The REvision Group

"Only by giving are you able to receive more than you already have." – Jim Rohn

Jim Rohn was an American entrepreneur and author. He not only created one of the most famous Thanksgiving quotes about money, but he lived it as well. Born on a farm in Idaho, Rohn started life with a limited understanding of business. After quitting college, he attended a lecture regarding entrepreneurship. He used the information to work for various companies and eventually turned his skillset into an advantage.

During his life, Jim Rohn mentored several people. He also wrote numerous books regarding wealth and philosophy. With each step, he made sure to provide sound financial teaching as well as motivational support. Rohn demonstrated that giving was indeed a grand opportunity to receive happiness.

Using Depreciation as a tax advantage for owning Commercial/Residential real estate:

Investment Properties Depreciation Requirements for Tax Deduction

Real estate can only be depreciated if it meets all of the following four requirements:

1. An investor must own the property, even if there is a mortgage on the property. For example, if Investor B sublets the entire property from Investor A, B could not claim a depreciation expense because he does not own the property. On the other hand, Investor A could depreciate the property because he owns it, even though he is renting the entire property to Investor B.

2. Real estate must be used for a business or income-producing activity, such as rental property. That is another reason why Investor A can take the depreciation expense and Investor B can not.

3. Property is expected to last more than one year. The building itself, along with capital improvements such as appliances, a fence, or a new roof, is expected to last much longer than one year and is depreciated accordingly.
- The more than one year rule for depreciation is also the reason why fix-and-flip real estate investors generally cannot claim a depreciation expense because the property is held for less than one year.
- Another exception to the one-year rule is developers. Lots and the homes built on the lots are considered stock in trade by the IRS and cannot be depreciated by the developer, even if the subdivision takes more than one year to build and sell out.

4. Property must have a determinable useful life. That is why repair and maintenance costs are expensed the same year they are incurred as immediately deductible expenses.

Residential real estate, such as a multifamily property, has a useful life determined by the IRS of 27.5 years. This is also why land cannot be depreciated because the land is never used up and has a useful life that theoretically goes on forever.

If you are on the capital raising side, you will know how competitive it can get! Here are 14 ways to stand out and be unique from others looking to find capital partners:

1. Focus your investments on one niche area that you already know well or can grow to become a relative expert in.

2. Identify a niche that investors you go to would understand but nobody ever offers them a chance to invest in

3. Identifying investments which are hyper secure but still have decent returns (but remember to never offer nor claim your investment is a zero-risk investment)

4. Performance fee only structures

5. Equity bump as the only fee, meaning you get a larger equity piece for putting the deal together but no fees ongoing or every year

6. Structuring investments which are fun, enjoyable to use, but also protect capital and grow it over time

7. Create an experience during due diligence, if you are a helicopter pilot take them on a ride to see the asset, if you have a ranch, take them there, if you own a private jet, or enjoy adventure trips build relationships on those.

8. Identify what investors you have deep access to constantly, and listening to exactly what structure, fees, and types of income/risk/deal parameters they seek so you can design something just for them

9. Have a sharp one liner combined with a short 3-4 minute video from your founder so you cut through the inbox and pitch deck clutter

10. Only raise capital from those who have created all of their wealth in the niche the asset or deal is in

11. Create your own local investor club or investment community and leverage your expertise to create a community

12. If you have the permission and relationship in place to, use SMS text message communications to get past inbox clutter

13. Have a sense of humor while also having institutional polish – investors want to invest in those they like, trust, and enjoy spending time with all else equal. Many times relationships are built on soft skills during the first interaction.

14. Conduct tax diligence on how your investors could complete your investment in a way that protects some capital gains or income from taxation, most ignore this and most investors want it.

We are very excited to announce our new partnership with Tauro Capital Advisors!