Welcome back to another brand new episode of the RUN GPG Podcast as all. I am your host, David Morrell, and I’m excited to bring you a special episode today. This one is a recent live recording from our Greater Property Group Mastermind Session featuring none other than guest speaker, Mark J. Kohler. Now, Mark is a CPA, attorney, and real estate investor with millions of former clients.
Followers on social, you may already be following him. And if so, you know that he’s a best selling author of four books, and he’s known for his innovative approach to financial strategies and wealth building. This was a punchy value pack session. Mark really went deep on tax and legal strategies that can make a big impact on your business and in your personal wealth, his high energy and his depth of knowledge, make this a must listen episode.
If you’re an entrepreneur or sales professional, I really enjoyed this interview and I know you will as well. And as always, this episode is brought to you by the Greater Property Group Real Estate Brokerage. The GPG is excited to announce our new partnership with Ryan Serhant’s premier real estate coaching and training platform, Sellit.
Now, this program offers access to coaching calls, on demand courses, live workshops, and more. A digital community and hundreds of guides, templates, scripts, and more. They’re all designed to help real estate professionals elevate their business and stand out in today’s competitive market. Now, if you’re looking to transform your real estate career and access some of the best real estate coaching in the industry, visit greaterpropertygroup.
com slash careers to book a call or email info at greaterpropertygroup. com for more information. Again, that’s greaterpropertygroup. com slash careers or email info at greaterpropertygroup. com for more information. All right, let’s get into it. This is my interview with Mark Kohler.
I’m very excited about our guest speaker this week. I’ve been waiting for this one for a minute. Mark Kohler is a CPA and attorney who has profoundly impacted millions of small business owners with his expert tax and legal advice as a senior partner at Kyler Kohler, Ostmiller Sorenson. And co founder of the Directed Trust Company, Mark brings practical credentialed insights to his nearly half a million YouTube subscribers and 2 million podcast listeners.
A real estate investor and author of four best selling books, Mark teaches life changing financial strategies through engaging content and hands on workshops. His innovative approach includes pioneering tax planning in the metaverse using NFT technology. Mark’s mission is to provide accessible, reliable advice for building real wealth and financial freedom.
Mark, it’s a pleasure. Welcome to the GPG mastermind this week and a live recording of the run GPG podcast. Well, thank you so much. I appreciate it. Sound check. All right. Yeah, you sound fantastic. You look good. Your, your team was on it this morning. So Mark, where do we start? You know, there’s so much I do want to talk to you about, and I know you have a lot of, you know, valuable insights for those on the call.
most, if not all tuning in. Today are entrepreneurs and obviously real estate professionals, which your content, your books are perfect for, but first some context and background. you’ve spent years educating people on tax strategies, wealth building techniques, of course, what initially inspired you to focus on financial literacy?
And then the big question, why do you think it’s often overlooked by entrepreneurs and real estate professionals or sole proprietors? Well, I, I want to say this boldly. I know you, I know you real estate professionals, and I love you. And today is extremely important because the coaching and training you’re getting on how to sell is great.
But my realtors, my brokers, my entrepreneurs spend about this much time on the tax and legal and hope they’re going to find that perfect tax and legal person where you guys can just forget about it and just put it on. autoplay and I cannot emphasize enough how important it is you captain your own ship in this tax and legal space.
Your nber one cost is going to be taxes. Your nber one possible loss is going to be in poor legal planning and audit with the IRS, not making your deposits. And I, I know the, I know you so well, my daughter, who I love to death is, an agent and I’ve spoken at Every major brokerage in the country, and that would be us.
I know many of you are up in Canada, but I speak at the national conferences, the monthlies. I’ve been talking to realtors for years, and I know that this is a blind spot. It’s an area you don’t want to focus on. And I get it because you’re great with people that you’re great with sales. And every year I’m begging my daughter to take her bookkeeping a little more seriously and her monthly deposits and tax planning, because it’s absolutely critical.
And so to, I guess, to answer your question, I feel like I have a calling. I have a mission to help entrepreneurs and, and, and I’ve been in the real estate industry for years and years helping people. Raise the call the flag and just say, please focus a little bit on this. This is the difference between being a successful broker And failure is this tax and legal piece and you’re never ever ever going to find someone to just do it for you You’ve got to captain your ship Get engaged get involved and know your your strategy and direct your tax advisor And so I guess I just want to say I have a few Calling to do this, a mission to change the world in this area.
And I don’t know when it came to me or when I evolved this such passion for me. But, that’s what I’m doing and I just love it. Yeah. Well said. and that’s why you’re here. Mark, we know. We know that agents, providers, entrepreneurs need to pay attention to this stuff. and you know, truth be told, as you heard at the beginning of this, this call, we do have a nber of new to the business agents at our company and a lot.
We’ll be listening to this recording in the future. So for the real estate professionals just starting out, here’s a question. What are some key tax strategies? You should implement from day one. And let me just say this though. remember in the States, we have the IRS and Canada, we have, CRA, of course, and the principles are universal, right?
The principles are universal, right? But the actual, laws sometimes will differ. Based on the country, we do have to get that out of the way. But, key tax strategies. If you’re just starting out on your journey as an entrepreneur or sole proprietor, here’s what I want to point out. Now, everybody, this is super important.
Let’s get to it. The first major concept is you’ve got to be able to see your tax plan. It’s got to make sense. It’s got to be visually something you can wrap your head around. And so years and years ago, I actually. I figured this out speaking to a group of real estate professionals probably 20 years ago, and then I’ve trademarked it and fine tuned it and learned it over the years and taught it so many times that it just resonates with people.
And it’s called the trifecta. And when we do a tax strategy plan for any client, entrepreneur or real estate professional, we build them in trifecta so that they can manifest and see where they’re going with their tax and legal plan. And here’s what it looks like. The foundation, I sometimes have a. A white pad we were going to project, but we’re just going to go here with the white board.
We have our foundation with a trust, a revocable living trust. Every entrepreneur, small business owner should have a trust that is a receptacle of all of their wealth. This is where you’re going to be building your legacy. Leaving a legacy. And this is your 1040 tax return. All your money, all your wealth flows downhill.
All the arrows lead to roam your revocable living trust. That’s the foundation of your structure. It is not for asset protection. It’s for long term wealth building and planning. That’s your foundation. Then we split your life in half. And on the left side, we’re going to put your operations, and on the right side, we’re going to put your assets.
This is going to create passive income, your assets side, and the operations side is going to be creating ordinary income. As a real estate professional, this is super easy to understand because in my trifecta, I’m going to have my operational entity. And if you’re an agent or broker, even in your first six months to a year, you’re going to be doing a transition to an S corporation, call this your S Corp.
And then over here is going to be your LLC for your rental property. Let’s say this is just your basic. trifecta, then it blows up from here. The S Corp is owned by your trust. Your LLC is owned by your trust. This is where I run my 1099, my ops. This is where all of, if I’m an entrepreneur, this is my sales of service, product, restaurant, landscaper, engineer, accountant, lawyer, dentist, CPA, online marketer, influencer.
It’s all here. This is where it goes on the S Corp side. And we’re going to try to take every write off we can. Because we want to minimize our self employment tax. Self employment tax is going to be a killer if we don’t do the S Corp. I can explain that more in a moment. But the S Corp is owned by the trust.
The LLC is owned by the trust. And this is where I’m going to put my rentals, my Bitcoin, my notes, my investments, my real estate. And I might have two or three LLCs. I may have one. I may have more. La, la, la, la, la. I’m going to build passive income over here. Operational income over here and I’m going to have a firewall between the two This is the trifecta.
Once we have this picture, we can build on it. This is the first core principle we have to have so we can build our tax plan and our, our asset protection plan. That’s usually cheer and throw underwear. This is a big moment. So I just want to throw that out. That’s so cool. How many, who has ever done that?
Like actually diagram that out because it’s a really powerful exercise just looking at it. Right. sometimes you can talk about this stuff, but actually diagramming it out and seeing it for yourself makes a ton of sense years ago, somebody showed me a diagram of how we, I should be structuring a corporate.
Tax structure and, you know, paying shareholders, et cetera. And it was drawn out on just a napkin and it made so much sense to me. So having a visual is really, really powerful. Right. Gotcha. Gotcha. Okay. So point nber one is the trifecta. Then we’ve got to unpack strategy nber two, which is why an S corporation, every realtor broker, real estate professional fix and flipper rehabber, wholesaler developer.
Needs to have an S corporation in the U. S. and Canada. I don’t know where it translates. You’ve got to have the S corporation. Here’s why you just do an LLC and I bring in 200 grand. That’s my 1099 whatever commissions. I’m selling a product to service any small business owner. I spend 50 grand on expenses.
So this could be cell phone, dining, travel, auto, computers, staff, employees, rent, blah, blah, blah. I spent 50 grand. Most realtors are going to have a very higher gross profit margin because they’re not going to have a lot of staff and buildings and space. Think like a dentist is going to have a much lower gross profit margin.
We’re an influencer online, a consultant, right? We’re running pretty low overhead. You’re going to net 150. Cool. Self employment tax, 15. 3%. Wow. Right out of the gate. So, I’m going to be spending close to 17, 000 in self employment tax, right out of the gate. And then I’m going to have state and federal. Bam, bam.
One, two, three. LLCs do not save taxes. No way shape or form. They don’t llc is limited liability companies They’re not called limited liability corporations do not save taxes So I want to convert this As soon as I have a net profit margin of around 50 grand or more And if you’re in real estate, you better be making more than 50 grand more, right?
So i’m going to convert to the s corp And once I bring in that same 200, I spend the same 50. I have the same freaking bank account, the same expense. So I can even have the same EIN when I make this conversion and I net one 50 apples to apples, same example, but because I’m an S corp, I take a reasonable salary, reasonable comp, and I might do 50 grand here.
and net out a hundred. I just saved 15 percent on 100, 000. No, no FICA, no self employed tax, no Obamacare, ACA, no corporate tax. Last thing you want is a C corp, stay away. So I’ve got none of these taxes. I’ve just got my regular income tax here. So I’ve got my state and fed. So I just saved 15, 000 or more by converting to an S corp.
Some people in California will mark. I got to pay a hundred dollars or I got to do a tax return. I got to do a quarterly payroll and blah, blah, blah. Holy crap. Let’s say your S corp cost you two grand. Let me do the math. Say 15 spend to get your crap together and get a little more organized. Say 15, 000.
It’s simple. It’s easy. And so many realtors say, well, my accountants got it. They’re choosing my salary. They’re choosing my payroll. They’re taking care of this. You don’t have to get a paycheck. You just take draws whenever you want. And then we do our quarterly paychecks. Payroll reports. We nailed this.
Every dentist, doctor, engineer, accountant, online marketer, dentist, restaurant owner, realtor. We’re all S corps. If you’re not an escort, you got a problem. And nber two, if you’re not in charge of your payroll allocation, right here, 50 grand payroll allocation. If you’re letting your accountant do this, they’re probably leaving money on the table.
You’ve got the most conservative scared of their own shadow industry in the world, planning your nber one cost. You’re not at the table. 10,000 in payroll is a $1,500 bill and way too many accountants take way too much salary. I have never had a client in 25 years audited for taking too little of reasonable comp.
Any of you accountants out there freaking out? Going, well, my accountant said I can’t take that much, that little of salary. I’m gonna get audited. Really? Really? I interview prior IRS agents on my show. I teach classes, continuing education on reasonable comp. And you guys can tell I’m pretty passionate about this.
I’m only on strategy nber two. I teach 12 modules of 80 strategies to accountants to pull their head out of their butts because you don’t learn this becoming a CPA. You don’t learn this in law school. You don’t learn this on the On the bar exam or the CPA exam or the enrolled agent exam, you’ve got to get out on the street and learn it.
And most accountants start working for a firm and learn from some old white guy that’s 75 years old. And that’s their most current strategy. This has got to change. The industry is broken and accountants are. Burned out and they don’t have reasonable strategies and you the real estate professional entrepreneur are starving for strategy And you get some guy or gal that takes your paperwork and throws it back at you a month later And here’s your tax bill.
It’s stupid. It’s ridiculous and you guys you can take control of this and save so much money It’s easier to save money. It’s easier to save money than make money This is wildly Mark. I love the enthusiasm at this is the, this is the importance of having a proper advisor, a professional looking after this, like Mark, just absolutely.
Well, if you haven’t already subscribed to, Mark’s YouTube, he does this on the daily, I believe. so you want to go subscribe to his YouTube, hundreds of thousands of subscribers there. I could see why you’re so popular with this. Here’s a question. Yeah. What are some like misconceptions, common misconceptions about tax deductions that may be real estate professionals and entrepreneurs fall victim to, or maybe what are some of the most overlooked, you know, deductions that, entrepreneurs can leverage to reduce their income.
Like, can I, let’s go there. We’re going to go to the right side. Now, this is one of the biggest misconceptions right here. And by the way, before we’re done today, I’m going to give all of you A network you can go to of certified tax and legal advisors that are trained by me. They have to pass over a thousand quiz questions with a 90 percent pass ratio, go through 50 training videos and meet with me twice a week just to be on my network.
And then you can interview them and hire them. I don’t make any money off of what you pay them. They’re on the network because they’re paying me to get trained and learn freaking kick ass strategies. And then you can interview them West Coast to East Coast, young or old, male or female, no real estate, no crypto, no this, no that, whatever.
They have to go through 12 modules on strategies. You’re going to freaking love it. So I’ll hook you up. But here’s the thing. When you find an advisor, it’s not like, okay, just do it. Bye. No, you’re sitting on the same side of the table, putting together a freaking plan and you’re going over it quarterly.
You’re talking about how you’re going to get your kids on payroll, how you’re writing off every trip, how you’re writing off your auto, how you’re writing off your home office, how you’re writing off all of your electronics, when you’re going to be writing off real estate, what type of real estate to buy, how to stay out of debt, how to build your Roth, how to build your 401k.
When do I put my spouse on payroll? Every one of those questions you should know the answer to. And I have a podcast and YouTube channel where you can frickin soak it up and you will know more than your db ass CPA that you’ve been working with for 10 years. Appreciate some of the smiles out there.
I’m trying to get some of you to laugh. This is a fun topic. Actually. I’m kicking your guys’s ass today and we’re going to have an awesome time. I want you guys making money and saving money. If I don’t save you 5, 000 in this conversation today, I’ve blown it. Like literally. All right. Thanks. Thanks, David.
I’m so excited. All right. Keep it going, man. All right. Okay. So here’s our trifecta. Left side, right side. We talked about making sure you’re all in S Corp, making sure you’re nailing your payroll. We haven’t even talked about getting family on payroll, writing off your board of advisors, your board of directors, and auto and blah, blah, blah, all these write offs.
We’re just on strategy nber two right there. Okay. Now, I love that you said some of the biggest misconceptions and screw ups. It’s actually over here on the passive side. There are four asset classes or tax strategies when it comes to real estate. I’m going to break down all four for you real quick here.
These four, the first one, this most common is the longterm rental, single family home duplex. Yada, yada. Very, very common, right? I own six, seven, eight rentals. I could ask all of you, how many own a long term rental? If I was able to monitor chat here, I just see everybody go, me, me, me, me, me. We all, everybody generally owns a long term rental on the side.
When I have an LLC here for this long term rental, maybe I’ve got a couple of them. I’m able to collect rent, write off all of my direct expenses, and write off the big one, depreciation. Now I may do a cost seg, I may not. You guys are sick of hearing people sell you cost segs. Sometimes they’re a waste, a lot of times they’re a waste of time.
Let’s just asse I do a cost seg, I’m ripping out some depreciation, and I have a loss. The average long term rental is going to have a loss of six to eight thousand dollars a year and in the year of acquisition I could maybe rip out a fifty or a hundred thousand dollar write off with my depreciation.
That loss can be directly deductible, deductible against my ordinary income if I’m a real estate professional. You guys heard that. Now you may call yourself a real estate professional, but does the IRS call you in a real estate professional three part test? I’m in the primary occupation of doing real estate is my full time job.
I cannot be a dentist and a real estate professional. I cannot work with a W2 at Amazon and be a real estate professional. Nber two, I’ve got to put in at least 750 hours a year. Doing real estate. So I can say, Oh, I’m retired. I managed my real estate. How many rentals do you have to? Okay. You’re not a fricking real estate professional.
I need 13 hours a week doing real estate on average. Third, you got to materially participate in the real estate. Now I can have property managers and I can do a grouping election. This is a dash seven election to group all my real estate together, to hit my material participation role. I’ve been across the desk fighting this with IRS agents for 25 years and Kill, kill him every time there’s seven tests on how to materially participate.
Boom. You or your spouse is a real estate professional. All these losses are a hundred percent right off. Since I’m speaking to a real estate group today, 90 percent of you were real estate professionals. If you’re an entrepreneur and married to a real estate professional, boom, second asset class. It’s all above all this rage right now.
Short term rental, Airbnb, short term rental. I’ve got three. In it love it short term rental. I can have a new llc hold my short term rental or rentals cool. That’s great Here’s the beauty I can still pull depreciation and do a cost seg Maybe if it makes sense and I don’t have to be a real estate professional This is a loophole many of you have heard of the str loophole a lot of misconceptions out there now to qualify as an str It’s got to have an average stay of seven less than seven days I cannot provide substantial services like a bed and breakfast And Third, in order to take advantage of this loophole, I have to materially participate under one of those seven tests.
The third of those seven tests is the easiest. Nber three, if I can put in a hundred hours working on this rental property, getting it launched in that year of acquisition and put in more time than anyone else, a hundred hours trip last fall, Patty, my partner, we, we worked our asses off on three short term rentals.
We put in over a hundred hours on our short term rentals, a hundred percent flow through loss. Do not have to be a real estate professional. I’m a tax lawyer, Patty’s life coach, not real estate professionals, but I hit my material participation test. And I could take all of that loss. This is where we see professionals and you as brokers should be out looking for high income earners that want a tax write off and could buy a short term rental.
Boom. You’re selling them a tax strategy and a cashflow machine. If you do it right, that’s this quadrant, the next quadrant, which I love. And I have realtors that build a whole practice around this. Is the self rental. This is a dash four election. The self rental says I’m going to go out and buy a building and rent it to my escort.
Very common. I owned three commercial buildings that I rent to myself and they could be a commercial condo. I don’t own like high rises, but I can buy a commercial condo, rent it to my law office or my accounting practice, or that’s that. And I can take a hundred percent depreciation flow through loss on that year.
When I do my cost seg out of the gate. Not a real estate professional. We even have to materially participate. This is a dash four self rental. This is a huge opportunity for you again, to find professionals that have a high net worth high tax bracket problem, and they rent from someone else. The best renter can be themselves.
So we want their business to rent their own building. That’s called the self rental. The last one that we see everywhere now is every influencer out. There’s got to have a syndication. You know, it was Nicki Minaj that said, you ain’t nobody till you got an LLC. Now you ain’t nobody till you got a fund.
Who knows whatever the hell everybody’s trying to build a fund anyway, so that you do your reg D, your crowd fund, your 504 D, whatever. So you got, you know who they’re out there. They’re buying apartment buildings. This is Grant Cardone, one on one Grant and I are friends. I was in Mexico with him three months ago.
He’s been on my show. I’ve been on his yada yada grants on fund 23. That’s his MO, right? And he’s selling all of you. You got to get in his fund and la la la. That’s his, that’s cool. That’s what he’s selling. That’s going to create passive income. And passive losses. If he goes out and does a depreciation deal, but it will never, ever, ever translate into a write off for you.
And I’ve corrected Grant on this so many times when he does his monthly training calls or in his monthly updates on his fund. You’ll say, Oh, but you’re a real estate professional. You get the flow through losses. No, you don’t. No, you don’t because you don’t materially participate. They have management in that.
That syndication is managed by someone else. There is no way in hell you’re going to have material participation under those seven tests. So it’s fine. You can cashflow a syndication. That’s great. And you can have losses, but the losses in the syndication are only deductible against the gains and syndications, passive losses against passive gains.
They do not morph. Into any sort of pass through loss, even if you’re a real estate professional all day long does not matter because you’re not in material participation. So David, to answer your question, there are so many misconceptions in these four quadrants of who gets a write off and who doesn’t, and what the hell is a real estate professional, who material participated and blah, blah, blah.
You guys should be right now, just in this last 10 minutes, you’ve learned more than the average accountant. If you could re explain these four quadrants, syndications, long term rental, short term rental, self rentals. And how those losses pass through, watch this video over and over again. You’re going to know more than the average account.
I teach classes to CPAs around the country on this. And that blows their brain because they’re like, Oh my gosh, someone finally made sense of it. This is why you’ve got to captain your ship and know this because your accountant doesn’t. You’ve got to own it. You sign your own tax return. You’re the one that gets audited.
CPAs aren’t liable if your tax returns aren’t wrong. You can sue them civilly. Good luck. It’s on you to own this. All right. I want questions from you guys. I mean, we talked about ops. We talked about holdings and David, I freaking love this stuff. And I’m so grateful to be here with you guys because this, this is the secret sauce.
To making money as a real estate professional. I’m just really thankful and grateful that we’re recording this, Mark. I’m just really grateful. We’ll get you back to the show in just a few moments. We’re pausing here to remind you that this podcast as always is brought to you by the greater property group, real estate brokerage, as mentioned, the greater property group is proud to offer our scholarship program.
Are you new to the industry or thinking about getting your real estate license? If you are, you’re going to want to ask about the Greater Property Group’s new agent scholarship program. Why pay for the full cost of licensing yourself when the GPG will help subsidize the cost? Additionally, if you’re already a real estate agent or associate, the Greater Property Group is also proud to offer our best of everything fee plan for sales professionals.
What’s the best of everything plan? What would you say to zero monthly fees, no splits, and a 100 percent plan? Yes, it’s true. It’s possible to keep your money and pay no monthly fees at the brokerage. Hit us up for details on either of these programs or for additional info about the Greater Property Group and what we’re doing to help real estate agents grow and scale their business in a changing industry.
Go to greater property group. com slash careers or email info at greater property group. com. Back to the show.
You know, you talked about Airbnbs and short term rentals. What, what’s the biggest tax mistakes you see real estate investors making? Like how do you avoid them? You know, is there, is there a common mistake you see when somebody says, Hey, I’m going to invest in real estate. I mean, you covered a little bit of it, but is there something specific they should be thinking about or is there a mistake?
Yeah. by the last week and out well, 10 days ago, I was in Dallas speaking to 400 dentists. And then I, five days ago, I was in the Kennedy space center, speaking to a group. and every, and so I’m not in front of real estate professionals every week. I could be in front of dentists. I could be in front of entrepreneurs, influencers.
I’m on YouTube every week live, but every one of my business owners should also be a real estate investor. The nber one asset class for wealth building, tax deductions, tax deferred growth is real estate. Wealthy people own real estate. When I started as an accountant and a lawyer 22 years ago, and I’ve done my 10, 000 consults, people, you’re going to love it.
I’ve done my 10, 000 consults. And, it was so funny. I was interviewing Robert Kiyosaki. He was on stage with me at my event. And we were talking about how, Rich dad, poor dad, life changer, right? For so many people. And what you found out was, as I did my 10, 000 consults, 95 percent of my successful clients, Own rental property.
They just do wealthy people own rentals. Okay, let me get this straight. I want to be wealthy. Maybe I should buy freaking rentals and learn that asset class and figure it out. And who am I? Who am I going to buy a rental from a broker agent? Maybe I need to find a good broker agent that understands freaking rental property.
You know, you did talk about diversifying income. It is wide open for you guys that haven’t caught the vision of you should be buying rental real estate so you can talk about it with your clients and build your own wealth as well as have a copious amount of clients that are dying to buy rental property and you’re talking about and teaching it in your own personal newsletters, your own personal podcasts, in your own marketing, you’re showing single family homes and rental properties every other day.
Boom, boom, boom, boom, boom, boom, boom. Cause there’s so much opportunity there. First point I wanted to make David is every one of your clients should be buying rental property. And so you should be talking about it with everybody. Now, one of the big mistakes. And I just, it was right here in front of you.
People buy real estate thinking they’re going to get all these write offs and they may or may not, depending on which quadrant they’re going for. So you want to be careful making promises to real estate investors that are day jobbers or entrepreneurs and making sure they’re buying the right type of real estate.
Now, if I’m not a real estate professional, am I still buying long term rentals? Hell yeah. I’m buying long term rentals. But I already own, but I know where I’m going to use those write offs and I can carry them forward. I can dp them out when I sell any rental. Maybe I’ll use a charitable remainder trust on exit.
Maybe I use a 1031. Maybe I go opportunity zone. You should know every one of those strategies and be ready to pull them out of your toolbox. So you’re helping clients not only exit their rental properties, but get into the right one. Cost segs, huge mistake for a lot of people. They’re getting sold everywhere.
And if you don’t get the depreciation, why in the hell am I doing a concept? I don’t need to do a cost seg. So we want to be careful not over promising write offs and seeing investors go into properties thinking they’re going to get a write off and then doing cost segs and spending for crap they don’t need.
and I think the other thing too, David, is too many people think that, Oh, I hate the word. I hate the word or phrase turnkey rental. They don’t insist. They don’t exist. If you want to be a real estate investor, you’re going to get dirty. You’re going to have to learn. You’re going to have to roll up your sleeves and figure this crap out and then get it on a system, get it set up properly, but it’s never completely hands off.
And so there’s so many people that make mistakes thinking, Oh, I’ll just buy a rental. It’ll be easy. And then it gets jacked up. They lose their money. Oh, rental real estate’s bad. No, you were just a db ass and thought it was just going to be easy. That’s the problem. What did I eat this morning? I don’t know.
Can somebody give Mark another coffee? That’s it. I’m going to break into a rock star right now. Let’s do it. Sponsor because I’m a rock star account. I’m going to break into my rock star right here. It’s only 9 45, but I need one. There we go. I love it. no such thing as a turnkey. Super interesting.
Like, I’m really glad you’re breaking this down for us because it’s, it’s stuff that, you know, we think about, but to have it broken down and such, you know, it’s just very well said the way you’re putting it together for us to take a look at and think of, and of course, it’s firing us up to, talk to our clients about this in, in a educated way as well.
I got a couple of questions here. in the time we have remaining with inflation, economic downturns, you know, people are talking about this, what financial strategies, should real estate professionals, entrepreneurs focus on a state resilient, like, what are you telling your clients and colleagues, when they ask about potential downturns boat very carefully in November, no politics, Mark.
No, I know. I’m just saying vote carefully. Yeah. 80 percent of this book. Gone in 2025. Vote carefully. That’s seriously. And here’s the other thing I would say. Worry about your own economy. Are you in debt? Where’s your cash flow? Are you on top of your tax strategy? Have you done a balance sheet of your personal life lately?
We can’t expect the government to solve these problems or our company we work for. We’ve got to take accountability for our own future. There could be a total economic downturn. And I’ve got clients going like this. Where people, where there’s people are losing money, people are making money. And so if we put our head in the sand, we get scared, we don’t, you know, whatever, just.
Be, be engaged, understand what’s going on in the world and in politics, but also worry about your own little world and make sure you’re careful and you’re making wise decisions. And that’s so hard when we got to pay the bills every week and prices are up and inflation’s up, but we’ve got to take a little time each week to do future planning and long term planning.
And, Yeah, that’s a big question. So I hope that’s okay. That’s good. A little short term pain always pays off later, but like you said, we can geek out on this stuff. If we understand it, we’ll enjoy it more as well. And, you know, I do want to ask you about this topic because you are, this is unique. This is a topic that we’re very familiar with, which is cryptocurrency and blockchain.
we are a brokerage that transacts actively. In a Bitcoin and digital currency when it comes to real estate transactions. So you’re somebody that we’re very excited to talk to you about this in the last few minutes here, in your opinion, what role does cryptocurrency play in the future of real estate investing?
I don’t know if you’ve thought of that or how should entrepreneurs and sales professionals approach it, or, you know, how can entrepreneurs. Integrate cryptocurrency into their business operations, investment strategies. What should they be thinking of? You know, just your general thoughts on crypto
There’s a lot there. There’s a lot there, but you know, it’s something that we we’re super excited about it because we’ve transacting in crypto for a while now and it’s just, oh yeah. So you can pay your legal bill at our office with crypto. I own crypto. I own a crypto mine. Mm-Hmm. . inside my Roth, IRA, I’m mining right now inside my Roth ira, tax free of crypto.
so I’m very engaged in it. . First of all, crypto is here to stay. It’s super important. It’s the future. Crypto and NFTs are going to transform the way we transact in real estate. So it’s here to stay. So we all know that you guys are smarter to know that. Do you know how it’s taxed? Do you know how it moves through the eyes of the IRS?
The nber one question on the 1040, the nber one question after you put in your name. Social security nber. Do I have kids? The first question. Did you transact, get a reward, earn, or do any transaction with cryptocurrency last year? Yes or no. Penalties of perjury. Go to jail if you lie. What? That’s the first question?
The IRS task force is on this are insane and you don’t think they understand blockchain? I thought the beauty of crypto was that it was public. That everybody can see what’s going on in the blockchain. You don’t think the IRS can see that? How’s it taxed? When a client buys Bitcoin and then they go to do a deal in real estate, when they use the Bitcoin to buy the real estate, they have to pay tax on the appreciated gain of that Bitcoin.
They’re paying tax to buy real estate with Bitcoin. Unless their basis is fair market value, which it won’t be, they could have a loss. But we’ve got to be making sure our clients understand that when they’re staking, they’re paying tax on staking. Then they’re going to pay tax on the appreciation on the coins they received from the staking.
You’re one of the biggest ones. I mean, I did a video yesterday on gaming kids that are playing pay to play, pay to play games. You, they earn tokens. AXXIS and Infinity is one of the big ones. Axiom Infinity. You, you earn tokens. When you play the video game, you will get a 10 99 and if you don’t, you’re still taxed on the tokens you’re earning in the game.
Kids are playing video games and earning crypto. They will be taxed on that. Then the minute they’re taxed on the earnings and then it sits there in their Phantom Wallet. Wallet or metaverse wallet, any appreciation they’re taxed on. And they go, oh, well I didn’t convert it to USD. Doesn’t matter. I can take that.
what, what I get. I’m gonna get SLR and then I can trade it for Solana when I trade it for Solana taxed. So whenever I transact with crypto, even if I don’t go back to my fiat currency, I’m taxed people. We gotta understand this. So wouldn’t it be nice if someone held like a two day virtual conference where I could watch from the convenience of my home and watch and learn about crypto taxation strategies that actually make sense and they’re not talking down to me and techie Mark Kohler’s handling one this weekend.
Ironically, I don’t know if you knew that, David. So I have the crypto tax smit, third annual, it’s going to be online for two days, this Friday and Saturday, 30, a hundred bucks, 300 bucks to get from 10 experts, everything from gaming to staking, to defy, to capital gain, to crypto mining inside of Roth, outside of a Roth.
When do I get taxed? How do I get taxed? Taking crypto in my business, the future of NFTs and digital currency, two days. Come check it out. It’s recorded. You can watch it up for three months later. Sorry. One more time. The URL crypto tax smit. com crypto tax smit. com. Yeah. Yeah. And of course we do this similar thing here as you, as you know, everyone with the, future of real estate, crypto and web three.
so get educated, you know, super important now, to wrap things up, Mark, it’s been fantastic having you. And of course your insights are profound. It’s been incredible. what. If, if you had to simmer down, can you think of the best wealth building advice you’ve ever received or that you can give, you know, when it comes to legacy, and you know, wealth building It’s such a big one.
Well, I’ll say this cause it’s in my books. Every one of my books I tell my clients, and I’ll go with the last two words you said in that question was wealth building. There’s a lot we can do for legacy and tax planning and asset protection and la la la by one rental a year. Buy one rental property a year, and it could be a part of one.
You and I might get together with two other people, and I own 25 percent of an LLC and go buy a rental. Every year. Buy a piece of real estate every year. Inside my retirement account, with crypto, cash. Maybe I put in my credit. I don’t have any money, but I’ve got credit. I partner with you. You’ve got cash.
I’ve got credit. Let’s go. Buy one piece of real estate a year. That’s what wealthy people do. Be wealthy. What an awesome piece of advice, Mark. Thanks so much for joining us today. What an awesome breakdown and some very valuable insights for all of us on wealth building, entrepreneurship, crypto. Of course we squeezed that into the end, all of it.
again, I know you covered this, but where do you want the people to follow connect with you again? Just one more time, the YouTube channel, Instagram, et cetera. Yeah, thank you. Whatever your, your, Favorite. What do they say? Your favorite, flavor is if you like Instagram, I’m on Instagram. If you like Facebook, I’m on Facebook.
I’m on tiktok for how much longer we’ll have tiktok. and you want to follow me on youtube. Please do. I go live on youtube every thursday and answer questions around the country. A lot of times people ask questions and they’re there going, oh my gosh, I didn’t even think to ask that. You don’t know what you don’t know.
You know, sort of thing. If you want to come to an event, la, la, la, you can all get to those, spots at my website, markchakeholer. com and got a blog there if you like to read. So, I’m not going anywhere. I want to be your tax and legal guru. I want to be your nber one nerd. Let me be your nerd. Let’s do it.
It’s anything but nerdy, Mark. But anyways, thank you so much, Mark. We truly appreciate it. Big round of applause for Mark. Oh, thank you. Thanks so much for joining us. That’s a wrap for this week. Thanks for listening. Don’t forget you can always get a copy of the show notes and smary at RUN GPG. com along with additional links and other info including the YouTube version for some of the episodes.
