Thoughts from the desk of Bob Repass…
As they say, “Timing is everything…”
This edition marks the one-year anniversary of The Buyline. Our goal with this monthly newsletter is to bring you the latest industry news as well as updates on what’s going on with our family of companies here at NoteSchool, Colonial Funding Group and Colonial Capital Management. We want to keep you well-informed and apprised of the latest developments in the note business and help you grow your real estate note investment portfolio.
In addition to The Buyline, which comes out monthly, our social media channels are a great way to keep up with the many educational opportunities we offer plus the latest news on the ever-changing market. If you don’t already follow us on Facebook and Twitter, please do so today.
We have a lot of exciting deals and projects taking place as we wrap up the first quarter, and our forecast for the remainder of 2015 tells us this is going to be a great year across the various asset classes in the note space. Be sure to stay connected!
The Trading Corner
Individual Health Savings Accounts
By Martha Speed
HSAs: The Triple Crown
The Self Directed Retirement account specifically for health care cost is the Health Savings Account (HSA), which is another great way to grow tax-free income for future expenses.
Accounts must be open by year’s end and contributions must be made on or before April 15 of the year following. Contribution limits for 2015 are $3,350.00 for individuals and $6,650.00 for families. Those over 55 can contribute an extra $1,000.00 per year catch-up contribution.
HSA Advantages (the “Triple Crown”)
- Annual contributions are tax deductible
- Money withdrawn is tax-free for qualified medical expenses
- Money grows tax free!
Funds in a HSA can be invested and self-directed in a wide variety of assets, including real estate or real estate notes, precious metals, and public and private stock.
- Requires purchase of a high-deductible health plan
- Withdrawals must be strictly for medical expenses until age 65, when withdrawals for expenses other than medical are treated like a traditional IRA and taxed
- Withdrawals before age 65 are subject to income tax plus a 20% penalty
The biggest hurdle to get over is keeping your money working by not withdrawing HSA funds for present-day medical expenses as they are incurred. One strategy is to make a short-term investment and use profits for current medical expenses and put the original contribution back to work again in another investment.
Distributions don’t have to be taken in the year the expense is incurred. This allows you to grow the account and at a later date use the tax-free dollars at your discretion (maybe an overseas trip with Walter?) by claiming those prior year health expenses in one lump sum.
You can view a quick list of eligible expenses at www.hsacenter.com/qualified-med-expenses.html. Even “over-the-counter” medications can be expensed with a written prescription on file in addition to vision, dental, long-term care, and more.
A recent study by Fidelity Insurance reported the rising health care cost in 2014 at $220,000.00 for a retired couple. This may be a great time of the year to compare health plans, eligibility, and the rules and regulations for another Tax Free Income Account.
The Push for Regulatory Relief
The Seller Finance Coalition got off to a fast start in 2015. Our bill’s champion, Congressman Roger Williams from Texas, was appointed to the powerful Financial Services Committee in the 114th Congress. Williams’ position allows him to maneuver inside committee meetings and hearings, as he gets ready to reintroduce our bill during the first legislative session. He has already secured the support of the lead Democrat co-sponsor in Henry Cuellar from Texas.
This past month, the SFC Leadership Team came to Washington to strategize with the offices of Congressmen Williams & Cuellar to plan the bill’s re-introduction. The team also met directly with staff of the Financial Services Committee. Adding new language for the bill and a reintroduction plan to be rolled out in the springtime were among the topics of discussion during those respective meetings.
The 2014 midterm elections ushered in a new Republican majority in the Senate which gives us a better opportunity to pass our bill in both the U.S. House and Senate. We need to take advantage of this opportunity by activating our grassroots leaders. We will be mobilizing SFC members across the country to call on their members of Congress to ask them to join our effort.
Visit our website for the latest information on how you can become a part of our industry’s efforts to defend and promote the great work we do as seller financers. Also, remember to follow us on Twitter and Facebook.
The Top Ten With…
There are many people behind the scenes that drive the engine to make our companies successful. In our continuous Top Ten series, we turn the spotlight on one of these people so you can get to know him/her better. This month the spotlight is on one of the key members of our Road Sales Crew, Rachel Suttles.
How long have you been with Colonial Funding Group/NoteSchool?
What is your role at Colonial Funding Group/NoteSchool?
Sales Administrative Support
Favorite TV Shows?
Favorite Movie of all-time?
Last Book You Read?
Favorite Sports Team?
The 3 people you would like to have dinner with (dead or alive)?
My Mother, Maya Angelou, and Albert Einstein
What do you like best about working at Colonial Funding Group/NoteSchool?
I enjoy meeting all the new students and traveling around the country.
Capital Markets Update
Colonial Impact Fund II has Arrived
We are excited to share with you that after many months of preparation, listening to investors about their investment objectives and desired fund features, positioning relationships with large, institutional sellers of assets and adding additional back-office operational technology and people support, Colonial Impact Fund II is ready to acquire assets and accept capital from trusted and accredited investors.
We have several large trades in the due diligence phase that will allow us to deploy investor capital fairly quickly. For more information visit Colonial Capital Management.
Quote of the Month
“Risk comes from not knowing what you’re doing.” – Warren Buffett
Connect With Us
Are you on Twitter? If so, be sure to follow us on Twitter @NoteSchool and @ColCapMgmt, if not, why not?