Susan Geist - The Untold Stories of Real Estate Investing - Investor Strategies to Save on Taxes

Welcome to the Untold Stories of Real Estate Investing hosted by Wayne Courageous iii. A place where active and passive investors come to hear the good, bad and ugly of real estate investing. Our guests consist of experienced operators and investors who want others to succeed by sharing their stories. If you're looking to syndicate deals or grow your wealth passively in real estate, you've come to the right show. It's now time to sit back, take mental notes and enjoy next episode of the Untold Stories of Real Estate Investing.

Welcome everybody. So we're starting off the year strong with the investor strategies to save thousands in taxes. This is our monthly meetup. We meet on the fourth Monday of every month and excited to kick this year off in 2023. So this meetup is created for people of all parts or of progress within their real estate journey. So we have passive and active investors and really what we try to do is heavily educate the passive investors so that way they can look at deals whether it's multifamily or other assets so that they can make the right decision if they want to to invest. And we try to make it as easy and simple as process to get educated. So we have a lot of investors that have been with us on this journey and hopefully we continue adding value. So what we just did was had our networking breakouts group. We always do that in the very beginning. Like I said, it helps just to keep everybody focused on building relationships and that's the key in real estate investing. Then we'll have our guest presentation which I'll introduce shortly and then we'll follow up with a Q and A. So a little bit about myself. My name is Wayne Courageous. I am the Managing principal of CREI Partners. We focus heavily on value add, multifamily, storage and build to rent investments in Texas and the Southeast United States. Over the last 15 years I've been working with a Fortune 150 commercial real estate firm and been doing a lot of capital improvements and renovations and heavy on the value add of commercial real estate. Currently We've got about 33 million assets under management with properties in Texas, Louisiana and Alabama. So want to introduce you all or make sure you are aware of our podcast. If you want to continue learning more about real estate investing, go to Creipartners.com forward/podcast on our website. We also have a lot of blogs and resources and we've got an e book to help. Again just educate as much as possible for people looking to get in multifamily and real estate investing in general. So today I'm super excited. That's enough about me. I want to shift the gears all to Susan, guys. She grew up in a lower class family in rural Appalachia and began investing in real estate in 2008. She eventually achieved a portfolio that now generates over five figures in passive income each month. Using strategic investment deductions, she reduced her annual federal tax bill from $137,000 to $6,000 while increasing her W2 in investment income. Her current multimillion dollar real estate portfolio consists of both long and short term rentals in addition to limited partnerships in apartments, car washes, self storage hotels and mobile home parks nationwide. Through her company, Rising FEMA wealth llc, Susan provides financial education workshops and investment coaching to empower other women with the strategies and confidence to grow their wealth, reduce their tax bills and achieve financial independence. Susan, thank you so much for joining us. And I will turn it over to you.

All right, thanks, Wayne. Well, thank you. So I'm Susan Geist and I'm the founder of Rising from wealth. And I am here today to talk about investor strategies you can potentially use to save thousands of dollars in taxes. All right, so my disclaimer, Well, I love diving into investing in tax data. I'm not a certified financial professional or accountant. I'm not a cpa. I'm not a lawyer. So this is not personal investing or tax advice. It's for educational purposes only. And you should do your own diligence based on your own personal situation. All right, so my story, which Wayne talked a little bit about. So I grew up in Oak Ridge, Tennessee, which is in East Tennessee in the Appalachian Mountains in this lovely contaminated town you see here. I grew up lower class and so my mom is my real inspiration for what I'm doing with my investing. So I watched her have to endure a very abusive relationship with my dad. And she was stuck in it because she had no financial means to get out of it. And she didn't work, she didn't have any investments. And so she had to endure the abuse and she ended up actually passing away. And so I told myself that I was never going to be in that situation. I was never going to be beholden to a bad situation or a bad person because of money. And I started saving and investing when I was young and just built and built and built my portfolio to where it is today. Hold on, here we go. So here are some of my current properties, actually. So my current real estate portfolio, I've got eight long term rentals, I've got two short term rentals. Which you can see here at the bottom, my cabin and beach condo. And then I've got limited partnerships in five apartment complexes. One of them is Wayne Steel and three car washes, one hotel, many self storage facilities, and mobile home parks nationwide. I also participate in a real estate debt fund which actually lends money to house flippers. And I receive interest off of those loans. All right, so as you can see here, my 2021 federal tax bill was $137,000 on 550,000 in income, so about a 25% effective tax rate. And that just about gave me a heart attack when I did my taxes and spurred me to learn more about tax planning and tax optimization and try to figure out what are all these rich people doing to reduce their tax bill. How, how can real estate help me reduce how much I'm having to pay of my wealth to the government? So I started figuring things out. I did kind of a shell game with my investments. And so my 2022 federal tax bill, I'm estimating will be about $6,500 on 580,000 in income, so about 1.1%. All right, and we will talk about how I did that in a few minutes. But first I want to go over sort of what is next optimization and why you should do it. So it's one of the most essential tools for growing your wealth. Really. The biggest wealth killers are inflation, which we can't do. And so inflation and taxes are two of the biggest wealth killers. So fundamentally, I mean, tax law was written to shape the economy. And so tax shelters were put in place to provide reduced taxes in exchange for promoting housing and job creation. So if you're owning rental properties, you're providing a place for people to live, you have a business, you're employing people, you're creating jobs. And the government wanted to reward this things by reducing how much you'd have to pay in taxes. So you're really doing what the government wants you to do by taking advantage of these tools. All right, so really, I mean, nobody owes any more than the tax law demands. So not using tax deductions that are legally available to you really is stealing from yourself and your family. And another big thing is you, and only you have control over your money and your tax liability. So your CPA and accountant and attorney, they can give you advice, they can do your tax returns for you, but it's really you who have to understand what you need to be doing, right? You're the one who has to go out and buy particular properties or Sell particular stocks to optimize your taxes, they can't do that for you. So the more you understand, the better you're going to be able to plan your taxes out and reduce your tax liability. And unfortunately, few CPAs are well versed in real estate investments. Most of them are trained in small business accounting. They tend to be really good at that. But they don't know a lot about real estate and even a lot of the ones that claim to get a lot of stuff wrong still. So, you know, everyone has a unique tax situation and really knowledge is power here. So the more you can learn, the better you can structure your investments and the lower your tax bill will be, even if you still have a CPA who is preparing your tax returns every year. So two really important concepts that we need to talk about before getting into the tax tools are tax buckets and depreciation. So the IRS splits your income into three different tax buckets. And this not understanding this is how I ended up with such a big tax bill. Because I was like, okay, well I have income coming in from my job, you know, some other things, some stock sales, and then I have all these losses, you know, in my real estate portfolio from depreciation expenses. I'll just combine all those and won't have to pay very many taxes. Well, unfortunately that's not how it works. So each of these are distinct buckets and you need to have your gains and losses in each particular bucket. You typically can't combine them. So here in the active income, so this is like earned income. So We've got your W2 income if you have a business. So if you're running like an llc, if you have real estate professional status, so you're like a professional real estate person, typically your income will be over here in the active bucket. The IRS considers short term rental properties to be an active business if you self manage those yourself, which can be a really powerful tax tool if you are an active flipper. So if that's like your job is flipping houses, you do multiple a year, that's actually when you sell a flip, that's considered active business inventory that you're selling. And you also have to pay the extra 15.3% self employment tax on that. So that's in this bucket, you can take up to a $25,000 passive real estate loss if your adjusted gross income is less than $100,000. So that's one place where you can move from one bucket to another. Also if you're doing Roth contributions, that's going to Come out inactive. And if you're retired, there's 401k withdrawals also are here as their taxes, active income, they're not taxes, capital gains, even though they are typically coming out of stocks and bonds, still going to be taxed as active income. So our next bucket, so we've got our portfolio income, so that's going to be your stock and bond sales. So it'll be a lot of capital gains, capital losses. We've got dividends, interest, owner financing. If you do a lot of owner financing deals in your real estate, that interest is going to fall in this portfolio bucket. If you're doing private debt funds like I invest in, and I actually invest in that debt fund through a syndicator. But it doesn't come into my passive bucket because it's interest. So it comes here in my portfolio bucket and then sales of non business assets. So that would be like if you are selling your house, so you never use that as a rental, you're just selling your personal house and you're above the capital gains exclusion on that and you're going to owe some tax on how much you paid. That would be here in your portfolio bucket. If you're selling like classic cars. So these are assets that you have that weren't either a passive or an active business. They're just here in your investment portfolio and you're selling them now and you've made or lost money on them. And then over here we've got your passive income. So we've got your rental real estate and then any syndication income coming in, royalties, any passive business income that's coming into you on K1s and then short term rentals. If you have a management company, they'll be considered passive businesses. All right, so here we have depreciation, this is the other big thing that's a huge tax saving tool in real estate. So it's an income tax deduction that allows you to recover the cost of a physical business asset. So it doesn't have to be a property. That's where you hear it talked about the most and probably where it's most beneficial tax wise. You can also write off depreciation on like business equipment, cars, things like that. But it's super powerful in real estate because it allows you to generate a paper loss on your tax return. So this is something you just get to write off even though you haven't actually lost this money, you just get to write it off on your tax return. So standard real estate depreciation, so it's 27 and a half years for residential properties, 39 years for commercial properties, for the building value. So to figure this out, typically you'll go to like your tax appraisal, and you'll see how much is valued in land, how much is valued as building value, and then you'll divide that by either 27 and a half or 39 to get how much you can depreciate every year as a loss on your taxes. So most of my properties I'm depreciating usually between 5 and 10,000 on each one of them. So that can offset any gain that I make on that property that year in rent. So another really powerful tool with depreciation is doing a cost segregation. So this is going even deeper into the depreciation. And so we're going to look at that business asset and pull out the components that are actually going to depreciate faster than 27 and a half and 39 years. So we're going to look at things that can be depreciated over five, seven and 15 years. So these would be like appliances that you wouldn't expect, you know, to last close to 30 years, flooring, light fixtures, things like that. And you can depreciate them on a faster schedule. You can also do bonus depreciation. And this was a neat little thing that was implemented in 2018, and that's the ability to take all of this depreciation and deduct it in year one. Unfortunately, this is phasing out, but this is a hugely powerful tax tool. So until 2022, you could do 100% bonus depreciation starting in 2023. This year it's going to decline 20% each year. But still, 80% is, is no chump change. It's still very powerful. And you can get a really big deduction on your taxes from that. And I'll show you when we go through my example, how it was able to save me about $50,000 in taxes. The downside to depreciation is that there is a depreciation recapture tax, and it is taxed at your ordinary income rate up to 25%. So typically, right when you would sell property, you would be taxed at the capital gains rate, which is either 0, 15% or 20% based on your income. But unfortunately, the depreciation, they're going to come and get you on that, your ordinary income rate up to 25%. So you could have a big tax bill at the time you sell your property. So you want to think about before you go taking a bunch of Bonus depreciation. When are you going to sell this property? Is it worth it to have that extra tax bill at the end? Are you going to be able to 1031 out of it to avoid the tax bill? And what are you going to do with that money? Right, it's the time value of money. So if I can save 50,000 on my taxes now and I can go and invest that in something that's making 8% a year, then that's probably a good deal. If I'm going to save 50,000 and I'm going to go spend it on a Lamborghini or I'm going to go put it in a checking account making 0% interest, probably not a good deal. So you always want to be thinking about leveraging your money and you know, are you making smart decisions with it? But the real power behind depreciation is it creates a paper loss. And that's the real, that's the biggest bang for your buck on your taxes is creating a paper loss. So you're not actually losing money, but you get to write things off on your taxes. All right, so let's take a look at what I had going on in my 2022 tax buckets. So I had about 100,000 in W2 income for myself, 200,000 for my husband. So we knew we were going to be in a high tax bracket because we also had a bunch of real estate income and some other stuff coming in. So we wanted to max out our 401k contributions. So that's pre tax. So we each put in the max for those. We maxed out our health savings account contribution at 7750. We maxed out our dependent care FSA contribution for 5000 in tax savings. And then here's where it really starts to get interesting. So we bought a short term rental and it was actually that cabin that I showed on a previous slide and we did a cost segregation and we were able to take a little over 163,000 in depreciation on that between bonus depreciation, accelerated depreciation, just regular depreciation. So that's coming straight out of our active income bucket. And we're able to do that because I self manage it myself from here in Austin. It's actually not that hard to do even though it's in Tennessee. So that's a great tax strategy if you have a high active income. So if you are still working a W2, there aren't a whole lot of ways to reduce that active income. But this is a very Powerful strategy is to buy a short term rental, manage it yourself and take that bonus depreciation. I also was able to take 3,000 in tax loss harvesting off of my stock portfolio, which I'll talk more about in my portfolio income. And then of course the standard deduction, 25,900. So that got me down to about 54,000 in that category. All right, so portfolio income. So this was kind of an interesting one for me. So my husband and I had bought a single family home back in 2021 that we had planned on doing the BRRRR strategy. So we were going to buy it and renovate it, run it and refinance it. And we got caught in the supply chain shortages, the labor shortages. Just like everything was going wrong. Like we couldn't get the renovations done, they just kept dragging out. We couldn't get the supplies we needed. And so it dragged out, it dragged out over a year. And then the neighbor next door got a lawyer and said he was going to take us to court over this tree that was shared in our backyard. And so we were just like, okay, we're just done with this, we finished it, we're going to sell it, we're not going to rent it, we're not going to deal with this neighbor anymore. And so it kind of put it in an interesting bucket for us because we're not active flippers. Like we don't do this for a living. So it's not in the active income bucket. But we never used it as a rental, so it's not in our passive income bucket. So that gain threw it in the non business asset portfolio bucket. And I was like, well great, what am I going to do to offset that income? I can't do like a 1031 or anything. But I happened to, I, I guess luck out. I don't know that you would say that about the stock market tanking, but I have a taxable stock account that had lost a fair amount of money. And so I did tax $70,000, which is my gain from that flip, unintentional flip. I did $70,000 in tax loss harvesting, which is sort of, it's the stock equivalent of depreciation as far as creating a paper loss on your tax return. So tax loss harvesting is when you sell losing stocks and you immediately rebuy back into the market and you can't buy exactly what you sold, but you can buy similar things. So I could sell say vti, which is this total stock market index fund, and then buy Voo Voo, which is the S&P 500 index fund. And so I have the same amount of exposure in the market as I had just a few minutes ago before I sold my stock. But now I also have this big paper loss because I've shown a loss right from my sale. And so I did that with $73,000. And you can use 3,000 on your W2 or active income, and that's the max. And then you can use however much you need on capital gains in your portfolio income. So I was able to wipe out my capital gains from this unintentional flip house that I had. I also made about 9,000 in dividend income, which is really hard to get rid of, but luckily it's taxed at a lower tax rate. And I also made 1200 on municipal bonds, which are almost always federal tax exempt. So that's a good place to put your money if you want something that's low risk and with a low tax burden. So a lot of really wealthy people put a lot of money in those to serve as a tax haven. So. And they're also state tax free if you live in that particular state that they're in, which of course doesn't apply to Texas since we don't have a state income tax. So I've got $9,000 left here in my portfolio bucket and then passive. So I have a lot of rental income coming in with all my rentals. I've got about 160,000 in rental income and. And about another 40,000 in syndication income. But I also have a lot of losses to use, so I invested in a lot of syndications. One of those was Wayne's. This is a big advantage of investing in these syndications is they are doing depreciation and bonus depreciation on these big investments too, like these big apartment complexes. There's a ton of stuff that you can do accelerated depreciation on. And so you get a big tax write off, typically when you invest in these syndications. I also had carryover losses from doing a renovation on one of my other properties a couple of years ago. And then any business expense you should be writing off. So any mileage, of course, any expenses that you've had on your property, but then also off your property. So if you're doing education, marketing, if you're driving to meetup events, I mean, count that mileage. This is marketing work, right? It's continuing education. Like, these are things that you can write off. You might even be able to write your Internet off for attending this online meetup. There's Really a lot of different things that you can include. If you go out for a meal and you're meeting another real estate professional and you're talking about real estate and your purchases and your business plans, then write that meal off, just keep track of all of it. So there's a ton of expenses that you can always be writing off. And then another great way to reduce your taxes in this bucket is by buying a work vehicle. It has to be over £6,000. So it's got to be like a truck or a van. But the great thing about depreciating vehicles is typically they depreciate all the way down. So you don't have any of that recapture tax on them. So they usually depreciate in five years with bonus depreciation. I'm able to take all of it at once. We actually didn't pay for this work truck. We inherited it when my father in law died. But I talked to my tax advisor and he said I can go ahead and write it off because it came in the probate and we had the value for it. So we now have a work truck that we get to write off $40,000 on. We take it all. As long as we keep the truck for five years, use it at least 50% of the time for business, then we won't ever owe anything, any recapture tax on that. So that's another great way. If you're looking at a big tax bill, you know, buy a vehicle if you're going to. Especially if you're looking at buying a vehicle anyway, you know, buy it, use it for work and write it off. All right, so here's how it came out. So my active income, I ended up with $54,337, which puts me in the 12% tax bracket for a tax bill of 6,500. My portfolio bucket ended up with that $9,000 dividend income. So on dividends the tax rate is 0%. If your total income is less than 80,800, this is for 2,022. So my tax bill, zero. And then of course passive. I was able to write off all of my income using depreciation and deductions. So my tax bill was zero in that bucket. So my total gross income that I took in was 580,000. My total net income after I took out all my deductions was about 63,000. My total tax bill was 6,501.1% might income. It's pretty amazing when you start implementing all these and working out these strategies. So an even better tech strategy, which I couldn't take advantage of because both my husband and I had W2s last year. But an even better strategy is if one person has a W2 and one does not, that other person can get real estate professional status. And that allows you to take what would be in your passive bucket, all that real estate, and move it to your active bucket. So you can take all those losses that you are generating from depreciation and expenses and move those to offset W2 income. And this is how a lot of couples that are in real estate pay no taxes because they are able to take advantage of that. And you don't have to be a realtor to do that. You cannot have a W2 job and claim real estate professional status. Even if you are managing a bunch of properties, you just can't do it. The IRS will come after you. But if you know, one person is, all they do is just manage the properties. They look for new properties to buy and the other one is working at W2. It's a great strategy and you can save a ton of money by implementing that. All right, so real estate can be a powerful tax tool. So I teach workshops. Wanted to mention a couple here that I have coming up. So sensational investing the financial security formula. So this will be February 4th and 11th. These are online 10 to 1. So this one is about how to actually set up an income generating portfolio. You know, I have spent a lot of nights, you know, sleepless nights, worrying, okay, what's, what's going to happen to me and my family if I lose my job or my husband loses his job or we become disabled or my husband leaves me, like, and I think a lot of, a lot of people have these uncertainties about the financial consequences of things that could happen in the future. And so this is about how to really set yourself up for financial security. So if something does happen to you, you'll still have income coming in. And this will help you create your own personal wealth building plan and generational wealth for your family. So we'll talk about stocks, bonds, active and passive real estate, how to optimize your investments in retirement funds and alternative assets. All sorts of interesting things. And then my second workshop is, it's a tax workshop. It's like this, but on steroids. So it's pretty long. We go into a whole lot more tax tools. You'll get a whole library of tax saving tools. So that's March 4th from 10 to 1. And we'll actually look at my 2023 tax plan. I have some interesting things I'm going to going on with that. I'm going to try to do pair my real estate with a backdoor Roth conversion to try to take a lot of my retirement funds and make them completely tax free. So that's kind of an interesting thing. We'll also talk about setting up an S corp which helps avoid a lot of the self employment taxes that I mentioned. The 15.3% a lot of real estate active real estate investors that have real estate income in their active bucket do that, especially flippers. You'll see do that most of the time. And it will include the workshop includes mapping out your own 2023 tax plan because the best time to do it is now so you can start implementing these strategies. And I also do personal coaching too and you can see all this on my website, risingfinwealth.com all right, does anybody have any questions?

Susan, that was awesome. If those on the phone are on this call are not super excited about lowering tax bills or at least the opportunity of so many different things we just don't even know about this weekend. I was talking to a tax planner at this conference and I was just getting excited. The way I talk to you all about real estate investing, I get excited. Like it's fun talking to like someone who really knows how to do tax and all that good stuff. So super, super exciting. Susan. Thank you. Some of the questions, we did have some questions in the chat box. I figured we can start there. Does 27 half years exclude the age of the residential property?

So yes. So it is just 27 and a half years. No matter how old the property is, you get to depreciate it for 27 and a half years.

Yep. And then another question. Can we extend the depreciation to W2 income?

So it depends on what bucket your depreciation is in. Typically for most real estate investors it's going to be stuck in that passive bucket, which was my problem. If you are an active, like if you have real estate professional status, you could have it potentially in your active bucket. But for most, most people it's going to be stuck in that passive bucket and the answer is going to be no.

Yeah, passive losses offset passive income. The best way to look at unless you're a real estate professional, you have or yeah. So it's pretty much, you know. But to see a lot of love for you sharing your story. Susan. So thank you for being raw and just being very transparent. It's pretty awesome. Can you explain syndications and the tax Effect of the income.

Do you want to explain that since you're a syndicator?

Yeah. So around this time, our teams work with our bookkeepers and our CPAs, and we're starting to work on the K1s. There is a recording we had last year that went through K1s, and we'll probably have one of our partners, vendor partners, come and talk to us again about K1s. But as Susan was saying, there's a cost segregation that typically happens for each property, not. Not even just in ours, but just in general. I think that's just the right practice thing to do. Right. Because we're trying to reduce our tax liabilities. So that company is hired. They look at all the things at the property. Now depreciation is on the improvements. Right. So, you know, the. The land itself is not depreciated, but the actual improvement of the property. And to the question really doesn't. Doesn't matter as far as the age, but they'll provide a report. Those K1s will go out to our investors typically in early March. And then when that they can, you know, work with their tax professional on that. One of the things that I always like to tell people that are getting in syndications is, you know, a lot of times we're. We're all used to submitting taxes on time, right. We don't want to. A lot of times we get money back or we're like, you know, it's. We're using TurboTax or something, and we like to, you know, submit. By March, when you start getting into real estate transactions and you start probably having a portfolio like Susan, it probably gets a little. It definitely gets a little bit more complicated where a lot of times you do do have to extend to the October deadline. So just be mindful of that. Hopefully that helped explain the syndication. So again, passive income offsets passive losses. And you don't have to use those passive losses year one. Right. If you didn't have any income that year and you want to, you know, keep those losses for a future year or, you know, when the sale comes, when there's that recapture tax. You know, at the end of the day though, taxes are personal and everybody's different. And so what Susan's offering with the tax planning and then also working with the CPA and Yalls individual circumstances is really the next step. So thought the max for tax loss was 3,000. Can you explain how you got the 70,000?

So it's 3,000 against active income. So that's your max to be able to use against like W2 income. But if you're putting it against other capital gains income or capital losses in that portfolio bucket, you can offset whatever you have there. So I was only able to move 3,000 over to the active but luckily I had a big gain in my portfolio bucket that I was able to offset.

Yeah, I like the visuals that you gave with the different buckets is you know. All right, so one question. So I don't know really this answer but this might be slightly different topic but how do you see solar panels and its tax credit?

I don't know a whole lot about this. I know solar panels, it takes a really long time if ever to make your money back on them. So I would just make sure you're doing the math on that and make sure it makes sense.

Yeah, I, when I can't remember what year I bought a property, 2009 or so. But the big incentive then was like the, oh, the government was incentivizing with these credits to improve your home. And I remember improving our home and using that credit and that came off of our active income. So if we spent 10,000, that was a straight credit from our active but not sure 100% of what the rules are right now on it. All right, did you purchase your STR in 2022 to do such a large write off and are you doing the 27 year cost segregation or did you take a huge portion from the first year you mentioned on your other properties you typically depreciate five to $10,000.

So the answer is yes, I did it for the tax benefits. It's, it's not cash flowing very well right now. As I'm sure you guys have heard, the short term rental markets getting a little saturated and the economy is potentially going into a recession. So I'm breaking even on it. But I did buy it solely really for the tax benefits. So and it's because it's a short term rental that I'm using as an active business. It's a 39 year old depreciation. But I did the cost segregation with the accelerated depreciation bonus depreciation which is how I got to the 163,000. So I'm saving about 50,000 in taxes by doing that. And so I'm going to take that 50,000 and reinvest it. And so now I'm making money. It's a way to leverage right. That, that cabin. And so that's income that's due to the cabin. Right. The fact that I bought the cabin. And so I Can attribute whatever income I'm making off that 50,000 to my cabin.

Perfect. And then you got some more love on these chat messages. And does the depreciation include the land value or just the structure?

It's the structure, yeah. Unfortunately, the land value, it doesn't depreciate. It's still land. So just the structure.

And are there firms that specialize in cost sex. I could take that one. Yes, there. There are. We use Madison specs. I'll do a shout out to them across our portfolio. They do a great job. But there's definitely a lot of groups out there that just focus on the cost Segs.

Yeah. And there's a few different ways you can do them. You can do the engineering based, which is probably what you do for big like apartment buildings. And then you can do. They have like an online. Which is actually what I did for mine. And they're a lot cheaper. They're. I think mine was $450. And I just put in the data and say, this is how big my cabin is. This is what it has in it. And they just send me a report with all the information. I think the engineering ones cost thousands of dollars to get them done.

Yeah. So just depending on the size of your property, I would just reach out to see. I mean, and as Susan pointed out, it's a cost of doing business and could be a write off.

Yes.

As well. So if. If you don't have an llc. Let's just go off on that. If you don't have an LLC on this Zoom call or those listening on future something to look at. Right. Or set up a business and you can invest like in our syndications. You know, we've got people that invest with their business. Right. And llc. So something to look at. But I'm not going to pretend I'm a tax expert. I was like, I got super excited talking to a tax person on Sunday as an example. Susan, you're gonna kick out this. Our kids go to private school and we spend a lot of money. And part of that is because we just don't live in a good school district. We live out in the country. And so I was like, if you can save me on those taxes, I would be. Or somehow offset private school income. And what she told me, she's like, I actually can. You could hire them. So I'll have a call with her this week. You can hire them to your company, pay them. You know, they have to do a job, you know, do something. I don't know. They're 1110 and 9. So they would do work and then I would pay them. And they. She said that the standard deduction is $12,000 per kid, which pretty much offsets. Yeah, you know, it doesn't offset completely, but it offsets a huge chunk of private school tuition. And I just went like, boom. You know, it's like, it's so important to have, you know, talk to people who know.

I do that. I pay my son to do work on my properties. Like, he'll stuff envelopes and he'll go over and make leaves, and I pay him. And I actually can put that money in a Roth IRA for him because he has earned income now. So you can start a custodial Roth IRA for your kid, too, and you get a tax write off.

Yeah, and then, yeah, I will check my state's labor laws. That's. But I, you know, it. I've heard other people doing it, but they'll, they'll actually do some work. But, yeah, like I said, I don't pretend to be a tax person, but you got to have these conversations, just like you have these health checkups and things that you do for your personal life. You know, talking to a tax planner is part of that health checkup. It will save your.

You know, you can even. You can write off that shirt you're wearing because it's business clothes. And I can write off the haircut I got this week because I'm presenting a webinar. Right. And so, yeah.

Well, awesome. Really incredible meetup. So next month we'll have our next meetup be the fourth Monday of February. So be on the lookout for that. Are there any other questions? I know we went through the chat box, but anybody want to ask a question? All right, well, really grateful for everybody.

Just one question I have.

Yeah. And Susan, she is maintaining all these accounts by herself. Right.

So how much time does the Susan.

Spend on a day or probably in a week to manage all these properties?

So I only actively manage my one short term rental in Tennessee. The rest I have property managers for, so they don't take up a lot of time. And even my actively managed short term rental, which I only actively manage for the tax benefits, that one, I mean, I spend a few hours a week. I go out there a couple times a year and do maintenance work or, you know, replace the furniture, those sort of things. You have to spend at least 100 hours during the year, which has to be documented to be able to claim active participation to get active management on your short term rentals. So you do need to put in at least 100 hours during the year.

Okay. Thank you. All right. Any other questions? Thanks for asking. All right, Susan, thank you so much for your time today. It was. It was really wonderful.

So thanks for having me.

All right, well, everybody, have a great evening, and we'll talk soon.

Thanks. Thanks. Thank you, everyone.

That's all for this episode. We hope you subscribe, share and leave a review of the show. For more information about passively investing in apartments, check out Wayne's free ebook by going to creipartners. Com Ebook. Also, follow us on Facebook by searching CREI Partners. This was the untold stories of real estate investing.