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Get Unlimited Private Money With Amy Mahjoory – Real Estate Women

REW 104 | Private Money

 

Raising capital is an important part of starting a business. And private money is one way to get your real estate investments financed. In this episode, we examine how as Moneeka Sawyer deep dives into raising money with real estate investor and educator, Amy Mahjoory. Amy has helped thousands of real estate investors with private money, walking us through each step. From building relationships to crafting your pitch, Amy lets us have a look at her process. Tune in and learn more about building a real estate business right here.

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Get Unlimited Private Money With Amy Mahjoory – Real Estate Women

The Golden Rule For Raising Capital

I am excited to welcome to the show, Amy Mahjoory. She is a real estate investor and educator, HGTV personality, bestselling author, and keynote speaker. Her life didn’t start in real estate. After fourteen years in Corporate America, she had her fill working for other people. Although she was a highly recognized global leader in procurement, logistics, and operations management for Dell Computers, she decided that a traditional education combined with the false security of a 9:00 to 5:00 was not producing the results she wanted.

Real estate was the game-changer. She has been investing in real estate over the last several years. During that time, she has raised well over $20 million in private money. As a result of her immediate success, she went on to resign from her corporate job to pursue her passion for real estate. Shortly thereafter, she signed a contract with HGTV and began coaching real estate investors all over the country on the same creative rapport and trust-building strategies, systems and scripts that she still uses in her business now. Here is the best part, all of this can be done without having to depend on friends and family members for private money. This is her new passion and focus.

She helps her students transform their minds so that they can feel confident raising private money. She takes the fear out of raising capital and breaks her systems down into a methodical and easy-to-follow system. Her greatest achievements go beyond what she has accomplished herself. Many people become successful in real estate, but her talent is helping others become successful themselves. She has a genuine interest in helping others succeed. Most of her success originates from her streamlined operations and proven systems. She changes people’s lives. Amy, welcome to the show.

How are you? It’s great to be here with that warm welcome.

This is what I love about you. Your bio is so much more about what you’ve done for others. It’s not all about, “I’ve accomplished that,” because you’ve accomplished quite a lot. It’s pretty amazing. Thank you for that. Can you talk a little bit about your story? How did you transition from corporate to entrepreneurship?

Surround yourself with people on a similar path. Believe in yourself, and you will do great things.

My background is very traditional. Like many people out there, I was raised to go to school and get good grades, get a job at a secured stable company, and collect my paycheck for the next 25 years until I retired. The transition for me was easy because once I realized real estate was my new path, I had goals and was committed. I invested in coaching and mentorship. Where it became challenging was the lack of support from my friends and family members, specifically my dad. That’s a whole other conversation.

For me, I’m a product of the system. A lot of people out there can relate to similar situations and losing friendships along the way. It’s always like, “Perseverance will prevail. Keep your head down. Surround yourself with people who are on a similar path. Believe in yourself and you will do great things.” For me, it was an easy transition because I knew I was going to do it. I was committed to doing it.

Some people are committed but they second guess. I love the power of, “I’m committed, even if my dad doesn’t like it.” Many of us are influenced by our families. “People may not like it. It doesn’t matter. I’m doing it.”

Once you know your role and you’re confident in who you are and what you’re doing, it makes that decision-making process so much easier. At the end of the day, I still have to do what’s right for me and my family while respecting my dad, for example. That’s why I believe so much in coaching. The reason I had so much immediate success was because of my coach. If I didn’t know what I was doing, I worked at the corporate for fourteen years, but they helped me with that fast track to success which was cool.

Talk to me a little bit more about overcoming the roadblocks that maybe family and friends put in front of you. A lot of us women are susceptible to that and experience that.

The hard part for me was I’m very sensitive. I wear my heart on my sleeve and I don’t like disappointing my parents, even as an adult. I always seek out my parents’ approval. I want them to be proud of me. They are now. My dad is my biggest cheerleader now. It was very hard for me, more so losing my two best girlfriends during that transition because I was so excited and passionate. I know real estate can be a game-changer for everyone. That’s why I coach and preach it. They didn’t want to hear it. Until this day, I still believe that I drove them away from me.

It was very hard. I cried for years. Even when I speak on stage, I share this example and I get emotional. However, I’ve also learned that friendships are seasonal. People come in and out of our lives for a reason and their purpose was served. I made a bunch of amazing friendships along the way. I never expected my entire inner and outer circle now to be other real estate investors, entrepreneurs and business owners. Our girls’ trips are masterminds. Don’t get me wrong, I still have my OGs. We have fun and go out. It’s just different.

For me, it’s the same way. When I do ladies’ weekend away, we’re ten real estate investors and professionals in that industry. Not a single one of us is an agent. Just because you’re in real estate does not mean that you need to be an agent. I want to emphasize that again. There are a lot of people in the industry that do a lot of this stuff around what we do. It’s so interesting because I remember when I got started with this show, I’m so passionate about real estate anyways, but it’s always been my side hustle. This is what brought me into this fear of learning more about real estate, expanding my own influence, and also my own learning. That’s why I keep going because I learned so much.

REW 104 | Private Money

Private Money: Once you know your role and are confident in who you are and what you’re doing, the decision-making process becomes much easier.

 

Suddenly, I’m having these real estate conversations with all my friends. That’s not what we used to talk about before. People are getting a little bit uncomfortable. I had several friends that were like, “I’m totally inspired by you. I’m going to go get my real estate agent license.” I’m like, “No, that’s not what we’re talking about. We’re not talking about getting another job and not investing and not growing your own wealth, and doing that for other people. We’re talking about this.”

Over and over again, “Don’t get your license. Don’t spend all your time on a license. Go get a mentor, learn to be an investor.” I lost so many friends because they got tired of hearing, “Don’t spend all your time and money becoming an agent,” because I was pretty bullheaded about it. I can see what happens when you spend all that time and money doing that. It does not grow your wealth and freedom. In a lot of cases, it takes away your freedom. Some people want to do that. That’s great, but that’s not the strategy for becoming an investor necessarily. I had the same experience, lots of nights crying because people dumped me.

It’s part of the process and journey. We’re going to have the highs, lows, wins, losses, make money and lose it all. I had this conversation with a girl who was at my LA event. She was like, “I’m going to go get my license,” and I was like, “Why?” She said, “Don’t I need to?” I’m like, “No. Don’t get your license.”

For those of you who may not already know this, there are so many ways where we can still generate referral fees and additional income without being a realtor by referring people to realtors. I always believe in working smarter, not harder. I’m not going to spend time getting a license when I don’t need it to list my own properties. I don’t want to list someone else’s properties because that’s another job to your point.

The other thing is once you have a license, you have to hang it. You’re legally obligated to hang it. You have an obligation now to a broker. That broker is going to have expectations. Every year, you have to do your education to renew and to get your hours. You have to renew your license every four years. It’s been a long time since I had my license, so these numbers may be different and they’re different in different states, but there’s a lot involved in that.

In California and a lot of states, you have to disclose that you’re a realtor, which means you often lose offers because people don’t trust a realtor-buyer sometimes. I found that to be the case for me too. It was a complete hindrance in my business and took all this time and energy. I want to work 4 to 10 hours a month. That was a lot more time and energy that was getting put into my business that wasn’t necessary. Talk to us about your transition to HGTV. How did that happen? What did that do for you?

I did have a goal when I first started to be on TV. I didn’t share it with many people. I wanted my own show. I was in the middle of hiring a virtual assistant. She was 21 years old. I was surprised when she asked me, “What are your short and long-term goals?” I was like, “Who is this girl?” I loved it and appreciated it. I ended up hiring her and I said, “One of my goals is to get on TV,” and by having a voice. I always talk about word of mouth going a very long way. She responds with, “My mom knows a producer at HGTV, would you like an introduction?”

I said, “What show?” She said, “House Hunters,” which many of us know that show. I respectfully declined her offer because I thought to myself, “I don’t want to be on House Hunters. I want my own show.” Two days later, I thought to myself, “Amy, what are you doing? You wrote a book on networking. Get your foot into the door with this lady and see what happens.” That’s what I did. I had a snowball effect. I hit it off. I was on House Hunters. We did a four-part mini-series, but it’s cool because they broke the mold with me.

Everyone you encounter is a prospective private money lender.

In the 12 or 15 years at that time that they had been filming, they had never had an investor on the show. They showed my transition out of Corporate America into real estate on the show. My contractor walked through projects before, during and after. That was cool and it was great for credibility. The relationships, I still have and cherish until this day. I realized I don’t want my own show because it is a lot of work and that’s not a priority for me anymore.

For a long time, I thought I wanted my own show and then I realized there’s this thing. Ladies, this is relevant to you too. How many times are you shooting for something because you think it would be cool? You’re afraid of missing out. You want to have that credibility and whatever it is in your life that you’re looking for that lifts you, but so much that we drive towards is not serving our core values or serving our dreams. This is something that I’m focusing on now on the backside of the pandemic where I’ve been sitting at home for two years. I’ve had so much time to think about, “What is it that makes my heart sing?”

Traveling and speaking, I was gone every single weekend. I remember the year before the pandemic, I was home for six weekends out of the entire year because I was traveling. I miss my husband, my little dog, my family and my life, but I was doing it because it was what was expected, it gave me more credibility, got my voice and message out there, and all of those things, but it wasn’t doing it in a way that supported the bliss of my own life.

As we move forward, I’ve realized, “No, I don’t want a television show. I don’t want to be working that hard. I want to be working hard on the things that are going to reach my goals and are aligned with my own core values and the things that make me happy.” I love that you mentioned that because we can have so many opportunities. Which ones do we choose?

I hear you talking and I hear myself. We were the exact same. That’s the only reason I wrote the book. I wrote this bestselling book because all my friends were writing a book and I’m like, “That’s the next thing to do. I got to beat my friends. I got to be bigger and better.” Now, I love what I do and it’s the only thing I want to do. I’ve cut back on speaking and all these other things. I don’t care anymore. I want to do genuinely what makes me happy, but I also treat it as a business and capitalize on it. How do we do that?

Talk about what you do.

I never thought I would be a nationwide coach showing other investors all over the country how to raise private money. That’s what I do now. I was a leader at Dell, but I was never a manager of people. I was always an individual contributor. When I got into real estate, I never thought I would be hiring a team of twenty people and getting on stage and being on TV. I was super shy growing up. For the first eight years of my real estate career, investors kept saying, “How did you raise all this capital? You must have asked your friends and family.” I was like, “No, it’s the opposite because I’m so stubborn.”

Once they heard that out, they were like, “What list did you buy?” I have never bought a list to target private money lenders. If you have, great. I would love to hear how your experience was. I launched a coaching program a few years ago, once my daughter turned one because I wanted to be a soccer mom. Now, I get to still stay connected with investors all over the country from the comfort of my own home while changing their lives and showing them how to raise capital to get 100% funding for their deals. That’s my main focus now. I’m still an active investor so is my husband, commercial, residential and all that stuff, but now I’m a coach myself and it’s on one topic.

REW 104 | Private Money

Private Money: We just want to do what genuinely makes us happy, but also treat it as a business and capitalize off it.

 

The topic that you focus on specifically is private money. I want you to dive a little bit deeper because the very first time that you and I connected, everything you said was like magic. I was like, “That’s so cool.” That’s why I wanted to bring you on. Tell us a little bit more about the private money angle. I know that the way that you approach it is different. You’re not going after friends and family. At least, in the beginning, you opted out of that.

I still don’t because I’m stubborn. If you guys get out there and you listen to podcasts and read books, you take other coaching programs, the majority, if not every real estate educator out there will say, “Raising capital is easy. Go ask your friends and family members.” What if you don’t want to? What if they’re not supportive? What if they’re not in a position to invest? How do we get out there and build rapport and trust with strangers?

I’m talking about your Uber driver, cashiers at a grocery store, people at airports, church communities, sporting events, happy hour, anyone and everyone you encounter is a perspective private money lender. How do we make those mindset shifts? Start planting seeds to open up those conversations to coffee talks where you get them to ultimately invest with you. What I teach is raising capital from people who aren’t even a part of your inner circle. I have students who want to target their friends and family members, and I show them how to have those conversations as well.

I have taken her online course. It’s phenomenal. Ladies, you know that I will not recommend a course unless I’ve vetted and liked it. Many of you asked me, “Moneeka, if you’re only working 4 to 10 hours a month on your real estate business, what’s all this other time? Why are you always so busy?” First of all, this show takes a huge amount of my time because I want it to be the very best for you, but the other thing is I will not recommend anything to you that I have not been through myself.

I take a lot of coursework, not that I need it. I’m not doing this for me. I’ve got my business, but I do love to learn and I do want to get to know the people that I am doing business and partnering with, so I vet their courses. Over the last few years, I’ve vetted twenty courses and only two that I have recommended. It’s a lot of work that goes into that. I’ve never shared this before, but this is what I do. If I’m going to recommend it to you, I’ve been through it or one of you have been through it.

I meet with some of you and you tell me, “I have this great coach. I’ve got a great program.” That’s how I met Mark Willis. Someone else recommended him to me because they loved working with him. You’ve heard from him a few times. A lot of it is recommendations and coursework. Many times, I’ve done the investing with them before I’ll recommend them. I don’t vet everybody that’s on the show and that we do courses for, but I will tell you if I’ve gone through their coursework and I have with Amy. That allows you to feel a little bit more comfortable about the recommendation. I do want to be clear, I don’t vet everybody on the show.

Some of the people out there who know me or many of you who may not know me, I’m raw, real and direct. I’m very approachable and easy to talk to. I am not scripted. It’s a proven system. It’s stuff that I’ve been doing for many years. I’m tested and fine-tuned. If you are coachable and can follow steps, I’ll hand you everything you need on a silver platter, “Do this, call this person, say that. Call me back when they do this.” You will have success and can raise unlimited capital if that’s aligned with your goals. All of our goals are different.

Having money is a good problem to have.

It’s cool because, with private money, there are endless opportunities. You don’t have to flip or wholesale. Buy five rental properties tomorrow with private money. Start a fund and invest in commercial syndication.  Invest in a multifamily deal. There is so much we can do. I’ve got mortgage brokers and realtors who learn how to raise capital because all they want to do is generate referral fees for their investor clients. Having money is a good problem to have. Let’s educate people on why they should invest with us.

Do you find that when you raise the money, you should have some idea of where it’s going to go before you raise the money? They’re excited about giving you money and then you stalled.

The answer is no, we do not need to have a deal right now. We don’t want to wait until we have a deal. For those of you who are looking for a deal, whatever your strategy is, we want to be looking for deals and raising money at the same time. Even though I’m telling you that you’re going to raise money from your Uber driver, which is what I did and what you can do as well, it is rapport-based lending. We’re building a relationship and developing trust. You can do this in as little as three weeks, but you don’t want to wait until you have a property under contract. You want to be proactive in that skillset.

You’ve told us a little bit about what makes your course different. You’re talking about not going to friends and family, and doing the fundraise simultaneously. There are some other special things about your course.

I know a lot of big and small name educators out there and nobody teaches private money the way I do. No one teaches how to get creative and think outside the box. I have over 54 different creative trust and rapport-building strategies scripts and templates. My course is a done for you system. I give you all twelve of my credibility pieces, all my contracts, and my list of FAQs. What’s cool about the program is the online portion is eight different modules. Each module is built upon the previous one. In order to have success, you want to come and watch the videos, and do the action items in order of priority because it all means to one another.

I don’t guarantee success and I never will. I have a 90-day money-back guarantee because I can and it works if you follow the system. What’s also unique about my program is I give you lifelong access. Not just to your online curriculum which I’m also fine-tuning and tweaking because I’m still an active investor, but you get lifelong coaching with me that does not expire. I’m not going to call you six months later and be like, “Your coaching is expired. Would you like to reinvest?” That’s it. One investment, lifetime access. It’s a no-brainer.

It’s unheard of. While we’re talking about the course and since you ladies already know a little bit about it, Amy and I are doing a few things together for you. We want to do a webinar. We’re calling the webinar Grow and Scale Your Real Estate Empire with Private Money. We’re going to be doing that together so you can meet Amy, ask questions live, and all of that stuff. If you want to join us, go to BlissfulInvestor.com/PMWebinar. The webinar is going to be held on Thursday, April 7th, 2022 from 1:00 to 2:30 Pacific time. Let’s talk about that a little bit more. What are we going to be covering, then I’ll talk more about the coursework.

My webinars are pretty insightful and eye-opening. People are walking away mind blown, which is cool. We have plenty of time in the end for Q and A so I got you. I always keep it simple and to the point. I always focus on three things. Number one, what is private money? Who are we targeting? Who aren’t we targeting? Where is it? Number three, how do we obtain it? How do we get our hands on it?

REW 104 | Private Money

Private Money: Follow proven systems, be coachable, and you will have success.

 

When you understand all three of those points, you can obtain 100% funding for your deals moving forward. This is regardless of your experience, credit, and whether or not you’re doing this part-time or full-time. None of that matters. Follow these proven systems, be coachable, and you will have success. We’ll get into some of those strategies during the webinars, so make sure you guys attend.

Grow and Scale Your Real Estate Empire with Private Money, Thursday, April 7th, 2022, 1:00 to 2:30. Go to BlissfulInvestor.com/PMWebinar. Some of you may be like, “I’m all-in. I want to do the course,” join us for the webinar also. If you want to do that, Amy’s already shared a little bit about the coursework. Do you want to give us a few more details before I give them some links?

One of the first things I have my students do is start building our foundation and getting ready to raise capital as early as module one. One of the key takeaways from module one is what I refer to as our Four-Second Power Pitch. In four seconds, you are going to explain to anyone and everyone, the minute you leave your house, who you are and what you do by dangling that carrot and getting them to ask you more questions about it.

The Four-Second Power Pitch is how I got Larry, a retired physician who was my Uber driver to become my money lender. That’s going to be step one. As we build our foundation, and there are a lot of things that go with building a foundation, how do we start to take action? It’s with your Four-Second Power Pitch. The minute you leave your house, anyone you encounter is a prospective private money lender. What do you say? It’s your Four-Second Power Pitch.

For our ladies that are subscribed to EXTRA, she’s going to give us a Four-Second Power Pitch in EXTRA. In that first module, she’ll be covering that. That’s the foundational building block. That’s where we start. From there, there’s a world of information in the course.

That’s opening up the door to having ongoing conversations with each of your private money lenders. Step two is, how do we take action? How do we find the people to book these coffee talks with? At these coffee talks, what do we even say to them? That’s going to get into all your credibility pieces and all the content that I give you. Don’t worry about what that looks like.

If you are in and ready to go, you can get her course. Go to BlissfulInvestor.com/PrivateMoney. That’s for the full-pay option. Her courses are insanely inexpensive. I can’t believe that she offers all this information for this little amount. It’s a good deal. If you can’t make the full payments right away, you want to do a payment plan, she offers that. She wants to make sure that everybody can get the advantages of this coursework. If you want to do a payment plan, go to BlissfulInvestor.com/PrivateMoneyEasy. Is there anything else you wanted to add?

I don’t think so. It’s a lot of fun. It’s a tight-knit community. It’s like a family. We got each other’s backs. A lot of us develop friendships and end up hanging out outside of our work and coaching environment, but you think about what if you could raise six figures in as little as 21 days. If you can raise six figures, how much more can you raise? What would your business and life look like?

You never know who you’re talking to. You never know who is standing in front of you. Be respectful, and follow the golden rule.

You can sit out there and go read a bunch of books and listen to a hundred podcasts, but why not leverage from my years of experience, lessons learned and mistakes? Stop posting desperately on Facebook groups. I see this all the time. Get the system in place and position yourself as a polished professional poised for aggressive growth. Get out there and do everything you’ve ever dreamed of when it comes to growing your real estate business. You can do it.

That’s the thing. Us real estate investors, what is it that we love? Leverage. Leverage when we’re purchasing and other people’s information. I love that you said it that way. Leverage her years of experience to fast-track yourself. Thank you so much for all that you offered in this part of the show.

It was great being here. Thank you so much for the opportunity to chat with you and your audience. I look forward to coming back.

We got more on EXTRA but before we move on to that, let’s talk about our three Rapid-fire questions. The first one is, what is the super tip on getting started investing in real estate?

Number one is to commit to it and decide that, whether or not it’s for you. Commit and then set your goals up.

What is number two? What is the strategy for being successful in real estate investing?

Once we have our goal, because thoughts expand, number two is to get after it. Get out there and take action. For example, take my Four-Second Power Pitch and start implementing it every single day. Practice it at home. Don’t just sit there and talk about it and do it. That’s why I could do a lot of these implementation workshops. We can sit here and talk about it and take a bunch of notes that you’re going to throw in the garbage, or we can meet up live and start taking action and see results. Just do it.

What is one daily practice that you use that you would say contributes to your personal success?

For me, it was treating anyone and everyone I encounter the minute I leave my house as an equal and specifically private money lender. I have struggled in the past with anger management. I had an anger management journal. I had a very low tolerance for poor customer service regardless of the industry. I’m comfortable saying no. I would go off on people. I would be rude to them if they were rude back.

REW 104 | Private Money

Private Money: Anyone and everyone you encounter, treat them as equals or better yet, target them as private money lenders.

 

Once I decided to commit to being a real estate investor and a business owner, I said to myself, “You can’t talk to people this way. You never know who you’re talking to. You never know who is standing in front of you.” Be respectful, the golden rule from here on out. Anyone and everyone you encounter, treat them as equal and better yet, target them as private money lenders. How do you do that? My Four-Second Power Pitch. Everything is very closely linked to one another.

One of the things is that how we do anything is how we do everything. If you have to improve yourself or your business, you’re improving yourself for your life. That’s what blissful investing is all about. It’s who are you getting to become as you’re building your wealth because that’s the person that you are going to be when you’re wealthy. As you improve yourself, you’re treating people with a little bit more respect or a lot more respect whatever. That’s going to show up in every area of your life.

It’s going to show up in how you bring up your children. Our businesses help us to grow. They help us to become a better version of ourselves. I love that example. Nobody has ever admitted something like that on this show but it’s so amazing. Being vulnerable and allowing people to see that we all grow is a perfect example of that.

Thank you. I had a therapy session. I got personal and professional coaches. I’m like all of you. I’m still an investor and a student. All I’m doing with you is sharing the secrets behind some of my success. I’ve had plenty of failures too. What you choose to do with it is on you. I invite you to consider taking action, invest in coaching whether it’s with me or someone else, and start seeing results sooner than later.

Join us for our webinar. You can get to know Amy more. I always love meeting with you, Ladies. I’m trying to do this once a month. It’s like a community. Let’s get together. Several of you come to every single webinar, so I’m getting to know you. I’m loving that. Again, it’s on Thursday, April 7th, 2022 from 1:00 to 2:30 Pacific time, go to BlissfulInvestor.com/PMWebinar. Come join us for that. We’ve got more.

Stay tuned for EXTRA. We’re going to be talking about the Four-Second Power Pitch. You get that for free if you are subscribed to EXTRA. If you’re not subscribed to EXTRA, but would like to be, this might be the time. Go to RealEstateInvestingForWomenEXTRA.com. You get the first seven days for free. For those of you that are leaving Amy and me now, thank you so much for joining us. I always love spending time with you and I look forward to next time. Until then, remember, goals without action are just dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon.

 

Important Links:

About Amy Mahjoory

REW 104 | Private MoneyI’m a Real Estate Investor & Educator, Best Selling Author, HGTV Personality & Keynote Speaker who built my business by Networking w/ A Purpose!

I am lucky to be able to travel the country, doing what I want – when I want, with who I want.

After building multiple businesses and through many lessons learned, I am able to enjoy my time coaching and mentoring real estate investors all over the country on how they too can grow and scale their real estate business by CONFIDENTLY raising private money!

The most important concept I teach is that with the right attitude, anything is possible.

I was born and raised in the midwest in one of the tightest families you’ll ever meet!

My mom and her two sisters married my dad and his two brothers before immigrating to America and no, none of it was arranged. They decided to buy homes within three miles of one another which is where they raised all of us! Although I technically have one brother, I always say that I am one of seven since I have five double cousins, we all look the same and we grew up within three miles of one another.

After attending undergrad at Michigan State University, I moved away from home for the first time to Austin, Texas where I landed a job working for Dell Inc. After working in Corporate America for over fourteen years, I was doing well, but felt like my true potential was elsewhere. I was completely burnt out and had no passion for the work I was doing. I knew I needed a change.

During my spare time, I was glued to all of those home renovation shows. I absolutely loved the idea of taking an old dumpy house and turning it into something new and modern!

Although it may have sounded a bit ambitious and even unrealistic, especially since I had no previous knowledge of the real estate market, my mind was set! I was on a brand new mission prepared to learn how I too could learn how to buy, renovate and then sell distressed properties.

In my hunt for quality real estate investing education, I found mentors Than Merrill, Paul Esajian and JD Esajian from A&E’s hit TV show, Flip This House. With their ongoing support, guidance and trust, my very first company was born.

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To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com

To see this program in video:

Search on Roku for Real Estate Investing 4 Women or go to this link: https://blissfulinvestor.com/biroku

On YouTube go to Real Estate Investing for Women

Investment Strategies: Choosing Between A 30-Year Or 15-Year Fixed Mortgage With Jen Du Plessis – Real Estate Women

REW 103 Jen Du Plessis | Investment Strategies

 

People always ask our guest Jen Du Plessis, whether to decide on a 30 year-fixed or a 15-year fixed mortgage. In this episode, she shares in-depth insights on what to choose and expect. She explains that the factors in your decision should always include analyzing the market opportunities and your life goals. There is no right way for everyone since people have different situations. Listen as Jen discusses the various factors affecting the rates of your investments, mortgages, and business. She also shares critical success strategies to help scale your real estate business. Tune in to know your assets and loans and make the right decisions.

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Investment Strategies: Choosing Between A 30-Year Or 15-Year Fixed Mortgage With Jen Du Plessis

Real Estate Investing For Women

I am so excited to welcome back to the show, my friend, Jen Du Plessis. She is known as America’s lifestyle mastery mentor. People most attracted to her are high achieving professionals and entrepreneurs who are missing something. Through her mastermind, she helps people increase their awareness of what’s possible and to multiply the results in record time while having the courage to say yes to their personal lives.

She is the CEO and founder of numerous companies. She is from Northern Virginia and attended Colorado State University where she studied Architectural Design and Construction Engineering. She has been married to her high school sweetheart, has two children and three grandchildren. She has been in the financial services industry for many years and was listed in the Top 200 of Nationally Ranked Mortgage Originators and funded over $1 billion in mortgage loans. She is an eight-time #1 Amazon Best-selling Author, host of two top podcasts and a TV show host.

She is an expert in living a life of luxury, priority and time management, business relationships, business scaling, sales management and a certified mastermind facilitator. She is a charismatic speaker. She’s been sharing stages with icons such as Tony Robbins, Les Brown, Darren Hardy, Jeff Hoffman, Sharon Lechter, and many more. She believes that entrepreneurs can live their legacy while building it and it’s time to start living a life of luxury every single day.

Jen, welcome back to the show.

It’s so painful to listen to all that. Every time I get introduced, it’s what happens. You have to do it.

It’s so funny because we were in the green room chatting away and I was like, “I’ve got your bio.” She’s like, “No, I’m updated.” It’s so funny because I updated mine too.

We grow. That’s what happens. You have to add stuff.

That’s what we are doing. That’s what we’re supposed to do. We’re supposed to grow. I love that. Thank you. The last time you came on the show, we talked about mortgages and some of that stuff. I want to talk about specifically the 30-year versus the 15-year. I get questions on this all the time about, “Which one should I invest in because the rate is lower? Which one should I get when I do my refinance or purchase because one has a lower rate, but the other one has a lower payment?” I know what I say and my audience knows what I say, but I want to hear what you have to say about that because you’ve been in the industry about that.

When I was originating, I got asked that question all the time and it was funny because people don’t believe that you can customize a 30 or 15-year fixed-rate loan or 20, or 25. I used to have clients call me and say, “What’s your rate,” which is the wrong question to ask. I would say, “What have you been quoted on a 30-year?” They would tell me. I’d say, “Did they tell you about the Super Saver 25?” They’re like, “No.” “All that is a 25-year term. There’s nothing different, but you are a customizing.”

Even the difference between a 30 and a 25, if you look at how the loan pays off, you look on a graph, it’ll pay off sooner, not as much as a 15. There would be a smaller line, but depending on the person’s life goals or the goals that they have, that can be a good strategy for you. If you’re going to be in the house for a shorter period of time because, at any point in time, you have a lesser balance if you want to accelerate that.

The answer to your question is it depends. I used to reply it depends and bring them and go, “What do you think the answer is?” Everybody goes, “It depends.” There is no one strategy that’s good and I don’t think anyone should put their mindset to, “I only do 30-year. I only do-15.” Your life events, the market and the opportunity costs are all going to play a role in the decision that you make on it.

We wanted more return on our money and better ways to invest.

Before we move deeper because I do want to find out about this customizing, I was a mortgage broker for years. I didn’t know about that. I’m excited to hear more about that. The other question is, “What is the rate?” You said, “That’s the wrong question to ask.” What’s the right question to ask?

It’s interesting because the rate is an important factor and this gets down to the customization. I’ll take you back to The Great Recession that we had in 2008. At that time what gave them the momentum for that was that we had all been waiting for some market churn. At the churn of the century, we were all into the dot-coms and leveraging dot-coms and stuff because we wanted more return on our money and we wanted better ways to invest.

What ended up happening is because of dot-com, our eyes were opened and aware of what was happening in investing and in the marketplace and as consumers, all of us, we were hating to open up our 401(k)s every quarter and we’re like, “It’s going to be painful.” I don’t want to go too detailed but into the trenches of the secondary market and everything, loans are sold in pools. On conforming conventional loans or whatever that may be in your area, the standard cookie-cutter conventional loan, if more people are buying that, the pool is larger. It’s like taking all your groceries in at one time. It’s less energy versus 1, 1, 1.

If you have this big pool and you’re selling the big pool and you called the lender and said, “I want 30 or 45 days, 60-day lock.” We’re committing to delivering however many loans are in that pool by that date, otherwise, there are penalties. There’s one loan. It’s going to be more expensive to deliver than if there are 1,000 loans in that. The lender banks on the fact that they’re going to have a plethora of loans in a bigger pool and therefore, the cost of delivery is going to be lower.

You have to know this in order to understand. Back then what happened was, we said, “If you’ve got this big pool of clear water. You can drop one little drop of Coca-Cola in there or coffee and it wouldn’t impact the whole thing.” We as consumers said, “Let’s mix up our investing or mutual funds and stuff like that. Let’s mix them up a little bit and let’s drop even more of this color in.” What ended up happening is it turned color. It got bad because now we had more non-performing and difficult loans into these pools that we thought we would get good returns. We were all living high on the hub because we were like, “Look at this,” as it came in.

What people have to understand is that the rate is very important. I get it. I had been selling a negatively amortizing loan way back in the ’80s and ’90s for nine years. Best performing loan in the marketplace and lowest turnover because no one would refinance because the rate was always better than the market but we got all these brokers who came in and said, “I want that product to. I need to have a mix.” The start rate was one in a quarter.

They didn’t tell you about all the implications that it’s negatively amortizing. The best rate in the world could be a financial disaster. You don’t want to shop for a rate. You want to shop for the terms that fit your financial situation and your life events at that particular moment. It isn’t that there’s a better question. It’s not the only question. A lot of people lead with that and it’s important, but every lender is within an eighth and a quarter, sometimes 3/8 to each other. There are more than 365 lenders in the world and you’re never going to find the best rate every day because it’s all shifting around.

If you call at noon and the market tanks and you’ll call someone at 4:00, then they’re going to have a higher rate than the one you talked to, but when you call them back, they’re going to have the higher rate and vice versa. It’s not about the rate. It’s about who can deliver what your financial goals are or who can help you dissect the DNA. This is why you want to customize it. When I say customizing a 30, 15, 20, 25-year loan, it’s, “Do you want to put 5%, 3% or 0%?” There are different rate options. There are seventeen different things that can affect the interest rate. That’s the customization of interest rate.

When you call and go, “What’s your rate?” “My rate anywhere from 2% to 8%. What’s your deal? What are your terms?” As we talked about on the last show, I do a lot of situational lending. It’s called non-conforming. People will say, “Yeah, but the rates are high.” It’s not that high anymore. There’s not a big spread, but I go, “I understand that the rate is high, however, your situation isn’t fitting into the conforming. You need to understand that.” It’s not about the rate. It’s about who can get you across the finish line with the best terms for your financial situation at that moment.

I was also in the mortgage industry when the NegAms were the biggest thing. There were a lot of people that got killed by the NegAm or they thought they got killed by the NegAm, but the problem is it was because they weren’t educated. I love that you were like, “You need to understand the terms that my rate was 1.25%, but at that rate, it’s negatively amortizing.” Those NegAms all had a rate where you were not negatively amortized. They pay that. There were four options.

When you’re looking at that, all of my clients that did the NegAm, equity were going crazy here in the Bay Area. A NegAm made sense, but then as the market turned, they started to pay so that now they were paying their minimum in order to not NegAm so that they could wait for the properties to recover because we also took a huge dive as far as equity. Instead of getting called on those loans, they adjusted their payment. What happened with a lot of people is they ended up getting called on those loans because they didn’t understand that they could make a different payment.

REW 103 Jen Du Plessis | Investment Strategies

Investment Strategies: There is no one strategy that’s good because your life events, market, opportunity costs are all going to play a role in the decision that you make on it.

 

That’s a consumer issue because we lack the financial education to understand how those work, but it’s more in the hands of the lender. You go to Bob and wherever Bob works and he manages your assets. It’s Bob’s job to call you and say, “That stock we were in, it’s going down.” We all experience this. We don’t get a call from Bob. We find out when we get our statement. “Why didn’t you call me, Bob?” The same thing happens with your CPA. They go, “You owe $30,000 in taxes.” You’re like, “If you had told me at month six to make some adjustments, I would have made adjustments.” This is a huge failure in the financial services industry and it includes lenders.

I don’t care if you’re in a 30-year fixed rate or if you’re on a NegAm loan, we need to be able to manage and help guide clients. That’s what I coach on for loan officers is having those mortgages under management. I used to say, “If you’ve been orphaned by your last lender, I’d like to adopt your loan.” They all left at the end of 2008. It’s dropping off like flies and these people were crying. They had negative equity and not because of NegAms loans, but because of other things. They didn’t know who to turn to. I said, “I’ll adopt your mortgage. I’ll be the Bob who helps you go through this.”

We had emotional refinances on 30-year fixed-rate loans, which is interesting because you had said, that adjustment, you could make the minimum payment, the interest-only, the 30-year and the 15-year payment. The people go for the low payment. It’s like your credit cards. Why do you go for the low payment? You know if pay more, it’ll pay off. If you don’t, you’re meeting the interest. That’s it and not even all of it.

If you do the minimum payment, it’s NegAm.

It’s the same exact thing. The only difference is it’s not on an appreciating asset. Be thankful that you have that on your mortgage. We did an emotional refinance on a 30-year fixed because people would say, “I’m not going to make any payments.” I go, “Hold on.” I had a guy call me once and he said, “For the last several years, I’ve been making an extra $100 payment on my mortgage.” He was not my client until I had this phone call.

He said, “All that adds up $1,200 a year times seven years.” Wouldn’t the lender give me that credit and allow me not to make the payment now, since I lost my job? “No. If you had put that $100 in the bank, you could draw from it and make your payment while you’re looking for a job, then you could refinance, but now you haven’t made your payment and you don’t have a job. I can’t help you.”

These are the discussions. It was so funny because I had a little bottle of pink Pepto-Bismol, a box of tissues, a bottle of wine, and I said, “Pick your poison because this is going to be a painful conversation.” If I could do an emotional refinance to help them strategize on how they’re going to get out of it if the market isn’t going to give it to them, that’s huge. On 30 and 15-year mortgages, it doesn’t matter. The customization is, “Do you want to put 5% or 20%? Do you know when you put 20% down, your rates are higher than if you put 19.99% down?”

I did not know that.

People don’t see it. They’re all going to put 20% down. I don’t want that private mortgage insurance. That would give you a lower interest rate. You have to ask these questions. You have to figure them out. One of my specialties was investors. With investors, people would come to me and say, “I want a 30-year fixed because I want the lowest payment.” They want cashflow. The problem is as investors, we’re doing the same thing.

When we make that transition from an owner-occupied homeowner to an investor, you have to take the emotion out of it. It’s about the numbers. When we go to a 30-year fixed-rate loan, while you may have the cashflow, you’re also not paying down the balance on your loan. We’re only looking at cashflow. We’re going to buy for cashflow or appreciation. It amazes me. I would tell people, I’d run these numbers all the time, “What if we did a fifteen-year and an investment?”

People are like, “I got my cashflow.” I remember running one of these negative cashflows. It was $275 a month. He said, “That’s not why I’m buying the property.” I said, “You’re buying the property for appreciation, so we’re going to go for negative cashflow.” “I can’t pay $275 negative cashflow on an appreciating asset that gives me a tax deduction, but I can pay $700 on a car.” While you have a job, this is a strategy. This is why I say it’s all customized. If you didn’t have a job and you were solely relying on that income, then we would put you in a 30-year, so you have the cashflow.

It’s not about the rate; it’s about who can deliver what your financial goals are.

While you have a job and you can afford $275 negative cashflow, let’s accelerate the payoff and let’s use these first two properties as jumping things to your next property. In that same five-year timeframe that you would own the house, one, when you’ll sell it and have had cashflow. The other, you will sell it and have more equity to take those two properties and go buy that one property and go buy two. Now, we’ll put you in the 30-year. That’s called step investing and people don’t see that.

It’s how Brian and I were able to exponentially increase our portfolios because we would take one, hold it, sell it and buy two. The next one we would buy normal and the next one we would buy fifteen-year term, hold it, sell it and buy two more. That’s why for the investor side of things, there’s a great difference between a 30, 15 or a 20, whatever you know is comfortable, but we jump into these crazy 30-year terms because we think it’s the safety, but we’re not going to have the loan that long anyway.

That’s true because most of us refinance.

That’s a NegAm loan. Every time you refinance, you rob yourself of equity because you roll the closing costs in. It’s not about the rate. It’s about the strategy you need to be looking for and how long you think you’re going to have the house and the loan.

What you guys do is you get a house, you take a fifteen-year loan, pay it down, you sell it and then with that equity now or whatever you get from that, you use that and you buy two. The next one you buy on a fifteen and those two, you finance on a 30 because you’re going to hold them longer. You buy another on a 30.

The two houses that I bought, one will be on a 30 and one would be on a 15. That fifteen, I will sell in five years and buy two more.

To explain what happens when you’re amortizing loans on a 30-year, in the first ten years, it’s basically all interest. You get this great write-off but you’re not paying down your principal at all.

You’re at 21 when the streams cross.

Those first ten years are all interests. When you’re in a fifteen-year, you’re paying down more principle, which is why her equity is growing. You’re paying it down. Your equity is growing because the property or asset is appreciating. You’re also paying down the principal. When do those lines cross on a fifteen?

It’s at year nine.

It’s a lot sooner. That’s why she’s doing it that way. She’s got one that she’s holding, one that she’s paying down so that she’s building equity so that she can buy another piece of property.

Instead of trying to save 20% down every single time for investors. At the time, I was doing 10% down for investors because that’s what you could do. That was to my benefit too, but again, this is why your lender is so important to you and why, “What’s your rate,” doesn’t work. Whether it’s owner-occupied and an investor that doesn’t work. You have to talk about the strategy.

REW 103 Jen Du Plessis | Investment Strategies

Investment Strategies: It’s not about the rate; it’s about who can get you across the finish line with the best terms for your financial situation at that moment.

 

I call it the EHE strategy. “What’s your Entrance, Holding, and Exit strategy for everything?” We know as investors, we’re always going to have an entrance, holding and exit strategy, but we don’t think about that on owner-occupied. That’s important given what the long haul looks like. It’s not enough to find a good low rate.

You and I had talked about it too is the rate on a 15-year is lower than on a 30 because the investors can’t predict 30 years out. It might be a good loan. They don’t want those low-interest-rate loans on their books. Especially now, with inflation, everybody who refi’d in 2021, they don’t want those loans on their books. They want to get them out because they’re not making as much money as the inflation side. With new loans, they are, but you get a lower interest rate on a fifteen-year loan. More of your payment goes to the principal than to interest on a fifteen loan, so it pays off more. Less of the payment goes to interest on a 30-year loan.

If you’re going to commit to a fifteen-year loan, you’re committing to that loan. You and I talked about this in the green room. It’s better sometimes to get a 30-year loan and pay it as a fifteen anytime you want because no loans have prepayment penalties. You can pay at any time you want. Annually or monthly, it doesn’t matter. I would say, “Put your money someplace else and make lump-sum payments if that’s what you want,” because there’s no obligation to pay it.

What is your equity growing at? You can’t cut a piece of your drywall and walk into the bank and say, “I’d like some more of my equity back.” That doesn’t happen. I’d rather retain my equity in the form of cash in my bank account, but there are opportunity costs too. You’re paying more and accelerating the principal reduction for whatever reason you have. I would challenge people, “Why do you want to own your house free and clear? Is it because you don’t have any tax benefits?” Even in my house now, I have a little over $750,000 of equity sitting in my house and it’s killing me.

It’s because it’s dead money.

It’s sitting there and I hate it because we were going to move, but my husband had a medical thing and now we can’t. We got to sit here, but it drives me crazy. There’s no benefit whatsoever to having all that equity in there, but you could reduce the equity if the interest is lower. If you took a 30-year fixed rate and the interest is higher, you have a lesser payment, you could divert that money that you would have paid on the fifteen to something else.

You could divert it to paying off debt, non-preferred high-interest rate debt that’s not tax-deductible. You could divert it to funding your child’s student loans or education. You could do what you and I do. We get capital and then we seek around and try to find another place to invest our money. That’s opportunity costs. If you get a fifteen-year loan, because you want equity, you’re missing out on opportunities to be able to create other cashflows passive income.

Think about the Delta about that. What right now is the rate of a fifteen-year?

I don’t know what the rate of a fifteen-year because I’m not in the market anymore, but I’d say it’s probably 3.25% or something like that.

Your Delta is 3.25%. You’re paying 3.25% more so you have cash available to you so you can make another investment.

To get a 30% return.

As investors, we’re always going to have an entrance folding and exit strategy.

Even if you get an 8% return, is it worth it to you to use that cash to make 4%, 5%, 10%, 50%, 30% or whatever? It gives you the flexibility that we went through COVID. How many people were like, “I can’t afford my mortgage.” If you’re on a fifteen-year and your payment is higher, you have to pay that higher payment. If you’ve got a lower payment because you’ve got a 30-year, you only pay that 30-year payment. When times are flushed, you’re welcome to pay down that 30-year if you want to.

You can put it in a bank or invest it over.

That’s why I recommend always to get a 30-year because it gives you so much more cash flexibility because I’ve seen 2001, 2008, 2019, 2020 and 2021 come. We’ve suffered financially and it’s a bit of a security blanket not for rate, but for payment.

It’s always about the payment. What we were talking about in the green room is there are life events that happen to all of us. During COVID, people got divorced, passed away, or got married. There are life events that depict whether you should be doing a 30 or 15. Whether you should pay points or not. whether you should roll in your closing costs or not or you should escrow or not. All of those seventeen different factors have to be looked at every single time and not because they need to be looked at to get you the lowest rate. You want the lowest rate, I get that. I want it to, but the lowest rate for your terms for the things that you want.

For example, people don’t realize that it costs extra money at closing to waive escrows. People don’t understand that. The reason you don’t understand that is because if you don’t pay your taxes on your own, you don’t pay them. They become the first position and the lender could lose the entire principal balance of your mortgage if you don’t pay your taxes and it gets turned over to someone like me who buys tax liens. I’ll buy a tax lien for $5,000 and I get a $300,000, $400,000 house free and clear because the first mortgage is beneath that. It’s more of a risk on the lender side that you’re going to be capable of striking that check in a timely fashion to not hurt their equity or collateral.

That’s why they want to EMP out.

All of this depicts what your circumstances are. Don’t lead with rate, get the whole gamut.

Go to somebody who understands. This is why we talk about this all the time. When you’re going to a lender, you want someone who understands investing because the conversation is different for investing than it is for a primary residence. It’s significantly different because the package is different. The goals are different. How long are you going to hold that loan is different? There are a lot of different things. Those are the basic things and things we don’t even know to ask or we do know to ask, but there’s a lot that we don’t know what to ask. Your lender will help you through that.

Even if it’s owner-occupied, you need to be taking this strategy and this outlook. You don’t want order takers. You don’t want to call Quicken Loans because they’re not going to do anything to help you. They’re order takers and are there to give you the lowest rate. If you go on Quicken or Rocket Pro go and immediately, they’re on you like, “Do you want to talk?”

You see a great rate. If you scroll all the way down, you’ll find out that you have to put 25% down and it costs three points to get it. If you have a $100,000 loan, that’s $3,000. If you have a $300,000 loan, that’s $9,000 to buy that rate, which may be your strategy, but most people don’t have 25% down and three points on an owner-occupied.

Could you tell me a little bit about doing a 20-year or 25-year loan? I know that they’re out there. I don’t know how to get them and I was a mortgage broker.

REW 103 Jen Du Plessis | Investment Strategies

Investment Strategies: It’s not about the rate. It’s about the strategy you need to be looking for and how long you think you’re going to have the house and the loan.

 

All you have to do is ask because there’s pricing available for 20, 25, and 30-year loans. Fifteen and below is going to be one price or the same price. Anything above that is going to fit into the category of a 30-year fixed-rate loan and there might be a slight advantage. It’s a little yin and yang that goes on because like a 30-year with 20% down would be X price. A 25 would probably be the same price, but if you put another five down, you might get a better price and then it depends on the day or market.

All of this adjust moment by moment, all day long as stocks are trading. This is exactly what is happening with the market. If you have a phone call with someone at 10:00 in the morning, that’s yesterday’s rate. If you have a call with someone at 11:30 or 12:00, that’s this day’s rates as they were released and good luck the rest of the day because they could be adjusting all day long. This is why you’re never going to find the best rate in the market. You’re going to have to find what works for you.

We were talking about you sell the loans in buckets to Fannie and Freddie or whatever. When you’re trying to get a specialized or customized loan at 25 or 20 years, doesn’t that take it out of the bucket?

No, it’s still sold in the 30-year pool. It’s still the same strategy.

It’s amortized differently.

What makes it different is that it’s the loan amounts. It is not the points you paid or whatever. They’re sold based on the loan amounts. This is interesting because it’s a question that I ask the loan officers and realtors all the time and you wouldn’t believe how many can’t answer the question. This is scary. As consumers, you want to be able to answer it. “Why is the interest rate higher on a $1 million loan than it is on a $400,000 loan?” What do you think the answer is? We’ll put you on the spot. Not because you were a lender or anything. This is what consumers do is risk and it’s not. That is not the right answer.

For example, a $400,000 loan has someone who’s putting 5% down is squeaking by with credit, is squeaking by with qualifying ratios. It is getting a gift. He probably has some job changing and hopping. He has high debt. We’re using all their money. Maybe they’re even getting a 401(k) or all of that. That’s less risky than someone who puts down 35% on a $1.2 million home.

My husband and I have this conversation all the time. We can afford a $1 million loan. Why are we getting hassled when someone who can’t afford the $200,000 loan is not? I get what you’re talking about.

The reason is the pool. There are fewer people buying that high of things. The pool is always smaller. The price across the sale of the pool is higher. It’s not a risk at all.

That’s so fascinating. Thank you for that. I love that. Now, we know.

That’s why when you go to a bank and they have a portfolio loan, they have something that says, “We can do something unique and different as a portfolio.” It’s a higher price because it’s not even sold in a pool. They’re taking on the risk on its whole. They’re shelving the loan and they’re not selling it. That’s why when we get to situational lending, this non-QM or non-qualified mortgage, non-standard Fannie, Freddie, FHA and VA. We start getting into non-QM, the rates are a little bit higher because you’re asking them to take on a riskier situation.

Every day is a choice. You can choose to be successful.

A situation where they can’t sell it in the secondary market or now, we can. We can sell in the secondary market, but again, the pools are smaller because fewer people are coming into that. I call it situational lending, which is the name of my mortgage company, Situational Lending because your situation depicts what the price is.

Tell everybody how they can reach you.

The best way is you can go to JenDuPlessis.com and send me a message or something and I’ll be happy to respond to you. You can text Make Your Mark to 26786 so you can get some preliminary information about what I’m doing. I hold very high-end masterminds that are for people who are highly successful and are missing something in their lives. What I’m here to do is guide you in that facet, mortgages and on business. I don’t coach anybody. It’s a mastermind. We have some personal breakthroughs too. It includes a high-end retreat. I believe that mindset plus mechanics creates momentum. You can’t have one and create momentum. You have to have both.

You can text 26786. The thing you’re going to text is Make Your Mark. It will go through even though it’s not a normal phone number. It’s all set up that way. What are we going to be talking about in EXTRA? We’re going to be talking about priority management. This is one of the things that Jen does better than anybody else. She runs all these companies.

She still has time for vacations, spend time with her husband and her grandkids, and all the things that she loves to do, but she also runs all these businesses. She does a good job of priority management. I want her to share some of her magic and wisdom around that. We’re going to do that in EXTRA, so stay tuned for that. Before we move into EXTRA, here are three rapid-fire questions. Tell us one super tip on getting started investing in real estate.

Get educated. Go talk to several lenders and find out who has, what specialty, where, everybody has a niche and expertise. Make sure that you go to the person who has. Don’t go to your buddy, grandma, sister or grandchild. Go and talk about what their expertise is in any type of investing.

What is one strategy for being a successful real estate investor?

Sometimes we assume things. We get contracts in and we go, “I’ve seen that contract.” Don’t. Look deep into those. I would say that strategy is to get yourself comfortable with looking at contracts and looking at terms, etc. Ask some title companies or escrow companies around you if you could look at investor contracts. They can mark out all the people and all that good stuff just so you get a feel of what it looks like because that first one that comes in is scary.

You feel so much more confident making offers and doing deals if you’ve got some depth of knowledge inside of you that you can count on. It gives you more confidence.

Even with me when dealing with our Buyers Club, the first time I got the contract in I was like, “This is foreign to me.” I’m not going to make assumptions that they know what they’re doing so I’m going to challenge everything on there to make sure that I clearly understand.

REW 103 Jen Du Plessis | Investment Strategies

Investment Strategies: Get yourself comfortable with looking at contracts and looking at terms. Ask some title companies around you.

 

What would you say is one daily practice that you do that contributes to your personal success?

For lack of a better word, get your head on straight. Get a checkup from the neck up every morning. Meditation, prayer and all those good habits that you have in the morning. Every day is a choice. You can choose to be successful or you can choose to let the day slip by. I choose to be successful and the only way to do that is to reformat myself every day. Recalibrate every single day.

This has been phenomenal. Thank you so much for everything you’ve offered on the show, Jen.

Thank you so much. I sure appreciate it. I always love talking to you, Moneeka.

Thank you for joining Jen and I for this portion of the show. We do have more so stay tuned for EXTRA. We’re going to be talking about priority management. If you would like to subscribe to EXTRA, go to RealEstateInvestingForWomenEXTRA.com. The first seven days are for free. Go check it out. For those of you that are leaving Jen and I now, thank you so much for joining us. I appreciate you. I look forward to seeing you next time and until then remember, goals without action are dreams. Get out there, take action and create a life your heart deeply desires.

About Jen Du Plessis

REW 103 Jen Du Plessis | Investment Strategies

Jen Du Plessis, America’s Mortgage Mastery Mentor helps mortgage loan officers and real estate agents who are overwhelmed, stressed out, and sabotaging their personal lives for the sake of their business to multiply results in record time and have the courage to say yes to their personal lives (which sometimes means saying no to clients).

During fifteen of her 37-year career in the mortgage industry, Jen has been listed in the top 1% of loan officers nationwide; spending 3 years in the top 200 of nationally ranked originators, and has funded over $1 Billion in mortgage loans. She is recognized as an Influencer in her industry as the best-selling author of LAUNCH-How to Take Your Business to New Heights, top podcast host of Mortgage Lending Mastery, and highly sought out and charismatic speaker; speaking on stages with such icons as Darren Hardy, Tony Robbins, and Les Brown.

Today Jen is passionate about empowering mortgage loan officers to achieve professional and personal breakthroughs so that they stop the daily chaos by identifying their priorities to gain calm to take back control of their business and life. She is guiding her coaching students to attract clients rather than chasing them. And lastly, she is devoted to helping each student’s business grow exponentially rather than hitting the reset button to have the same results year-after-year.

She has been seen and heard on Good Morning America, Sirius/XM Radio, Voice America, and Mortgage News Network.  Jen has been featured in publications such as The Wall Street Journal and The Washington Post; is a regular contributor to Mortgage Executive Magazine and Mortgage Women Magazine and has been recognized with the Women with Vision Award as one of the Top Women in the Mortgage Industry.

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To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com

To see this program in video:

Search on Roku for Real Estate Investing 4 Women or go to this link: https://blissfulinvestor.com/biroku

On YouTube go to Real Estate Investing for Women

Smart Tax Strategies for Real Estate Investors with Amanda Han – Real Estate Women

REW 102 | Tax Strategies

 

How can you recharge your wealth and scale your real estate business? Today’s guest has the smart tax strategies for you! Amanda Han has all the background she needs for real estate. Even though her family is pursuing businesses in the real estate industry, she decided to take the traditional route of studying, graduating, and landing a job. She became a CPA which helped her more in the real estate business, where she could focus on expenses and taxes. That knowledge led to successful real estate investments. In this episode, Amanda details what you could write off, especially for your taxes, to gain more savings instead of expenses.

Watch the episode here:

 

Listen to the podcast here:


 

Smart Tax Strategies for Real Estate Investors with Amanda Han – Real Estate Women

Real Estate Investing For Women

I am excited to welcome back to the show Amanda Han. Both a tax strategist and real estate investor, she helps investors with strategies designed to supercharge their wealth-building using entity structuring, self-directed IRA investing, and income offset opportunities to keep more of what they make. Amanda has a highly rated book, Tax Strategies For The Savvy Real Estate Investor, on Amazon and has been featured in prominent publications including Money Magazine, Talks at Google, CNBC’s Smart Money Talk Radio, as well as BiggerPockets podcast. Amanda, how are you?

I’m doing good. I’m excited to be back.

Thank you so much for offering to be on the show. You are always full of amazing information. I appreciate your time.

I’m excited to be back and talk about everything taxes.

You have been on the show once before, so everybody knows you. Why don’t you give us a high level of how you got into this story?

I am the third generation of real estate investors in my family. My grandparents first immigrated to the USA and invested in real estate. My parents also invested in real estate, although not full-time. My husband and I decided to invest in real estate after several years of working in a large firm in public accounting, where we helped real estate investors with their taxes. It wasn’t until I read Robert Kiyosaki’s Rich Dad Poor Dad book that I realized that’s something that I should do. My job at the time was to help real estate investors save taxes. For some reason, it never dawned on me that that was something I should be doing for myself until I read Robert’s book. That’s how we got started.

It’s fascinating because I’m a legacy investor also. My parents were immigrants and started investing in real estate. Think about that. All these immigrants are coming to the United States, and they have heard from someone else in the world that the way to build wealth in the United States is by real estate. They usually don’t have those opportunities in their own countries. They come here, buy real estate, build wealth, and do amazing things for their families, yet here in America, we’re sometimes a little bit complacent simply because we don’t know how valuable the opportunities are. We take them for granted.

It sounds like Amanda had the same experience as me like, “That was fine for you, but I don’t necessarily want to do that.” We don’t get the value of the opportunities that we have here. My dad was like, “You should get into real estate not as an agent but as an investor.” I was like, “I don’t want to do that. It’s too stressful.” It was funny that you had to get advice outside of your family.

In Robert’s book, he talks about rich dad and poor dad. Those are two different people for him. For me, it was the same because my parents and grandparents, although they did real estate, they always taught me the traditional route, which is, “Get good grades, get to a good college, get a good job.” When I got into one of the largest public accounting firms, it was like, “That’s it. I made it. I have already attained my life’s goal.” They didn’t talk to me or push me in the direction of being a real estate investor. I had to get that from someone else telling me that and then, “Maybe that’s what I should do.”

Investors are always really good about writing off things that are specific to their properties.

I had both from my parents too. They were like, “You have to go to school, get good grades, go to a good university, get a good job.” They also said, “You should be investing in real estate.” My dad had me managing some of his properties, which stressed me out so much as a kid. I was like, “I don’t want to be doing all this stuff,” but he was trying to help. We have that experience as immigrants. For our ladies who are reading this, know that these opportunities are amazing here in America. We don’t get those in other countries. I’m proud of you for tuning in to this show, but we need to take action. Taking advantage of those opportunities is the only thing that’s going to grow your life. I love that story.

When I was growing up, we lived close to my grandparents, and it was the same feeling as real estate. It wasn’t glorious to be a real estate investor. It was more of a hassle because we did our own work during tenant turnovers. I remember I was really young when my grandparents would take my cousin and me out to the properties. When people moved out, we would be there cleaning up and painting. It’s not like, “This is such a cool thing.” It’s something we didn’t want to do, but it’s different for investors now, you don’t have to be doing that stuff.

It’s not glamorous work. People meet me and they are like, “How did you do what you do?” They all think it’s glamorous. This is not glamorous. First of all, it’s the most intuitive thing on the planet. Buying a home and either living in it or letting someone else live in it is the most intuitive business. We all need housing. I do still manage my property. I’m not into painting but I’m hiring somebody. I’m still vetting out my people. It’s not glamorous. What is glamorous is the levels of money that I made and the wealth that I built working for a few hours. Even though I might be there 4, 5 or 10 hours during a turnover, what do I get for that?

I love this conversation because this is important for us to point out. Every job has its glamour factor and the grunge work that has to happen as a tax consultant. Amanda is this beautiful woman with a beautiful voice. She’s running this company. She’s wealthy. She invests in real estate. She’s very successful. There’s a level of glamour around that. She’s still the one that’s punching numbers. That is the non-glamorous piece. Everything that we do in the world is going to have like, “This is awesome,” and “This is the thing that we have to do to make it happen.” Keep that in mind as you think about all these things you would have to do in real estate. First of all, you don’t have to do all those things but no matter what you’re doing, you have to do both sides.

REW 102 | Tax Strategies

Tax Strategies: Getting into one of the largest public accounting firms is an attainment of a life’s goal.

 

You still wash dishes together, clean the floors, and wipe your babies’ butt when they poop. You do all of those things. There’s the beauty, glamor, romance, and the living life piece. That’s true for everything that we do. Sorry to belabor this but I feel like some ladies need to know it. They want to do the things that are cool but they don’t understand. Not just ladies, this is for everybody. As you are learning something new, you have to do those other things to make the glamorous end result you are looking for. It doesn’t have to be painful, unhappy or any of that, but it’s part of the course. You’re going to need to do things that don’t feel glamorous.

As it relates to the tax side of things, not for me as a CPA but just for investors, a lot of times, people who either hear me speak on a platform like this or read one of our books will say, “I love hearing the stories about how people saved $10,000 or $50,000 in taxes. I want to do that. Does it happen automatically? I read the book, and now I’m going to expect that to happen.” It doesn’t happen that way. The story is the glamour of this is what happened, but what you’re not seeing or paying attention to is what did that investor do during the year so that by next April, when they’re meeting with their tax person, they have everything in place so they can get the tax savings.

Let’s talk about investing and taxes. What can you write off as an investor? Give us some ideas.

When it comes to write-offs, the IRS sees investors as business owners. By business owners, I don’t mean you have to go out and get an LLC, a corporation or anything like that. I mean that you are in the business of investing in real estate. Whether you are a landlord who’s getting rental income, you are in the real estate business. If you are a flipper, wholesaler or even a realtor and you are making money in those activities, you are in the real estate business. You hear people talk about things when they say, “Business owners get all these incentives, loopholes and benefits,” but the vast majority of those write-offs are also available to us as real estate investors because we are business owners. Investors are always good about writing off things that are specific to their properties.

Let’s say you’re a landlord, most people don’t forget to write off their mortgage interest. There’s a lot of money they are paying into the bank, so they are not going to forget that or property taxes you paid to the county, maybe even paying your property manager to manage properties or repairs. People are usually pretty good about those expenses and not missing out on them. What I find that a lot of people miss out on is what we consider overhead expenses. These are expenses you are spending for your real estate business that are not necessarily specific to a property.

Maybe you bought a membership to be in a club or a group like a women’s group or something, or a tax book to learn how to invest in real estate and save taxes. You are driving your car for real estate purposes. Most of us probably use our cell phones, laptops, and all that for real estate. Even though these are things that are not specific to any property, they are for your real estate business as a whole. It’s important to make sure that as an investor, we are tracking and writing off those expenses. We’re all in agreement that tax rates are not going down. If anything, they will stay the same but possibly go up.

As those tax rates go up and you have $100 worth of expenses and save $20 or $30 in taxes, that’s pretty significant. $100 might not seem like a lot but if you are tracking all those throughout the year, then you are talking maybe a couple of thousand dollars or tens of thousands of dollars. That’s when the savings could be significant that you might save enough money for a down payment on another rental property next year.

I love that last piece where you said, “What if instead of paying taxes, we were buying another rental property?” Understand that Amanda and I are not advocating and doing anything that is not legal, but these are things that are legally accessible by us if we pay attention and prep a little bit. It’s never been positioned that way where you could take the money you are not paying in taxes, get a refund or however that shows up, and then turn it into another rental property and opportunity for cashflow.

Let’s say it was $10,000 we paid in taxes. We know what the return on investment is. It is $0.

We got nothing. We get the stuff that the government gives us but we don’t have it personally.

It’s not a surprise that, as real estate investors, we can save on taxes.

If you instead had $10,000 more to invest as a down payment, that could be $50,000 worth of real estate. That could be small property or at least a part of a property. If you do that year after year, they could supercharge how quickly we build our portfolio. A lot of real estate investors I meet oftentimes will say, “I want to get into real estate but I don’t have money to invest. How do we get bank financing? How do I get investors’ money? How do I partner with other people?” Although those are all great ideas and things we need to use as an investor, why not look in our own pockets first? It’s like, “This is the money I’m making. If I can keep more of my earnings, then I already have more money to invest. I don’t have to worry so much as to where am I going to find the money for my next deal.”

Especially for a down payment, you can use that money to invest in another deal. You could also use that money to do a partial or a down payment for several properties or one property in a nicer area. You can make different choices about the business you want to run.

People don’t look at it that way. They are like, “I don’t want to pay the IRS. I’m going to save money.” I have met people who are like, “I got a big refund, now I’m going to go on vacation with that. I’m going to buy something personal.” That’s not the goal. If you save the money and use it to invest in real estate, that new property will give you more write-offs for next year. It’s a compounding effect of saving and investing more so that you can save more and invest more.

Along the way, you are going to be enjoying that cashflow which would be supplementing, and you can partially reinvest that into your business. You deserved that vacation but it is a mindset switch. Amanda and I had the pleasure of meeting in San Diego. We had a boss lady weekend. I met with all these amazing women that are investors in real estate or some iteration. They do something around the real estate investor thing. It was funny because we all carried nice purses. I’m not a purse person, but we had our nice clothes or purses.

We all drive nice cars and have nice homes. Amanda talked about the tents that her kids built right in their cute bedrooms. We have got nice lives. We had met another woman and she was a friend of ours. She had bought a $50,000 ring. That’s certainly her right. If that’s what lights her up and she loves that, that’s awesome. All of us had the reaction of, “That’s another house.”

I love jewelry. My husband bought me another $6,000 ring for our 25th wedding anniversary, but that’s a house. It is a mindset of you should enjoy your life and have things that you love and make you happy, but understand that it’s balancing between our businesses and those things that we think are going to make us happy. We do need our vacations. I’m a choose-bliss person. A big part of bliss is about loving the journey and vacation is a big piece of that, but you should balance that. Use some of that money for investing. If it’s tax-saving money, that is business money. Business money should be reinvested. You can decide.

REW 102 | Tax Strategies

Tax Strategies: $100 dollars might not seem like a lot, but if you are tracking all those throughout the year, then you’re talking maybe a couple thousand dollars or tens of thousands of dollars.

 

It’s making that conscious decision and being honest with yourself in terms of what you are doing. Sometimes I’ll meet people who say, “I want to get into real estate investing. I hear all these great things about cashflow, appreciation, and tax savings.” By the next time I see them, they are like, “I was looking at real estate, and then I bought this nice big home for myself. I decide to upgrade. This is like an investment.” It’s being honest with yourself in that, “I didn’t end up buying an investment property. I ended up buying something nice for myself and my family.”

There’s nothing wrong with that, but understanding that the nice large home that you bought is not giving you cashflow. It’s not giving you an additional tax write-off because it’s not a business. It is by understanding the differences between every financial decision you are making, whether that’s more for personal enjoyment or true investment and growing your portfolio.

Do you need an LLC in order to save on taxes?

It piggybacks off of your first question, “What can you write off?” A lot of investors are under the assumption that in order to write-off anything, you have to have an LLC or you have to pay for it from your LLC. That’s not true at all. What I was saying is as real estate investors, we are business owners in the eyes of the IRS. The definition of business is not LLC, S corp, C corp or any of that. It’s whether you are investing in real estate. We have a lot of investors who are landlords who don’t have LLCs. For one reason or another, they choose the whole rentals in their own name, in the trust or something like that.

They can still write off all those same expenses we talked about, a car, home office, cellphone and travel. All those things are tax-deductible. It’s a common myth that people feel like, “I don’t have an LLC yet. Let me go ahead and form an LLC so I can take these deductions,” when more than 90% of the time, those normal expenses can be deducted regardless of whether you have an LLC or if you operate in your personal name. When it comes to taxes, we break it out into two different groups like if you have rental income. That will be rental from single-family, multifamily, commercial, all types of rental income versus the other bucket, which is more active income. Active income will be if you are a realtor, a wholesaler or a fix and flipper.

The reason we have those two different buckets is because taxes are treated differently for those two different types of income. For most landlords with rental income, it doesn’t matter from the tax side whether you have an LLC or not because you don’t pay self-employment taxes. You can write off the same things. For landlords, the reasons for having an LLC would not be for tax. It’s mostly for asset protection purposes. Your attorney might say, “You don’t want to lose all your assets because one of your tenants sue. Let’s put that in an LLC or a partnership to get the liability protection.”

On the other hand, for active income flipping wholesaling, you also have to pay self-employment taxes. Not only do you pay federal and state income taxes, but you are also paying into Social Security and Medicare. That’s another up to 15% tax. That’s where having an LLC or S corporation could help minimize those. It’s difficult to say if you should have an LLC or not, and that investment number two should have one. That’s all based on your unique situation. How much money do you make in real estate? How much other income do you have from a job or a business? That’s something that you want to plan out with your tax person.

For someone who has active income, let’s say you have $100,000 of taxable profit from flipping, wholesaling or as a realtor, if you run it through an S corporation or something similar, you might save up to $7,000 in taxes with the structuring. That’s where it typically makes sense to have an entity. In either situation, you can always write off the same things regardless of whether you have an entity or not.

I loved the clarity on the two different ways that work and how the IRS looks at that. What would you say are the biggest mistakes that real estate investors make when it comes to taxes?

There were quite a few of them. We are talking about entity structuring. There are two big mistakes on the entity structuring side. One is using entity structuring almost as an excuse to delay investing. This is more for newer investors because I do hear this quite a bit like, “I’m going to invest in something,” and then a couple of months later, they will tell me, “I have not invested yet. I could not decide on a name for my LLC.” That’s an excuse to say, “I didn’t do it because I don’t have an LLC yet.” One way to overcome that is to understand you don’t have to have an LLC to buy rental properties. Even if you bought a property now, you can always move the title into an LLC after the fact. We don’t have to worry about that. For a lot of the women investors, it is more of we have to find that perfect name like Blissful Real Estate, LLC.

People get caught up in all that instead of focusing on taking action and doing real estate. The other most common mistake on the entity side is forming the wrong type of entity. That’s one of those things that if you form the wrong entity to hold your real estate and don’t find out until way later that you were in the wrong entity, it becomes very costly to unwind that.

We have seen clients who had owned real estate inside of S corporations for 5 to 10 years. It’s very difficult for them to unwind it because now the property has appreciated. The only way to unwind it is to pay a lot of tax to get it out of the entity’s name into the correct entity. There’s a fine line between not waiting too long to form it, but then also forming it correctly from the start, so you don’t have such costly ways to unwind that structure.

That to me seems a little scary when you think about, “I have to unwind if I screw up.”

Sometimes, you can’t do it. There’s no real way to do it where you don’t have to have taxes. Entity formation is not like a do-it-yourself like, “I was on this podcast. I read this book,” and then you go ahead and do it. It’s something that you want to sit down with your tax advisor and talk through. Some of the questions to answer are not just, where am I buying a property? It’s also, how much is the equity in my property? What’s my exit strategy. Am I just selling it like flipping? Am I going to hold it for 5 or 10 years? What other income am I getting from this property? Is it a long-term rental or short-term? If it’s a larger property, am I also going to have vending machines or a washer and dryer? All these things help determine what type of entity you are going to hold your real estate in. By having that conversation upfront, it helps them minimize the risk of getting into the wrong type of legal entity, to begin with.

The other question we were going to talk about was can we buy rental properties in retirement? The answer is yes. Ladies, you have heard other people talking about self-directed and stuff like that. One of the things that I want to talk to Amanda about is, what are the logistics around that? We got a pretty good high level on the fact that it’s possible and what that looks like, but I asked Amanda to do a breakdown on what that looks like. Amanda, let’s do that in EXTRA.

I have a little different spin for the custodians when they talk about what you can and cannot do. My job is on the step before that, where the investors are figuring out, what type of account is best for you? How do we use that and invest in real estate, and how do we save taxes with the money going in? There are lots to share on that part.

We will do that on EXTRA. We’ll be talking about investing in real estate through retirement funds and from a tax perspective. Before we go into our three rapid-fire questions, let’s talk a little bit about some of the things that you are offering my audience. You do have a free eBook.

We have an eBook. It’s called Tax Strategies For Real Estate Investors. You can find it on our website at KeyStoneCPA.com. It goes a little bit more in-depth in terms of a lot of the things we talked about. We talked about maximizing write-offs and how to take a tax deduction by shifting income to your kids. If you have kids or elderly parents helping you in your business, how do you do that? We talked about entity structuring. In our book, we break down some of the questions and what you should be considering before you meet with your tax person, how to use legal entity structuring correctly, and a lot more stuff. Check it out on our website.

You also have a mini-course for real estate investors specifically. Could you tell us a little bit about that?

It’s an on-demand course for beginner investors. It’s delivered in the course of four days. You can get the content when you have time. We talked about the power of tax savings like how you use tax savings to supercharge your wealth building. We go over the top ten most common tax strategies for all types of real estate investors. We talk about the six-step process like, how do you have an effective tax plan?

Know the main things that you need from the property. If they meet your criteria, then go after it.

It’s not a surprise that as real estate investors, we can save on taxes, but the question is always, “How? What are the things I need to do so that I’m ready for next April?” We also have a risk assessment as part of our on-demand course. Those are a set of questions to help you try to figure out if you are overpaying in taxes. That’s a question we get a lot, “How do I know? Do you think I’m overpaying in taxes?” I don’t know because I don’t know the answers to some of these questions but hopefully, you will, by taking this assessment yourself.

All of that goodness is only $39. Go get that. It’s good stuff. You have to go to BlissfulInvestor.com/AmandaTax. I know that will be helpful. Amanda covers a lot of very good stuff for real estate investors, specifically because she is an investor herself, so she knows what we go through. Amanda, are you ready for three rapid-fire questions?

I think so.

Tell us one super tip on getting started investing in real estate.

I’m a numbers person. The way I look at it is to look at the numbers. If the numbers make sense, then pull the trigger. Don’t overthink it, don’t delay and don’t overanalyze it. Know the main things that you need from the property. If they meet my criteria, then go after it.

What is one strategy for being successful as a real estate investor?

We work with new and advanced investors. One thing that I see across some of my more advanced real estate investor clients is they treat real estate investing as a business. I don’t mean LLCs or set up an LLC. They run it like a business in terms of they have the right teams in place to do the things that they’re not good at. If they are not a good bookkeeper, they have a bookkeeper in place. If they are not good at managing real estate, they have property managers in place. It’s by running that as a business and creating systems around everything you do as you scale your real estate. You don’t have to recreate the wheel every time. Those are the things I see with most successful real estate investors.

REW 102 | Tax Strategies

Tax Strategies: Treat real estate investing as a business.

 

I have frequently said that systems equal bliss because they give you freedom. A big piece of being blissful is having the freedom to choose what you do with your time. Systems and teams are key to that. Tell us the personal practice that you do daily that contributes to your success.

It’s not a system. It’s more of a habit. My habit is I don’t have a to-do list. My thing is if I have something that I know I need to do that is important to me, I add it to my calendar directly so that time is blocked off. When the time comes, that’s when I do it. I try to organize and prioritize the things I have to do, but it’s not in the list format. It’s more like, “Get it on the calendar so that it’s done.” I’m a big proponent of that because before, I had a to-do list. They kept getting longer. It’s more to-dos and more to-dos until you don’t have time to look at the to-do list anymore.

Nobody has ever said it that way before. We thank you so much for all that you have offered on this portion of the show. It was awesome.

I’m excited to be here. I’m happy to come back anytime.

Ladies, we do have more on EXTRA. We are going to be talking from a tax perspective all about investing in real estate through your retirement funds. That’s going to be an interesting topic. If you are subscribed to EXTRA, stay tuned. If you are not but would like to be, this may be the time to do it. Go to RealEstateInvestingForWomenExtra.com, and you will get the first seven days for free. Thank you so much for joining Amanda and me for this portion of the show. I look forward to seeing you next time. Remember, goals without action are just dreams. Get out there, take action and create the life your heart deeply desires. I’ll see you soon.

Important Links:

About Amanda Han

REW 102 | Tax StrategiesAmanda received her accounting degree from UNLV. As a CPA and real estate investor, Amanda has helped countless investors across the nation to supercharge their wealth building through proactive tax saving with her top-selling Amazon books as well as her teachings on prominent publications such as Money Magazine, Google Talks, and CNBC.

Amanda brings over two decades of tax planning and compliance experience from working in Big 4 Public Accounting as well as public and private companies. In her spare time, Amanda enjoys canvas painting, biking by the beach, and seeking out the best hole-in-the-wall dining options where ever she visits.

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To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com

To see this program in video:

Search on Roku for Real Estate Investing 4 Women or go to this link: https://blissfulinvestor.com/biroku

On YouTube go to Real Estate Investing for Women

Investors Of The Future: Why Women Have The Edge With Michelle Taylor

REW 101 | Investors Of The Future

Women are the real estate investors of the future. Moneeka Sawyer welcomes Michelle Taylor, the City General Manager at Sundae. Women are the future because they bring a new aspect to the business. Whereas men tend to be rigid in following standards, we are more creative. When female investors see a property, they can consider three different options to add value. We also tend to play the longer real estate game by passing on the legacy. Teaching others how we succeeded means more to us than quick selling. If you want to know more about a woman’s edge in the real estate business, tune in!

Watch the episode here:

Listen to the podcast here:

Investors Of The Future: Why Women Have The Edge With Michelle Taylor

It is so interesting that March 8th is Woman’s Day because it is also the birthday of the most powerful woman that I know, which is my mom. I feel like it is not ironic. It is not a mistake that my mom happened to be born on that day. It is such a special day for me on so many levels and all of you ladies because it is Woman’s Day. It is a day where we celebrate the power of the woman, and that is you. Sometimes, we do not feel very powerful. We feel like the world is so male-dominated, especially in this industry. We do not feel as powerful as we are.

This episode is a special honor to you ladies. I am talking to a company focused on helping women be successful in the real estate market and investing. One of the things I hear a lot from you, ladies, is, “How do I find my first deal? How do I get started? How do I know if I know enough? How do I get money? How do I get my first deal?”

We have covered the other topics quite a lot. The deal thing seems overwhelming, “Where can I get my deals? Where can I go to invest? How can we make this system a little bit simpler?” I got a phone call from a woman named Betty Sheu at a company called Sundae. She is like, “We would like to be on your show. We are doing a Woman’s Day campaign. This is what we do.”

What they do is they help to vet properties that are good for investors. I nearly jumped out of my chair. I was like, “This is what my ladies need. We have not had this on the show yet.” Here you go, a present. We are talking about how to get properties and make it simple. We are talking to a company called Sundae, but we are not talking to a company. We are talking to a person from Sundae. Her name is Michelle Taylor.

Let me introduce Michelle a little. This is what she says about herself. I love her little story. She says, “I grew up with parents owning rental property, and as they told me, it is how they paid for college tuition on their humble salaries. It is also one of the reasons I am passionate about exponential opportunities in real estate, particularly for women and people of color looking to bridge the economic gaps. Professionally speaking, I am a licensed agent and City General Manager at Sundae, where I get to marry my fascination with startups and my love for solving problems all while getting to do good work.”

The platform that we are talking about is called Sundae.com. Go check it out. “I am also a wife, mother of five, and budding buy and hold investor of a few short-term rentals in Sacramento.” This was so sweet. Michelle was like, “Welcome to Sacramento.” You ladies know I am moving. I am so excited to be making a connection up there so we can talk real estate.

Michelle, welcome to the show.

I am glad to be here. I am super excited about being one of the first people you might be meeting in Sacramento and around this topic. I feel very lucky. I have a lot of reasons to be excited about this episode, and this topic has me ecstatic.

You are a powerful woman, a mother of five, and a real estate investor. That is exactly the person that we want to be talking about or talking to on Woman’s Day. Michelle, why don’t you jump in and tell us about your story? The two-minute high-level version.

Women bring a new aspect to the business.

I did grow up with parents who own real estate. I did not quite understand why they wanted to own another house that we would not live in and how come we never lived in the house? I am about to go to college, and I remember thinking, “How are my parents going to pay for this?” My mom said, “You know that house over there that you always complain about when we have to go and clean up or do the things that require having a buy and hold?” She would say, “That is my workhorse. I am going to get some money out of that and I am going to pay for your college tuition so you are not worrying about those things as a student.” I know that my parents’ dream was to send their kids to school and they were able to do that through real estate.

How did you get started?

I worked in a lot of startups. I have a fascination with startups because you are always solving problems. I work for one of the budding major public companies now. When they were a startup, I was there, and I thought, “I am working with all these real estate agents. I understand what they are trying to solve. I want to get into real estate.” From there, I worked retail for a number of years. I realized that although there are plenty of shows on HGTV around that, there is so much more to the work and there are so many other layers of real estate.

There are even so many more opportunities than just living in the home that you are enjoying. I start to get exposed to more of that work as you start to meet clients, and they carry you along their journey, and then you want to take your own. That is how real estate got me between my parents and the creative problem-solving.

Were you an agent first and then you became an investor?

I had a chance to see other investors buy homes that I thought, “No one is going to want to take on this major project.” You realize there is this whole other sector of folks who can’t get enough of those properties because they see an opportunity to improve the home, bring more value to the neighborhood, and run their business from the work that they have done. It has been fun to watch. I finally took the leap myself and had a buy-and-hold property.

All of you agents out there, I know that you are reading this because you want to become investors. I love when I see another agent that has done that. You guys have access to properties in a way that the rest of us do not. Another point I wanted to make here quickly is that you do not need to be an agent or an investor.

I do not carry my license because I found that in California, it caused a lot of disclosure problems when I carried my license and wanted to invest, so I gave up my license. There are lots of different ways to do this. I know a lot of investors, and the very first thing they say is, “I am going to go get my license.” That is not necessary. Would you agree with me on that?

I would agree. The majority of investors that I work with have the same philosophy. It allows them to focus on their business and not have to worry about the licensing component of traditional real estate with the license.

REW 101 | Investors Of The Future

Investors Of The Future: Startups are fascinating because they always solve problems.

 

It is because you have got to renew that license and hang that license somewhere. Usually, you have to pay that broker. There are other obligations around licensing. I did not want to deal with that either. Sundae is focusing now on getting women investors and you have got 9,000 investors. Is it subscribed to the platform?

It is not a subscription, but they are able to come to the platform and vet properties online. They are able to see properties and access home inspections, which saves them a lot of time. They are able to see reports so they can do virtual walkthroughs. Our value add is for them to be able to compete on a property because we know how hard it is to come by inventory these days.

You will see a lot of property without necessarily having to step foot in it, which will save you some time and also provide discovery documents so that you are able to see, “How did it inspect? What is the condition of the title? What are some things that we may have to navigate to be able to resell this property?” It is a great time saver and also the insight, lots of content for investors who consume on our website. They are able to also learn about the business as they are growing.

You have got 9,000 people that are on the platform as investors, but only 20% are women. Is that true?

That is correct. We want to see that number grow. I personally think that women are able to bring a new aspect to the business. We want to let all people know that we are out here, especially women who may feel like it is a challenging industry to step foot in. It is an avenue to help bridge some of those gaps. If you want to feel secure about the opportunity that you are going to consider to flip or hold, the more information you know and the quicker you can review that information, the better you are going to be able to compete and win one of your biddings and to also feel confident that you did not necessarily buy completely blind. If you can’t walk through a home, that can be daunting. At least if you have some materials to review, it can make you feel much better about your decision-making.

You bought a property in Sacramento off of the platform. Is that true?

I have not bought it through our platform as an employee. I purchased the home prior to working for Sundae. I have worked with investors who do. I have a female investor who buys lots of buys and holds. She does short-term Airbnbs around the Sacramento region. She has a very particular buy box that she is trying to find. She wants to be near hospitals or colleges.

She has the particular square footage and age that she is looking for. You will see her win bids quite frequently because she is very familiar with our platform. She is able to engage with our content, make a good decision quickly, and then bid aggressively where she feels like there is going to be lots of competition. She enjoys our platform and talks very highly about how much it saved her money and time over 2021.

I believe women have a huge advantage in real estate investing. There are disadvantages, too, but could you talk about your perspective? As female investors, what are the advantages and disadvantages that we bring to the table?

Women tend to be more willing to play the longer real estate game.

What I see among female investors is that they are very creative in their approach where they will see a property and might see three different options, “We could do an ADU or accessory dwelling in this space. We could update part of the kitchen and most of the bathroom or all of it.” They are very creative in adding extra space to get more value-add of the property.

Whereas sometimes our counterparts, when men are approaching a flip, it can be very standardized in their approach, “We are going to flip every component of it. We are going to stick exactly to the previous footprint.” These are some generalizations but I do find that women tend to be much more creative with the use and their approach when remarketing the property. Creativity is our advantage.

I am out in Sacramento every weekend because we are remodeling our new home and I am there with my business partner. We have started to look at other properties. He is a guy and I am a woman, so we balance each other beautifully in the business. It is funny because I drive him crazy with what you are calling creativity. We look at a piece of property, and he is like, “We could build four condos here. I do not know if it is going to pencil out. Lumber is expensive.” I am like, “What if we did this? We could have one facing that way.”

He is like, “We do not know if it is zoned for that.” I am like, “We can find out about that.” I am talking to my contractors about remodeling my house. I am like, “We could do this. What do you think? What is the best option?” He is like, “We normally do this.” I am like, “Yes, but we could.” It is interesting. I come into the conversation, and I drive these guys crazy.

Once they settle down, they are like, “That is a great idea. Yes, we can do this.” This is one of the things, ladies, and I do not know if you have found this too. You come into the conversation, and you have to give them a few minutes to reground and rethink because they do not move. We can move in so many different directions so fast, and the guys are like, “Slow down.” They need a day to digest.

I also think that women tend to be more willing to play the long game in real estate. More often, when you are talking to male investors, it is about, “How quickly can we sell this?” The profit margin for each one of those deals within the investment community is majority flips. Most of the women I work with all have a decent size of portfolio of buy and hold. In fact, they will say, “I am never selling these.” That is where they see themselves.

I see a lot more of that too. My business partner says it is more like a savings bond. It is for the future,  pay for education or retirement, and we want to hold them to pay for those things. I wonder how much of that is because we do not want to have our hands in the mud on this. You do not want to be getting our hands dirty. We do not want to be doing all the flipping and that stuff because we have to hire contractors for the most part. That is not always true. Again, we are generalizing. Women are like, “I am happy to make this the long game because we do not want our fingers in the mud.” Would you say that that is true?

I would say that is also things I have observed in the businesses. It is also, “I want to hold on to this as long as I can. I am thinking more of the legacy or what to pass on to my other family.” Whereas I see men are, “Let’s take this down, demo this, and get this back on the market and move on to the next one.” It is a much more hands-on, hands-off approach.

If you could look back to where you started, what would you advise yourself based on what you know now?

Investors Of The Future: Female investors are more creative because they can consider three different options when they see a property.

 

I would have started sooner and where I could. In my mind, I had to have a certain amount of income in the bank already to do certain things, or I had to be a certain age. If I had started in real estate younger, that would be great, even if it would have been just a condo. Now that I look back and see that those prices have changed so much within a ten-year span, you think, “I could have bought twice as many units if I would have been willing to take the leap. I could have been less fearful and more creative in my approach.”

That is one of those things that I see with women all the time. We want to be ready. It is like having a baby. Maybe you wanted a baby your entire life, but you are never quite ready. There is never a good time. You know this better than anybody. When you want something, you got to do it. That is the same thing with real estate. We need to birth that business because if we don’t, it does not have an opportunity to grow as fast for us in our lives. I always want women to start sooner than they think they can.

It will teach you something. Sometimes, we imagine that maybe we will have a property for a long time. You realize, “It is time for me to let this one go because a better opportunity is coming.” I feel that real estate, like children, will teach you something about yourself, too, like, “Why am I so attached to this property? Why did I think that this was a great deal?” There are all sorts of things and you learn something both about the business and yourself with each property as well.

This is not real estate or any business. You do find out what you are made of when you are investing. 

Even your threshold for pain.

As you learn those things, you are able to do the business better later. It improves your life too because you realize how powerful you are. You will find with that threshold for pain is it is significantly higher than you thought it was. I would say, “There are tears in real estate.” You find where those tears start and how much you can take. This is not supposed to be scary. You grow, and you realize your power and your capacity. The reality is almost anything that comes up is not going to take you down. You take it down.

There are tears of joy, for sure. It does something to you when you are able to visualize getting a property for particular use in terms of an investment and then manifesting that where it is like, “This is an Airbnb and rental property. This did sell.” I thought it, I imagined it, and I executed it. I can do it again. When you get good, you can teach other people how to do it too. That is a powerful thing anytime you can pass it off on.

We do have an EXTRA coming. We are going to be talking about what the biggest red flags are that Michelle looks for when considering a deal. She is going to talk about not just what she looks for but what she is seeing a lot of her ladies on the platform and what they are looking for. She is going to be showing that with us in EXTRA.

Also, as our free gift to you, Michelle and I are going to be holding a webinar. She is bringing in someone else. Her name is Jennifer Welborn. We three ladies are going to come together for a Woman’s Day Special to talk about overcoming roadblocks as women property investors. We are going to be doing a webinar on Thursday, March 17, 2022, from 1:00 PM to 2:30 PM Pacific Time. Go to BlissfulInvestor.com/WomansDay. Did you want to talk about what you guys are going to be covering in that webinar?

Starting in real estate when you’re younger would be great.

We are interviewing you and finding out more about what it is that women should be looking out for in a real estate deal.

This is going to be a different webinar. That is why Michelle is like, “I don’t know.”

I know that we have a lot that we are covering. When you are speaking for your company, sometimes those things are also developing.

What we have set up is we wanted to have three powerful women that are in real estate. Two of them are coming from Sundae. We are going to talk about what the roadblocks are that we have experienced, what we are seeing other women investors experience, and how we can overcome those things. It is going to be an open conversation. I am going to be interviewing them and they want to interview me. It is going to be a fun open conversation. The lovely thing about it being a webinar is it is live.

Those of you ladies, you can ask questions because you have experienced roadblocks. You are going to have three powerful women that you can personally ask questions of. It is going to be a fun open discussion. It focuses on the power of us, women as investors, and how to amplify that powerfulness rather than getting stuck in this isn’t working or the things that make us feel we can’t do it. Does that sound right?

Absolutely. The roadblocks that we all have to encounter and then either have solutions for or decide that we have to go in a different route.

Go check out Sundae at Sundae.com. Are you ready for our three rapid-fire questions?

Yes.

Tell us one super tip on getting started investing in real estate.

Get a mentor, learn from someone who you like, their work, they are able to prove success, and you can learn from them if they are willing to share their experiences.

REW 101 | Investors

Investors Of The Future: When you get good, teach other people how to do the same.

 

What is one strategy for being successful as a real estate investor?

Consistency. Looking at your market at all times of the year because there is some seasonality to it and consistently taking a look at deals, not always looking to purchase, but to know your market. The only way to know your market is to consistently review the deals that are successful.

One of the things that I appreciate about that is that even if you are not looking to purchase if you are looking around, you get to know areas, zoning, and parameters so that when you find something that you want to make an offer on, you are ready to go. You have got all of this wealth of information on that market. You can confidently make offers. Nobody has said it that way. Thank you for that, Michelle. I love that. What would you say is one daily practice that contributes to your personal success?

I get up pretty early every morning and I make at least an hour of that morning to be about centering myself, usually through some form of fitness. We spend a lot of time in different mental buckets of thought. As an investor, you have to jump through. Sometimes, you are thinking financially, marketing, and also the economics of what is the next year going to look like.

You are able to do that fluidly. You also have to be physically disciplined so that you can do the work when it is not always your wheelhouse, but it is part of the business. You can flow freely in the areas that are your passionate parts of it and tap into your creativity. Having that morning hour helps those days be a little more inflow than out of flow.

I also believe that exercise gets my mind more stabilized. It gets me more into my body, so I am able to utilize all my resources. I do feel like exercising makes me significantly more creative.

That is exactly why I do it because there are some mornings where I am like, “I am so tired. I can’t believe that I chose to get on this treadmill.” As soon as it is over, I am like, “That is why.” I feel like my mind is snapping into clarity.

Michelle, thank you so much for all you have offered on this portion of the show. This has been super fun.

I wish everyone reading this and considering going into investing to come and check out properties first on Sundae. There is a great place to get started. From there, you would be able to have some documents to feel much more confident about the deals you would be stepping into.

The only way to know your market is to review the successful deals.

Remember, we do have a webinar. You are going to get more of Michelle and more on this topic about how to overcome roadblocks and become a successful investor. It is an open panel. We will be chatting with each other. We will love your questions. Remember to join us on Thursday, March 17th, 2022, from 1:00 PM – 2:30 Pacific Time. Go to BlissfulInvestor.com/WomansDay. I hope to see you there.

Ladies, stay tuned for EXTRA. We are going to be talking about what are the biggest red flags Michelle and her clients look for when considering a deal. If you are subscribed to EXTRA, please stay tuned. If you are not but would like to be, go to real RealEstateInvestingForWomenEXTRA.com and you can sign up for free for the first seven days.

After that, it is a subscription, but it is a very low cost. It is a huge value for what you pay. For those of you that are leaving Michelle and I now, thank you so much for joining us. Be the most amazing, beautiful, wonderful self that you are. I am so delighted to have you on this journey with me. I do look forward to seeing you next time. Remember, goals without action are just dreams. Get out there, take action and create the life your heart deeply desires.

Important Links:

About Michelle Taylor

REW 101 | Investors Of The Future

Real estate is artistic capital. I help people enjoy it.

 

 

 

______________________________________To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com
To see this program in video:

Search on Roku for Real Estate Investing 4 Women or go to this link: https://blissfulinvestor.com/biroku

On YouTube go to Real Estate Investing for Women

Tax Strategy: Igniting Your Unique Wealth Formula With Lorraine And Jim Conaway

REW 100 | Tax Strategy

 

Your CPAs are your defense players; they’re defending the goal. Your tax strategists are the ones putting the points on the board. They make sure that you’re using the right and most efficient strategies. Join Moneeka Sawyer as she talks to Lorraine and Jim Conaway about tax strategies. They believe that success is truly about education, support, and the art of supercharging your unique style of wealth accumulation. Find out the difference between a CPA and a tax strategist. Discover the process and learn how they evaluate your taxes today!

Watch the episode here:

Listen to the podcast here:

Tax Strategy: Igniting Your Unique Wealth Formula With Lorraine And Jim Conaway

Real Estate Investing For Women

Using their extensive experience, knowledge and success in the world of tax strategies, real estate investing and other wealth vehicles, Jim and Lorraine used their straightforward, big-hearted style to guide thousands to ignite their unique wealth formula. With decades of success, designing and implementing customized wealth solutions, they appreciate that success is truly about education, support and the art of supercharging your unique style of wealth accumulation.

Jim and Lorraine, welcome to the show. It’s nice to see you.

It’s great to be here. Thank you.

We’re excited.

Lorraine has been on this show before. I’ve met Jim several times. We’re all in a mastermind together. I was so excited to share the two of them. Lorraine is so brilliant and shared such good stuff about the CARES Act. They’re such an incredible power couple. The 1 plus 1 does not equal 2 and equals 11. That is true. I’m so happy to have both of you with us. Let’s start with a little bit about the story of how you put this company together. You cover a lot of good stuff like all sorts of strategies around real estate. I remember when I first talked to Lorraine, my first thought was, “Where have you been all my life?” You talk about all these different strategies. The one that I am engaging you for is taxes. Let’s talk about how that piece started for you.

You would think that being a tax expert, a CPA, would make you a tax strategist. That is not the case.

It organically came together. We met in the business.

My first thought was, “Where has she been all my life?”

In the business, years ago, we were working at an insurance company. We started our company in 1996. We worked for ten years side by side with the CPA. Along the way, we started investing in real estate. My father is a contractor. He always had real estate. We had the real estate going on the side. We had our business working. We’re learning about taxes and finding that there was an enormous amount of money in the tax return. I was frustrated like, “Why are people talking about this?” Even in our situation, when we got our taxes done, our CPA said, “You could have saved $18,000 if you had this type of structure.” We’re like, “You tell me after the fact.”

REW 100 | Tax Strategy

Tax Strategy: Think of your CPA as your defense player; they’re preventing points by defending the goal. They’re not putting points on the board. The tax strategists are.

 

We have to spread the word, educate people and let them know that there are better ways of doing things. That you could keep much more money in your pocket and then get the education on real estate, not just investing but understanding how to maximize your real estate portfolio feeding in the tax strategy with the real estate and business. We’re business owners and entrepreneurs. Over the last few decades, it all came together like a recipe going, “This tastes good.”

You look at taxes differently. You are business owners. You two are not CPAs. You have a CPA team. You marry the business mind with the CPA mind, which I love. Talk to us a little bit more about what makes you or your team different from other accountants.

I’m going to jump in here and dovetail into something that Lorraine talked about. That was how we came to be about how we are. We learned by working side by side with CPA and learned an enormous amount working with that man and his practice. What we found was that by doing the tax strategy, we were having a greater impact than we were working with people’s assets. We learned to turn our world upside down and work from the tax down. What makes us different? Is there isn’t a class out there? There’s not a designation out there that says, “You’re a tax strategist.” This is where people disconnect. You would think that being a tax expert, a CPA would make them naturally a tax strategist. That is decidedly not the case.

My analogy is a sports analogy. Think of your CPA as your defense player. They’re preventing points by defending the goal. If you think about their language, that’s how they operate. “Can I defend this with the IRS? Does that make sense? Can we justify it?” Those are the words that you hear from them. They’re defense players. They’re not putting points on the board though. That’s our job. If you’re using the soccer analogy, think of your CPA as the goalie. Think of us as the kicker, the point, the guy that gets the ball and puts it into the other net to score points.

We came about how we are by organic growth, most of it from our painful experience. When you’re trying new recipes in the kitchen, that’s always a mess in the kitchen. What our clients get to enjoy is the fact that the recipes are all nicely laminated in cards. We’ve gone through. We know how long to leave things in the oven. The biggest difference is we are the people that are putting the strategies in place before the taxes.

Other people have brought it to our attention that said to us, “Do you know why you’re unique and why you’re different and why you have success?” I’m like, “Tell me why.” They say, “It’s because we focus on the implementation.” When you meet with somebody and they said, “You could get an entity, maybe do a cost sag on your real estate, deduct a certain way or your accounting, £6,000 on a vehicle and all of these things.” What happens is there’s a lot of information out there like on the internet. It’s like, “Who do I trust? Where do I go? What is the right fee?”

It’s like, “I get an entity. What’s the state that I live in? If I get an LLC, is it a partnership? Is it a disqualified partnership? Do I file as a SEVIS or C corp?” There are all these other questions that people are left with going, “I got information but who has time to sit with me, hold my hand and say, ‘This is too complicated. It’s too much. My CPA tells me to get an escort but my attorney tells me to get an LLC. Which one is right?’” What we like to do is get both parties on a joint call together and discuss it. Let’s get all on the same page. We’re advocates about teams, getting the right team on your side, working together collaboratively and not having to redo your strategy and focus on implementation. Almost all of our time is focused on implementing the strategies.

What I love is that if you’re working with a tax strategist, you have all of the team members available to you. They all understand similar strategies and are having conversations. I’m not talking to my lawyer bringing information to my CPA. I’m not playing the middleman. With me not knowing what I’m talking about in the first place, which is why I need them. We’ve got a middleman that’s educated, doing it themselves and understands the process.

Don’t treat people based on their checking accounts. Treat people based on who they are and provide as much value as possible.

In the past years, I’ve been using a tax attorney. This speaks to what Jim was talking about. The reason I used a tax attorney is that he’s on my side, not on the IRS’ side. He’s not playing defense. He’s playing business coordinator for me. In part of what he does for me if I were to ever get audited, as he represents me in court and that thing, they handled that whole picture. Jim, what you were saying about how we’re not playing defense rationally doing an implementation. You’re making the goals. How does that work? You are a CPA firm. Their responsibility is to the IRS. Could you speak to that a little bit more?

In my next appointment, I’m going to be sitting down with a CPA who only has several years of experience in advanced planning. I’m going to be sitting with him to review a tax strategy for a client. What I do is cook up all the good ideas that would apply to this client. We sit with our CPAs and edit them. “This would work but less of it. This would work, let’s do more of it. This won’t work at all. This works brilliantly.” We go through and do the checklist. When we do that, we have a tested strategy. We also put it in writing. The client has something to hold on to. I want to do 1, 2, 3, 4, 5, 6, 7, 8 different strategies.

I’ve got the rules and description. I understand it. If I want to read the document, most of our clients browse it. They don’t read it. They have a deliverable that they understand what the tax team is supposed to do. Here’s a critical element. The tax team also gets a copy of it so they understand what the taxpayer needs. If you were our client and we’re looking forward to working with you, you would get a deliverable that tells you all the strategies.

The tax team gets the same deliverable so that when they’re looking over the tax organizers, there are 50 pages of questions that nobody knows how to answer. You do your best and send it down. Our tax people look at this stuff. They see the strategy and don’t see the information they need. They know there’s a disconnect. Reach out to the client and ask them for the information. “How big is your house?” “It’s this big.” “How big is your studio with the lovely rice paper screen in the background?”

REW 100 | Tax Strategy

Tax Strategy: Tax strategists got the rules and descriptions. Their clients have a deliverable, so they understand what the tax team is supposed to do.

 

That all goes in there. You can see immediately that there’s an enormous amount of connection. Imagine for a minute that we’re sitting with you as our fresh client and we suggest, “Your tax strategy calls for a C corporation. Do we have a network partner that knows how to set up C corporations and that’s their focus and they’re good at it?” They’re already exercised and working with us as part of the team. That’s the thing that helps with the implementation. Everyone in the network that’s already been through the process knows. You don’t have to explain it. It’s one and done. Once you go, “I approve of this strategy,” then it’s off to the races. Everybody knows how to do what they got to do.

In the case of an audit, do you support your clients? How does that look?

What it looks like is we take a 40-year CPA and put that 40-year CPA between us and the bad guys. That 40-year CPA will handle most audit questions. Remember, every strategy is A) Legal, B) Approved, C) All the documentation is in the strategy. It’s like, “Here’s the homework. Where’s the mileage log? Where’s this log? Where’s that log?” We collect the data and put it together. We go and handle the audit. You should also know, this is one of my favorite questions is it a red flag?

I hear this all the time. When you get, “That’s a red flag,” don’t do and write that off. That makes your return auditable. Many right eyes I haven’t taken because of that.

Not true. It’s a myth. The thing that is more likely to cause an audit than anything else is the size of the numbers on your tax return. The larger the numbers, the more likely you’re going to be audited. Think about it. Logic. If you are a tax auditor-manager person, would you audit somebody who has had a $50,000 tax return? Would you audit the guy with a $500,000 tax return? It’s $500,000 all the time. What this tells us is that we have, roughly speaking, a 3% chance of an audit. If you went Vegas and you knew you could pull that handle on the one-armed bandit and you had a 97% chance of winning, how often would you be pulling that enamel?” We don’t want to push the IRS but we want to do everything that we’re legally entitled to. That’s what the strategy is all about.

It’s about following the rules. Another thing that I see is that when there are errors like we had somebody who doubled expense something or there’s not a matching item when it’s not matching, the IRS is going, “Why is this not matching? You got 1099 for X amount of dollars but you reported a different number.” Those types of things are errors. One thing I would say though, from my experience is that people who have very clean accounting and books either have a bookkeeper or they’re doing it themselves but they’re using like a QuickBooks process.

You get clean PNLs, no commingling of money in your corporate checking or your real estate, keeping the real estate separate from your checking account, you pay your groceries and your bills. You got to keep your real estate separate. When you have clean accounting then it’s so much easier process than going through an audit. When it’s commingled and muddy like that, it’s a nightmare.

Do you help people to understand what all of those things are? What is it exactly that we need to avoid this idea of commingling and stuff like that? It’s bigger than the account that you pay for your groceries and business account. I’ve got five different businesses. There are intricacies to that too. Do you help guide people on how to make that last money?

Typically, we’ll ask people, “Do you have a bookkeeper? Do you have a separate checking account?” Starting with the basics of having a separate checking account. When people ask us about those questions, we will go through them and go deep. When they don’t ask us, it’s because we’re covering so much material and education. Everybody’s so different. Some people have different specific needs and goals that they want to know answers to. They might be selling a property and are like, “I don’t want to do 1031,” or whatever it is. It’s all over the map.

We will help the people as much as we’re able to help the people. What we would do normally with bookkeeping is we’ll bring in somebody who is a CFO-level bookkeeper, have them audit the books and let us know exactly what they see. I spoke with a client. In 2021, we brought in our bookkeeper who was trying to be nice to the client, politely pointed out that there were some small changes that they needed to make in their bookkeeping. It turned out that was $540,000 worth of loss carryforwards that they had never reported. The bookkeeper found this error. They save taxes on over $500,000. It can be very valuable to have somebody go through and make sure the books are nice and neat, somebody with an accounting background, not just a bookkeeper.

Tell us what kind of person should engage you. Does it matter where a person lives?

It doesn’t matter where a person lives. They can live in any of the 50 states. We’re nationwide.

People who are alive. That’s the first criteria.

Typically, the people who have more complex and multiple returns have greater value. The more opportunity on saving taxes is the greater value. If you could save $500,000 in taxes, that’s great but there’s no minimum. We work with everybody.

Lorraine and I went through a season where we weren’t financially successful. This is way back when we were quite young. We remember what it was like and how it was when we got treated well and we didn’t get treated well. We committed that we weren’t going to treat people based on their checking accounts. We were going to treat people based on who they were and provide as much value as possible.

Let’s talk about costs. What is this going to cost? Are you going to give blissful investors a special deal?

To do an evaluation takes us quite a bit of work. The process is we reach out and we’re going to have the link. You go to the link. It’ll be a pink link.

They made a landing page especially for my community. As we were talking about it in the green room, I was like, “It has to be pink.” That’s what that reference is.

They will have the opportunity to raise their hand and say, “I would like to have my taxes evaluated to see if there’s any money to be saved.” The evaluation does take time and effort. It’s normally $497. How much are we charging the blissful investors?

We’ve discounted it to $97.

Save taxes so you can turn around and invest that money.

That’s the deal you ladies are getting. When you go to the website, which is BlissfulInvestor.com/taxstrategy, that’s where you would get the Last-Minute Tax Deductions, which is the free report.

It’s 2021 and they will be useful for 2022.

You also get the added benefit of 80% off of an actual consultation with them. Is there anything else you wanted to add before we go into the three rapid-fire questions?

I’m looking forward to people saving taxes so they can turn around and invest the money.

Find more real estate.

That’s the big thing. That money is saved for our businesses. Grow your real estate fempire. That’s what I’m calling it. Become a real estate mogul. It’s good to understand that this is a business strategy. Thank you for mentioning that. Here are our three rapid-fire questions. What’s a super tip on getting started in real estate investing?

The first thing is you have to understand that getting started in real estate means moving. I don’t care what you do. There’s no shortcut. It’s getting moving. If you’re in action, you can do something like wholesaling or sandwich places. You can save money and buy income properties. You can use your tax savings to help you save for your real estate. Get in motion. That’s the bottom line.

What is one strategy for being successful in real estate investing?

Saying yes to your wife.

That’s good advice. We need the guys to read this.

It’s managing the manager. Before you manage the manager, do some serious due diligence and find the right manager because you can have the most amazing property in the great area and grants and have terrible management. If the management is not responsive to the tenant, the tenant is going to move out. You’re going to have a vacancy and then the property is going to go downhill. Management is crucial and critical. Managing the manager is important and making sure you have the right manager.

Make sure that they’re going to be responsive to you, the investor.

You guys don’t do turnkey properties but you help people to find them to be working with teams that find you properties that have leverage. In real estate, we love to talk about leverage. Part of that leverage is our relationships. If you’re going with a turnkey operator or something like that, they have many properties so they can put pressure on the managers if things start to go sideways.

We do have vendors with properties with turnkey. We have already done the due diligence and have our properties with these vendors.

REW 100 | Tax Strategy

Tax Strategy: The thing that is more likely to cause an audit than anything else is the size of the numbers on your tax return. The larger the numbers, the more likely you’re going to be audited.

 

What was the cash-on-cash return for that one investor?

It was about a 20% cash-on-cash return. We also have amazing non-recourse lenders, which we can explain at another time.

We have to talk much more. We’ve got lending, turnkey, notes, self-directed IRAs and so many amazing things. This is why I was like, “Lorraine, where have you been all my life?” They’ve got all the different pieces and you’ve got access to them in one place.

The network has developed over the decades. Somebody said to me, “Do you know how valuable your address book is?” We don’t have address books but what I’m talking about is your network, your Rolodex. I was like, “I didn’t pay attention because I’ve been doing my job and working in expanding and getting all the pieces and all the people to bring it all together to create great success.”

I like both of you to answer this. What is one practice that you do daily that contributes to your success?

For me, it’s saying, “Yes, dear,” multiple times a day and staying very close to our real estate vendors and various network partners.

We don’t want to butt heads. Although we both meet with people, we have different roles in our business and working together. One thing for me is I focus on the critical things that I have to get done for the day before I even open an email. I have to get control of each day. Stay focused and accomplish what I said I was going to accomplish.

Thank you for that. We do have EXTRA. We’re going to be talking about the Augusta rule, which is a tax write-off that nobody seems to know about. It’s so interesting because when I did my tax evaluation, Lorraine was like, “You’ve heard about the Augusta rule. Why are you not using it?” I was like, “Can I use it? I’m just a little guy. What is this?” It could have saved me $20,000 in taxes. We ran the numbers. I’m super excited about it. It’s simple and available to many different people that wouldn’t expect it. That’s one of those little strategies that is often missed. It shouldn’t be. We’re going to talk in detail about that in EXTRA. Did you want to add anything to that?

No. I’m looking forward to speaking about that in your EXTRA.

Ladies, if you are subscribed to EXTRA, stay tuned. You’ll get to know about the Augusta rule. If you would like to subscribe to EXTRA but you have not yet, go to RealEstateInvestingForWomenEXTRA.com. The first seven days are free. Get in there. Seriously, this is the time to do it. If you don’t love it after seven days and you’ve gone through the content, you get to make that choice. For those of you that are leaving Jim, Lorraine and me, thank you so much for joining us for this portion of the show. I hope you enjoyed it and got great value. I look forward to seeing you next time. Until then. Remember, goals without action are just dreams. Get out there, take action and create the life your heart deeply desires. I’ll see you soon. Bye.

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