Here’s the thing.
If friends don’t let friends drive drunk, then, please know->
Friends don’t let friends give away insane amounts of money to greedy politicians to frivolously waste it away unless they really aren’t friends.
So, You have been informed my Friend! I love you.
“The costs” to save such crazy amounts of money, You Ask?
Minimal. And…let’s reframe Your mind, because:
It’s not a cost!
The last time Annie and I did this, it was an investment of $950.
Yes, we paid $950 to a company, but we considered it an investment to try and keep much greater monies in our pocket.
In fact, without knowing the exact figures, this exact strategy probably saved Annie and I about $135,000 in Federal taxes on one transaction.
Again, it’s plus or minus whatever, but, that number is probably in the ballpark. (You know I love me some Yeagallelo whiffleball stadium lingo…Missed that newsletter?…stay tuned. Back Issues are coming haha!) Again, I digress.
Could I have used the injection of American Cashola? Sure!
But, We’d have instantly bought something stupid and unnecessary with it. Right?? You know it’s true.
Had we done that, we would have lost:
135,000 Valiant Soldiers
who are fighting desperately to provide for our retirement.
Think of it this way…Math zinger coming at you…
That $135,000 of extra investment capital is the equivalent to a 20% down payment on a $675,000 property!!
(For the fact checkers out there (I know you’re there)… $135,000 / 0.20 = $675,000)
And if that $675,000 property appreciates at 3%/year…that is $20,250 the first year!
Let’s stop here.
Hit the PAUSE button.
I’m not sure if you are fully understanding this.
Because I know I just pulled some Math ninjitsu on some of you. (Sorry, as a former Electrical Enginerd, sometimes I geek out on this.)
We not only saved ourselves like $135,000 in Federal taxes that would have had to be paid…we would have kept ourselves from a buying power of $675,000 that the appreciation alone is worth nearly $2,000/month. (Math geeks…$20,250/12 = $1687.50/month)
And…that number only goes up after year 1 because of appreciation.
This is some serious talk. Big numbers. And I know it sounds complicated. It is, but it really isn’t.
Here is why this matters:
Annie, my sidekick, and I have been there before.
If you have an investment property that You would like to try and sell AND save your hard-earned money and roll it into another property, so you can get to retire more quickly, experience more cashflow, and not sacrifice any more dollars at the feet of the government altar than you already have…
Call me.
Message me.
Send up smoke signals, if You have to.
Or a Bat-Signal! I don’t care.
Whatever you need to do. For the love of our relationship, please do not anything without at least talking to me first.
Deal?
Also. I know this newsletter is more “Investor” slanted.
You regular homeowners out there…2 things for you:
1) I’ve got you covered next week. You will learn about one of the greatest advantages you have in owning your home.
2) Sounds like it may be a great time for any of you “fence-sitters” who have “thought about getting into real estate investing”.
I tell you, as the ole saying goes:
The best time to plant a tree was yesterday.
The second best time…is today.
Here’s the thing:
George Washington hired Indians who knew the Laurel Highlands to guide him and his soldiers. They traveled the well-worn trails, though the trails were foreign to the British soldiers.
When you proceed through treacherous territory, (and conducting a 1031 exchange…there can be some pitfalls) and if you want to survive to see the other side, please, hire somebody who has been there…Somebody who has the knowledge and resources to save you the money you want to keep.
The number of real estate agents who have conducted a 1031 exchange themselves, is probably like 1-3%. Seriously. Most kind of stink…tbh.
If you know anybody who owns an investment property of any type, and is considering selling, please have them call me to talk through all the options.
Later,
Brandon “Ready for Your Bat-Signal” Yeager 😎
PS. None of these real estate judo techniques should be used without first consulting with your own personal CPA or financial advisor. Nothing in this email should be construed as financial advice and you should seek your own professional counsel. Had to tell you that silly line because this world is full of crazies.
NEXT WEEK: For you homeowners out there with no investment properties, or the desire to go into the minefield…I’ve got You covered.
PPS. 100% Non-CrapGPT Guarantee: Every single word and thought behind this email came from my brain that wants to infuse knowledge into yours. I love you my Friend.
Make it a Great Week!
