Benefits of Investing in Designated Opportunity Zones

One of the good things about real estate (and there are many) is that the government generally creates incentives for investors and developers to provide housing in certain areas.

This is the case with the fairly new “opportunity zones” initiative that launched in December of 2017 with the tax cuts and jobs act legislation.  Let’s discuss what the benefits are of investing in one of these areas.

Investing in Designated Opportunity Zones

By investing in opportunity zones you can save a bunch on capital gains taxes.   Similar to a 1031, but with more flexibility, you only need to designate the gains from a property into the opportunity fund.

That money obviously needs to be used to invest in one of the many opportunity zones designated by the government entities.   You can see a map of opportunity zones here.

Tax Benefits of Opportunity Zone Investing

A basis step-up for capital gains reinvested in an opportunity fund

A temporary deferral of taxable income for capital gains reinvested into an opportunity fund.

A permanent exclusion of capital gains if the investment is held for at least 10 years.

For us buy hold folks that last one is very enticing as normally you will hold a rental for atleast 10 years.  Capital gains being excluded permanently sounds nice to me!  It’s likely a 15% savings staying in my pocket!

Tax benefits are just one of the reasons rental properties are so awesome.

How One Guy CRUSHED IT Trading Beyond Meat

Active trading is more than just reading charts.   Sentiment, news announcements and sometimes just simple logic can all play a part in making a trade, especially one that offers a big move.

That’s what Guy Gentile did trading Beyond Meat (BYND)

How One Guy Crushed It Trading Beyond Meat

Beyond meat is a meatless food company (think burgers, etc.).   They had an initial public offering back in late May and the stock had basically skyrocketed since.

The hype around the company and stock was a big part of that.  Kind of like anything “new” that gets the “this is the next big thing to boom” vibe throughout the masses.

Granted meatless food products isn’t new, but they have a burger that is apparently very good and used that fact to expand like crazy and then raise a ton of money to fund it.

Either way there were plenty of signs, that atleast in the near-term the stock was far ahead of itself.

Higher Valuation Than JetBlue and Coors?

As shared in @rollandthomas post has beyond meat seen its best days the value of beyond meat had blown past some rather larger companies that do way more business such as beer maker coors and airline operator jetblue.

I’m sure the meatless burger is good, but can they sell enough to generate more revenue than the two companies above?

The chart also gives us a nice indication that things may be a bit ahead of themselves…..

There is always a Catalyst

As you can see the stock ripped higher into earnings and gave us a nice doji candle meaning the buyers were not fully in control anymore.

Now it was just a matter of what happened at earnings.  Here is the thing though, the hype around the stock was so high that even an earning beat might mean a sell off.   Buy the rumor sell the news is a mantra for a reason.

Shorting with Leverage and Safety to Crush It

Mr. Gentile made a big play with the use of options (which is good cus it establishes your risk up front) by buying weekly put options heading into the earnings announcement.

If the stock goes down he has the right to buy the stock at those lower prices or he can just sell the put option for the higher valuation it has at that point.

With the stock trading around 230 on Friday he bought 230 strike prices down to the 215’s in 5 point increments, thousands of them.  If he was right he gets paid.  If he was wrong he loses only what he spent no more.

Well, he was right and the stock is down 30 plus point from Friday’s close.  Just booking the profits by closing out those put options is a homerun.

However, he leveled up (and did take on my risk) by selling a bunch of the 220 calls that expire this week.  Basically if the price of BYND closed below 220 this friday he will also keep all the premium collected from selling those calls.

Conviction Meets Size

There are times to make regular trades and times to load up.  He saw this as a time to load the truck up and get paid.  You won’t always be right, but to make real money actively investing you need to take the occasional big swing when all the signs line up.

Just be sure that if you are wrong it doesn’t knock you out of the game.  Never put yourself in a position where one trade can blow out your whole account.  Always live to trade another day.

You can read a detailed article about the trade including an interview with Mr. Gentile here:

Guy Gentile Made $4M In Beyond Meat, Sees 50% Downside By December

 

Bears Have Bulls Backed In a Corner!

Bears have bulls pushed against major support at $9,950. This is not just visual support, but also the 0.619 fib level of the larger structure. A decisive break (daily open and close) below this area would be significant.

Screen Shot 2019-07-23 at 12.44.11 PM.png

Bulls are still defending the 8 week EMA at the time of writing this.

Screen Shot 2019-07-23 at 12.44.34 PM.png

In today’s video we’ll look at the macro and micro picture. We’ll discuss where price may go from here, key areas to watch, I’ll answer your questions and so much more. I hope you find it helpful.

Video Analysis:

If you don’t see the above video, navigate to TIMM (https://mentormarket.io/profile/?workin2005/) or Steemit in order to watch.

I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Until next time, wishing you safe and profitable trading.

Workin

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Live On the ScaredyCat Investor Show Build Team CEO @thecryptodrive Talks DLease! 8pm UTC (4pm EDT) on MSPWaves

You are not gonna want to miss this one!  DLease has made earning passive income off your steem coins easier than ever – and even better, the rate of return is a market best.

Show agenda for…

  • Interview with Build Team CEO @thecryptodrive as we talk DLease
  • Let’s make it rain some PAL Coin
  • The Crypto Market Check (Cat’s Price Chart Calls are on Fire)
  • And some good music if we have the time!

———————————————————————————————————————–

Come and Join Us!

Hear it on discord: https://discord.gg/ZvwASjs

Join audience chat: https://discord.gg/77MCBer
Vimm TV: https://www.vimm.tv/@msp-waves

Only on…

Why You Should Self Manage Your First Rental Property

When it comes to investing my favorite saying is “experience is the best teacher.”  It is something that holds true in much of life, but I love how experience has a positive financial impact on my future real estate investments.

Why You Should Self Manage Your First Rental Property

This is one of the reasons I believe everyone should self-manage their first rental property.  This is assuming you can of course.  If you are investing out of state to start then it may not be an option, but for anyone with a place less than 2 hours away the experience is valuable.

What does good management look like?

Here’s the thing about hiring property management.  How do you know if they are any good if you have no idea what managing a property entails.

Now, of course there is the tag line “no one will look after your own investment as well as yourself” but that does not mean property management is a bad idea.

You just need to know what you are looking for.

Here are a couple examples of experiences I’m glad I had before turning to property management:

1.) Tenant Screening Process

I can tell you first hand – screening tenants is a bit of a pain.  However, once you do this process yourself you will know exactly what you are looking for in a tenant.

Granted much of the criteria is dictated by fair housing laws, but there are plenty of variables that you are allowed to decide for yourself.  Things such as credit and pets, for example.

More important though is the actions of the applicant.  I once had a lovely couple with a young child apply for a property.  I was very happy with what I saw from them, but when it came to getting me pay tubs and such, something that should take a day, they struggled to supply them.

It wasn’t like they were lying about employment as I knew where the guy worked and the type of money made in his position.  He was just that much of a disorganized mess.  Doesn’t bode well for getting my rent on time and the property being taken care of.

After a few days passed by I told them I had to go with someone else.

The tenant I went with was awesome, she supplied me everything right away.  Was always punctual and stayed in the unit for two years before moving out of the area.

In fact, when she moved out the place was in such good shape I didn’t have any turnover.  No repainting, no wall patching, nothing.   Not every tenant will be like that, but what a dream.

You value stuff like that when you have a tenant much the opposite, which I have had.  When it came time to turnover the property, it felt more like a rehab.  Deposit money only gets you so far.  Quality of tenant still counts.

I guess it’s the nuances that make a difference within all the standard criteria.

2.) How is that lease looking?

When you research leases and acquire even a standard one for your state it gives you a much better idea of what you can and can’t do.

I always advise having a lawyer look at your lease to ensure you are on the right side of the law, but remember there are many options you can decide on in your lease.

Along with the aforementioned pets policy, how about things like broken glass, unlicensed vehicles and minor plumbing issues?

These are just examples and are items that may not be in the lease the property management company uses.

Plus, how do you know where you stand on these items until you have had to decide and experience what works.

Final Thoughts…

Self-managing my first three properties was an invaluable experience.  It is very easy for me to tell when a property manager is doing a solid job or doesn’t have there stuff together.

Yes, there were times I hated self-managing, like that one month when all three properties had issues.  That happened one time though over that three year span.

If you are able to self manage at first, why not get the experience?  Good Luck!


You can learn the ins and outs of investing in rental properties through the scaredycatguide to investing in rental properties video series.

The Price of STEEM – Destination 10 Cents

We get so caught up in the day to day that sometimes I like to zoom out and look at a monthly price chart of a crypto to see what my broad guess would be for future price.

Boy I Wish I Wouldn’t Have Looked

This monthly chart of steem seen in the post.  Well, it definitely doesn’t give you the warm and fuzzies about future price action.

25 cents is a key area on the daily chart and price just bounced off it today.   It is important to hold that level because otherwise we are likely going to see 20 cents which is the most recent bottom on the monthly chart.

However, for tried and true support from the past though, we are looking at 10 cents steem.  TEN CENTS!  I really don’t want to experience that again.  I was here for it the first time and boy is that ride depressing.

Here’s hoping we see an uptick in alts, steem included.

The Sell Programs Need to End Already

I can say this, until these sell programs from some whales (not to be named) end it will be unlikely we see good price appreciation.  So many good things going on in the steem community and on the blockchain, but damn if that selling pressure just won’t let up!

You know what is UP when the Market is Down? $TWTR

The ole MO strikes again with the Twitter bird. The market gets smoked, and $TWTR rips higher. You can’t make it up folks, it happens regularly.

I have been long $TWTR a while since last earnings and still sitting green. It looks like I am going to have to be in it this earnings as well and looking for a run up. $TWTR is a no brainer IMO and I have been saying this from the early 20s and been on the platform 9 years. I am looking for this to make a VERY BULLISH move here.

Buy $TWTR.

Is Bitcoin Still in a Bear Market? Analysis and Answering Questions

Bitcoin jumped today from $11,350 to our known resistance at $12,000.

Screen Shot 2019-07-08 at 12.11.07 PM.png

Zooming out on the weekly chart, we can see price is trading above the last 3 weekly candle’s close. Bitcoin has been defiant of the bearish reversal candle we saw 2 weeks ago.

Screen Shot 2019-07-08 at 12.12.31 PM.png

As most of you know, I believe the bottom is in and bitcoin is now in a bull market. Could I be proven wrong? Of course…and I’ll be the first to admit it if I am.

In today’s video we discuss the case for the bear market continuing and lay out why I think it’s over. I also answer your questions on how I learned to trade, discuss where price my be heading next and so much more. Hope you find it helpful.

Video Analysis:

If you don’t see the above video, navigate to TIMM (https://mentormarket.io/profile/?workin2005/) or Steemit in order to watch.

I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Until next time, wishing you safe and profitable trading.

Workin

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When Not to Use an LLC for an Investment Property

That title may have thrown you for a second.  As investors a Limited Liability Corporation (LLC) is one of the best tools we can use for investment properties for both liability and tax purposes.

However, there are some scenarios when using one does not make sense.

When Not to Use an LLC for an Investment Property

1.) House Hacking, FHA Loan, etc.

If you plan on living in the home and leverage loans designed for owner occupants then you would not want to purchase in an LLC, but rather your own name.

LLC’s cannot procure certain loans, such as ones back by the Federal Housing Authority (FHA).  That loan needs to be in your own name.

If you plan to refinance out of that home and move to the next house hack, then at that point flipping it into an LLC can make sense.

2.) Low Down Payment Traditional Loans

As stated above you really can’t get the traditional homebuyer loans using an LLC, which also eliminates low down payment loans for the most part.

Putting down 20-25% will basically be standard when buying with an LLC.   If you don’t have that kind of down payment money then an LLC is probably not the right move for you.

Protection Though

So if we aren’t in a position where leveraging an LLC makes sense how can we be protected?

It’s simple – good old insurance.  It may not be perfect but it has worked for a century, just be sure you have the proper coverage.

Be sure to work through all the insurance options with your agent so nothing slips through the cracks and you and your investment is covered.

Same goes for when using an LLC, be sure to have your lawyer or accountant create it for you and structure it to your needs.

There are many variables in the real estate investing game, but in the end it is not rocket science.  Due diligence and some discipline go a long way.

 

ALL TIME is a LONG TIME $SPX $NDX $DJIA

The US Markets just closed out the week at ALL TIME Weekly Closing Highs (the Dow Jones and S&P). The Bears are out talking about unemployment ticking up and the yield curve inverting and Powell cutting rates. Well Mr. Jerome Powell has quite the decision to make in the coming weeks because that insurance rate cut is going to have to come on the back end of a YUGE JOBS Number. The jobs this morning came in RED HOT and the 50 point cut just went out the window. The 25 point cut is now on the ropes and will be a huge decision.

The perma bears just don’t understand this market and that is part of their problem. They can’t go both ways. You have to learn to go both ways! Long and strong baby! Do you go all in here? NO! You should have loaded up at the beginning up June!

I am looking for pullbacks to be bought until otherwise. The chase is on. You cannot be bearish unless you are under 2918 for starters.