Cannot wait to talk to Mark once again.
MarK, welcome back to the show.
Oh, thank you so much. I appreciate it.
Glad to be here. Love it.
there's so much that's happened.
Right.
And, you know, let's just start with your book, The The Tax and Legal Playbook.
You know, I know there's a lot of concepts inside of that book.
Let's start with the, you know, the entry level person.
What are some really basic things that people can do
or should be doing or mistakes that you see for the first time?
Investor Well, first of all, don't give up
the real estate game is a long term game.
And I want to attest to all of you that are listening as I've helped over
the last 25 years.
Thousands of real estate investors.
Now, let me rephrase it.
Thousands of wealthy small business owners.
Let me tell you a common thread.
I'm not kidding.
98% of them own rental real estate.
It could be a single family home, a duplex, multi-unit,
maybe in a syndication. Maybe it's raw land.
It could be storage units.
It could be commercial.
Any wealthy people own real estate, but it's not a get rich quick scheme.
And so as a as a tax advisor, I want to know
I see thousands of tax returns and I see what works.
So the first thing is, don't give up.
Be patient.
And it's the number one tax preferred asset on a tax return.
I have so much to work with.
And the the number one principle would be just stick with it.
So that's number one.
are some of the things that just the everyday person can do right now
to, you know, to to actually keep more because legally
And you'll see some of the new investors, Danielle, that you're
you're helping a lot of kind of the buying my first rental what rental should I buy
and it's it's really a lot of people over
complicated to try to sell things
they to their own advantage and so I'd like to tell the new investor
that let's keep the KISS principle, let's keep it simple, stupid.
We can go out and look for good rental property and start
taking advantage of some of those basic tax strategies, for example.
So people go, Well, I don't know about
a single family home rental or duplex or something.
I just don't know what to do. It seems so much.
Why always ask?
You're always, Are you running from someone else?
You're always your first best renter.
So if you are renting a storage unit or a a
a warehouse or have a small office, or should you convert
to a commercial condo kid or do you have kids going to college,
Could you be buying a rental property your kids can rent from you?
Where's your parents living?
Could you buy the house from your parents? Let them rent from you?
That could be a good estate planning strategy for your parents.
Cash in on the sale of home exemption.
Now they're in a better position to apply for Medicaid and other things.
And so if we can find property
that we're already engaged with in some way in our small business,
when we buy it, we get it in our simple legal entity.
Now I'm tracking travel, dining,
home office computers, electronics, cell phones.
I want all of my kids on my board of directors, board of advisors.
I want my kids learning about that rental property, taking
deductions for auto and
all the things that relate to that rental property
tools at Home Depot, Apple Store, Best Buy start to be a write off.
Owning a rental property is owning a business,
and a lot of people realize that.
So I could go online
but just starting to track the little things they add up
and then those write offs can offset the cash flow
and they're always going to offset the cash
and then maybe some other income as well for ads for mouthwash.
But it's so exciting.
know, I think a lot of times
people believe that they're either employee or a business owner.
But the truth is, you can be lots of things.
You can be multiple businesses,
you can be an employee and have multiple businesses.
And a lot of those businesses can do lots of things to also offset.
You're right. Can you you talk about
why and
it's such a good idea just to start a small business yeah well
with COVID we saw the onslaught of another wave of the side hustle the side gig.
It's now estimated over
one in three Americans, working Americans have a side hustle.
It's almost 50% per person.
Over 45% of of wage income earners have another side hustle, but they don't
realize it's a gateway drug to capitalism
and building wealth and saving taxes.
So let's have a deal.
Tell me tell me one of your favorite small businesses you started.
Like that's
one of those that you're like, Man, I, I knocked out one out of the park.
What's the small business that you like It was it a real estate deal?
Was it retail? Was it
my small
business I started over was a bartending company.
What you tell A what?
What?
Nope.
I'd hire bartenders to propel them to event it.
You know?
Yeah.
Yeah,
now, folks, what are all the things that we'd be writing off here?
We'd be writing off
all of the events Danielle's going to because she's got a network.
She's got to get out there and do her job and find people that need bartenders.
Every event she goes to is now right on.
She's going to have to do some research, you know, like she's going to be out
having dinner.
She's going to be trying different drinks at the bars.
She's going to be networking with other restaurants.
So all of her dining is now right off
and in sometimes those expenses for
the supplies, the equipment, the clothing,
the uniforms, the travel, the auto,
all the dining and food that she might be spending
becomes a write off because it's part of building her business.
I call these personal conversion expenses.
I know this sounds religious, but it's actually bigger expenses.
I was going to have anyway.
I was going to go out to eat.
I was going to go to that a bit.
But now I'm networking with that restaurant.
I mean networking.
So Dell, that expense that I was going to have
otherwise personally is now converted to business.
So I'd love to go around here in my wallet right here.
I've got two cards.
I got my my business card and my personal.
Now, if I'm going to the grocery store using the personal
if I'm out doing business, I'm using this.
So I want you business owners. It's a deal.
Whatever she's going to do, anything related to drinks and bartending,
going to use a business card So my great question.
So when somebody owns a single member alcohol thing
and they're supposed to turn an minute, how does one have minutes when
you're a single owner?
Great question.
have your meeting.
You know, you take yourself out, you get something real nice, usually a spa
treatment support because you know, you're the head cook and bottle washer.
You're the the manager, the member.
But no, I even my own S corp, I have an annual meeting
in my Legal Corp that's part of a law firm and all that with myself.
I have minutes.
I say, Yeah, this year went well.
I hired someone.
I fired someone.
I did this, I did that, I just did this.
We expanded.
And even if in fact it's required,
even if it's by yourself, you have that meeting now.
But we want to go next the next level deal because it's never just going to be you.
Every LLC we set up, even, it's just disregard.
It's single member LLC, it has a board of advisors,
a corporation has a board of directors, an LLC has a board of advisors.
So who's on your board?
Can the boys and we're going to have a meeting.
Oh, my Mom.
Hey, Bob, this is your mom will like ball over.
She'll be like, Hey, Mom, I need some advice.
You've got so much sage wisdom.
Could you please go out?
Let's get our nails done.
And I need some advice on my business
board meeting right off.
We're going to have lunch.
We can have drinks at that, but.
But it brings the family together.
We're not going to get good asset protection.
We're getting tax write offs and recruiting family education,
financial literacy.
We're teaching them about business.
The Roth IRA is an entity that you set up and you do business
in and it grows tax free, right?
Yeah,
Well, I think the people, they understand
there's a big difference between tax deferred and tax free.
And the Roth IRA.
The Roth IRA is tax free.
Let's do a little real estate example.
You're going to love this one.
And one of those entry level deals that you talked about by HSA.
You can do this with your health savings account.
I, I open my first HSA up over ten years ago and put in five grand.
You could put in 55 the next year, six grand.
Now it's up to 7500 for a head of household, a married couple
health savings account.
They work just like a Roth IRA, but better because I,
I get a tax deduction on the way that I can invest it
whatever I want and I can pull it out for health care tomorrow.
Eyes, dental co-pays, any surgery prescription drugs.
So I start.
My HSA ten years ago formed a little LLC
I bought this little rental property and my LLC is owned by my HSA.
I've had it for the last eight years.
Cash flows a couple hundred a month paid for Molly, my youngest daughter's braces.
So this rental property is creating flow
inside my HSA and I can sell it tax free.
And I had seller financing on it with five grand down just a little $50,000
crappy little house.
And it's in Elgin, Illinois, outside of Chicago and it's been great
And I've got my we've continued to buy real estate
and my partner I our Roth IRAs we've been teaching this for years
and you can buy real estate and get out of Wall Street
and buy raw land duplexes, rental properties and.
It grows tax free.
It comes out tax free. It's just they're just
yeah, that's a really good that's a great segway
into the self-directed discussion that I wanted to talk to you about.
I know you you talk a lot about this on your podcast and in your books.
And so so when you put money away and whatever a retirement vehicle,
you could actually move it into what's called the self-directed
plan.
And then you can
literally be self-directed the investment right now, you walk people through that
because I don't think people realize you mentioned it was the HSA,
which is essentially just taking something like that and self-correcting it.
But you know, you can do this in in
and in most retirement accounts, right, Oh, yeah, absolutely.
So let's say any of you out there have a an IRA.
It could have been something you've been put money into
and it could be a Roth or a traditional IRA or
some of you might have an old for when you left a job.
And when you left that job, they kicked out your forward K to an IRA,
then you went to a new job and they may have a new for
what came for you, but you got this IRA languishing here.
It could be a TD Ameritrade, Merrill Lynch, Yo, Smith Barney,
Edgar-jones wherever.
And you're lucky and this is not to beat up wall street.
They are what they are.
You're lucky if you make 8%.
And after all the fees buried in some of these for one case
which Warren Buffett, even Tony Robbins, they call it just highway robbery.
Legalized gambling
is more likely, but it is Warren Buffett's call recently.
But we've got this Warren K or IRA languishing in Wall Street.
And you say, well, I got 40 grand sitting there.
Well, oh, there's a little rental property here for 100 grand.
Now, I know you can add zeros to this.
It could be 500 grand, 100 grand, whatever the concepts are.
Say, step one, you take, your IRA, that's over here at this
big bank and Wall Street.
And you say, I want to transfer it or roll it over
to a self-directed custodian or trust company.
Now are directed Ira. Directed Ira.
Okay.
We're going to we're at $1.7 billion in clients retirement accounts.
We'll hit 2 billion this year.
People have taken their money and said, I want to redeploy.
I want to get it out of Wall Street.
So it directed IRA account.
You go on your phone, on your ID just right now in the middle of the night
or at night when you're not driving and set up a Roth IRA
and I can transfer that IRA over to my Roth IRA.
And now I've got it to self-directed brought on day three.
They're going to call you up. Go do with it.
Where are you going to go with this 40 grand?
Oh, I want an investor. My brother's landscaping business.
I'm going to buy him another trailer
or I'm going to buy into this restaurant down the street.
Oh, I found this $100,000 rental.
We have a list of banks that will do a non-recourse
loan at 40% down, meaning your credit doesn't even matter.
So you got 40 grand.
Don't you get a $60,000 loan to buy $100,000 property?
Tsarnaev leveraged my Roth with 40 grand to buy a $100,000 property.
There's no tax on the transfer because you just rolled up
from Merrill Lynch to a trust company to let you buy what you want.
So you roll it over for me, LLC, buy it.
I mean, there's about six steps in this, but within a month you have an LLC,
you control the checkbook, a single member LLC owned by Roth,
or your family gets together, four of you get together and say,
We're going to put four Roth IRAs in this LLC.
You go buy a $200,000 property.
Okay, Now your Roth is invested in real assets
and what the hell, you know, and you're getting the benefit of inflation,
protecting that asset, rolling it.
As always, live information.
Thanks for everything you do for our listeners and good luck to you, Matt.
having me.
I love what you guys are doing.
Keep up the good work, and it's just an honor to be a part of your community.