The Achieve Podcast - Zac Larsen (Elkridge Investments)

Welcome to another episode of the Achieve Podcast, the show where we highlight leaders, creators, and entrepreneurs who are building meaningful businesses, shaping their industries, and having an impact. I'm Taylor Baker Baker, your host, and today we're excited to learn from Zach Larson, the president at Elkridge Investments, and you can find them at elkridgeinvestments.com. Now, Zach, give us the backstory. Investment's kind of a broad spectrum, but you guys dial in specifically in your little niche. How did you get into this space and who are you currently serving?

Yeah, great question. Appreciate the opportunity to be here, kind of tell our story. Um, Elkridge Investments was actually built and kind of established on, you know, a pain point that I had. I was in corporate for years, right, traditional 9 to 5, and I actually loved it. I didn't have anything about it. You know, traditional PTO is actually not a bad thing. You know, as an entrepreneur, it's something I think we dream of. Um, but I started in sales, right? Kind of grew up through the sales org at a, at a local HR tech company here in the Valley and, and loved it. But one of the challenges or problems I had each year as I made more money, I was paying more money, um, to the federal government in taxes, right? And as a W-2 employee, I didn't have a ton of options and to be able to retain that, to keep it. And so my now business partner and one of my good buddies introduced me to short-term rentals and the strategic tax benefits that the short-term rentals bring in. And so now the clientele that we serve were people that, you know, are, were just like me, you know, in the corporate world or just business, you know, business leaders, entrepreneurs that are looking to retain more of their money and wanting to do it in a way where they're not cutting a check as a tax strategy to avoid a bigger check, They're wanting to invest in real estate, use it as a way to shelter some taxes, generate returns, and ultimately keep more of that money so they can do with it what they want.

So that makes sense. Now, for you guys at this stage of business, what is driving growth for you?

Honestly, demand. I mean, there's so many W-2 employees and just people out there that are recognizing and realizing like, hey, I pay way too much. In taxes, or it's like, I just want to have more of a say of what I, um, what I'm doing. And there's a lot of legal ways to be able to retain and keep some of that, you know, and funnel it into college funds for their kids, or, um, you know, take a vacation, you know, things like that. And so I think what's really driving ours is the big beautiful bill that was released last summer, bonus depreciation, and using the ability to bonus depreciate real estate and use it against your active income. And so for us Our goal right now is really just trying to keep up on the demand of, you know, people recognizing that there are options out there, you know, as traditional W-2 employees and, you know, utilizing the tools that the government has given us.

I love that because it's such a pain when you get at the end of the year, like, I made how much and how much is in my account? Like, where did it go? I know I didn't spend it all.

And you looked at that little tiny box that says how much you paid. you know, in taxes, and it just kills you every time.

So yeah, and so it's nice to have an option, a vehicle that you can roll it into that actually generates some value back. Now, for you personally, what turning points, positive or negative, have affected and molded the way you think about running the organization?

Yeah, good question. You know, I actually lean on my corporate days a lot, right? Because the corporate world's not perfect. Right. But I did learn a lot of really good things that I've adapted and used into our business. And I've also learned a lot of things that, you know, I didn't love the way that that was operated and it was ran as a sales professional. Right. I always thought that the company was taking their unfair share because I was driving revenue, things of that nature. But I think one of the biggest things I learned from my corporate days that I try to introduce or build into our company now is It's dangerous to surround yourself with yes men, right? And so I think it's important to be able to hire people that, you know, are one, better than you, right, in a particular topic, but also those that aren't afraid to, you know, tell you no or to tell you to look at it from a different angle, right? And so my prior role in company, there was a lot of yes men or women in the C-suite, right? And that was dangerous. And so I think having the right leadership that's, you know, experts in their own fields, they understand what needs to get done, and giving them and empowering them the ability to, to make decisions, even if maybe it's not what I envision. Um, and that's been— that's helped us driven a lot of success.

So that is such an underrated value right there. From everything I've seen, when you get that echo chamber of yes-men and no pushback, like, you, you have— you develop these blind thoughts. And I love that— give them the vision and then empower them to go make it better. So now, as you guys try to grow and expand, what are the biggest bottlenecks or obstacles that keep showing up and getting in the way?

I think it's limiting beliefs, and it's oftentimes it's just us, you know. I think, you know, as we go about and we operate and we understand like, hey, this is what we did last year, like we're at the brink of capacity. We're always trying to challenge ourselves in terms of like, is this an actual limiting mindset or is this just something that we need to scale and build? You know, there was a time period where when we were onboarding, you know, 5 short-term rentals in a month was like crazy, you know, and it was a bottleneck we were running into. And just, you know, now I think on average, I think this month, you know, we're currently onboarding 25 to 30. And so just that limiting mindset of how do I You know, how do I look outside of what, what current situation is, current state, and how can we get past that? And what does it take to be able to get past that? You know, the infrastructure we had at 5 definitely needed to change in order to be able to get to doing 30 in a month. Um, but it's, I think it's us is ultimately it. Um, and just being able to, you know, to get creative.

Now, when you say short-term, how do you define that?

Short-term rentals, right? I mean, the tax strategy, um, we utilize short-term rentals because the IRS sees it as a business in trade. And just like any business, there's, there's assets, right? And then this business in trade of short-term rentals, the biggest asset is real estate. And that's where you have the ability to bonus depreciate and leverage, right, from a tax perspective. And so it's very black and white, it's very clean and organized. There's no real gray area in the short-term rental tax strategy, um, because at the end of the day it's just a business and you're writing off that biggest asset.

That's awesome. Now when it comes to your messaging and outreach, your marketing systems, what's been working well and where do you feel the gaps and frustrations?

Man, marketing is always an ever-evolving beast, right? Um, I think one of the things that's working really well right now is we've actually just transitioned our CRM from traditional SMS text message and communicating and touching people that way, where we've actually integrated in iMessage, right? There's a new level of trust with that, but we're also integrating and building in, you know, personas and individuals there. So as they're starting to ask basic questions and interacting with us from, you know, bots and different things like that, you know, we're giving them more information before they ever have to meet with the sales individual to you know, really qualify our people. So our salespeople and, you know, those that are doing the education around the tax strategy, they're already well armed, right? They already know half the answers they're looking for. So it makes, you know, the sales team's job a little bit easier. But like I said, marketing is ever evolving and changing. And so just trying to stay up with the latest trends is so important.

Yeah, it's been changing so much in the last year. It's been unreal. With the AI. Now, speaking of the, the bots and AI, where all have you guys found ways to utilize it and where do you still see opportunity on the table?

Yeah, good question. So we're definitely, unfortunately, probably behind the curve. We're actively looking for new ways, right? There's a few ways we've implemented it. Um, AI's really helped from like an operations standpoint when guests are having issues or challenges or struggles and they need basic, basic troubleshooting. We now have a software there to be able to help them. you know, get connected with the right people on our end, help them troubleshoot through basic things of like unclogging a toilet. You'd be surprised at how many people don't know how to unclog a toilet. To where even just being, you know, building GPTs, right, to be able to help understand what our model is. There's so much tax code and so much depth to what we do. Even just having a resource, internal resource for our teams to be able to leverage to understand to be able to help answer questions, right, in real time, or even just responding to emails. And so there's— we're definitely— there's definitely room to improve on the AI side of it, but we're constantly trying to figure out ways to be able to, you know, help us streamline things and make things just that much better with it.

That's awesome. And I'm sure it's a fine line to navigate where giving legal advice or tax advice through an AI versus a human that understands the context So yeah, yeah, it's, it's important, right?

I mean, understanding the context behind it, because the code can say one thing, right? But the human interpretation of it can be different. And so making sure that you're there to be able to walk that fine line is, is very important.

Yeah, and there, there's a human element that AI just can't touch. And so it can help prep a lot of things and gather that data, but it Yeah, that's wonderful. Now, when you think about the next stages of the business, what are you most excited about and what do you feel like you need to build or fix to reach the next peak?

Yeah, I think it's relationships and it's people and it's actually both, right? So we have, we have some core employees and team members that have been with us for a long time and they're now starting to get to the point where we've got to empower them to be able to be a leader and to be able to run a team. And so the next stage of this I'm really excited about because they get that opportunity to grow and to develop, you know. And like I said earlier in our conversation, like surrounding yourself with people that, you know, are A-team and willing to be able to try something different, even though it's different than the way that I set it up or organize it. I'm excited to see them take that next step. And then for us to be able to do that, I've got to backfill. right? And to be able to bring on new people and to be able to scale both on the operations side of things, the capital raising side of things, um, and, you know, everything in between marketing, finance. And, and so I'm excited about the next side of it. And it also, you know, changes my role, you know, and I'm ever evolving and, you know, maybe focusing on, you know, different types of things, which I think will ultimately lead to my growth too, which is, which is exciting.

Yeah, you definitely have to outpace and so you can still lead.

Yeah, absolutely.

Invest in that. Now, when you look at your own journey, the wins, the mistakes, what lessons stand out and what do you wish you understood sooner?

Yeah, what a good question. Um, the biggest lesson I take away, again, I think one of the things that we harp on with our team is money is just a byproduct of relationships, right? And I think in our earliest days when we were bootstrapping and trying to figure out how to be able to pay payroll and to be able to get through the end of the month, you know, at that time period, we were just trying to find cheap labor and help to be able to do this all. But once we kind of shifted our mindset of like, your best employees going to be cheapest today, right? They're going to be more expensive down the road. And so really being able to commit to individuals and A-players, I think if I had learned that earlier on, you know, assuming we had all the money, right, I think it would have, I think it would have given us the ability to grow and scale quicker rather than trying to find the cheaper options because the cheaper options end up costing you probably more money than the A-team player. But I think that's one of the most important things that I've learned over the last couple of years is just investing in your people, making sure you have the right people in the right seats, which ultimately let, you know, drive the ability to grow and scale. And it also, as an entrepreneur, gives me a little bit more freedom and flexibility, not as many late nights, because ultimately I've got people, you know, that are professionals and they're really good at what they do.

I love that money is a byproduct of relationships and the power of investing in the right people. Yeah, that's all so true. So true. Now, if you had to pick one constraint to solve over the next 90 days, what would it be?

One constraint to solve. Good question. Um, it would honestly be the hiring process. I think I've grown, um, kind of a bad attitude towards it. I think when going and doing resumes and the vetting process, And I'm very fortunate to have a team to be able to filter through some of these where I'm really only getting some of the best. But the hiring process is so difficult to be able to find those A-team players, to be able to shift through the noise, find the right signals, the right people. Um, as we grow and scale and we're backfilling on these teams, making sure that we have the right people and we're not wasting money on the onboarding and the turnover process. Because one thing that we do as like a standard is everybody comes on as a 90-day temporary employee, right, where they're kind of tested, they're tried, really to make sure that they're a good fit for us as well as our culture is a good fit for them, you know. And so I think a constraint that I have is I feel like it just takes so long to be able to find the right people, especially through traditional ways where almost always I'm trying to reach out to my network and, you know, getting the referrals and you know, the people that way. And so maybe not the answer you were looking for, but that's, that's kind of my, my, uh, my need over the next 90 days as we continue to grow.

That makes a lot of sense, especially as you're growing methodically and not just, you know what, we'll take whoever to make it work.

Because it is a lot of mental cognitive energy that goes into cultivating, teaching, training somebody, then have them walk out Yeah, well, and especially with what we do, right, from a high level, right, with everything from taxes to real estate and to investments, those are 3 things that most people are interested in, right? So from a marketing perspective, we have the ability to attract all sorts of people, but at the end of the day, we, we can't take everybody, right, on as clients or as investors. And so being able to make sure that when we do get somebody into the ecosystem that's a good fit, they're being taken care of all the way from the time You know, they're being educated through the investor, you know, partnerships model all the way through the end of the process. You know, we have to have 18 players through the entire process because that's ultimately, you know, who we are. And with us having a core foundation of relationships being important and relationships first, you know, if we're making the relationship a negative experience, then that's, that's a bad thing on us. We need to make sure that we're always putting first, which is through good people.

That's so true. Good people, and, and you develop those more than find them. So that is amazing that you're investing that much time and energy into that. That is, that is marksmanship of a good leadership. It's like you're, you're willing to put that effort in and be selective on the front end. So that's good. So again, Zach, I appreciate you coming on and sharing your wisdom and what you guys are doing. Any final words or advice for other leaders and entrepreneurs in a similar journey?

The only thing that I would say is, you know, it just takes creativity. Every problem, every challenge, um, it takes creativity and relationships. You know, I think if you are willing to be able to get creative and not always win, right? Or if you're willing to be able to give more than you take, I think ultimately the relationship and taking care of them, I think it leads to success. Again, money is just a byproduct of it, of a relationship. Success is just a byproduct of the relationship. So as long as, you know, whatever your challenge is, whatever frustration you have, you can lean into those relationships around you and give more than you take. I think I think anything's possible. I love that.

That is so true. Give more than you take. Add value because money follows value.

Yeah, absolutely.

I— that is a quote I heard years ago and I pass on to many, is like, if you want to make $100,000, look at— say, how do I add $100,000 worth of value? And so it's I'm bringing versus I'm taking.

Yeah. 100%.

That is awesome. Well, Zach, thank you so much. And for those who want to learn more, get involved, they can reach out elkrigeinvestments.com. Is there anywhere else you want to send them?

I think just social media as well as LinkedIn. You know, we'd love to connect. And obviously we do free consultations with anyone that think they're paying too much in taxes and want to learn more how they can retain more of it than paying it out to Uncle Sam. We'd love to have the conversation.

So that's awesome. So yes, I think most everybody falls into that category. Yeah, like, how do I retain a little more of that? So thank you for joining us. Thank you for coming on and sharing and, and giving your wisdom and understanding with the, the tools that are available out there. Because I think a lot of W-2 employees are like, I don't own the business, I don't have the write-off, it's just not an option. To know that there is an option designed for them, they don't have to be the boss of their own business if they don't want to, right?

That's all. Taylor, thanks so much for having me. Appreciate it.

Oh, thank you. And thank you to the sponsors of today's episode, Achieve Fractional, which provides fractional executive leadership for growing businesses. And if you enjoyed today's episode, share it with a friend, with a W-2 employee, someone who's paying too much in taxes. Pass it along. Reach out to Zach and the team, and he'll show you some, some awesome strategies on how to put a little more of that money back in your pocket.

Absolutely. Thanks, Taylor Baker Baker.

Hey, thank you so much, and we'll see you guys in the next episode of the Achieve Podcast.