Cost Segregation Made Simple with Yonah Weiss

 “Failure is part of the process, but you can avoid a lot of that failure by learning and studying and apprenticing other people who are doing it.” – Yonah Weiss

Today’s guest is a LinkedIn rock star, a celebrity in the real estate world, and a powerhouse in property tax savings. As Business Director at Madison SPECS and as a national cost segregation leader, he has assisted clients in saving tens of millions of dollars in tax savings. He has a background in teaching and a passion for real estate and helping others.

Let’s welcome our guest, Yonah Weiss: Cost Segregation Made Simple.

[00:01 – 08:26] Opening Segment

  • We introduce and welcome our guest, Yonah Weiss
  • Yonah talks about cost segregation 

 [08:27 – 26:15] Is Cost Segregation Exploiting the System?

  • Yonah walks us through the process of introducing cost segregation to an active investor
  • He talks about the government incentivizing real estate investors with tax advantages 
  • Yonah shares a story about treating tenants as customers 
  • He talks about how he got involved in cost segregation 
    • Can cost segregation be done by one person? 

[26:16 – 40:00] Prepare Yourself First Before Jumping 

  • Yonah Weiss shares some secrets about choosing the right people to work with 
  • He also shares some tips to connect with somebody you meet for the first time
  • Yonah shares the worst piece of investing advice he heard 

[40:01 – 43:25] Closing Segment

Tweetable Quotes:

“Housing is an essential part of the economy.” – Yonah Weiss

“You can add so much value just by making connections” – Yonah Weiss

Resources Mentioned:

Connect with Yonah on LinkedIn, Facebook, Instagram, and YouTube. Check out his website and listen to his podcast: Weiss Advice. Also, visit their company online at Madison SPECS and on LinkedIn.  

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The Five Rules of Investing

Dan Krueger (00:15):

Welcome to the multi-family investing made simple podcast where we take the complexity out of real estate. I am Dan Krueger and as always, I’m joined by my co-host Anthony of the CNO. How are you doing today? My man,

Anthony Vicino (00:28):

I am doing fabulous. Fabulous, Actually, piggybacking off of the interview that we did back with Chris Salerno. I’m amazing.

Dan Krueger (00:37):

Amazing. That’s about as bad as this, I think right now it’s better when we are joined by someone else today. We’ve got a very special guest we’ve got unit vice on. And for those of you who don’t know, I’m sure everyone probably knows who he is. He is a LinkedIn rock star and pretty much a celebrity in the real estate world. Yonah Weiss is a powerhouse with property owners with property owners, tax savings. As a business director at Madison specks, national cost segregation leader. He has assisted clients in saving tens of millions of dollars. That’s a big number, tens of millions of dollars in tax savings. That’s a legit amount of savings. Yeah, that’s a decent amount of change right there. It’s like tens of billions of dollars on tax savings through cost segregation. So those of you who don’t know who that, what that is, we’re going to get into it today. He’s got a background in teaching and a passion for real estate and helping others. And he, he is a real estate investor himself and also has a podcast called vice advice. I love it. Welcome you. And how are you today?

Anthony Vicino (01:36):

Thank you guys Dan Anthony. It’s a pleasure to join you guys once again, you know, it’s, it’s always good to talk about it. I know people get thrown off at a 10 tens of millions number and, and just to clarify, that’s just me personally, having to people are not even Madison specs is over $3 Of of tax tax savings for people.

Dan Krueger (01:58):

Yeah, well, I mean, we’re experienced, we we’ve, we’ve done some cost savings, so we’ve seen the numbers on our end. And so that’s not surprising to me, but by the end of this podcast, think our, all of our listeners are going to be equally well versed in what you do and realize that that tens of millions of dollars is just a walk in the park for you. I love it

Anthony Vicino (02:17):

Down stone, arch bridge, as your background for those who are listening, they can’t see, but Yonas rock in the twin cities skyline in the background of his zoom video right now. And, and I think this actually ties into something that I love about you so much, which is he’s always thinking about the other people that he’s engaging with and thinking, how can I bring them value? How can I, you know, connect with them on a deeper level? I think this is why he’s so successful on LinkedIn. He’s a great conversationalist. He’s always looking to add value and connect people. And that’s just, you know, it’s a small little thing that he does, but it has huge benefits. And that’s why he is the cost segregation King. So I guess that’s the starting point, right? Like what is cost segregation? So really, I, I like to think of it as

Yonah Weiss (03:00):

Like an advanced form of depreciation, because all it is is instead of depreciating your property and taking a tax deduction a little bit every single year, it’s segregating that cost or splitting up that cost into different components, meaning the purchase price, the cost of the building and taking larger deductions at a faster rate during the earlier years of the, of the ownership. So essentially instead of put lumping everything together on a 27 and a half year schedule, which is what a lot of people do, and that’s how much a building depreciates on you can actually accelerate some of that depreciation to a five-year scale or a 15 year schedule, which, which would allow you to take those deductions much faster.

Dan Krueger (03:45):

So I think a question that some listeners might have after hearing that if this is kind of a newer concept to them, is why is that good? I mean, isn’t something depreciation means that something, an asset is losing value. Why would we want to lose it

Yonah Weiss (03:57):

Value quicker? So depreciation, that’s a great question because it’s appreciation a lot of people have a misconception, the concept you’re right. Something’s going, that’s what the definition is. Thing is going down in value as time goes on. But from a tax perspective, it’s really just a borrowed term, which means, yes, everything has a useful life and things go down in value as time goes on, but real estate actually goes up in value as time is going on. So it’s a borrowed term. The IRS allows you to take a tax deduction based on the principle that things are going down in value time, but that starts the day you purchase the property, which means it’s not intrinsic to the building. It’s actually just relative to the owner. So yeah, so we don’t want things going down in value, but you do want to be able to take tax write-offs income tax, write off just because of the fact that you bought a property. Yeah.

Dan Krueger (04:48):

So realistically, you know, we’ve seen this in real time with our properties. We do value add deals. So you know, we’ve bought a property, improve the units done a bunch of work on the common areas. And over the course of about 12 months increased the value by 25%. So it’s appreciated by 25% and then simultaneously over that same period use cost segregation to accelerate the depreciation. So it’s really interesting. The only place this depreciation shows up is on your taxes everywhere else, your property increased in value, you made money, but as far as your taxes are concerned, that’s where this comes into play. And that’s pretty much it. So it’s

Yonah Weiss (05:25):

Right, exactly. It’s a good thing. And again, it’s just really what it is. It’s a name of a tax deduction based on that concept of things going down to value.

Anthony Vicino (05:35):

Yeah. When we talk about the value of real estate and like the different ways that you can make money, one of the ways that often kind of gets overlooked in how powerful it is, is the tax benefits of tax savings. And one of the things that we talked a lot about from a business perspective, but also from a personal finance investing perspective, it’s not how much you make. It’s how much you keep, right? And that’s where this really becomes powerful. We can be generating a lot of cash flow, but you know, if we’re paying the full tax amount on that, then that takes a, you know, that’s a, that’s a big burden, but if we can kick that can down the road and we can reinvest those funds even earlier than we just get to accelerate the velocity of our capital, that much more, which is really exciting.

Yonah Weiss (06:17):

Exactly. And I think part of the reason why this is a foreign concept to a lot of people in, and the tax advantage of the tax benefits of real estate in general is because we come from this corporate world where we’re making money and immediately our tax deductions come out of our pay check. Even before we see it, you work in a W2 job. You don’t even see the money you make. It gets deducted immediately. Now with real estate. It’s not the case real estate. You make money from your properties, that income, first of all, it’s taxed differently because rental property income is considered passive income. And nevertheless, you can have these deductions, these depreciation deductions, and a huge amount of them with conservation and therefore pay no taxes. If you have more deductions than you have income. So you have to keep all of that income that you’re making from the properties. And if you’re a real estate professional, you can even use that against your active income as well. So that’s really where the benefit comes in. Forget the concept of paying your taxes before you eat, goes to hits your pocket. No, it hits your pocket first. Then when you file tax and you figure out how many deductions do I have? What are my expenses? And then after all is said and done, now how much do I owe? And hopefully if you’re doing it right, the answer is going to be zero.

Dan Krueger (07:26):

Yeah. I think that’s a really important point. It’s something that I’ve forgotten about, you know, in recent years, because I’ve been an entrepreneur for so long, but you know, a lot of the people listening to this show are probably going to be passive investors who have a W2 job, and they’re doing this on the side. So that concept of, you know, making your money and then spending it and then paying tax on what’s left over is different for a lot of people. They’re not used to that because like you said, they get paid their salary at their job taxes get taken out, then they get their pay check and they do what they do with it. But you know, when you’re a business owner or invest in real estate, you kind of want to try to get rid of the profits before you go and pay your taxes because you’ve just pay the tax on, what’s left over. So at this depreciation, it’s like a big expense that shows up eats up all your profits and then you’re just tax on. What’s left over if anything. And I think a lot of people could actually eliminate or take their effective tax rate down from, you know you know, 20, some percent down to what, low single digits or almost nothing. Sometimes nothing. Yeah. That’s a really powerful concept.

Anthony Vicino (08:27):

So if we’re say we’re speaking to the active investors out there real quickly now. Okay. So if you’re new to active investing and you looking at getting a building and you’re like, I want to take advantage of cost segregation, what does that actually look like? Is it a really complicated process? Do I have to, well, actually I’ll just leave it for you. I could fill in how complicated it probably might seem at first, but what do we have to do?

Yonah Weiss (08:50):

Yeah, it’s a really straightforward process actually. First of all, what we always do is provide like an upfront analysis for, for free, no cost whatsoever to show you what those numbers would look like, what your potential tax savings would be. And so that’s the first step. We always, always want to look at it and that’s really more educational than anything else because you know, we’re talking now probably there’s a lot of people listening to this. Who’ve never heard of conservation or don’t really know how it works. So part of the reason why we do this is just to kind of have a conversation and provide some education and to show you really what the difference would be. If you’re taking straight line depreciation, versus if you’re going to do it the conservation way. So that’s the first step and that’s pretty unobtrusive. We don’t have to go to the property to do that.

Yonah Weiss (09:30):

Just take, collect some data points of the property. Once you have that you can decide, does this make sense? Does it not? If, so we send an engineer to the property, create a report based on his findings. You know, we’ll take measurements and pictures and everything to understand what’s in there, create a report a few weeks later, you have everything set. You have a new depreciation schedule instead of lumping everything together, you have stuff broken down and that’s it. You take that one page from this a hundred page report, that one page, which is the depreciation schedule, and now you apply that to your taxes. And this is a one-time thing for property and you’re set. Okay.

Dan Krueger (10:03):

I guess the next question, I, for the, you know, the active investor who, who hasn’t done this yet, but likes what they’re hearing is, you know, how much is this going to cost? You know, I already know I’ve done this before. I know what the answer is going to be. You know, it sounds like something that’s going to be expensive. You’re sending engineers out, there’s this big hundred page report right off the bat. A lot of people just kind of tuned out and said, okay, that sounds expensive. Does this make sense financially? Like what do you think the ratio is between like cost to tax savings? Like on average for most of your clients, do you think?

Yonah Weiss (10:32):

Sure. And there’s really no average because it’s not contingent to the tax savings. We have a flat fee, you know, based on the type and size of the property, it’s in a pretty small range when it comes to, you know, a half a million dollar property to a hundred million dollar property. The range of the fee is pretty small, meaning anywhere from, let’s say $4,000 up to $10,000. But generally speaking for small multi-family properties or even large multi-family properties in that smaller range of four to $6,000. So it’s not a lot, you’re talking about a million dollar property when all is said and done per million dollars, you’re looking at easily 150 to $200,000 tax benefit where, you know, a $5,000 feed to do that is really totally insignificant.

Dan Krueger (11:18):

That’s pretty good return on investment. So I guess maybe a better question would be, you know, size property, I guess, what size, or maybe like out of all the quilts you provide, what percentage actually failed the test, where it would actually cost more to do the study than it would save you on taxes. I’m guessing the number is small.

Yonah Weiss (11:35):

Is that a estimate that we’ll send really tells it all? Okay. but generally speaking under a $500,000 purchase price, it’s going to make a lot less sense over that price point. I always see that as benefit, there’s tremendous amount of benefit in 10 X benefit. At least it’s really going to be more up to the, and if it makes sense for them and for their portfolio or for their tax situation or their investors, or what have you, but that’s kind of the, that’s the decision-making process as this enough benefit, is this going to be worthwhile? Yeah.

Dan Krueger (12:06):

And that’s all that matters. Like if it, if it costs less to do, then it’s going to save you. It’s, it’s a no brainer. And, you know, even to kind of expand on that point about the half million dollar purchase price. My very first property that I got was a six units, a building up here in St. Paul, Minnesota. I purchased it for four 75, $175,000. And it made sense for me to do it on that property because I was an active investor. I was, it was my full-time job. So I could take advantage of that, that element that you mentioned, where those real estate professionals quote unquote, can actually wipe out some of their, their other income. So in my case, my wife’s W2 income was able to get reduced. Our taxable income was able to get reduced. So we took over a hundred grand of depreciation on that $475,000 property.

Dan Krueger (12:49):

So any income that was made from that property was sure as heck not getting taxed. And then I had another business that was wiped out and then some of my, what my wife’s income was wiped out. So it was like, yeah, that makes sense for like five grand to do that. So but yeah, like you said, it’s all dependent on the individual, their, their tax situation and, and their specific deal that they’re look it up, but my guess would be the vast majority of deals, you know, over half a million bucks, probably a no. And that flows through to passive investors as well, you know, and you know, syndications, if you were an LP in a syndication these benefits will flow through as well. And our partner in crime on our round table that we do, you know, you were on that just recently. He had a K one for one of his investors that showed you know, I forgot the numbers, but basically the guy made, what was it like 10, 20 grand or something in cash flow profits for the year, but taxable income was negative, which means he could carry over. So he didn’t pay taxes that year and he probably wouldn’t pay any for

Anthony Vicino (13:50):

The next, he did pretty good in that one. Yeah. So

Dan Krueger (13:53):

I guess that first year is usually pretty, pretty substantial.

Yonah Weiss (13:56):

Yeah. It’s actually usually the first five years where you’re getting, you know, substantial benefits, but what’s funny is a lot of people will see that and they’ll be like, what the heck is this? How come I have negative income? Right. And they don’t understand it’s, it’s a good thing. Exactly. So is this,

Anthony Vicino (14:11):

This is one of the questions that I think a lot of people have. And when we talk about taxes, this is the thing I see on Facebook a lot is I Oh, let’s say we’ll take Trump. Or like these big wig, real estate moguls and whatnot, that pays zero in taxes that we heard about like, Oh, so-and-so, didn’t pay anything in taxes, but they made $50 million last year. People get all up in arms because it feels like this should be, this feels wrong. So is this wrong? Like, are we explaining loopholes? Are we taking advantage of the system here or the deep, or what are we dealing with? Are we on, are we on the right side of good and evil? We’ll say

Yonah Weiss (14:45):

That may be a relative question, but I’d like to think more on that, on the side of good, in terms of loopholes, in terms of explaining system, the, the rules, right. Are, are set up and in, you know, Tom wheel, right in his book, tax-free wealth discusses this a lot about this concept of, if you want to understand, you know, how governments work, how they incentivize taxes per their economy. And so the fact that real estate investors or real estate owners are incentivized with tax incentives to, to more than almost any other type that shows you that housing is an essential part to the economy, right. Whether or not you agree with the fact that, you know, now you can have people making millions and tens of millions of dollars and, you know, not paying any taxes legally, you know, that’s debatable, but when you come in and think like, well that every single person who owns real estate is now this re Realty mogul, who’s making, you know, billions of dollars.

Yonah Weiss (15:42):

That’s just, that’s just a misnomer. That’s just wrong. I mean, there’s plenty of people that, unfortunately, especially with nowadays that people, you know, in States like New York, where the local government is literally saying, you don’t have to pay rent if you’re a tenant. And a lot of these owners of properties maybe have one or two or three properties or buildings, they’re, you know, mom and pops, they’re there individually just like me and you who, you know, might own one or two properties. And they’re, they’re hurting very badly. So, you know, yes, the government is incentivizing people to invest in this because integral part of the economy. But yeah,

Dan Krueger (16:17):

So like, you know, for someone who’s making that argument that it’s, it’s, it’s shady, or it’s a loophole or throng, like I would pose this question, like what’s more valuable to society. Just keep it like a small example, a, a real estate investor who owns a hundred units, a apartment complex that, that wouldn’t exist. If it weren’t for these incentives or his, you know, a couple of million dollars in tax revenue that would probably be mostly wasted by the government anyways, like what’s going to provide more value, affordable housing, or his, his his tax revenue. And I’d argue affordable housing because you know, this incentive that the government created is creating housing that normally that wouldn’t be available to people unless they had the ability to buy their own home or wanted to buy their own home. There’s a ton of people that just don’t have the option to go and buy something. So having a rental option has a huge value to society. I’d say more valuable than the tax revenue, because like I said, that usually gets squandered anyways. So there’s a couple,

Anthony Vicino (17:14):

Well, different sides of that, right? I, the evil landlord narrative is a really popular one where if you’re in real estate and you own an apartment building, then you must be evil profiteering off the back of the people you’re in. You agree you’re rich. And, and to be fair, like these are some of like the wealth generating aspect of real estate is there, it’s immense. And it’s one of the reasons that we have, you know, we’re doing this podcast and, and spreading the word is because we want people to understand that it’s accessible to them and participate because it’s right there, it’s not an accessible, it’s not behind a gated community. You can do this, but within that, then, you know, it’s really easy to villainize landlords and real estate owners because we’re providing this essential need. And it’s interesting, you know, when we have this conversation about, well, should we forgive rent and should that just go on a moratorium?

Anthony Vicino (18:05):

And, you know, a couple of months back, people were talking a lot and maybe they still are talking a lot about rent strikes. And it was interesting to me, I had a conversation with somebody about this because what was interesting, I was like, well, you know, that just, that’s just shifting the issue to somebody else and that’s going to cause another issue down the road. But it’s interesting that we feel it’s morally okay to skip out on rent to our landlord, but we wouldn’t run to the grocery store and take an arm full of fruit and vegetables and run out the door. You know, the argument is the same, it’s an instant essential need. But for some reason when we talk about real estate, it’s a very, I think it’s because it’s somebody’s home and they feel very personally attached to it. So yeah,

Yonah Weiss (18:46):

I mean, real estate is a business. And so why would you treat this business owner any different than, than anyone else? And I think, you know, I kind of had a bit of a paradigm shift when you know, speaking with Ivan Barrett who, who he said, he refers to his tenants as customers because essentially that’s what they are. I mean, you, you’re running a business. These are people that you want to, you know, have come and rent your space and there are customers of yours. So when you treat them and you, you, you treat them with respect that you treat them like you would, any business would treat customers, right. Then, you know, that’s a mutual agreement. When someone signs a lease, that’s a mutual agreement that I’m taking this space and I’m paying you for this. And you’re agreeing to give me your space for business. And it doesn’t make any sense to me that the government should step in to something like that. And forgive, forgive that. And that would just be like in, you know, in your example, that would just kind of socialist kind of example, of just enforcing the grocery stores to give out free groceries to anyone who needs the

Anthony Vicino (19:49):

Camp. We’d all be up in arms and be like, no, Really weird, right? Like and at the end of this too, you know, I love this business for example, and thinking about our tenants as customers and through that lens, then, you know, we, we go into our properties, we find V value, add properties, things that we can go and improve. So we want to make it better to justify, you know, raising the values of the, of the community. And this, this, you know, is better for the people that are living there. It’s better for the neighbourhoods and the community at large. And without, you know, that incentive without, you know, being able to, then let’s say profit from these improvements. There’s not a lot of incentive to do it. And that’s where the slum lording release I think starts to happen then, because why should I improve this thing? If it’s not clear to me, if I’m going to be able to benefit from it. So I’m really curious, how did you Get into cost segregation? Cause this is like a really weird niche over here in the corner, right? Like, like, and, and, and is this something,

Anthony Vicino (20:43):

The thing that I could go and do my own cost segregation, like maybe I have an background, could I do it? If I go read a book and study up on it, could I do my own and save the, save the money?

Yonah Weiss (20:53):

The way I got into it is because I’ve gotten with this company. It really that’s, that’s the truth. I was interested in real estate. I was involved in real estate and different aspects for a few years. And then I stumbled upon this company that, you know, had an opening and they are the largest national company doing conservation. And it just kind of fit with me now by all means, you know you know, self-proclaimed the concentration expert, but a lot of that is because I have the experts really behind me and I couldn’t do this if I, if they weren’t meaning we have people that have been in this industry for, for decades and have, you know, probably done the most of any, any firm out there. So they have the experience and those are the people that I learned from. And I just have a great ability to, to teach and to educate people and to kind of explain these concepts, like, you know, the engineers and the accountants that do the work there, I may not be able to be as as personal with it.

Yonah Weiss (21:47):

So that’s really how I got into it. Like I said, this company, Madison is an incredible place to work. A credible company. Can one do this on their own? The answer is no. I mean, there’s so much that goes into it besides for, you know, the accounting aspect, the engineering aspect, you know, if you go to the IRS website and check out the conservation audit techniques, guides, there’s a whole guide, there is put out of how to do this properly. You’ll see that, that it’s just, you know, it’s a mammoth of a, of a playbook, so to speak and unless you’re following all those guidelines, it’s pretty much impossible to do so. So really, unless you have that experience and you have everything set up, it would be very difficult. There are people that do it. I actually came across a client recently who had hired an in-house architect to, to do all the conservation for their buildings.

Yonah Weiss (22:37):

And they had a controller, an accountant on staff, and then he, and he was really paying and he, and created this, this very complex software to, to do this. And he paid, he said he paid through the wazoo to, to get this until we crossed paths. And he was like, wait a second, show me what you do. Let me show you what I do. And it came out and he was like, this is not worth it for my time. I’ll pay you guys $5,000 to do this on the property, on my properties. And I can just take this guy off payroll. And it just doesn’t make sense.

Dan Krueger (23:08):

Just kind of like doing your own taxes. It’s like, yeah, you can muddle your way through it and take up a ton of time, keep you from doing stuff you’re actually good at. And there’s a pretty good chance that we get audited and that’ll suck, or you could leave it to an expert whose full-time job is to do it the right way. And if something does get audited, Hey, they’re going to, you know, help you out in that, in that situation. You’re not going to be sitting there trying to argue with the IRS over something you hardly understand. So [inaudible]

Yonah Weiss (23:33):

Makes sense. I mean, like anything, if you could also you know, potentially rewire the entire electricity of your you know, your apartment complex, I

Dan Krueger (23:43):

Would not, I would not do right. You can watch it. I wouldn’t come back from that. I would not return.

Anthony Vicino (23:51):

It’s really common within business at a certain threshold when you’re first new and even like trying to make that transition and to like an intermediate size operation, is this, this tendency to think, ah, I’ll just do it myself. I’ll learn how to do it. And I’ll save the money. What I’ve experienced in so many different ways is that DIY usually ends up costing me way more money, headache, and heartache. And if I would have just hired the professionals who knew what they’re doing, yes, you’re going to pay money for it, but they know what they’re doing. They’re going to do it right the first time. It’s it’s worth it. And yeah, I think this is a really classic example because you could read that tax guide, but think about where’s the highest and best use of your time and your business. Is that really what you want to be doing? Well, maybe that, that should be your business. Maybe you should transition into that field then if that’s what you’re passionate about, but by and large find the professionals hire them.

Dan Krueger (24:47):

Yeah. I think a lot of people really undervalue their time, honestly, and this, you know, applies to more of the active investors who might be listening people forget to kind of do the math on that. Like how much time is this going to take me? And how much would it cost me to outsource this? And usually what you’re going to find is people are effectively paying themselves, quote unquote, I’m doing air quotes for the listeners, you know, five bucks an hour, essentially. That’s what they’re valuing themselves. So it doesn’t make a lot of sense. And I struggle with this personally. So no hate to anyone that’s going through this. I think everyone, every business owner does at some point, especially you know, to so many in so many different aspects. Yeah. Drawing and outsourcing and delegating is really tough.

Anthony Vicino (25:31):

There’s a guy I’ve talked about him before briefly. [inaudible] I don’t know if you guys are familiar with them. He’s a venture capitalist out of San Francisco. He started Angel List and he has a really great podcast, which is called how to get rich without getting lucky. And in there he talks about setting aspirational, hourly wages and saying like, what is my time worth in the future? Like, and set the aspirational amount. What would I like that to be? And he said like a ridiculous one. He’s a billionaire now. So it worked out well. But the idea then was any task that he could outsource to somebody for less than that aspirational amount, he would do it. And wouldn’t even think twice about it. Like it wasn’t worth his time and energy to waste. Wondering if you could save the money. So let’s, let’s transition this back to Madison specs and for you Yona specifically, why, when I’m looking okay, I’ve decided I’m not going to do this myself, because that would be stupid. I’m I’m, I’m not, that’s not me. How do I decide who to work with? Should I just go with the biggest company? Should I go with the cheapest company? Should I go with somebody local? Should I go with somebody with an awesome beard?

Dan Krueger (26:37):

Yeah. I mean the beard from listeners, you going have an awesome beard. I mean, the beard factor is definitely the way to go the time.

Yonah Weiss (26:44):

Yes. Yeah. I definitely agree. You know, you should definitely choose now. There’s a lot of, there’s a lot of factors that should go into the decision-making process. Obviously everyone in the end of the day likes to do business with people that they know that they like, that they trust, you know, and that’s cliché, but it’s so true. The advantage of being the biggest national company doing this is that we have such a big footprint and we’re, you know, working in all 50 States, we’re working in every single asset class that is out there. Have the experience in over 15 years, like I said, over 3 billion in tax savings, 17,000 studies. So, you know, you want to look for, you know, someone who has that type of experience when, when you’re doing something, are they going to be the cheapest, believe it or not.

Yonah Weiss (27:28):

It may be close to it because the fact that you have such a high operation, a huge operation going means that you can cut costs and actually be more competitive in the market. So we’re of the most competitive price in, in the entire space. But yeah, I mean, you never want to have costs as the main factor. I understand that some people do and think is, you know, it’s just a commodity. The results are going to be pretty much the same if you go to anyone. So I’ll just get the cheapest price. That’s not always necessarily the case. If you knew the actual intricacies of it, then, then you’d see the differences in the quality of the study that’s being done. But, but to the common eye there that they’re all look the same, right? So I would say three things, the factor in one, you know, make sure they have experience number two, make sure they have you know, the audit protection, meaning they’ve had experience with that.

Yonah Weiss (28:20):

They offer, if you were ever to get audited at no extra charge to kind of stand behind their work, which is, you know, it’s a no brainer, but you want to make sure that you have nothing to worry about and it conservation doesn’t raise any red flags whatsoever because it’s written into the tax code is actually considered the proper way of depreciating your property to do it in this way. What if you were ever to get audited, they’re going to look at that. You want to make sure this stands up. And then the third thing is, you know, it’s all going to come down to the beard, right? I mean, that’s who, you know, right. Who are, you know the recommendations you, you would do business, you know, nine times out of 10 with someone that, that came referred to by a trusted source.

Dan Krueger (29:02):

Yeah. I agree with that a hundred percent just from personal experience, prioritizing relationships with people or banks or institutions that we work with is it’s usually important. Even if, you know, you could potentially go to, you know, larger institutions, save a few basis, points on your rates, you know, are they going to go to bat for you? If there’s an issue, do you have a personal relationship or that you’re more than just a number then that’s, that’s the kind of stuff I think people need to really prioritize. And then, you know, to your point there, a lot of these companies are probably gonna be fairly comparable. And when you’re, you’re, you’re saving 10 times the amount of money in, in Texas that you’re actually spending on the study. I mean, what’s the difference in saving a couple hundred bucks or there really

Yonah Weiss (29:42):

You’re going to, you’re going to make it back that’s for sure.

Anthony Vicino (29:44):

Like that last part of well, it was kind of the last part in the first part that you said know like, and trust, and then also, yeah, like who, you know, and one of the things that I said at the beginning of the show, and so I’ll bring it back around. It’s like bringing things full circle here is one of the things I really admire about you is that you’re very good at putting yourself in the other person’s shoes and thinking about like, how can I add that value to their life? And that’s one of the things that I look for a lot in business relationships, you know, you can maybe go get a cheaper rate over here with this company, but does behind it, do they have a customer service or representative or somebody that I’m working with that I know like, and trust, and maybe that person, you know, they can only add so much value in this context, but maybe they have other ways of adding value to, and that’s one of the things I think that you do really well, which is like, Hey, you know, I’m not just a cost segregation guy.

Anthony Vicino (30:37):

I’m also like looking out to connect you in with other professionals. If you have questions, he has a lot of experience. And so you only get that, I think with certain organizations, certain people, and you got to look for them. So,

Yonah Weiss (30:51):

Yeah, I think it’s important, you know, at that point I do this kind of like almost subtract subconsciously at this point, but I think it’s great for a lot of people who are, who are in the service industry or, you know, real estate brokers or mortgage brokers or those type of people, you can add so much value just by making connections and you know, seeing what your clients or what your potential clients, their needs are in other areas and you, you know, by creating relationships with other people in the industry, you can really bring together people when they need it. And that’s, that’s tremendous. That’s huge.

Anthony Vicino (31:27):

You’re so good at that. I wonder if you can give us some tips, like how do you go about one making the connection with somebody that you’re meeting for the first time? And then how do you go about seeing the ways like those potential paths

Yonah Weiss (31:41):

Connection? It has a lot to do with just awareness when, like you said, you’re putting yourself in the other person’s shoes, just listening looking and seeing what are their needs, you know, what are they doing? Asking questions. So my, you know, my clients like to get to know people in the industry doing a lot of networking, and it’s a lot of us, like you said, just listening, like, what are you doing? And paying attention to detail. And I happen to have a very good memory. So that helps also if I meet someone I’ll remember their name, I’ll know who they are, you know, and I’ll just, that kind of gets stored so consciously in my mind. So when, you know, I see like someone’s looking for such and such or so-and-so, it will just like come together and you can look at a classic example.

Yonah Weiss (32:21):

I just had a post, I don’t know when this is going to air, but on LinkedIn this week about being a people connector, kind of, it’s kind of my hashtag. And I literally said, you know, what are you looking for in the comments? Like we were just like, I’m looking for a value add in, in you know, in San Antonio. Like if you can connect me with any brokers and like, I just tagged five brokers that happened to know or be connected with. And, you know, that creates relationships, creates conversations, and it doesn’t take a lot of effort. And so when you can go and do things that don’t take a lot of effort, but can add tremendous potential, tremendous amount of value. It’s so easy to do. And when your mind-set is just, how can I help other people without trying to, you know, to be willing, well, I want to get a commission and I wanted this and I only want to share my contacts with, so no, just go ahead and go and help people and going through things, it’s going to come back tenfold, whether you know it or not. So just be in that mind-set.

Anthony Vicino (33:13):

Yeah. It’s this, I’m making connections with no expectations of, you know, and your expectation there is, you know, Hey, it feels good. I’m you know, I’m adding value to this person and that’s, you know what, I wake up in the morning trying to do, like, I want to connect to people, add value. Great. So, but you’re not like I need to have them feel like they owe me. And then I get this brokerage fee. Like, that’s the wrong way of doing business in general. And like to share an anecdote a couple of months ago, you know, we had a deal somebody slid a deal over to us and was like, Hey, how’s this deal look. And we’re like, Oh, this looks interesting. And they’re like, Hey, would you like us to connect you with the, the, the selling broker on this? And we’re like, sure, like if that’s interesting. And then they were like, okay, that’ll be a, this much fee. And we’re like, well, I mean, we’re not going to pay you for a deal that we don’t even have under contract at this point. Like, that’s not even your deal. It’s just somebody else’s listing it. And so it was just like immediately very transactional. And that’s, that’s the wrong way to approach business, I think in general. Yeah.

Dan Krueger (34:13):

And I guess, you know, say we haven’t really followed up with that person or felt the need to provide them any value sense. I mean, we found it amusing. We don’t, we don’t, we’re not like harbouring resentment, but it was just kind of interesting. And, you know, to your point before about just like really listening to people and, and having your, your, your, your intention be, how can I help this person as opposed to, how can I get something? I think that’s the minority out there. I think I found a lot more people, especially out at networking events and things like that, looking to get something for themselves. But if you just walk around and say hi to someone, and then just, you know, ask them questions about what they’re trying to do these, I mean, it’s tough for your brain not to start to find resources for those people.

Dan Krueger (34:57):

I think it’s just the intention that you go into these interactions with that’s different than a lot of people out there. A lot of other people are just so kind of focused on themselves. They just they’re really kind of missing out on the long game. Like you said, it always comes back to you. Universe has its way of just making a comeback to your usually, you know, tenfold down the line. It might be a year later. It might be a month later. It might be same day. But that, that kind of stuff, there’s a lot of way. Yes, I’ve had it. I’ve had some, you know, workout quick. I’ve had stuff, just, you know, something I did, you know, three years ago for someone they show up back, something worked out and it ended up coming back. And that was like you said, it’s almost never the intention that that happens, but it does, you know, It’s kind of like gravity,

Anthony Vicino (35:40):

I’m curious. Do you have any Keystone, like habits or behaviours or routines that you do on a daily basis that help you succeed or get the most out of your day, or just really Excel at being an awesome human? How do we, how do we get to be

Yonah Weiss (35:55):

All stars? Like you, that’s what I’m trying to aspire to, if someone’s really trying to aspire to something like that. Which, you know, it’s not necessarily for everyone, but, you know, I think I’m intentional about, well, first of all, is a lot of things. One thing, which doesn’t maybe not doesn’t show through at all, but I’m a very spiritual person and I, you know, maybe the beer gives away, but yeah, not everyone’s a beard as spiritual summer, just hipsters, you know, that’s a,

Anthony Vicino (36:25):

Like yours, your beard, your beard has like, like legitimate commitment and conviction. That’s a legit beard, right? That’s not, that’s not a millennial beard.

Yonah Weiss (36:34):

I think we found a title for this week’s episode. Hashtag well, what I, but no, seriously, I it’s, it’s really about for me putting kind of God at the forefront of everything that I do and seeing things through the lens of, you know, that I’m not in this world, this is a finite world. We have a job to do here. How can I make the best of every situation? How can I make the best of that relationship? How can I help people? And that’s kind of like my Mo of like everything that I do and may not be easy to do that, but that’s, that’s where I come from. Hmm. That’s interesting. I’d argue. It’s fairly simple. The concept of just like making it, your, your purpose to provide value and help people. I think the difficulty that people probably find is, you know, being consistent with that and not getting distracted,

Anthony Vicino (37:21):

You’ve said this before, Dan, I think it was a really astute point, is that all the things that are more or less good for you in life are really fairly straightforward and simple, but actually, you know, consistently executing on it. That’s the difficulty because our tendencies lead us away. So whether that’s like, I want to be healthy, well, that’s pretty simple. Eat well, get some exercise, take care of you, your body. Or, you know, I want to, I want to be wealthy. Like that’s fairly simple, again, like make more than you spend and save. And, but the, the actual execution is right

Yonah Weiss (37:53):

Difficult. Yeah. The daily effort day in and day out for years on end. That’s where, that’s where that’s what gets people.

Anthony Vicino (38:01):

That’s where the beard is made. This is not a day in, day out. All right. So we, we skipped right over this at the beginning of the show and that’s been eaten at my brain this entire time. I need to know Yona your worst piece of investing advice.

Yonah Weiss (38:15):

The worst advice is probably trust everyone. No, that’s, I mean, that’s for everyone, but that’s definitely the worst advice, but the worst advice I’ve ever heard, which you know, which is pretty common when people say get into something because it sounds good and it looks lucrative without first doing, you know, all the proper research. And, you know, there’s, there’s a certain point where people say, you just have to jump into it, right? And when you just have to jump into something that there’s truth to that. But at the same time, if you don’t spend an adequate time, I mean, you know, three to six to 12 months, like studying something and really understanding it to the best you can jumping in is just gonna, you know, most likely lead to failure. And so do one might argue that failure is part of the process, but you can avoid a lot of that failure by learning and studying and apprenticing other people who are doing it. I love it.

Anthony Vicino (39:12):

We’re, we’re big proponents Piece here with real estate and everything. It’s simple, it’s straightforward. It’s not necessarily easy. You can learn it, but you shouldn’t be getting into it just because you can make a ton of money. And you’ve heard so-and-so did really well. And it sounds really straightforward. Like you got to learn it. You got to, you got to put in the reps, you got to do the time. And once you do, once you have a certain level of competency, like the sky’s the limit with how far you can go. One of the things that we talk a lot about is micro failures, macro successes, and you want to avoid those macro failures, the ones that are fatal and when you’re first starting out, that’s when you’re the, you know, you’re, you’re a baby. That’s when you’re the most vulnerable to making a macro failure that can really and catastrophic. I love it. Good advice. Well, I mean bad advice, but all right, Yana, I am needing a book to read. I’m needing a really good book. It doesn’t have to be real estate. Doesn’t have to be business speed top of the list. What’s, what’s good.

Yonah Weiss (40:12):

Great book. I’m a big fan of Gary Vaynerchuk, right? In terms of social media, especially, and you guys may have read some of this stuff and crushing. It was one that I, you know, jab, jab, jab, right hook. And in fact, I learned recently that I think it was from Adam. Adam said that that originally Gary V one wanted to call the book, Jab, jab, jab, jab, jab, jab, jab, jab, jab, jab, Jab, left hook, you know, like 20 times, but the editors like would not give it to them. They had put in three, there, it was the concept. There it is. There you go. You got it right there. Dan is showing it in the, in the video for anyone.

Anthony Vicino (40:47):

Gary V book, I want to be in, I want to be in the cool kids crowd. You were just talking about the probative value thing,

Yonah Weiss (40:55):

Crushing. It is SQL to crush it. And in fact, I heard about it when he just published it and he was on the Bigger Pockets podcast and like a really, really short episode. He was like in his car. And he’s like, I just pulled up this book last week and crushing it. And, and it really shows you like case studies and it’s really testimonials of people that, and I listened to the audio version, which is actually the people that he wrote about in the book that are telling their stories of how they used his methods from jab, jab, jab, you know, and all that, and how to literally crush it in a forgettable. It’s been a while since I listened to, but you’re right. That,

Dan Krueger (41:34):

That added audio bonus, I think is definitely worth. It. Usually I’m a fan of like having an actual book if possible, if I’ve got the time, but the audio book version was had that extra bonus. Cause I don’t think the written one had that stuff in there did it? I don’t think so. But another thing, what I love about, I’ve read a few of his books and listen to them. Also, he goes off script a lot on the, on the, on the audio books, which is great. If you’re a fan of his yeah.

Anthony Vicino (41:59):

I mean, if you’re going to consume Gary V it has to be through audio or video, otherwise you’re just, you’re more or less doing it wrong. These, I mean, this is great. He clearly did not write this. Like this is ghost written, which he’ll, you know, he owns that fact. He’s not a good writer, but you know, to get the full Gary V experience, you got to listen to them.

Dan Krueger (42:16):

Yeah. That voice really kind of emphasized nicely gets right down face.

Anthony Vicino (42:23):

All right. Well, Yonah, man, this has been a pleasure, an absolute, a gem of an episode. You know, we just had you on the weekly round table, not too long ago. And we’re like, we got to get this guy back here for another conversation. So really appreciate you taking the time out of your schedule. I know you’re really busy. You’ve got a lot going on. Where can people get a hold of you? If they’re looking to connect

Dan Krueger (42:44):

Best place is LinkedIn. That’s definitely the best place to find me. You can go to Yona Also, that’s a good place to find out about what we’re doing and updates on the wife’s advice podcast. And that’s, that’s about it, LinkedIn. That’s the way to find me. Yeah.

Anthony Vicino (42:59):

Go, go friend of mine on LinkedIn and then go subscribe to his, his podcast wise advice. It’s fantastic. It’s really great show. So before we let you go, listeners, don’t, don’t leave it quite yet. Just do us a favour, go and leave a review, hit the subscribe button, hit the bell, w all the things just let us know how we’re doing. Give us some feedback. It helps the show grow. It gets more reach. And as always, we appreciate you and we’ll catch you next week.

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