Real Estate and Beyond Blog

THE ROAD LESS TRAVELED IS LONG BUT JUST DO IT

Happy New Year 2012. I am writing my first blog of 2012. Many of you have been asking about Harry D'Elia. I would like to thank many of you for inquiring about my presence and well being. We all face challenges in life from time to time. Well, my challenge was last year about this time. I would like to announce that the roller coaster ride has ended for me and my family. It feels good to be normal and to get down to business. So, what happened to Harry that was so tragic.

My wife of 21 years embarked on a journey back to Louisville, KY, to settle her parents affairs. We only calculated her being gone for two months. It lasted nine months. Both of my inlaws were diagnosed with dementia. So, the plan was to empty the house and put it on the market for sale. It sounded like a logical plan when it comes to real estate. Right?

Well, we had to go through 40 years of personal belongings which is never easy. Then, we discovered the home had structural issues that had to be dealt with at the same time. This meant obtaining bids from licensed professionals in the local area and completing the work. We decided to enroll our kids into the public school system. I had to go back to Phoenix, Arizona to continue my real estate business and to take care of my inlaws. It has been a long road.

Also, I decided to join a new real estate company that offers full real estate and property management services to the public. I have never practiced property management. I had to learn this part of real estate from the grown up. Wow! I have a new respect for property managers. Currently, I manager well over 100 units and counting. I am now able to offer my clients a true ONE STOP solution when it comes to real estate

• ACQUISITION
• REHAB
• PROPERTY MANAGEMENT

My life was put on hold last March of 2011 when my father in law died. I flew out to Kentucky to bring my family back home. It was a long and hard trip. We buried my father-in-law with full military honors here in Arizona. It was a great day as they had arranged two planes to fly over his burial services. Picking up the pieces is never easy in one's own life. However, I believe we are a better family after it. I was learning a new part of real estate, closing deals, and taking care of my sick in-laws. I do not regret one thing about it.

3 LESSONS I HAVE LEARNED FROM THIS LIFE EXPERIENCE

1. FAMILY FIRST AT ALL TIMES IN LIFE
2. I CAN DO IT
3. ASK FOR HELP IN YOUR CIRCLE OF INFLUENCE

IT IS NICE TO BE BACK WITH MY AR FAMILY

HELLO I AM BACK IN THE RAIN

We all know this movie is an all time classic. It feels good to be blogging in the rain after taking a month off to iron our family business. Yes, we just finished burying my father-in-law who passed away on March 25th, 2011. He was 80 years old. He lived a long and prosperous life. He will be missed.

I just wanted to inform everyone that today is my first official day back. Yes, I have some great posts to write in the next couple weeks on real estate that I have experienced over the last couple of months.

HAPPY MEMORIAL DAY

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

It is important to separate business expenses from the following expenses:

• The expenses used to figure the cost of goods sold,
• Capital Expenses, and
• Personal Expenses.

Cost of Goods Sold

If your business manufactures products or purchases them for resale, you generally must value inventory at the beginning and end of each tax year to determine your cost of goods sold. Some of your expenses may be included in figuring the cost of goods sold. Cost of goods sold is deducted from your gross receipts to figure your gross profit for the year. If you include an expense in the cost of goods sold, you cannot deduct it again as a business expense.

The following are types of expenses that go into figuring the cost of goods sold.

• The cost of products or raw materials, including freight
• Storage
• Direct labor costs (including contributions to pensions or annuity plans) for workers who produce the products
• Factory overhead

Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Indirect costs include rent, interest, taxes, storage, purchasing, processing, repackaging, handling, and administrative costs.

This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million.

For additional information, refer to the chapter on Cost of Goods Sold, Publication 334, Tax Guide for Small Businesses and the chapter on Inventories, Publication 538, Accounting Periods and Methods.

Capital Expenses

You must capitalize, rather than deduct, some costs. These costs are a part of your investment in your business and are called capital expenses. Capital expenses are considered assets in your business. There are, in general, three types of costs you capitalize.

• Business start-up cost (See the note below)
• Business assets
• Improvements

Note: You can elect to deduct or amortize certain business start-up costs. Refer to chapters 7 and 8 of Publication 535, Business Expenses.

Personal versus Business Expenses

Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.

For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible. Refer to chapter 4 of Publication 535, Business Expenses, for information on deducting interest and the allocation rules.

Business Use of Your Home

If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Refer to Home Office Deduction and Publication 587, Business Use of Your Home, for more information.

Business Use of Your Car

If you use your car in your business, you can deduct car expenses. If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. Refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses. For a list of current and prior year mileage rates see the Standard Mileage Rates.

Other Types of Business Expenses

• Employees' Pay - You can generally deduct the pay you give your employees for the services they perform for your business.
• Retirement Plans - Retirement plans are savings plans that offer you tax advantages to set aside money for your own, and your employees' retirement.
• Rent Expense - Rent is any amount you pay for the use of property you do not own. In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. If you have or will receive equity in or title to the property, the rent is not deductible.
• Interest - Business interest expense is an amount charged for the use of money you borrowed for business activities.
• Taxes - You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses.
• Insurance - Generally, you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business, or profession.

http://www.irs.gov/businesses/small/article/0,,id=109807,00.html

COMMENTS: THE IRS WEB SITE IS GREAT WHEN IT COMES TO OBTAINING ADVICE. JUST THOUGHT I WOULD SHARE MY NEW SOURCE OF INFORMAITON.

DO YOU DO YOUR OWN TAXES OR HAVE A CPA DO THEM?

DOES YOUR BUYER LOOK LIKE THIS GUY?

More than 50% of first time home buyers are fearful of obtaining a home because they are afraid of losing their jobs. Unemployment rate is hovering right around 9.5% so everyone is afraid at this time. Are you hearing the same concerns in your local market? Another major concern is not being able to sell their current home to purchase another home. Many people are staying in their current homes and not moving across the country. I believe the conventional way of doing real estate is not working for many people based upon the facts above. Home prices continue to fall. Why give away your home for nothing?

Americans know this is the time to buy. However, they are not ready to take the financial plunge. They know the interest rates are low and the $8,000 tax incentive is tempting to many first time buyers.

 WILL THEY BITE?

I am tired of all the doom and gloom in the press. I have refused to participate in this recession. I have taken the following steps to get the message out there:

• Educate first time home buyers on real estate purchase and the many great reasons to purchase a home today. Cheaper to own oa home than rent
• Benefits of investing in real estate
• Offer several different lending options for first time home buyers
• Be the light of hope during these dark times

What are you doing to make a difference in your local market?

 SHINE LIGHT ON THE DARKNESS. EDUCATE THE BUYERS.

Real estate is a part of everyone's life. We see real estate for sale or lease on a daily basis via Internet, television, radio, and newspaper. The definition of title means an owner has the right to maintain or sell real estate in his/her possession. The owner has the right to enjoy the property. Title is the history of ownership of a parcel of land. Title companies do title searches to ensure that a buyer will have clean title when purchasing a piece of real estate. They want to ensure there is a true hand over of the property to the new owner without any blemishes on title. This service is provided by your local title agency. Title is another word for "right" or "interests" when it comes to real estate.

A title insurance policy is written against the property after thorough research from the title company. Title insurance is the company's opinion concerning ownership and marketability of title on the property. The buyer is purchasing the title insurance from experts. This means the title company is backing their research and willing to issue a title insurance policy on the land. Title insurance policies do not cover the following:

• Defects in title known to the insured
• Liens not on public records
• Easements
• Interests of parties in possession
• Survey matters

The reasons for issuing title insurance are twofold. The mortgage company wants to ensure that they will be able to put a mortgage on the property with no issues. The buyer wants to enjoy the property they just purchased with no problems. The owner wants to make sure that their real estate is marketable and will be able to sell, lease, or mortgage the property with no worries.

The title insurance policy protects the lender if there is a title issue. One must purchase an owner's policy to protect oneself. If not, it would be very costly if a title issue would arise down the road. Many times you can ask for a lower rate if you purchase from the seller's previous title company. I always believe in asking for a discount.

Conclusion

First, I would advise to ask the escrow title officer to explain the title insurance policy in detail in what it covers and does not cover. The escrow title officer is a great source of information since they perform this type of service on a daily basis. Another person to ask would be a real estate lawyer. I would highly advise to hire a real estate lawyer for an hour or two to review the title insurance documentation for one's protection.

I want everyone to welcome Brian Markus to the ActiveRain Community. Brian joined my company a little over two months ago. I started my own real estate company here in Phoenix, AZ after my popular radio show named Real Estate and Beyond. We have created a one stop for people to plug into the Network to start buying homes in the Greater Phoenix area. So, Brian has been in real estate since 2002 with great experience.

He is holding up his first real estate commission check with Real Estate and Beyond. He came to Real Estate and Beyond because of the Network concept and wanted to learn new things in real estate. He is off to a great start. He has many buyers at the present time because of the Network concept.

I encourage everyone to look up Brian Markus on ActiveRain and say Hello. He has his own section on ActiveRain and is learning the entire social marketing one day at a time.

I just want to give thanks to ActiveRain and Brian Markus for making this a better world.

 KEEP UP THE GREAT JOB!