The majority of people choose a home based business as a great opportunity for many reasons. The first reason is there is very little up front capitol required. Another reason is the ability to work around family which is especially helpful when there are children around the house. There is nothing worse then waking up one day only to realize the children have all grown up and you have missed the entire thing.Some other advantages of a home based business are the fact that you do not have to make an additional rent payment, nor pay for gas to commute to and from work. One of the best things you can do before starting your home business is to sit down and decide what your skills are and how you want to use them in the course of your online business. Think about what you are best at, and what you enjoy most of your given skill set.There are many people online making a tidy living who are always in need of support people. Suppose you are great at expressing yourself and have a passion for writing, there are many people and businesses that pay people with writing skills to create articles, e-books, sales pages and many other writing related necessities. You can also write articles and submit them to article directories and blogs who might be in need of content. Always make sure your articles offer value to the potential reader, and are not taken from other peoples work.If you are great at taking pictures, and love to do so, there is always demand for pictures in all sorts of web design, marketing, and sales copy. Many people search for freelance photographers to help them with their online projects. There are many free online marketing tools available to anyone and all that is required is a little persistence and ingenuity. There are many different and free ways to promote your home based business online, such as blogging, forum posting, and even social networking. It is possible to create a huge audience using these methods, without spending a dime.One of the most important investments you can make for your online business is a good website that accurately portrays who you are, and what your business offers others. This will help you create a strong and valuable relationship between you and your customers.There are tax benefits to your online or work from home business, but it is also important to understand what is and is not tax deductible when making purchases for your business. It is always best to consult an attorney to help you understand your rights and limits as a business owner.One last thing to be on the lookout for is people or companies trying to scam unsuspecting entrepreneurs. There are many legitimate home based opportunities being offered online, but there are also scammers just looking for someone to take advantage of and victimize. If a home based business opportunity looks too good to be true, you can bet it probably is. Look for feedback from others who have tried the opportunity, and do your due diligence on any program that does not require patience, time, or hard work.

The tax deferred exchange provides real estate owners with one
of the last true tax breaks and the only method of deferring tax
on the sale of investment and business property. Most
taxpayers know they can exclude the gain on a sale of their
personal residence. Unfortunately, many business and
investment property owners fail to capitalize on the benefits of
another type of tax-deferred exchange, under Internal Revenue
Code Section 1031.Far too many business owners sell their business and
investment property and pay capital gain taxes because they are
unaware of provisions in the tax code that allow for deferral.
Internal Revenue Code Section 1031(a)(1) states in part that
“no gain or loss shall be recognized on the exchange of
property held for productive use in a trade or business or for
investment if such property is exchanged solely for property of
like kind which is to be held either for productive use in a trade
or business or for investment.” Examples of property types that
typically qualify are vacant land, office buildings, warehouses,
farmland, single-family rental units and shopping centers. Even
leases with 30 or more years remaining are considered real
property and can be traded for other real property.How does one get started? The procedure is fairly simple as
Treasury Regulations issued in April of 1991 provide a
guideline for taxpayers to follow. Once a buyer for the property
to be sold (the “relinquished property”) has been found, a
phone call to a selected “qualified intermediary” to assist with
the Section 1031 exchange is all it takes to begin the process.
The qualified intermediary will produce the necessary legal
documentation required to facilitate the exchange process.
Once the closing of the relinquished property has occurred, the
taxpayer has 45 days from the date of closing to identify in
writing to the intermediary the possible replacement properties.
Due to significant restrictions, it is usually best to identify no
more than three replacement properties. The final step is to
close on one of the identified properties within 180 days from
the date of closing of the relinquished property.Although the 1031 tax code section is very liberal, various
modifications over the years have resulted in a few additional
restrictions. Partnership shares, notes, stocks, bonds,
certificates of trust cannot be exchanged. A taxpayer who holds
a partnership interest or shares in a corporation that owns real
estate cannot trade that interest for similar share interests.
Business owners should consult a tax expert or legal advisor in
this situation.With the reduction in capital gains tax rates, taxpayers were
given a rare break. However, this break was not as generous as
originally proposed. Most taxpayers are aware of the new
capital gains tax rate of 15 percent, lowered from the previous
28 percent rate. This is applicable for gain generated from the
sale of capital assets held for more than 12 months. At the last
minute, however, Congress altered the tax rate for recapture of
depreciation taken on real estate to be taxed at 25 percent. This
higher rate is applicable for all depreciation taken after May 6,
1997. Combining the 25 percent depreciation recapture rate
with state and federal tax rates could cost a taxpayer who sells
business real estate over to 40 percent or more of their profit.
On the other hand, a property owner who chooses to perform
an IRC Section 1031 tax deferred exchange can defer taxes on
the all of the capital gain! This leaves the prudent exchange or
with the entire amount available for reinvestment.Many business owners are unaware that personal property used
in a business, such as a medical practice, can be exchanged as
well. The major difference between a real property and
personal property exchange is what the Internal Revenue
Service considers “like kind” property. I.R.C. Section 1031
defines like kind as “…property held for productive use in a
trade or business or for investment.” Like kind as it applies to
real property is very broad in definition. Determining whether
personal property is like kind to other personal property
requires a much narrower scope. The Internal Revenue Code
does not define “like kind.” The IRS has published regulations
that can be used to decide if an exchange involves like-kind
properties. The Treasury Regulations distinguishes between
two types of personal property: depreciable tangible personal
property (DTPP); and other personal property (OPP), which
consists of intangible and non-depreciable personal property.
DTPP can only be exchanged for other DTPP. These properties
must be of a “like class” or “like kind.” In determining whether
DTPP is of a like class the Treasury Regulations designate 13
general asset classes. These classes combine particular types of
personal property into a certain class group. Some examples of
these groups are office furniture and fixtures, information
systems, airplanes and helicopters, automobiles and taxis, and
buses.The Regulations also designate that personal property can fall
within product classes contained in the North American
Industry Classification System. These numeric codes can be
used as an alternate method to define the characteristics of a
particular property.OPP is difficult to classify as like kind to other OPP. It does
not fall within the like class safe harbor available to DTPP.
Intangible personal property, such as a lease or copyright, can
be considered like kind to similar intangible property. The
determining factors are the nature and character of the rights
involved and the nature and character of the underlying asset.
Selling a business can create more than one personal property
group in which to exchange. The IRS looks at the sale of a
business as an exchange of each asset to be transferred, and not
the exchange of the business as a whole. The underlying assets
of a business (e.g., lease value, covenant not to compete,
equipment and fixtures) will need to be analyzed in respect to
their comparable replacement property. Each asset is placed
into the proper exchange group. An exchange group is a
subgroup of the total assets exchanged. Every exchange group
will either have a surplus (trading up in value) or a deficiency
(boot). When the total fair market values of the properties
exchanged are different, the value equal to that difference is
called the residual group. The property in the residual group
will consist of cash and other property that does not fit into an
exchange group.An example of a business exchange would be the exchange of
one medical practice for another. The relinquished medical
practice value consisted of: (1) the medical equipment (x-ray
machines, etc.) and office fixtures; (2) a covenant not to
compete; (3) lease value for the below market lease of the
office; and (4) client patient lists and files. The medical
practice acquired will generally have similar components of
value. To balance this exchange each separate component is
matched up with its like kind counterpart. A surplus in one of
the exchange groups is not taxable as the Regulations allow for
trading up in value. Any deficiency – going down in value -
would be taxable as “boot.”The Regulations provide the non-yielding rule that goodwill
and going concern value in one business can never be like in
kind to goodwill and going concern value in another business.
In the example of the medical practice exchange, the client
patient lists and files would probably be viewed by the IRS as
goodwill, and should not be included in the exchange. A
prudent tax planner would attempt to allocate value to the
depreciable or amortizable personal property, such as the
medical equipment and office fixtures, to avoid this problem.
Additional personal property not eligible for exchange
treatment is inventory. The inventory of a business is held for
resale and does not fall within the definition of Section 1031
property.Anyone considering deferring tax under IRC Section 1031
should obtain competent tax/legal advice before proceeding
with a transaction. A mistake can be costly.

Professional Property Management vs. Mom and Pop Management

One of the things we’re going to focus on is what is professional management versus mom and pop management. Now many of you may have a couple properties. Maybe you’ve read a book on property management, I don’t know, but if you ultimately want to make a business and to grow wealth and to be a serious real estate investor, you need to become a professional property manager.

That is you’re better at it than most people. You’re better at it than nine out of 10 investors. You take it seriously because you’re investing a lot of your own money in these properties, a lot of your time and a lot of your energy, and you want to get the most you can out of it.

That’s where the money is, because if you don’t manage it properly, the value of that asset declines rapidly. I guarantee you, if you’ve bought a property, put a bad tenant in there and they destroyed your property, you’re looking at $5,000, $10,000, $15,000 of damage. Not that property management can totally eliminate that possibility, but certainly professional management versus mom and pop management makes a huge difference.

Advantages of Property Management

We’re going to go through that and understand that process. We’re going to go through the advantages of property management. Why is it worth you getting on this call for two hours for a series of four calls? What are the monetary advantages of doing it? Are there monetary advantages to it? Why not just read a $12 book?

Sure, you can do that, but everybody knows reading a book is a hard way to learn. It’s not interactive. You won’t have the ability to fire questions at me. Maybe you’re pretty good at property management and you have a couple areas you’re weak at. You won’t have the ability to fire questions at me.

Again, filling a rental. Let’s say we had a $900 a month rental. Filling it 30 days earlier than you would otherwise puts $900 in your pocket. So the monetary issues here are tremendous. Keeping a tenant a second year as opposed to losing them because you didn’t treat them right or you didn’t fix the property right or whatever, reselling a vacancy is tremendously expensive.

You could be looking at two months vacancy, $900 per month, and costs you have to pay to maybe carpet in between tenants, so maintaining a tenant is again a huge monetary issue. So there are clearly some monetary issues here that can be quite overwhelming in terms of cost savings.

We’re going to talk about the importance of education, these kinds of calls tonight, the importance of doing it on a continuous basis, meaning joining your real estate clubs, looking for other resources, maybe join my coaching program at some point down the road, but continue to educate yourself further and more completely as time goes by.

Again, a professional real estate investor continues the education process and never stops. A mom and pop learns a couple things and then stops. We’re going to talk about the difference between the two. How to do things like develop contacts and network, how to work with contractors.

Advertising is a very essential part for every business. As the business owner, you have to make sure that the existence of your enterprise is known to many. Advertising lets you reach out to customers and attract them to buy your products or avail of your services. You can advertise your business through a lot of means. You can use print, radio, or TV advertisements to tell people about the products and services that you are offering. However, in the digital world that we are all moving in, advertising has taken a whole new form. Nowadays, the power of the Internet it at your fingertips which you can readily use to promote your business.

One of the most effective techniques of advertising through the Internet is by advertising through Facebook. Facebook is one of the most popular social media sites and there are many people who have a Facebook account. Using this site as your main tool for online advertising can be very advantageous given the number of subscribers and their diversity.

However, if you do not know how to advertise using Facebook, then you should not see it as a huge problem. Facebook advertising is easy and simple. If you want to know how to advertise on Facebook, then here are some quick steps to get you going.

Advertising on Facebook

Advertising for small businesses is easy when you use Facebook. Keep in mind that advertising strategies done on Facebook are nearly free and very effective. So, keep your creative juices flowing and start creating your own Facebook ad campaign.

· To start, read the guidelines and FAQ of the advertising area of Facebook. If you have a lot of questions, reading the guidelines is sure to help you clear your mind. This area also lets you see the overview of the whole advertising process and how it can benefit your small business.

· Once you have understood the guidelines, you can now move on to choosing your clientele. Yes, Facebook enables you to choose the people to whom your ads will be shown. Using Facebook, you can specify the demographics of your targeted audience such as the country, city, age range, interests and hobbies, gender, occupation, and more. Choosing as many constructs as you can can aid Facebook in filtering their subscribers and help you show your ads to the group of people who are very likely to purchase from your business.

· Create your ads. Now, you are ready to create your very own ads. Facebook encourages their business partners to use ads which have a photo and text element. Image-based ads tend to perform better than image-based ads since they catch attention more effectively. Identifying your clientele can help you with creating ads that are appealing for them. Extract all the creative juices that you have to give it your best shot. After all, the ad campaign will represent your business to the Facebook community. Be on the safe side and make sure that your ad campaign rocks.

· After creating and indexing your ad campaigns, it is now the time to select the type of ads that you want to have. You can either avail of the CPC mode which charges you for every click that the ad will generate. Alternatively, you can choose the cost per million which charges you for every 1000 clicks that are generated by your ad. Don’t worry, these rates are very affordable and you do not have to worry about your budget.

· Now that you have everything ready, you can activate your Ads so they will start showing on the network. You can schedule the date and time that you want your ads to be shown. If you ran multiple ads at a time, you can also devise a schedule for all of them.