EP 014 - Short Term Rental Success Stories w/ Jonathan Pacilio

Join me and  Jonathan Pacilio to discuss how they've built their multimillion dollar portfolios, used Short-term rentals to replace their W2 incomes, and the tax strategies that saved him hundreds of thousands in taxes. 

Jonathan Pacilio spent a 20 year career in financial services managing risk portfolios for various lines of businesses for several large financial institutions on Wall street.  Despite having an excellent career trajectory and great opportunity, he never had passion for the work, and discovered his true passion was in entrepreneurship. He decided to increase his real estate holdings/investments, and fast tracked his retirement through real estate investing  in just under two years.

He now focuses on Financial Independence coaching through the Short Term Dojo, Diverse Real Estate Holdings and Business Acquisition.  He loves the chaos of every day and how such amazing opportunities can present themselves around every corner. His primary focus is ensuring he and his wife are building an extremely intentional life with complete freedom to enjoy their children and travel anytime they want and never work in an office again!

To learn more about John, go to www.JonathanPacilio.com

Transcript

SPEAKER_00 0:00

Hey guys, I'm excited to show you the recording of short-term rental success stories and tax strategies. Unfortunately, Karen couldn't join us, but she's probably gonna be able to come through on another interview, she'll have some great stuff. But we were joined by Jonathan Basilio and he provided us with some fantastic insight into his journey and experience as a short-term rental investor. We talked about his how we started as a W-2 employee, and how he realized slowly that entrepreneurship is really the way to go for him and many of our audience members. We talked about mindset, we talked about strategies to acquire capital and use leverage, evaluating properties, assessing risk, finding deals, so many things that we covered that are gonna be valuable to you, whether you're starting off or whether you are a seasoned veteran, whether you can barely afford anything at all, or or if you're making millions of dollars and paying tons of money in taxes. So listen up, you're gonna get some great information here. And if you are interested in being a prospective client, you can email info at markperlbergca.com. And also, if you know any accountants looking for work and an exciting and entrepreneurial practice, tell them to reach out as well. Enjoy and I hope to hear from you soon. So uh welcome everybody who's tuned in. We're gonna be talking today about short-term rental success stories and tax strategies. And the cool thing about short-term rentals, and I really think for anyone here who has a job and is just get or and or is just getting started in real estate investing, I think short-term rentals are, if not the best, one of the best ways to get started in real estate investing, building wealth, reducing taxes, and achieve finding a way to get out of your W-2 job to achieve financial freedom. I mean, first off, you want to consider the gateway, the barriers to entry here, right? I mean, obviously, it takes a lot of money to buy a property. To buy an investment property, you need 20% down. But with short-term rentals, you can start by just renting out a plot of you know, a room or a sub or a unit in your primary residence just to get started. I mean, my first what I consider my first deal, I was actually um hold on a sec. I want to make sure that's not Karen. Okay, no, it wasn't. I was um, I went on vacation in Mexico and I wanted to toy around with this Airbnb thing. And what I did was I put all my personal belongings in a car, ran out my place on Airbnb for 10 days, and it paid for my trip. And that was the my first bite uh and just taste of it. I mean, I got in trouble. They said you can't do this anymore, but I just I just got a feel for how easy it was to make money and how powerful this was. And so not not only that, but the margins are for fantastic. You can do rental arbitrage where you sign the lease as a tenant and you you rent it out on Airbnb or VRBO at a markup. I'm doing I'm doing a deal right now like that, any cash flow is about$1,500 to$2,000 a month. And then one of the most, and this is what I talk about every day with my clients, one of the most impactful things is the tax advantages for short-term rental investing. So, with long-term rentals, generally speaking, you can't really use your write-offs and losses to offset your W-2 income. They're kind of stuck in this group, this bucket of activity, this passive income bucket, and you can't use those passive income losses to offset your W-2 and other sources of active income, W-2 and 1099 income. But think about this: if you have a short-term rental and the average length of stay is seven days or less, and you materially participate, you can reclassify your losses into the non-passive bucket. And now you can use these write-offs and losses to offset your W-2 and 1099 income. Now, there are some exceptions to the rule with long-term rentals, but it's a lot easier to get there with short-term rentals. You can still have a W-2 job and you can still make this work. So we have a lot of clients where what they do is they invest in the short-term rentals. And if we plan properly and we also want to document things properly, we are going to be able to use the losses to offset our W-2. Now, for some of you guys who aren't my clients, you're thinking to yourself, well, that sounds great, but I want to profit, we want to have a cash flow here. So we don't want to be losers, we don't want to lose money. You know, we're still gonna be bringing in rent revenue. And then the the magic word and the the strategy that that is the bread and butter for real estate investing is cost segregation. I mean, there are hundreds of strategies we use, but right now, cost segregation is amazing and allows you to accelerate depreciation and create massive losses. So even if you're cash flow positive, when we file your taxes, we can create significant losses. And with clients, we can, in many circumstances, take a cash flow positive property and use it to offset 100% of the income of their W-2 income of the client and his or her spouse. So many amazing opportunities there. We're gonna and you want to learn more about cost segregation. I'm gonna be sending out an invite soon next uh Thursday, the April 24th. So two Thursdays from now, we're gonna bring in Yona Weiss. He is like, I don't know anybody more synonymous with the tax strategy than Yona Weiss. He's everywhere, fantastic guy. We're gonna be talking about Costag and diving in deeper, talking about more advanced strategies because a lot of you guys probably know the basics. We'll talk a little about the basics and then dive into some really cool stuff to do if we're a little bit more resourceful and thinking outside the box to maximize the benefits of Costag. So, what we can so to sum up every all the awesome things with taxes, we could we take our passive losses that are rental losses that are normally passive, we can reclassify them as non-passive without having to quit our jobs. We don't need the real estate professional tax status, and if and then we can accelerate those write-offs and really use all our write-offs and be resourceful and create write-offs from other sources, not just cost tech and depreciation. Maybe put our vehicles in the business, hire the family, tons of other ways if we're resourceful and understand the tax code. And now we're creating huge savings, get a nice refund on your return, and you reinvest it back into your portfolios, business endeavors, financial vehicles, and whatever you need to get you to where you want to go and reach your goals financially and with your career and lifestyle. So lots of awesome stuff here, right? And uh we have uh we're intending to have two guests right now. We have John Pasilio, who we're gonna introduce in a little bit, and Karen, who is uh hopefully going to join us. She is in the middle of giving testimony in court still, and uh, but we hope she can she can tune in. We're um I gave her a one-touch button to tune in with uh her um on her phone. Hopefully she'll call in. But right now we're joined by John Pasilio. He is a longtime friend and client and short-term rental investor. And if you guys have W-2 jobs and you're looking to get out of the rat race with rental invest with real estate investing and to reduce your taxes, I think John's story is going to be a fantastic model for you guys to learn from and to follow, and also to think about where you're going. So um, okay, Karen just texted me. Definitely not making it, still giving testimony. Um, anyways, so uh John. Not getting sued. I don't know, maybe that's what's going on. Yeah, we'll do another webinar on malpre on uh on um liability insurances, but uh and asset protection. But so John, um, we're gonna go into some things and talk about you know strategies and tax strategies and and the short-term real market. So, but first, uh John, can you introduce yourself to the audience?

SPEAKER_01 8:56

Yeah, no, sure. Thanks, Mark. And it's actually funny that this is it's not funny, but it's happening. So so we're talking about two, and I'll introduce myself in a second, but I think it it's so timely. The you have someone who's literally in the middle of like a legal situation, and then we're also talking about taxes. And and nobody wants to be an entrepreneur or open up their own business or try to invest in anything to deal with taxes or lawsuits, right? But like it's it's it's kind of interesting. You you you have to spend a tremendous amount of time preparing for both. Um, you know, we were joking earlier, right, Mark, about you know, it's just a matter of when, uh if or when, not if, if you'll you know get sued by somebody will be upset. So, but it's so interesting because I think if when when you start down this road, and we'll talk about some cool things that you know, I was able to do my wife and I, um, but we have kind of spent some time on the side preparing clearly for tax strategy. Um, the next the next thing I'm gonna be focusing on is legal strategy, right? And just preparing for anything that could go wrong. But it's again, it's kind of timely that one of our panelists who is doing some great things, good friend of mine, um, you know, has these things come up. Uh, but anyway, so so yeah, so my name is John Jonathan Pasilio. Um I my background has essentially been about 20 years in managing large risk portfolios for large uh financial institutions on Wall Street. So I spent that time really kind of chasing the early part of my first career, I'll call it, as wanting to be a suit, if you will, right? And and try to get a C-suite job and and uh push the corporate ladder in banking. I I don't know what necessarily drew me to banking. It was just kind of a I grew up in New Jersey and that was kind of a thing, Wall Street and either investment, you're a broker, you're part of a large uh firm of some sort, uh, or you you can kind of get into banking in different ways, whether it's uh, you know, it's being like a risk executive or or whatnot. So my path, and I'll spend not much time on this just because it I'm glad that I went through it, but I essentially about 12, 13 years into that career, started to realize how much of an entrepreneur I really was deep down. And so I had various roles at companies like Bank of America, Merrill Lynch, Wells Fargo. Um, and I essentially actually worked with Mark just in the last couple of years. Um, it's it's my desire to essentially recreate a new path started probably about five years ago, just the kind of the politics and the different things that I just didn't want to do in corporate America uh were weighing on me. So I started thinking about it pretty aggressively um about five years ago. And then in the last, I don't know, let's just call it three years. Um, I spent some time coming up with a strategy that would really help me bring in, I'll call it semi-passive income. Cause the reality is this, there's I I have this pyramid that I kind of think about when it comes to financial uh freedom, um, which I'll talk about a little bit later. But essentially you need to start gaining traction on how you're making your money, like where the hell is your money coming from? Right. And so that 20-year career was was excellent, right? And the last, and we'll talk about how I left over the the last just almost one year ago today, is when I finally pulled the plug completely. But I had spent several years putting together a stream of income, uh, or really kind of multiple streams of income with the large lion's share coming from short-term rentals. And and I'll get into why in a second. But essentially that 20-year career was great, right? I have a risk background. It's it's actually very good to have in terms of thinking about real estate, investing, being an entrepreneur, because nobody wants to do that and think about all the things that can go wrong, right? They want to get excited about all the things that can go right. But I don't mind thinking about the things that can go wrong because you know, when you plan for that and you have stress tests and you have things in place to think about contingency plans, it helps your success along the way. And when those things inevitably happen, they prepare you to move forward. So, again, from New Jersey, married to my wife, Kimberly. We have two girls, McKenna and Violet, five and two. Um, when my firstborn, uh Violet was born, it really kind of kickstarted, and this was about five years ago. It really kickstarted the focus on you all the thoughts you have, all the things that you want to accomplish, all the changes that you want to make, that the path deviation, you have to get going because time shrinks immediately. When for any of those that have kids, you know this. Um, but essentially that's it, right? So it's like that that that day happened, then I realized, you know, I can go a whole day without even brushing my teeth. I have this little infant to take care of. Like if I don't make changes now, I'll be, you know, 65 and nothing will change. So that's kind of my mindset that that headed into um, you know, about three years ago, where I actually met Mark, some other folks, and we'll talk a little bit about what I think is helpful in terms of coming up with your tribe or, you know, getting mastermind groups together, or really kind of situating yourself around people that they don't have to think exactly like you, but you have to pull yourself away from any of the tendencies or the mindset tendencies of people that you enjoy being around, but they're just kind of keeping you from your goal. So it was Mark actually who was um, we met through I was actually one of my goals that year, and I don't know, let's just call it 18, 2018, 2019, was to specifically strengthen a relationship with what I call a tax strategist, not a CPA. You know, I don't know how many of you guys are for familiar with Mark. Obviously, you're following him and you understand it, but I think the big differentiation from from a non-MARC follower, right? Um, is I just knew that CPAs, they're just employees, they're just someone else with a job that they just want to get to the end of the day. They just want to take the get their paycheck and just do their job the bare minimum as possible. And that's what that's fine, right? There's nothing wrong with that. But if I needed a strategist to essentially construct the right way to invest and make financial decisions. And I just called Mark about three hours ago because we're going through something. And if we get to that, I'll kind of elaborate as much as I can, where I literally now have to go to Mark and I say, what do you think I should do to avoid essentially losing money? Right. So where we we we we what type of fund can we use for this transaction and how can we do it and in what way? And then again, I need more legal partners and I need a strong partner there where they can legally struck construct some things, right? So, you know, there's a lot for me even me to learn there. But but that's essentially what I did. I met with Mark and I said that was one of my goals. And he just seemed the way he approached his business, seemed very unorthodox. Um, and it was about truly relationship building and kind of establishing his skill sets to investors. So we hit it off. I also found out he was working Lowe's at the time, right, Mark? So, you know, you had that career where you were you were about to leave as well. So it was weird because I I wanted a tax strategist, but I also initially found what I'll call a tribesman, right? You'll hear that a lot from people where it's like, okay, this I don't know this person very well, but but instantly they have this major North Star goal, if you will, of leaving their corporate job. Versus I remember when I told my boss a couple of years ago, I'm like, I'm gonna I'm gonna be leaving soon and you know, I'm gonna be going down the real estate road. And he looked at me and hey I have a good relationship with him, but he was like, Yeah, real estate's not gonna make you rich. Because he's thinking, like, it's all this work and it's it's you gotta do this, and it you know, it can't really pay off. You need hundreds of homes and all that stuff. And but I but I just realized like instantly you can share a thought with somebody and they just have a negative reaction because they would never quit their corporate job, let's say, to do what it takes. And that's fine, right? That that's his path. But but my point is, Mark instantly shared something that had a true connection, which is I'm going to put a path together to leave corporate America. I enjoyed the career, but again, 15 years in or so, just needed to do something else. So, so that's my background, uh, a little bit about my family, what my I'll call first career of a tremendous amount of time with really good skill sets. I mean, don't get me wrong, uh, with with risk management, but but now I'm on this path of being a true entrepreneur. Short-term rentals just happen to be a vehicle. I don't want that to be our primary source of revenue for uh forever. Um, but it but it's such an interesting all-in asset class at the moment that's very misunderstood. It's brand new. And quite frankly, uh it's it's kind of exploding in a lot of good ways, but then in a lot of bad ways, which you know, we're navigating like everybody else with regulatory issues and lots of things, which I won't talk about quite yet. So that's that's kind of me in a nutshell.

SPEAKER_00 17:14

Fantastic. And, you know, I'll ask you some of the questions later on um just some common challenges that a lot of my clients who are investing in short-term rentals are are getting. Uh now, for those of you in the audience, I want to encourage you guys to put your questions in the QA section of the chat. We're gonna I see some questions coming in and we're gonna address all the questions. So just keep on putting them putting them in as we go through these things. Now, one of the things I just want to point out, so Orin mentioned the 10% uh second home mortgage, which is amazing because normally when we think about getting a mortgage for a property, we think, oh, we got to save up 20%. But with the second home mortgage and you can have multiple second home mortgages, you can get a property with only 10% down. So not only that, can you acquire more real estate and have more leverage? Think about this: you put 10% down on a$500,000 property. So you're putting$50,000 down. We run the cost seg, and let's say we write off 30% from the cost seg. Part of the before in addition to when I when I say cost seg, we may write off 25%, and then we'll estimate the fair market value of the furniture that comes with the property. So you got a lot of these mountain cabins and beach cabins that already have furniture. We, you know, that's property that has a shorter life than the real estate and also qualifies for bonus appreciation. So let's say we write off, and this is an in a typical circumstance, we'll write off 30% of the purchase price. You're writing off more than your cash that goes into the down payment. And if you're in a high enough tax bracket, you're gonna get a refund that is greater than your down payment. So you get that money back, and you can just put it right back into your rental portfolio. Talk about a compounding effect of building wealth and reducing your taxes. Um, so the second home mortgage combined with the tax strategy is just one of the ways that short-term rental investing is so amazing and so awesome. And also think about um these short-term rentals. If you're gonna buy something with furniture, you're again, you're gonna have access to more depreciation than buying some bare boned, uh, ordinary long-term rental or multifamily where you're not gonna have those shorter life depreciable assets in the real estate, such as the furniture and the linens and the kitchen supplies, kitchen utensils. Um, so yeah, and and John, I'm I know that you've taken uh advantage of the second home mortgage once or twice, right?

SPEAKER_01 19:53

Yeah, no, so so uh that's interesting. So it it was such a we did. The short answer is yes. We we bought our uh first cabin with that, which was and it was right at the uh, I forget what they call it, but I guess the Fanny or Freddie limit of, I don't know, maybe it was like 800,000. Um, but it it was we we it was crazy because it was in the middle of COVID and we use the 10% down, and it just just to highlight some things, a couple things on the 10% down, right? So don't think of second homes necessarily. A lot of times it they do have to be perceived. Um, and the banks will really tell you this. So, you know, don't take it for gospel from me. But you know, if you're gonna do like your next doorhouse, right? You know, you just want to own that, you know, they're not gonna really think it's gonna be a vacation home. But don't necessarily think you just have to have something on a lake, a beach, or a mountain. Because I'm gonna be honest, like right now, I'm you can absolutely find good acquisitions, but they're much harder than they were even just two years ago. So it might make sense to do that, it might not. So so I'm my point is it doesn't just have to be those locations. You can there could be, you know, another city that that does allow short-term rentals, right? That's the key thing in any of these searches, but is to find something where you might just like hey, I just want an apartment in the city, another city, right? Let's just say Atlanta or something, right? Um, that could be where you just enjoy going to Atlanta and hanging out for the weekend, right? So you think of that too. It just has to make realistic sense to where you're like, no, no, no, I go there and I travel there and that's a second home, right? You have to kind of justify it. It can't just be, you know, a house in a neighborhood just randomly, right? So just think that through. And again, they're gonna have their own their own requirements. But but yeah, so we we were able to leverage the 10% down in the smokies right in the middle of COVID. Uh, and I actually had to do, I was able to actually take advantage of all these forbearance um programs that were in place. And I just hit the cutoff and they they they gave us the maximum amount we could get with 10% through my wife. I've refinanced that cabin, I think, twice now, actually, to get out of it and get money back and then reinvest it somewhere else. But by and large, as a singular product. The multiple second home approach is really good to get started. You just got to be careful where you're looking if it's a true vacation market, because they've kind of exploded in prices and you'll see a lot of crap. That's not worth it. The benefit is, and obviously, Mark, you you hit on it a little bit and you'll continue to talk about it. Is I don't want you to go crazy, but you do have wiggle room because you have the cash flow that these things are not traded on right yet. So there's more cash flow in terms of a long-term rental. And then you have the tax benefits, and then you potentially have your W-2 income to return to you. So you can pay a little bit more if it's the right property and get a tremendous amount of benefits, and you'll still win. You have a huge win, if that makes sense.

SPEAKER_00 22:44

Yeah, and let's talk about this. So now I'm gonna talk about this from the perspective of a CPA. Now look at so think about this. And I remember this return. I remember looking at the numbers when I was finalizing your return, and um, I was pretty happy when I was looking at this. I was like, I am looking forward to showing this to John. And um, so you purchased the place for$800,000, right?$80,000 down. I think you pull, like you said, you you the way you acquired the capital with some forbearance. I think that you may have refinanced some places, right? And did you borrow from 401k from that?

SPEAKER_01 23:22

No, but I refinance everything to get nothing in my wife's name and just mine. Like it was it was pretty impressive. And it literally came down to the last minute.

SPEAKER_00 23:31

Yes. So he puts$80,000 down by with some some strategic just sourcing from his different sources of capital, and he gets an$800,000 property that's going to cash flow. And you can imagine the cash flow. You'll tell you can tell us about the cash flow in a little bit, but this is what I see as a CPA. So we wrote off$280,000 for depreciation in year one for bonus depreciation. We had some straight line depreciation for a couple thousand dollars too. So we're putting 10% down into the property, we're writing off 35%. And think about this. So if you are gonna get a$280,000 write-off and you're only putting$80,000 down, the refund that you're gonna get is probably gonna give you as much or more than uh the amount of money that you put into that down payment. If you're at a, you know, it'll probably be equal to your down payment if you're at a 28% tax bracket. If you're at a higher than 28% federal tax bracket, you're gonna get more of a refund than your down payment into the property. If and that's setting aside the fact that you may have some cash flow, you may have some other expenses for revenues, but just looking at the the depreciation from this. And and and why I say that is because in year one, a lot of times you're just getting started, you have a lot of startup costs. Usually we see the net income being around a wash or around zero or not that significant. Obviously, there are some variations there, but just imagine that that you get your day, your down payment comes back to you in the form of a tax refund when you leverage uh a good tax strategy and some financial strategies as well. Um, and and so how about the numbers here? So, you know, we're we you know, we we pulled some source, some money from some sources here. And how how about, you know, when it's normally operating, you know, or like can you give us a feel for how much profit and what was the cash flow looking like for this?

SPEAKER_01 25:44

Yeah, hold on, Mark. I don't know if it's yeah, hold on. I don't know. Well, you're breaking up a little bit. I don't know if it's uh internet or yours. No, that's fine. I don't know, it might be mine. Um, can you hear me now though? All right, I got the gist, some numbers, right? The good stuff. Yeah. Uh yeah, so look, I mean, I here's the thing, and this is why this this there's there's two things happening in this industry right now. Obviously, people are chasing the money, right? So so the margins are starting to squeeze. Um, but then you also you also have people that are are getting they're they're buying almost anything, and that's not good either, because it it'll work, but it won't necessarily work long term. And I'm not even talking about regulatory shutdowns if cities don't allow it. But that so that particular cabin, let's just say at that time, because again, we've refinanced it differently. So costs have gone up and we've redeployed capital. But we I think we did like close to 200 in six months, 200K, right? And that was brand new online. We rented, we spent a fortune, well, not a fortune, a small fortune to to renovate. We knew that going in, like it was a rent, it was a rehab. Um, it was rentable, but not to our standards. And so the the point is, like I remember the first good month, we I there was a management company running it, and their numbers were awful. Like, but I was still making like 10K a month for a couple months until I fired them, right? I had to give them three months or something in the contract. We took it off the line for a little bit, renovated some things, and our best month that year was like July, let's say. I don't know, let's say it was like almost 40K that we made, right? So just think about that, right? That that one um the the 40K essentially put in almost at that time, I don't know, what the it was a peanut second home loan, you get good rates. It was probably 3,500 a month, give or take, right? And forget the expenses, the expenses, I don't know, maybe another 500,000, whatever it is, but not even that much. So there you go. That's your that's your 35,000 plus another seven. That's like 42,000. So the one month paid for the entire mortgage, right? Now I had I had some other, I had almost$150,000 to make up for renovation costs, but I was okay with that because I knew I was going to refinance out of that. But but even a slow month, let's say 18 to 20,000, right? Um, and to be honest, from this isn't the Smokies, Orin. Um, so in Sevierville, yeah. So sorry, you're answering that. So um, which everybody knows the numbers in the Smokies, the Smokies are kind of out of control. Obviously, the problem is right now the prices are out of control as well. So you you have to know where you're picking this up. But here's the thing I don't want the punchline to even be about the cabin, right? Clearly, the acquisition of that returned some excellent cash on cash returns, and I got the money out and I'm redeploying it and all that stuff. Where you can still, my best return on investment is something here, even locally in like the Fort Mill area, um, which we're having some troubles now with um regulations. Um, they they possibly want to shut it down. But you you can still pick up a$250,000 property if it's cute and unique and you have a vision, if it's four walls and a bed, you're screwed. Because nobody is gonna pay top dollar for that. But you can make you know$68,$72,000 on a 250 pickup, which is ridiculous, right? Versus, you know, you you well, you're not gonna pay$800 anymore for the same cabin. But let's say you pick up one and a half. I'm seeing all sorts of people accepting under 10% returns, which you don't have to do that in short-term rentals. You just don't. Um, if you're lazy, then you're gonna have to. And I mean that not to insult anyone, but you just kind of have to look through deals, look through houses. Uh, you know, look look at five, 10 in the same neighborhood because you just you want something that's unique. It is has the ability to kind of change it. Um, but I mean, I'll take we're in my partner and I, my wife, our goal is to essentially grow into much bigger developments. So uh we're not targeting single family homes anymore. But I I I push when I consult people, I I am all about I call it like B, you you want to look at the surrounding suburbs of like B plus cities, right? Like the Charlottes of the World or Columbus's or Indianapolis's, right? And obviously you got to look at the regulations, but you could still pick up affordable homes where where 90 out of every hundred investors are just waiting for the air DNA report for the top 20 markets. And then when the smoky showed up there, everything triples in value. So that's not really helpful, or you have to spend 2 million now to get$250,000 or whatever. You know what I mean? So you can make such great returns,$4,000 a month, like in cash flow on a$250,000 place, or you know, maybe$3,100. I mean, who's not going to take that? And I'll tell you, I again, I don't want to, I could go on and on and on down this road, but just even the level of clientele, the expectations from someone who's just traveling for short-term housing needs, because this is a big distinction in my mind short-term housing and vacation rentals, different STRs and vacation rentals. Just I know it's the same beast, but not the same clients. So, anyway, that those are the numbers, right? So we ended up crushing it that year. We'll we'll still make a lot of money. Uh, we still do, but obviously my expenses are higher because we're refinancing and whatnot. But but like the best return, I think we had we we picked up a place for like 210 and made like 68,000 for the year, right? Um, and but it's tough because you everyone wants the vanity project, they want the beach house, the mountain house with the view, the lake house. Um, and it but it takes a little bit more, those are overpriced, not all of them, but in some at a lot of the key areas that show up again on the top 20 reports. But to get to find a nice, serviceable, uniquely different house, or at least the ability to make it very charming through your own design methods, you'll get people that book that that need just a place to stay for a million reasons. And it's not because they're on vacation. So I'll I'll stop there because again, I can go on and on about my thoughts, but those are the numbers. I mean, whether it's 68. Well, we I think we're gonna pick up another place that'll do 120. Well, we'll see. It we're still renovating, but I'm I think I'm gonna I think I'm gonna go past my projections into the 130s on something that costs 400. Again, there's some renovation costs there, but it's it's you can find value in places that other people won't look, is the point.

SPEAKER_00 32:12

Yeah, that's that's a great point. Because and what I've seen from you is, and which is different from a lot of my other clients, is a lot of our clients are jumping on the you know, the Smoky Mountains bandwagon, and it is lucrative. But what what I've seen from the numbers and and everything from you and a few others is you know, a lot of people is over stressed, and it's like, oh, what location? What look you have to be at the beach, the mountains, the beach, the mountains. And and I say, hey, you know, don't overthink this too much because if you have if you are if you can make intelligent decisions and manage the property well and market it properly and implement sound business decisions, you can make a faint, you know, you can still make profits in areas that are not so sexy. It doesn't have to be all these things. So so John, some of these places were in the suburbs outside of Charlotte. You know, people are people aren't flocking to Charlotte for any special events or anything, but people are moving to Charlotte very quickly. People are getting divorced to need temporary housing or moving or and this and that. There's uh so many reasons why people will use short-term rental housing and why it can be still being super profitable. So we have people here from you know, if we have people from less sexy areas, you know, you don't have to be from the mountains or the beach to look in your own backyard and generate significant profit. I mean, for some of you hustlers out there who have the ability, you can just buy a home 3% down, owner-occupied alone, move out, buy another, move out, buy another. Furnish each one to be a short-term rental in 10 years. You you can you can live off your rentals and live really well. And um you don't have to be rich to get into to making a six-figure cash flowing business, and you don't have to be a brilliant genius mastermind. I mean, you can I'll tell you, it's a lot easier to get rich with short-term rentals than it is past the CPA.

SPEAKER_01 34:11

Yeah, so it's funny. Okay, seriously, though, that that okay, let me I just want to throw this out there real quick. So the one of the the reason I picked short, I I've been investing technically in real estate for I don't know, maybe 15, 20 years. But I one of the mistakes is that I I I did some long, but that's not a mistake. Long-term is still one of the best ways to well, the problem is you just need a lot of them. Again, I mean a lot of them, right? Long-term tenants, right? Long-term rentals, you know, you need a lot. That's why people get into the multifamily. Um, and there's nothing wrong with that. I just got burnt out a little too early, and I wish I had stayed with more investing. I would just know, I would just know more. And I was investing, just not as heavily as as as I was dedicated. You know, I I was the one of a million people, hundreds of millions of people, probably who read Rich Dad, Poor Dad 20 years ago or whatever. And now I know, you know, I'm so motivated, blah, blah, blah. And it kind of led me down a good path. But I just I didn't stick with it as much. But but my whole point is when I was recalibrating how I'm going to get out of my corporate career with so where I really didn't have to just, you know, give up everything lifestyle-wise. I mean, obviously, you know, mine's a little uh biased because Kim, my wife, I mean, she she still had her job, she still has her job as uh up until any day now when we get this line of credit approved, which is again, we're just leveraging W2, the power, the magical W2, right? Um, but anyway, I'll get into more of that some other time. But she's we're retiring her too. We set a 24-month goal after after I quit last year. We cut it in half to 12. We could have done it a couple months ago, but uh, but they're the bank's dragging their ass. Anyway, the reason I chose this is because short-term rental, like I knew businesses are what make a lot of money, right? Businesses make money. Long-term investing is just that. It's long-term investing. It's it's it's paper cutting your way to prosperity. And it's great, right? It works and it just takes a while. But what's different about short-term rentals is it's you're now entering the hospitality space, right? You are now in the business arena. You can make business type revenue, right? With without with tax advantages, all these other things, but without the business type operating expenses. Once you've streamlined your business, right? So I remember talking to a I did all this franchise research, we were going to buy into a franchise, yada, yada, yada. All this capital investment, all this was we we visited a ton of different ideas. But anyway, I ended up talking to a guy, he he ended up doing like a pest service, let's say, and he he made a million dollars in revenue. I'm like, that's pretty good. And after everything, he walked away with 70 grand. I'm like, that's a fucking job. Excuse me. Sorry. I'm like, that's a job. That's a job. So you now you're responsible for all this business and you're gonna 7%, right? I'm like, that's just awful. So the beauty of this is you you obviously Mark talked about the cost seg, you have some injections of steroid, if you will, of cash flow or capital, right, through tax strategy. But now you have the ability to make some make 28,000, some make 47,000, some make 200,000. But if you pick up the right ones, all of a sudden you're making$200,000 with just your mortgages and utilities. And obviously, you know, you have to have the capital to furnish it and stuff. But even that, you could find partners where they'll be like, I'll give you$20,000 of property to furnish it, whatever you need. I want X percentage, right? So you don't have to come up with that capital. Like Mark said, 3%, you get owner occupied, you rent it, move out. And it's all legal, it's all legit, it's a legitimate strategy. But imagine making 100, and I'll just, you know, let's just use the proverbial 100,000 in revenue is six figures, right? So you have a good tax strategy, you're making 100,000 in revenue, and your mortgage and utilities is 30. Well, now you're making 70, but it's a different 70. It's not 70 to run a freaking pest control company with all these employees, and you're always on and blah, blah, blah. You're making 70, which is actually worth more, non-W 2. I mean, this is Mark's job, right? He's the one who's going to express that, but this is what he taught me. It made a lot of sense. Making 70 as an entrepreneur is way different than an up W 2. And so I'm thinking, well, I can get to 100 in revenue with these things with limited expenses. And so I thought, again, the summary is business type revenue without business type expenses. And so it and I just saw how quickly one short-term rental, cash flow-wise, and again, let's just be conservative. Like, who wouldn't want$1,975 a month in cash flow on one property to manage? Like, we could all do so much with that, right? And then you just times that by two, four. Maybe you stop at six, maybe you stop at three. It doesn't really matter. But it's it's the power of scaling your new intentional life that you're trying to create was just so evident in short-term rental real estate investing versus multifamily, which is all you know, it's definitely the way to go in that arena. But you, you know, harder to find deals, price to perfection, the capital requirements are harder. And then long term, the I mean, you're doing all this, and yes, the work is technically less, but you're walking away with 150, 200 bucks, 300 bucks, 400 bucks. What you need a hundred of those things. So it just it that that was where my mindset was.

SPEAKER_00 39:13

And think about how long it takes to close on those transactions. I mean, unless you're maybe a wholesaler getting like insane deals, I mean, it is really hard. It's possible, but it's very hard to get to build wealth and financial independence with single family rentals. The just the the the margin with the margins being as low as they are, and how the you're competing with ordinary families, and it is it it is tricky. Um, so we have a we have a lot of clients here who are using short-term rentals and tax strategies to get financial freedom. And a lot of them, what they say their goals are is to replace their W-2 income. And you know, with us, I think that in our first two years together, we reduced your taxes by uh over six figures. You know, I think that without a strategy, you may have owed money in taxes because your margins were good, but we eliminated the taxes on your on your rentals and also created some nice refunds for you. Uh now, what was your thought process? Or can you tell a little more about like what what were the steps that you needed to do to gain that comfort and confidence in saying, okay, now I'm ready to leave my W 2 job, I'm ready to make the leap, I'm ready to quit.

SPEAKER_01 40:34

Yeah, so look, I'm not gonna, you know, pretend that everyone's scenario is the same. It's it's hard. A couple things. I had my wife who does well, you know, so so that's helpful. Um, but then you can argue, you know, we had two kids, which you know is a bunch of expenses that kind of you know take they pick away at that. It's you know, they have the old adage, like the dinks, right? Double income, no kids, right? That's the ideal spot. You have two working adults, no kids. Um, but you know, so we we had her. Um we also had made uh her salary, and we we also were very responsible with our money for you know the decade before we met and and then while we were together and married. So thankfully, we didn't have a lot of cars and you know, fancy this, fancy. Like so, so that matters, right? I mean, if you're trying to get out of debt, like you got to phase where you're at. If you're you know, if you have debt to get rid of, if you're just trying to uh remove your W-2, you're trying to transition away. You gotta write everything down and you gotta be very articulate with exactly what you're trying to accomplish. So for us, it was we actually didn't have it was more of a gut feel, and I don't suggest doing this just because that's just how I work. I don't necessarily didn't say like I want to be making$175,000 in revenue because I was gonna, I was getting to the point where I just I wanted to exit regardless. But what I think you need to do is what makes sense is, and again, everybody's in different stages of what they need is, and this is kind of a a try, I guess, a pyramid that I go off. This is I I've learned this in various sources. They kind of kind of get presented in different ways, right? The the the the three generations of financial freedom. It's financial security, which is gen one, which is basically covering your your food and your housing and just general lifestyle things that you know you can get by and you can sacrifice a lot of stuff like going out and drinks and movies and whatever dinners, and you're you're fine. Like I can deal with that. If I can quit my job, I'm good. So that's gen one. Whatever that that's different for everybody. So, you know, maybe it's I I need$3,900 a month in cash flow, right? And I and again, I I don't think about this as eventually you want it to be all passive, but you're talking about being an investor way down the line where you have people running your businesses and all that stuff. Don't even get there because I'm not even close to that. That's the goal. We I want to remove myself from these things, but I'm totally cool operating these things with the vast less amount of time it takes to manage my portfolio for the amount of money I make versus my old Wall Street career, right? So, so gen one, really, it's about financial security. Then it's about financial independence, gen two, right? So it's like, okay, well, I I want the car. Again, I hate the whole car thing because that's just kind of a waste. We all know that. But whatever it is that you drive, you need a car, right? Whether it's new or that, whatever. But it the independence piece is you're starting to layer on luxuries in a lifestyle that maybe more travel, right? Like, oh, I want to be able to, like one Kim and I, we want to uh once she retires, we're going to spend a week hanging out with my uncle in his Florida house and just kind of vegging for maybe 10 days or so. There's no real timeline, right? Because the kids are in daycare and we can do that, you know, we're not as kids. Uh, but but that's just an example where maybe it's a month up in Michigan with her family during the summer. There's there's no one to like report to. Um, but that independence piece is like, what is the next uh number? What is that for you? I want to travel four times a year. I want a trainer, and I just I like to go out once, once a a week, right? But you have to think about it that way. So if it's 3,400 to cover rent and your basic expenses. Expenses, maybe it's 6,800 for financial independence. And then the third gen, again, way down the line, is financial freedom. And you know, this is really do whatever you want, whenever you want. Again, I mean, you could say, well, Rick's talking about planes and Ferraris. Well, that's going to take a long time to get to. But maybe it's literally if I have$25,000 coming in every month, I pretty much within reason. I mean, I'm not talking about medical expenses or kids going to private college and all that. You want to work towards that separately. But like as an individual, what kind of nice life would you have if you had just 20 to 25,000 coming in? You could basically kind of do what you want when you want to do it within a reasonable sphere of things, right? But but again, what did I do? Is it started with one, right? You just you kind of have to acquire one of these things. Now, again, some of the tax, and maybe this you can speak on this a little bit in a minute, Mark, because I don't I don't know how many tax advantages apply. I'm always about ownership, full control and owning the asset, which obviously comes with more and more uh tax advantages than let's say arbitrage, which is a better way to scale because you can pick up more properties with less money down and do deals and lease things and stuff. Um, but the bottom line is you know, owning things come with just so much more advantages, and you're you're actually owning the wealth and the appreciation and all that. But you just what is how can you navigate that pyramid for you to quit? And again, the tax advantages that Mark's talking about, the same 100K, the same 50K, W-2 wise is not the same 50K entrepreneurial-wise. And you what we just put it as I want whatever's coming into our account to cover all the new business expenses from running this thing, to be able to meet me cover all of our expenses living-wise, to where we're not like my wife's, she doesn't pay anything other than like just a little bit of shopping for the kids or something. But like I can cover everything. So then that's like, okay, I can quit. And then we'll build it further to where we can do whatever you were paying or whatever you want to pay, right? And then and then she'll she'll be quitting here shortly. And we're just taking the leap of faith at this point. It doesn't come with a uh a compromise of lifestyle. Every time you do that, you know, you're taking away a six-figure salary that still sucks, it still hurts, or whatever, whatever the salary is, right? Let me stop there. I mean, does that answer the question, Mark? Because I mean, I know it's not as specific, but you every small little specific, spec specifically written goal monetarily, is really all it's about. Is it$1200? Is it$2,400? Is it 30, 30,000? I don't know. But a long-term rental bringing you$250 a month, that's gonna that's gonna take a while. But what if you pick up the right one and it puts$2,500 a month? Boom. I mean, that's 10xing it.

SPEAKER_00 46:35

Yeah, that's huge. Yeah, so for and for some of our younger client, you know, audience members and clients who are you know who don't really have as many financial needs, and maybe they're willing to live with roommates and house hack just so they can get out of the nine to five and enter the entrepreneurial world, where thinking long-term, the upside is so much greater when you're a business owner. And then for some of you guys with spouses, when we look at the tax, and I have a whole webinar, and the title is Tax Incentives and Strategies to Quit Your Job for Real Estate Investing. And when we consider the fact that you can create refunds from your spouse's W 2, and you look at the after-tax effect of this activity, you realize that when you go in that the impact of this and switching into full-time investing and what that's going to look like with how much cash you're gonna pull in every month compared to you and your W-2, you slowly start to realize it becomes more and more feasible. And when personally, when I think about what did I need to quit my job, the number I had was actually extremely low. I just said I need to have a setup that is feasible for me to get by because I know if I stick it out over time, my income will grow and I'll make it work. So for me, I just said, okay, I'm actually I took a pay cut to start my own business and go on my own. But I I set myself up. I had rental income as well to complement my consulting income. And I set myself up so I knew that I would never have to go back to a W-2 to survive. And it took about a year, year and a half before I was actually making more money than my prior position. But, you know, with some strategic planning in myself, and my path was a lot different than John's. I did so I just started roughing it. I was house hacking and renting out another property. The house hack was pulling in more revenue than my overhead, so I was profiting on where I was living. And uh for me, you know, it was, you know, I was able to live on my endeavors, you know, psychologically, you would just say just to get me to the point where I knew that even with worst-case scenarios and rough months, I had enough to keep the ball rolling and to keep things moving forward. Now, for you guys as short-term rental investors, you also want to think about how we can set this up so you, you know, it's a little tricky. You want to have capital to reinvest and to grow it. So some of your planning is going to be considering your ability to qualify for loans based on your income and your spouse's income. So to get that push, to get enough of that momentum where you know that when you make that leap and you leave your job, you have enough sources of capital and revenue and cash flow to make this something that you can continue to build and grow and to support yourself. Um so question for you. So what are some key success strategies that let's say, and you know, obviously there's there are some obvious strategies, but thinking about let's say if you were to tell yourself, you know, John the John Pasilio from from three to five years ago, and you were you were to have a conversation with you now, what are some key things that you would tell yourself that that has or that that would have really would have been the most important thing for you to really thrive and succeed?

SPEAKER_01 49:59

Yeah, I I think I mean less less thinking and more doing, right? Um, just a lot of action. So I know that seems generic, but it's been proven that a lot of individuals will overanalyze taking some sort of step, right? If it's investing a property, they'll run the numbers even, but then they'll think about all the things that can go wrong, and then they they they paralyze themselves. Um if it's a business, if it's starting a business, right? And I've done this, right? It's it's okay. I have this idea that I think might resonate with somebody or enough people to pay me, but what if what if I fail or nobody wants it? Or I leave my job to go do this and it doesn't work out. Um I it it's it's not like I have 30 years behind me to validate what I'm gonna say, but I I pay attention and I follow so many different successful entrepreneurs and influencers, if you will, uh and public figures that are successful, Tony Robbins, Tom Bilew, Gary V, you know, and then just people you never even heard of, and but from different philosophical perspectives. And I don't really think I need 30 years to validate this. I just hear it from everybody who's been there. And they're not selling me anything, they don't get anything out of seemingly having the same message, which is you just have to try and get started and be willing to fail and have something not work out. So in this case, right, let's let's make it relevant, short-term rentals. It's all you're doing is buying a house, right? Don't overcomplicate it. Whether you have the financing or not, there's clear tax benefits, there's clear cash flow benefits, and I I'll just be one to validate there's ownership benefits through equity and appreciation. Okay. But in this case, this conversation is for those that want to do two things. I'm just gonna assume maybe this audience has some that have zero, or maybe they have one or two and they're they're experiencing some positive things in it, but they're like, could this really help me quit my job or or or or or leave that path, right? And so when I say just just start taking action, is you're you're just buying a house. Like maybe some of you already have a house, but you just were conditioned in the past to go, well, you just you live in a house, you don't you don't use it as an asset, you don't sell it, you don't rent it, or maybe you're you're sophisticated enough, like all of us have heard about landlords, and we rent it. But the the proof is there. Like if you find even a decent short-term rental in the in the place that this industry is in at the moment, and I think it'll be much more squeezed over the next five to 10 years, margin-wise. So, how much you're gonna make, the same$2,500 houses will be$1,500, it'll be a thousand. But all you're doing is buying a house. If it's a capital problem, then and you got to approach it the right way, but find somebody who wants you to do the work. Like if you can do the work and you have a plan and you've picked out a property and you've assessed conservatively what you think that will make, then go to somebody and go to an investor group. I don't don't go to your brother or unless they're like a I keep using the word tribesman, right? And Mark can attest to that. People in investor groups are looking for partners, they're looking for money, they're looking to learn how to get deals, they're looking for something. They're they're there because they want to do something similar to you. So in this case, like your first property, even if you net$950 a month, it's it's it's gonna it's gonna, and it's a simple two-bedroom, one bath. Like the what's the worst thing that's gonna happen? Even if the market crashes, right? Forget like the$2 million mountain house that could potentially go down to like$950, right? I get it. You're not ready for that. But like maybe the overpriced in 2022 inflationary period, two bedroom, one bath that'll net you$39,000 for the year is$230,000. And a couple of years ago it was$180, and you're like, man, I'm the one paying the$50,000 more. Like, it's so much easier for you to qualify that for that kind of a property. You you have tax advantages, it's actually still a real asset, you still own it, even if it went to$180 back to$180. I and this, I had this happen during the the the 06 thing. I had someone, it was appraised at 250. I tried to sell it, no one wanted it, and it went back down for like 10 years or whatever. It was back down to 170 or something like that. But the point is, you have the asset. You can you can any one of us could pick up a two-bedroom, one bath somehow, some way. There's so many programs, train on that. Again, maybe it's$600 a month, but it will be more than the long-term rental. You will learn so much, just do it. And then now, again, all these entrepreneurs, these influencers, all these people I keep hearing, like just get going and you'll learn along the way, and all these things. Like, yes, I'm not saying don't assess it, but just try something out of your comfort zone that's reasonable for you to acquire. And it's amazing how just two years later, we our first short-term rental was like 150K a little over two and a half years ago, right? And now we're buying two million plus dollar places. And it's not bragging, that's just I I have the confidence. I still may, it still may blow up in my face, but I know so much more and I have so much more confidence because I just quickly went like this because I stopped thinking about it and I assessed, I did my due diligence, I invested in myself, I went to masterminds. But just try to pick up one short-term rental, and you should almost certainly net like$1,000 a month, whether it's arbitrage, you sign a lease, and then you go, you know, obviously with the landlord's permission, you there's a lot of things behind that, but just try it. It's like the simplest thing. And Mark, you tried it and they shut you down. You weren't supposed to do it. You learned, you okay, you gave it up. Like, okay. So I just it's such a powerful positive potential versus a very low floor, right? Risk-based, right? Investing. The positive ceiling is very good cash flow on your first deal and a bunch of learnings along the way. And the bottom is maybe you overpaid either in a lease, which is easy to get out of, no big deal, or you overpaid by buying a house that's$30,000 more than what it was paid, uh, than it was what it should be worth, because people are overbidding it. I mean, we're we're paying if you're an investor in the one and a half million and uprange, you're overpaying by hundreds of thousands. There's so much bloated garbage right now on the market that those are the people that really, if they don't know what they're doing, they they could lose the 300,000 swing in a heartbeat. I can see that. So I guess I don't know if that directly addresses what you're saying, but but to but to derive it or to align it to this conversation and taking action and just getting started, that first pop of like, I can do this, this is simple. Whether you want to grow to$2 million properties or whatever, is not the point. But three of those thousand dollar properties, all of a sudden you have 3K that's semi-passive. Now you have choices.

SPEAKER_00 57:17

Yeah. And so here's one of the ways that I looked at it when I before I purchased my first property is that you know, think about, you know, look at the purchase price and then think about your overhead, you know, mortgage tax insurance, and then your maintenance, and then look at what you can get on Airbnb for it. So you can just go in as though you're you don't need air DNA, and Air DNA doesn't do every neighborhood, but you can go in as a guest and just see what the revenues would be. Now, what don't just look at how much it would cost as a guest, because some of those costs are going to go to Airbnb for their fees, the lodging tax, which is eight percent of the revenue amounts, which is an insane amount of tax, but that just comes Airbnb handles that for you, and the customer pays it. But think about the um the actual amount that you're paying to the host for the stay for the clean, you know, maybe consider that the clean they're paying for a cleaner, so just ballpark that, but just for the actual staying at the place, and then think about what percentage of the time, how many days do you need it to rent out just to break even? And what you're gonna find is you only need to really rent it out maybe 50-60 percent of the time to break even. And if you break even, that's still a win because now you're paying down equity, you're building equity from appreciation, but you're gonna do a lot better than break even in almost every every instance, um, unless there's some you know extraordinary event or some sort of calamity. So you it's really not, you know, it shouldn't everyone here should be able to find something that cash flows and and to find a way to finance it. It is not the most impossible thing. And uh John touched on arbitrage. So if you can't afford, let's say you have a bad credit score, you don't have a down payment, all you need if you could maybe you need someone to sign off as a co-tenant on a lease, you could buy some furniture with a credit card, even with a 25% credit card interest rate on your credit card debt, you're gonna pay that off way faster. That you're gonna get the cash to pay off your credit card debt way faster than that interest is gonna grow. So even then, you know, you you if that's if you're even you know broke, you can still find a way to get into the game. You're not gonna see the advantages of depreciation, but you're gonna get your cash back a lot faster and eventually build up the capital to purchase properties as well. So, I mean, this is not a game for the you know, it's not just a game reserved for the wealthy. And it's funny because when I was in New York City and seeing the cost of properties and you needed 20% down on New York City real estate, I always thought that the barrier to entry was so high and only the wealthy could get into this game, but anybody can do this stuff. You know, you can be making 40, you could be serving tables and you can get started in this and build a multi-million dollar product uh investment portfolio with just sound decision making.

SPEAKER_01 1:00:19

Um let me throw this right real quick, Mark. So just real quick on that, because it's true. So many people started with not a lot of capital, if any, and they they've built this. So, yes, does it take time? Sure. Is it is it quick, fast money? No, but in this case, it it's it's nice size rewards, and that's what you're going for because you're not getting 7% returns. You could get 20, 25 returns, maybe more, right? And so there's really three ways to build the businesses, and and that and that it kind of addresses everybody's financial situation. It's obviously you can own, you can buy 20, 10. You know, that's for people with a little more capital and better credit, whatever the case may be. You can arbitrage what you just said, but you could also start your own your own management company. And obviously, you you kind of are like, Well, I don't know how to and I don't I don't know how to do that. And that's that's fine, right? But that's almost like a sub-tier option that you can incorporate once you start learning how to do these. Because once you know one, you can know two and three and four. But I what if you even just just again go to an investment group and say, hey, listen, um, I I have a tremendous amount of um knowledge and desire to run an Airbnb. Uh, this is what I was thinking. There are a lot of investors who who have long-term rentals that want, they know they hear about the power of this and they want to turn it over. But when you tell them, like, furnish it, get linens, hire a cleaner, you got to message guests every weekend. Uh, you got to have a good sense of style and you got to manage payments every you know couple of days. Like they're like, yeah, I want the cash. I don't want that work. And that's where you can come in because that stuff is just it's just grease. It's just elbow grease. It's no big deal. It's just some work. I mean, seriously, like the phones, I mean, this is it. Like you're you're just on your phone like you are for every other aspect of your life. It's just now you're on Airbnb platform instead of texting, right? And then you're sending messages through that and you're dealing with, you know, you're picking up the phone for a cleaner. It's it's it's there's so much, there's just so many ways to enter this business, whether you have capital or not. So it's just a really good point, Mark. You just got to look in the right places. Like, don't just search on your own and stay on your own island and hope it's gonna come all together and you're gonna figure it out. Go to somebody who has something to gain by you being involved in the formula. And then you could just as soon as you add that value, because a lot of long-term tenant conversion investors they have no desire to learn this business. And I look, it's it's a lot of work. You gotta you gotta know guess, it's a different mindset, it's a different business model. But if this is what you want, then it's easy to bring that value.

SPEAKER_00 1:02:42

Yeah, and another demographic of people that I kind of haven't touched on, we get a lot of uh physicians and dentists and and high-income earners who are using this strategy, and I'm working with as well, because you know, you really you're paying so much in taxes once you know, if once you're making around you know 800 to a million and up, you know, and well with you know, with all the opportunity, the limited opportunities if you're in a high-paying W-2 type of job, what they have found is that this is the single most effective way to reduce their taxes and replace their income, which is just investing in short-term rentals. Because with long-term rentals, you can't get the real the real estate professional tax status to reduce your taxes. This is it. And you know, we have clients who we're able to reduce our taxes by as much as half a million dollars per year with this strategy, and they love it. And they can be, because they have so much cash to deploy and so much cash on hand, they're not as stressed out about the margins. Some of them really just want to reduce their taxes, and they know if they stick it out and pay off the equity in the long run, it's all gonna come together anyways, but they don't even care that much about the return because they like their jobs, they just want to win the tax game. So we have some folks like that taking advantage of these strategies as well. Can I throw something out, Mark, on that real quick?

SPEAKER_01 1:04:09

Sorry, like yeah, so uh one of the um the clients you had sent me, um, let's take it, let's take the flip side. I don't I don't know everybody on the call. Maybe maybe they are making a million dollars a year in a sales job or something, right? Um, obviously the problem is, you know, the more money you make, especially in corporate America or sales, it you know, it just you know, you're kind of become more and more of a slave to to the company, which you know, that's fine. You it's what you wanted, you make a lot of money, that's great. But at some point, and I don't really firmly believe anybody truly wants to just sit on the beach for the rest of their lives for 30 years. Like I think we want to do that more and more with breaks and actually work on something that we enjoy. And it's usually not selling other people's goods and services, even if you're getting well compensated, you're making them rich and you're just you know you're getting compensated well. Or let's say, again, you're a surgeon, right? And I and I I don't I don't know if anybody has read this book, but you know, you hear it a lot the cash flow quadrant. It's it's it's such a brilliantly and simplistically uh well-written book on explaining the essential four ways you make money. Um, but let's say someone on this call making a million bucks and they and they want to, you know, obviously you you don't your cap capital is not a problem for you. Um you're gonna want to, you know, you want you're gonna want to strategically pick these things up so that you can make$50,000,$60,000 a month, but maybe you can move faster, which is you can definitely make$50, 60, 70, 80,$90,000 a month by having, you know, 10 of the right rentals, maybe less. It all depends, right? But um, it's just relative. Whether you have no money or a lot of money, you're you're essentially trying to do the same thing. You're trying to get out of your nine to five by building a five to nine. And whether you literally have to approach someone because you got no money or you have lots of money and you don't necessarily want to be in this business, you still just got to acquire the right amount that creates that that that new intentional income based passive semi or passive income based life. And then there's there's a question here eventually. I want to get to this, but I'll let you go, Mark, because this one's a good one. But go ahead.

SPEAKER_00 1:05:58

Okay, great. Yeah. So we're gonna get to Question, guess the question is just a little bit. Um, but before we do, I want to ask two questions. Um, so one I want to know is what's the biggest make mistake you've made as a real estate investor? And then what I also and that you've learned from or that other people can learn from by just hearing your story. And the second thing is I want you to tell the audience what you're working on now.

SPEAKER_01 1:06:26

Yeah, sure. Uh, you know, I I don't know how this might come across. I I feel like I don't have a horrible mistake yet. And that's that might be the mistake, actually. Is like I said, I I started maybe 15, 17 years ago, and I and I I I hit the quintessential like, oh, I'm I'm gonna be richer on real estate and it's gonna be easy. And like my first tenant problem, I just was like, this sucks. Uh I don't want to have to call about a toilet, you know, the proverbial you hear it all the time. I don't want to have to fix a leaky toilet at 2 a.m., which that kind of stuff rarely ever happens, but it's just the consistent like dealing with tenants and stuff. But so I so two two two quick things. I probably should have stuck with it more, and not that I didn't, it's just I bought on way too much of an infrequent basis. I just I I I when I read Rich Dad Port out, it was all about real estate, it was all about different sources of income. And I kind of gravitated toward back towards my career. When if I if I had just quit then or just figured it out then when I was 25 uh four, five, six, whatever, I I would, you know, I have a lot of confidence in myself. Um, not not cocky. I just I I I'm obsessive about things. I learn, I like being a student, and then I I learn as fast as I can to just make changes happen. And so I just feel like if I had that extra 12 years, I who knows where I'd be now. But it is what it is, right? No regrets. Just I think that was a mistake in not having too many mistakes, which I would have had a ton in the last 12 years. Um, the only other one, too, is because I know we're this conversation is specific to short-term rentals, but the reality is like, I don't want to wake up in even five years and only have short-term rental income and all that. I, you know, I'm working on multiple streams of income. I mean, I have, you know, consum consulting income. Um, my wife and I just play around with like e-commerce, right? Because it's just kind of fun. We'll get we'll get our hands on some stuff and we'll flip it for profits and stuff. But that, you know, there's people obviously who have automated that. I'm not saying um go do that, but I think there's a way to you can easily make a thousand dollars a month just selling goods and services on eBay or whatever, Amazon and stuff, and and and and many more than that. But the goal is to really essentially um and have multiple businesses, right? But the goal is to have multiple income streams, which we're we're we're funneling out some of our additional ones. I think the saying goes like have four to six or something, and you and then you're really covered. You're kind of like when one business is is uh doing poorly, other ones are picking up or they're stabilizing and all that. Um, and then the uh I bought into another just quick lesson. Like I bought into a business which I I didn't know anything about. It was really it was around real estate, but it was around like property management. This was like years ago, and um I it was kind of like the inverse of what I'm telling you guys a little bit, just like take action. In that case, I I I literally didn't even assess like why I wanted to do it, what was I trying to do, what was I trying to accomplish. I just like bought into this business because I just I was so pissed that I didn't, I think we lost it.

SPEAKER_00 1:09:36

I'd be probably a lot further along.

SPEAKER_01 1:09:39

Sorry, did you lose me for a second?

SPEAKER_00 1:09:41

Yeah, you're I think okay, you're good. Yeah, we got you.

SPEAKER_01 1:09:43

Okay. So anyway, I was just saying, I wish I had better stories for you, and I think that's the mistake because the stories are what lead you to prosperity. When you have really great stories, it means you've been through a lot, which means you learned, which means you ultimately led yourself to the promised land, which is a lot of success. I mean, that's just the way it goes. Uh and then you had another question. Sorry.

SPEAKER_00 1:10:02

Oh, yeah. And so to add on that, a lot of people are like, oh, well, the market's too high right now. When is it gonna crash? Everybody's waiting for the real estate to crash. People were waiting and prophesizing on the crash for like the past like 10 years now. And what I've said to people, instead of waiting for the right time, if you're gonna do that, you're gonna miss out on all these lifelong opportunities, all these opportunities to learn how to work with attorneys and tenants and and think about contracts and thinking about working with contractors and evaluating deals, just get the repetitions and don't overstress about the timing. Uh, so tell the guy before we get into QA, just uh uh yeah, because I know you do some consulting and coaching for other uh investors and short-term rental investors. So if you could tell some people about that project you're working on and some of your other uh rental projects you're working on as well.

SPEAKER_01 1:10:54

Yeah. Um yeah, okay. And just uh if my internet's spotty, I'll I'll try to repeat myself just a little bit. Um, because I don't know, it's giving me some trouble. But anyway, um, yeah, okay. So so as I said, the my mindset was this is uh we you know we started a couple years ago, we we hit our goals. Um I think there's a couple things. I think the short-term rental industry is is is going through a transformation because it's new, it's a new asset class. Institutional investors are just now getting involved. Um I think you know, you could in the years past you could just throw anything up and make money, and that's true. And it's still tech technically true, but it's it's you know, you're you're kind of having to raise your game, just like any industry. Okay, so so you know, I see that in the future, and a lot of people I follow, you know, clearly can dictate that that's the case. Um, but my goal was as very quickly shifted from instead of single families, like, how do we create unique experiences? How do we buy maybe uh more land with structures on them, but maybe we create a destination, right? So my partner, Mark Reitman and I um we're we're kind of creating something called a destination within a destination, right? That's kind of like the vision is where can you go to places that people want to travel to? And you insulate yourself from maybe some of the regulatory risk, but also the unique um the copycat risk, right? And so the two things we're working on now. I mean, I have something locally that I'm renovating working on, but and that's gonna do well. And that's kind of like a lines to when I was telling you guys, just look outside Indianapolis, look outside of Columbus, look outside of somewhere in Ohio, somewhere in Arizona, just find and and I think something it's it's all relevant. Some of something like my initial reaction, right? Like, how do you I totally understand why it's analysis paralysis because you know why? You're actually really good at what you what you're doing, and you're you're analyzing the numbers and they suck, right? So um they don't suck, they're just not as strong as what maybe you heard about in the past. Um, let me stop there real quick. Mark, can you am I bouncing in and out or are we good?

SPEAKER_00 1:13:09

Um my internet for a couple seconds there, but I think we're good. Yeah, all right.

SPEAKER_01 1:13:14

Yeah, so okay, my point was we're looking for unique destinations, and we're we're looking for places that obviously people are traveling to, and that we can create a destination with a destination. But where I pivoted was uh there's an anonymous question here about analysis paralysis. So you're getting stuck on the smokies, gulf shores, and destined. Those are literally your three areas. Now, if you would have bought three years ago, you're golden. But I don't think you're not paralyzed because you're scared, you're paralyzed because you're looking at numbers, which are just not very strong. And that's just I don't invest in those markets. If I went to any of those markets, it would be doing what I'm doing now, which is to find a way to find a piece of land that I could develop, maybe with a structure, uh, build something unique. And again, it's probably going to be expensive. So maybe those markets aren't for someone without a lot of capital or a very crystal clear vision. But I don't don't beat yourself up. I look at those markets and I say, man, I just don't like the returns here. I could I can make some money, but is it worth it? Um it's tough. Totally agree. But we're working on this big development in Texas and this one that we just got under contract for about 2 million yesterday. Um, a lot that I don't know about that yet because you know, we have to do our due diligence stuff. But what I was telling Mark at the beginning of the recording here was essentially how can we work on things that are non recreatable in the experience? It doesn't necessarily even mean the house, right? But like the surrounding area, the views, the the compound you might inevitably create. Maybe the house. Maybe the house is just so cool, right? This just happened to have a structure that was just really cool. Like I could just envision amazing memories being made during Christmas and Thanksgiving and stuff. So there's two huge deals kind of we're working on with developing. Um, one's obviously further along than this one we just found. Um, but those to me are kind of like how I'm pivoting from single families, your average Airbnb pickup to really kind of a an experience and hospitality connoisseur of creating something amazing that I'm not gonna compete with other people in the future for that business, if that makes sense.

unknown 1:15:21

Cool.

SPEAKER_00 1:15:21

And tell them about the uh short-term dojo.

SPEAKER_01 1:15:25

Yeah, so well, I put together a little group just to kind of pull very specific like-minded investors together. Um, it's it's really I'm still formulating what how I'm gonna take that, but I have some really close members that I have personal relationships with, which essentially um there's multiple, there's multiple ways we're taking this. And that's gonna be kind of like a mastermind group where it's again, it's gonna be all about your tribe and who's pushing each other, what are you gonna be doing? Right. Like I almost want people to, it's you know, I'm not into mixed martial arts directly, but I respect it for how much of it's probably one of the most disciplined uh things you could be a part of, right? To maintain focus and hit goals and not make excuses. And the only way to grow, um, I just have such a respect for it. And so that's kind of where the concept came from. But the reality is in this industry, in any industry, it takes that, right? You have to feed off each other, you have to get in front of each other, you have to be comfortable, right? Like if I was sitting here and this was a round table and Mark had me on the hot seat, he'd say, Listen, you know, you had that place under contract. You said by the end of the year you were gonna have an architect draw plans and you'd you'd be breaking ground on at least two structures. And if I didn't, if I didn't have a even a remotely good reason why I learned something along the way that prevented that from happening, and it's sort of legitimate, then it's an excuse. And he should press me on that. And so, you know, that's something where, like, if I'm meeting the right people that are a good fit for that, you know, they can kind of kind of join that and be a part of that. Um, and then just consulting, right? Like me as a general, I mean, I leverage that brand, but you know, I always look at that as like a community. And any consulting I do will be, you know, you can you can say it would be aligned under the dojo brand, the short-term dojo, uh, because that's what I'm teaching a lot about, uh, is short-term rental investing and consulting and how to pick up properties and what to do with them when you get them, how do you set them apart? I can go on and on. Um, but I I like directly interacting from a consulting and a coaching standpoint um with prospective clients that I kind of teach um with multiple things, not just short-term rentals, but really investing and then mindset. Mindset's huge, mindset and action taking. It's a whole different, you can apply that in it to anything in life.

SPEAKER_00 1:17:33

Awesome. Okay, now let's get to some of these questions here. So, one of the earliest ones here uh from Daniel said asked Um, if you have a property manager, can you still materially participate? So there's nothing that says that you cannot materially participate with a property manager. However, you got to look at the material participation test. And there are three tests that are most relevant. And it's gonna be hard to pass that test if you have a property manager doing all or most of the work on that property. So when you're starting out, you're probably not gonna be able to get in enough hours to pass the material participation test with one rental when you have a property manager overseeing everything. Even if you're doing some of the decision making, you're not gonna hit that material participation test threshold. So, what you want to think about here is what our clients do is when they're starting out, I tell them, fire your property manager, say you can hire them in a couple of years or whatever. You want to have you want to self-manage when you're starting out. But as you grow your portfolio, and we think about that material participation test where we want to say we put in either 100 hours and more than anyone else, or 500 hours total, and then there's a substantially all test occasionally that applies where we say we did more than 50% of the work performed by anybody. We're gonna be able to reach those thresholds by looking at you not just one property, but your whole group of properties. So if you have 15 properties and you're putting in 500 more than 500 hours per year, and then you buy another property and you have a property manager managing it, you're still materially participating over your portfolio of properties, and you'll pass that test. So uh it's fine to leverage property managers, but when you what if you want to win the tax game, you wait until you are confident you can pass that material participation threshold by looking at your combined hours um before offboarding so much of your responsibilities. Um here's one from Yeah, Mark, can I throw can I just throw one thing?

SPEAKER_01 1:19:44

Can I throw in one thing? Because the the good thing about, well, first of all, just to just just to add on to that, just quickly. Nothing wrong with a property manager, obviously. Um I think just learning the industry, and I get it. Some people are just like, I don't, I want to make money and I want to invest and I'll I'll pay the expense. Um, but there's so much that goes into the initial onboarding and setup of a property and like learning the business that you'll hit that 500 hours probably pretty quickly. And then and then you can kind of have that conversation with Mark because you know it's like furnishing it, setting it up, interacting with guests, you know, you're constantly doing that. Um, so it's it's easy to hit that threshold, hit the, you know, whatever uh whatever you know, Mark the requirements Mark needs you to have. And then now you actually know enough to challenge your property manager if they suck or not, which a lot, they just they just they're just not very good. So it's like it's a short amount of time of a commitment for a massive capital gain, and then you can turn over the reins, I I believe, Mark. Isn't that accurate technically?

SPEAKER_00 1:20:50

Yeah, yeah. I mean, so uh especially when you're like you said, you're getting started on a new property and you're you know you're you're putting a lot of time into setting it up and you can get to that hundred-hour test, passing the hundred-hour test uh relatively easily. I find most of our clients in their first year will pass the material, will will be able to say that they materially participated. So absolutely. Um now, but make sure we talk before we do this so we can plan, especially if you're gonna buy a property towards the end of the year, you may not have enough time to pass the 100-hour test. So then we may be able to get the substantial y'all test, or maybe change our facts around. So make sure you're talking to me or whoever your advisor is to make sure you're doing this in year one. Uh, so Derek asks something along. So, how do you guys approach patterning patterning with individual? I guess you said patterning, but I'm guessing you meant partnering with individuals for funds. I have high income earners who are interested in partnering, uh for um them for tax and them for tax savings and me for cash flow. How do we structure this so they get the tax benefits? Or how should we structure this? So, for for the from a tax perspective, now we there's some things we want to consider here. What is the value of our losses, right? So if these partners have real, let's say they have passive income, let's say, for instance, and this is not common, but let's say they're passive partners in in businesses or their rental properties are operating at a profit and they want general passive losses. They could be a cash partner, you can manage the properties, and they'll get their share of the losses and they'll be happy and they'll be a tax win. But let's say that these are high-income earners with W-2 jobs and they want to just put all their money into this real estate and they know about cost segregation and they want to get a fat refund at the end of the year and have you do all the work. Well, they're gonna be disappointed to find that because they're just cash partners, they're gonna fail the material participation test and they're not gonna be able to use those losses to offset their W-2 income. The best they can do is have some nice cash flow that's gonna be untaxed because we can offset the revenues with our with our write-offs and depreciation. So if you're gonna partner with someone and a cash partner, make sure that they understand the treatment of these losses and maybe they can get involved in enough of the decision making and management with either that deal or that combined with grouping it with some other short-term rentals, so we can say that they materially participated, and now we can treat the losses as non-passive. And um on how to structure it, so you want to make sure you talk to someone before you do this, especially if it's a cash partner, because these are treated as regulated securities, and we really want to make sure that we have our proper documentation here. There might be opportunities to allocate more depreciation to the cash partner with a special partnership allocation. So if they're bringing the funds, you can give them more of the depreciation write-off benefit, and now they're no, it's a win-win for everybody. You get the cash flow, they get the write-offs. Um, side return. Okay, uh Brandy, we'll we'll talk about send me an email. Um okay, so we have a question here about it going on schedule E versus Schedule C for your rental properties. Um, so the when you have a short-term rental, you can so I used to take the position that a short-term rental where the average length of state is seven days or less goes on schedule C. But uh I've decided to follow the masses and put it on a schedule E as well. And there's a lot of reasons why, which we don't have to go into um too many rabbit holes here. But however, you can still treat your losses as nine non-passive on the schedule E, even if you don't have real estate professional tax status. So tell your accountant to see if you can treat, if you can mark off the losses as non-passive rental activity on the schedule E. So he has the comfort of it being Schedule E, and you can still treat the losses as non-passive on your 1040. Um, we got a question from Rob Anderson. What about depreciation recapture when you sell the property someday? Is the idea of the exchange to exchange and never sell? So you can defer the depreciation, right? The straight line depreciation recapture with the 1031. However, the depreciation that you took from a cost irrigation study and that bonus depreciation, you cannot avoid that with a 1031 exchange. It gets recaptured and and you are taxed at your marginal rate on that recapture. However, there's some strategizing we can do. If you 1031 into a larger property, you do another cost egg and potentially create enough losses to offset that other depreciation recapture, and then maybe then a little more to further reduce your taxes. You can re-evaluate the market value of that property that's being recaptured and maybe not recapture 100% of that bonus depreciation because you could say that it has um become less valuable over time. So maybe you're not recognizing all of that that prior bonus depreciation back is recapture with some strategizing and analysis. And we have a question here that I think both of us can address, especially you, John. Uh, how does one get out of analysis paralysis? Going through this in markets such as I think, oh, I think you already addressed this, right, John? Smokies, gold shores, and dust. And so I think we already talked about that topic.

SPEAKER_01 1:26:49

Um, I do, but I want to reiterate because it's like she should, or he or he or she should feel good. That's not analysis, paralysis. That's you just looking at numbers and not being comfortable. That's that's good. I'm not saying those markets are dead. I mean they're great, you know, they're busy and it's a lot of money. But if you don't like the numbers, then you're doing the right thing. I probably lost you.

SPEAKER_00 1:27:13

Oh no, we heard you. Okay, okay. Awesome. So, John, uh, what I would like for us to, I think we're reaching a good stopping point, uh approaching a stopping point. Let's say I'll see. I think we've answered all the questions, and this was a really great conversation. And I think a lot of people are really going to appreciate your story and insight. And um, can you tell us a first, you know, where to reach you if people want to reach you, and also any calls to action or anything you're asking of the audience or anything to check out or anything along those lines?

SPEAKER_01 1:27:49

Yeah, I mean, for just for me, like, look, if you, you know, if you think there's something I could do to help you in the future, um, especially around this business or just kind of really getting out of your own way, I think that's. What I'm going to focus on. There's a lot of knowledge that I have around the short-term rental industry. But just helping you with the mindset component of just how to take your first step. I mean, you could reach out to me. And I'll put in maybe you want to share it after this. It's just jonathanpasilio.com is kind of my landing page to uh engage me and set up some time with me. Um, you know, if that's what you you you so want to choose. And then, you know, again, the short-term dojo is is kind of like a group I'm going to be building. And it's really kind of tribe-specific. Um, so if that's something you're interested in at some point, you know, let me know, kind of see if if if you're a good fit to kind of get involved in that community um so we can push each other. Um, but the call to action is uh this is obviously specific to I I can't stress enough how just making one acquisition of a piece of real estate that you turn into a short-term rental can do from both the immediate cash flow perspective and then an I I call it this injection of capital with the right tax strategy. Forget even where you're gonna go in the future, and you're gonna have multiple deals and you're gonna work with Mark in the future to take one 1031 and roll it into something bigger, and now you're working on a lot of things. One of the best, and I don't want to say I use easiest loosely, but one of the best, easiest ways to vastly improve your wealth situation is to pick up a property, try short-term renting it, get the cash flow, and then integrate it into a smart tax strategy. Like it's like the quickest way to see this boost in your net worth and have capital come your way, because you it's very, very difficult to change your financial situation without owning things, right? Owning assets. You you have to own assets, right? Even if you start a business, that's great. But if your business is poorly performing, it's it's not even an asset. Real estate is always an asset, right? It's a hard asset, right? I mean, you know, there's a million things, Bitcoin, stocks, bonds, but like it's it's literally the most secure. It's how it's how the whole banking system is built, is to lend on a hard asset like real estate. No one's gonna lend you money on stocks, they just don't do it, right? So if you just try one small one, manageable, learn the business, get the cash flow, and have one injection of this new tax this new tax strategic implementation of capital to get a little bit more of a return. It'll it'll teach you so much about what it what it does for your net worth and your financial situation to own an asset, have it cash flow, and then have the third cherry on top tax advantages. That's how everybody manages their wealth, whether you're a politician or a business person, a billionaire or whatever. They own stuff, they have businesses, and then they make sure their tax strategy pulls it all together, pulls the thread through, and protects them from losing money, right? It's not how much you make, it's how much you keep. So I just just try this out. Like, even if this was about crypto, which I'm exploring and stock trading, which is great if you're good at it. And there's so many ways to make money, but this is like literally, and it comes from 20 years of risk management, it's like one of the easiest ways to securitize, limit your risk, and securitize a financial gain for yourself. I don't know how else to say it.

SPEAKER_00 1:31:24

Yeah, absolutely. Those are all that's all wonderful things, you know. And when you compare that and think about how hard it is, how long it takes to get a raise or a promotion at your job. And like you get these promotions or raises, what are you gonna make? Like maybe an extra couple thousand, maybe 10,000, 20,000. That doesn't even compare to how fast and how much more powerful it is to invest in real estate. So um, you know, you know, for some of you guys listening and looking to become entrepreneurs, this is you know, this is really where the upside is. Um, and so I think that so you know, before we wrap it up, just some calls of actions. I have obviously if you or anyone you know are interested, we can assess your situation. Email info at markprobercpa.com for prospective clients. And if you know someone who wants to work with me, to work for me, we are hiring nonstop. You know, a good accountant looking for work, just send them my way because we need we're looking to grow and we can't serve all the clients that want to work with us because we need more manpower. Um, we do have openings, but we uh we are selective and we could be a little less selective when we get a little more manpower. Uh and if you know anyone who might be interested in this and may see value, you can send them the recording. I'll send this all to anyone who's attended or just registered for the event. You could also watch it on the YouTube page or listen to the recorded version of the podcast, uh, anywhere you go on any of the major podcast players. It'll be released there soon as well. Um, all right. Well, hey, John, thank you so much for your time today. And everybody else, thanks for tuning in and giving me your questions. And again, next uh in two weeks, we're gonna be talking about Costag. You'll see the invite, register. It'll be another great, great insight from another guest speaker. And uh until next time, best of luck in your investing journey, and we'll be keeping in touch.