Yonah Weiss Untold Stories of Real Estate Investing Podcast Maximize Real Estate Investment Returns

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 to Untold Stories of Real Estate Investing. I'm your host, Wayne Courageous. For our next episode, I'm excited to have Yona Weiss with Madison Specs. Yona is the business director for Madison Specs who has helped hundreds of real estate investors save tens of millions of dollars in income tax through cost segregation. He's also the host of Weiss Advice, where he speaks to best of minds in real estate business and beyond. Help others succeed in life. Welcome to our show, Yona.

Thank you, Wayne. It is a pleasure to be joining you once again, this time virtually, but it's always great to chat with you.

Yeah, I'm excited for you to be on the show. I think. I know you're going to have a lot to give our listeners and myself, we met earlier on in the year and just seeing your success with the webinars and the podcast, like we were talking before this, I mean, you're out there and I love that you have the mindset of teacher because we're all here, including myself, you know, just to keep learning. So did I miss anything in that, in that intro? Anything you want to add? I know you're actually looking on the active side as well, getting on investing. So whatever you want to share that I missed before we get started.

Yeah, that's it. You know, I'm a LinkedIn addict, so if you want to learn anything more about me or connect, that's the place you will find me. But I think we'll just leave it at that.

Perfect. Well, at the end, we'll give everybody your info and, you know, I highly recommend people connecting with you, so. All right, so today we're going to dig in on how investors, both active and passive, can save significant tax dollars and doing so legally. We're going to talk about depreciation, bonus, depreciation, cost segregation, all the things that Jonas an expert at. And then when we dig on these things, I would love to first off, start, you know, how did you start? Stumble across cost segregation or this career path and you know, what have you loved Most about working with Madison Specs.

It's funny you asked that, because I really did stumble upon it. It was not like something that, you know, had seeked after because it was, you know, I was involved in real estate in many different forms, but this company really is what I stumbled upon. Madison, Madison Commercial Real Estate. I have a number of Services, Madison Title 1031. But they were looking for someone to work on the business development team. And my teaching background was like, okay, well, I really started loving real estate a couple years prior, getting involved. And I was like, okay, well what do you need exactly? What are you looking for? And it just kind of turned out that my role became kind of a trial and error of doing podcasts and webinars and just really teaching this subject. Because I found the more people I spoke to, the more people I found that had no idea what cost segregation is, let alone how it works. And to the extent of even accountants and seasoned investors, which to me was surprising. And I just decided to learn as much as I can about the subject, have the team members, the CPAs, the engineers in house at Madison Specs that I just soaked up everything from and decided to just, you know, go on a. So I love doing that and I love the fact that I'm able to bring my skill set, whatever that is, into what I'm doing. Because, you know, the engineers and the accountants that are really the experts at this don't necessarily have the same wherewithal of being able to explain it or being able to make it a little bit intriguing. So a little bit more boring. You know, the seminars, you know, I sit in with them and just. Anyways, so that's been fun for me. And the ability to just literally be networking non stop with people in the real estate industry, that's probably for me the most incredible part of this.

So starting off, digging in more on the depreciation. Before we dig into that though, let's split it up between the real estate investment world and the tax world. Can you explain or high level? Both. And obviously we're going to be talking a lot about the tax world today. But just clearing up that differentiation for investors and people interested in investing in real estate.

Well, yeah, I mean, real estate is always talked about as one of the most tax advantaged type of investments. And the reason why that is is because of depreciation. I mean, depreciation is a deduction. It's an income tax deduction that comes along with an investment property. You literally get to write off the entire value of your purchase. Okay. Long period of time. So cost segregation comes in and that's the ability to kind of refocus that depreciation and front load certain portions of that so that you can take huge tax deductions upfront. And so really that's where it ties into real estate. And I think that gets overlooked because people think about, oh, the tax advantages, but they don't really dig into it. Sure, there's a lot of tax advantages like refinancing a property that's tax free money, okay, 1031 exchanges people know about, they've heard about. But depreciation everyone also knows about. But the kind of detailed advanced form of that consequent, very few do. So that's where it ties into real estate and then the taxation aspect of it, like we just discussed. But since it's an engineering method, the consequent study itself, it involves taxation, but it needs to be conducted by engineer. So it has this weird aspect to it that even accountants who should know things about the tax code aren't really familiar with this part of it because it involves this engineering component to it.

So the real estate side, when someone invests, say passively or even going in actively, you'll have those returns, those dividends that are coming in from cash flow. And then from the tax side, what you're trying to do and try to spread the word out, it's all legal, it's looking at that depreciation to make it more of a loss on the paper side. So that way you're reducing your taxes. Did I say that right?

Yeah, exactly. It's, it is exactly that. It's a loss that is a paper loss is showing you're making money. But when you make money, you have a tax liability to that money that you've made. Income tax liability, right, you made $100,000. You have to pay tax at whatever rate you're taxed at if you have deductions. And that's precisely what depreciation is. It's a non paper loss, as you put it. It's a deduction that reduces your taxable liability. It says, well, if you have $100,000 of income, but at the same time you have $100,000 of tax deductions, well, you've offset that entirely and you get to keep the entire 100,000 that you've made. So without paying tax on it. So that's essentially what depreciation is.

Well, that was really, you know, my next question is what is regular depreciation? So to add to that, you know, who can Use it. You know, if a single family, say someone's an investor of single family units or duplexes, does it have to be a certain cost size or property size before they can get into that regular depreciation?

It doesn't. When you buy a property, no matter what size or shape the property is, as long as it's not your personal residence, as long as you're not living there, and even if, even if it is, you know, a duplex or something, you're living in one unit, you still get depreciation on the other unit. Okay, prorated to however much space that is. So, yeah, any type of investment property, or business property for that matter. And this is really what's funny about it, because probably a lot of listeners here are real estate investors, but people who are business owners that also own the property they operate out of don't necessarily consider themselves real estate investors. The same holds true if you're, if you own your home, you don't consider yourself a real estate investor. You bought a piece of real estate and that's pretty much it. But the difference between a business owner is that they actually get depreciation. They get that depreciation deduction. And again, it's literally a paper loss allowing you to write off the entire amount of the property, meaning you paid a million dollars for your property, you get to now subtract a certain amount for land which is not depreciated, but then the entire rest of that amount you can now take as an income tax deduction a write off over a certain period of time.

So on that you mentioned, the land is not depreciable. Right. So if the property was built in the 80s and it's been traded multiple times through the cycle of its life, that depreciation starts over every time a new buyer owns that property. So if it's a 1980s property and in 2020 they bought that property, they can benefit from depreciation as of this year. And is it different asset classes where I understand like multifamily, you can depreciate the improvements or the property on the land at 27 and a half years. And then like office and other asset types is more about 30 years and it's more of a straight line. Right. We're talking straight line depreciation over those amount of years on the property as whole.

Correct? Right. So residential, including multifamily, is a 27 and a half year timeline, which means you take that entire amount and, and it starts, and it's a really good point you made here. It starts the day you purchase the property. So it doesn't have to do intrinsically. And this is the crazy thing about depreciation, it doesn't have to do intrinsically. With the wear and tear of the building, you literally get to take the value that you paid on closing day and now start your 27 and a half years from that day. And like you mentioned, for commercial properties other than multifamily, it's a 39 year schedule. But that's anything office, industrial, self storage, retail, you know, you name it. Anything besides for where people actually live.

Nice. Yeah, it's a huge, huge benefit. So, and that's really, you know, so the income, say if I have a duplex, triplex or a large multifamily property that is, you know, tax season comes up, talking with your, I guess, tax advisor and they would make that, I would say journal entry, but they would make that entry to your, your tax forms. Right on that. Is that as simple as that or do you need to go to an. I wouldn't think at this point in the game of our discussion you need an engineer.

Sure. Right. So the simple form that most accountants understand, depreciation is they take the entire property and they put it on a 27 and a half year schedule like you mentioned, called a straight line depreciation schedule, which allows you to take that entire amount minus land and then you take that and then you divide that by 27 and a half years. The first year is always a little bit tricky because it's, it's prorated to the date that you bought the property. So that first year you never get a full years of depreciation. So you have to divide it by 26 and a half really. And then that one year, so that 26 and a half, that's going to be every year between year two and 26. And then that first year is going to be prorated. It's going to be just a little bit depending on when you bought the property, how much depreciation you took. So yeah, it's a pretty much straightforward. But it's interesting, it's a tax, like you said, it's a line item entry.

Right.

And so the way that a lot of accountants operate is they are just, you know, putting in computer data points. And I think this brings me back to the point why I was so surprised to find how few CPAs, how many, few accountants are actually know about conservation or are telling their clients about it. Because it takes a little more proactivity. Right? You need to actually care about how to reduce your taxes, not just how to enter those numbers into the system.

And you mentioned earlier, so business owners, so equipment, desk, large machinery, anything that you use for your business, my understanding, can be depreciable, same benefit in real estate, but you don't have that same benefit of depreciation and gold and other type of investments. Is that correct? So mostly, mostly on the business side of real estate are the two areas that can really benefit from this.

That is correct. Any, like I said, for a business perspective, for a business property, the property itself can be depreciated. But then when we get into cost segregation and we are depreciating equipment and, and furniture and things that depreciate on a shorter lifespan. So all those things like you mentioned, fit into that shorter lifespan. Right? Furniture. And that's in any type of property, whether it's an investment property or a business property. And that's precisely what we're doing. When you just buy equipment outright for your business, it's very easy to know how much that costs. You can depreciate that on the, you know, the number of years that that is depreciated. Right, you can. And when I say depreciated, I mean take that as a tax write off called depreciation. Right. It's not like it's necessarily going down in value. I mean, equipment usually is, but the real estate itself is not. And so the interesting thing is you can start that process over. The conservation is the process of identifying what all of those things are in the building after you bought it for a new construction. It's very easy to know what was spent because you have those invoices, you know. Exactly. I spent $50,000 on paving the parking lot and that depreciates on a 15 year schedule. I spent $47,000 on new washer and dryer for all the 300 units, whatever it is. And you have those line items, you can now depreciate those on a five year schedule. But when you buy a building for $10 million and that includes everything that's in it now, you have to go back and like reverse engineer. Well, how much percentage of every tiny detail of this property is depreciated. And that's really where this, why this is so complicated?

Well, it's complicated to me. It's sort of, you know, icing on the cake. So it gets better as we dig more into this and I get more excited about it because it's like cost segregation. Okay, it's great. You depreciate, say in the multifamily world, 27 and a half years or other asset classes sounds like 39 years, which is exciting. But most people are not owning their properties that long. I mean there's definitely long term owners, but I would say majority of people are not just making a wide statement out there. But then there's this thing called bonus depreciation and it gets a little more exciting and then we'll get really into that cost segregation that you're, you know, you're talking about, but bonus depreciation. So my understanding in 2017, a law came up, came past that you can depreciate instead of doing that 27 and a half year or that 39 year depending on asset class, you can depreciate faster on the property itself. Can you talk to us more about that and, and who should take advantage? And you know, to me I think that's, it's an exciting aspect to, to tax shielding your taxes.

Absolutely. It's a really exciting thing. It's probably one of the biggest game changers with, with real estate investing and depreciation in general. That's been for decades and this bonus depreciation law. So just to clear that up, clarify what is that? So it actually has very much to do with cost irrigation. So once you've done a cost segregation, the things that depreciate faster, which we are allocating into these faster lives from the main building, okay. So the main building and the main structural components of the property, like the roof, the windows, doors, main electrical, main plumbing, you know, things that are actually structural, those all depreciate on that longer 27 and a half or 39 year schedule. But everything else, and that's essentially what we're doing is reallocating stuff to faster life. Once you've done that, once you have done that cost irrigation and you have allocated different property to this faster lives, that amount, those assets can now be depreciated, what's called 100% bonus depreciation in the first year. So the structural component, which is usually always the majority, cannot benefit from bonus depreciation. But the other aspects of the property that were cost segregating, which typically is, you know, for multifamily and other types of properties, between 20 and 30% of that building cost. So it's not insignificant at all. So now that amount you can take as what's called bonus depreciation to take it all up in the first year as one year deduction.

Great. So, so 70 to 80%, well, 60 to 70% of the property would be on that straight line depreciation because that's more structural, roof, facade, etc. But then going into it. So carpet, floor, obviously the flooring, appliances, shelving, that is what benefits from a bonus depreciation. And to do that it sounds like you have to do the cost segregation, for example, to a firm like Madison Specs. Right?

That is correct, yeah. 100% correct. You can only. I wouldn't say you can only, but the best way to do it is first, yeah, you have to do that cost because you have to identify what those things are that do depreciate faster. That now you can take the option and say I'm not going to put them on a five year schedule or a seven year or 15 year schedule, which is where we're reallocating things to. But I'm going to actually take the entire amount upfront and depreciate them on the, on one year schedule.

So as an active investor myself, you know, I'm going in and doing value add. Repositioning the property and such is, you know, choosing this is, you know, a question that I have, I'm sure other people have. But decisions are making on finishes like the type of flooring and the appliances. What type of finishes or what type of thing should I be thinking about that has really that the most benefit on that bonus depreciation that, you know, if I'm a five to seven year holder of the property, you know, I should be looking at, you know, if I recall flooring was, was a big one. I don't know if appliances, you know, color or anything matters, but if it does, you know, let us know.

Right? Yeah, right. The color of the appliances doesn't necessarily matter. I mean. Well, I take that back. It does matter. Okay. If you're an interior designer it does. But for tax purposes it doesn't. But what does matter is knowing what the value of those things are. Because as I mentioned before, when you're doing the, when you buy a property, you take the entire purchase price and you're putting that on a depreciation schedule. Meaning you're saying now I'm starting based on the purchase price, how much I can now take as a tax write off over a number of period of years. The only time that changes, okay, obviously it changes when there's a change of hands, when there's an acquisition. Right. Starts over. But for you as the owner, the only time that changes is when you add more money into the deal, into the property, when you make capital improvements and you spend more money into the property, it does not change when you do a refinance or you get an appraisal and say now it's worth more, doesn't change your depreciation. Okay. So it's important to note, yes. When you are spending money to upgrade the property and you're putting in whatever amount, 50,000 for flooring and appliance, etcetera, you have to know how much is that I'm spending and how that can be applied to my tax return. And like you mentioned, those things are depreciated on a faster schedule. There are things that are structural you're doing. You may be tearing down some walls, maybe painting. You may be doing some things that are more structural in nature, like replacing the roof. That does not benefit you from a cost segregation standpoint, but it still will be depreciated. So you have to know how much I'm spending and then how to apply that.

Got it. What happens, you know, speed up five, seven years, you use this bonus depreciation. Is that tax accrued or carried on to the end? I mean, you're obviously benefiting from cash flow, say from a passive investor. You put in 100,000 on the investment and it's a 7% return. So you're, you know, 7,000 a year. And we hire Madison Specs, do the cost segregation benefit from this bonus depreciation? So we're showing a loss on the property. So that investor is keeping that 7,000, you know, each year, tax free. Well, what happens at the end, right when it's time to sell? Is there a catch up? And what, what should investors expect at that point?

Sure. When you sell a property, you have a tax that you're hit with called depreciation recapture tax. Now similar to capital gains tax, when you sell a property, if you made a profit, you have to pay a tax on that amount of profit that you made. So too with depreciation recapture, we're looking at the purchase price and then how much depreciation you took over the course of ownership. That amount you took, you now have to pay a tax on that amount. It's not like you have to, like some people think recapture means you have to pay back that depreciation. It does not mean that. What it means is that you're subject to a tax on the amount of depreciation you took. And it's actually taxed on a few different ways depending on how long you held the property for and if you did consideration or not, what we're being spent on. But without getting too complicated into that Simply put, it's a tax. You're subject to that for sure. Whether you're an active or passive investor, you have to keep that in mind. Upon the sale, you will have the capital gains tax to deal with. You have the recapture tax to deal with. And when I say deal with, it's something that can be avoided, right. It can be Deferred by doing 1031 exchanges. Right. Those are easy ways. As a passive investor, that may be a little more complicated. Not necessarily. Every syndication has the option to roll it over into a 1031 exchange. It's still something out there. But what is important is to know that if you have more investments. And this is why people who are in real estate are not just one trick ponies. They're not usually just investing in one property. And that's it. Most people that I've come across are people that are investing in multiple properties, multiple deals as years go on, not just one this year. And then I'll invest again in 10 years from now when I sell this. No. So let's see how I can scale. Let's see how I can reinvest. And this is really important because this is where consegration and this recapture tax and all that comes together more so than any other aspect is because when you have depreciation, these deductions offset your income. Okay. But it can also offset that recapture tax or the capital gains tax upon the sale. So it's important to note that it's not all, you know, just all or nothing over here. It's not just like, well, yes, I put the money in, I'm getting tax on the back end. It also has to, you have to understand your overall tax strategy. And probably the best part about that tax strategy is that you can have multiple investments and get the benefits from, you know, from one to offset the, you know, the tax from another.

Yeah, yeah. A lot of the people I've talked to on this podcast and just out in the market and, you know, in general building relationships, it's, you know, why. Why did you get into real estate investing? Majority of the time it's because of this tax benefits. Right. It's. It's to shield their other income too, you know, that they have from other resources, you know, whatever their other. If they're on the active side, you know, other resources that. And they're using, you know, this tax benefit to them as, as well. And also to go back to. Yeah, we're not. It's. You're saving the taxes up front. And maybe for the first however many years until you sell. But cash is king and cash is worth more today than it is tomorrow. So if you're not having to pay that tax this year, then. And you were say 100% passively investing in real estate. Right. And you're just, there are those people that are just 100% passively investing. We've interviewed one on this podcast. You know, in essence, his or her taxes could be near zero or at zero, pretty close for as long as those properties are still within the investment. And then when they sell, to your point, it sounds like they can either do potentially if it works out at 1031 Exchange, where they're taking that money, putting it into another investment and continuing to kick the bucket of taxes down the road, but all in the meanwhile enjoy that tax free income legally. Right, right.

Which is something you don't really find in too many different places. Right. It's very rare to find this. And again, that's why real estate is considered one of these tax advantages investments, because what other investment vehicle are you getting those returns on your investment over, you know, the cash flow over those years and you know, potentially tax free.

So stalking your LinkedIn page and you know, you wrote about the benefits of cost segregation and we've talked about a lot of these already, but I really want to hit home while we have, you know, these things. So one of those benefits was that you had written on your or your LinkedIn was cost segregation can maximize annual depreciation. So I guess this goes back up to the bonus depreciation, right. Of you know, you're maximizing, you had that straight line depreciation, but then you go into the walls, you go in, into the building and you maximize that depreciation. Right. So that pretty much summarizes that first.

Yeah, pretty straightforward, right? We're accelerating, we're accelerating depreciation, we're maximizing depreciation.

And I mean, all investors scratch my head when you say that a lot of people don't know about this. Right. Because this is the huge benefit of real estate investing. So hopefully those active investors are doing this. But hopefully if you're passively investing, you're listening to this podcast, you're getting educated. That's something definitely to ask your, you know, syndicator or your sponsor for that property. And Yona, when a active or, you know, syndicator or sponsor is going through the sale process and they're raising capital, you know, they're really should be contacting, you know, someone like you or your company or others that do this Type of cost segregation early on. Right. And passive should be asking, you know, what are those benefits for this investment?

Yeah, I would think so. And one of the things that we do is we provide a free analysis up front, which is basically just a one pager, which will show you what the potential tax deductions, what are the potential depreciation, what the difference between regular straight line depreciation and your tax benefits of that versus doing the consequent. So you can see up front, even before you buy a property or whether you've owned one or you've owned one for years, whatever, and you're thinking about doing consequences. You, you can already see that and you understand it from a kind of objective perspective and see, well, hey, does this make sense?

Yeah, I just think that it's so key. I mean, most investors aren't passive investors are not thinking about that. Right. So definitely a nugget to take away from this is ask your sponsor syndicator, you know, what is the tax benefit through, you know, and if it's free, you know, especially through, you know, Madison Specs and you know, there's others out there, but I'm a little, little biased towards, towards your company. And you, Yonah, Yeah. You've been on this podcast and really so much value. But the second thing you put on your LinkedIn, so we talked about cost segregation can maximize annual depreciation, but then you get into reduced upfront income tax costs. Can you highlight that once again?

Yeah, well, listen, I think it's actually saying two sides of the same coin, which is income tax is the biggest individual and business expense that anyone has. And so with increased depreciation deductions, what you're doing is lowering your income tax. And especially if you are a real estate professional. And I think I want to touch on this a little bit because it's something that's so important, so integral to understand what the maximum benefits of consolidation are is something that the IRS coined called a real estate professional. Okay. This is someone that spends, you know, either you or your spouse. So actually only one of a couple needs to have this status in order for both of them to benefit. And it means that one of you spends the majority of your time in the real estate trader business. Okay. So you're a broker, you're property manager, you know, you own properties and you're dealing with acquisitions, you're dealing with construction, you're dealing with, you know, whatever that is, all those different things. You literally get to take the tax deductions from depreciation to offset Your ordinary income, what that means is normally real estate income, what's called rental property income is considered passive income. That's not your Schedule E. That's a passive deduction and depreciation and consequent, which is again, just the same thing. It's like depreciation on steroids. It's like a lot of it. You use that to offset your passive rental property income, and that's it. Okay? If you have more deductions than you have income, you actually have what's called a passive loss. You create a passive loss. You have, you know, $100,000 of income from your properties and you have $200,000 of deductions from cost segregation. You knock off the entire 100,000, but then you have a remaining $100,000 of what's called a passive loss. Okay? You are limited to how much, if any, of that you can actually take beyond your rental property incomes. It carries over. So don't get worried. You don't lose it if you don't use it, you get to use it next year. It carries forward to the future years. But if you are a real estate professional, you don't have that limitation. And you can literally use those extra deductions to offset your ordinary income. Okay, so when we talk about lowering, reducing your upfront income tax costs is that if you have a way, especially if you're a real estate professional, to lower your income tax liability not just from your rental properties. And I say rental properties because deductions from one can be used across to offset income from multiple from all your properties. But if you are a real estate professional, you can literally use that to offset your ordinary income as well.

That's a huge benefit. And that's why a lot of people that maybe have gotten in real estate initially, but they're now real estate full time just to get that real estate professional benefit of applying, I guess that that full loss to other sources of income for that investor, that individual. So thanks for, for clearing that up and adding more on that. The real estate professional.

Yeah, it's huge.

So lower cost of capital. Can you talk to me about that? Is that the capital improvements that I'm putting into the property?

Well, capital in general, cost of capital, you know, capital is like money. Like where. And everyone's looking for money, right? Whether it's from equity, whether it's from, you know, financing from banks, everyone's looking for money. And lowering your cost of capital means in any type of investment, you're always going to do some sort of a picture to See, well, how much will it cost me if I get a loan at this rate? Or how much is it going to cost me if I get investors and giving them returns at this rate? Each one has a balance when you have more cash flow, and really, that's the next one as well, improving your cash flow when you have more cash flow. Because again, if you have $100,000 of income and now you've knocked that off and have literally zero income tax liability, Instead of having $70,000 to play with because you had to pay 30,000 to Uncle Sam, you now have $100,000, which means you have lowered your cost of capital, meaning beforehand you only had $70,000 of your own money to invest. You would have to take out a loan for 30,000, right? Let's say you're taking a loan for, you know, $150,000. You'd have to take an $80,000 loan. Now you can take a $50,000. So again, that's lowering your cost of capital. How much is it going to cost you to, you know, get that loan or get that investors? Get those investors.

So are there any other, you know, any other questions you think I should be asking about depreciation, cost segregation, you know, that you think our listeners should know? I mean, we've, we've covered the straight line depreciation, the bonus depreciation, cost segregation. But is there anything out there that I'm missing that could, you know, benefit investors or real estate professionals?

Yeah, absolutely. I think it's important. Like I said, the, the free estimate is probably the most important aspect of this whole, you know, this whole thing, right? It's all education, it's all learning. If you don't know anything about this, right, and this is your first time you ever heard hearing of this, I'm sure you've learned a few things, but if you want to continue that education and you actually have a property that you're, you know, buying and you're like, well, will this benefit me? Well, first of all, have a conversation with your accountant. If your accountant doesn't know what this is. So that's a good sign for you to maybe get a new accountant. But it's also a good sign that, well, maybe I should reach out to someone who will be able to tell me about this and then get that free estimate that, you know, that free analysis, which again, will help educate you, to tell you, what's the difference? Is this actually going to benefit me? Is it not in that we'll also tell you what will it cost to get it done. That's something obviously everyone needs to know. Well, okay, this is not a free service. The analysis is free, but it's actually get the full conservation study done. Costs a little money. How much is it going to cost and is it going to be worth it? Are my tax savings going to outweigh the cost of the study? And the answer to that question is, you know, 99% of time, 10x the investment. You know, unless you have a very small, you know, $50,000 single family property that you bought, I wouldn't recommend doing cost segregation just because the benefits really are there.

So shifting gears, a lot of great info on segregation and such, but you, you have so much experience in just real estate investing in general, you're getting on the active side as well. So I'd love to hear, you know, what do you think are the good, bad and ugly aspects of real estate investing? One of the questions we ask on the show is the good, bad and ugly. Would you share any thoughts that you have?

Good, bad and ugly? What can I say on that? I think the good is there's so much good because real estate investing is a way for you to kind of diversify your investments. The community that I found in real estate in general is probably the best part of it for me. So the networking, which I love to do and just meeting such incredible people, people that are in general, I found, are more growth oriented type people, people that are successful maybe in one endeavor and are moving into real estate to increase their wealth, increase their cash flow. So it's really proactive people, people that are growing individuals. That's number one. I think it's the good for me that's the good. The best part about it, the bad, the bad is jumping in before you have any idea what you're doing. I've seen a lot of people get burned that way, just not having the experience and thinking that they can take on more than they really know. There's a fine line between jumping in because you're hanging on the fence and you're ready, but you just have that imposter syndrome and actually not having any idea what you're doing, not having the proper financial wherewithal in your mind to know what the impact is going to be by not taking those as a precautions and sometimes that comes with just experience. So it's a kind of catch 22 because you do have to jump in at a certain point to experience those things. But the way to combat that is to partner up and to apprentice those who have gone through it before. And I know Wayne, like you've done that with James and his group and finding mentors, finding people that have gone through it. You don't have to start, reinvent the wheel, start from scratch. You can get a lot of that by proxy of someone that's done it before you. So that's the bad again is just that kind of jumping in over your head. And the ugly part of that, it's part of that. The ugly, I think is just people who are not honest. And that comes with any business. Not just real estate in general, but contractors have a bad name. And I think I've experienced this firsthand. But contractors, subcontractors, I think it's unfortunate, but a lot of them are just trying to get work and not necessarily the most honest. So make sure that when you are dealing with vendors or dealing with contractors specifically, use someone that comes with high recommendations, not necessarily the cheapest bid.

Yeah, I appreciate you going through that. Good, bad and ugly. And one question I'll also ask before we close up here is, you know, what are your most proudest moments doing what you do or in general love to hear what you feel is your most proudest moment in your career?

As I mentioned before, I love this because it's helping people. Literally, I help people all day long. Save tax. And you mentioned at the beginning, like hundreds of people saving tens of million dollars in taxes. Well, you know, that's kind of like an abstract number for some people, but when you are that person who got a bill from the IRS that had a six figure number on it, and then you do the consegregation and that number disappears and now is zero, well, that feels pretty good. Okay. And to be the, you know, the conduit to help make that happen, that's. That's amazing. I mean, that allows people to enjoy what they're doing more because, you know, I'm able to provide them with this very, you know, very simple service. Right. And I always say, like people, a lot of times people will tag me on a post on Facebook or on LinkedIn where they just close a deal and like they're tagging the whole team, like the lawyer and the title, and they'll tag me also. Listen, I had a very small role that has a huge, huge outcome. So it is a very tiny role. But I'm very fortunate to, to have all those incredible people in my network and those clients that trust us with the work. And to me, that's a proud moment.

Well, Yona, thank you again for being on the show. And providing these insights to help me and investors out there. Anything more you want to share on the show or about your company, your listeners? I know you've got a weekly meetup. I mean, you've got so much going on. So take as much time as you need to get the word out. I'd love to, you know, have my listeners get to know you more.

Yeah, absolutely. Like you said, LinkedIn is the best place to find me. I got the, you know, the Weiss advice podcast going on. Have the weekly meetup on Zoom where we get a speaker, come out and do some networking that way as well. That's a lot of fun. You can all find that all on LinkedIn. But the only other thing, let's say you can go to yonaweiss.com because that's where I have, you know, everything that's going on, including the deals coming up that, you know, working on in terms of the actual real estate investing as well. So you can check that out. You can go do the cost segregation thing as well there. Find our company, Madison Specs. And yeah, thanks, I guess. Thank you for having me, Wayne. It's been a pleasure.

It's good seeing you and if I can do anything for you, let me know. We'll definitely stay in touch.

Awesome. Well, good luck to you with everything going forward and appreciate you inviting me.

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 multifamily apartments, check out Wayne's free ebook by going to creipartners.com ebook Also, follow us on Facebook by searching Creipartners.