Short-Term Rentals can make you THOUSANDS!

Hey everybody, don't go anywhere until I at least tell you what the title of this video is 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 and 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 going to have a good time here. I've got my whiteboard. We got a late start and I've already downed my entire diet Mountain Dew. But I do have a really nice king size Sharpie. It's a good month and it's going to keep me going. All right, we're going to 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 going to 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 eight Steps workbook and, and a couple other books. I'll talk about these later, but I'm giving these away today on this broadcast. No catch nothing. So I hope you enjoy this. So let's get into it. Airbnb, VRBO, HomeAway. 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 and 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 and B V RBO strategy. Paying the rent off every month and keeping the cash. That right, you can do this. So I'm going to run through all the strategies here and we're going to 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 going to help answer your questions. Talk about them online here for me to throw down some good content. Alright, so good, let's go over the good. I'm having lots of my clients double or 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 1,500amonth 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 3000amonth in rent compared to 1500amonth 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 going to get to the bad. I know some of you are like, well, you, I can't do it in my municipality or my city or I can't do. We'll come to bad 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. It's a Sharpie. It's knocking me out. All right, 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 into 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 going to put no rent. When you use it yourself, it's now a tax write off when you go visit because you, you're going to travel there, not to go enjoy it. You're going to go do fix up. Every time you stay there. You're going to paint something, fix something, check on it, clean it, do something to make that rental 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 going to look at the fair market value of the comps in the area. But also you can have them appraise 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 going to put higher appraisal. Now I kind of get excited about this and even though I'm not jumping up and down, I can't even spell appraisal day. Now last point, in fact, I'm going to 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, then they turn around and drop it in a vrbo. And we call that the sublease short term rental strategy. So you're going to 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 going to put in here low capital. So anyway, these are the positives of using a short term rental strategy. Now before I get into Q and A and there's already questions popping up, I want to get into the bad, let's get the good, the bad and the ugly. And then I'm going to get into the legal structure and you're going to 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 going to rent this out, you've got to make sure it's attractive. One of 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 love that show. Google it for me. See, 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 you're marketing this property. So I'm going to 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 too. 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 his 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?

Thank you.

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 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, all right, risk year round and I'm going to 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 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 market's great and everybody's flush 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 five, 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 outlying 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.com and stay in homes and get Marriott points because they're like, if we can't beat them, we're going to 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 going to 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 going to rent my little Seattle rental. Well, there's 50 other Airbnb 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. 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 outlying 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 market's ripe 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 and 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 whenever 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 it's 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 Airbnb 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. We're going to take 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, Rosalie, tell us our question.

Okay. How do you get around with the cost clause 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 everybody heard that. I think my audio team are we. Okay, I'm going to 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 going to be her 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 a rental and drop it in an llc. In these mortgages, it says if you sell the property, you sometimes are subject to and oftentimes a due on sale clause, they're going to call the mortgage due. 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 continue to make the mortgage payment and you're not in default, the banks are not going to know and they're not going to care. But Mary, you do not walk into your bank and go, hey, I just got this mortgage and I'm going to turn it into a VRBO rental. Are you okay with that? You think a bank's going to do, I mean, they're going to hit a button and I wouldn't be surprised if the police don't show up. Bankers freak 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 going to be fine. The worst case scenario is Mary, call the mortgage due 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 going to deed it into an LLC and turn it into a rental down the road? Mary, do not worry about it. Next question. This is from Mark. Okay, Marco. Okay, over on the microphone.

So if I have four rental properties, it better to put the title under the llc.

Okay, Marco says he has four rental properties. What I thought you were going to say, Marco, is can I put them all in the same llc? Marco's 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 LLCs and I have a paralegal that will deed them into the LLC on day two. 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. You, if you know what you're doing, that's fine. But I have a whole team of paralegals, 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 side. This is your day job side. This is your ordinary income side. We're going to put your rentals over here. Four options. Some people set up one LLC and put all their 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, they're 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. 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 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, four 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 and You can look at which states allow for series LLC Here. With the 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, and you're off to the races. But they only work in states that have series 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, Wyoming, which I'm good with. I'm not saying Wyoming and Nevada are bad, but they're not for a brand new investor and everybody. Only when you have more assets then I have it. Hold all your LLCs and you can have multiple rentals in multiple LLC is 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 got a rental in Tennessee, you're going to set up a Tennessee llc. And if you're worried about the California tax, you're going to register foreign 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 Waco and Lovbot.

Okay, he's between Waco and Lubbock. Rosalie's like wacko and lubuque. I love it. That's good. Rosalie, for those in Texas, yes. Rosalie just butchered your town. It's Waco and Lubbock and he's in Texas and he says I want to. 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 could 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 a client from Texas literally just an hour before this live broadcast. And he probably has 10 rentals in Texas. Loving it, making money. He pays 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 Airbnb someone else's home?

Ooh.

Okay.

When it comes to contracts. And let's say we're going to 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 going to want to make sure you can sublease and you don't want to go in there and go, hey, I'm going to rent your property and put it in Airbnb. And there's going to 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, here's my down payment. I'm going to move in this weekend. 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 going to get to design that lease. The homeowner is going to 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 VRBO home away, you're going to have a short term lease that you use. And this is where these websites do a great job. They're going to make sure you carry the right amount of insurance. There's going to be check in and check out procedures. They're going to show you the type of lease you need and they do a great job because Airbnb and vrbo, they want to see you succeed. So they're going to give you all the documents you need and then they're going to take their cut every time they rent it. And then you're going to look at your Net income from that point of view. So again, Josh, back in Texas, you're going to look at what is my net income expected whether I go a short term or a long term. All right, Josh, again, we're going to let Josh double dip or is this a new Josh? All right.

Yes.

Okay, Josh in Lubbock, Texas.

Okay, I think it's a new Josh.

Okay, new Josh.

Can I build a granny flat in the backyard and turn it into an Airbnb? I live in San Diego.

Okay, so Josh lives in San Diego. Sounds like a new Josh. By the way, Josh, in Texas, have you been to Buc EE's? I hear it's amazing. I want to go to Texas just to go to BUC EE's. I hear the bathrooms are amazing and the barbecue, I can't wait to go. Alright. Josh in San Diego says, I want to build a little house on my property in the back and then turn it into an Airbnb. 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 this lot that we think is a no brainer. Right, Dylan? Well, in San Diego, you're going to want to make sure you look at the zoning. You're going to have to get permitted for this. You're not going to just be able to start turning a garage 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 going to have a problem with the city building a second rental unit on your property. Once you do that, you're going to want to look at some of the rules for Airbnb and vrbo. A lot of times they want to make sure there's proper parking. There's. You're not going to have a permit problem. Again with the city. See, 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 going to be okay with you renting it. Then you want to go to Airbnb 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 too, and get out there and play like you're a renter. Get on Airbnb and vrbo. Shop around. I want to stay in San Diego this weekend. What are my options? How much are you going to 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 eight steps to start or grow a business. It comes with a business plan, a marketing plan, and a strap plan. It's 99 bucks on Amazon, 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 going to 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 live 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? Call Mallory at our office and let me give you the number. 435-586-9366. 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 counties 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 $125 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 LegalZoom, you're going to spend anywhere between 2 to $400. Check all the boxes, get an operating agreement, get all the books, 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 are 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 going to sit down with you that understands taxes and understands legal. If you want any services, get over to kkoslawyers.com 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, or a consult. 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 will call you. All right, Ben, what's Ben's question?

Ben, on YouTube, he has a question. How can I use a registered agent to keep my name off the articles organization when filing an llc?

Very good. Ben brought up privacy. Now this is really important, people. Check this out. Privacy versus asset protection. So Ben said, 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, 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, J.J. 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. It's Ben, right? If you're asking these questions, you're going to love that book. My wife hates it because I freak 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 JJ Luna. There's a lot on this topic, but let me give you the quick answer. Whenever you do asset protection, you 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 going to have properties in Atlanta, Georgia, I'M going to set up a Georgia llc and I'm going to have to have a registered agent address and I'm going to 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 going to be out there, but I don't want your home address out there. So the first thing is you're going to 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 going to use a PO Box or a cmra, which is like your UPS store where they have little addresses. That's a cmra. 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 P.O. box for 100 bucks a year. I have other clients. In Seattle, a P.O. 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 CMRA or a PO 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 CMRA is registered with the state and it'll kick back 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 LegalZoom charges. That was what we charge. So you're going to be out 125 bucks. Now, Ben, 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 to kkos lawyers again, kkoslawyers.com we can be your registered agent and your mail forwarding for 325 a year. Ben, your name shows up as manager, but your address is nowhere. And 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?

Jean 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, Jean says she's going to 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, or 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 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 10 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 Owner's Guide to Financial Freedom. This is my newest book out. It is freaking awesome. And I'm going to give this away today as well. You can get over on Amazon. Business Owner's Guide to Financial Freedom. Ryan Shea, 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 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 S corp. 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. 2 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 quiet about it. I'll call him out. I don't care. Robert Kiyosaki knows who I am. I know who he is. Robert says never buy rentals. It's 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. Oh, yeah, you don't get the depreciation. Well, who cares? I'm making 10 or 20% on the money. Are you getting 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%. It was like in Salem witch trials. Everybody's like, mark's crazy. You can't get 12 or 15%, but you get it 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, not taking away what Robert Kiyosaki says. I'm stepping on his shoulders and doing the next level. 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's cool? 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 going to lose money on paper. These losses either offset your income in your 1040 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 got YouTube videos on every one of these topics. I've got a library of videos on my website. Markjkohler.com 60videos. Couple hundred bucks. You can start watching videos right now, over and over again. Lifetime membership. Again, this is not 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 going to 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 $5. Raj 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 markjkohler.com Raj, my article last week was 10 Steps to Buy your first rental property. Now, I'm not a. I don't teach classes on rental properties but I own rental properties. I've got thousand of clients that buy rental properties and I'VE learned enough to give you 10 steps of what my wealthy clients are doing. So get over to MarkJ Kohler.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 Iraq. 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. You'll 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 have to come from the ira?

Okay, Tyler says if I'm going to use an LLC owned by my IRA, maybe my brother's IRA too, 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 IRA company that you can go set up your IRA. Roth IRA. Right now. Go to direct. I'm just trying to give resources here. There's so much. Go to directed ira.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 and 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, and your HSA could have 5 grand in. You add all this up, 10, 20, that's 30, 40, 52, 62, 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, 40% down, 10% in 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 loaned 50 cents on the dollar to IRAs to buy property. This is what Wall street isn't telling you. So anyway, I'm going to 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 going to 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, the topic of IRAs and 401ks 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 4pm 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. At 4 o'. Clock. I don't know what day of 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 Rosalie or Carly and I'll throw down. Thanks, everybody. I'm going to drop my pen. Boom. That's how good it was. See you later.