On this episode of Money Monday, we have a special guest on the show, Roger Lasad. Roger is a real estate broker and owner of a multi-family real estate company in South Florida. He has been on the podcast for a while now and has a lot of experience in the real estate industry, so we thought it would be fun to have him on to talk about how he manages his business and what it takes to be successful in real estate. We also talk about the importance of having a team behind you and how important it is to have a solid support network to keep you on track with your goals and dreams. We hope you guys enjoy this episode and share it with a friend or family member who needs some help with their real estate business or needs some extra help in their own real estate brokerage business. We appreciate your support and look forward to seeing you guys on the next episode! Hit us up at FreshFit and let us know what you thought of this episode. We are always open to feedback and questions from the community! Timestamps: 1:00:00 - Who do you think is the best real estate agent in your area? 2:30 - What is your favorite part of the business? 3:15 - How do you manage your finances? 4:40 - What are you looking for in a business partner? 5:20 - What do you need to know about real estate? 6: How can you get the most out of your network? 7:00 8:00- What is the most important thing you can you can do to make the most efficiently? 9:30- How can I get the best deal? 11:40- How do I build the most effective real estate deal in my business in my life? 12:15- How much money I can I can get? 13:30 14:40 15:20 16:10 What do I need a team? 17:00 | How I m looking for a good real estate firm? 15 - How much do I m going to get in my real estate career? 16 - What can I'm going to be able to do for me? 18:30 | How much? 19:40 | What are my budget? 21:00 + 16:00 / 16:20 | What can you pay for my agent? 22:10 | Can I get a better real estate contract?
00:02:51.000Yes, and the behind-the-scenes stuff and all the other content that you might not necessarily see on YouTube.
00:02:57.000Also, guys, check me out on Twitter, Unplugged Fit X. I just made it.
00:03:00.000I've been going crazy on there, tweeting a bunch of times a day.
00:03:04.000I talk about certain topics that I might not necessarily talk about here on YouTube, so check me out over there, Unplugged Fit X. That is the new Twitter.
00:03:10.000And then also, and it's growing at a good rate, man.
00:03:13.000We're at already 27K, and I've had it for only a few days now.
00:03:19.000The goal is to hit 100k before the end of the year, guys.
00:03:21.000Let's get there because, you know, we got a bunch of losers on Twitter that have a bunch of followers.
00:03:24.000So let's get our followers up and get that message out there to as many guys as possible.
00:03:28.000And then also join the CEO Network Refresh, as you guys know, on Patreon.
00:03:32.000He helps guys out with, you know, getting their shit together, really, and then introducing them and putting them in line with guys that are higher status, higher value, so you can go ahead and improve your network because your network is your net worth, especially leading into today's episode of Warm for Fresh.
00:04:05.000For free, by the way, y'all are going to go ahead and be able to ask them questions and really they're at the top of the game of what they do, man.
00:04:13.000And they're going to teach you guys how to screen out for a good real estate agent versus a bad one, how to screen out for a good accountant versus a bad one.
00:04:27.000I can't say how many times I'm on the phone with these guys a week, whether it's I'm talking to them individually or we're doing a three-way call pause where we're discussing things because my real estate ties and works in tandem with my taxes and we're able to strategize and move in certain ways to make things happen.
00:04:41.000You're not able to do this unless you have a team behind you.
00:04:43.000Not only that, whenever I want to buy a car, a big expense, I call Steve for help.
00:04:47.000Whenever I have questions about real estate, I'll call Roger back in the day.
00:04:49.000So it all helps me move forward in my current task right now.
00:05:20.000But guys, without further ado, I'm going to have you guys introduce yourself to the people because it's been a while, especially you, Roger, since you've been on.
00:05:44.000I've had an interest in real estate since the 90s.
00:05:48.000My daughter is a real estate broker in the Atlanta area with Sotheby's.
00:05:52.000My cousin has his own brokerage up in New York City, and he does big commercial deals, including nine-figure deals in New York City.
00:06:00.000And my cousin, who also works with investors and has a lot of business in Philly, recently moved down here, and we're going to be working together in the Fort Lauderdale area.
00:06:26.000I've got two practice locations here in Florida, and I predominantly work with small business owners, entrepreneurs, high net worth individuals, serial entrepreneurs.
00:07:01.000Alright, so today we have three things to help us succeed in life.
00:07:04.000For example, with real estate and taxes as a team.
00:07:08.000And then how to screen for, you know, a good accountant and a good real estate agent for you guys that want to get into this world because you're going to absolutely need a team, but you're going to need to build and make sure that you bring the right people in versus the wrong people.
00:07:32.000You guys are literally going to be, or for a low cost.
00:07:35.000You're able to basically get a console with these guys, which would cost you hundreds upon hundreds of dollars if you wanted to talk to them one-on-one.
00:07:56.000And as someone who wants to be successful, you need someone to help you, for example, with taxes, real estate for investing, and also know what to do.
00:08:02.000So real quick, Roger, can you tell them how to find a good real estate agent and how to find a good CPA? Alright, so real quick.
00:08:08.000So number one, when you guys start off in real estate investing, the first thing I always tell people is have a goal in mind.
00:08:15.000Whether that be something as simple as, hey, I want to make enough money to pay off my car note or to pay off my mortgage or my rent, etc, etc.
00:08:22.000So with that being said, when you're looking to find real estate agents, the number one thing that I always recommend people do is get referrals, right?
00:08:33.000Especially if you're looking to invest, I would say start off looking into investing groups on Facebook, join local investing clubs.
00:08:41.000And there, you will most likely find a real estate agent that's already in the game that's either an investor or someone that is recommended by a bunch of investors.
00:08:50.000And for those of you guys that move to a new area, once again, look for the guys that dominate certain markets that you're interested in investing in, i.e.
00:08:59.000look at who has the most signs up in a particular area, as well as talk to your neighbors.
00:09:05.000Who are the people that they recommend?
00:09:08.000And then once you get Two or three, you want to sit down and ask the right questions, make sure they understand basic things like NOI, cap rate, cash on cash returns, why one neighborhood is better than another neighborhood, and make sure that These people's experience and what they're advising you on,
00:09:30.000Just out to your point, Roger, I remember I was looking on YouTube for real estate tips against real estate, and I kind of figured out for myself what my goal was.
00:09:58.000A lot of people, all right, so real estate involves the buying and selling of real estate, right?
00:10:02.000But another huge component Is relationship and relationship building, which is like what you just alluded to.
00:10:08.000And that's what I think a lot of people are missing, that you building relationships is where you're going to find your best deals, because there's certain things that pop up that it's really based on relationships.
00:10:36.000Last year, right around this time, me and Roger found a deal.
00:10:38.000It was a three-bedroom, two-bath up north in the Pompano area, and we were able to go ahead and get a cash for $400K. Now, granted, the seller didn't have it on market, and on top of that, he didn't want to do a deal with the bank, and it was a little bit difficult, but it was a brand new build.
00:10:53.000It was steel structure, really good numbers.
00:10:56.000We were able to get rent at a certain rate based on the comps and everything else like that, so it ended up working out.
00:11:03.000That's something that down the road, if I want to put it, you know, do a cash out refi or do a, which I wouldn't do right now, rates are too high.
00:11:08.000But if I wanted to do a, you know, a HELOC or something like that, I can do that.
00:11:11.000But I wouldn't have found that deal had it not been for Roger looking at off-market deals and you're able to find things like that.
00:11:16.000So in that house now, I bought it for $400.
00:11:19.000It appraised, didn't it appraise more than that?
00:11:29.000When you bought it, you had equity in, and I think now you're probably looking at around $5,000 or some change.
00:11:34.000Yeah, I bought that house exactly a year ago.
00:11:35.000And the reason, too, and me and Roger talked about this, guys, you typically don't want to buy a house cash, but since it was the end of the year and the seller only wanted to do a cash deal, sometimes you have to jump on opportunities like that.
00:11:45.000And when I bought it, bam, $60,000 equity by closing.
00:11:48.000By the way, we have in the chat right now the legend himself, Ben Mala.
00:13:10.000He's part of that network of investors I deal with, so that's why he was like, hey, I want to do X, and I was like, I got you, and he thought I was kidding for a few days.
00:13:20.000But anyway, we were able to negotiate, make it work, but this is what I'm talking about.
00:13:23.000The best deals, you're only going to find the best deals through relationships.
00:13:27.000If you're in that special group, for example, in school, the cool kids, if you don't know, you don't know, but if you're in there, you win.
00:13:32.000Yeah, being off-market deals a lot of the times, especially in a competitive market like Florida, South Florida.
00:13:36.000Actually, mine was off-market too, actually, to be fair with you.
00:13:43.000And then, Steve, what would you recommend for people as far as finding a good CPA? Obviously, your niche is dealing with entrepreneurs, small businesses, guys of a certain net worth, etc.
00:13:54.000But what about someone that might want to get their business started or maybe is just trying to figure out, hey, I want to go ahead and get a tax advantage by having a small business.
00:14:02.000How do I screen out for a good accountant versus going to H&R Block like everybody else?
00:14:07.000So I think the most important part in finding the right CPA or tax professional is to figure out what your needs are.
00:14:13.000If you need somebody just to prepare your tax return, you don't really need a CPA. You can go to a place like H&R Block or Jackson Hute or something like that.
00:14:22.000Or have just a regular, you know, like a enrolled agent maybe?
00:14:26.000But are we gonna do like a real estate investing deal where, you know, a lot of times, you know, like you said, you gotta have communication.
00:14:33.000So you want a CPA. If you're gonna, like, a specific business, there's gonna come a time where you need financial statements because you're gonna want to have financing with the bank.
00:14:41.000So you probably want to get a licensed, certified public accountant, a CPA, because a lot of times that's the only financial statement a bank will accept.
00:14:52.000Every time I do a deal, guys, they need a profit loss statement, and thankfully I'm able to hit up Steve.
00:14:57.000Hey, Steve, can I please get a P&L? I need an ASAP, and he's able to generate me one, and then bam, I'm able to give it to the lender, and then they approve it with underwriting, and then I'm able to close the deal.
00:15:06.000Because you're buying it under the business.
00:15:08.000No, I buy it on my personal name, but they still need to see money coming in.
00:15:12.000Yeah, they have to verify that the source of income, that he could pay back the loan, is coming from somewhere that's going to be a business, so they're not just going to take his financial statement for it.
00:15:21.000They want an independent accountant to look at that and certify it.
00:15:24.000So I'm putting my license out online saying, no, this is legitimate.
00:15:29.000So, you know, you definitely want to check their credentials.
00:15:32.000You know, go online, go to the Board of Accountancy or whatever state that you belong to, and everything's all public.
00:15:36.000Just look up that professional, make sure that they're properly licensed, that there's no disciplinary action, obviously.
00:15:42.000You know, the other thing is that you want to be able to feel comfortable with that accountant.
00:15:46.000So you want to have an open line of communication with them.
00:15:49.000Just like you said, whenever you want to go buy a car, you can pick up the phone and feel confident that I'm going to respond to you in a timely fashion.
00:16:02.000I think that's one of the most highest complaints that we get as professionals in our industry is that you call your lawyer, you call your CPA, and they're not responding back to you.
00:16:20.000Have them be in line with what you need in an entrepreneurial life.
00:16:23.000If you're a guy doing a regular W-2 job, you don't need a CPA. But once you start getting in, you start a business on the side, and you start generating, at what point should people start seriously looking into getting a CPA? How much money should they generate, you think?
00:16:35.000I mean, I think if you get incorporated and you have a business and you think that's going to take you in a direction where that's going to expand and you're going to make your substantial amount of income, whether it's an operational business or a real estate investment, you definitely should get a CPA professional in because you're going to come to the point where you're going to need financing if you want to grow your business.
00:16:55.000You're going to definitely need financial statements that are going to be certified.
00:17:25.000Like, oh yeah, I was billing you hourly, I was billing you flat fee.
00:17:30.000So that's going to be one of the things that you want to basically get out front and talk to your CPA about.
00:17:36.000The other thing is to make sure that they're in line with your specific industry, that they have knowledge in that industry, whether it's real estate, whether it's manufacturing or construction.
00:17:45.000Make sure that you talk to the people in that industry that you're in, if it's a business, to see who they recommend.
00:17:53.000Talk to real estate agents if you're going to do real estate.
00:17:55.000Because I'm sure he has probably a Rolodex of CPA professionals in his area where he could just pick up the phone or just give one of his clients their name.
00:21:51.000And I'm like, because you get more flies with honey than vinegar.
00:21:57.000And and that's really the biggest lesson I learned because a lot of times just just talking people real laid-back cool I'm telling you, Myron Well, I'm glad that Roger does the brokering because sometimes I don't be I'm not as nice or I will like be pissed off at tenants because they're late on rent or something like that and Roger's all calm and collected about and I'm like ready to fucking you know scream at them like pay your fucking rent you bum But yeah,
00:27:02.000But that's how you know you got a good deal.
00:27:04.000So I would say trusting the numbers, trusting your experience.
00:27:09.000Of course, you never want to buy speculatively, but dude, when it's like that, you're in a hot market like Florida, you know that the interest rates are going to go up, you're getting it at a good rate, you're still getting a good cash on cash return.
00:27:20.000Sometimes you've got to put your ego aside because a lot of people are like, I'm not paying more than what it's worth.
00:27:40.000So does it really matter what it's really worth?
00:27:42.000Yeah, you pay a little bit more, but you're going to get that cash on cash return and you're in a hot market where it's going to appreciate.
00:27:49.000Trust in the numbers, trust in the experience, and just making a deal happen and not putting your emotions in it.
00:27:54.000Because another part of me was pissed off at the seller because he didn't want to budge on that even though it appraised like $30k below what we went under contract for.
00:28:19.000But I didn't think too much after that, what I should do next.
00:28:22.000So I kind of waited a little bit, and then, you know, COVID finished, and then, come to find out, now the rates are so high.
00:28:29.000So I have a few properties I bought in Barbados and then offshore, but I should have been like, Myron, I bought some more before the rates went up.
00:28:50.000Because when that other building gave me that bullshit, first person I called, hey, Roger, we got to find a spot because these dudes are telling us they're not renewing the lease, man.
00:31:20.000I mean, you guys already know, like, you know, obviously shout out to Brandon Carter.
00:31:24.000I've had so many guys that helped me out in different ways, right?
00:31:27.000You got Brandon Carter, you got John from Modern Life Dating, you got Donovan Sharp, you got Rolo Tomasi, you know, all these guys helped me come up in the game.
00:31:34.000So I gotta, you know, obviously give credit to all of them.
00:31:37.000Locario, all these guys took a chance on me when I was a nobody.
00:31:44.000I would say my granddad for sure, because he came to America when he was younger, worked at a factory, overtime as well, and then became successful, and then made a way for my family.
00:31:57.000And number two I would say is, honestly, surprisingly, Grant Cardone.
00:32:02.000Him telling me no put a fire under me that I didn't have.
00:32:09.000And guys, just so you know, 20 and up from before.
00:32:11.000I'm reading these chats that came through.
00:32:13.000Ali goes, I have an offer for a six-figure salary and I'm praying I get two minutes of mine for the first time before I make that decision.
00:33:14.000It's to have an emergency savings account, bro.
00:33:16.000Like, that's your first priority before you start investing.
00:33:18.000Black Argon goes, Myron, off topic, please fixate on the total number of rich slash tall successful people when Destiny slash Jazz cite their stats.
00:33:25.000The stats will not bear out hypergamy because the sample of high school men is too small.
00:34:59.000Again, that's from Lord Malachi, 20 years old, still in school, computer science, no loans, so he has no debt, and he got his first job making 65K a year.
00:35:08.000So that's roughly, what, $5,000, $6,000 a month, something like that?
00:35:26.000Yeah, that amounts to about $5,400 a month.
00:35:29.000I would say, bro, number one is get that savings account, man.
00:35:33.000Get that account like an emergency fund where if anything happens, you're able to sustain yourself for six months to a year.
00:35:38.000Once you have that established, then you can go ahead and get into the investing and everything else like that, which it might take you some time to build that up.
00:35:43.000It might take you seven, eight months to build it up, but that's fine.
00:35:46.000But after that, everything that you make, you can go ahead and start investing.
00:35:59.000And get a job that's more flexible, more of like a weekend job, you know what I mean?
00:36:04.000Get another job, make a little bit more money, you'll be able to go ahead and hit that savings number faster, and then the faster you do that, the faster you can start investing, and then you know what they always say, money loves speed, right?
00:36:14.000You're gonna be able to kind of propel yourself there.
00:37:04.000So the entity structure does not matter in this instance, and definitely you do not want to be a sole proprietor.
00:37:10.000So we have talked about that before because you're going to wind up paying way more in self-employment tax than you have to, and you should get incorporated.
00:37:52.000But another place you might want to look, if you don't have a ton of credit and Business longevity where you have to have like two years basically if you're going to get something for a business loan where it's unsecured.
00:38:07.000That's a small business administration and a lot of times they'll be willing to give you loans through the government for businesses and you go onto their website and you can download all of their Business plans for any types of industry or whatever, you could start there.
00:38:21.000A lot of times they're willing to give you more of a shot than your local commercial bank, basically.
00:38:30.000And guys, keep in mind that the United States was built on the backs of small businesses, man, so nothing wrong with going ahead and starting off and getting a loan through the SBA. Okay, we got here.
00:38:41.000One way to raise cash via equity margin loan.
00:38:43.000Example, if I have 100K invested in marginable securities such as an index fund from Vanguard, you could borrow against those securities at around 9%.
00:38:49.000Of course, there are risks, so consult your broker.
00:39:04.000Yeah, that part kind of threw me, but I mean, I would say the best thing is to look up the definition, do the calculations, because basically, ROI, for you to get ROI, you got to know what the net operating income is, and then you divide that by the sales price,
00:39:21.000So basically what you're looking to do is take the profit minus the expenses, that's your net operating income, and then you divide that by the sales price, and that gives you your rate of return or rate of interest, and you take it from there, but I know this is short.
00:39:37.000I mean, I don't want to get too into it, but yeah.
00:39:38.000You're talking about return on investment?
00:40:43.000And you're asking, bro, once you start raising money and trying to take other people's money to invest in deals, and you're not necessarily a savvy investor yourself, you're going to run into issues, bro.
00:42:05.000So, commercial real estate and residential real estate is kind of a generic term.
00:42:11.000Like, for instance, a lot of people would look at a 100-unit apartment complex and say, well, the use is residential, but it's still considered commercial.
00:42:20.000So I'm not 100% sure what you mean by that, but I'll just assume you're talking about one to four units and then five plus units.
00:42:29.000Oh, he wants the pros and cons for each.
00:42:33.000You have greater tax benefits, and the financing is completely different when you're using commercial real estate, and there's a lot of advantages to that.
00:42:42.000One of the biggest advantages is that you can actually get loans in commercial real estate that are called non-recourse, which means they don't hit your credit.
00:42:50.000And if the property goes bust, your company is the one that takes the hit, not your personal credit or your personal name.
00:43:00.000Like I said, the financing is different.
00:43:02.000Case in point, and I'm just going to say this just so everyone knows, once you go above 10 units, When the financing looks at the property, all they care about is the income coming off the property.
00:43:15.000They don't care if you personally have enough money to cover it, if you make any income.
00:43:20.000They're basically treating that more like a business and it's completely separate from your own personal income and finances.
00:43:26.000So that and the tax benefits finance, that's the main difference.
00:43:30.000Even though you have to depreciate at a higher, because at commercial, what, 37 and a half or something like that versus 27 and...
00:44:34.000These are the offices that investment firms go to, you know, big lawyers go to, big accounting firms.
00:44:40.000And then the B-class is just below that.
00:44:41.000And then the C-class tends to be the no-frills where it's okay, but you don't have a lot of amenities like concierge or people greeting you.
00:44:50.000And then, of course, D-class is you're basically a strip mall in the hood.
00:44:57.000So the A-class property, they haven't been having issues because obviously the companies that have the big budgets, that's what they go to.
00:45:05.000Whereas B.C., you know, those places have been struggling.
00:45:15.000It is, but there are just certain brands that are still doing very well.
00:45:19.000There were certain companies that did very well during COVID, and basically, if you know what you're doing, you did well during COVID, the ones that were mediocre, yeah, they got cleaned out.
00:45:29.000Steve, isn't there advantages to driving commercial real estate for taxes?
00:45:35.000I mean, both you're going to be able to depreciate.
00:45:38.000You can do cost segregation studies, which are huge for both properties just as well.
00:45:42.000Sometimes it's even better for commercial because there's more money involved with those deals.
00:45:46.000Typically, you know, you're going to buy a commercial property for higher prices typically than your average real estate residential deals.
00:45:53.000So yeah, they're about the same, you know.
00:45:57.000The other thing, too, that you had mentioned that I think I really want to draw people's attention to is commercial.
00:46:01.000And this is why I've said, like, if you're going to do commercial, man, try to do residential commercial, because you've got tenants and stuff like that.
00:46:06.000So basically, as you guys know, anything above five units, now you're entering commercial real estate versus four units and below is still residential.
00:46:13.000They tend to look at, so with one and four, they look at you as the investor and they look at your finances very hard.
00:46:20.000Do you have enough money to pay this off?
00:46:32.000But when you're doing commercial, they look at the unit that you're buying and they look at that and they see how much can that generate.
00:46:37.000And that's how they evaluate when you're doing commercial.
00:46:40.000So you don't necessarily have to have as much I guess, capital or they don't scrutinize you as hard as a buyer when you're doing commercial because they're looking at it like, okay, we know if you're buying commercial, the building in itself is its own business.
00:46:54.000How much money can this thing generate?
00:46:55.000So that's what they tend to go off of.
00:46:56.000The value of how much the building can generate, excuse me, how much money the building can generate will immediately dictate its value versus on residential, it's not necessarily like that.
00:47:52.000So, most of Myron's properties are C and a couple B-class properties.
00:47:58.000Can you explain to the audience real quick, now that we're talking about residential and commercial, residential C and B and A-class?
00:48:07.000So the easiest way I can explain it is A-class properties or the properties, or A-class rentals, usually people that make well into the six figures rent those properties.
00:48:16.000They're luxury properties, tons of amenities.
00:48:19.000B-class tends to be the properties that, like, let's say firemen, police, nurses would rent, people that make either low six figures or close to six figures.
00:48:28.000And then C-class is more like more of the working class.
00:48:32.000They usually are either paycheck to paycheck or just above that.
00:48:36.000And then D-class is basically really bad properties.
00:48:42.000So with C-class properties, I love C-class properties because I have no problems renting to them because what happens is in an economic downturn, The A-class renters, they just drop down to B-class.
00:48:56.000The B-class drops down to C, and then boom.
00:49:09.000Yeah, because it's more expensive for those people to try to go out and get a 20% down.
00:49:12.000They tried to actually leave into the world and say, you know what, I'm just going to stay.
00:49:15.000The trick with that, the strategy me and Roger play is we look at the comps in the area, and we strategically raise the rents to just below it.
00:50:35.000But the only thing is, and another mistake that I made.
00:50:40.000You want to try to put people in that make a certain amount of money, man.
00:50:45.000I noticed problematic tenants, once they make under 60K, then you start getting into issues with them of maybe not being able to pay rent, or if they're Section 8 or whatever it may be, you want to raise the rent, then Section 8 only covers a certain portion.
00:50:58.000So that's the only thing that kind of sucks when you're dealing with the C stuff.
00:51:01.000I find two incomes, like a family, works pretty well.
00:51:30.000That means you need to have at least two bedroom, one bathroom with three twos probably being the golden rule because that's usually when you get that.
00:51:56.000Is a lot of people kind of get blinded by greed and they'll go out and they'll buy a property that's a bunch of one bedrooms, one bathrooms.
00:54:24.000Yo, if you're going to do C&B class real estate, guys, have a lawyer that you can just go to immediately for evictions, man.
00:54:33.000And then we hit him up, and then we threw the three-day notices on there, and then bam, they knew it was...
00:54:40.000Because they have three days to pay from that point forward.
00:54:43.000And sometimes, bro, that literally tells them, when they go home and they see the thing on their door, bruh, We mean business, you know what I mean?
00:55:29.000I mean, just for the audience to learn, Roger, did you employ any other strategies besides just putting the notices on the door for them to pay?
00:56:45.000Yeah, I suggest, and me and Roger learn this hard way, because we have a lawyer that we deal with that handles some of our other stuff, right?
00:56:52.000Doing deals, looking at contracts, whatever.
00:56:54.000But he charges a little bit too much for evictions.
00:56:56.000So we went ahead and got another lawyer that deals specifically, he just gets niggas out, man.
00:57:14.000And knowing me, like, I thank God I have Roger, because Roger just deals with them when they don't want to fucking pay and shit, because I be getting tight when they don't pay rent.
00:57:20.000I'm like, in my head, like, what the fuck?
00:58:47.000Okay, Kano goes, I recently switched from W2 to 1099 and trying to figure out how to pay myself while saving in a company savings account in order to acquire more buildings.
00:59:50.000If my parents are paying $14K in taxes, is there a way I can create a mentor-sized coaching LLC and charge them for a finance course or something?
00:59:56.000This way they can write it off as education?
01:00:07.000Well, because you're self-dealing and you're creating something where it's not really a legitimate, you know, I mean, they're paying, what, 14,000 taxes?
01:00:13.000Is there any way I can create a mentoring coach and charge them for a finance court?
01:00:22.000I mean, is that you're just doing it just because it's like, you know, because there's this thing called substance over form.
01:00:27.000So if you're creating something, you know, in substance and the form of it really is not legitimate, then, you know, you can have an issue on it.
01:00:34.000But I mean, me as a CPI, I can't say in good conscience and to protect my professional license, I can't say, yeah, that's a good idea.
01:00:45.000What would the IRS say if they audited and saw something like that?
01:00:48.000I mean, the chances out there are probably slim to none anyway, but I mean, as a professional, I can't, you know, as my ethics in the state of Florida, I can't really say that's a good idea.
01:00:56.000Yeah, it's not a good idea, my friend.
01:02:00.000If you actually have a construction background, because I know investors, they're happy when they see stuff like that, because a lot of people are going to pass on that, and they're going to get it for dirt cheap because they know how to fix it.
01:02:47.000I'm looking into Dallas currently to purchase my first home, which I plan on renting out and having a vetted friend be the property manager.
01:02:54.000I'd like to know what you think of this.
01:02:55.000What order should I read your books in and any other recommendations?
01:07:26.000And you need to bring your credit score up.
01:07:28.000I would say, You want to be getting approved for $500,000 to $600,000 to be in a comfortable position to get a duplex or a triplex, and you definitely need more money, cash.
01:07:39.000Because remember, you're going to have to put in, well, if he's FHA, 3.5%, but even then, you're not going to be able to get, for $300,000 getting approved, you won't be able to get a duplex or a triplex.
01:07:49.000And they need to see reserves as well in your account.
01:07:51.000They're going to want to see you have some money as well.
01:10:31.000If they're separated, you want to have a separate bank account for each of those properties, which we did a show on that before.
01:10:37.000So that's going to be one of the things that you definitely want to do, and track your rent, track all your expenses through those individual bank accounts.
01:10:45.000So that would be one of the things I would recommend.
01:10:47.000And then you just report it on your Schedule E of your 1040 every year, give your information.
01:10:52.000Hopefully everything's in one bank account, and you give everything to the...
01:10:56.000Okay, he phrased the question poorly, but I see what he means.
01:11:00.000He's asking basically what we got going on right now.
01:11:02.000Having a system in place to collect rent, pay taxes, everything else like that.
01:11:43.000You can even have them set it up for you, and then you have your tenants basically go either through an app or to an online payment portal, and then they could collect the rent from there.
01:13:12.000Guys, again, fnfsuperchat.com if you guys want to go ahead and superchat it to the show because it's going to be, it's a little bit easier than screening out Castle Club and Rumble because obviously they got a screen cap in and put it in everything else like that.
01:13:26.000Number two is saving money on taxes with real estate.
01:13:31.000Now, I'll usually get off with this, Steve, but for example, how can I save money and start, I want to say, benefiting off of their taxes as well?
01:13:38.000So in relation to real estate, I would definitely say the biggest thing is depreciation.
01:13:43.000So making sure that you get a tax professional that understands that and is willing to do a study for you.
01:13:50.000Because not some CPAs, like I said, nine times out of ten, or maybe 80% of CPAs are going to Basically take the price of that property, allocate a little bit to land, you know, and then depreciate the rest either if it's commercial over 39 years or if it's residential 27 and a half years.
01:14:08.000So you're getting a little tiny bit of a depreciation expense deduction.
01:14:11.000So you want to do a, you don't need to hire like, you know, a multi, you know, thousand dollar study for the average house.
01:14:18.000You just have a CPA that understands that they can break the property into some component parts.
01:14:22.000I think in his case one time we had, you know, like he was talking about these turnkey properties where the previous owner already had all the receipts.
01:14:29.000So all the cost of a lot of the non-structural components of that property were already priced out.
01:14:35.000So we could take that and accelerate the depreciation and get a huge deduction.
01:14:48.000So basically because that rental property typically, well, if it produces a loss, if it produces a loss, if it's cash flowing and you take your depreciation and your mortgage interest and your repairs and maintenance and insurance and taxes and so forth,
01:15:07.000if you have a net rental income, then it's not going to help you.
01:15:12.000Because you're adding that to your W2H and it's increasing your taxes, your taxable income, that is.
01:15:18.000But if you have someone that comes in and says, okay, well, this property's worth $500,000 and we're going to, instead of taking $5,000 worth of depreciation, you know, we could get the cost segregation and we're going to take $50,000 or something like that, right?
01:15:32.000And then it pushes you into a net rental loss, then you're going to net that against your W2Hs and then that's going to help you tax-wise.
01:15:54.000Well, I mean, it's probably more towards Steve, but just from what I know, I mean, obviously, if you've got a lot of extra money around, I mean, it makes more sense just to purchase and get some more tax write-offs, right?
01:16:06.000Versus just potentially having to pay more money to the IRS. Mm-hmm.
01:16:10.000I mean, even something as simple as if you have a mortgage, the mortgage interest, that's deductible, right?
01:16:14.000When you make payments and mortgage interest.
01:16:15.000So that's just one that I know off the top of my head.
01:16:19.000And yeah, like Steve said, because of depreciation, the income you're generating off your real estate, you're going to pay way less in taxes than the same amount of money that you make at a W-2 job or even a 1099.
01:16:38.000I mean, I can answer that, too, and then Steve and I can add.
01:16:43.000The reason why I want to buy before the end of the year is so that I contribute that purchase and be able to collect that depreciation and that cost segregation from that new property.
01:16:50.000And the reason why is because since I buy houses that are turnkey a lot of the times, what ends up happening is they're typically rehabbed then and there.
01:16:57.000And the person did a bunch of fixes, so I'll talk to the guy and be like, hey, look, man, how much did it cost you to rehab this thing?
01:17:02.000And I'm able to go ahead and get the tax benefits from the cost segregation from all the fixes that they made that were non-structural.
01:17:08.000And then, obviously, the depreciation.
01:17:10.000And the beauty is that, let's say I buy a house for $100,000, right?
01:17:14.000I'm able to depreciate on the purchase price of $100,000, but I only put in $25,000.
01:18:39.000Yeah, just to piggyback off of what you're talking about is because now we're in November now, and we have a look-back period where we're saying, okay, how much money did you make?
01:19:46.000So you can see multiple reasons why you should buy real estate to save money on taxes.
01:19:49.000And again, guys, We're not getting paid to tell you how to buy real estate.
01:19:52.000We don't got no real estate course we're trying to sell you.
01:19:54.000We're not trying to gather money and tell you guys invest with us, blah, blah, blah.
01:19:58.000We're literally just telling you, yo, go fucking buy real estate so you guys can enjoy some of these goddamn tax benefits that you're going to be able to get.
01:20:03.000And it's a business on the side that you can do.
01:20:22.000And guys, just like I said before, 20 and up to answer questions.
01:20:25.000What is the best way to estimate monthly rent I could charge for a prospective property, especially for small towns with not many comps, looking to get my first property in Coachella Valley of California?
01:20:41.000I mean, you gotta be able to pull the data from somewhere.
01:20:44.000So, I mean, BiggerPockets actually has a rental comp calculator.
01:20:50.000That I think they give you a certain amount of, you can run it for a certain amount of times for free, but then if you pay, they allow you to run it as many times as you want.
01:21:00.000However, I would say even that rental, calculate in bigger pockets, you need to vet that because it's not always 100% accurate.
01:21:07.000And this is also where a good real estate agent comes in too, Roger, right?
01:21:10.000Where they're running proper comps because he's trying to figure out how to run prospective comps so that he can see what he would charge for rent.
01:21:17.000Yeah, I mean, to tell you how to run comps, it's a little complicated and probably too much to get into in the scope of this particular podcast.
01:21:25.000But yeah, you either learn how to do it yourself or get a professional to do it.
01:21:59.000But hell, I mean, dude, what you could do is you can...
01:22:04.000Look in the area at units available, apartments available in that area, see what they're charging, and then you can get a baseline from that.
01:22:11.000Pretend you're a prospective tenant that wants to move to that area and look at what the rents are like in the area.
01:22:16.000You can even call a realtor in the area and say, hey, I'm looking to buy or rent what are the prices right now.
01:22:21.000Yeah, so that's something that you can do as well.
01:22:23.000But just keep in mind, dude, that I'll tell you right now, just off where you're trying to buy that Coachella area, That's going to be expensive.
01:22:29.000It might be tough for you to run the numbers and get a profit with a good cash-on-cash return.
01:22:34.000So I would look somewhere maybe different.
01:23:42.000Can you guys do a show on purchasing exiting businesses?
01:23:45.000Also, when buying an existing business, oh, existing, excuse me, existing businesses, also on buying an existing business, how does depreciation apply to the purchase price?
01:23:54.000Are there tax breaks for loan interest for a laundromat?
01:23:57.000I mean, one of the things I know is when you're going to buy a business, there's always going to be a agreed upon list of assets that the attorneys are going to agree to, and it's going to be inside the contract.
01:24:07.000And a lot of times when you give that to the tax professional, they have to go off of that schedule, basically.
01:24:26.000But typically, most sellers will be amicable to beefing up, I guess, to say the value of a lot of the assets that you can take advantage of depreciation for.
01:25:59.000When you purchase property, are you immediately allowed to change rates or kick people out?
01:26:03.000I want to purchase my first property with FHA, but wouldn't that prevent me from being able to buy a turnkey because I have to live in it to purchase it with an FHA? Don't you have to live in at least a year?
01:26:43.000Raise the rent by more than 5%, regardless of whether they're on an annual lease or a month-to-month lease.
01:26:49.000You have to give them 60 days, minimum of 60 days notice.
01:26:53.000But just so you know, if there's a lease in place, whatever is in that lease, in other words, if they have 6 months, 8 months, 9 months, 10 years, 12 months, you have to honor that lease.
01:27:03.000It doesn't change just because you buy the property.
01:27:31.000When someone signs an estoppel letter, basically a notary's there.
01:27:35.000So if they lie on the estoppel letter, they basically committed perjury, which is a felony, which most people aren't going to do.
01:27:41.000So it's a really good way of getting people to be honest about how much rent is being collected, how much insecurity deposits.
01:27:49.000So there isn't any, you know, because you don't want to be a landlord, purchase a property, and after the fact, find out that you were lied to.
01:28:08.000And they were not paying as much rent as we were told.
01:28:12.000And we ended up raising the rent on them and everything else like that anyway after the fact.
01:28:16.000But that could have been definitely problematic.
01:28:20.000Thankfully, when I did my cash-on-cash returns with the numbers, with the rents that they gave us, it was high enough to the point where even though it was less after the fact, I was still getting a profit.
01:29:04.000Don't fucking hire a part-time real estate agent.
01:29:06.000Hire someone that's full-time that actually knows what the fuck they're doing, because a lot of these part-time real estate agents fucking suck.
01:29:11.000Don't hire some bimbo because she's hot and does a part-time.
01:29:15.000Hire someone that does the shit full-time and knows what the fuck they're talking about, bro.
01:29:19.000Because you'll be putting a position like this guy where he did a part-time and he didn't have the experience to detect what the rent really was, didn't even think about an e-stopper letter, and I ended up buying a house where I wasn't getting as much rent as I thought.
01:29:32.000Thankfully, we're able to raise the rents and we're able to fix the situation, but had I not, bro...
01:29:37.000Side note, the hot realtor that you want to buy from won't smash you.
01:29:47.000Echoing what you're talking about, when I first started, I had a real estate agent that I worked with, and they felt confident enough that, because I had maybe done three or four deals with them, so you talked about getting that off-market, what do you call it, pocket-listing, I guess, or something, where they have the connections, but they had been in the real estate Um,
01:30:11.000Somebody that like you talked about since what, 2016?
01:30:13.000So, you know, he's got networks of people in other states where you can call, you know, and he's even calling my office and making sure that I'm, you know, I'm putting my, my antennas out there to see if I, there's any deals that come up.
01:30:34.000Oh, Sakin goes, made $240K this year from W2Jobs, got $35K liquid, trying to lower a tax burden to find a CPA to help figure out taxes and start an Amazon FBA business.
01:30:43.000How does using earned income to start an LLC affect personal taxes?
01:30:46.000Reached out to Steve's guys named Lan.
01:30:49.000Well, that earned income is already taxed.
01:30:51.000It's already after-tax dollars, so it's not going to really affect it, but it's going to be your investment in that business and be able to write off whatever expenses and capital expenses that you're going to depreciate on there.
01:31:04.000Those are going to go in as startup costs, so you take those over a certain amount of period.
01:31:26.000Devante, do you guys know anything about investing in gold?
01:31:29.000Yeah, you can invest in gold, man, but just understand that it's more of a long-term hold and know that if you got gold, it's going to take you a while to actually liquidate it.
01:33:14.000They had a couple hundred thousand dollars and they wanted to pull it out and they were surprised that they had to pay tax on that as a dividend.
01:33:19.000But you're an S-Corp, that money just sits there.
01:33:22.000So if you pull that money out, it's just a draw or a distribution.
01:33:26.000For all you guys that are LLCs and not an S-Corp, watch our episode that we did with Steve where we wanted to detail about why you need to set yourself up as an S-Corp.
01:33:33.000If you started as an LLC, what, they got two years?
01:33:36.000Yeah, about 24 months, you can get away with electing to be a subchapter S. Okay.
01:34:14.000So it's really important, guys, to set yourself up as S-Corp because you will set yourself up for failure and paying a lot of taxes if you don't incorporate correctly.
01:35:35.000Is it better to buy your first investment property where you currently live, Red State, by the way, or is it also good to get your first one out of state?