Partnering v. Syndications Part 1

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This 2-part blog is going to cover the differences between partnering with others to engage in real estate investing versus putting together a syndication. These two techniques may be similar—and often confused—but they are very different! And you need to understand each as a separate investing strategy.

NOTE: There can be some subtle legal nuances to the discussion below. It’s meant as information and educational. content only. If you even think the SEC rules may apply to your deal, you should seek legal counsel to make a determination before proceeding.

Not only is it important to understand the difference from a structural standpoint, but also from an SEC compliance standpoint. True “partnerships” do not need to be registered with the Securities and Exchange Commission or other state securities office. While a syndication (almost certainly) will need to jump through SEC filing hoops. Because failing to register a project with the SEC can create very serious financial and criminal consequences, we’ll cover the SEC portion in this blog and the structural differences in the next blog.

All offerings of securities must be registered with the SEC. Private offerings, like the ones you’ll see in real estate investing, have exemptions from the complicated and expensive filings that companies going “public” face. But even with private offerings
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What You Need To Know About Healthcare Changes

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“To succeed in life, you need three things: a wishbone, a backbone, and a funny bone.” - Reba McEntire

Let's start with Premium Tax Credits (PTC).

These are the magic beans that help to reduce the cost of health insurance under the Affordable Care Act (ACA). When you buy health insurance through either a state exchange or the federal HealthCare.gov site, you may be eligible for help in paying your monthly insurance premiums. This assistance is actually an advance against the tax credit that you can claim when you file your 2021 income tax return in 2022.

While this arrangement does provide health insurance to millions of Americans that previously couldn't afford it, there is one significant hiccup to the whole setup. As your income goes up, the credit goes down. Once your modified adjusted gross income (MAGI) exceeds 400% of the federal poverty level, the tax credit vanishes entirely. This is generally referred to as the "ACA cliff."

The ACA cliff thresholds are based on family size. For 2021, the MAGI thresholds were:

  • One person: $51,250
  • Two people: $68,680
  • Three people: $86,880
  • Four people:
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Your Business Better Have Learned These Lessons (from COVID-19)...

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“Your talent determines what you can do. Your motivation determines how much you’re willing to do. Your attitude determines how well you do it.” - Lou Holtz

One year into this pandemic season and many pixels have been spilled by all of the think piece articles over it. There really are a few small business tips that you MUST come away with.

So, let's dive right into these lessons for any business from this wild season...

Small Business Tips #1 Establish and maintain a reserve of operating capital.

Just like every family needs an emergency fund of at least 3 months of living expenses, so too should every business have a working capital reserve. In my years of working with small businesses,  it's rare to see such reserves. When you operate on tight margins, it can be difficult to establish such a reserve, but as we saw at the start of the pandemic, it can make the difference between staying in business in try
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“American Rescue Plan” Is A Done Deal

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To our Utah REIA PEEPS, The “American Rescue Plan” Is A Done Deal. Act FAST and SLOW.

While I normally write weekly, there is information in this blog that you need to know about now that might even impact how you proceed in the following days.

As of this writing, Congress has agreed -- but this is so fresh off the presses that many of my industry colleagues are scrambling, and the research services are still compiling all the data. But I felt it important to get ahead of all of that on your behalf.

There is a lot to discuss, and I will have more to say early next week, but this is important for you to know about NOW. So, let's dive in...

Stimulus Payments 
(and how they might impact your tax paperwork)

These are different from previous stimulus programs: $1,400 dollars per taxpayer and dependent (with signific
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Janet Behm's Building Your Brand Update

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"A business has to be involving, it has to be fun, and it has to exercise your creative instincts." - Richard Branson

Unfortunately, many small businesses brainlessly ape big corporations with their marketing, by (wrongly) believing that "if these huge companies built their businesses by that kind of marketing, then it surely should work for us." Build the brand,” they say.

The thinking behind that kind of marketing is that you "get your name out there," and the clients and customers will pour in. "It's all about word of mouth," they say.

Well, if you choose to go down this road, far better is real word-of-mouth advertising.

And that is something that can actually be stimulated and stewarded. And one of the best companies to learn from about this is Disney, specifically about their parks.

(And this is still true in 2021, btw, with all
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What Are Important Things To Know For 2020 Taxes?

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“For every minute you are angry you lose sixty seconds of happiness.” - Ralph Waldo Emerson

So much has happened already in 2021 that the CARES Act and many of the "new" tax and financial provisions we operated from in 2020 can seem like ancient history.

But not us ... we're knee deep in these details right now (while keeping an eye on all of the NEW new things happening in tax code land).

So, I thought it might be useful for me to quickly run down important things to keep in mind about 2020 taxes (LAST year's taxes).

I also have learned that the more I can educate, the better.

So here goes. (And this is NOT a comprehensive list, so you know.)

Tax Brackets
For tax year 2020, the standard deduction for single filers is $12,400 and $24,800 for married filing jointly. "Head of household" filers is $18,650.

In many cases, the standard deduction works great. But there are other things to consider this
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When The Crazy Customer Strikes

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“Being deeply loved by someone gives you strength, while loving someone deeply gives you courage.” - Lao Tzu

Last week, I wrote about handling upset customers, and I laid out a simple four-step method: H.E.A.R.

1) Hear the customer and don't interrupt.  
2) Mirror back (Empathize) with something like: "I can understand why you're upset.  I would be upset too." Or, "I'm really sorry that happened to you."
3) Ask: "What can I do to make this right?" 
4) Resolve - Unless the request is absolutely ridiculous, DO IT!

But what happens if the customer is completely ridiculous?

It starts here: as the owner or general manager of the business you'll need to decide just how much empowerment you'll give your staff to resolve an issue.

Let's assume you have 3 levels of personnel in your business – front-line, manager, and you. You might give the front-line person the aut
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An Easy Tax Add-On: Estate Plans

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“Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do.” - H. Jackson Brown Jr

As we have seen this year, life can turn on a dime ... and we can't plan for every one of the specific ways it may do so. But we CAN plan broadly.

For me and my family, we've put some simple plans in place for a VARIETY of circumstances, not just financial or legal. And it truly helps us sleep better at night, just knowing we have it all covered.

And the unfortunate reality is that the most recent numbers indicate that almost 60% of Americans don't have a basic will -- and that's a big problem.

One of the big reasons that most families don't yet have this in place is because of some incorrect thinking about whether it's right for them or if it's even necessary. And sure, some just haven't gotten around to creating a will or trust. Others think they don't need an estate plan because they're not "rich".

I've even heard from people that they don't want to put it in place because when they do, it's sending some sort of death
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What Numbers Should You Be Looking At In Your Business?

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"You have been blessed with a mind that can direct your actions in any way that you choose." -Ramon Luis

It's easy to get lazy when a business can pick the low hanging fruit available in an easy marketplace.

But, that's not always the case, is it?

Markets shrink, funding dries up, prospects aren't as easily found, or profitability margins decrease. So what do you do? Many business owners don't know how to tweak their marketing and sales systems, so they can track the numbers at each step in the sales process and grow in new directions.

I have seen (in several industries) that the businesses who create a culture of accountability, have weekly sales meetings, track their numbers, and hold team members accountable, are successful ... while those that guess and "assume" are usually out of business. It's just a matter of time.

The key is knowing the numbers -- what is the average expected result, and how you are measuring up against that result for each step in the process. This is where accountability starts.

But
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A Checklist For Business Owners’ For 2020 Personal Income Taxes

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"Don't wait. The time will never be just right." - Napoleon Hill

As I mentioned last week, depending on how your business entity is structured, you could be paying anywhere from 15-25% (or more!) of your business revenue into the coffers of the IRS and various state departments of revenue.

This is the outcome of these blog posts: Guiding you in better business decisions.

Below is a list of what you will need during the tax preparation process on the personal side. Not all of them will apply to you -- probably MOST will not. Nonetheless, it's a useful tax checklist.

Before you get overwhelmed: yes, this is a long list -- but it's the unfortunate reality of our tax code that it's not even comprehensive! These items will cover 95% of small businesses. Really, this is for ensuring that you're able to keep every dollar you can keep under our tax code.

Also note: There are certain CARES Act (stimulus) and CAA (second stimulus) items that you will need to know as well. I've notated them in italics.
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