Transcript of a Pivot to Prosperity podcast interview (host Ginny Bolling) with guest Stuart Heath. Stuart, a CPA with ~35 years' experience from middle Tennessee, recounts his journey into real estate, early career reactions to the 1986 Tax Reform Act and its retroactive effects on tax-shelter real estate (multifamily), and how those events shaped his view of real estate investing.
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Foreign. This is Ginny Bowling with the Pivot to Prosperity podcast, brought to you by Pivotal Real Estate Investments, where we help our investors build wealth and income through commercial real estate that also improves communities. Today we have Stuart Heath as a guest here. Thank you for coming, Stuart. Thank you so much for having me. Yes, yes. Well, you are a part of the mastermind group that I belong to, Raise Masters. And we both enjoy that tremendously. I know. And so. And you have been a CPA, 35 years of being a CPA. So you have a whole different slant on things that I think that the audience will really enjoy. So if you would tell the. The audience about your journey into real estate. Sure. Thank you again for having me. Yeah, I think CPAs probably have a different slant on most everything. Some of it's quite boring. The, I think the way I think about it, at least for me, simplifies it down, because most of the time, real estate's really about the numbers and very comfortable with numbers. And then there, of course, is the sort of the external factors which you have to develop a sense for when you're looking at a piece of real estate to acquire. But, but my, my story is simple. Grew up here in middle Tennessee. My dad was a cpa. Really had no idea what that meant. Go to college, major in accounting, you know, become a cpa, Went to work with one of the big international firms and. And just like, oh, God, this is awful. And so naturally, after about four years, I start my own firm doing all of these awful. Least I was doing it for myself. And what was really interesting, you know, I got out of College in 1985. And so the very next year, you know, Ronald Reagan had been reelected for his second term. I think that's right. Anyway, they passed the 1986 Tax Reform act, which, if you're old enough to remember, devastated several sectors of commercial real estate. Multifamily apartments was one of them, because there was a whole industry called the. Basically called the tax shelter industry, basically using a limited partnership form of taxation. And so the 86 act had a retroactive impact. They didn't pass it to, like, October of 86, but it was retroactive back to the first. Near first of the year, and eliminated a whole bunch of. Of these deductions, 4 to 1 depreciation. And. And it was awful. And as a CPA, I was helping clients close down these things. A whole bunch of properties went on the market all at the same time. And I'm young and I don't know what's what. And and so I sort of come into the business world with thinking real estate is bad, you know? You know, it's. It's. It's not a good place to go. And I remember bankers talking about, we don't lend on real estate anymore. And from this side of history, it's like, well, that's, like the dumbest thing ever said, you know? To me, real estate is.
