Overall, the decision to rent or buy a home depends on your financial situation, lifestyle, and priorities. It's important to carefully consider the pros and cons of each option before making a decision.

List out your personal and financial goals for the next 5 years. Analyze your current financial situation. See how your goals would either be supported or negatively impacted by the pros and cons of owning or renting. It doesn't hurt to talk to a mortgage loan officer to get a good idea of where you currently stand in terms of mortgage qualification, and certainly discuss if purchasing a multifamily is a possiblity if that would support your financial goals. 

​So when I started my own business, Design Imaging Studios, little more than a year after graduating, I was not fully prepared. Granted, I had elected to take some courses outside of the photography college on marketing and professional selling. Ironically, I had the foresight to sign up for a business tax course, and after 3 painful classes and 1 demoralizing exam I swiftly replaced that course with something more bearable. Had the course been an approachable run down on the basics of small business tax, perhaps it could have saved me some future trouble. 

Entering 2014 I began operating as a sole proprietorship with a DBA (doing business as...), meaning I could accept payments and market myself as the business name. That first year was a grind, I met with as many potential clients as possible and was managing to make some sales. I was fairly quickly earning more than I was at the one studio job that I had after graduation, but still living week to week. With $50,000+ in student loans, and sporadic income as some months were better than others, and some clients were paying in 30, 60 or 90 days, the money that came in got used up and I failed to make estimated quarterly tax payments. I didn't think much of it, and assumed I would just have to pay a small amount come April 15. ​​
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​As April 15 neared, I filed my taxes myself online. I was shown a whopping tax bill (for a 24 year old in debt), including a lovely underpayment penalty. And as I was living week to week and didn't know what I was doing, I did not have a pile of cash set aside for this payment. So I was forced to get on my first payment plan with the IRS. This had me paying the IRS monthly until that debt was cleared (which would take years). The following year I moved to a new city, with a new apartment, trying to do a little better than the year before. While my income increased, so did my expenses. I managed to improve my tax paying skills slightly, but ultimately ended up underpaying for the second year in a row and had my payment plan with the IRS adjusted. This was not sustainable and I knew I needed help. So I reached out to a CPA (certified public accountant).
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Alright Tax-Man! I'm paying automatically. I incorporated in January of 2016, gradually paid off my past due taxes on a monthly basis, and now look forward to April 15 now because I never have an issue. It feels good! I was directed to Gusto by my CPA and it works great for me. The monthly cost is reasonable, it's all online and they file all necessary tax forms on my behalf automatically every year. Other than making sure my information is up to date (particularly my state tax rate), I don't have to do much other than click "Run Payroll" when it's time to pay myself. I'm on my 6th year using Gusto and highly recommend it. If you are looking to change your payroll company, or are working with your CPA to incorporate and need to sign up with a payroll service, you can use this link to sign up with Gusto and receive a $100 Visa card. ​
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​Having limited liability protection means my personal assets are separated and protected from the claims of business creditors. I feel assured knowing that my business and personal life are separated on paper, and if an issue comes up in the future, I have some protection already in place.
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​Whereas C-corporations can be subject to "double taxation", when income is taxed at the corporate level and at the shareholder level, income and losses from S-corps are only passed through to the owners. This means the owners pay their fair share of tax on business profits, the business itself doesn't pay any income tax.
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This benefit is a big one. Owners are expected by the IRS to take a "reasonable" salary from the business, that salary amount depends on your industry, job, etc. It is going to be different for everyone, and is clearly subjective, though the IRS ultimately keeps an eye on it to make sure the salaries are legitimately "reasonable". In addition to this salary, owners can take direct distributions from the business. These dividends are not subject to self-employment or standard payroll taxes. If I were still a sole proprietor I would be paying 15.3% self employment tax on all income. As an S-Corp employee of my business I pay standard payroll taxes on my salary, and then only pay income tax on my dividends. The savings can be significant. ​

​+ Better Tip

by Christian Scully

When I was growing up there was never any talk of retirement. Retirement was a far off place where I knew something called Social Security existed and that employees were taxed now in order to ensure monthly payments later. Other than that, there was no discussion of retirement accounts, what purpose they served and how they worked, or what the proper steps were to ensure a comfortable lifestyle after working year were over. 

I knew the word millionaire, and that was a magical word. It definitely didn't feel a real possibility, but I knew millionaires existed and as I got older I could certainly take a guess at who might be a millionaire. 

Though I'm almost certain many of my guesses would have been accurate, I've come to learn that you never really know what the state of someone's finances are behind the curtain. When we began our personal financial freedom journey I read a frequently recommended book, "The Millionaire Next Door". The author surveyed and compiled data on millionaires in the United States and created a profile with simple, easily copied attributes that lead to their financial success. It revealed to me the lifestyle differences between appearing rich and truly being wealthy. I also highly recommend this book to everyone to define a realistic lifestyle target for growing wealth, you can find this book here.
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​by Christian Scully

Credit reports are unfortunately a flawed and necessary evil we have to deal with. They are confusing, can change for no apparent reason, can go down when you think you've done something good and certainly cause a lot of stress for people in today's world. Because financial education is mostly not taught in school and the bulk of that education needs to come from parents and mentors, most kids don't understand the importance of a good credit score. I would argue that most kids don't even know what a credit score is. At least I like to think that because I certainly didn't! 

Like a lot of young people with no concept of personal finance, I destroyed my credit score in college, borrowing money to pay for living expenses without a thought of how I was going to back the money back. By the time I first started learning about personal finance and began working towards buying our first house, my credit was in the low 500's... not good. It took about 18 months to get the credit score to above a 620 to qualify for a decent interest rate on a government backed mortgage. 

A lot of people will be in this category and will need to commit to digging their way out of the bad credit hole. Another group of people, however, will have never opened a credit account and thus won't even have a credit score. I've had borrowers seeking my help with applying for a mortgage with no credit score. In this case, there are things you can do to get the credit bureaus to calculate a score for you and to start building a good credit history. The following are a few of the best ways you can either build credit from scratch without a credit card, or to start repairing bad credit. 

Remember that if you are recognizing that your credit score is less than ideal, and you are motivated to improve it, you are already ahead of the game! So many people never even think about it and just continue missing opportunities or struggling due to poor credit. It takes time to improve, but not as long as you may think! Stay focused on your goals, know why you are trying to improve your personal finances and credit rating, and you will keep doing better every day. 

​by Christian Scully

I've found that the most helpful topics to discuss on BL+F are questions that I am often asked by either borrowers or realtors. Appraisal gaps have always been an issue, but their instances have exploded in the past couple years. Home values have grown massively nationwide. Buyers are often paying in cash above asking price and waiving all contingencies. This sets the stage for a home selling for greater than a licensed appraiser can value the property. The difference between the selling price of a home and its appraised value is called an appraisal gap or an appraisal shortage. 

For example if a home sells for $250,000 and the appraiser values the home at $225,000 - there is a $25,000 appraisal gap. A typical purchase and sale agreement would state that the contract is contingent upon the home appraising for at least $250,000. When the buyer applies for a mortgage it will be based on the sale price of $250,000, which combined with their down payment will dictate their loan-to-value ratio. A conditional approval from the lender based on these terms would state that the loan approval is subject to the appraisal of the property at or above $250,000. 

There are five important options for a buyer and their realtor to know about preparing for and solving an appraisal gap. The chosen path completely depends on the buyer's goals and finances. 

​by Christian Scully

As we witnessed in 2020, news headlines and online advertising are enough to stir up excitement and send borrowers shopping and applying for refinances. 2020 even saw some interest rates under 2%! What those news headlines often forget to mention is the $10,000+ in discount points you'd be paying to get a rate under 2%. 

Sometimes borrowers will start a conversation with me by inquiring about the current interest rates. This is not a black and white question. Those advertised rates are generally the best rate you could possible qualify for under perfect conditions. However, in the process of applying for a mortgage, other details about the transaction are filled in. Those details can trigger a "loan level price adjustment" or LLPA. 

LLPA's can add or subtract a small amount to the interest rate for various reasons. The most recent newsworthy example of this would be the half-point (0.5%) fee that Fannie Mae and Freddie Mac added to all refinances after 9/1/20, named the "Adverse Market Refinance Fee". In most cases, this would cause the interest rate to increase simply for the fact that the loan purpose is a refinance. 

Other details that will affect a borrower's qualifying interest rate include their credit score. For example, if the borrower has a 580 credit score, their interest rate will increase more than if the borrower as a 660 credit score. If the borrower is applying for a mortgage on a primary residence, the interest rate will be lower than if it is a second home. Interest rates for investment properties are significantly higher. Interest rates for multifamily properties will be higher than for single family properties. Rates for 5% down payment will be higher than 20% down payment.

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by Christian Scully

Cryptocurrencies have reached new levels of popularity with individual investors and institutions around the world. Amid a record breaking bull run, with currencies like Bitcoin and Ethereum gaining a combined total of nearly $1.5 trillion, it is estimated that over 15% of American adults hold some amount of cryptocurrency in their investment portfolios. 

With decentralized finance, or DeFi, projects gaining more steam and attention, bringing real use cases to market, more than simply a buy-and-hold asset, the future of financial technology is poised for exponential breakthroughs in the next decade. 

Since central governments have generally not yet made major policy decisions regarding regulation and taxation of cryptocurrencies, critics argue the high volatility and lack of current uses make cryptocurrency a poor investment. 

When it comes to uses, some investors - while buying and holding crypto for long term gains - would like to at least know they can use their crypto gains for something as generic as buying a home. After all, what good are major gains if you can't use them? 
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