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End of the Year Financial Planning Tips for Investors

Episode 074

John Larson and the Real Estate Cowboys talk passive income real estate investing.

Hear new episodes every Sunday morning at 8 a.m. The Cowboys talk end of year planning for financial success in real estate.

Keep the #CowboyCoffee hot while listening to John, and the Cowboys talk about how to #BeACowboy and earn passive income in real estate.

Episode Transcript

Keith Weinhold: Hey, this is Keith Weinhold from the Get Rich Education podcast. You are listening to my friend John Larson and the Real Estate Cowboys. Don’t quit your daydream.

Robert Helms: Hey everybody. It’s Robert Helms, host of the Real Estate Guys Radio Show and you are listening to the Real Estate Cowboys.

Announcer: Have you thought about becoming financially free through real estate investing, but don’t have the time or knowledge to get started? Welcome to the Real Estate Cowboys podcast. Each week we discuss passive income investment opportunities in the red hot Texas market, John Larson and the Real Estate Cowboys will show you how to leverage their team to build wealth in real estate through passive investment opportunities. And now here’s John.

John Larson: Hello and welcome back to the Real Estate Cowboys. This is your host, John Larson. We took a week off last week, but we are back with some more great real estate investing content. Today I want to discuss end of year financial planning tips for real estate investors. It’s coming up on that time of year again, coming up to the holidays. It’s crazy. I can’t believe how fast 2019 went by, but I think this is a good time to kind of start thinking about the end of the year and start planning also for the beginning of next year because as we know, once we get into November and December with the holidays coming around, it’s really tough to kind of sit down and be able to focus on this stuff. So maybe you want to start taking the opportunity to get this planning, end of the year financial planning, in order now, while we’re still in October.

During the holidays you tend to get really busy. The family gets really busy, you have time off of work, maybe you go on vacation, whatever it may be during that time to where you can kind of easily get distracted from starting to really sit down and do some end of the year financial planning. I recommend before things get too hectic to take the time now to prepare financially for next year’s taxes as well. Many of you, if you own a business, you probably just got your taxes done, so this is a good opportunity for you to start planning for next year. You know, you definitely want to plan now so that you and your accountant can take advantage of all the possible benefits of your real estate investment activities also, right? Going into next year and you’re going to want to gather your investment records, so go through your real estate portfolio and gather up all your investment records for the year.

If you own a turnkey rental, you can access your property managers portal if they have an online portal. Hopefully, they do. If you’re working with a truly professional property management group, they should have an online portal that’s housing your statements and your year-end statement. It pretty much tracks your profit and loss on each property and you’re going to want to download all those financials, obviously from that portal. Also, be sure to download any receipts for any repairs and maintenance you paid for in 2019 because those will be able to be write-offs for you. Okay. For private money lending, if you’re a private lending investor, you’ll only need your bank statements showing your interest payments. You don’t really need to print all of these things out. Just make sure you organize the digital files somewhere on your computer so you can quickly and easily get them to your accountant.

Many investors find it helpful to separate them by project or investment for easier cross-referencing later. You’re also going to want to arrange for repairs and replacements now. When you pay for repairs or replacements in your real estate rentals, those expenses are tax-deductible. So it’s good to get those deductions on this year’s tax return by arranging them now and have them completed by year’s end. Definitely coordinate with your property manager now to get that list of expenses anticipated for the end of this year and early into next year. You also want to prioritize by need and your ability to pay for them by December 31st so by the end of the year and as you know, contractors and repairmen get busier during the holiday season too. Okay, so it’s good to start planning for all this stuff now before we get into the holidays and the earlier your property manager books, repairs and replacements and installs, the more likely that they’ll be done in time for you to claim them on your 2019 tax return.

And if a repair project does overflow into the new year, get an estimate of the final bill and go ahead and pay toward it so at least some of the expense can be claimed on your April, 2020 tax return. You also want to pay recurring expenses one month ahead. Typically the IRS doesn’t take notice if you pay January’s expenses in December. You can confirm this with your CPA though. So make a list of your recurring expenses that will come up in January and process those payments by December 31st, so you can deduct them. That’s a really good idea. Recurring expenses might include HOA fees, property management fees, ground maintenance fees, and any rental property utilities you pay on behalf of the tenant. Be careful with 1031 exchanges. If you’re in the middle of a 1031 exchange around the holiday season, you want to be very careful. As you know, you need to buy and sell according to the strict guidelines in order to get the 1031 exchange tax benefits.

Okay? Many title companies, banks, and other institutions have reduced hours during the holiday season, so realtors and accountants also take extra time off to spend with family. These innocent vacation days can endanger your deals going through and in time to comply with the 1031 exchange rules. So be careful with that. You got to keep in mind, you know, many real estate professionals, like I said, accountants, things of that nature, they’re going to take time off during the holidays. They’re not going to be working as much. They may be on vacation. So you want to make sure that if you’re doing a 1031 exchange, this is on everybody’s radar and make sure this is getting done before people leave for vacation. Okay? And you want to do what you can to speed things up before the holidays hit and avoid leaving your own tasks to the very last minute.

I’m telling you from experience, once you hit that middle of November, it seems like things really start to move in slow motion from middle of November all the way through New Year’s pretty much before people start to get back in the swing of things, get over the holidays, get back from vacation, so on and so forth. You also want to organize your travel time records, so as a real estate investor, the time you spend traveling to and from your investments is also tax-deductible. Often people record this time in an app or by hand in a notebook in the glove box. It’s relatively a simple task, but over the course of the year, these records tend to get sloppy. That’s for sure. You want to get these records out now and make sure they’re in good order. You’ll want the total time and mileage for each outing and the address of the destination.

Your CPA’s going to request that. Then you’ll need to complete year to date totals from here onto the end of the year. Try to keep these records neat, so you don’t have to organize them and be scrambling to organize them again when you hand your financials over to your CPA. You know, you may never need to show a tax representative the details of your travel, but you should always keep them on hand to be on the safe side in case your deductions are ever challenged. Okay. Definitely, I like this one, purchase rehab materials now. If you’re a hands-on real estate investor doing rehabs, buy as many of your materials as possible before the year’s over. I know it’s hard with the holidays and you’re going to be spending a lot of money with presents and travel and things like that, but if you can try and buy as many of your materials that you’re going to need into the next year now before this year ends.

Hardware stores often put building materials on sale at the end of the year so they can report higher sales to stockholders and make room for new inventory. Also, there’s less construction in the winter and they’re eager to make sales, right? So this is a good time to buy your materials. You’ll be able to take advantage of the tax deductions and possibly save more money on the sales prices. So it’s kind of like a double incentive, right? You get the tax benefits, but then you’re also getting some discounts on these building materials for these year-end sales. I also recommend holding off on selling a flip. If you’re an investor who makes money selling flip properties and you have one about to close, try to delay the closing until after the new year. That way the income will fall into next year and you’ll have the whole rest of the year to offset that income with more deductions.

Okay. These are just some of the year-end financial planning tips that I would give and I think that these are especially useful for real estate investors, so it’s really not too early to get started now. Organizing and planning your finances so you have a better tax outcome in the spring and always consult with your own tax professional for the final word on deductions. For more information about making money from real estate investments, please contact us. You know we have a ton of information here. You can go to our websites, or Tons of free information on those sites. My book, The Passive Income Guide, which is a quick, easy read, gives you a high level view on how to start making passive income in real estate, whether it be through rental properties, whether it be through private lending, which has become our most popular option at this point, or whether it is through vacation rentals, right?

Vacation rentals are great. I’m a big fan of them because if done correctly, you can use that vacation rental when you want and when you don’t want to, you can rent it out to others, right? Just kind of like an AirBnB as well. So I give details on all those different investment opportunities and ways to earn passive income in my book, The Passive Income Guide: What’s Your Return On Life? You can get that book off of Amazon or I’m pretty sure you can order it from either one of our websites or If you’re interested in learning more about the investment opportunities that we currently have available, we have a passive income private lending opportunity that’s paying 15% fixed annually to our investors right now. That deal is almost fully funded, so if you’d like to get in on this opportunity to earn 15% fixed, this is the most we’ve ever offered on a private lending opportunity.

And the reason we did that is because the opportunity is down in Belize. Although we’ve done a ton of investment opportunities down in Belize before, mainly in the form of vacation rentals, private island resorts, things of that nature. We now have a farm down in Belize. The first-ever approved hemp farm in the nation of Belize for the purpose of growing hemp and the reason why we moved down there is to kind of stay ahead of the curve in the CBD industry. We find it to be an extremely awesome opportunity to be able to grow hemp down in Belize where you have a pretty neutral climate. It stays about the same throughout the year with the location to the equator. So we’re able to get up to three and a half harvests per year whereas in America you can only harvest hemp one time a year. So it gives us a very large competitive advantage by being able to grow hemp down in Belize and eventually move to refining that hemp to an isolator distillate and then selling that refined material, active ingredient, as you would call it, to other groups around the world who have CBD product lines.

So we have a lot of exciting opportunities down in Belize, so if you’d like to become our partner in the form of a lender on that opportunity, just go to or We can get you over the marketing package so you can get more information on the opportunity and the exit strategy and then also if you’re an accredited investor, we can pass along that PPM for you for your review. Your money starts accruing interest day one. Right when it goes into escrow, you’ll start accruing interest at 15% annual on the money. If that opportunity excites you, like I said, visit our websites. We’ll get some more information out to you and a member of our team will reach out and let you know how to move forward. We have some other opportunities available as well. If you follow us, if you’re on our email blast, you’ll see that we have private lending opportunities and some real estate opportunities also.

We do a wide range of opportunities with our private lending opportunities here at American Real Estate Investments and the Real Estate Cowboys, whether it’s on CBD extraction equipment, land for the purpose of growing hemp, right? Agricultural land, or whether it’s an office building that’s cash flowing or multifamily property that’s cash flowing. We have a lot of different options for you. So if any of that interests you and you like the idea of earning a fixed rate of return on your money, go to our websites, put your information in and we will let you know what opportunities we have available to you now. But that’s it. Pretty short episode this week. I think it’s very important for everyone to, like I said, start getting their finances in order, so you have that done before the holiday season kicks in and you’re left behind, and not getting all of your finances in order to be able to take advantage of all your deductions for 2019.

So I think we gave you some helpful tips on how to take advantage of all those deductions by year’s end and then from there, that’s why I’m in real estate. You have a lot of tax deductions available to you, so I want to make sure everyone’s taking advantage of that before 2020 hits because it is upon us. So that’s all we have for this week. This is John Larson signing off. We’ll be back next week with a bunch of great investment advice. Have a great week everyone, and always remember, what’s your return on life?

Announcer: All opinions expressed by the host of the show are the opinions of American Real Estate Investments, LLC, and do not reflect the opinions of guests or sponsors. No personal or professional advice heard on this program should be considered an endorsement to follow a real estate financing or investment strategy. Before acting on any information, seek advice from your financial, tax, mortgage or real estate advisor as the information is not guaranteed. At investment strategies, half the potential for profit or loss.