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With April 15 looming right around the corner, and many of you scrambling to get your taxes done, I wanted to write something today that if you implement can make you much, much richer.
And, not only can these 2 ideas I have for you make you a lot of money, but the best part is that this money will be tax FREE! That’s right…loads of cash without having to give any to Uncle Sam!
Now you may be thinking what kind of crazy idea is this? There is no way that you can legally make big $$$ and not have to give a large cut of that to our favorite friend the IRS.
Well this is just not true. So, let me explain.
The first idea that I want to share is buying a home to live in. Don’t just buy any home, but buy one that is distressed, that requires some fix up. Using the methods that we teach here at StreetWise Property Investing regarding wholesaling, fixing/flipping and rentals, use these same tools to find your own below market value personal residence.
I prefer you to find the distressed below market value property so that you have instant equity. Now all you have to do after fixing it up is move in and wait. You are going to wait 2 full years and enjoy the comforts of your home for that entire time.
After 2 years your job will be to sell it for top dollar. So, make sure you have the place really dialed in and taken care of. One of the greatest gifts that the IRS gives us is tax free capital gains up to $250,000 if we are single, and up to $500,000 if you are married. The kicker is that you have to have lived in your primary residence at least 2 years.
This means that you can take up to half a MILLION BUCKS tax FREE! This is why I want you to move into one of your flip deals you find and let the magic of appreciation give you a little more equity goose.
If you take this advice AND you discipline yourself not to upgrade when you buy again, within 3-4 times (6-8 years) of doing this you could be paying cash for your house. Each time you buy again you want to take 100% of the tax FREE proceeds from your sale and put it into your new house.
Now, the 2nd idea is similar to the first but with a twist. The 2nd idea is buy a distressed below market value property, fix it up and move in. This part is no different than my first idea. However, after 2 years you will move out of this property into another, but rather than sell you will rent the first property.
The IRS actually allows you to live in a property 2 of the last 5 years and you can still sell and realize $250,000 of capital gains if you are single, or up to $500,000 if you are married…totally tax FREE!
So, after moving out of the first property, and into the second, you would proceed with renting out the first property for the next 3 years. All the while you would get to keep the cash flow from the rental income. When you sell prior to year 5 you would get to keep all of the capital gains completely tax FREE. This method gives you 3 extra years of appreciation to add to your gains.
Remember, as I have stated many times before, all of this knowledge and ideas are great, but until you take ACTION they remain just ideas. My desire for you is to take ACTION. Do it today!
Real Estate and investing have been my passion for over 15 years. I love transforming a broken down distressed property into something that is fresh, updated and modern. My real estate investing career began in foreclosures, but I have also built new, worked direct with sellers, apartments, condo conversions, rentals, wholesale, commercial etc.
This is very easy to do.
Step 1) Buy a house preferably distressed and below market value
Step 2) Move in and wait at least 2 years
Step 3) Sell when the you feel you have enough equity to make it worth your while
Step 4) Collect the income you receive from the sale tax free
You do not have to have a lot of money to do this. You can get an FHA loan with 3.5% down. There are other lending programs out there that you can get with even less money down and you could request that the seller pay your closing costs. There are programs like USDA loans in rural areas where you can get 100% financing. Of course your income and credit will be a factor in how much you can borrow. Again, you want to find something that is below market value TODAY so that you have instant equity.
It does not matter if you live in Cicero, NY or Billings, MO or anywhere in between. This works for everyone. I hope that helps. If you need more help feel free to contact me about one of my coaching programs. Best of luck to you!
Do you have to live in a certain area in order for this to work?And how is this money paid directly to the seller or through IRS taxes?
Thanks for the comment LaQuentta. To answer your question, no you do not have to live in a certain area for this to work. This is available to ALL US citizens that live in any of the 50 states.
The money is paid directly to you when you sell the property. You would receive the equity that you had in your property through the sale of your house to another person. Your title/escrow company would handle the closing and then would cut you a check. They would handle reporting to the IRS that it was your primary residence.
You would still be responsible for reporting the same on your tax return but you would not be subject to taxes. I would advise that you have a qualified tax professional handle your tax questions and return during the year that you sell. I hope that helps!
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Dear sir can you teach me how to do this step by step is it really that easy do you have to have alot of money.to do this.or can i get a gov loan in new york say cicero ny