5 Things You Need to Do to Prepare for the New Year

Five things to do
before the year is over when it comes to
investing in real estate. That’s today’s show. Let’s dive into it. Hey, everyone. I’m Clayton Morris. I’m Natali Morris. Hey there, freedom fighters. Welcome to the Investing
in Real Estate show. This is the show where
we focus on helping you build passive income
so that you can spend more time with your family. It’s the holiday time. It’s the end of the year. And there’s a lot
of planning that goes into making sure you have
a really kick-ass 2018, right? Exactly right. The idea of sort of drifting
into 2018 really sounds like– or even 2019– at
the end of the year, if you’re just planning to
kind of drift, you know. You kind of go where
the current takes you. That’s no good, right? If you have a goal– if you have an agenda– if you have agency in your
own life, and you’re planning, you can actually
achieve those goals if you put some focus on it. So we’re going to go
over five key things today that we’re
working on right now. Not all of these will
necessarily apply to you, but some of them will. And we’re going to
walk through how to maximize your
deductions this year and a whole bunch of
other things, right? All kinds of things. Right. So we wanted to talk
about what we’re up to when planning for
the end of the year. Because we want to hit the
ground running in 2018. And there are things that you
can only do in a given calendar year to maximize
your tax benefit or maximize your
appreciation or whatever. So I want to make
sure that we do all of those things
before the end of the year so that we don’t look
back and say, oh, I wish that we had done
something different, because now our taxable
burden is different. Now, we should sort
of mention that we’re doing this podcast at a
time when the Senate has passed a new tax bill. The House has not passed it. It seems like they
probably will. So we’re kind of
shadowboxing here. Because we think that
we’re planning for the way things are when we
have no idea the way things will be when we actually
come to file taxes next year. So we’re gonna do our best. And we are gonna
do a full episode once we get some clarification. Right now the House
and the Senate are going back and forth. They’re having sort
of private meetings right now to work out some
of the language in the bill. Whether or not the president
signs it before Christmas, we’ll see. So this portion of the podcast
might not be evergreen, but we will come back and
do a full episode on the tax implications of this new tax
bill passed by the Senate and House and then possibly
signed by the president. We’ll break it down– what it’s
going to mean for real estate investors. Because we’re already seeing
some significant benefits if you own a business and you
are a real estate investor. We’ll explain it all. Right. I mean, it could really
significantly change our taxable burden in 2018,
and we just don’t know. But some of the things
we do know, right? We know that we’re
always going to be able to take advantage
of depreciation as real estate investors. We know that some of our savings
accounts are tax deductions– pre-tax, post-tax, right? We know those things. We know what LLCs we’ve got now. We know what those
LLCs have made or about what they’re
going to make by the time 2017 comes to a close. So that’s why we
do this stuff now. And around November,
our tax accountants start calling us
and saying, give me an estimate of what you think
that you’re going to have made by the end of the year. Make sure that all of
these things we planned for had actually happened. They had set up
some LLCs that I was intending to use in one way,
as either a holding company or whatever. You know, they wanted to make
sure that those LLCs actually execute on those things. So this is something we
started in 2016 when we started working with ProVision. Because this is their way. They come to us in
November and make sure that any course
correction that needs to happen in that last eight
to 10 weeks of the year happens before the calendar
year comes to a close. So it always has me
locking myself in my office and making sure I run down
all the numbers properly and making sure each
property is in– it’s a lot of due diligence. But I love it. I love it as long as
you leave me alone. Well, like, last night, right? I was doing some work
down here in the office. In the pub. In the pub. And she was doing some
work in the office. And you know, putting
the kids to bed. It’s like, she’s like, OK. I’m locking myself
in the office. She’s got the 27-inch iMac
open with spreadsheets going over all these
numbers for the year. I got some new filing cabinets
at The Container Store to assemble. She’s super excited. It’s a very exciting
time, right? You’re thinking about going
into this New Year fresh. It’s like, you
know, when you were a student at the
beginning of September, and you get all the
freshly sharpened pencils. It’s so awesome! And the new Trapper Keepers. Right! Yeah. It’s super exciting. So I love this time
of year, as well. It’s my birthday
on New Year’s Eve. That has nothing to
do with anything! Well, I just want to
throw it out there in case wants to send me anything. [LAUGHS] So New Year’s Eve
is my birthday. And no– for me, it’s
always like a fresh start. Right. You know? I think the New Year can be
a bit of a cliche for people and goal-setting,
but it’s something that Natali and I always put
together on our white board. What are the goals
that we want to hit? What passive income goals
do we want to hit next year? How many property
acquisitions do we want to get in the New Year? If we’ve got 50
properties, is there one that, hey, we need to pay
a little bit more attention to? Or is this one particular
area of the country we’d like to buy more
properties in, et cetera? So maybe we want to
acquire more this year in Indianapolis or maybe
more in Michigan or whatever. So having a clear understanding
of where you’re going is incredibly important. I don’t want you
to drift into 2018. People who set goals actually
achieve them, especially if you’re looking
at them every day written on your refrigerator
or written on your white board. But there are five
key areas today that we’re going to talk
about where we are going to sort of clean up,
get you ready for 2018 so that you’re prepared. So let’s start with number one. What was number one? Was cleaning out
your file cabinets? Yeah, and your clutter. I don’t remember the
sequence of things. I can tell you all
about each thing. But you remember the sequence. So decluttering, right? So decluttering. And that really starts with
talking to your accountant. Right. So you want to make sure
your books are in order. Make sure that your
balance sheet is in order. Because at the end of the year,
I’ll come to Clayton and say, this is where we
started in January, and this is where we
ended in December. Now where do we go
from here, right? And so in 2016, we
did exactly that. We sat down and we said,
this is what we have. This is what we owe. And this is what
we’re worth, right? And then this is– in a
separate spreadsheet– is what we’re making right
now in passive income. So Clayton, actually,
in January said, OK. I want 50% more than that. Should we use real numbers? No. That’s not going to
really be relevant, but if you have percentages
it makes a lot of sense. OK. All right. So we were at a certain
number, and he said, I want to increase that by 50%. And I was like, you’re on drugs. Because it took us
five years to get to that amount of
passive income. But that’s what he wanted. He had no– we had no notion
in the beginning of the year that you would
leave your day job. That wasn’t really a goal,
but it was always a goal to get there so that he could. And so we’ve talked
about– many times– how he did that in
September, which was awesome. But last week we had a closing
that actually put us there. And we hit that 50% number. And so now, we’re
there, and we’re thinking to ourselves, OK. That’s great. It’s amazing we have this
amount of passive income, but it’s also a
lot of management of the moving pieces
of what LLC owns it or all of these different
things that go along with it. So how do we want to move
forward in the next year? Do we want to own more, and then
also, that’s more work for us? Do we want to have
people help us? Do we want– you know, we have
to really strategize from here. And so if you have
not hit your number, and you’re getting
closer to it, you want to really write
it out and figure out how can you get there. Right? Right. And some of the
personal things, right? Like if you own a lot
of properties, you may– we hired a bookkeeper this
year to sort of manage some of that for us
on our side, which has taken the burden off of
Natali on the spreadsheet side. I want to hire an additional
personal assistant. So I don’t want to– I don’t want to be going
through e-mails anymore. I want someone who is on my team
who can go through and manage these. Y’know, if you get 200
emails, most of, hopefully, my team is taking
care of those things. So I want to make sure that
I don’t have to do that. I want to be able focus on the
larger, bigger projects that help our clients, help our
customers, help our family. And getting bogged down in
stupid things like emails is a waste of my
time, and it needs to be pushed off on somebody
else who can really handle and do a better job of it. Moral of the story– don’t email Clayton. Right. [LAUGHS] Please. Please. I have enough of those. He does like it! No. But bottom line. Really begin to think about, OK,
how can you expand your family? You know, if you’re
starting a small business, honestly, you’re
doing everything. Right? If you’re the sole proprietor
of your own business– and you think of
real estate investing as your own business–
you’re probably doing everything yourself. And when you will really
double your company is when you stop
doing everything yourself and you start to
hire somebody else to do those things. So write down all of the tasks
that you’re currently doing for your family, your life. You know, your goals with
real-estate investing. And it’s probably going to
be like 100 things, right? Like submit taxes, get
property insurance, do all of these
different things. Whatever, on and on. The list is gonna go– Get the bank account. Make sure you have the
credit cards set up. Bank accounts. Credit cards set up
for your business. Right. All of that stuff. Yeah, it’s a lot. It’s a lot. And then what you want to do is
break those down into chunks. OK, these are 10 or
12 different pieces of this that I can literally
hire somebody to do. So we took that
list, and we were able to then hire
a bookkeeper that was able to take a
good chunk of that off of Natali’s lap for
the bookkeeping purposes. And guess what? But now that’s someone I
have to work with, right, at the end of the year. And say, I just
want to make double, triple sure that you’ve been
categorizing the expenses. Because we have now– we own close to 50 properties. And if you take, like– you know, you take
them in chunks, that each LLC has about
$150,000 worth of assets. So that’s like, 8, LLCs, which
has its own bank account. And so I just want
to make double sure. I keep a spreadsheet for them. Here are the list of accounts. Here’s what each account owns. I want to make sure that
these are all coded properly. So they do it, and I trust them. They also do our payroll. But you know,
there’s always going to be a way that you can’t
outsource yourself, you know? Because this is a business that
exists for the sole purpose of serving our family. So there’s going to
be things that we have to keep in the forefront on. So managing that,
even though I don’t do the kind of pencil-pushing. I do the higher level managing. It’s a lot. And so, that’s one thing. Make sure you strategize
with your accountant towards the end. Is there anything you can do? Right. For instance, you know,
you might have an LLC that’s the pass-through LLC. Or you might have an
LLC that’s the umbrella corporation under which all
of these LLCs make money. Have those LLCs, like, fed
up properly to the right LLC so that your taxation is proper? I had made a mistake in
one of those this year. (SARCASTICALLY) Hm! Really. And that was caught
by the accountant. Like, oh, you weren’t supposed
to accept money in this. You were supposed to
pay money through it. It’s complicated. I cannot explain it to you
because obviously I did it wrong. But we can fix it by having
one LLC pay the other one. So those things need to
happen in this calendar year. Also, for acquisitions
that we may have made this year that
they’re still being rehabbed, I want to claim depreciation
on them in this year. But I can’t say that
they were in use in 2017 if they weren’t advertised
for rent, right? So I have to make sure
that those properties were advertised. It doesn’t matter where, right? I can save it on
Craigslist and say, yes, it was indeed put in order
as a rental property. So those are the
kind of things you need to be having discussions
with your accountant– not with us. Don’t write us about it. (LAUGHING) Right. We’re not accountants. Right. But– all right. So step one is to declutter. Have a conversation
with your accountant. Areas you can clean
up in your business. And we use ProVision. provisionwealth.com. We believe in them. So when people ask us,
who’s your accountant? We get this question daily. We say, hey, go to ProVision. They’re the best. Yes, they cost a little
bit of money to work with. But you know what? They’re the best. So you pay for what
you get, right? You know, you buy
five shelves from Ikea because they break every
year, or you buy one really good shelf, and it
lasts a lifetime. And that’s the way that I
look at our accounting team and hiring our bookkeeper–
taking these things and decluttering and
making sure that you’ve got the right people
surrounding you. So in this New Year, think
about hiring the right team around you, as well. All right. Step two, let’s talk
about the deductions that you can take
this calendar year. So step one, declutter. Step two, making sure you’re
maximizing your deductions in 2017. Right. So you know, if
you were thinking of purchasing something for
the business, do it now. Right? You want to take
that write-off now. If you need a computer– Like what? You need a computer, printer– You need a phone. You need a printer, right? The fur coat probably
doesn’t count unless you’re– I don’t know. We can probably come up with
a way to (LAUGHING) put a fur coat through the tax
expenses, but we don’t. I guess if like–
if you’re a model. Like if you’re a runway model. Or if you’re, like,
a mosher, right? Like in a– Like a dog mosher. No. A musher? That’s how you say it. It’s dog moshing. No. Like a mosh pit is like when you
go to, like, a grunge concert, and people throw you
around in a mosh pit. Yes. That’s what I said. Is it the same thing? Dog moshing. Dog mushing. M-U-S-H. I actually don’t
know how to spell it. But anyway, if that’s what
you do with the huskies, then you can
probably get yourself a fur coat as a tax deduction. Or if you’re in Game of Thrones,
and you’re covering Winterfell, and you need one of the big
coats because it’s cold, you know, battling
White Walkers, that might be a write-off. But the point is– The Iron Bank might
challenge that because I think that those are provided
by the Lannister Army. But I digress. So there’s a bunch of things. Here’s a couple
of things that we took advantage of
in this calendar year that you might want to get
in before the end of the year. Your self-directed IRA. So we have a 14-month-old little
girl, we have a five-year-old, and we have a seven-year-old. Recently, we opened up
self-directed IRA accounts using our friends
over at Advanta IRA. You know, Scott and
his team are fantastic. They’ve been guests
on the podcast. So we recommend
them wholeheartedly. They manage our
self-directed accounts. They’re great, and
they’re very tech-savvy, so they’re easy to set up. And the key is we set up
these self-directed IRAs because you’re able to max them
out at 5,500 a year, right? Right. So that’s money
out of your pocket off of your taxable burden. Why not? Well, no. They’re Roths. So they don’t– Oh, they’re Roths. So they’re post-tax, right. They’re post-tax
dollars, but you only get until a certain
amount of time to actually make your
contributions for the year. Now, for those, they usually
are extended a little bit past January. You can make the contributions
all the way into April. But you still want
to do it, right? Because you lose the opportunity
to build brick by brick. If you have a
traditional IRA, yes. Then you’re going to take money
off of your taxation this year. We don’t want that. We want to pay tax on the crop. We don’t want to
pay tax on the seed. That’s what we have
decided in our family. So we put post-tax
dollars into our IRAs. Same thing with the 529s. 529s give you a
specific amount of limit if you’re saving for college. That’s not going to be taken off
your taxable burden this year, but you only get this
year to build this brick. And then you go next year. So you know, whatever
retirement accounts you have, whether they’re
pre- or post-tax, it’s just a
different philosophy. But make sure you put
the bricks in that are allowed for this tax year. Also, I think it’s great– I want to tell this little
quick story, a little aside. The other night, we
were sitting there. We’re both sick as– sick as can be right now. Well, I’m maybe a
little bit more– [COUGHS] He’s more sick. I’m– Let me get that cough out. Oh, geez. So I’m not being dramatic. You can hear it me, right? I’m suffering. (SARCASTICALLY) No, not at all. Can you get me, like, a
hot towel or something? Mm-hmm. So we were talking the
other night before bed. We actually pulled
up the spreadsheets of the self-directed accounts. Oh, yeah. This got him excited. And this is, like, pillow talk. Right. I got super excited. I was super hot under
the collar over this. [LAUGHS] So she showed us our
self-directed accounts. She showed our self-directed
accounts for our children that we had opened with
Advanta in the past year. Right. And for our little girl Eve,
who’s now 14 months old, putting in $5500 a year– From the time she’s two. Now, we’ve talked many times
about how a small child can qualify for an IRA. We’ve talked about
how we make sure we go through the proper channels. So it’s not like
we’re just taking advantage of the tax law. No. It’s totally legal. We’re actually doing
it legitimately. But OK. Go ahead. So $5,500 a year. From the time she’s two. OK. Then we also, then, take
that $5,500 from her account and invest
in real estate. So now, pulling out
$5,500 to invest– Not pulling out. Investing in. Oh, right. Right. Right. So at a minimum of 8% return. So we do about 8%. You know, most of our
properties do about 10% to 12%. But we were trying
to be conservative. If we made a conservative
8% per year for 67 years– because when she’s 69, she’ll
have had it for 67 years– and we put the minimum
allotment of $5,500 a year, and it grows at 8%,
by the time she’s 69– tax-free– she’d
have $12 million. $12 million. (LAUGHING) It’s so crazy. When you look at the
spreadsheet and you realize the power of
investing in real estate using a self-directed account for
your children, set it up today. Right. You know, you’ve
got a five-year-old. Do it today. Set it up. Start using– put
5,500 in there, and then use that 5,500
to invest in real estate. You know– 8%. You can buy into– or lend it out as a note, right? To somebody else who wants
to invest in real estate. Lend that money out. Even Clayton– he took
his 401(k) from Fox News and transferred it into an IRA. And he said, well,
it’s not a Roth 401(k), so I can’t transfer
it into a Roth IRA without triggering
a taxable burden. And so, we really did the
math, and we’re like, ugh. Do we want to pay taxes
on this this year? That’s such a big chunk
of change to pay taxes on. But we ran the numbers, and
if we took the sum of it and grow it at 8%
for the next 19 years until he hits 69 and 1/2, it
alone will be worth, I think– it was like $1.8 million that
he will then take out tax-free. So we had to really
ask ourselves, do we want to take the
tax rate this year. I’m sorry. I keep gesturing wildly. I’m getting excited. On this chunk of
change on the seed or the crop of $1.8 million. And so, we decided this year
we were gonna take the hit. So it might be the right year
if the GOP does this right. You never know. [LAUGHS] Who knows. [SIGHS] But we mentally
prepared to take the tax hit at our current
tax rate of 39% because we believed
in what we can do with this money in 19 years. All right. So step one, declutter. Step two, maximize your
retirement accounts. Step three? What was step three? I don’t remember the steps
as you laid them out. You just barked them
at me, and then– Well, they’re– no, no. I asked you. I said, these are the
five things we’re doing. So there are five things. Cost segregation, right? We can talk about
cost segregation. Has our episode on that run? No. So we have a full episode on
cost segregation that we– (EXCITED) You need to know this
before the end of the tax year! OK. We have a full episode with a
cost segregation expert coming up soon on the podcast. And he walks you
through, step by step, what is cost segregation. But you might not be there yet. Even if you are there– OK. Just– Stop interrupting me. No. You stop. You’re kicking the
can down the road. This is important. I’m not! I’m just telling you the
episode hasn’t aired yet. And so I’m not going to– there’s going to be a
full, detailed episode that we walk people through what
cost segregation is all about. OK. A couple things you need to
know about cost segregation. One, it’s amazing. Two, it’s a way to accelerate
your depreciation deductions on a current taxable year. So we teach you all about it. The thing is, you don’t
have to actually do it by the end of the year. You have to have your
calculations done by the time you file your taxes. So if you file your
taxes in April, you have to have all your
cost segregation done by then. But most of the time, if
you have a big corporation or you do a lot of business,
you might file an extension until September. And you can finish your cost
segregation September 1st and file on September 15
and you’ve got it, right? So you need to know what
cost segregation is. I think our episode
on this is awesome. We got the guy who does this. But you need to start
planning for it now. One, because it’s not free. It’s something that you’re
going to pay a specialist accountant to do. They have to fly in to
look at your properties. Right. And two, because you have
to plan for that to be done. So now we have several
dozen properties. And I need to make sure that– our guy. His name is David. OK, David, when
you go to Indiana, you’ve got, now, these
couple dozen properties. And then when you
go to Michigan, you’ve got these couple
dozen properties. And he needs to know what
each one was bought for. He’s got to be ready
to go because he needs to spend some time
in these places in order to help us with
our depreciation cost. So this is something that
you should be thinking about and planning for. And I just have been
working with our guy and getting him ready
for these things. But again, you don’t
need to finish it by the end of December. But have it in your
mind, and maybe plan to pay a little
bit extra for it. Because it will save you a
ton of money in the long run. And I don’t want you
to get scared about it. I mean, if you’ve got one or two
properties it’s probably not– to David’s point– it’s
probably not worth it. But when you’ve got, you
know, 6, 10, 12 properties, even more, then that’s when
cost segregation can really help you add an extra
level of depreciation. I think he makes the
point that it’s worth it. Why are you saying that? Did he? I thought, well– Were you even there? I asked him specifically. If you’ve got one property,
is it worth it to you? And he said, well, you
have to really balance. He said– Well, he said on a one– He said, if that one property
is 100 units, you know, that’s different. If you’ve got one single
family, then it’s probably not. His answer was– because
he’s gotta fly in– He said it probably would
be worth about $7,500 in depreciation expense and
would cost you about 1,500. OK, so you got to
weigh that, I guess. You have to weigh that. Why don’t you do the math? What is 7,500 minus– [LAUGHS] We’re gonna weigh a lot
of things, all right? We’re gonna weigh
a lot of things. (LAUGHING) Why are you
discouraging people from using this amazing tool? [AGITATED] I’m not
discouraging it! I’m just saying, don’t
get yourself all in a huff because you– I think you should
get in a huff. Ah, man! OK. Marriage. All right. What do you think
is number four? You tell me what number four is. Y’know, these were your
breakdowns– you know, because I’m a genius, I get
to remember all of these. Number four is getting
your acquisitions in line before the end of the year. Right. And you have to
remember number five. So number four is acquisitions
before the end of the year. Do you want to purchase
properties in 2017? Now, there’s a couple of things
to consider with this, right? Let’s say you’re going
to get a big raise, or you’re going to make a
boatload more money in 2018. Would it make sense for
you to close on a property that you’re about to buy in 2017
at your current tax bracket? Or, if you’re about to make
$200,000 more next year, in 2018, maybe you want
to consider closing in the new calendar year
to offset that new income that you’re about to make. So some things to talk about
with your accountant, right? And also, your title
person probably already has their head exploding because
so many people think like us, right? And they’re like, I want to
close this before December 31 for these specific reasons. We have about 60
properties lined up for closing before the
end of the year right now. Two are ours, and so– yeah. But I mean, oh, my god. And so everyone is rushing. My mom– this was her
career when she was younger. Now she’s in management. But she was an escrow officer,
and by the end of the month– because people had these
very specific goals– and especially by
the end of the year, I just remember she would
work so late at night to close escrows that
she would call a police officer to walk her to her car. Because it would be like
1:00 or 2:00 in the morning. Holy smokes. And you know, she would
just call someone and be like, I’m leaving my office. I’m alone. It’s late. Can you please
walk me to my car? And a cop would come over and
walk her to her car at night so that she could
get home safely because she worked so hard
at the end of the month. We’re sold out of properties
at the moment at our company, Morris Invest, because
everyone’s accountant have told them, hey, you’ve
got to buy two properties. You have to buy three
before the end of the year. So as soon as we’ve
gotten properties in, they’ve sold within minutes. And so please be kind
to your title company because they are swamped right
now at the end of the year. All of these people wanting
to claim it on their 2017 or– you know, whatever calendar
year taxes you’re currently in. So just be kind to them. They are absolutely swamped. They don’t need stupid
little fiddly questions coming from you. They don’t have
the time right now. They’re trying to
do title searches, provide title insurance,
fill out deeds, get all of this processed so
that you can close a property before the end of the year. Yeah, it’s crazy town. Yeah. But you know, if you’ve
got one in the works, and there’s anything you can
do to get it on the books this year, you know– that’s the kind of thing that
I’m working on right now. Is there anything that I can
do to make this go smoother and make sure our
ducks are in a row? And the last one that
you wanted to talk about. Making sure that you
set your goals for 2018. Because now you
have a plan, right? Or at least you have a plan
for the end of this year. And then anything
that you can do to make sure that
next year is not like this, do that, you know? Like what I’m doing right now
is putting my file storage away. I love that time of
year when I shred the seventh year in arrears. Oh, right. Yeah. You know? I go seven years back and then
shred all of those documents. Actually, I have my kids do
it, and I pay them for it. They love the shredder. And again, just
making sure– is there anything that I can make
sure that my ducks are in a row for 2018 so that we
can hit the ground running? So for us, we we’ve
opened some new LLCs, we’re acquiring now
in different states. So those LLCs need
bank accounts. Open those bank accounts. Make sure those things
are ready to go. Make sure all your
online banking’s set up. Like last night, I got
a few new accounts, and I was linking
them, one to the next, so I could pay the
credit card for this. It’s very exciting. Yeah, we’re buying some
b-class properties right now. Because if you’ve heard me
talk here on the podcast before– if you’ve got a lot
of c-class, that’s great. Those are our bread and butter. You want to sprinkle in
a few b-class properties into your portfolio. And that’s great
to be able to try to maximize before
the end of the year, to purchase some of those
$60,000 properties, $70,000 properties. The ROI is going to
be slightly lower. But guess what? You might get the benefit
of that appreciation. And then if you have that
property in your portfolio, you might end up selling
it for 100,000, eventually. Using that extra cash. So you want to look at those
different acquisitions. So we’re in the process of
doing some of that right now in Ohio, which is exciting. So yeah, in our
different markets. Exactly right. There you go. It’s exciting times
here in Natali’s office. Exactly. Very exciting. We hope it’s as exciting
in your home office right now with you
and your family. We’d love to hear your goals. Just don’t email us, please. Ahh. Can’t handle it. [LAUGHS] No, but especially at
the end of the year. That’s so rude! I’m just saying I
can’t handle it! All right. At least you know your
limitations, y’know? 500 emails– I know
my limitations. I know my limitations. I mean, you know,
what we’re telling you to do– like,
we’re not telling you open these types of accounts. We’re telling you, if you
have these types of accounts, maximize them. We’re not telling you to buy
this type of real estate. We’re telling you, if that’s
your plan or it’s in your goal, do it in a time that
benefits you, right? We don’t know–
like I said, we only know certain things
about how the tax law is going to continue to work. And then there’s certain
things we just don’t. Like for instance,
we do have 529s. They’re based on
market-based indexes. We don’t love that. We don’t love investing
in the stock market, but it is a pretty good
savings vehicle for– We keep it as, like, a lockbox. Right. For our kids’ education. But the new tax
plan might have it so that we could pay
for primary school. So you know, all of
a sudden I was like, oh, maybe I do want to put
a little bit more money into those 529s,
when we don’t really max out our contributions
there, usually. So you know, again,
we’re sort of bobbing and weaving based on what
the government’s going to do. Who the heck knows? Yeah, who knows what the
government’s gonna do. You know, we just have to play
the cards that are actually on the table. So we’ve got a lot of
episodes here in the archives. If you’re new to the channel, if
you haven’t already subscribed, please do. We’ve got so many back
episodes that we really try to treat these as
encyclopedic episodes for you to go back and reference
to really help you on your family’s journey
to building wealth. And helping you live the
lifestyle that you want. That’s ultimately the goal. We want you to be empowered to
go at it how ever you do it. You know, you buy a
100-unit apartment complex in your backyard. Great. Or you work with us, and
we help you get a property. It doesn’t matter. We want you to take action and
become a real-estate investor. And have an amazing
New Year, everybody. That’s right!

45 thoughts on “5 Things You Need to Do to Prepare for the New Year

  • Hey guys! Just wanted some clarification on a comment that Natalie made at 15:21. When she says she wants to pay tax on the crop and not the seed, isn't putting "post-tax" dollars by way of a Roth IRA be paying taxes on the seed? And what is your reasoning for the philosophy for wanting to pay taxes on the way out and not the way in?

    Just curious. Thank you guys for all the helpful videos.

  • When paying/employing your children

    A. Do you provide them a 1099?
    B. Are they subject to minimum wage?
    C. If not, what is a "fair" wage per age group?


  • Great video, thank you! Quick question, I believe Natalie mentioned that each LLC you have contains 8 properties?

    Do you find that the hassle/maintenance/managing of creating an individual LLC for each individual property simply isn't worth it? Is the concern of liability by having 8 in one LLC mitigated based on the state laws of where you have the LLC registered in, is that the reasoning behind it? Appreciate it!

  • So 2017 I started with 1 property, as of Dec 27 I will have 4.
    Goals 2018:
    -Outreach to Homeowners for “owner carry” make 2 offers a month (average) that meet my ROI.
    -Have at least 1 out of State Property.
    -Maintain at least 80 Occupancy rate, but budget for 60
    -Calculate a freedom number
    -Economic forecast planning and adapting to market trends have a Plan A, A.1, B, B.1, C
    -Find investors in my LLC
    -Revisit some Morris Invest Video for review of my investment Strategy when applicable
    -Be self-aware that not all things are emergencies.
    -Find a Mentor****
    -Maintain a A+ Rating for my LLC with the BBB

  • Wow, I was looking to contact you guys and get started with things…no more emails???
    is there another way to reach out to you for advice or assistance?

  • Thanks for sharing. When do we start investing in the coming year? This is the end of year and I believe business activities are mild. Which month or quarter should we start purchasing rental properties from you?

  • What is the price of your properties that u purchase? Over here in canada, we talk in 700k to 1 million properties.

  • Clayton and Natali Thank you for this video. Thank you for everything you are doing for us, the viewers. Thank you for taking the time to not only share your knowledge but you take it up a notch by posting show notes. I can't wait to be apart of Morris Invest.

  • I'll be honest I haven't learned much from your self directed account. I hope you can dumn it down for me.

    I have finally ventured into a rental real estate ($175k) I wish I had found you guys before that transaction….. but here we are… my goal is to grow this for my Son. I hope to work with you to maximize my accounts and profit from it. also I clayton, I have been following you since your fox news days….

  • Love u guys! in regards to the LLCs u guys recommend. Whats ur opinion of having them in our name compared to setting them up in anonymity states so potential lawsuits don’t lead back to the owner? Is this anonymity protection necessary in ur opinion or is it overboard?

  • How does closing on a property effect taxes?
    Does that count as an expense that offsets income? That doesn't make sense to me because then with depreciation you would get a double write off. Isn't the first year prorated?

  • Hey Clayton, I began really looking into real estate investing in November, I’ve read about 4 books so far, and I’m working on 5 & 6 now. I’m learning so much and I feel like I’m so much better off than before, but now I’m at the point where I need to begin practicing how I search for ideal properties to invest in, any advice for how I can practice that? I don’t make much money right now ($13k/year) and I’m still in college. What are good ways to find a great property to invest in? Simply as a method of practice before I dive right into what hopefully will be my career. My goal is to form my LLC and purchase 2 multi family properties before the end of 2018.

  • Thanks for sharing. I contacted your distribution manager. He showed me your current listing in Detroit for 65,000$ — a 4 bed 2 bath single family house which can rent for 850/month. I feel the ROI is a little less than 3 bed 1 bath. Also, with the money to buy five 4b2b houses, I can buy seven to eight 3 bed 1 bath single family house. Do you think 3 bed 1 bath has better ROI than 4 bed 2 bath? I feel 4 beds are too big for a family and it looks more like a multi-family. 3 bed – one bed for a couple and 2 beds for 2 kids seem to be more usual. What do you think? Thanks for sharing.

  • HEEEEEEELP! we want to build a new complex at part of our 5 year plan, would you just save the down payment in a money market or invest in index funds? we would pay down a current property and then refi, but we are planning to buy land, then start building and it involves a 1031 to paying down the mortgage and things would get too complicated.

  • You Guys are so overly excited… Can you actually do a video on how you used the 401k and IRAs for investing in real estate

  • Offensive comment on 70 year olds. Not all your listeners are young and not all 70 year olds wear “adult diapers”. Not funny and not helpful.

  • Hey Morris, great video as always…I currently own one property that I live in and rent out one of the rooms. I'm thinking about doing a cash out refinance or some other way to take out the equity to buy a rental property. Do you think that's a good idea, or am I better off just getting a new loan for that new property ? Is there a plus to doing it a particular way?

  • So much information it's over whelming but in a good way! Makes me look forward to investing. I just have to remember the information for where I'm currently at or I get lost when I try to go too far ahead when I'm not there yet. Thanks for the info!

  • What should i do with my traditional retirement account that is at about $6,000 if my end goal is to hopefully use it as a down payment for rental property? So that it is to the best benefit for me and my real estate goals?

  • NOTES:

    There are things that can only be done in a calendar year. The new year also presents some good opportunities to set goals.

    Here are some things to do:

    1. Clean out your file cabinet and your clutter—get things cleared up and organized. That’s a critical thing. This includes your balance sheet and your financial net worth.

    2. Maximize your deductions. This means making sure expenses are categories, investing into IRAs, etc.

    3. Cost segregation: Talk with your CPA about how this can help with depreciation. This doesn’t actually have to happen before a new year.

    4. Create an acquisition strategy. This is critical. Determine what you’re going to want to do and start targeting properties.

    5. Set Goals: This is important, and you should think about that. Make sure you do your freedom number first.

  • can you have buy a property with a mortgage and put it in a LLC? the banks in texas will not allow you to buy with a LLC

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