[00:00:05] Speaker A: Welcome to the Short Term Show. The show about short term rentals and long term wealth with real property owners hosting real properties who are crushing it in the vacation and short term rental space.
And here's your host, Avery Carle.
[00:00:29] Speaker B: Hey y'.
[00:00:29] Speaker C: All.
[00:00:29] Speaker B: Welcome back to another episode of the Short Term Show. Sorry I sound like this. I got the funk at Disney in Orlando with the kids in spring break last week. So sorry you have to listen to me like this, but we've got a really cool guest today that you get to listen to who's going to do more talking than me. We got Brian Boyd, a tax attorney and top tax influencer. If you guys aren't following him, make sure that you are following him on Instagram and now YouTube. He's got some some longer form stuff that he's doing now. Super interesting. We're. But I will let him introduce himself. How's it going, Brian?
[00:01:01] Speaker C: It's going well. Thanks for having me today.
It's going to be a nice day here in Franklin, Tennessee which is just south of Nashville.
You know, I'm ready to talk tax and real estate a little bit about me. I graduated from law school in 2004, then I went directly to tax school in D.C.
worked there and got recruited by one of my professors to go work at Ernst and Young in the corporate tax division. Did that for a while, then made my way back to Tennessee.
And yeah, my practice is focused on real estate tax, mergers and acquisitions, some estate planning and asset protection and business law.
So personally I've got 20 pieces of real estate and my wife and I manage that ourselves. We have four AirBNBs and the rest are all long term rentals.
So we're, we're in it as much as everybody else that's probably listening to you as well.
And we utilize everything that I'm going to talk about today, including the short term rental loophole and the real estate professional status under section 469. So we, we self manage those and then for our Airbnbs we have managers for those as well, but we use a hybrid model so we still qualify for the short term rental loophole. And then we aggregate all of our properties together to qualify for real estate professional status under section 469A7.
So, you know, really excited to talk and tell people about how they can utilize this too. You know, if you're a doctor, a lawyer, cpa, an architect, any sort of professional, this is doable. My wife and I have been doing it for a long time and quite frankly the tax benefits are Great. The cash flow is wonderful. And you know, we just want to help other people learn and understand about how to utilize the tax code in the proper way.
You know, tax is not a four letter word. You don't have to be afraid of it.
It's actually a rule book. And if you look at it as a rulebook, much like playing the game Monopoly, you can then know the rules, know how to navigate those rules, or in some circumstances navigate around those rules so you can achieve the tax profile you're seeking and not pay quite as much money in taxes to Uncle Sam while also growing your wealth, which is pretty important for my wife and myself. We have a son and we didn't come for money, so we're more interested in creating wealth that we can pass down to him. So he has a great life and his children have great lives.
[00:03:38] Speaker B: Love that. I think that that's the goal of, of everybody listening to our podcast. So for people, I think most of our listeners are going to be fairly familiar with what the short term rental tax loophole is. But for somebody who might have just done a quick podcast or YouTube search and comes across this, can you give us just a brief explanation of what the short term rental tax strategy is?
[00:03:58] Speaker C: Yeah, and it's, it's pretty simple if you think about it from a 30,000 foot view. It, it basically says if you spend 100 hours managing a short term rental, and that 100 hours is more than anybody else managing that property, then you will unlock all the tax benefits associated with that short term rental.
So what does that look like? Well, if you have a CPA that is married, you know, husband or wife and their stay at home or something along those lines, managing that short term rental just one or a hundred hours a year, that you track those hours and you can document those hours unlocks the tax benefits.
Now you have to juxtapose that with the Section469 Real Estate Professional status, which requires 750 hours a year, which has to be more than any other income producing endeavor that you're involved in. Whether it's W2 or 1099, you have to have 750 hours. And if you work 750 hours in another job, then you have to have 751 hours in real estate. That's not what the tax, the short term rental loophole talks about because the short term rental loophole wasn't made for, for people that are having a second home or, and that they're going to on a regular basis.
So it was actually created for Hotel and motel owners back in the 80s and it's never been eliminated because so many people use it and it is so valuable.
However, I think it's a misnomer to call it a loophole. It's actually a Treasury regulation and that treasury regulation is intentionally in the tax.
So we call it a loophole. It's not really, it's just something people need to be aware of and how to utilize it. Now I will tell you that if you are going to utilize it, you need to track your hours.
Get a spreadsheet, get a diary, get a journal, do something to track those hours. Because those hours are really important to audit. Proof you, if you do ever undergo an audit, you need to be able to prove that, yeah, I spent three hours today, two hours yesterday, whatever, on your short term rental. Now mind you, the 100 hours, if you break it down into what it really is, it's less than two hours a week.
And that's what makes it so attractive to working professionals. It's such a short amount of time that you actually have to spend. And that time can be anything from you got to go inspect the house, you have to turn the house, but you can use house cleaners to do that, you can use maintenance men, but you have to manage those people.
And by managing those people, you are managing the property.
Now the great thing about the short term rental loophole is that it takes what is typically known as a passive activity, which is defined in section 469 and makes it an active activity. And that is what you're really looking to do because you're trying to take it from a passive bucket to an active bucket and offset the active income over here by, you know, doing a cost segregation study and then overlaying bonus depreciation. Because as we talked about before we came on air, one big beautiful bill. Act of 2025 brought bonus depreciation back to 100% as of January 19th of 2025.
So you overlay bonus depreciation onto a cost segregation study and you are accelerating depreciation substantially, even as much as 30 to 35% in the first year as a depreciation number that you can take to offset your income. Now that will all go on your schedule C, because passive income typically in real estate goes on schedule E. But we're trying to make it active to pre lunch schedules.
That's what is going on here. And frankly it's, it's doable. I, I would tell all of your, your listeners out there, this is very doable.
You got Two hours a week somewhere. Just do it.
Manage it yourself. Cut out that middleman that you're paying property management fees to and save that money.
That way you're also more invested in the property. So you can go and tweak the algorithm every day by changing things in the description to get more eyes on that property. Because as you know, Avery, it's all about the algorithm.
It's all about the algorithm. And if you can't get that algorithm moving, you need to do something else. And so self managing allows you to really monitor that very well. Because as I've said to many people before, nobody cares more about your money than you.
[00:08:43] Speaker B: That's true. They don't at all, actually.
[00:08:49] Speaker A: Thank you for listening. We sincerely hope that you find value in this podcast.
We would love it if you would use our team to purchase your next vacation home.
We sell houses in all of the best vacation markets in America and we want to earn your business.
Reach out to us
[email protected] stsconsultation.com that's the shorttermshop.com
[00:09:23] Speaker B: yeah, so you, you mentioned it's not technically a loophole. And I want to call that out really quick because I don't love when people call it a loophole either. And even though I just did it, and I do it all the time because it makes it sound like you're doing something wrong almost and it's not right. It's just, it's a regulation and it's there for a purpose.
[00:09:43] Speaker C: Yeah, it's absolutely a regulation. It is there for a purpose. And, you know, guess it's a. It's definitely a misnomer to call it a loophole, but I understand why people do it. It's like we don't call Kleenex Tissues, right? We just call it Kleenex, right? And it's just kind of picked up this name that is known as a loophole.
That doesn't make it right or wrong. It just means, all right, it's just misunderstood. But it is available to everybody. Everybody. You don't have to be an LLC or an S corp, or C Corp, or a partnership. Anybody can do it. You can be a sole proprietor doing this, or if you want to manage it through your llc, you can do that as well.
So there are really no restrictions on who's able to do this.
Now, I will caution people there may be a phase out of income that will impact your ability to utilize the short term rental loophole, but that is something for you and your cpa. To talk about as you go through that process, but it is there and it's doable for you. One of the things I like most about the short term rental loophole is once people see the effect it has on their tax liability, they realize, oh well, maybe I should buy more of these.
And yeah, you should, because you're trying to snowball a tax loss while being cash positive.
So you want to be tax negative on the one hand and tax in cash positive on the other hand, which is all for everybody. Right.
You can exit out on a 1031 or a 721 or a DST or Slowman's 1031 and not have to repay that depreciation, recapture and capital gains because you're going to defer all that into your next endeavor. No, I really think people need to understand how this works, what it does for them and the insane tax benefits that come from.
[00:11:44] Speaker B: Yeah. So let's walk through a quick example again, just for people who might be finding us for the first time on this episode, who aren't familiar. So let's say you buy a $1 million short term rental. What does that look like in offsetting your W2 to income?
[00:12:01] Speaker C: Yeah, so let's just run through it. A million dollars. Right. So you're gonna have to deduct out the land because you cannot depreciate land. So that's typically about 25% of the purchase price goes into the land. So we'll just take out $250,000 on a million dollar profit. So now we're dealing with $750,000.
The way it would work is you perform a cost segregation study. And if your listeners don't know what that is, that just very quickly it's breaking the house into its individual components that have their own life cycles.
So a house isn't depreciated under 27 and a half years.
When you take into consideration refrigerators, ovens, air conditioning units, doors, wiring, lighting, all the things that make a house a home. Right.
So all of Those have lifespans. 5, 7, 10, 15 and 20 year lifespans.
We are simply trying to put all of those pieces into their individual buckets for their lifespan. That has the practical effect of pushing depreciation to the front.
Now, as you do that and you overlay bonus depreciation on our 168k, which is the bonus depreciation section, you're probably looking at a 30 to 35% tax savings from a depreciation number in the first year.
So 30% of 750,000. You know, we're talking goodness. You're asking me to do math in the morning. I'm still drinking coffee.
[00:13:34] Speaker B: You know, I've got a calculator right here.
[00:13:38] Speaker C: 220 or 225,000, is that right?
[00:13:43] Speaker B: Yeah, you got it right.
[00:13:45] Speaker C: Yeah.
In depreciation in the first year, which is insane.
Think about that.
You bought a house for $1 million and you're writing off $225,000 in depreciation in the first year.
That doesn't account for section 162 deductions, business expenses, or section 163 interest deduction. So you're going to create a larger loss in the first year. Because if you have a million dollar house, are you making a million in the first year? No, you're probably not. You're getting it on an algorithm and it's up and running and that takes time to scale up to that. But what that has the practical impact to do is offset your W2 income because that's what you're really trying to do. So let's just say you have a doctor, he makes good money, he's making $400,000 a year working here in Nashville, Tennessee, working at Batman Build or something. And you know, he buys a short term rental, let's say over in Gatlinburg, Tennessee, a million dollars, it sleeps 12 or whatever it is over there.
And he needs, he needs some help because the tax ramifications of that could be substantial to him. And he doesn't want them passive, he needs them active to help him with his tax loans.
He's got a wife and two kids at home. Right. So you know, he needs to be able to shelter more of that so he can pay for his family and then pay lots of time.
I, I think it's a brilliant idea. But he needs to self manage. Well, if his wife is a stay at home wife or his husband is a stay at home husband, I want to be inclusive of everybody.
They can manage that. And it's not that long, that much time, it's two hours.
So we just self manage it. And you know, Avery, before we came on the air, we're recording, we were talking about how you help people, you know, manage their properties and teach them how to self manage. Self management is not as hard as people think it is. Yeah, I mean there are some things that are kind of quirky about it. You deal with people on a regular basis, so you have to have some service oriented approach.
But you're going to save yourself a lot of money and the tax benefits are.
Mm.
[00:16:04] Speaker B: And it really, it really is easy to self manage.
In the over 5,000 short term rentals that our agents have sold over the past 10 years, I would say there's maybe been five of those clients that truly just did not need to be self managing like they couldn't figure it out.
So it, it's really not anything too difficult at all to do.
[00:16:29] Speaker C: Yeah. And you know, to that point like my wife and I work, you know, I, I'm at the office 12, 14 hours a day, my wife is working 10 hours a day every day. But we still self manage, you know, most, like you said, it's not as difficult as you think it is or most people believe it is.
We use a property management software system called BillVM and there are many others out there like it, but we communicate with everybody through it. Maintenance requests are made through it, payments are made through it. So we have it all in one place. If we want to list a property for lease, it's on there, it's got photos.
Self management has really come a long way since the short term rental loophole was created in the 80s.
So it's not as onerous as people think it is. And hey, no, it's better living through technology, right?
[00:17:26] Speaker B: Absolutely. Even just in the past 10 years since we started, there's been so much like we used. I used to have to sit at the beginning of every month and look at the calendar and write out each day that our cleaner had to go and text it to her. And now it's just all automatic. The strides that technology has made in this space have been huge over the past several years.
[00:17:48] Speaker C: Absolutely, absolutely. And you know, if, if some of your listeners are out there and like, hey, we have two short term rules, do I still do have to do a hundred hours on each? No, you don't.
You can aggregate that time together and you know, if you spent 50 over here and 50 over there, as long as you're aggregating the time, it's going to be more than enough to allow you to unlock those taxes. Now if people don't understand how those tax benefits work, I would encourage you to one, talk to a specialist that does cost segregation studies because those studies in and of themselves have to be defensive.
So you just can't have your accountant do a cost seg study.
The more professional studies are, they send engineers out, they take photographs, they measure things, they look up all the costs of everything.
And it's a report and it is not a short report.
You know, it's Anywhere from.
Some of the better ones I've seen are like from 10 to 20 pages.
And it comes with all the authority provided by the Internal Revenue Service to do this. Now a cost segregation study. It's not an exotic thing. You know, nobody's going out and creating Isle of Man trusts to do this and offshoring the money through the Cayman Islands or the Bahamas. And that's not what this is. This is very vanilla and it's low hanging fruit that a lot of your listeners can do and do with comfort because it's not going to raise your red flag.
So that's very important for them to understand. This isn't exotic at all. This is like very vanilla, you know, routine things that happen all the time. Now the bonus depreciation, when you start applying that, you know, that just really skyrockets the benefits out of this. So imagine having two 1 million dollar properties and taking a half a million dollar depreciation deduction in one year. That's, that's crazy. But it's doable under the current regime under 168k and the short term loophole, you could actually achieve that.
[00:20:02] Speaker A: Thank you for joining us. Here at the Short Term Shop we help real estate investors like you buy and sell vacation homes.
We operate in over 20 true vacation markets across the United States.
If you have more questions about buying and selling, join us every week for a live Q and A at strom the. That's STR questions.com I have a question
[00:20:31] Speaker B: surrounding that the number. Is there a, a max amount for one year that you can depreciate and offset? So let's say somebody has, I don't know, they're making a ton of money and they're like I'm going to buy a $10 million property to do this because I've got a lot of money that I need to, to offset. Is there a limit, a dollar figure per year that you can offset of your W2 income?
[00:20:58] Speaker C: No, there's not. So it's, it's based upon the purchase price of the property.
So whatever you buy can be cost saved and bonus depreciated, whatever it is.
Now what that may end up doing to you is you have more losses than you can use in one year. So you just roll those losses for forward.
So it's a loss carry forward and you would start the following year with those losses to offset your income for that year.
[00:21:28] Speaker B: Okay. And is there a dollar figure limit on the loss per year?
[00:21:33] Speaker C: The loss per year is associated with the amount of income. So you Can't.
Like if you make $400,000 a year, like our doctor example, and you have a million dollars in losses, you're only going to be able to use like $400,000 of that. So you're going to roll the other 600 into the next year.
[00:21:53] Speaker B: Got it. And how many years can you carry that forward? And it's unlikely somebody would be in a situation where they need to carry it more than one. But just for example, sake.
[00:22:01] Speaker C: Yeah, you can. Haven't looked at the lost carry forward rules lately, but anywhere between three and five years, I believe I'd have to check that out.
But hopefully you're offsetting it in the first year and then you have a little bit of loss left over that you could take the first following year.
And that's how it works. But remember, you're also supposed to be making money off your real estate as well. So. Right. That revenue comes in, your 400,000 hopefully jumps up to 500 or 600. Right. And then you're utilizing all of that loss and you buy another property from the savings on taxes and you do it again and again and again. You know, I don't want to get political on this, but a lot of people were talking about President Trump in the first term, how he didn't pay taxes. This is how he didn't pay taxes. He was cost sagging and bonus depreciating assets.
And so as a real estate developer that owns the real estate after he develops it. Yeah, he's, he's able to cost that. And that's what he did.
[00:23:01] Speaker B: Yeah, it's allowed.
[00:23:02] Speaker C: Yeah. And, and I'm in no way getting political here. It's just that seems great example of who does it. You know, other people that have utilized this and talked about it quite a bit. Grant Cardone talks about it a lot. Robert Kiyosaki talks about it a lot. You know, kind of like the Mount Rushmore of, you know who's who of real estate investing. This is very normal. It's not going to raise a flag, but you do have to have the support to back up your position that, hey, I spent 100 hours.
Now, I will tell you and your listeners if you do have a short term rental.
My wife did this the first time that we bought our first short term rental. She wanted to go in and blow it out of the water and spend all this money and restoration, hardware, furniture. I was like, please don't, please don't spend that. But she did anyway because happy wife, happy life. And I'm not Going to fight battles, I'm going to lose. So she did that and then there was no way to recoup it in the first year.
It's like, okay, well, we need to depreciate these assets and offset that income. But now we have a lost carry forward and we overspent. So I would just caution your clients don't overspend with the Restoration Hardware furniture in an Airbnb.
[00:24:19] Speaker B: So, yeah, and that's, that's actually a big kind of hot button topic in the short term rental world right now as a lot of the influencers have.
Either they either own their own design companies or they have kickback deals with design companies. And they're like, hey, guys, buy this $500,000 property and then let's drop another 300 or 400,000 into design and amenities and furniture and all these things that don't actually add value to the real estate. And people are like, oh, yeah, let's do that. And then when they go to sell it, they come to us to list it and we're like, you don't now have a $900,000 property and you're not, we're not going to be able to get all that 400,000 you spent on amenities back in the purchase price.
[00:25:01] Speaker C: Right. And then to that point, you know, it's not like a property improvement that would be capital in the basis of the property itself. It's just furniture.
[00:25:10] Speaker B: Yeah.
[00:25:11] Speaker C: And okay, great. So like I was telling you about our Airbnb in Nashville before we came on air and, you know, we bought it and we put another $50,000 into it to paint the walls, to clean the floors, to put new furniture in, to do some tweaks here and there. You know, that's a sunk cost.
It doesn't increase the value, it increases the appeal, but it doesn't increase the value itself.
So I would caution your listeners to, hey, you know, get a budget together. You know, don't go overboard.
Rooms to go.
It's perfectly fine.
You don't have to go Airbnb, you know, Pottery Barn or Restoration Hardware. You know, that's not what people are looking for. Now there are those properties out there and I think you'll find like Vail and Aspen and like big places like that, maybe down at the beach on 30A where people are renting like a five, six bedroom house that is renting for $5,000 a night.
You know, I just wouldn't overdo it. You know, I tell a lot of people, aim small, miss small. You know, if you buy a $400 couch and somebody spills their dinner on it while they're staying at your house, you know, that's not the end of the world. But they spill, you know, their dinner on a $4,000 couch. Yeah, that might be a problem.
[00:26:43] Speaker B: Yeah.
[00:26:44] Speaker C: I mean, so just remember you don't live there. Nobody lives there. It's really a hotel.
And you know, don't buy the super expensive furniture for buy nice stuff, but not so nice. It's like I told my wife, like, we don't really.
This doesn't have to be as nice as our house. We don't so.
[00:27:09] Speaker B: Exactly.
[00:27:10] Speaker C: From my experience.
[00:27:12] Speaker B: Yeah. Well, speaking of of pitfalls, what would you say is the biggest mistake that you see real estate investors make with doing this? I know what, what mine is. I'll go after you
[00:27:25] Speaker C: call sinking or self managing.
[00:27:28] Speaker B: Oh, trying to utilize a short term rental tax loophole regulation strategy. We're not calling it a loophole.
[00:27:35] Speaker C: So when they try to utilize that, what do they do wrong? They don't track time. They, that's the first problem and that's one of several problems. They, they will have other people do the management and say that they manage them.
You can't do that to be the manager. So if I were to self manage and then I went hired a management company to report to me, you know, there's case law out there that says that doesn't work. You can't manage the manicures.
You, you either are the manager or you're not the one.
And so those are the two big things I see being the biggest problem.
But it's not insurmountable. I would just cost you. Don't do it.
Now there are management companies out there that have hybrid models where you pay them a fee and they do all the, the advertising and you do all the management.
You're collecting the money, all that stuff. But they are doing the advertising that, that works like hybrid program works because you're still putting your hours in. They're simply just putting it online for you and you know, driving the traffic to your site.
That will work. But be very careful. Don't let scope creep in your relationship with that hybrid management company too far afield. That way it'll eliminate your ability to take them short terminal loophole deduction.
[00:29:06] Speaker B: Gotcha.
So the biggest mistake that I see people make is they hear something like this. They're not in the real estate investing world, they're just in the high income earner world and they're listening to personal finance podcasts and Things like that. And this topic starts coming up and they're like, great, awesome. I've always wanted a beach house. Like down here on 30A where I live. We see it all the time.
And they come down here and they don't care.
Or maybe they do care. They pretend to care whether or not it's going to actually cash flow and they buy it and because they love it, not because it's necessarily the best investment. You know, the, the, there are properties that are better for investment here than others that may not be as pretty as some of the other ones. You know, like you get into Seaside and, and Rosemary beach, like those are expensive just for the sake of, of being expensive. But getting in there and being so hung up on the tax benefits and getting to, to buy that beach house that they've always wanted or that mountain house that they've always wanted and not actually paying enough attention to is this going to cash flow? Because you're stuck with this property after that first year of the, of the tax.
You're, you need it to be cash flowing forever or else it, it doesn't make sense to bother with the, the tax strategy.
[00:30:24] Speaker C: No, I'm glad you mentioned that because a lot of my neighbors go to 38 on a regular basis and they, they've got condos or houses or whatever and they go down. And you know, I was talking to one of them recently, like, how often are you going down?
And he's like, oh, you know, three, four times a year. I'm like, okay, well, are you trying to take deductions on it? And he's like, yeah, we are.
You know, you can't, you, you spent more than 14 days in your, you know, investment property and that's going to now come back to you as personal.
You can only use the property 14 days.
It's like, oh, I didn't know that. Nobody told me. I'm like, yeah, there are little courts out there you need to be aware of.
But he's got all these losses over in a passive bucket that he can't utilize.
And it's a single income family. And I was like, oh, you know, when you sell it, you'll realize it, but until then, you're just kind of stuck unless you're going to manage it yourself and stop using it as much. Now I'm guilty of that as well. My wife and my, in our house in Montana, you know, which is Airbnb, which we, we go twice a year and we are very careful not to spend more than 14 days a year. There. So it'll be a week in the summer and a week in fall.
But we are very mindful. All right, let's get out of the house.
Let's go stay in a hotel for two or three more days and enjoy Montana more. But, yeah, you've got to be very mindful of the rules. The rules are very strict, and they're very strict because remember, the IRS is losing money. If you're utilizing the, these kind of strategies, you know, you're, you're not paying the tax, you're getting the money back.
So you just make sure you track your time.
And if you want to use it as a second home, great, you can absolutely do that. Just know that the deductions and losses will remain passive and you can't offset active income with passive income or passive losses. I'm sorry.
[00:32:30] Speaker B: Gotcha.
So thank you, Brian, very much for coming on. We've got three questions that we ask every single guest that comes on the show at the very end. But first, is there anything that we haven't talked about regarding the short term rental tax strategy and how it's utilized that you feel like our listeners would benefit from hearing
[00:32:50] Speaker C: anything we haven't talked about? Well, I would tell them, and I already mentioned it, Just track your time.
Track your time.
Make sure you know your time is spent managing.
That's what the rental loophole is for, is management.
It doesn't mean you need to go out and do the maintenance. You don't have to go turn beds, clean toilets. That's not what it's talking about. It's about managing the property. So just track your time on that. It's got to be a hundred hours a year at least.
[00:33:22] Speaker B: And I would add to that, track it at the time you're doing it. Because we see in our, in our Facebook groups and online sometimes when people are like, I got audited and I didn't, I didn't pass. And when we've had, when we've asked questions about it, they said it's always related to their tracking as to why they didn't pass because they're like, oh, let me track this. Like, they didn't track it. And then they got audited and then they tried to write a log in the, in the past tense. And it just, they're going to catch you because they're going to look at your credit card statements and were you, were you where you said you were? And just do it in real time.
[00:33:59] Speaker C: It's just, that's a great, that's great advice. Do it in real time. You know, I'm a lawyer, so I track my time all the time and I use a, you know, a start stop button. And you know, if you write it down contemporaneously, yeah, it's going to be a little cumbersome in the first month or so, but you'll get used to it. You'll write it down. And there's time tracking software out there.
There are apps you can get on your phone to track your time. Yeah, yeah. Get it all there and turn it into your accountant every year and let them utilize it and achieve the short terminal loophole deduction that you're looking for.
[00:34:37] Speaker B: Awesome.
Well, thank you, Brian. On to our last three questions. So these are a little more personal.
So what advice would you give 20 year old Brian if you knew then what, you know now?
[00:34:51] Speaker C: Wow, 20 year old Brian, Honestly, about real estate, I probably would have started buying real estate earlier.
I didn't buy my first house until I was in my 30s. You know, I spent my 20s in the military and then finishing college, then law school, then tax school and then just kind of making it, you know, until 2008 destroyed everything. But I would have spent as much discretionary income saving it so I could buy something.
Right. Just something I told my wife and we were getting into real estate. Like, look, we can't get our second until we get our first.
We have to pull the trigger on something.
Because she was having analysis paralysis and I was like, look, nothing's ever going to be perfect. There's no way to bulletproof this. We're getting into this. We just have to buy the first one.
And we did.
We bought a cabin in Gatlinburg and we sold it a year later for a $70,000 profit. And then we bought 13 single family homes with that.
So you have to get into it. You can't sit on the sidelines, talk about it like, oh, I'm going to do this.
Look what it could have, should have. Right, right. You know, you got to pull that trigger. You've got to get in the game. Otherwise real estate's going to go up and you're going to miss out on a deal that you're going to look back in a year or two. Man was so cheap back then. Yeah, it was. And the best time to buy real estate was last year.
But you need to do it today because next year you'll be looking at today saying, I should have done that. Yeah, you should have. You absolutely should have. And so for me, I should have bought a property when I was 20, I should have bought a property. I was gainfully employed, I was going to school and I should have bought a property, even if it was like a $80,000 property, put it on a 30 year note, maybe it's a duplex. I could rent out one side and house hack it. You know, do that, do something.
Don't sit around and talk about what you're gonna do. Just do it.
[00:37:09] Speaker B: Great advice. Also a segue, great segue into our second question. What advice would you give a new real estate investor who's getting started today? And I think that would be just do it, right?
[00:37:17] Speaker C: Just do it. Like, you know, if you don't have any money, find a way to be valuable to somebody who does.
If you can bird dog a deal or if you can source, you know, capital for a syndication deal, they're going to be a gp, they can bring you in as an LP and give you a small slice of the Jeep. Do that, do something to get into real estate. And there's so many different avenues of real estate. I know we're talking about short term rentals today that there's, there's self storage, there's RV parks, there's long term rentals, there's syndication deals, there are all sorts of things you can get into. There's oil and gas leases, there is something you can do.
But if you sit around and talk about, oh well, I don't know how to do it. Yeah, you do. You listen to podcasts like this.
I can't tell you how many podcasts I was listening to my first year. Two in real estate.
Everything from Bigger Pockets to the REI Tax podcast to. And I still listen to these. You know, there's always something you can learn. Even if you think you know it, just listen to it. You may remember something that you had forgotten and that's really important to you. But if you don't do it and you only talk about talk about doing it, you're not doing yourself any favors. So if you're interested in real estate, do it. Educate yourself as much as possible. Get a mentor and do this, because it is the only way. Well, it's not the only way in the United States, but 80% of our millionaires in this country are involved in real estate somehow.
I mean, the proof is in the pudding, right?
Statistics don't really lie about this.
I started my real estate journey with $115,000 out of my SEP, my simplified employee pension plan, which is my retirement, and that is now worth $7 million.
And I did that in 2017.
So think about that.
In nine years, I took $115,000 and turned it into 7 million.
Only real estate can do that. Only real estate.
[00:39:24] Speaker B: Totally agree with that. And last question. What's your favorite book that's impacted your mindset?
[00:39:32] Speaker C: Hayeks, A Road to Serfdom.
He's an economist from the 70s. He's a Nobel laureate.
And one of my law professors in law school was a law and economics guy, and I'm a law and economics guy now.
And it's a very, very short book, but it talks about these very simple rules that you follow in everything, and it can be applied to any industry, any situation, like what makes the most sense. And the Road to Serfdom talks about how you can change your mindset to look at things in such a way that makes sense. For example, we're talking about if you're a new real estate investor. Yeah, it's great to postulate how, you know you're going to make all this money, but what are you doing to make that money? What are you doing right now? You're talking about it right now. Are you putting pen to paper? Are you putting together a plan? Are you doing those things?
And as long as you're happy with the status quo, you're never going to move. You're never going to move your needle. It's never going to happen. You've got to go and act on it. You have to listen to your podcast, Avery, or other podcasts. You have to inform yourself. And then if you have more questions, you know what?
YouTube's a great place to go.
Educate yourself on it. You know, use Chat, GPT or Claude or something to explain, you know, something you don't know. Read books.
I'm not saying that's a novel concept. Read books. My wife didn't believe a thing I said until one of my clients gave her Robert Kiyosaki's book, you know, and Rich Dad, Poor Dad. And I was like, I've been telling you this for years.
She's like, yeah, but he wrote a book. I'm like, yeah, and I've gotten degrees on the law.
What are we talking about? She's like, yeah, but he wrote a book. And he explains it in a way that I can understand. He's not talking legalese all the time. I'm not talking legally there. I'm talking how to save money. But, you know, I digress.
Educate yourself and get into it. Just do it. Because if you don't do it, you're going to be Looking back next year going, damn it, I wish I did it.
[00:41:47] Speaker B: Yep, yep, I agree. I am kind of your wife a little bit. I was in college bartending. I went to UT Austin, and I was bartending at a very touristy barbecue restaurant called the County Line. And a man, one of my regulars gave me rich dad, poor dad. And I did not read it because I assumed that it was going to be like, save X amount per of your paycheck per day. And at the time, houses in Austin were like $70,000. Now they're $2 million. And if I would have read that and not been an idiot back then, I totally could have afforded it on my bartending salary at, at 19.
[00:42:29] Speaker C: Yeah, right. And it's like, God gumm it.
But you know, one of the things that I, I think the, the younger generation, you know, they, they complain about, oh, I'm never going to be able to buy a starter home. It's too expensive.
I can show you today a house in Birmingham, Alabama, under $50,000. You put another 50 into it. You bought a house for a hundred thousand dollars.
It works.
You can do that. You just can't buy where you want to buy.
[00:43:01] Speaker B: Right?
Can't buy on 30A.
[00:43:04] Speaker C: You can't buy on 38. Okay, maybe you don't need to live on 30th.
When I was 20, I didn't have any money.
You know, I was waiting tables and going to school and doing what I could in the fraternity and then I had my military obligation that I performed. But if you want a starter home, go to where the starter homes are.
Don't wish they were where you are. That's not how life works.
You know, get used to disappointment. You know, would I like to live in downtown Nashville? Not me personally, but a lot of people want to live downtown and it's way too expensive.
Go to where you can live and you can buy a house and if you have to find another job, okay. But what's more important, your job and your house, you're gonna have to make these decisions in life and welcome to adult.
Know these were just part of it, but there are properties out there you can buy.
Absolutely.
You know, so I would tell the younger generation, hey, you know, look at the opportunities available and go there.
You know, I, I think you and I probably had a very similar college experience that we were working all the time and going to school.
But, you know, if I had had the opportunity to buy a $70,000 house back then when I was in college, that's a no brainer. Now, like I could kick myself for not doing it, you know, here 30 years later. I didn't buy a house until I was in my 30s, so.
[00:44:41] Speaker B: All right, Brian, well, thank you so, so much for coming on. If our listeners want to find you on social media, YouTube websites, all that, how can they do that?
[00:44:51] Speaker C: Yeah, on Facebook, TikTok and Instagram, it's Brian T. Boyd. On YouTube it's your tax lawy.
I'm putting out long form content. I'm also putting all the courses I've made on YouTube so people don't have to pay for them anymore. You can just go watch them.
That's helpful to people. It saves money for people. I've written a couple of books. I've got another one coming out next month on how to reduce your taxes.
I did write a book on real estate investing called Replace your A Lawyer's Guide to Finding Funding and Managing Real Estate.
And you know, if you want to talk to me, you can go to our firm website, thompsonburton.com click on my bio, there's a calendly in there that you can schedule time with me and I'm happy to talk to you about your situation.
So. But yeah, thank you for having me today. It's been a pleasure and I hope somebody learned something from what we talked about today. You know, we talked about it quite a bit and it's all useful information.
[00:45:50] Speaker B: I'm sure they will. Thank you so much for coming on and listeners, we will catch you next week.
