The Tale of Two Neighbors

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The Tale of Two Neighbors

Jeff and Tom are neighbors – good neighbors, in fact. For the last ten years they’ve done the typical things good neighbors do – shared meals together, gone to each other’s children’s birthday parties, pet-sat for each other during vacation week. Jeff and Tom are both married, have two kids, a mini-van, a nice 4 bedroom 2.5 bath house with a big yard. They both work extremely hard to provide their families with a life better than they had growing up.

Every day each gets up, goes to the office and comes home to their families. In fact, Jeff and Tom are more similar than not. Even though they work for different employers, their current financial situations are nearly identical with one HUGE EXCEPTION! Tom will be wildly financially secure in a few short years while Jeff will still be getting up each day going to the office and continuing to tread financial water.

Really you ask? How is this possible? What is Tom doing that Jeff is not?

Both Jeff and Tom make $110,000 a year, have some interest income, the typical Schedule A deductions, and the same number of exemp-tions. Jeff was pretty happy: he got $6,669 back from Uncle Sam this year. Tom was even happier because he got $2,037 more than Jeff back from Uncle Sam.

How is that possible? There’s more…

Not only did Tom get $2,037 more back from Uncle Sam BUT Tom actually made $6,300 more than Jeff did last year. Huh? Let me repeat.

Tom made $6,300 more than Jeff did last year and actually received $2,037 more back on his taxes than Jeff did. How in the world can someone make more money and actually pay less in taxes?

The Tale of Two Neighbors

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Well you see… Tom actually has a side business and that side business lost about $8,500 on paper last year.

Confused? Skeptical? No need to be – you’re just missing out on one of the best wealth building opportu-nities of your entire lifetime! What’s Tom’s secret?

Tom’s secret is that he discovered a company called PA Deals a few years ago and immediately began building a rental portfolio of residen-tial properties. Tom’s a passive real estate investor taking advantage of the tax breaks the government has set up for real estate investors.

Over the last 18 months Tom has acquired three residential real estate investment properties that are producing monthly positive cash flow of $175 each per month – about $6,300 per year. That’s $6,300 more per year than his neighbor Jeff. All Tom does is sit back and cash his rent checks every month because he tied into a “turn-key” real estate investing program offered by PA Deals.Com. You see – turn key, passive real estate investing is real estate investing without all of the headaches - no late night tenant phone calls, no uncomfort-able evictions and no risky fixer upper type foreclosure properties.

PA Deals has developed a system that allows anyone to Acquire, Manage and Grow a portfolio of top qual-ity, investment grade real estate and do it all with very little involvement!

Let’s take a look at the side by side tax returns of Jeff and Tom:

Wages

+ Taxable Interest

+ Rental Real Estate

Adj. Gross Income

- Itemized Deductions

- Exemptions

Taxable Income

Tax

- Child Tax Credit

Total Tax

Federal Tax Witheld

Refund

JEFF

$110,000

100

$110,100

$19,178

$14,800

$76,122

$11,281

$1,950

$9,281

$16,000

$6,669

TOM

$110,000

100

($8,487)

$101,613

$19,178

$14,800

$67,625

$9,294

$2000

$7,294

$16,000

$8,706

The Tale of Two Neighbors

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In the end, Tom’s tax refund is $2,037 more than Jeff’s ($8,706 - $6,669). Even though Tom is making more money than Jeff (Tom owns three residential real estate investment properties that are producing a yearly positive cash flow of $6,300) his taxable income is much lower. Why, because passive real estate investing opens up a plethora of tax benefits. Tax benefits that are legitimately available to Tom that his neighbor Jeff doesn’t even know about: benefits such as write-offs for property management, maintenance, and property depreciation. All of these additional write-offs from Tom’s passive real estate investing endeavors help Tom lower his taxable income. A lower taxable income means a lower tax liability and more money back from Uncle Sam.

These are just a few benefits of passive real estate investing. Other benefits of passive real estate investing include: monthly mortgage pay down – your tenants can pay off your mortgage for you; long-term apprecia-tion – residential real estate values are at an all-time low; and massive pride of ownership – you can own nice homes in nice areas and provide affordable housing to those in need.

We’ve provided Sample Tax Returns for Tom and Jeff on the following pages for you to review.

To learn more about investing in real estate in a safe and structured manner, contact PA Deals.Com at 717-943-1921 24 hours a day 7 days a week or claim your free “2012 Wealth Creation Kit” at www.padeals.com

Sincerely,

The PA Deals Wealth Building Team

The Tale of Two Neighbors

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Jeff’s Tax Return

The Tale of Two Neighbors

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Tom’s Tax Return

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