1
00:00:00,000 --> 00:00:03,120
You can write into your operating agreement.

2
00:00:03,120 --> 00:00:12,920
And you can allocate depreciation to some members versus other members, you know, based on certain capital contributions or otherwise.

3
00:00:12,920 --> 00:00:18,680
And so once the operator is being drafted, there's really nothing you can do at that point.

4
00:00:18,680 --> 00:00:21,520
You know, if someone says, well, I don't need depreciation, someone says, I really do.

5
00:00:21,520 --> 00:00:29,280
There's not really much you can do at that point, but if you plan ahead and do that beforehand, you can actually make it make sense for every all parties involved.

6
00:00:29,280 --> 00:00:58,480
Welcome to the TCO Method, the only show focused on helping you massively increase your

7
00:00:58,480 --> 00:01:05,040
net operating income. And in this particular episode, we are going to be talking about keeping

8
00:01:05,040 --> 00:01:10,160
more of your money after you've maxed out your net operating income. I am Andy McQuade. Thank you

9
00:01:10,160 --> 00:01:20,000
so much for joining us for this episode. I am honored to welcome our very first guest interview,

10
00:01:20,000 --> 00:01:27,920
Yonah Weiss. He is a powerhouse with property owners tax savings. He's business directors at Madison

11
00:01:27,920 --> 00:01:34,720
Specks, a national cost segregation leader. He has assisted his clients in saving hundreds of millions

12
00:01:34,720 --> 00:01:40,080
of dollars. I'm going to throw that out there on taxes through cost seg. And he has a background

13
00:01:40,080 --> 00:01:45,280
in teaching, a passion for real estate, and helping others, which he's done for me personally,

14
00:01:46,080 --> 00:01:50,960
sort of following his lead and getting involved. I think through Jaime Cain, originally, was

15
00:01:50,960 --> 00:01:56,880
who brought me into your circle a long time ago. And he's an active real estate investor, and he

16
00:01:56,880 --> 00:02:02,000
hosts a top real estate podcast Weiss advice, which I was listening to yesterday in the car on my

17
00:02:02,000 --> 00:02:08,480
way home. And if you want to check him out, link up with them on LinkedIn, check out his website,

18
00:02:08,480 --> 00:02:14,880
YonahWeiss.com. Check out his day job at Madison SPECS. And hopefully this episode will be coming

19
00:02:14,880 --> 00:02:19,440
out on a Saturday. We're calling this the Saturday specials. So with that, Yonah, thank you so much

20
00:02:19,440 --> 00:02:25,200
for joining me. Welcome. I appreciate your patience and dealing with this new setup that I've never

21
00:02:25,200 --> 00:02:30,160
used before on Riverside. It's so far so good. Thank you so much, Andy. What an honor to be the first

22
00:02:30,160 --> 00:02:37,200
guest on the podcast. It's really a pleasure. And you're absolutely right. It's so much to learn,

23
00:02:37,200 --> 00:02:43,360
especially when you are wanting to keep more money. It's not about how much you make. It's

24
00:02:43,360 --> 00:02:52,560
really about how much you keep. Absolutely. Absolutely. So a lot of the listeners of this show are either

25
00:02:52,560 --> 00:02:57,200
new to real estate or maybe new to commercial real estate so they don't really understand necessarily

26
00:02:57,200 --> 00:03:06,720
all the ins and outs of what happens in their income taxes. Once they start dealing with larger

27
00:03:06,720 --> 00:03:13,600
properties that are eligible or maybe where it's worth doing a cost seg. So let's, I guess, start with

28
00:03:13,600 --> 00:03:19,520
what is cost segregation? What are the advantages? And who should be using it?

29
00:03:19,520 --> 00:03:28,800
So cost segregation is a really weird name that the IRS gave to a tax deduction. It's a strategy that

30
00:03:28,800 --> 00:03:35,840
allows property owners to get accelerated depreciation deduction. So taking a step back

31
00:03:35,840 --> 00:03:41,120
to understand depreciation anytime you buy a property whether it's residential commercial. It's

32
00:03:41,120 --> 00:03:47,200
not your primary residence. You're able to take a tax write off of the entire value of that property.

33
00:03:47,200 --> 00:03:52,400
Okay, that's called depreciation. And it's based on the principle that things go down in value as

34
00:03:52,400 --> 00:03:58,400
time goes on like the name sounds, but it's just a borrowed term because the value is not really

35
00:03:58,400 --> 00:04:04,240
going down of your property. You're just able to take a tax write off as if it were going down in

36
00:04:04,240 --> 00:04:09,760
value. But it's over a long period of time. So depreciation generally for commercial properties

37
00:04:09,760 --> 00:04:15,920
it's over a 39 year period or a 27 and a half year period from the time you bought the property.

38
00:04:15,920 --> 00:04:23,760
So again, it's not intrinsic to the properties it would depreciation as it were because this 39

39
00:04:23,760 --> 00:04:29,920
or 27 and a half year schedule starts over every time the property changes hands. So it's very

40
00:04:30,480 --> 00:04:37,600
subjective to the property owner. Now, like I said, that's a very long time to wait to take all of those

41
00:04:37,600 --> 00:04:42,560
tax write offs or those tax deductions. That's where cost segregation comes in that we're able to

42
00:04:42,560 --> 00:04:49,280
break down the property through an engineering report or study of the building or the property

43
00:04:49,280 --> 00:04:55,440
that allows you to pull from that pool of potential deductions and by allocating certain components

44
00:04:55,440 --> 00:05:01,680
to faster depreciation schedules like a five year or 15 year schedule, you're able to take the

45
00:05:01,680 --> 00:05:07,440
deductions of the value of those components over a faster period of time. So basically to sum it up,

46
00:05:07,440 --> 00:05:13,200
it's a cash flow mechanism that allows you to pull from this pool of potential deductions that you

47
00:05:13,200 --> 00:05:18,480
may never see or may never take and then get them like in the earlier years of ownership.

48
00:05:18,480 --> 00:05:24,160
That's awesome. And it's extremely powerful. And then something that we've

49
00:05:24,880 --> 00:05:33,120
seen over the last several years since Trump was in office, the bonus depreciation availability

50
00:05:33,120 --> 00:05:38,080
and how that's changing right now or maybe changing back to what it was. I don't really know where

51
00:05:38,080 --> 00:05:42,320
we stand on that particular part of it, but can you bring everybody up the speed on that please?

52
00:05:42,320 --> 00:05:47,440
Yeah, so bonus depreciation as you mentioned was a change in the tax code in the law and the

53
00:05:47,440 --> 00:05:54,560
tax cuts and jobs act back in 2017 that once you've done a cost segregation study and have allocated

54
00:05:54,560 --> 00:06:00,240
certain components, sometimes 20 or 30% of the property into these faster depreciation lives

55
00:06:00,240 --> 00:06:05,600
that you can take over a five year or 15 year period. Bonus depreciation says that you're allowed to

56
00:06:05,600 --> 00:06:12,880
take 100% of those deductions in the first year. So think about it like this. Let's say you have a

57
00:06:12,880 --> 00:06:18,640
million dollar property and if you take off a land, land doesn't depreciate, but you're able to

58
00:06:19,200 --> 00:06:25,360
essentially take whatever was left, let's say you take off 15% for land, which is pretty national

59
00:06:25,360 --> 00:06:31,200
average. And then the remaining 850,000, you're able to depreciate over a 27 half year period.

60
00:06:31,200 --> 00:06:36,640
That would give you a 30,000 year deduction every single year. Okay, which is great helps to reduce

61
00:06:36,640 --> 00:06:42,560
your taxable income, but what cost segregation does is accelerate some of those deductions. Let's say

62
00:06:42,560 --> 00:06:49,120
again, 20% of that just be very conservative and you're able to take 160,000, 170,000 of the

63
00:06:49,120 --> 00:06:53,520
deductions in the earlier years. Okay, but that's spread over a five year period like I mentioned.

64
00:06:53,520 --> 00:07:00,240
Bonus depreciation comes in and says now you can take that 170,000 in the first year as a tax

65
00:07:00,240 --> 00:07:06,480
right off. So instead of a 30,000 dollar deduction, you're boosting it up in the first year to 170,000

66
00:07:06,480 --> 00:07:13,920
in that example. So that's what 100% bonus depreciation did. It was in the tax code to be in effect

67
00:07:13,920 --> 00:07:21,200
through the year 2022. If you bought a property between 2018 and 2022, you can claim this 100% bonus

68
00:07:21,200 --> 00:07:28,000
depreciation method. However, this year 2023 at the time of this recording, it's gone down to 80%,

69
00:07:28,000 --> 00:07:34,800
and then it will continue to phase out by 20% each year. Unless, of course, as you alluded to, there

70
00:07:34,800 --> 00:07:39,920
are some changes. It gets reverted. We may need a change of administration in order for that to

71
00:07:39,920 --> 00:07:47,920
happen, but it has yet to be seen. Got it. Thank you. I wasn't sure if there was any updates on that

72
00:07:47,920 --> 00:07:53,200
particular change or not yet. I figured it would probably die on the fine the way things are

73
00:07:53,200 --> 00:07:58,640
currently, but it's worth at least discussing that it is being folded down there. Somebody's paying

74
00:07:58,640 --> 00:08:03,920
that. It's actually been passed in the house in a bill that was proposed, but again, it need in

75
00:08:03,920 --> 00:08:08,000
order to come to law. It needs to be passed in the Senate and as well as signed off by the president.

76
00:08:08,000 --> 00:08:19,360
So that may or may not happen. Right. So for cost segregation, who is the right person,

77
00:08:19,360 --> 00:08:28,720
what size properties and how does that look process wise for those people once they start

78
00:08:28,720 --> 00:08:33,840
really digging into it and wanting to make that a reality? The first thing you always look at is

79
00:08:33,840 --> 00:08:40,880
the person. Who is the right person for this? Now, cost irrigation is a great tax tool, but is not

80
00:08:40,880 --> 00:08:47,120
able to be used equally by everyone because there's something called real estate professional status,

81
00:08:47,120 --> 00:08:53,280
which is a term that the IRS came up with for someone who is full time in the real estate business,

82
00:08:53,280 --> 00:09:00,480
whether you're managing, owning, operating, buying, renovating, or brokering even properties. Now,

83
00:09:00,480 --> 00:09:04,560
the one exception there, the brokering, is doesn't have to be your own properties. All the other things

84
00:09:04,560 --> 00:09:09,360
has to be materially participating in running your own your own properties. So if you have rental

85
00:09:09,360 --> 00:09:15,200
properties and that's your full time job, as long as you don't have another W2, you are automatically

86
00:09:15,200 --> 00:09:20,480
a real estate professional. Why this is so important is because as we're going to see in a second,

87
00:09:20,480 --> 00:09:27,600
the deductions from cost segregation and depreciation in general are limited to just offset any

88
00:09:27,600 --> 00:09:33,600
passive income. So passive income, the IRS defines as real estate or rental income. There are some other

89
00:09:33,600 --> 00:09:38,880
options like royalties or if you have a passive business interest, for example, but generally speaking,

90
00:09:38,880 --> 00:09:44,240
if you have another full time job, you're not able to benefit from the depreciation or the cost

91
00:09:44,240 --> 00:09:48,720
creation again, which is just like depreciation on steroids, you're not able to benefit from it much

92
00:09:48,720 --> 00:09:55,040
outside of your rental property income. Whereas if you're a real estate professional, that's the best

93
00:09:55,040 --> 00:09:59,680
person because not only are you able to use these deductions, remember that huge,

94
00:09:59,680 --> 00:10:06,640
$170,000 deduction, well, if your rental property income is only $30,000, well, you've just gotten

95
00:10:06,640 --> 00:10:12,160
this huge tax right off that just is a passive loss and you can't actually use in the current year.

96
00:10:12,160 --> 00:10:17,840
However, if you are a real estate professional, that deduction will carry over not only forward,

97
00:10:17,840 --> 00:10:22,400
but in the current year to be able to offset or reduce any other taxable income you have. So that's

98
00:10:22,400 --> 00:10:28,240
the best person to get it done. I would say there are scenarios where even someone who's a not

99
00:10:28,240 --> 00:10:33,360
real estate professional, it does make sense. There's always going to be scenarios. So it's important to

100
00:10:33,360 --> 00:10:39,920
discuss this with your tax advisor, discuss this with someone who understands this and the type of

101
00:10:39,920 --> 00:10:44,640
property really doesn't matter the type because this can be done in a single family, multi family,

102
00:10:44,640 --> 00:10:50,000
commercial retail office, industrial storage, you name it any type of property, but it starts

103
00:10:50,000 --> 00:10:56,640
making sense in terms of dollar value. If the purchase price is over, let's say, $200,000,

104
00:10:56,640 --> 00:11:01,920
anything below that, it just the cost of getting one of these things done versus the actual

105
00:11:01,920 --> 00:11:10,000
after-tax savings is going to be minimal. And so if, because I know this question will come up for

106
00:11:10,000 --> 00:11:14,000
some of the newer people because everybody seems to want to start on the ground level with doing

107
00:11:14,000 --> 00:11:19,760
their own flip or doing their own rental property and it's usually like a single or a duplex or maybe

108
00:11:19,760 --> 00:11:25,680
a quad, but those are usually a little more expensive. So let's say, single family rental, they buy the

109
00:11:25,680 --> 00:11:32,240
thing for 30 grand, they dump 100 grand into it fixing it up. It's now worth, let's say 200, they want

110
00:11:32,240 --> 00:11:38,480
to rent that out. How does that work for them? Is it worth it for them at that point or can they pool

111
00:11:38,480 --> 00:11:45,280
multiple properties like if they have three or four separate properties in one LLC that are

112
00:11:45,280 --> 00:11:48,880
worth more than 200,000 can they pool that together or what is that?

113
00:11:48,880 --> 00:11:54,880
A few really great questions there trying to tackle them one by one. It's important to understand

114
00:11:54,880 --> 00:12:01,120
we're going to segregate the questions. It's important to understand when it comes to renovations.

115
00:12:01,120 --> 00:12:09,360
Two, best case scenario is to do a cost in a property before you've done renovations. Now,

116
00:12:09,360 --> 00:12:16,000
we're going to look at the purchase price and that's the sole basically determining factor is the

117
00:12:16,000 --> 00:12:21,760
purchase price because once you've done renovations, you've essentially disallowed yourself from use

118
00:12:21,760 --> 00:12:25,680
doing cost creation on the purchase itself and then we're only going to be looking at the

119
00:12:25,680 --> 00:12:32,240
renovation component. So if you buy in your example, buy property for $30,000 and then put $200,000

120
00:12:32,240 --> 00:12:37,920
into it, so it can be beneficial to do a cost on the renovations, but on the purchase, there's not

121
00:12:37,920 --> 00:12:45,360
going to be any benefit there. Now, lumping properties together, that can be done only when

122
00:12:46,240 --> 00:12:50,640
the properties are number one, were purchased together. So they're on the same depreciation

123
00:12:50,640 --> 00:12:56,960
schedule. And number two, that they are very extremely similar in nature, meaning that they're either

124
00:12:56,960 --> 00:13:02,640
in close proximity, you know, have the same year and type of build. So it's very common to do

125
00:13:02,640 --> 00:13:09,520
away if you're buying and I've had many people who buy properties like in it in a development.

126
00:13:09,520 --> 00:13:13,680
You know, so you're buying the same properties on the same block or something like that. You know,

127
00:13:13,680 --> 00:13:19,680
they're all built at the same time, the same layout, etc. Otherwise, each property is really going to

128
00:13:19,680 --> 00:13:26,640
need its own engineering study because the differences involved can be huge for one property to the next.

129
00:13:26,640 --> 00:13:32,560
Awesome. Okay. That's helped a lot because I didn't know that. So I was kind of thinking,

130
00:13:32,560 --> 00:13:42,720
everybody else is probably going to know. So I guess my next question is, what do you advise people do

131
00:13:43,520 --> 00:13:52,320
when they're looking to start, I guess, the process? What's that look like? So you already mentioned

132
00:13:52,320 --> 00:13:57,680
sort of that they're not going to start by doing renovations immediately. It's going to benefit them

133
00:13:57,680 --> 00:14:02,720
to buy the property, do the cost seg, and then worry about doing catbacks down the road. So

134
00:14:02,720 --> 00:14:07,520
how does that benefit them and why and what's their process look like? The first step we always

135
00:14:07,520 --> 00:14:14,400
like to do is run a free upfront analysis of any property. So we're going to collect some information

136
00:14:14,400 --> 00:14:19,120
you reach out to, you know, a cost to your company like osmatic inspects or any other company usually

137
00:14:19,120 --> 00:14:23,680
provides this service where you'll provide them with certain information about the property that

138
00:14:23,680 --> 00:14:28,480
you address the purchase price, you know, if there were renovations done, that's, you know, a separate

139
00:14:28,480 --> 00:14:33,520
thing, but square footage, etc. And we're able to run the numbers and show what the potential

140
00:14:33,520 --> 00:14:39,440
tax savings would be, breakdown the deductions versus, you know, the regular straight line deduction

141
00:14:39,440 --> 00:14:46,000
method that we said over 27.5 year or alternatively showing you the bonus depreciation or the cost

142
00:14:46,000 --> 00:14:50,240
segregation depreciation. So that's the first step is really just the education understanding

143
00:14:50,240 --> 00:14:54,640
what this is actually going to look like if I do it on my property, how much it's going to cost

144
00:14:54,640 --> 00:14:59,280
and what the potential tax savings are going to be. It's pretty simple, you know, straightforward

145
00:14:59,280 --> 00:15:04,000
process, like I said, it takes about a day or two just to run those numbers. And then once you have

146
00:15:04,000 --> 00:15:08,960
that, you have a much more educated decision to see if it's going to be worthwhile for your property.

147
00:15:08,960 --> 00:15:16,960
Perfect. And then I've heard through the grapevine and a little bit through personal experience,

148
00:15:16,960 --> 00:15:26,160
there are some let's say, nervous CPAs or accountants or bookkeepers out there who are not fans of

149
00:15:26,960 --> 00:15:36,480
doing cost segregation. And I've heard the word scam come up. I've heard the phrase, it's not actually

150
00:15:36,480 --> 00:15:41,840
worth doing because you just have to pay it back if you sell the property. So I guess let's tackle all

151
00:15:41,840 --> 00:15:48,960
the craziness that the listeners are going to get from their teams if they have a team and kind of

152
00:15:48,960 --> 00:15:54,720
go from there. So it's very common. Unfortunately, as as you mentioned, where you'll have CPA,

153
00:15:54,720 --> 00:15:58,560
they just may not be so familiar with this. I mean, there are really two categories of CPAs, the ones

154
00:15:58,560 --> 00:16:04,320
that really have no idea. And like someone calls it a scam, just they have no idea. This is directly

155
00:16:04,320 --> 00:16:09,920
in the tax code and the IRS considers it the correct way to depreciate your property, not spreading

156
00:16:09,920 --> 00:16:15,600
it out over the straight line, but actually categorizing each component to its proper depreciation life.

157
00:16:15,600 --> 00:16:21,680
Now, they don't require it because it would require you to pay an extra, you know, a third-party firm

158
00:16:21,680 --> 00:16:26,560
to get this done so they don't require a cost variation. However, there's another category of CPAs

159
00:16:26,560 --> 00:16:31,440
who are just against it, meaning they know what it is, they just don't recommend it. And that can very

160
00:16:31,440 --> 00:16:36,480
well be for a lot of good reasons. For example, if you're planning and holding a property for short

161
00:16:36,480 --> 00:16:40,880
period of time, there is going to be what's called depreciation recapture tax, which we'll talk about

162
00:16:40,880 --> 00:16:43,920
in a second. It doesn't mean you're going to pay back that depreciation, but it means you're going

163
00:16:43,920 --> 00:16:49,360
to be subject to attacks on the sale. So CPA who understands a person, hopefully a good CPA who

164
00:16:49,360 --> 00:16:55,680
understands a person's full tax situation can hopefully push them in the right direction.

165
00:16:55,680 --> 00:17:01,440
Now, that being said, there are certainly situations where it's not going to be beneficial. Like I said,

166
00:17:01,440 --> 00:17:05,680
if it was not a real estate professional, getting these extra losses or deductions that may not be

167
00:17:05,680 --> 00:17:16,640
able to be used is really exercise and futility at best. And there are many cases where if you are

168
00:17:16,640 --> 00:17:21,040
continuing to buy property, it is certainly a good situation. So if you have a CPA that's not

169
00:17:21,040 --> 00:17:25,920
recommending it in that situation, if you are a real estate professional or you do continue to buy

170
00:17:25,920 --> 00:17:31,040
properties, your plan is to continue to use this to scale, I think that's probably the best case

171
00:17:31,040 --> 00:17:36,560
scenario to use cost irrigation. But yeah, again, there are situations where it will work, where it

172
00:17:36,560 --> 00:17:42,480
won't work. If your CPA thinks it's a scam or doesn't know what it is, the best thing you can do is

173
00:17:42,480 --> 00:17:47,440
either educate them, try to educate them if they're willing to, if not, just find someone else. If

174
00:17:47,440 --> 00:17:52,880
you're a real estate investor and that's something that you want to be doing, you want to make sure

175
00:17:52,880 --> 00:17:58,640
that you have a CPA who is familiar, not just familiar, who is an expert in real estate because

176
00:17:58,640 --> 00:18:02,880
just like if you were a manufacturer or if you were a doctor or a dentist, you want to make sure

177
00:18:02,880 --> 00:18:07,120
there are certain specific deductions for each industry that you want to make sure you're

178
00:18:07,120 --> 00:18:13,360
capturing and you need a CPA who specializes in that field in order to maximize that.

179
00:18:13,360 --> 00:18:19,200
I agree completely. I actually had an entire episode about

180
00:18:19,200 --> 00:18:24,800
making sure your team is going to help you because they will make or break you. And if you have

181
00:18:24,800 --> 00:18:29,760
somebody who doesn't work full time in real estate and understand the business and they're advising

182
00:18:29,760 --> 00:18:34,080
you on any part of what you're trying to do, you're going to have a real rough time.

183
00:18:35,360 --> 00:18:45,040
So that's awesome. The, I guess the next question is when it comes to actually

184
00:18:45,040 --> 00:18:55,600
filing a cost segregation with your CPA, with your attorney, with your business partners, whatever.

185
00:18:55,600 --> 00:19:01,760
How does that break down between like a Joe homeowner who's got a few properties and they want to do

186
00:19:01,760 --> 00:19:07,360
cost-seg because maybe they bought four or five this year versus how an LLC would do it that's a

187
00:19:07,360 --> 00:19:14,880
partnership versus like a C-Corp or another entity. Let's say that. Is there differences in the process

188
00:19:14,880 --> 00:19:20,800
or is it really just get the paperwork done and file it and take the money? Yeah, take the money run.

189
00:19:20,800 --> 00:19:26,320
There's not really a difference from the cost segregation perspective. What we're doing is on

190
00:19:26,320 --> 00:19:30,640
the property level. We're going to do one cost segregation and that's going to create,

191
00:19:30,640 --> 00:19:35,840
you know, it's a detailed study report, it can be 80, 90 pages long and then that creates a new

192
00:19:35,840 --> 00:19:41,600
depreciation schedule and that one page essentially your accountant, you're going to hand off to them

193
00:19:41,600 --> 00:19:47,440
and they'll apply it. You know, if it is an LLC, obviously each member will receive their

194
00:19:47,440 --> 00:19:52,640
proportion of depreciation based on their proportion of ownership in that LLC. That's typically how

195
00:19:52,640 --> 00:19:58,720
it flows through. The one main or a couple main differences is if there is a structure called the

196
00:19:58,720 --> 00:20:05,040
Tenencing Common Tick Structure, which is fairly common in real estate when you're having not as

197
00:20:05,040 --> 00:20:08,880
common as the having an LLC, but when you have multiple partners, especially if there's a 1031

198
00:20:08,880 --> 00:20:15,040
involved or you have different tax basis is going into that property, they'll actually need to be

199
00:20:15,040 --> 00:20:22,000
two separate cost variation reports filed for each respective basis of that and then that's going

200
00:20:22,000 --> 00:20:28,560
to be applied accordingly. The other thing that is necessary when doing a cost variation

201
00:20:28,560 --> 00:20:33,360
on a property that you've owned for, you know, and you've already filed taxes on it a previous year,

202
00:20:33,360 --> 00:20:39,920
but you didn't do a cost tag is there's a special form called a 3115, it's a 3115 form, which

203
00:20:39,920 --> 00:20:45,440
changes your depreciation method and it's something you need to adjust your, you know, adjust the

204
00:20:45,440 --> 00:20:50,880
calculations and adjust the methodology of depreciation. That's something that is in addition to

205
00:20:50,880 --> 00:20:55,200
the cost variation that needs to be done, but otherwise, like I said, it's pretty straightforward,

206
00:20:55,200 --> 00:21:00,080
get it done, hand it off to your CPA and hopefully they'll be competent enough to apply it.

207
00:21:00,080 --> 00:21:11,520
Yes, hopefully. So you mentioned the depreciation tax if you sell the property before you hit

208
00:21:11,520 --> 00:21:18,800
those lengthy milestones of ownership. So what is that in tail and what does that really look like

209
00:21:18,800 --> 00:21:24,480
from a, I guess, a planning standpoint and, you know, most people are going to be business owners

210
00:21:24,480 --> 00:21:29,600
if they're rep status, they're going to have some sort of right off every single year to offset earnings,

211
00:21:29,600 --> 00:21:35,680
but what does that tax look like? So anytime you sell a property, you're going to be subject to what's

212
00:21:35,680 --> 00:21:41,840
called depreciation recapture tax and it's similar to a capital gain tax, which everyone is familiar with,

213
00:21:41,840 --> 00:21:46,560
your, you know, taxed on the difference between the purchase price and the sale price that's

214
00:21:46,560 --> 00:21:52,640
called capital gain. Similarly, you've had what's called an unrealized gain by taking these depreciation

215
00:21:52,640 --> 00:21:58,880
deductions over the course of ownership. That's going to be taxed similar to capital gain on a few

216
00:21:58,880 --> 00:22:03,280
different rates, actually. One rate is going to be certain components of the property, the structural

217
00:22:03,280 --> 00:22:08,960
components to depreciate line depreciation on the capital gain, you know, maxed 25% tax rate.

218
00:22:08,960 --> 00:22:13,520
Other components when you're doing a constriation and taking more deductions upfront, those are

219
00:22:13,520 --> 00:22:18,640
actually going to be taxed ordinary income tax rate. And so being subject to that tax, some of you

220
00:22:18,640 --> 00:22:23,200
definitely have to plan ahead of time, especially if you plan on selling in a shorter period of time,

221
00:22:23,200 --> 00:22:27,840
because the main benefit of cost-seg is the time value of money. Like I said earlier,

222
00:22:27,840 --> 00:22:33,680
using those deductions to reinvest to help you scale, especially if you continue to buy properties

223
00:22:33,680 --> 00:22:38,960
year after year is a great method to do that. It's important to note also, a lot of people think

224
00:22:38,960 --> 00:22:42,400
here, like you mentioned, see if you will say, well, don't do the cost-seg, because you're just going

225
00:22:42,400 --> 00:22:47,600
to have to pay it back and recapture. It just means I'm recapturing. And so it's a misnomer to think

226
00:22:47,600 --> 00:22:52,320
on paying back the depreciation. That's not what it means at all. It means you're subject to a tax

227
00:22:52,320 --> 00:22:59,600
on the amount of depreciation taken. So whatever the case is, you're always going to benefit from

228
00:22:59,600 --> 00:23:06,400
doing a cost-seg because two reasons. Number one, the arbitrage, the difference of tax rate between

229
00:23:06,400 --> 00:23:11,840
had you just paid the taxes on your ordinary income tax rate this year versus paying or paying

230
00:23:11,840 --> 00:23:17,360
that tax even down the road whenever you sell is that the arbitrage is always you're going to

231
00:23:17,360 --> 00:23:22,400
be benefiting from that. But the other reason is, I mean, inflation, I mean, think about it. The time

232
00:23:22,400 --> 00:23:28,480
value of money is going up. Another really important thing is being subject to a tax doesn't mean you

233
00:23:28,480 --> 00:23:35,280
have to pay that tax. There are other deferral methods or strategies that can be done in the year

234
00:23:35,280 --> 00:23:41,360
of the sale that can actually help you to either further defer that tax, so you're not going to pay it,

235
00:23:41,360 --> 00:23:47,280
or even reduce that or offset that with other deductions or other losses that you can actually

236
00:23:47,280 --> 00:23:55,200
just wipe out that tax value whatsoever. I'm a big fan of the opportunity cost side where if you

237
00:23:55,200 --> 00:23:59,520
have more cash in your pocket, you can deploy. You're in a better position period. Of course.

238
00:23:59,520 --> 00:24:07,840
So my, I guess my question is, is there is there an impact on long-term capital gains versus short-term

239
00:24:07,840 --> 00:24:12,160
capital gains from a taxation level involving cost-segren now? Is it just it's a wash?

240
00:24:12,160 --> 00:24:16,560
No, short-term capital gains is only if you're going to be selling in less than a year. So,

241
00:24:16,560 --> 00:24:24,800
obviously there is an impact when it comes to that. So don't usually, very rarely I'll recommend

242
00:24:24,800 --> 00:24:29,600
getting a cost duration done if you're planning on selling in less than a year. In fact, it may be

243
00:24:29,600 --> 00:24:34,800
questionable if you can even claim depreciation if the intention is just kind of to flip a property

244
00:24:34,800 --> 00:24:40,000
because it's more, it's not being held as a rental property. It's really just being flipped. So that's

245
00:24:40,000 --> 00:24:45,600
that in of itself is questionable, but it is still possible in certain scenarios, but definitely

246
00:24:45,600 --> 00:24:50,880
that's why we run the feasibility analysis upfront. You can weigh the options and you can see what

247
00:24:50,880 --> 00:25:00,080
the benefits are versus paying the taxes. That makes a lot of sense. And yeah, I didn't really think

248
00:25:00,080 --> 00:25:04,960
about it on the flipping side, but yeah, it does seem to line up. I saw a couple people

249
00:25:04,960 --> 00:25:10,880
rates and purchase offers recently with a rider in there. We'll pay you a million bucks for this

250
00:25:10,880 --> 00:25:16,960
if you want to buy it back in 12 months, you can buy it back at 1.1, something like that. And

251
00:25:16,960 --> 00:25:24,400
great on you if you can, but most people aren't going to execute that particular clause. I just

252
00:25:24,400 --> 00:25:28,880
thought it was weird. I'm like, how is this going to even affect all of your planning and tax strategies

253
00:25:28,880 --> 00:25:31,760
and stuff if you think you're going to hold this and then you're giving it back to the owner in a

254
00:25:31,760 --> 00:25:35,680
year? I mean, yeah, you make a hundred grand, great on you, but I just didn't know what that was

255
00:25:35,680 --> 00:25:42,800
going to look like on the cost side. And that's an outlier. It's a weird one. So what else do people

256
00:25:42,800 --> 00:25:48,960
need to know about cost segregation? Because I'm a new, but I haven't used it. I do hard money lending.

257
00:25:48,960 --> 00:25:55,760
I'm in storage. I help people with my consulting business, which is still my full-time job,

258
00:25:55,760 --> 00:26:01,600
even though I work for myself. So what does that look like for the average person? What do they need

259
00:26:01,600 --> 00:26:06,560
to look out for pitfalls wise? What do they need to do to plan ahead? Is there any benefit to

260
00:26:06,560 --> 00:26:14,560
structuring out ahead of time when they're looking to do a rehab? Is there a period of time after

261
00:26:14,560 --> 00:26:19,360
a cost tag is done that they should hold off on doing the rehab? What are the impacts? I just...

262
00:26:19,360 --> 00:26:22,880
Yeah, I mean, really, really great questions. A lot of interesting points when it comes to

263
00:26:22,880 --> 00:26:26,160
the cost. I think one of the most important things, what you mentioned about the renovation,

264
00:26:26,160 --> 00:26:31,040
gets overlooked by a lot of people. And they think that, oh, I could just do a cost segregation.

265
00:26:31,040 --> 00:26:36,960
No matter what. And that's not the case. So really important when you're planning a renovation.

266
00:26:36,960 --> 00:26:43,840
If you really want to benefit maximum from the cost variation, now I'll take a step back and say

267
00:26:43,840 --> 00:26:49,360
cost segregation and tax planning in general shouldn't be the reason why you're buying a property.

268
00:26:49,360 --> 00:26:56,320
The business plan, I fully believe that the business plan and the actual property itself

269
00:26:56,320 --> 00:27:03,920
should be in itself, make sense enough on its own, volition to warrant buying the property and

270
00:27:03,920 --> 00:27:09,600
executing the business plan of the property. So the tax benefits are secondary and maybe even

271
00:27:09,600 --> 00:27:15,920
further down the line. But if you're planning a renovation, the best case scenario to maximize

272
00:27:15,920 --> 00:27:20,640
the benefit of a cost tag, as I mentioned, is to do the cost tag first before renovations and then

273
00:27:20,640 --> 00:27:28,800
wait off at least six months or so if not a full at least tax year, meaning within the same tax year,

274
00:27:28,800 --> 00:27:35,680
in order to maximize the benefits. So you can do the cost tag on the acquisition as well as

275
00:27:35,680 --> 00:27:40,000
after the renovations are completed. So in that case, you can actually double dip and claim,

276
00:27:40,000 --> 00:27:47,440
double benefit from the tax write offs when it comes to the depreciation of the components in

277
00:27:47,440 --> 00:27:52,880
the property at the time of purchase, as well as the renovations, any money being spent and put

278
00:27:52,880 --> 00:28:01,440
into the property on the back end. That's huge. Okay. I kind of was hoping that was going to be the answer,

279
00:28:01,440 --> 00:28:06,400
but I wanted to, you know, just clarify because again, I'm not an expert in any of this stuff. You

280
00:28:06,400 --> 00:28:11,200
want to talk about building materials out there, but for, you know, in construction and renovations,

281
00:28:11,200 --> 00:28:16,560
awesome. But this tax stuff, it's all, you know, that's why we have people on our team to handle that

282
00:28:16,560 --> 00:28:29,920
same thing with a lawyer. So how do people approach the, I guess the planning with you guys at

283
00:28:29,920 --> 00:28:36,880
Madison Specks or any cost ag firm when it comes to, you know, multiple, I guess multiple hands in

284
00:28:36,880 --> 00:28:43,280
a cookie jar, some want to do it, some don't want to do it, they're confused. Are there resources

285
00:28:43,280 --> 00:28:51,680
for them to access where they can sort of get a warm fuzzy feeling and not necessarily have to

286
00:28:51,680 --> 00:28:55,680
understand at all, but understand enough of it to know, yes, this is in our best interest. No,

287
00:28:55,680 --> 00:29:00,640
this is not. I mean, education is key. So the first thing, like I said, we always like to do is run a

288
00:29:00,640 --> 00:29:06,880
free analysis so you can see for yourself. And then, you know, we're open for discussion. You

289
00:29:06,880 --> 00:29:11,760
know, I'm happy to jump in a call with anyone happy to, you know, discuss. We have people on our team

290
00:29:11,760 --> 00:29:16,560
that can walk you through the process to make you more comfortable with it or discuss the pros and

291
00:29:16,560 --> 00:29:20,560
cons, you know, like I said, in many cases, it just doesn't make sense for people to do costs. I give

292
00:29:20,560 --> 00:29:24,160
I'm going to tell you, I'm going to be the first one to tell you this is not something you should do.

293
00:29:24,160 --> 00:29:30,560
But there are scenarios where you'll have partners, you know, partnerships where, you know,

294
00:29:30,560 --> 00:29:36,720
it's not something that some everyone wants to do. In that case, it's best to really think about

295
00:29:36,720 --> 00:29:41,680
that in the planning stays before the partnership you've been having. So, for example, you can

296
00:29:41,680 --> 00:29:50,000
write into your operating agreement and you can allocate depreciation to some members versus other

297
00:29:50,000 --> 00:29:55,440
members, you know, based on certain capital contributions or otherwise. And so, once the

298
00:29:55,440 --> 00:30:00,480
opportunity has been drafted, there's really nothing you can do at that point. You know, if someone says,

299
00:30:00,480 --> 00:30:04,160
well, I don't need depreciation, someone says, I really do. There's not really much you can do at

300
00:30:04,160 --> 00:30:09,040
that point. But if you plan ahead and do that beforehand, you can actually make it make sense for

301
00:30:09,040 --> 00:30:15,360
everybody all parties involved, which is huge. And I had no idea, like I knew that's how it worked when

302
00:30:15,360 --> 00:30:19,680
you structured dividends and stuff at the beginning. The capital doesn't necessarily have to matter.

303
00:30:19,680 --> 00:30:23,920
It's it could be the amount of work that's put into it or whatever, but knowing you can allocate

304
00:30:23,920 --> 00:30:28,720
depreciation at the beginning is huge. And I don't know that I've ever heard that from anyone ever.

305
00:30:28,720 --> 00:30:36,560
So that's that's really cool. What else? What else? I mean, this is like, I'm a new. I've asked all

306
00:30:36,560 --> 00:30:43,440
the questions to come to my mind. So what else do people need to know about it? And if nothing else,

307
00:30:43,440 --> 00:30:48,800
how do they get in touch with you and where do they find you and what's your availability like?

308
00:30:48,800 --> 00:30:52,960
How does the fee structure work? All that. Okay. I'm just trying to remember all those questions

309
00:30:52,960 --> 00:30:58,240
as I go through, but I can read. I can read. Okay. This is gonna be my challenge. I like to think I

310
00:30:58,240 --> 00:31:04,320
remember have a good memory. So, okay, now I forgot everything. No, it's just,

311
00:31:04,640 --> 00:31:10,320
okay. A couple of things. That's really important to know. We'll start with that.

312
00:31:10,320 --> 00:31:14,800
One thing is we mentioned the real estate professional status is huge. If you are that,

313
00:31:14,800 --> 00:31:16,960
that's going to be beneficial. If you're not a real estate professional,

314
00:31:16,960 --> 00:31:21,920
cost variation usually doesn't make sense. There are a couple exceptions. One major exception is

315
00:31:21,920 --> 00:31:28,800
something we like to call the short term rental loophole, which says that if you own and self-manage

316
00:31:28,800 --> 00:31:35,200
a short term rental, Airbnb, average stay is less than seven days, and you materially participate,

317
00:31:35,200 --> 00:31:39,680
meaning again, you self-manage, you're spending more time than anyone else, and a minimum of 100 hours,

318
00:31:39,680 --> 00:31:45,760
which is a pretty easy threshold to cross, especially even if you're a W2, even if you have another

319
00:31:45,760 --> 00:31:52,160
full-time job, the cost variation or the depreciation that becomes active, the business becomes active,

320
00:31:52,160 --> 00:31:56,880
you're able to use those deductions against your active income, which is not the case with any

321
00:31:56,880 --> 00:32:01,520
other type of real estate investment. There are a couple of other types of businesses similar to that,

322
00:32:01,520 --> 00:32:07,520
like car washes, laundromats, things like that that are operated as businesses as opposed to

323
00:32:07,520 --> 00:32:12,400
just real estate in and of itself, where you can use those deductions to offset active

324
00:32:12,400 --> 00:32:17,120
business income as well. Those are a couple really important things to know. A lot of people aren't

325
00:32:17,120 --> 00:32:20,720
aware of that in the thinking, well, how can I benefit from cost? Well, here's a great way to do it,

326
00:32:20,720 --> 00:32:25,840
even if you're not a real estate professional, short term rentals. Now, it may not be the best.

327
00:32:25,840 --> 00:32:32,720
Business idea for you, you have to want to have the hospitality mindset and want to actually run

328
00:32:32,720 --> 00:32:41,120
one of these, but it definitely is an option for a lot of people. Cost-wise, it's, like I mentioned,

329
00:32:41,120 --> 00:32:49,920
$200,000 in up is really the lowest point where we'll even look at a cost to do. The fee structure is

330
00:32:49,920 --> 00:32:55,280
not contingent on tax savings, so it's a flat fee based on the size and type of property, which means

331
00:32:55,280 --> 00:33:02,400
if you buy a property for $200,000 or $2 million, the fee may be exactly the same to get it done,

332
00:33:02,400 --> 00:33:08,160
but the actual tax benefits are going to be 10X because again, it's going to be based on your purchase

333
00:33:08,160 --> 00:33:14,160
price. Feel free to reach out to me. We're available. We're the biggest national cost-reation company

334
00:33:14,160 --> 00:33:20,880
out there, so last year, for example, we did over 7,000 cost-seq studies, all asset classes across

335
00:33:20,880 --> 00:33:26,560
all 50 states, so there's no limitations there. You can find me, like you mentioned at the beginning of

336
00:33:26,560 --> 00:33:33,440
the episode on YoneWice.com, or you can check me out on all the socials, especially LinkedIn, but

337
00:33:33,440 --> 00:33:39,920
one condition, do not just hit the follow button, make sure to hit the connect button,

338
00:33:39,920 --> 00:33:46,480
and write a little note that you heard me on the TCO method podcast, and I'll know that that's where

339
00:33:46,480 --> 00:33:52,000
you heard me and Andy, and otherwise, I have no idea. You know, it gets tons of followers every day,

340
00:33:52,000 --> 00:33:56,400
and just like, yeah, where these people, how do they find me? Why are they following me? And it's really,

341
00:33:56,400 --> 00:34:02,160
it's great to start a conversation and to get to know, so take 10 seconds and just write a brief note,

342
00:34:02,160 --> 00:34:09,200
it goes a long way. It really does. Unless your note is a sales pitch saying, "I want to sell you

343
00:34:09,200 --> 00:34:14,800
this stuff, this is the first message I have with you, can you please accept my connection request?"

344
00:34:14,800 --> 00:34:19,760
And then usually it's going to be hard to know. So please don't sell, don't sell whatever you want to

345
00:34:19,760 --> 00:34:25,760
sell on your first contact. It's called social media, right? So you don't want to be social media

346
00:34:25,760 --> 00:34:30,080
awkward, right? You don't want to be socially awkward, and do something like that on social media.

347
00:34:30,080 --> 00:34:35,600
I almost feel bad for those people because usually I don't even respond, I usually just delete it

348
00:34:35,600 --> 00:34:41,520
and move on with my day, but it takes a certain type of someone, and that's not the way.

349
00:34:42,960 --> 00:34:48,960
So a lot of podcasts seem to have these questions that they ask people at the end.

350
00:34:48,960 --> 00:34:57,280
So tell us a little bit about your background in teaching and where, where, how did you end up doing

351
00:34:57,280 --> 00:35:05,760
this from education to cost segregation? I'm not seeing the connection. That's actually a good

352
00:35:05,760 --> 00:35:08,960
title of the episode, you know, it's kind of catchy, education to cost segregation.

353
00:35:10,320 --> 00:35:18,560
If you didn't come up with a title yet, but there's no real good segue or

354
00:35:18,560 --> 00:35:22,720
you know, way that I went from one to the other. Like you said, I was a teacher for about 15 years,

355
00:35:22,720 --> 00:35:29,280
and really has always been my passion. I love it. I still do to this day, but it really didn't pay

356
00:35:29,280 --> 00:35:35,120
the bills. I was in debt was having problems getting, you know, just getting by and realizing

357
00:35:35,120 --> 00:35:39,680
you to make some changes, reached out to some friends and just figured, you know, hey, what are some

358
00:35:39,680 --> 00:35:44,080
options? I'm open to new opportunities, opening to doing something totally different, but I had really

359
00:35:44,080 --> 00:35:50,320
two conditions. Number one was I was not interested in having any sort of additional formal education.

360
00:35:50,320 --> 00:35:55,840
So I didn't want to go back to school in order to, you know, to have a new profession of some kind.

361
00:35:55,840 --> 00:36:02,560
And second, I was looking for something that had the maximum, you know, potential in terms of income,

362
00:36:02,560 --> 00:36:07,200
you know, scale opportunity. So I was like, hey, what's something that I can do that really,

363
00:36:07,200 --> 00:36:12,080
there's no limit, like the sky's the limit. And real estate just kept coming up in conversation

364
00:36:12,080 --> 00:36:17,200
between some friends when I was reaching out to people I knew who were in business and finance and

365
00:36:17,200 --> 00:36:24,800
whatever. And that it's a long story, but the short story of it is I met a friend who was a mortgage

366
00:36:24,800 --> 00:36:30,320
broker, a commercial mortgage broker actually, and taught me everything I know, basically about

367
00:36:30,320 --> 00:36:34,240
commercial real estate. I sat with him in his office for about eight months and literally just

368
00:36:34,240 --> 00:36:40,160
like a printus to him and we were cold calling, you know, banks and business owners and just, you know,

369
00:36:40,160 --> 00:36:48,160
trying to find deals and it was a lot of fun. Fun. I don't know if I would ever consider cold calling

370
00:36:48,160 --> 00:36:51,920
fun, but if you say so, I guess if you're with the right people, yeah, exactly. I was sitting, you

371
00:36:51,920 --> 00:36:56,960
know, we're just buddies are hanging out in his office every day. It was fun. I had never really

372
00:36:56,960 --> 00:37:02,640
cold called before and that wasn't the fun part of it, but I learned some strategy. That's really

373
00:37:02,640 --> 00:37:08,960
where I had my first foray into social media and to seeing the power of, you know, of connecting with

374
00:37:08,960 --> 00:37:14,080
people and, you know, incoming leads and things like that where I was using different methods and

375
00:37:14,080 --> 00:37:18,960
came across bigger pockets at that time. And so that all like there's a lot that goes into that,

376
00:37:18,960 --> 00:37:23,600
but in those first eight months or so, that was kind of my foray into the whole, you know, commercial

377
00:37:23,600 --> 00:37:30,800
real estate world. That's awesome. I guess my next question for you is you are an active investor.

378
00:37:30,800 --> 00:37:37,360
You do have some stuff going on. What's your favorite right now? Like everybody's, oh,

379
00:37:37,360 --> 00:37:41,520
doom and gloom, you know, the housing market blah, blah, blah, I'm looking at it and I'm going whatever.

380
00:37:41,520 --> 00:37:45,520
At this point, I have no idea. My crystal ball broke like six months ago as soon as the government

381
00:37:45,520 --> 00:37:50,080
started doing this in the pot. And I don't even attempt to guess at where we're going at this point,

382
00:37:50,080 --> 00:37:56,720
but, you know, where are you putting money? Where are you getting involved? I know that I've seen you,

383
00:37:58,480 --> 00:38:03,760
you know, kind of dragged into some of these conversations at conferences and other things.

384
00:38:03,760 --> 00:38:09,120
I know you were thinking about doing podcasts and interviews at a conference, I think. I don't know

385
00:38:09,120 --> 00:38:15,840
if that actually happened, but why should tell us a little bit about where you're seeing

386
00:38:15,840 --> 00:38:20,640
opportunity right now. And then yeah, there's always opportunity out there. I've been much more

387
00:38:20,640 --> 00:38:27,600
of a passive investor, excuse me, over the years, which, you know, I'm still seeing benefits. I've

388
00:38:27,600 --> 00:38:32,720
like self-storage. I think it's very resilient. I love, you know, multi-family. I think it's also very

389
00:38:32,720 --> 00:38:38,800
resilient as a class, obviously. Returns are very much contingent in many cases in terms of the,

390
00:38:38,800 --> 00:38:46,160
the, you know, the, the financing and the mortgage rates, et cetera. However, there's still a lot

391
00:38:46,160 --> 00:38:51,200
of possibilities out there. Affordable housing is a huge need all across the country. And so,

392
00:38:51,200 --> 00:38:55,760
you know, when you look into options, when it comes to affordable housing, I like to look at

393
00:38:55,760 --> 00:39:01,680
mobile home parks, manufacturing, housing communities, I think is a great option. There's not a lot of

394
00:39:01,680 --> 00:39:06,400
development of them going on. So when you can find them, you'll have invested alongside some,

395
00:39:06,400 --> 00:39:13,600
some great operators in the RV park space and the mobile home, park space. So those are options that

396
00:39:13,600 --> 00:39:19,680
I think still have a lot of room to grow, even in this inflationary kind of environment that we're in,

397
00:39:19,680 --> 00:39:25,680
real estate is always going to be a good option because there's always long term wealth

398
00:39:25,680 --> 00:39:32,000
you'll be in created, but at the same time, you can find good deals if you look for them. And so it's

399
00:39:32,000 --> 00:39:35,840
just, it's just a matter of having the patience and having the time to look for deals.

400
00:39:35,840 --> 00:39:43,120
Right. Yep. Offmarket is key and everybody loves it and nobody ever seems to know where to find it

401
00:39:43,120 --> 00:39:47,520
unless your network is actually working for you and with you and looking out for you because

402
00:39:47,520 --> 00:39:53,520
offmarket deals don't land on your desk if you're not out there giving to. So that's, that's a big

403
00:39:53,520 --> 00:39:58,560
part of it. So anybody who wants to get started on social media since this will be my last question

404
00:39:58,560 --> 00:40:05,520
since you are not just the cost that king there, but in reality also as your full time job,

405
00:40:05,520 --> 00:40:11,040
where, where should they start on social media? I've, there's a million different gurus out there,

406
00:40:11,040 --> 00:40:17,520
selling courses and offering services and we'll do this and this and this and I don't know that

407
00:40:17,520 --> 00:40:23,760
you've actually followed any of those pieces of advice you've just kind of created your own little

408
00:40:23,760 --> 00:40:29,600
niche and have crushed it. So where do you, where do you think people should start or where do you see

409
00:40:29,600 --> 00:40:36,000
kind of the, the opportunity for somebody who wants to build a following and really, you know,

410
00:40:36,000 --> 00:40:42,480
become become a player or even just to, to give just to help inform people and, and be kind of

411
00:40:42,480 --> 00:40:49,520
build your brand as an expert or a thought leader. There's a lot of options like you said. I haven't

412
00:40:49,520 --> 00:40:55,280
followed any gurus. I haven't done any of that method, but the first thing to do for anyone

413
00:40:55,280 --> 00:41:00,080
wants to like grow their social media presence. The first thing to do is figure out what are your goals?

414
00:41:00,080 --> 00:41:06,640
Like why? What do you want to do it for? Okay. Now, the, the, the answer to that question may

415
00:41:06,640 --> 00:41:11,600
totally determine which direction you take. So I'm not going to, you know, go, go into every one of those.

416
00:41:11,600 --> 00:41:17,840
But I'll offer a couple pieces of advice that hopefully will be able to translate, you know, in a lot

417
00:41:17,840 --> 00:41:23,440
of different ways. The first thing is you talk about niche, right? Finding a niche, finding a niche is

418
00:41:23,440 --> 00:41:28,960
probably the best thing to do. In general, in real estate in order to be successful is finding a niche

419
00:41:28,960 --> 00:41:35,520
and just go all in on that. And then social media is a great way to be known and to build a brand

420
00:41:35,520 --> 00:41:41,200
around that niche. The people when they think about that thing, they think about you. And the way

421
00:41:41,200 --> 00:41:48,960
that you do that is by being, just, just being there showing up as a social media means posting and

422
00:41:48,960 --> 00:41:56,320
engaging on a daily basis. And so one thing you really need to focus on more than anything. I think

423
00:41:56,320 --> 00:42:05,200
the one, if I was to just do one thing, okay, is to focus on commenting on other people's posts

424
00:42:05,200 --> 00:42:10,000
and engaging. I mean, giving very, you know, high quality, not just like just putting your name

425
00:42:10,000 --> 00:42:14,960
there and just saying, hey, great, you know, congrats or whatever it is. I mean, LinkedIn is amazing for

426
00:42:14,960 --> 00:42:20,880
for that, but Twitter as I ventured into over the past half a year or so has been amazing.

427
00:42:20,880 --> 00:42:28,560
Instagram can be good. Not so much in that regard, but the, yeah, I mean, yeah, exactly. The commenting

428
00:42:28,560 --> 00:42:33,840
on other people's and really engaging is where you're going to find the benefit and where people

429
00:42:33,840 --> 00:42:39,360
are going to get to know you and get to know, you know, who you are, what you do and build that brand.

430
00:42:39,360 --> 00:42:46,240
And so even more than posting, you know, coming up with content on your own, the main difference

431
00:42:46,240 --> 00:42:51,840
you're going to see is by just engaging and putting out comment comments that are adding value.

432
00:42:51,840 --> 00:42:59,120
Awesome. That's great. Well, I, uh, I got work to do, but anyway,

433
00:42:59,120 --> 00:43:04,880
I definitely comment more than I post everywhere, but I don't know if that's a good thing or not.

434
00:43:04,880 --> 00:43:11,440
I guess my last question is threads is threads dead because I, I don't really like, I log in now and I

435
00:43:11,440 --> 00:43:16,800
do get some real estate content from like three people. And then it's just the spammy crap that I spent

436
00:43:16,800 --> 00:43:23,920
hours and hours blocking. So is it just toast smoked done? Like, I don't see a lot of, a lot of

437
00:43:23,920 --> 00:43:30,560
re-twit people going on there. I didn't really see the benefit of the whole idea of it to begin with.

438
00:43:31,520 --> 00:43:36,560
You know, I created an account and kind of logged into, to it just to see what it was all about,

439
00:43:36,560 --> 00:43:40,720
but similarly to what you're saying, I found the same. I posted a couple things, got in a couple

440
00:43:40,720 --> 00:43:47,440
kind of interactions, but there's really, I don't know, I haven't found any benefit in it.

441
00:43:47,440 --> 00:43:53,840
I really haven't either. I stopped and I think most people have because you log in and it's just

442
00:43:53,840 --> 00:43:59,040
a bunch of ads and social media influencers who want people to follow their Instagram. Like,

443
00:43:59,040 --> 00:44:03,760
I don't care what you think. Like, if I wanted Instagram, I'd be looking at your pictures. I wouldn't be

444
00:44:03,760 --> 00:44:08,640
like looking for what you're telling me verbally. So, okay. All right, I'm good. I'm not, I'm not

445
00:44:08,640 --> 00:44:13,760
insane. I was afraid I broke something, but that's good. I just want to thank you so much. This has

446
00:44:13,760 --> 00:44:18,800
been great. It's been a blast. I really appreciate you coming on the show. For everybody out in

447
00:44:18,800 --> 00:44:24,880
listener land, please stay tuned. We're going to do a couple of these interview style episodes every

448
00:44:24,880 --> 00:44:31,040
single month. The show will continue on Tuesdays and Thursdays and then we will release interviews

449
00:44:31,040 --> 00:44:37,360
on Saturdays, hopefully two times a month. And it will all be involved with people who help you save

450
00:44:37,360 --> 00:44:42,400
money, max out your return on investment, max out your net operating income, reduce your risk, all

451
00:44:42,400 --> 00:44:48,080
that other fun stuff we talk about on a program. And I appreciate everybody tuning in, please hit the

452
00:44:48,080 --> 00:44:53,520
bell if you're watching on YouTube. If you are listening on Apple or Spotify, subscribe, like,

453
00:44:54,320 --> 00:44:58,960
leave a comment, leave a recommendation, share it with your friend, share it with your network.

454
00:44:58,960 --> 00:45:04,480
I will love you forever. And I appreciate it. Yonah, thank you so much for joining me. It's been

455
00:45:04,480 --> 00:45:13,920
a blast.

456
00:45:13,920 --> 00:45:23,920
[Music]