"He is Risen..."

Hallelujah!

Happy Easter - we all have reason to celebrate!

"Happy Tax Day!!"

If you are ready to throw a rock at your screen right now, intending to hit me, it is only because you did not buy enough real estate last year!

So, put the rock down (please) and lets talk...

Real Estate has been described as the IDEAL investment!

Its TRUE.

IDEAL is a device for remembering the five key attributes of the advantages of investing in real estate versus stocks, bonds, precious metals and other investments.

IDEAL =

I = Income.
Real estate generates income - or at least it is suppose to! If your real estate is not generating income, then you did something wrong. We need to go back to the instruction book (Can be found at: http://www.realinvestors.com/ click on: "Getting Started") and start over. Yes! It is true. If you have been "suckered", excuse me, "sweet talked" into buying a piece of real estate with zero (or G-d forbid, negative) cash flow by a local real estate agent, then you are missing out on one of the all time great things about real estate vs. other investments like precious metals or "growth stocks". During the entire period you own the asset, the asset should be paying you (every single month);

D = Depreciation (a/k/a "Tax Shield"). It is a wonderful thing to be an American, or at least have to pay taxes in America! Yes! You see, the tax code (as it currently exists, and has existed since 1986) allows for you to shelter the "I", as in income from your real estate through something called Depreciation. This depreciation is an imaginary loss in the value of the property, year over year. Now in reality, the property is increasing in value (should be if you bought right, if it is not, go back to the instruction book: http://www.realinvestors.com/ click on: "Getting Started"). However, the folks who make the laws (as in the rich guys/gals in Congress) say that real estate depreciates and therefore, everyone who owns real estate should get a tax break for this imaginary loss in value! Now in reality, the sticks and bricks on a property do go down in value over time, but again, a well placed piece of real estate should see the underlying value of the site (the dirt) go up over time. More on this in a future post;

E = Equity. Equity is defined as the difference between the Value of a piece of real estate and its underlying debt. Equity can be paid for (as in down payment), equity can be earned (as in what happens when you learn to buy real estate correctly, which is for "X cents on the dollar", or at a discount from actual value), or equity can be created - The great thing is that when equity is "created" it has absolutely nothing to do with energy exhausted, and has everything to do with "picking" the right property at the right time. E.g. you buy a house in the burbs. Over a five year period the house increases in value 200% - Question: how much of that increase did you "earn"? Answer: "ZERO"! Yes, it is yours, and yes, you can tap a home equity line of credit (HELOC) and pull it out "100% TAX FREE", but you can not honestly say you "EARNED IT" SWEET! One of the 101 reasons you not only want to own real estate, but want to make the time to learn how to do it correctly.

A = Appreciation. Again, Thank G-d for America! This is one country where real estate has historically gone up in value! So you say, "Sherman, doesn't real estate always go up in value all over the world..?" Don't think so! Let's talk about real estate values in Cuba from 1948-2006. You have to have a stable investing environment for values to consistently go up, year over year. WARNING: The following is not a political statement: The United States of America is the only country on the planet where every four year there is a "bloodless coup" and the people have the opportunity to change its leadership, and yet the day after the 2nd Tuesday in November, no one is flooding out of the country on plans, trains and automobiles... We can thank the framers of the Constitution for this, and every successive administration that believes it is worth fighting for, regardless of their skewed interpretation of it. Back to real estate: Check the stats going back to the 1929 stock market crash. In the US, in most markets (particularly along the cost lines) real estate goes up - can not say the same for any other type of investment;

L = Leverage. Most people think of this as the ability to borrow money to fund real estate deals - this is true. However, real estate (particularly single family real estate) also inherently has the ability to "leverage" other people's time! Think about it. If you want to buy a single family investment property you have a whole team of professional people who are ready at your "beck and call" to make the deal happen, and they do not get paid unless the deal goes through. Try this one with a small company and a payroll of 7-14 employees. Seriously, if you own a small company go to work on Monday and make the following announcement: "O.k. team, starting today, no one gets a pay check. From now on, when the company makes money, we will distribute commission checks to everyone!" See who comes back tomorrow ;)

Now let's look at the list again from the perspective of APRIL 15th:
1 - You get real INCOME you can spend (month after month) on properly structured real estate deals, BUT you also get:
2 - Tax savings from the DEPRECIATION (which shelters the real cash in your pocket);
3 & 4 - and if the EQUITY in the property goes UP because of APPRECIATION, you can refinance and pull cash out! That's right ;
5 - Because of the ability to use LEVERAGE, you can pull cash out of your properties that is 100% TAX FREE, because the IRS says it is a loan, and therefore NOT TAXABLE.

So, if you bought real estate last year, and have a good CPA, then this absolutely should be a "HAPPY TAX DAY!" for you.

And if for some reason it is not, then we need to get to work on this NOW, for next year....

"Why This Night is Like No Other..."

Dear David,

Tonight marks the first night of the Passover.

Tonight we celebrate, as well as observe the memory of an awesome event in the history of mankind.

Although the word "Awesome" is misused in society today, such as when used to describe the features of a new car. The true meaning of the word "Awesome" is to be in "Awe", and specifically relates to the power of G-d. And as with many events in history, and many events pertaining to the power of G-d, it can be both wonderful and terrible in the same instance.

The Passover is no exception.

The Passover represents both the Beginning of the End of a time of bondage for the people of Israel, and also the End of the Beginning for the people of Egypt, and a time of great suffering due to the loss of the first born of all Egyptian families.

In the same moment when G-d brought "Deliverence", He also brought "Judgement": "On that same night I will pass through Egypt and strike down every firstborn—both men and animals—and I will bring judgment on all the gods of Egypt. I am the LORD. The blood will be a sign for you on the houses where you are; and when I see the blood, I will pass over you. No destructive plague will touch you when I strike Egypt." Exodus 12:12-13

This is but one of the many attributes of G-d, Deliverence/Judgement in the same act.

The Passover as a significant point in the history of the human race stands as a clear message to all mankind as what happens to those who obey G-d, as well as those who refuse.

So today we begin the "celebration" of Passover, as well as make time to observe the suffering of those who lost loved ones, and in all things know that G-d is the same today, as yesterday, and forever.

He is Awesome and able to do all things, and as always loves those who love him.

Five Things #3 - You & Your Habits Go With You...

I know a number of people who want to leave their jobs, not because they do not enjoy the work, or their industry, but because they do not care for the office politics, or the people they are working with, or the work environment.

Truth be told, this is exactly why I had to get out of my LAST JOB!
Loved the students - hated the politics.

But there is one thing I have noticed, now that I am going on 16 years of having no one sign my "paycheck" but me...

A lot of the issues I was "running" from followed me into my business, or more accurately, businesses.

As I have "matured" (Code for, as my hair has turned from black to gray), I notice that a number of the things I professed to despise came with me into my business and the reason for this is because I brought this baggage with me...

... Worse, the baggage seemed to be even worse once I was "Free".

There is a scripture I often quote to myself which says: "As iron sharpens iron, So a man sharpens the countenance of his friend" - Sherman's Interpretation: God places certain people in our lives who will "rub us" the wrong way, and in the process, we actually become better people.

The reality is that once you are the BOSS, there are fewer and fewer who are willing to "risk" rubbing you the wrong way (Critical Reason Why Mastermind Groups Are SOOOO Important for Entrepreneurs).

Think about it... Most people are unwilling to "tick off" the person who is signing the paychecks, even if it is something the person needs to hear. This is generally true of employees and vendors alike. It is amazing how much garbage is out there, whether in the area of advertising, tax advice or advice on raising children, simply because the vendor/consultant was more concerned about getting the check rather than telling the client the truth!

So, on my list of "what I wish I knew then, that I definitely know now", is start now to practice Good Habits, while you are still on someone else's payroll. Once you leave the "nest", there are fewer and fewer people who will tell you the truth about your own Bad Habits.

So, what kind of Good Habits am I talking about....?

Some are as simple as reminding yourself to say, "Thank You and Please..."

I know this sounds "simplistic", but how many times have you said to yourself, "...I know she is my boss, but man I would be more responsive if she simply said 'Thank you' every once in a while - I am no one's lackey..."

So, if you feel this way, what kind of "Boss"/employer are you going to be...?

"Well Sherman, I do not plan on having employees, so this particular post on your blog does not apply to me!" BULL-O-NEY!!

It is virtually impossible to succeed in life, much less business, without the assistance of others. (Guess what we are discussing tomorrow). You can call them contractors, you can call them vendors, you can call them "virtual assistants", but at the end of the day, YOU are giving the directions, and YOU are writing the checks, or giving them a credit card, THEREFORE, YOU ARE THE BOSS.

So lets start today practicing GOOD HABITS.

"Thank you and please" should be a part of every conversation you have.
Getting to the office early, staying late and being THE MOST PRODUCTIVE person in your office are habits you develop today that you will take with you into your business.
Setting aside time each week (best to use the same day and time) to both plan out the week and spend time learning something new, will do you very well when you are "Out", and the only pressure to grow comes from within you.

Anything you do over a 21 day period has the potential to become a "life long" habit, both good, and bad.

Start now eliminating bad habits and integrating new GOOD HABITS.

You will thank yourself down the road, when (seemingly) no one is looking...