DreamNation Real Estate 15 – Brandon Hall: How To Optimize Your Accounting For Real Estate

Casanova Brooks:

What’s up dream builder. We are back again with another real estate episode, and I’m excited for this one because we bring someone on. That’s been doing it for many a years, not only as an investor, but also teaching investors, how they can protect their wealth. And so without further ado, please help me in welcoming my friend, mr. Brandon Hall to the show. Brandon, you want to go ahead and say what’s up to DreamNation.

Brandon Hall:

Yeah, thanks Casanova for having me on. I really appreciate it. happy to share my insight and running a virtual team investing or taxes, w w w and any of those topics.

Casanova Brooks:

Good man, we’re going to tap into all of them at least a little bit, but I always like to make sure that we start off with the proper introduction in a way that I do that is I always compare us as entrepreneurs to superheroes.

Why is because we’re constantly flying around the world. We’re putting on our capes and we’re trying to solve the world’s biggest problems. And so for you, obviously you’ve been a superhero, not only in your family’s eyes, but also in the eyes of a lot of investors because you’ve helped them protect well.

So my question to you is before you had your CPA business and you’re helping with taxes and your real estate business and all of that, let’s take it back to when you were just a young boy and tell us who is that superhero or that Clark Kent behind Brandon Hall.

Brandon Hall:

Yeah. Yeah. Yeah. So I think, I think it all started for me the entrepreneurial mindset that started for me in middle school.

I remember my mom led a class as like an afterschool class. My mom’s, an engineer. It was like after school, she came in and taught everybody how to invest in the stock market. And we played this like game. There was a software and I was trying to game the system and that’s really where it started for me.

So throughout high school, I had different like weird jobs or. I had a little mulching business at one point. And I say business very lightly, by the way, I had two clients that I would spread mulch for once a year. I mowed a couple of lawns and I was just always trying to like, figure out how to make a couple bucks then in college.

so I went to East Carolina university out in North Carolina. Go pirates. And during college, the same thing I studied, I studied economics. and that kind of led me to a double degree in finance and accounting. So I didn’t actually. Degree, major in economics, but that kind of led me down that path.

And it was just so fascinating to learn about the psychology behind everything and how money works and how business works. And so throughout college, I also tried a couple of random things. At one point we were launching like a t-shirt business that didn’t hold like maybe three sales, a lot of, a lot of these like kind of half hearted attempts at, trying to earn money, but really what I, what I kindled it all to is just simply.

Being lazy, it’s just trying to figure out how to make the system work for you in a way that you don’t have to go and slave away at W2 job. I just, for whatever reason, that just did not appeal to me. So after college I went and got a W2 job at Pricewaterhouse Coopers. This was one of the big four accounting firms.

Three months into it. I knew that it was not for me. It just, it just didn’t feel right. My idea, I had a lot of ideas and my manager kept telling me, no, we don’t tell the client that type of stuff. And it just didn’t make sense to me. It, I didn’t understand why now I understand why by the way, being in professional services, but at the time I was too naive.

So I did that for about a year and a half, then switched to their competitor, Ernst and young did that for about a year and a half, and then launched my own firm. and now we have 17 staff at the firm. I, 100% own it. We’ve got about 600 clients nationwide. It’s only real estate investors or people that are in real estate.

So we work with a lot of agents, brokers, construction guys, the developers. And we work with a lot of syndicates and funds as well. But the one commonality is everybody is in real estate. So it’s been a lot of fun. Most of the people on my team invest in real estate too, which is a cool.

Unplanned competitive advantage or was a hiring for that. But. What happened is people would reach out to me and they say, I’m buying real estate and I’m an accountant. And what you have going on seems really cool. And I don’t know much about tax, but all I’ll spend whatever it takes to figure it out.

Cause I want to work for a firm that aligns with my interests and that’s how we scaled out. That’s my team essentially. And in our clients love it. Our clients absolutely love it.

Casanova Brooks:

Nice man. It’s crazy journey. And I love what you said about, I just knew that it wasn’t for me. And the reason why is because there’s a lot of people right now, especially because we’ve been going through this pandemic, that this is their opportunity to Merge their way out, if that makes sense.

And so they’re looking at it and they’re saying, you know what? I think that’s exactly me. I understand that in this corporate world, I’ve had a lot of ideas. I keep getting shut down. It feels like everybody can tell me no, but nobody can tell me yes. Maybe I should go along that path. So maybe someone hears this and they say, okay, that’s really cool.

And maybe they could go down that journey as well. My question to you is, as you’ve built your team, which if I understand correctly, it’s a hundred percent remote. Are they all here in the U S or now have they, all here in the U S what’s been your biggest challenge from a business owner perspective of growing a remote team?

Brandon Hall:

So the biggest challenge is figuring out what to hold people accountable to. And on top of that, instilling a really strong culture, that those are the two biggest challenges that you face with a remote team. The, the accountability piece is tough when I was at Ernst and young, I was, quote unquote, managing two people.

And when, when I think back to it, it was really do you show up on time? 9:00 AM. Do you leave at six? Are you booking 45 hours a week? And is the quality of your work decent? If yes. Cool. You get a 300 performance review. and I know that that’s oversimplifying performance reviews, but there’s a lot of that.

In, in the in office environment, there’s a lot of the, do you show up at nine or at eight or whatever that start time is. And for me it never made sense because if I, if I produced the work, it didn’t make sense to show. I think that you should show up on time and I showed up to this podcast a minute late, so I’m eating my words right now.

But anyway, you, you should show up on time, but how important is that to your overall performance? and, and you should. Spend whatever time needed to drive the results. But is that nine to five or is that nine to 10:00 AM? What are the results that you’re actually being held accountable to? So the biggest thing for me was trying to figure that piece out.

I knew that running a virtual firm, I did not want to track people’s time. I didn’t want to worry about what time they started or what time they left, or if they decided to take a break for two hours in the middle of the day to go to a barbecue, which our employees have done and I’ve encouraged it, it doesn’t matter to me that that makes it it’s your time.

You do it the way you want. We call it work-life integration, not balance. There’s no Saturdays and Sundays you work whenever you want to. It doesn’t matter. The difference is that I’m going to hold you accountable to a set of results that you can reasonably achieve in a 40 to 45 hour work week. And those results are what, what I hold you accountable until you either hit them or you don’t.

And that’s the objective piece of accountability. There’s also the subjective piece of how else did you add value to the firm and help the firm achieve key objectives? So that was the hardest piece to figure out. And it’s a weird thing because you, you, you have to try to figure out, are you going to be hardcore about this?

If, if I’m holding you accountable to $15,000 a month in revenue and you hit 14,999, And you come to me for a raise and a promotion. What do I do? Do I tell you you missed it by a buck? Or do I tell you that was close enough? So you got to figure out like how hardcore you want to be about results and that’s going to influence the results you hold people accountable to.

But once you have that, you add immense clarity to your staff and to your organization. And, and it’s always something that can be improved and worked on too. So that was my big thing for 2020. And I’ve been working at this for five years when my big thing for 2020 was to finally solidify and add that rock solid clarity to everybody.

Because even when you get employees coming on board to They’re coming from environments where they show up at nine and they leave at five, they get a three on their performance review. And now all of a sudden you’re telling them, it’s, you’re going to work 40 to 45 hours a week. But you’re going to work and you’re going to drive results.

And here’s what results look like. And are you willing to accept this challenge? Because it’s going to be weird. And so that’s, that’s the toughest thing is just holding people accountable to results and making sure it’s the right results for the right things. the right motivations.

You’re motivating the right behavior.

Casanova Brooks:

And then the second piece of it, which, takes on a whole life of itself, but the culture thing, Whether you’re corporate or whether you’re not, I think a lot of people struggle with, with culture, just like you said, because they’re coming from a lot of different environments.

Like, how has that been for you being, being, are you, is everybody jumping on one team meeting? Have you just, delegated it to like brand managers and they handle their departments? What does that look like for your company?

Brandon Hall:

A little bit of both. So what I like to say is we have to work on culture, very intentionally in a virtual environment.

It’s not something that culture, if you do, that’s not totally true for virtual. It’s true for office too. If you don’t work on your culture, the culture is going to. Be built regardless, right? Like people are going to talk, things are going to happen. The culture is the result of every little decision that has been made up until that point for your firm’s history.

And, and that’s how you define that. So the question is, can I intentionally influence those little decisions along the way? And I think that in a virtual environment is just absolutely critical. To spend the time influencing that otherwise you’re gonna have people in silos. They’re gonna be very isolated because the virtual environment is isolating by nature.

and they’re not going to feel like they are part of the culture that you’re building. How do you intentionally build culture? you’ve got to create meeting rhythms. Something that people can always count on is we always have a Friday team meeting. Same time. It starts at the same time ends at the same time, every single week.

I have a manager meeting with my managers every single week. Same thing. We have a sales meeting, a marketing meeting with various people on the team. All of my managers have weekly meetings with their teams. So doesn’t seem like it’s that different from an office environment. But the one thing here is that we never canceled those meetings.

It’s always going to be there. Except for like holidays, obviously. and we expect everybody to show up and we expect to have everybody to participate. So it’s just creating a rhythm, um, uh, the different team events that we have, the different, the ways that we layout our Slack channels, just all very intentional.

We have an online virtual office called Sococo. That actually replicates an office and we require everybody to be in there. We require everybody to keep their calendars 100% up to date. If you’re out of office, you gotta have big blocks in your calendar so that everybody knows that you’re out. and, and all we’re doing is just trying to be very transparent as to what we’re all doing on an ongoing basis so that we can collaborate and communicate very easily with each other.

And that’s what that intentionality comes from.

Casanova Brooks:

Man. I love that. And I think the transparency part is something that a lot of people respect nowadays, especially in the world of social media, where everything is so hidden figures and it looks like people have big businesses. And then all of a sudden you join their business.

And you’re like, Oh my God, this seems like it’s not like what it was shown to be. So I love that transparency piece and I hope anybody who’s starting right now, their own business, that they can keep that going now for you. You have helped so many investors when it comes to the tax world. And I know that a lot of people right now, they’re looking at this pandemic and they’re being told that, Hey, if you can hold off the next three to six months, It’s going to be a lot of properties that are going to start to come available and rightfully I think that there will be a change in the market, especially with housing prices. Going up. My question to you is one of the biggest questions that I get up front. It should someone be starting an LLC and, and how should they do that? Like what, what do you normally tell a brand new investor when they say, Hey, should I start an LLC before I even get a property?

Or what does that look like?

Brandon Hall:

Yeah, good question. So my core belief is just keep it simple. You’ve got way too much to figure out right now that the LLC conversation, it may be worthwhile depending on your situation, but it may also not be a, so an LLC is not going to affect you from a tax perspective. If you’re buying rental real estate, it’s not going to allow you to deduct more or less.

It’s going to be the exact same tax treatment. Unless you have a partnership, LLC, then it can be a little bit different, but it’s still, everything’s still. The same deductability and all that. the, the difference that the reason that you would get an LLC at the beginning is if you are at risk of being sued, right?

so the LLC is asset protection. If you’re a physician, for example, in your day job, you’re at risk of getting sued. So you should start with an LLC to protect your wealth. And, and that’s just how I stepped through that piece. On the corporation side, people that are buying rental real estate should generally never have an S corporation or C corporation owning the real estate.

if you are going to set up an LLC structure, you can use trusts. You can use LLCs, but I would never advise, I don’t want to say never. So sometimes, sometimes we do, but rarely would I advise that you put your rentals into a C Corp or an S corporation? just an LLC. So when, when we get to that point, you just put the rentals in LLC, and then we.

Say the next thing and your tax positions, the exact same. It’s not going to change anything. Now it’s just a question of asset protection. Do you need the asset protection? Hmm.

Casanova Brooks:

got it. And so for a lot of people that are first getting started, let’s say that I already have three, three properties right now.

I have a little bit of asset protection. What are the benefits that I would get with having an S corporation or C corporation after I’ve already gotten going? Is there any benefit for that? None

Brandon Hall:

if you have rentals now. so where the S corporations and the C corporations are going to come into play is if you have a really large portfolio and you have in your portfolios, pretty much tapped out on depreciation.

So you’ve got a lot of, a lot of cash flow coming in. A lot of taxable income. Now we might look for an S corporation or C corporation incorporating that somehow. And the S-corporation side, we might start like a property management company and the S-corp will siphon off the profits and run it through an S-corporation.

But we have to be very with that very specific reasoning for that on the C corporation side, we can use it as a blocker entity and they call it a blocker entity because. You move profits into the C corporation. It stays there, right? And it’s taxed at that flat 21% rate, but that means that your cashflow, if you’re married, filing joint needs to be, half a million dollars a year.

So we’re talking about a large portfolio at that point. If you have three properties, five properties, 10 properties, 20 properties, you’re probably find just sticking with an LLC.

Casanova Brooks:

So how does cause a lot of people get into real estate because they want to save on taxes. They want to have depreciation.

They want to be able to shelter their income. How does one start to save on taxes? What, are there any tips that you recommend for investors? The, how they can start to shelter? Some of that income.

Brandon Hall:

Yes. So we, there’s basically two approaches. There’s the Warren buffet approach to investing and Warren, if it makes millions of millions of millions of dollars a year, and he also pays millions of millions in taxes a year, but the big famous comparison is that.

His effective tax rate is lower than his secretaries. And the misconception is he doesn’t pay less tax than his secretary does, but he, his total taxes compared to his total income, that ratio is less than his secretaries. So the question is, how can you do that as a real estate investor? And that’s the ultimate strategy over time, over the span of 10 years, I’m, maybe I earned 200 K today.

How can I, over the span of 10 years increase my income to 500 K but only tell the IRS that I earned 200 and rental real estate can do that for you through mainly depreciation and some of the things that we can do. So you just add rentals every single year. You add rentals, you add rentals. You’re adding cashflow.

After 10 years, you’ve added 300 K of cashflow. But we get to tell the IRS that we, we don’t have any cash flow or even we lost money thanks to depreciation. So that’s the Warren buffet approach to investing that lowers your effective tax rate. You’re still always going to pay tax on that 200 K income as long as you have it, but we’ve also added 300 K of income that we’re not going to pay tax on.

So now we’re paying a low tax rate on 500 K of income, which is great. So that’s. Strategy number one. Now we tell that strategy to everybody and then sometimes people go, that’s great, but I want to save taxes today, right? The second. And that’s your mindset in that case now we’re looking at your income streams.

what, or how do you earn income? Are you W2 employed? Are you running a business? Realtor, broker, any other type of business, developer, flipper? What are you doing? And what we’re going to try to figure out is can you qualify as a real estate professional for tax purposes, to qualify as a real estate professional, you need to spend 750 hours personal service hours in a, in a real property trader business in which you materially participate.

You also need to spend more than half your time in real property trades or businesses in which you materially participate. So if I am a full-time real estate agent, that’s all I do. brokering is one of the 11 real property trades or businesses. So if I’m a full-time real estate agent, I’m a real estate professional for tax purposes.

If I’m a physician or if I’m a W2 employee. and I work full time in that role, then I, I will not be a real estate professional, even if I spend a ton of hours because of that second test, more than half your time in re in real estate. Got it. If I work a 2000 hour day job, I’ve spent an additional 2001 hours in real estate.

And while you may be able to do that, The tax court is never going to buy it. And about a hundred people have tried and everybody’s lost. Got it in tax court. So it’s just not going to work. You can work a part-time job and you can hit real estate professional status. And that’s great. It’s a real estate professional status.

What it does is once we hit that, if we can also show that we materially participate in our rental real estate activities, then what we’ve created as a non passive activity. From the rental real estate. And that’s important because passive activities that generate passive losses can only be used to offset passive activities that generate passive income.

So if I go buy 15 rentals and I tell the IRS, I lost 20 grand. it’s all passive and I can only use the 20 grand to offset passive income, not my CPA firm income. So to offset my CPA firm income, I or my spouse needs to qualify as a real estate professional for tax purposes. We then need to demonstrate that we materially participated in our rental real estate activities.

And then the 20 K becomes non passive that 20 K loss becomes non passive in. Then I can use that 20 K loss to offset. My CPA firm income, but it’s really important to understand, because this is the apex of tax planning. If you hit real estate professional status, and if you can materially participate in your rental real estate activities, you’ve got a lot of options.

I can go buy a million dollar apartment complex and I can cost segregate it. And I can probably write off 250 K bonus depreciation in the first year. What does that worth the in tax savings? Probably a hundred K or so. So that’s the refund you’re going to get? I can, I can invest in syndicates. I could put a $50,000.

capital contribution into a syndicate or these guys go and buy the really massive apartment complexes. They’re going to run a cost SEG study too. And they’re going to pass me back a 45 K or so lost that I can then use to offset my W2 income or my business income. Assuming that I qualify as real estate professionals.

So what it does is it allows you to, if you pair it. Really well with an acquisition strategy. if you’re heavy in buying for the next couple years and you qualify as a real estate professional and you materially participate in your rentals, then you can take those losses currently and you can essentially use your tax savings to fund your next acquisitions.

and it just allows you to snowball it much, much quicker. So that’s what, that’s what everybody wants to achieve. We actually put out a 12,000 word guide, end of August and on, on this, on real estate professional status, because it’s, it’s confusing. There’s a lot of folks out there that don’t know what they’re doing with it.

and, and we felt we needed to set the record straight.

Casanova Brooks:

Yeah, no. And we’ll definitely put the link to that guide in the show notes. but I guess my question to you is There’s so many people when, when they first approach you are, are many people just leaving so much money on the table, with the government,

Brandon Hall:

if you are, if you were running a business, Or if you are investing in real estate, typically, yes.

The more your business does. So the more revenue you pull in, or the more properties you own, or the more multifamily, if you own a bunch of single-family properties, your risk exposure is a little lower, but you’re owning other types of asset classes, like self storage, mobile home parks, multi-family assets, the larger your portfolio.

The more you’re typically leaving on the table and there’s a lot of factors in there. Real estate professional status is one of them. There’s a whole other, other set of regulations that I’m not going to go into, but yes. Yeah. So the bigger your business, the more rentals you have, typically what you need to do at that point, if you’re a business owner, or if you’re investing in real estate is you need to find somebody in this space .

That’s all they do, because they’ll be able to educate you on exactly how you’re leaving money on the table they’ll give you best practices to, like rehab property in the future. Like we work with all of our clients. Hey, don’t give us a scope of work that says kitchen rehab for 40 grand. I want it broken down line by line material by material, labor costs, everything.

And you might not be able to get it on something you’ve already done, but the next project, the next project. Now you’ve got a best practice that you can implement into your business. so yes, this is like little things like that, that the experts or the, the niche experts will know. So as you continue scaling, you definitely need to pull, pull those folks on your team.

Yeah.

Casanova Brooks:

Now there’s, there’s something that, one of my, CPA’s a couple of buddies who are,

Brandon Hall:

they want to hear CPAs, man, you’re rolling.

Casanova Brooks:

No, I’m not doing it that well, but One of my buddies who is a CPA, he had told me, and this was a couple of years ago, about ways that I could shelter. income through paying my son.

And so is that something that you’re an advocate of? Because a lot of people don’t know this. And so I guess, could you explain what that even means to somebody who’s fairly new to this?

Brandon Hall:

Sure. so we’re, we can talk about a couple of things. One, we can talk about a, or what you might be talking about is setting up a family management company where you have this company that siphons profits off from your business and an employee is your, your children, your spouse, your grandparents, whoever else.

so family management companies is something that we can set up, but a more simple approach is just to have them work for your business and you pay them a reasonable salary. you can’t go and pay them thousands and thousands of dollars. We have to look at it as if you were to hire somebody else to fill that role.

What would you pay them? And that’s what you pay your child. So a lot of people with the 2017 tax cuts and jobs act, they thought, Oh, what the standard deduction going up? And I’ll explain this in a second. But with the standard deduction, going up to 12,000, now I can pay my children $12,000. Just because the tax code changes doesn’t mean that your child deserves a big raise, right?

So we have to be reasonable. Wait, we have to pay them something that would make sense. And again, what, what, when we’re going through this type of planning with our clients, we always just think, how do we not look bad? How do we not make you look bad in the eyes of an auditor? credibility is a big thing.

Whenever you’re getting audited, or if you go to tax course, you want to look very credible. So the way that it works is it’s just, it’s just transferring wealth. If I earn a hundred thousand dollars net income, I can pay my taxes on my a hundred thousand dollars of net income, or I can hire my children to do different tasks in my business and I can pay them.

And let’s say that between my children, I’m able to shift $10,000 to them. So now I only pay $90,000. I have a $90,000 income. I saved 10 K. Or I, I moved 10 K to them, but my tax rate or my tax liability is going to decrease probably to the tune of $2,500 or so. So by paying them 10,000, I’ve saved myself $2,500 in taxes.

And let’s say that I have two kids that I’ve paid $5,000 each. the standard deduction is $12,000 per person. So because the $5,000 that I paid them is less than the standard deduction. They don’t have to file a tax return and they don’t pay taxes on that. So by moving $10,000 to my children, I’ve, I’ve essentially created $2,500 of additional wealth for my family because that’s my tax savings and they don’t have to pay taxes on their $10,000.

There’s a lot of other rules that come into play. It depends on the age of the child. And, it depends on exactly what they’re doing, but that’s essentially how it works.

Casanova Brooks:

Got it. And so just like you said, a lot of it comes with credibility, And and it has to, you have to show a good intent. It has to be something that’s reasonable.

is there a Mount of kids that you can have on this? is there, you can only do up to four kids? Could I go get my, does it have to be my biological son or something like that? Or what can it be? Like my stepson.

Brandon Hall:

Whoever you want. Yeah. Yeah. Whoever you want

Casanova Brooks:

it doesn’t have to just be under the age of 18.

Brandon Hall:

Yeah. Yeah. To realize the benefits. Yes, yes. To realize the benefits that I’m talking about. Yes. But theoretically, you can hire whoever you want,

Casanova Brooks:

Very much sense. But with

Brandon Hall:

this though, it’s, it’s very much like a lot of people come to us and they go, I’ve got a new baby, the most beautiful thing in the world.

And I want to pay the baby for modeling. And they go, I’m going to pay them $12,000. I’m like, the Gerber campaign, if you win the Gerber campaign, you only get five. So I don’t know how we’re gonna be able to justify 12. Because I have the most beautiful baby in the world and we wanted to get the Gerber campaign.

so anyway, it’s just, it’s just, how do we, how can we reasonably. Say that this was something that makes sense. This payment makes sense. And typically until the kids are like seven, eight, nine, 10, the payments aren’t going to, it’s not going to be worth your time is essentially what it boils down to.

Cause we’re not gonna be able to pay them enough to justify. using the strategy. So typically we wait until the kids are a little bit older and they could take on like a lot of tasks, like cleaning up the rentals and helping this maintenance stuff. And, even if they’re in the teenage years, running your spreadsheets and paying them for your accounting and your bookkeeping and stuff like that.

Casanova Brooks:

Got it now, one thing, because to see so many different businesses and you talk to so many different investors and real estate professionals, and you’re an investor yourself, is there one area that you’re very excited about investing in real estate? Because a lot of people, when they first get in, they’re, they’re wondering which area should I go?

Should I flip? Should I have rentals? Should I go multifamily and try to get into a fund? What’s that look like for you?

Brandon Hall:

Yeah. if you asked me this nine months ago, I would have said multi-family, but I think now I’m in the single family camp and I, I think that, I think that multifamily, it’s going to be interesting to see how it plays out over the next year.

I think that it’s going to, I think that if you have the wrong type of class of multifamily, if you have A class or C class multi-family. depending on how long the economic constraints are or what the real damage to the economy was with COVID. I think that you could see some pain, you could see some pain and tenants not being able to pay.

depending on where the government support ends up landing for an extended period of time. So I don’t know. I think also that you’re going to see people want to move into single family homes to get away from the multi-family space during the pandemic. So for, for me, single family, actually in my mind makes a little more sense, but.

I’m also bullish on short term rentals. Surprisingly. so we have a lot of clients that have short term rentals and a lot of them got absolutely decimated during the earlier part of this pandemic, but now they’re all booked out for two years.

Casanova Brooks:

And so you’re, you’re referring for anybody who doesn’t understand what you mean.

You’re talking about Airbnb.

Brandon Hall:

Airbnb VRB is. Yeah, exactly. Yeah. Short-term rentals. So these guys are booked out for years because people just want vacations. Yeah. At this point, they’re just like, give me away from all this crap. I don’t want to be near people. And so we’ve seen that a lot of people with beach houses, mountain houses, we’ve got clients with property near Gettysburg, Just random, random places that just don’t have availability. They’re just booked out. So super interesting, but definitely a good place in the tax benefits of short-term rentals. Are also interesting. You don’t have to qualify as a real estate professional for tax purposes to take your losses from the activity.

You can, you can have a non passive rental activity without qualifying as a real estate professionals. So if you’re running a business or if you’re a high income earner, And you want to take your rental losses. The answer is to buy short term rentals, Airbnb rentals. And you can, you can do that. There’s some rules.

So don’t just go out, Willy nilly buying these things and say, I heard about it on this DreamNation. You know, there, there are some rules. Yeah. But it’s great. we, we have, we have a lot of clients out in Silicon Valley or who are making. Obscene amounts of money and that, going back to the question of all that Warren buffet approach to investing is great, but I want to save money today.

Cool. By short term rentals, you’ll be able to do it.

Casanova Brooks:

You think there are a lot of short term rentals will start to become available as well? Or do you think that it will always stay, stay hot? Because I feel like for a lot of people they’re just treading water, but you don’t really know like what Arizona, all of a sudden, just blow up over this thing.

what are your thoughts on it? So

Brandon Hall:

what the trends that we have seen are that if you have short term rentals in like random cities or random locations, those are typically not doing very well. But if you have short-term rentals that are in destination areas, those are absolutely crushing it right now.

so just, I think it depends on location. you can’t really cause, cause the location, like I live in Raleigh, North Carolina, And so there’s a lot of people that have short-term rentals in Raleigh, North Carolina. They’re not doing so hot because nobody’s really flying into Raleigh, North Carolina to do business travel anymore.

And to, to come to Raleigh, it’s not really a destination location for a lot of people, so those people are struggling and we’ve seen a lot of those people try to sell their assets to some of them are our clients, but what this means for people that are like me that are bullish on short term rentals, long-term bullish and short term rentals.

Long-term yeah. It provides an opportunity, right? Cause I could be looking around and I can say, Hey, I’ll pick up this property and you’re trying to sell it now because it’s costing you money. You’re not, you’re not having any bookings, so I’ll buy it. And I have the cash to weather the storm, maybe. So yeah, it could, it could provide some good opportunity.

Casanova Brooks:

Yeah, I’ll let, I’ll let you know, for me, Raleigh is a destination area, but for anybody who knows me, they know it that’s cause I’m a diehard Duke fan. yeah. So the Raleigh Durham area, obviously knowing that Duke’s and, and, Durham, not in Raleigh, but yeah, no. Yeah. who inspires you in real estate?

May I ask you that?

Brandon Hall:

Who inspires me in real estate. I dunno. I think that’s a really tough question. I have a lot of people that inspire me. I have my business coach, coach Jeff. He runs a $50 million title company. and he is an inspiration. he just, he’s just a masterful, just a masterful business owner in terms of handling people.

that emotional intelligence is a skill that you can learn and improve on. and that, that if you want to be, if you want to create a, a scalable, if you want to scale a service business, You have to implement a coaching culture. So you have to be able to replicate yourself. And then the people that you are having replicate, you also have to replicate themselves.

So you have to teach everybody how to be a coach, to everybody else, into help people grow and expand their mindset. And that’s the number one thing that he’s taught me.

Casanova Brooks:

Yeah, no, I love that. Has there been any book, like from a tax perspective, is there any book or podcasts or even a blog that if somebody else is maybe saying right now, I don’t know that I have the investment to work with Brandon and his team, but I still want to start learning about these strategies.

Do you have a book that you often recommend for somebody to get started with?

Brandon Hall:

Yeah. So I’m going to do the shameless plug. We have a blog, therealestatecpa.com I think slash blog. we also have a podcast, so we’ve got 130 episodes or so we interview investors and business owners and we asked them a bunch of tax questions.

So it’s a cool behind the scenes look, but not real estate CPA related. I would definitely recommend checking out NOLO that’s NOLO they have a great. A book on tax deductions for landlords. It covers pretty much all the basics. It’s actually the book that I bought to learn the basics myself.

So it’s a really good place to start. And you can also check out biggerpockets.com. That’s the place that I got my start and asking a lot of questions and also answering a lot of questions. And that’s just, there’s just a wealth of knowledge there.

Casanova Brooks:

Yeah. Cool, man. Hey, this has been a phenomenal conversation.

Last thing I want to ask, is there somebody out there right now, that’s listening to this that they’re inspired by you, your journey and the way that you’ve educated and helped others for many a years, but they have this little voice in their head, especially when it comes to real estate that they’re not strong enough.

They’re not smart enough. Or maybe they just don’t have enough resources. What’s the one thing that you would say to that person to get them to just take action.

Brandon Hall:

Yeah. It’s funny that you ask, my team every, every day we have a, a coffee station channel in Slack that somebody goes in and asks a question to get the, get people moving.

And the question today was what’s the, what, what’s your favorite movie quote of all time. And so mine, and this is what I would say to people too. Mine is from Wolf of wall street. One of my favorite movies. The only thing standing between you and your goals is the bullshit story. You keep telling yourself as to why you can’t achieve them.

So get out there and just grind. And you’ll look back five years from now. And you’ll say, man, it was tough. There’s a lot of pain, but I crushed it and look where

Casanova Brooks:

I love it, man, for anybody that wants to stay connected with you, where can they find you at?

Brandon Hall:

You can check me out on LinkedIn. Yeah. I don’t actually know my tag or whatever.

So just Google, Brandon Hall, CPA. LinkedIn, you can check me out there. or you can check us out at therealestatecpa.com.

Casanova Brooks:

Cool. we’ll put all those links in the show notes and we appreciate you coming on. We look forward to hearing the feedback and remember DreamNation, just as he said you, first off we understand that a dream will only work.

If you take action, otherwise it’s only merely a fantasy. So just as he said, you got to get out there. You got to put the work in and then you’ll see the results. So that’s all for this one. We’ll catch you on the next one.