This is the last review on our list, and it is the one that can make you very happy at tax time. Having an excellent real estate and tax accountant on your side is critical. You are going to have to make decisions prior to closing the transaction and post closing, and the advice you need can come only from people who make their living understanding and staying on top of complex tax code. Prior to closing, they can work with your lawyer to develop the best ownership structure for you and/or your partners. Is it an LLC? A corporation? And how should it be structured? It matters because as you learned in the chapter on entity structures in this book, these decisions have tax implications. Post closing, your tax accountant can file the K-1 forms (the form used to report each owner's share of income and certain expense items) and perform audits if necessary.
TIP| If you do not have a good real estate and tax accountant, get one.
One of the great benefits of being in the mortgage brokerage business is that I get to see amazing real estate projects and have the privilege of helping very creative entrepreneurs put those real estate projects together. I have learned much more from their good practices and bad decisions than I ever did in school or in my own real estate investment career.
Real estate is a magical way to use leverage to your advantage and develop sustainable wealth. With that as a premise, it also requires you have a professional focus that not only sees the big picture or vision but also forces you to pay attention to the details.
All real estate involves taking risks. The difference between the professional investor and the amateur is that the real professional tries to manage this risk by surrounding himself or herself with an incredible team that adds value at every turn. Property due diligence is one of those turns and it is too critical to just roll the dice!
Scott McPherson is a principal and cofounder of a highly specialized real estate finance company called Capital Advisory Group, LC. Established in 2001, the firm has successfully closed around $3.5 billion of structured debt and equity in the United States. Scott has financed everything from raw land to high-rise condominium towers from Portland, Oregon, to Tampa, Florida, and has successfully sourced and closed multiple projects in excess of $100 million in cost. For more information, visit www.capitaladvisory group.us.
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This book makes it easy to not only buy a home, but figure out everything that you need to do, even get a loan. In simple and easy to understand language, it talks about where you should buy a home, what to look for in a home, how to find a home, how to get an agent, how to get a mortgage and more. This is a step by step process that you, a new home buyer, can use to purchase a home.