How to Make Thousands with Short-Term Rentals | Mark J Kohler | 2019

How to Make Thousands with Short-Term Rentals | Mark J Kohler | 2019

Hey, everybody don’t go anywhere until I at least tell you what the title is videos about. Yes, you can make thousands of dollars using VRBO Airbnb home away strategies at our law firm accounting firm We’re getting calls every day helping our clients structure the deals for asset protection and tax planning and we’re blown away with a lot of the numbers it is true you can make thousands and you don’t have to have a lot of capital to start and the more capital you have the more money you can make And you can even do this in your IRA or 401k. So yes, that’s the topic I’m mark Kohler CPA attorney best-selling author blah blah blah but I’m here for the next half hour answering your questions that I’m going to go through the good the bad and then how to structure it for maximum Asset protection tax planning and I want to field your questions on this this video will also be embedded in a blog article that will help explain more of it and put the Everything I say to print we’re gonna have a good time here. I’ve got my whiteboard I we got a late start and I’m ready down my entire Diet Mountain Dew, but I do have a really nice king-sized sharpie It’s a good month and it’s gonna keep me going. Alright, we’re gonna have some fun So please pay attention and share this video share this link. I want you to get it out there And for anybody that shares the video I’m gonna give away three different books Free shipping. I will autograph them They’re worth more on eBay if I autograph them But only after you read it and apply it then you can sell it But I’ve got my H steps workbook and a couple other books I’ll talk about these later, but I’m giving these away today on this broadcast no catch nothin. So I hope you enjoy this So let’s get into it Airbnb VRBO home away. I don’t care what order you put them in but Short-term rentals guys, this is a new market that I’m serious I mean this didn’t even exist five years ago. Maybe no one knew about it, but it’s been blowing up right now Here’s the concept if you own a rental property, why just rent it to someone long-term on a year lease Why not put it in one of these app portals website portals and rent it out nightly. I have clients that are even renting properties and then Subleasing it in a B&B VRBO strategy paying the rent off every month and keeping the cash. That’s right You can do this so I’m gonna run through all the strategies here and we’re gonna go through the good and Then the bad there’s always risk when we were making money and then we’ll go through the structure So let’s break it down. And if you want to type your questions below My amazing producers over here. They’re gonna help answer your questions. Talk about them online here But for me to throw down some good content. All right So good. Let’s go over the good I’m having lots of my clients double or triple triple their income. Right? Let’s do numbers right off the bat Let’s say you’ve got a little rental property maybe in a sexy neighborhood Maybe it’s just in a rural area. But whatever some people want to go vacation where your property is So if you could normally get let’s say 1500 a month with a long-term renter What if you were able to rent it out for? 200 a night Now, let’s just be conservative and say you get 15 nights Let’s just say you’re able to rent it 15 nights out of the month You’re already at three thousand a month in rent compared to 15 hundred a month the rent. That’s very common I’m seeing a lot of clients take properties and Triple the rent they were getting monthly with a long-term rental strategy now, I’m gonna get to the bad I know some of you’re like Well you I can’t do it in my municipality or my city or I can’t do I will come to bat in a minute But keep your mind open to some of these strategies. So the first good thing you can do is increase your rent I’m going to put that as number one number two. What is nice is you can use it? Yourself? Oh man. My handwriting today is terrible is I’m it’s a sharpie. It’s knocking me out. Alright use it yourself That is another strategy. In fact, let’s just number them. So this is number one number two is you can use it yourself That’s right I have a lot of clients that’ll set up a VRBO Airbnb in an area they like to visit when they’re not there They’re renting it out Now you may say well it’s going to cut – my rents Yeah But now you’ve got a vacation home that costs you nothing if it could break even You’re still paying down the mortgage and getting tax benefits and the use of it, right? That’s another Pro number three I want to throw this down You don’t have to pay rent when you visit you can go park your butt in that rental property and not have to pay rent to yourself and why is this cool because No rent, I’m gonna put no rent when you use it yourself. It’s now a tax write-off when you go visit Because you’re going to travel there not to go. Enjoy it You’re gonna go do fix up every time you stay there You’re gonna paint something fix something check on it clean It do something to make that rental properly a property a little better so now you’re getting a tax write-off to use it you don’t pay rent to yourself and The last thing I want to put in here is you can get a higher Appraisal a lot of times because it’s going to be an income-producing property see when you go to get a property appraised They’re gonna look at the fair market value of the comps in the area But also you can have them appraised it on an income approach So you can show that this property is making money and it’s worth even more because it’s an income property. So I’m gonna put higher appraisal Now I kind of get excited about this and even though I’m not jumping up and down. Oh, I can’t even spell appraisal day now last point in fact I’m gonna throw this in on the good is you don’t have to have a lot of capital to get into this strategy For example, I’ve got clients that find a property they like that’s up for rent They sign a year lease and make sure in the provisions. You can sublease it if you want they pay their deposit make sure there’s no pets yada yada and then they turn around and Drop it in a VRBO and we call that the sublease short-term rental strategy So you’re gonna sublet it on a short-term rental, even though you signed on a long-term lease You didn’t have to buy the property, but you’re making money on the difference. So I’m gonna put in here low capital so anyway, these are the positives of Using a short-term rental strategy now before I get into QA and there’s already questions popping up. I want to get into the bat Let’s get the good the bad and the ugly and then I’m gonna get into the legal structure and you’re gonna love it So here’s some of the bad the first bad Is you’ve got to furnish the place right now? Maybe you’ve got some leftover furniture somewhere and a lot of times you can’t throw your crappy couch in there You’ve got to put some decent furniture in there because if you’re gonna rent this out, you’ve got to make sure it’s attractive What are the fun Oh help me out my producers. What’s the name of that? Reality show it’s on Netflix where they turn properties into short-term rentals, and I can’t remember the name of it My wife and I watched it and I loved that show. Google it for me so we can come up with it’s a short-term rental Reality show fixer-upper type show and I love it I think they have a lot of great ideas to make the experience better for your renters and you’ve got to think your marketing this Property so I’m gonna put in here furniture and you’ve also got to think marketing. You’ve got to make this place Attractive for a short-term rental and you want to get good reviews and you want to be thinking about that You can’t just pop, you know, like a long-term rental you get someone in there and you forget about it You got to think about this Next the risk. There’s more risk in certain seasons I’ve got a client that’s got a short-term rental in Park City Utah now in the winter. It’s killing it in the summer people are loving it to spring and fall his rents dip now he may get 20 days out of the month or sometimes 30 days out of the month in his High-use season times and then sometimes five days a month in its low seasons So you’ve got to think of the risk year-round on this stuff year-round When you guys find it you yell to me. Got it. What’s the name of it? Stay here is the reality show. It’s on Netflix. It’s on Netflix. Stay here I would watch that show you want to get into it and understand some of the challenges that they cover in that show But they’ll take a property fix it up and not flip it, but turn it into a short-term rental. So that’s a great show Thanks We’ve got Rosalie and Carly over here directing me. So They didn’t do makeup today and it’s you can see it’s not good. So alright risk year-round and I’m gonna put in here Seasons so you want to be thinking about that? number four as Market volatility hits you harder this happened to mark Kohler myself I had a little rental property up in the mountains ski-in ski-out area. Guess when I bought it 2006. Yeah, I was a brainy a brainiac right? So so 2007 2008 when the market crashed no one was going to vacation rentals. Everybody had tightened their belts Austerity cutting back it hurt It was a better long-term rental see when the market hits long-term rentals are better when the market dips short-term rentals take a hit when the market when the Markets, great and everybody’s flushed with cash short-term rentals are great And a lot of people are people are buying homes because they’re doing better. They don’t want to rent long-term rents go down So you’ve got to be careful with this again with market volatility? Volatility be careful now number 5 which everybody knows is a big one is you’re subject to local legislation subject to local legislation now what I mean by that is there are Towns and cities that are outline outline short term rentals in certain neighborhoods and The hotel industry is going berserk with this. Did you know I read in the Wall Street Journal yesterday Marriott just launched their own short-term rental home department So now you can go to the Marriott calm and stay in homes and get Marriott points because they’re like if we can’t beat them We’re gonna join them So you’re seeing Hyatt look into this and also other major hotel chains So they’re getting into the market as well And so there’s going to be more competition and I’m gonna put that down here more competition see, you’ve got to look at who’s in the area with short-term rentals because if you pop in another one, you’re like Oh, everybody’s gonna rent my little Seattle rental. Well, there’s 50 other Airbnb ease within a mile radius so you’ve got to look at your competition and Also look at the taxes when I say local legislation Hawaii has implemented some new taxation I can’t even keep up with the rules on that There Hawaii is well I can but I’m not going to get into it But there’s a lot of areas in the country that are either outline short-term rentals in certain areas or now charging a hotel tax So you got to know what you’re getting into in a certain market and maybe the markets right for your little area Maybe it’s already saturated. So there’s the good and the bad now before I go into questions. Let me take a moment and Give you the structure and I want to tell you the books. I’m giving away now Here’s how structure works a lot of clients call me and they in our law firm and our accountants and lawyers I’ve got a great team. You don’t have to talk to me. I got five other lawyers and seven other CPAs that are amazing a lot of people think short-term rental is Ordinary income see if you’ve watched my video videos before and you can get over on YouTube Give me a like hit the bell whenever I go live you get a ping or whatever I shoot a new video, but usually we put our short-term operations over here in an s-corporation and Some people think I need to put my short-term rentals in the S Corp because it’s a short-term income no, the IRS ruling on this right now is that short-term rentals are a Long-term asset so I put your short-term rentals over here it still is a Schedule E on your 1040 and its long-term income now the rule from the IRS is if you want to put your rentals on this side and Call it passive income. You cannot provide daily hotel services, for example daily cleaning concierge services if you act like a hotel Then you’ve got ordinary income and you’re subject to self-employment tax So if you own a hotel you’re over here if you own an air B&B VRBO and you only clean the property at the end of the rental experience three days five days two days, whatever Then you can claim long-term passive income now. I’m just starting to Open the can on this end because this gets exciting. We’re going to use LLC’s We’re take a long-term passive income and passive losses and I’ll talk about this more But let’s dive into some questions. Who’s up first. What do we got? Mary Rosalee? Tell us our question, okay How do you get around with the cost in the mortgage saying you won’t rent it out or that it has to be your main? Residence from the lender. Okay. So some Mary and hopefully you everybody heard that I think our my audio team. Are we? Okay, I’m gonna repeat it a little bit and put it in a different terminology Mary goes out and buys a property in the mortgage. She gets a sweet loan She says it’s gonna be your primary residence. So she gets a really low interest rate Well, Mary join the club for the last 30 years. A lot of people go buy a home They may live in it for a little bit and then they turn it into rental and drop it in an LLC In these mortgages it says if you sell the property You sometimes are subject to and oftentimes I do on sale clause they’re gonna call the mortgage do But putting it into your own trust putting it into an LLC We have in 20 years had a handful of clients that had a problem with a bank calling a due on sale clause 99% of the time the banks have already sold your mortgage. They don’t care as long as you have Continued to make the mortgage payment and you’re not in default The banks are not gonna know and they’re not gonna care. But Mary you do not walk into your bank and go Hey, I just got this mortgage and I’m gonna turn it into a VRBO rental or you are going okay with that What do you think of banks gonna do? I mean, they’re gonna hit a button and I wouldn’t be surprised that the police don’t show up bankers freaked out So don’t go into your bank and don’t start waving a flag saying I’m turning this into a rental now I’m not suggesting you commit mortgage fraud either if you’re on a certain type of mortgage that’s going to throw you in jail Which is very unlikely if you turn it into a rental you’re gonna be fine the worst-case scenario is Mary they call the mortgage do and you go refi it with someone else and again in Thousands of deals I can count on one hand how many clients have had a problem with this? so even if it’s a long-term rental You’re gonna deed it into an LLC and turn it into a Reynold down the road Mary do not worry about it. Next question. This is from Mark, okay mark. Oh okay over on the microphone So if I have four rental properties, is it better to put the title under the LLC? Okay, Marco says he has four rental properties What I thought you were gonna say Marco is can I put them all in the same LLC? Marcos question was kind of like should I put it in an LLC? Yes, you do not want to be personally liable if the tenant falls down the stairs or has a party or starts licking the mold Off the wall or breathing in the asbestos off the ceiling people Get your properties into an LLC now, I’ll come to where you do the LLC in a moment But the first question is you should never own those rental properties in your individual name and Mary Don’t worry about the mortgage get them deeded into your LLC now at our law firm We set up LLC’s and I have a paralegal that will deed them into the LLC on day 2. We’re affordable We’re simple and you talk to a real lawyer when you do it Some of you may get on and click Legal Zoom and do some things if you know what you’re doing That’s fine But I have a whole team a paralegal two of them That help people that set up their entity online and now have to clean it up because they didn’t know what they were doing So here’s the point Marco this is good for everybody over here on this side. Remember, this is your S corp site This is your day job site. This is your ordinary income side. We’re gonna put your rentals over here For options some people set up one LLC and put all the rentals in there. Is that a bad thing? I wouldn’t say It’s terribly bad But you’ve got all your eggs in one basket if these have not a lot of equity in them their cash flowing But you’ve got a mortgage to the hill. I may put three or four properties in one LLC I’m not the type of attorney that sets up a new freaking LLC for every rental and Certainly not going to set up a new LLC in Wyoming, Nevada or Delaware Every time I have got blog articles and videos out there that it’s generally a scam and it’s oversold that people argue you need to go to Nevada, Delaware or Wyoming with your first rental property be careful people and I can tell you more about it We can talk about it. Your second option is Marco You might set up maybe two LLC’s and you put two rentals in this one and two rentals in this one guys That could be just fine. You’ve got two baskets for eggs, and you create some separation. I don’t want to overdo it in Some states you can do what’s called a series LLC Texas just came on board with these a year or two ago. There’s 15 states that allow for it I’ve got a table in the back of my book and a whole chapter that goes through Series LLC’s and you can look at which states allow for series LLC’s here with a series LLC you have baby subs and Then you put your different rentals in these different subs the beauty of that is you pay for one LLC one tax return One filing in you’re off to the races But they only work in states that have serious laws, Texas, Oklahoma Utah Boy Tennessee, you can go through the list the final strategy and I had a phone call with a client today is That you would set up a parent LLC in Wyoming which I’m good with I’m not saying Wyoming in Nevada are bad but they’re not for a brand new investor in everybody only when you have more assets then I have it hold all your LLC’s and you can have multiple rentals in multiple LLC’s in multiple states now the last thing I want to say everybody is set up the LLC in the state where your rental is now if you’re in California, and you’ve got a rental in, Tennessee You’re gonna set up a Tennessee LLC and if you’re worried about the california tax You’re gonna register for and in California some people try to hide out and just leave it in, Tennessee And if California catches you they shut it down and set up a new LLC I’m not saying that’s the right thing to do because California does want to tax you if you’re the manager of the LLC we can talk more about it Give me a call if you want. Okay, Josh. What’s his question? Okay, would you buy and hold in Texas? I’m freaking out about the property taxes being so high. I’m deciding between wakow and love fog Okay, he’s between Waco and Lubbock Rosalie’s like a wacko and Luque I love it. That’s good Rosalie for those in Texas. Yes, Rosalie just butchered your town its Waco and Lubbock and he’s in Texas and He says I wanted should I buy rentals in Texas? They have high property tax? Josh you’re missing the point People don’t stress about what the state taxes or if it has high property tax or it has a local municipal tax Like I can be in Maricopa County Arizona and there’s a tax there. I Could be in New York City and there’s a city tax there. Here’s the bottom line Josh Run the numbers and look at your net income I could be in a state where there’s no state tax and low property tax But if the numbers don’t make sense, it doesn’t matter look at your bottom line So I’ve got I was just meeting with the client from Texas literally just an hour before this live broadcast And he probably has ten rentals in Texas. Lovin it making money He paced the property tax But his net income rocks Josh focus on the net income and don’t get upset if they have property tax You don’t have state tax in Texas. So there’s pros and there’s cons run the numbers. Okay, Adrian All right, Adrian from entrepreneur says what type of contracts or agreements do I need to air B&B someone else’s home. Whoo, okay When it comes to contracts in let’s say we’re gonna go here and this is Adrian on Facebook entrepreneur Thanks for paying attention here. Love entrepreneur. They rock so let’s say you’ve got your LLC and You go lock down a rental property You’re going to sign a long-term lease in this lease. You’re gonna want to make sure you can sub lease And you don’t want to go in there and go Hey I’m gonna rent your property and put it in Airbnb and there’s gonna be thousands of people coming through Don’t open your mouth like that Adrian you want to just go in and go. Hey, I would love to lease your place This is great. Here’s my credit check yours my down payment. I’m gonna move in this week. I’m so excited Then you do move in. You start getting it ready. You take a month You get it furnished you get it ready to go and the lease Allows you to sublease make sure you read that lease really? Well, you’re not gonna get to design that lease The homeowner is gonna give it to you to review if you can allow for subleases. Great They may say no move on to the next one then when you go to your Airbnb the RBO home away you’re going to have a short team term lease that you use and This is where these websites do a great job. They’re gonna make sure you carry the right amount of insurance There’s gonna be check-in and check-out procedures they’re gonna show you the type of lease you need and they do a great job because air B&B and VRBO they want to see you succeed so they’re gonna give you all the documents you need and then they’re gonna take their cut every time they rent it and then you’re Gonna look at your net income from that point of view So again Josh back in Texas You’re gonna look at what is my net income expected whether I go a short term or a long term Alright Josh again. We’re gonna let Josh double dip or is this a new Josh? All right. Yes Hey Josh in Lubbock, Texas. Okay, um, I think it’s a new just okay Can I build a granny flat in the backyard and turn it into an air B&B? I live in San Diego Okay, so Josh lives in San Diego sound like a new Josh by the way, Josh and Texas Have you been – Bucky’s I hear it’s amazing I want to go to Texas just to go to buckey’s I hear the bathrooms are amazing and the barbeque mmm I can’t wait to go All right Josh and San Diego says I want to build a Little house on my property in the back and then turn it into an air B&B Now Josh, I love it. You’re a dreamer. That’s great. You got a number of hurdles to get over My son and I are doing a rehab in a small town here nowhere near the regulations in San Diego and they’re still upset that we want to build a second rental unit on on this lot that we think is A no-brainer right doing well in San Diego. You’re gonna want to make sure you look at the zoning You’re gonna have to get permitted for this You’re not going to just be able to start turning Raaj into a rental property without some city Inspector showing up going. What the hell are you doing? So number one, make sure that it’s allowed You’re not gonna have a problem with the city building a second rental unit on your property once you do that you’re gonna want to look at some of the rules for air B&B and VRBO a lot of times they want to make sure there’s proper parking There’s you’re not gonna have a permit problem again with the city I’ll say first of all, you got to make sure the city can let you build this place Then you got to make sure the city is gonna be okay with you renting it Then you want to go to air B&B RBO and make sure you check all the boxes that this property Qualifies because they don’t want you throwing up a piece of crap and it makes them look bad. So look at all those rules Ask around to and get out there and play like you’re a renter get on Airbnb in VRBO Shop around I want to stay in San Diego this weekend. What are my options? How much are you gonna pay? Look at what your competition is do a business plan. Now, this is a good inroad to tell you about my workbook This is my 8 steps to start a grow a business. It comes with a business plan a marketing plan and a strap plan It’s 19 a month 99 bucks on Amazon. It is freaking awesome 70 videos or webinars and podcasts It’s got a workbook you fill out. This is what you need to do before you start any business Analyze your competition run the numbers I go through this I have an hour-and-a-half video with each step that you can watch over and over again if you want I’m gonna give this away today. So everybody that shares this video this broadcast you’re in the drawing Rosalie will email our winners in the morning and I’ll announce them next week on our next slide broadcast Okay, next question Adam from March a Kohler Facebook or YouTube? All right. Here we go How much are your deeds? Oh, how much do we charge for deeds called Malory at our office and let me give you the number four three five five eight six nine three six six talk to Mallory and She will tell you what the filing fee is in your county and how much we charge for that deed We have two or three different types of deeds for different states because some counties are more expensive guys. There are 3,500 in America 50 states 3,500 counties Mallory has done hundreds of deeds all over the country. She will tell you how much the deed is in your area Typically around one hundred and twenty-five dollars plus filing fee and we take care of everything For anybody that needs an LLC, let me just say this real quick If you go to an online service like a Legal Zoom You’re gonna spend anywhere between two to four hundred dollars check all the boxes get an operating agreement You get all the books you get a tax ID number get stock certificates get everything even with an LLC It’s not one sheet of paper I know some of you’re like well in my state it’s 50 bucks if I go to the state website Yeah, you did one piece. Good luck. When you go to court people. You’ve got to have all the pieces and parts That’s why I have clients literally two paralegals that fix people’s entities that went to the state website for 50 bucks Make sure you get all the pieces now what we charge again. This is not an infomercial I’ll just tell you we charge 800 bucks for an LLC in any state Usually half off for the second LLC you get an hour with a real tax lawyer sharing their screen You can break it up into two calls on the phone webcam Whatever you want answering questions about tax planning the LLC Monitoring and maintenance how you set it up where you set it up. All those questions you want to ask is Included so anyway find a lawyer that’s in that same price range That’s gonna sit down with you that understands taxes and understands legal if you want any services get over to que que OS and there’s a sign up right there contact me that says I want a free 15-minute interview to know how much you charge or a Console you can get started right there Just check the box put in your info and you’ll get a phone call right away. Maybe even Rosalie. He’ll call you All right, Ben. What’s Ben’s question on YouTube? He has a question How can I use a register agent to keep my name off the Articles organization when filing an LLC? Very good been brought up privacy. Now. This is really important people check this out privacy versus asset protection So Ben How do I use a registered agent to hide my name or my address now? This is deep. I Call this the bulletproof vest and the camouflage. This is a chapter in my book tax and legal playbook I’ll give this away today I literally have a whole chapter on privacy on my podcast If you want to get over to my podcast on stitcher iTunes or Spotify Type in refresh your wealth refresh your wealth two months ago. I interviewed the father of privacy in the world the Best-selling author on privacy Jay Jay Luna came on my podcast if you want to get over to his book It’s on Amazon how to disappear it is Good and Ben if you’re at it’s been right, if you’re asking these questions, you’re gonna love that book My wife hates it because I freaked out and I always want to go off the grid anyway It is a really cool book And I have a whole chapter in here and I go through three stages of privacy 15 things you can do and I quote Jay Jay Luna there’s a lot on this topic, but let me give you the quick answer Whenever you do ask that protection You’ve got to start with an LLC people and you set it up in the state where the property is not where you are It’s where the property is if I’m gonna have properties in Atlanta, Georgia. I’m gonna set up a Georgia LLC and I’m gonna have to have us a Registered agent address and I’m gonna have to have a company address. So Ben it’s really two things Now when it comes to privacy, I don’t want your home address out There you as the manager your name’s gonna be out there, but I don’t want your home address out there So the first thing is you’re gonna have to come up with a business address This BS doesn’t stand for what you think it does. It stands for business so business address I don’t know where your head was, but mine was on business okay business address and you’re typically gonna use a peel box or a CM RA which is like your UPS Store where they have little addresses, that’s a CM RA We also have a mail forwarding service. You can use it anywhere in the country up to three companies 200 bucks. So price it around. I have some clients that go get a peel box for 100 bucks a year I have other clients in Seattle a peel box was like $400 a year 360 380 we do it 200 bucks any state mail forwarding and a virtual mailbox We scan your mail. You get a ping. You can go read your mail So do a mail forwarding a CMR a or a peal box, but don’t spend more than $200 Now that’s your business address Then you’ve got the registered agent address and that has to be a street address in the state where your LLC is and you’ll say oh Well, I can use mailboxes at a UPS Store No, the CM RA is registered with the state and no kickback because the state knows that it’s a UPS store So you have to use a real registered agent. So the registered agent we call it RA is about 125 bucks a year That’s what Legal Zoom charges That was what we charge so you’re gonna be out a hundred and twenty-five bucks now Then I don’t put your name on that either. That’s our law firm and I can do it in all 50 states Now if you want to get over 2 K Kos lawyers again KK o s lawyers calm we can be your registered agent in your mail forwarding for 325 a year been your Name shows up as manager, but your address is nowhere in your street address of your home is hidden. Now, this is privacy This is protection. What do you think’s best? Both of them together if you were going into combat Would you want just a bulletproof vest or would you want the camouflage or both? So that’s what we recommend and you can do it Affordably and you’re not setting up in Wyoming or Nevada to do it. You set up the freaking LLC where your property is All right, gene, what do we got? Gene has a question if you buy a house with residential mortgage And once you rent out just a room how long before I can claim that home as an investment property Okay Gene says she’s gonna buy a home and rent out a room. She’s not going to rent out the whole property Really gene we call this kind of the bed-and-breakfast or the mother-in-law apartment for in Hawaii We call it the Ohana problem and I help clients all over the country So I’m very familiar with this when you’re only renting out your room in your house. I’m not going to depreciate the whole house I would not call the house an investment property until you move out Now we did a whole podcast on this how to turn your home into a rental property Get over to my iTunes and scroll back we’ve done a couple shows on this over the last five years and You can look at a show on how to turn your home into a rental property. I’ve had a lot of clients do that They buy a home they live in it for a couple years. They fix it up. They’ve move out refinance it and buy a new home and they turn that one into a rental and think about this guys if you did that every Two years for the next ten years you’d have five rental properties cash flowing. Would that change your bottom line? Guys, one of the best strategies to build wealth is rental property that gosh I’m like guys I did not script this but it brings up my other book, okay? This is the business owners guide to financial freedom. This is my newest book out It is freaking awesome and I’m gonna give this away today as well you can get over on Amazon business owners guide to financial freedom Ryan Shay the CEO of Entrepreneur was like mark, this is one of your best books yet. It’s about building wealth as a business owner What Wall Street isn’t telling you check it out. It’s pretty darn good now I want to say this real quick before I go to Raj Raj has a question. I’m coming to you next Raj I just love this. I hope you guys are okay. Even though I’m out of Diet Mountain Dew I’m hanging in there with you. Okay? Here’s why this gets even better here’s guys I’m not even to the part that gets me geeked out. Here’s why it’s good Short-term long-term your day jobs over here your spouse day job. You’ve got a small business. You got an escort I don’t care down here is your family trust This is where you file your 1040 married or single Trust S Corp LLC. That is the trifecta This gives you asset protection for your rental This gives you your ordinary income to pay your bills as you live meagerly as possible and you save money We’re bringing your money over here to build wealth. It all is owned by your trust This is what my clients do we build this trifecta Now here’s how we go to the next level two points with this money. What do I want to do? Do I want to buy every rental in my name? Why don’t I form an IRA or use my 401k and Buy rentals in my retirement account as well now Robert Kiyosaki He’s not he’s not quiet about it. I’ll call him out. I don’t care. It’s Kiyosaki knows who I am I know who he is. Robert says never buy rentals in your IRA. I don’t agree with that he says only buy rentals in your name because you lose the depreciation if your IRA owns it and Robert knows our argument and I think he does a great job. I love Rich, Dad Poor Dad I quote it in my book, but I think he misses the next point. It doesn’t matter that you’re not getting depreciation Inside your IRA with a rental. What matters is your rate of return? If I can do better with a rental in my IRA than buying Facebook stock then buy a rental Yoyoyo, you don’t get the depreciation. Well, who cares? I’m making 10 or 20% on the money Are you giving 10 or 20% on your Facebook stock? I shot a video just three weeks ago on how to build a million-dollar Roth IRA I said you could do better than 7% I used an example of 12 or 15 percent It was like a salem witch trials. Everybody’s like mark’s crazy You can’t get 12 or 15 percent, but you get in your rental property all the time. Just do it in your IRA Rental property. You can do 15% people Wall Street isn’t telling you this So Robert Kiyosaki the father of rental property training. I love him. It’s great But do it in your IRA as well. You should be doing both I’m not taking away what Robert Kiyosaki says I’m stepping on his shoulders and doing the next Now if that wasn’t good enough, here’s the second point and then I’m coming to Raj What about the rental losses the depreciation the mortgage interest? You know what school rental properties cash flow they go up in value But they lose money on paper because of the big D and I don’t mean Dallas, you know that song I’m going through the big D. And I don’t mean Dallas. He’s talking about divorce is a country song He loses his truck his dog and his wife, but the point is here Depreciation is the big D when it comes to rental properties. You’re gonna lose money on paper these losses Either offset your income in your 1040 or or they go into a bucket and they grow you never lose those Until the day you die So I’m building losses for when I sell my rental property So I don’t have to do a 1031 exchange or I can use these losses against my other income if I’m a real estate professional Guys, I’ve got youtube videos on every one of these topics I’ve got a library of videos on my website Mark J Kohler com 60 videos couple hundred bucks You can start watching videos right now over and over again lifetime membership again This is not a an infomercial but the information is out there. I’m not just blowing smoke here people I’ve got 200 blog articles 80 YouTube videos over a million views with people that are starving for this information Thank you for watching this video share it and I’ll give away a book Okay, a few more questions and we’re gonna wrap it up Raj. What do we got? What are various things to consider when buying property as an investment and for rental income? Oh my gosh, Raj. You just played right into this. I’ve got to send him a book or five dollars rush Says what are the things I should consider? last week my blog article last week on my I’ve got a Newsletter that goes out every week that’s free Get over to March 8th Kohler com Raj my article last week was Ten steps to buy your first rental property No, I’m not. I don’t teach classes on rental properties, but I own rental properties I’ve got thousands of clients that buy rental properties and I’ve learned enough To give you ten steps of what my wealthy clients are doing so get over to Mark J Kohler Dot-com and go to my blog and my first article right now is 10 steps to buy a rental Sign up for my newsletter there if you want, it’s cool I’ve got youtube videos on how to buy your first rental in an IRA literally go to youtube type. Kohler IRA rental first video right there baby. I’m at the top of the list go watch it. Raj you’ll love it We don’t even need to waste time in this video on it your love those videos. Okay last question from Tyler Okay Tyler from YouTube when purchasing property within the Roth IRA You mentioned it does all the money you have to come from the IRA Okay. Tyler says if I’m gonna use an LLC Owned by my IRA. Maybe my brothers IRA – or my husband or wife’s 401k and my HSA and my kids Roth. That’s right People all the money doesn’t have to come from your IRA You can take multiple retirement accounts and fund one LLC. We do this every day We’ve been doing it for 15 years with all the IRA custodians around the country We have our own are a company that you can go set up your IRA Roth IRA right now go to to direct it I’m just trying to give resources here. I’m just there’s so much go to directed ira Dot-com you can set up an account right now to start self-directing your roth or IRA or health savings account. So What’s his name? Tyler? Tyler Tyler. Listen, everybody. You take your IRAs in your 401ks you form an LLC and Tyler says does all the money have to come from my IRA. No This is going to blow your mind. You can even be a partner. That’s right You could take 20 grand of your own 10 grand from your 401k 2 grand from your Roth 20 grand from your IRA Your sister’s IRA could have 10 grand in in your HSA could have 5 grand in you add all this up 10 20 That’s 30 40 52 60 to 67 you got $67,000 in your LLC now you can go buy a property and guess what you can borrow money from the bank There are banks and we’ve got a list of banks that will loan your IRA or pile of IRA money up to 50 cents on the dollar they want to see 40% in reserve of 40% down 10% and reserves and they’ll loan the other 50% Banks have departments that do this. This is not I’m not in the even on the fringes here people There are Main Street banks that loan 50 cents on the dollar to IRAs to buy property This is what Wall Street isn’t telling you. So anyway, I’m gonna give away these books for those that shared the video I want you to I’ll announce those book winners next week My producers are making me give a list here. Subscribe to my youtube channel freaking awesome videos Hit the bell you get a ping every time I shoot a new video If you follow me on Facebook LinkedIn and Twitter and Instagram I’ve got daily tips that you’re gonna love and if you get over to my youtube channel I’ve got some sweet shirts and merchandise and all that stuff and we’ve got a summit. We’re doing a whole Workshop on the topic of IRAs and 401 k’s in Chicago in June Honolulu in August it’s 200 300 bucks includes lunch. Then I have my four five workshops in the fall $200 includes lunch Philadelphia, Orange County, Seattle Chicago and Honolulu, that’s my fall workshops people. I’m out there. I’m legit. I got books I got my youtube and I want to help you live your American dream. Thanks for watching today Share it and I’ll be here every Thursday Afternoon at 4 p.m. Mountain unless I’m out of town, but I’ll be here next No, I won’t be here next week on Thursday because I’m speaking in Salt Lake at a conference I will do this on Wednesday. Should we do it on Wednesday next Wednesday? I will be here. It’s May 4th At 4 o’clock, I don’t know what day the week it is It’ll be at 4 o’clock mountain next Wednesday doing a video to help you live your American dream You got a topic send it to Rosalee or Carly and I’ll throw down. Thanks everybody I’m gonna drop my pen, but that’s how good it was. See you later

15 thoughts on “How to Make Thousands with Short-Term Rentals | Mark J Kohler | 2019

  1. Shared !!!

  2. Deed it in to an LLC, can the property be deeded to a land trust and the land trust be “controlled” by an LLC? Would this avoid the due on sale clause by maintaining animosity?… Shared…

  3. Shared!!!

  4. Shared

  5. "Wacko"… I love it! 🙂

  6. Shared 🙂

  7. Fantastic video. Could you provide the source for the IRS Ruling that says short term rentals are a long term asset?

  8. At 43 minutes, if the LLC borrows money, would it be required to include UBIT on the K-1s given to the IRA K-1 owners?

  9. Mark I have been following you and purchased many of your products for some time. I have been doing STR's for almost 2 years. Thanks for sharing such insightful information. shared

  10. I'm just starting STR. Shared to my STR group!

  11. What is the STR? I seen it in the comments section. I’m at the beginning of learning all these terms. What is the best books / video to start investing. Thanks so much for your valuable advice!!! Can you or should you do a llc when you buy rentals? I’m in Michigan

  12. Shared – thanks for giving so much great information to us both here and in your other videos! Much appreciated!

  13. Aw dang… I want a book lol

  14. “Stay Here” on Netflix

  15. Hi, what is LLC?

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