Karla Dennis Discusses Priceless Strategies Real Estate Investors Should Know

When people step into real estate investing, they expect overnight success, which obviously does not happen. Karla Dennis, one of America’s renowned tax advisors and real estate investors, says:

“Overnight success doesn’t happen in any field, and even if it does, it’s never long-term success.”

Karla Dennis is the CEO of her own firm known as the Karla Dennis and Associates, Inc. Karla continually works with small businesses across the United States to help them garner long-term and stable success. She also has significant expertise in real estate. Karla believes that success without proper skills and determination is a pipe dream.

Common Mistakes Real Estate Investors Make

There are many serious mistakes real estate investors make, such as not planning properly, not researching, poor financing, overpaying, etc. According to Karla, the following are the three most common and serious mistakes real estate investors make:

1. Ignoring Due Diligence

The biggest and most common mistake real estate investors make is not doing their due diligence when purchasing a property.

2. Ignoring Tax Implications

Another common and serious mistake is underestimating or ignoring the tax implications of selling a property before selling it.

3. Overbidding

Overbidding is also a major mistake real estate investors make. Karla believes investors can avoid making this mistake by knowing the current Fair Market Value (FMV) of the property and making sure to get their own team to provide the FMV and not take the word of the seller.

Think Strategically

Karla Dennis is famous for her strategic ways of handling taxes. She authored an article on Forbes about why one should be strategic about taxes. Her strategic thinking is not only limited to taxes. She also adheres to strategic thinking as a real estate investor.

The following are some of the key strategies Karla believes real estate investors should understand and follow:

1. Try to understand how each of your properties will impact your overall portfolio from a tax perspective.

2. Try to understand how much additional income your investments will make you, along with the associated tax consequences.

3. Understand your Return on Investment (ROI) in a systematic manner.

Reducing Tax Burden When Selling a Property

Since Karla is an esteemed tax advisor, she always tries to teach her real estate clients how to reduce the tax burden when selling their properties. She recommends two ways in which people can reduce their tax burden:

1. Sale and repurchase through a 1031 tax-deferred exchange.

2. Sale your property outright without doing an exchange but do tax planning to lower the overall income on the return.

Stick to A Good Revenue Model

Your revenue model is everything, says Karla. Make sure you have a sustainable and effective revenue model. One of the ways in which you can make money in real estate is through house flipping, i.e., buying distressed properties, fixing them up, and then reselling them for a profit). Karla regards it as a good revenue model. Karla, however, does not consider house flipping an investment strategy because it involves buying inventory to fix up and sell, not buying an investment to hold. In whatever ways you want to make money in real estate, make sure it is a long-term way of earning money and not just a temporary solution.

How Can Karla Dennis and Associates, Inc. help you?

Karla and her team help real estate investors by analyzing the tax implications of their potential investments and helping them understand their return on their investment after tax. Karla Dennis and Associates, Inc. helps clients to go into negotiations with their eyes wide open as it pertains to their real estate transitions.