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May 24
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PTP 14 | Tax And Retirement Strategies

Tried And Tested Tax And Retirement Strategies

By | Passive to Prosperous Podcast, Podcast | No Comments

 

You can read almost all there is being written about taxes and retirements, but you can always shortcut your way through your goals with a couple of handy strategies. In this episode, Dan Zitofsy and his co-host Logan Hassinger share the tax and retirement strategies they use in their daily business as entrepreneurs and real estate investors. Though not licensed accountants, attorneys, or financial advisers, they still provide some insights that you need to be aware of, especially great opportunities at hand that you may be missing out on. Open your eyes to taking control of your destiny in the tax and financial space. Follow this episode as Dan and Logan help you create true wealth and prosperity for your family tax-free.

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Tried And Tested Tax And Retirement Strategies

Learn Under The Hood Strategies We Use As Entrepreneurs.

This is going to be an important show. We’re going to talk about some topics like tax strategies and what we do. We are not accountants. I’m going to put that up there upfront. Logan Hassinger and Dan Zitofsky are not accountants. We’re not attorneys. We’re not financial advisors. We’re going to share with you what we do under the cover in our business that’s helped us build either a tax–deferred or tax-free income from some of the strategies we use. These are all legal strategies. We both have accountants and attorneys on our teams. We’re pretty crazy. We go as far as reading the tax codes to see what’s going on and seeing how we can make it benefit our business and our investors. Welcome to the show, Logan. It’s great having you on here as co-host. What do you think about our topic?

There’s a lot of power in putting some of these strategies to work. I always think back to people ask me, “How do you know all this stuff?” I didn’t years ago. I knew nothing about any of these things that I was telling people that I’m using. To your point, we’re not trying to advise anybody. We’re not licensed in any way to be giving out financial advice or tax strategies. From workshops and other business owners, networking and trying to figure out, “What are you doing?” I take it back from my CPA and say, “What do you think? Let’s see what we can do.”

Isn’t that a breath of fresh air? Especially you go to social media or events. There’s always somebody talking about, “Do this life insurance policy.” A financial advisor is like, “Invest in this.” I don’t know when you’re going to be reading this but now everybody is a crypto expert online. They’re all going to affiliate relationships or multi-level marketing relationships. We’re telling you what we do. We’re not selling you anything. If there’s nothing I can tell you now, you cannot invest your money into a mutual fund with me that I manage. I’m not a life insurance agent. I’m just showing you exactly what I do in my business. Logan’s going to show you what he does in his business. Maybe you could start asking those questions. 

It’s unfortunate. I might piss a lot of people. I might piss your financial advisor, your accountants or even some attorneys off but I don’t care. I didn’t get to where I’m at by being nice to everybody. I’m going to be honest, no financial advisors can invest their way out of a paperback. I implore you to ask your financial advisor to show you what they’ve done in their own portfolio. Unfortunately, they can’t do anything. What they do is most of them are selling what their company tells them to sell or their banks. I’m not going to mention the banks or the investment firms. They have you sell in certain products. You can’t sell all the products. When they tell you can self-direct in real estate, you’re not self-directing in real estate. You can’t buy 1, 2, 3 main street with your IRA, 401(k), life insurance or anything like that.

The same thing on accountants. A lot of accountants, unfortunately, finished their accounting degree, even if they become CPA, they get lazy. They like the nice, easy tax returns, W-2 pay stubs tax returns. I start telling some of my students who are self-employed, “Have you set up a management company and pay your kids?” I always tell them, “Check with your accountant. Trust and verify what I tell you. You can Google and type in, ‘How much can I pay my kids under eighteen years old tax-free?’” There’s a certain way you have to do it. You can’t just give them money but you can do it. Once you know you can do it, you can follow a stream to do it. I get it all the time. They go to their accountant and they’re like, “My accountant says that I can’t do that. I shouldn’t do it. It’s risky.” I don’t know why it’s risky. It’s written into the tax code for a reason. Think about it.

We’ll talk about different strategies but think about paying your kids tax-free. Your kids can invest in multiple things. I’m not going to tell them what they can invest in. It could be real estate, notes, lending, gold or silver. There are so many things it could be. They could invest in stocks, forex, mutual funds, auctions. There are one million things they can invest in. You’re paying your kids tax-free for the work they’re doing for you. They’re learning life skills. With the money they make, they can pay for their college. They’re not taking on these heavy student loans. Even if they don’t go to college, they can turn around. Let’s say your kid goes out to the movies. You’re going to give your kid $20 to go to the movies. You’re being double taxed on that money. You’re now getting taxed on the money when it comes in. You’re essentially not saving any tax on the money when it goes out.

Imagine paying your kids $20 to shred all your papers. They work for two hours. You’re paying $10 an hour. “If you want to go to the movies, shred all my papers for two hours. Go clean all the weeds on the rental property. Here’s $20.” You’re going to give them $20 anyway. They now have money to go out to the movies that they earn. You’re not paying tax on that money because it’s an expense to you. It’s not truly payroll, but it’s an expense to you that goes out to your kids. There are ways to do it. We can talk a little about how to do it. If you’re an entrepreneur and you have your own business and your CPA or your accountant is not in tune with what you’re doing or says you can’t do stuff like this or has not given you some ideas to look at tax strategies, that’s where all wealth is made. It’s tax strategies. We can all make a ton of money but if we don’t save any of it, we’re not building any wealth. We’re paying 40%, 50% out in taxes. We’re working much harder to be partners with the government.

When I think about tax strategies, in the very early stages of my investing, I didn’t think twice about it. I’ll worry about that later. I didn’t ask a lot of questions. I didn’t dig into what I probably should be doing. When the time came to pay the tax bill, it only took one year where I had to shell out a sizeable check. I was like, “I should have looked into some tax strategies.” That was a few years ago. Ever since that, we’ve done something every year to take advantage of how the tax code is written. There are no loopholes. We’re following a playbook that has been handed to us. It’s very lengthy. There’s a lot to it. We pay people to make sure they understand what’s going on. I didn’t think twice about it. Looking back, I’ve been able to save a whole lot of money and be able to reinvest. That’s the key piece. That compounded return of taking your dollars, putting it in, keeping it invested and then the dollars that you do end up owing tax on, how do you mitigate that and get it working for you again. The more cash you can have working for you in your sleep, the better. That’s been my strategy over the years.

That’s the reason the government put these strategies in place. They didn’t put it in place so Logan and Dan could take the money, sit on it and do nothing. They wanted the money so you recycle the economy so we can keep investing. When you invest in the economy, the economy keeps growing.

No financial advisors can invest their way out of a paperback. Click To Tweet

Talking about how capitalism works.

We can get into a political conversation here. This could go on a deep end. You and I could do that for sure. I’m not going to do that but I do believe that it’s the smartest thing they do. It’s to get investors to have their money constantly used and then incentivize them to invest because as we invest and hire, we’re bringing in the cost of goods, employees, companies. Every asset that we buy, whether it’s a property or a note, I can’t tell you how many people we employ, how much money gets changed hands from doing that. That’s the reason that they do that. Not just so Dan and Logan can save money on taxes. They’re trying to change the tax code. If they do, it’s not in our favor. Unfortunately, what’s going to happen is Dan and Logan are probably going to stop selling off some stuff because it’s not going to make sense. We’re going to hold, sit back and do nothing.

It further accelerates the slowdown.

You bust your butt to do all this and turn it around to get hit with 40%, 50% taxes. That doesn’t make sense there. That’s what we’re looking at on that side. I don’t want to go down that rabbit hole. Some of the things we do that you might be able to do is practice using solo 401(k)s, self-directed IRAs, Coverdell accounts, HSA, life insurance accounts, life policies that I started doing. I wish I knew about them years ago. We’ll break each of them down a little bit.

Those indexed annuity life insurance policies, people are so quick to say, “That’s the most expensive plan you’re probably sold.” I will agree with most people. The plan is mostly sold to people that don’t understand. Knowing what I know about those policies, they are so powerful.

Can you imagine having one?

Yes. It’s amazing. We’re starting to employ it. We’ll probably be going to get it ramped up in January of 2022. We’re just getting things in order in 2021. That’s a strategy that will be taken on. It’s another stream of income years from now.

That’s how the Rockefellers built their wealth. I’m going to break it down simply. You got to think like the bank. How does the bank think? That’s how it is. We’re building our own banks. We’ll fund everything ourselves out of our own bank and our insurance policy. I’m not going to teach life insurance policies on this. I’m also not a life insurance agent. There are enough people out there. You got to get somebody you trust and learn about it. It took me a good year before I jumped in and did anything.

I was skeptical for many years. One of my good friends from college tried to sell me an index whole life policy right out of school. Looking back I’m like, “That was shady.” That was not the policy for me because I hadn’t yet exhausted 401(k)s, HSAs, IRAs, Roths. There were so many other things at your disposal that you need to max out first that are tax-advantaged, and then start looking at non-tax advantage plans to invest into your retirement. It’s another tool in the toolbox. I was gauging it on a short leash back then. Everybody’s situation is different. It’s the old attorney or CPAs coming back. It depends. People hate that. Using that policy depends on your situation.

PTP 14 | Tax And Retirement Strategies

Tax And Retirement Strategies: We can all make a ton of money, but if we don’t save any of it, we’re not building any wealth.

 

I’m in a situation now where it’s great for me. It depends. If you’re a business owner what should you be doing? To me, if you’re a business owner and you don’t have a Solo 401(k), Health Savings Account and Coverdell set up for your kids, you’re out of your mind to not be doing those. That’s where your money should be going first. Solo 401(k), you should max that out. A company can do a 25% match. Let’s say you and your wife worked for your own company. You both could have a Solo 401(k).

The limits now are $110,000.

Per person, it’s $19,600.

It’s $19,600 or $19,500 plus the company’s contribution up to $56,000. You’re looking at $112,000 between you and your wife.

You also have to be careful. We aren’t going to throw $112,000. What we say is you got to look at your income. You don’t want to kick up your employment tax to pay just so you can do that. You need to get an accountant that can work with you. You have to make a salary that makes sense congruent to what your business is. You can’t say, “I’m making $5,000 a year. I’m making $1 million a year in my company.” Let’s say you’re making $50,000 a year. You put $19,600 in at $50,000 a year. Twenty-five percent of $15,000 is $12,500. Let’s make it $19,500 to make it easy, plus $12,500. You’re at $32,000 for you. If your wife’s making the same $50,000, she’s at $32,000. That’s $64,000 a year that you got to put in, that you’re not paying tax on that money upfront. When you take the money out, depending on how you do it, you’ll be paying tax later on.

At $60,000 something, you could turn around and invest that into real estate, notes or whatever you want to invest in. You can dump it all into crypto. You could put it into an auction play. You can do stock mutual funds, gold, silver. There are business syndications. You can be a limited partner and somebody’s multifamily syndication. Throw $50,000 in there. There’s so much you could do to grow that. That’s one avenue. If you’re a business owner, that’s a Solo 401(k). You could also do the Health Savings Account. You put money in the tax rate. The gains are tax-free as well. One of the best investments in the world is a Health Savings Account.

When you distribute them out to pay for medical expenses, they’re tax-free. That’s our plan. For years, we’ve been putting for our family, the limits now are $7,100. They’re always moving around. We’re up to $15,000, $20,000 in there. My investment is in the stock market with that account but eventually, when it gets to a balanced big enough, I’ll roll it over to a self-directed HSA custodian. I want that account to be self-funding. I don’t want to depend on Medicare, Medicaid and all the things down the road or ongoing medical expenses that everyday life has.

For us, we’ll build that account up to a $50,000 to $100,000 balance. Buy rental property or a note. Something that has re-occurring income in it for us, at least that’s the strategy we’re taking on. Have it a self-fulfilling health plan. For every time we spend $500 at the doctor’s office, I got $500 coming back in more from the investment that we hold in there. That balance continues to grow. It pays for itself versus paying for medical expenses. Maybe you hit the threshold for being 10% over your adjusted gross income. You get to deduct it from using itemized deductions versus standard. There’s a whole other way to go about it. I’m using the HSA to get that accomplished.

If you’re an individual, it’s $3,550. If you’re a couple, you could do $7,100. If you were self-employed. You have my own business and you’re paying your own medical insurance, I have a high deductible medical insurance. I pay about $600 a month for the family. It’s a $1,500 deductible which I can use my Health Savings Account to pay for the deductibles. The money that I pay comes out of my business. I worked so my business pays for my medical. Business dumps money to my HSA. It’s considered income. It becomes tax-deferred from there. You can see exactly what Logan does with his Health Savings Account. You can invest in it. You can build that thing up. You can take that and roll it into syndication.

The more cash you can have working for you in your sleep, the better. Click To Tweet

We’re talking about $60,000 something for Solo 401(k). We’d have another $7,100. We’re at almost $70,000. You could pay your kids under eighteen years old whether if you have 3 kids, 2 kids, 1 kid. Logan happens to have three daughters under eighteen years old. It’s $12,000 a year. Every year it changes. They add a couple of hundred dollars. Logan essentially can pay his kids another $36,000 total between the three kids out of his company. You don’t want to pay out of your S corp or your LLC. What you want to do is you want to set up a family management company, which is a sole proprietorship. It’d be like Hassinger Family Holdings. You go on based on your Social Security number, not your EIN. You do not pay out of your corporation. You do not do that.

There are ways to make sure this happens the correct way.

There’s a triangle. Your corporation pays your family holdings. Your family holdings pay your kids. You can’t just give them money for nothing. You have to document what they do. You can’t pay them $100 an hour to shred paper. Let me ask you this. With modeling, how much the models get paid? I know Kim Kardashian doesn’t get paid $10 an hour. You can decide you want to do modeling with your kids. I did that. I used to own a mortgage company. I had my kids throwing up $100 in the air. I used them for modeling but I also taught my kids a great lesson. My sons used to clean out all my rental properties. He went on to start a side business doing clean–outs. My daughter does all my marketing, advertising, paperwork, admin. She was valued way over the maximum. My youngest has done everything from design, shredding, filing, scanning, emails.

I put them to work. The cool thing about putting them to work is not only is this money tax-free, which I should say tax-deferred, eventually depending on what you use it for. It could be a tax rate. I teach them a great life lesson. That’s what I use it for. I’ve taught my kids great life lessons. My two older ones are doing great things with what they learned. My younger ones are already planning to do great things with what they learned. The cool thing is they invested their money in real estate deals as when they were younger. That money was able to take care of their college education.

I’m not here to push that you go to college and be like, “College is a waste.” That’s up to you. If you don’t want to use it for college, use it for something else. I’m telling you, my two older kids use that money so far and had no student debt while using that money. There are many benefits. We’re talking about people or entrepreneurs who own their business. That’s what we’re talking about. That’s what this is about. We haven’t even gone into self-directed IRAs. That’s where I’ve used this money. If you got anything to add there, let’s jump into self-directed IRAs and talk about people looking at it.

We’re getting there. My girls are 7, 5 and 9 months old. The seven-year-old will eventually start doing some modeling for the short-term rental stuff. I know that’s in the near future. We got the 7 and 5-year-old in there. I’m not comfortable paying the nine-month-old for being a model. She’ll sit on the sidelines. She might be in the photo but she won’t get paid. She’s free labor. I’ve seen you put it to work for years. I know other business owners that are doing the same thing. It’s a very powerful tool that if you don’t know, you just don’t know how to ask. You don’t know how the strategy works. The biggest thing that I want to get across with all these strategies is to plant that seed and to get somebody thinking about that next step, even if they’re not a business owner but want to be years from now. There are multiple strategies that you can start putting in place or at least have ready when you make that jump. Plant a seed and get your thinking. That’s what I want somebody to take away from this. Self-directed IRAs, that’s where I first got started before I had the company. I had some old corporate 401(k)s that I rolled over.

Before we go into this, talk about the roll-overs. A lot of people here have lost their job, left their job, retired. That’s the biggest question I get from potential investors, “I work for this company. How do I self-direct my IRA?” Talk a little bit about that.

To be honest, it’s a very simple process but until you’ve gone through it, it seems daunting. I’ve been with two companies prior. I had 401(k)s at both of those companies. I had left. I didn’t know about consolidating and rolling them over to a certain company. Once I got to my third company, I started contributing there. That’s where I was introduced to the self-directed IRA. I’m using this individual with a custodian and all the LLC stuff so that we can direct in the things that we want to invest in. Consolidate those two accounts from the two prior companies, roll them over to a custodian. It’s a very simple process. I went to both of those 401(k) companies and said, “I’m rolling the funds out.” There’s usually an online form that you fill out and submit. It can take anywhere from 1 to 3 weeks to get it processed and the funds change hands.

You roll them over to TD Ameritrade or Fidelity, one of the big brokerages. You’ve got a little bit more control over what you can invest in. Sitting at an old 401(k), you’ve got twenty mutual funds to pick from. Half of those are usually target date life funds, “I’m going to retire in 2050.” Every five years you’ve got another fund for that. You’ve got some small growth, large-cap, all different stuff in there that you can invest in. It’s usually 20 to 25 funds. The minute you consolidate, roll over it to a Fidelity or TD Ameritrade, you open it up to the entire stock market. If that’s your thing, stay with it and invest in other mutual funds or other things.

PTP 14 | Tax And Retirement Strategies

Tax And Retirement Strategies: One of the best investments in the world is a Health Savings Account.

 

By keeping that old 401(k), there are also small fees that you’re absorbing, planned maintenance fees, third-party administration fees. There’s a lot of stuff in there. They’re not big dollars but things add up. By rolling it over to get them all together in one account, go from there and start being a little bit more self-directed about it. That self-directed IRA thing always cracks me up. To a brokerage house, self-directed means you get to pick whatever stock you want, but self-directed means you get to pick whatever investment vehicle you want. If it’s stocks, awesome. If it’s gold bullion, I’ll go do that. You kicked the door open to what you can self-direct versus what the brokerage count.

That’s where I got weird about them being a true fiduciary. They’re truly being a fiduciary to you, putting you in something that might or might not be the best investment vehicle for you. I’m not saying this about every financial advisor. One of my best friends is a financial advisor. I always got to be careful. He knows. He talks to me, “We’re not touching the returns that you’re pretty much doing.” I asked him, “If somebody comes in, let’s say they’re top-heavy in whatever. It could be stocks and mutual funds. You know that they shouldn’t be investing your money in other avenues. Are you allowed to tell them to do that?” He’s like, “We got to be careful. We can tell them to do it but we can’t do that for them.”

I said, “How many people do you tell that they should go and talk to somebody else, real estate, notes, private lending or syndications?” He says, “We don’t tell that.” You’re not truly a fiduciary. If you’re working for a bank or an investment house, you’re selling pretty much what they’re telling you to sell. For me, it doesn’t sit right. There are investors that have been with me. They invest a lot of money with us in our deal. They’re like, “What do you think? Is the market going to sink?” I always say, don’t put all your eggs in one basket. Do your research. I’m not a financial advisor. I’m not a stockbroker. Try to pick some funds that you think work best for you. Talk to your financial advisor. You should probably put some eggs in that basket too. I never believe in putting all your eggs in one basket. You’re right about that. It’s very important.

People get confused with the difference between LLCs, S corps and C corps. I’ll break it real easy and then I’ll give it to you, Logan, to go a little deeper. LLCs are there to protect your assets. That’s what an LLC is for. People think that if they follow this LLC, there are tax write-offs. They’ll be able to do all these crazy things. Unfortunately, that’s not what LLC is for. I’m not telling you to go out there and set up an S corp or a C corp upfront. You have accountants, CPAs, attorneys. You want to talk to them. They’re the experts. They’re licensed. I’m not. I’m telling you what I do. LLC is good if you’re going to buy assets like houses, rentals, maybe notes. LLC is pretty easy to set up. It protects your assets if you do it the right way. I can tell you this. I can guarantee that almost everybody out there that has an LLC or even S corp does not do it the right way. I’m not an attorney.

I didn’t do it the right way when I set my stuff out two years later.

I have fears about almost everybody’s LLC and S corp. I’m not an attorney. If you got an attorney that has half a noodle on corporate law, they’re going to destroy your LLC and S corp. If God forbid somebody gets hurt on one of your properties and you think you’re protected by your LLC or S corp, I can almost guarantee you that you’re not doing it correctly. Here’s what it comes down to. You’re probably not spending the money. We’ll go back to this whole mindset thing. You’re not investing in yourself the right way. You’re trying to save a couple of dollars. I’m not going to mention companies where people are out there using to form their own LLCs, S corps and legal docs. It’s not just the legal documentation, it’s the fact that when you have any corporation, there’s a process.

You have to have corporate minutes. You cannot commingle funds. There are many things that people screw up. I’m telling you this upfront not to scare you but I want your light bulb to go off and talk to your attorney and accountants and say, “What am I not doing right?” There are companies out there to help you do this. You’re not going to be able to go and do it yourself for $199 and think you have all your legal docs done. It’s not the way it’s going to work. If you do that, you’re probably wasting your time. It’s not even doing anything because you’re probably not protecting yourself. How do I know this? It’s because I have the mastermind and a bunch of students. I’m at events. I speak to people. I was like, “What is your company minutes?” They’re borrowing money personally, giving it to the company, paying themselves back without corporate approval.

The simple fact of you can borrow money from your personal accountant into your business but that business now owes the personal interest on that money. We did that. I paid $5,000 interest on it to myself but it was still good.

You have to pay the interest and get corporate approval. Whoever owns the company, even if it’s you and your wife, you have to sit down and put in your minutes, “We agreed to pay ourselves back alone for purchasing furniture for one of our rentals.” It’s ways to do things the right way. Let’s talk about some of the income. We called them the active and passive. We’ve mentioned the active income. You could probably dive a little bit into that.

If you don’t know, you just don’t know how to ask. Click To Tweet

On the active and passive stuff, I’ve got interest in limited partnerships through syndication in Phoenix, Arizona. I invest in those things. I have those through passive entities. I’ve got active income, the stuff we’re doing in Broken Bow, the short-term rental stuff. Any consulting income that I receive runs through my S corp. I’m generally flipping houses. That’s active income. That would be flown through an S corp. Your passive stuff is pretty easy. Your rental properties and anything that you’re passively investing in that you don’t have a say so. You’re trying to put a very fine corporate veil around so that you’re not touched if something were to come up.

For tax strategy-wise with my cabin rental stuff, I charged my cabin rental an asset management fee. I pull some of that income out of there into my S corp as active management so that I can help with the salaries and then also in turn with 401(k). There’s a reason behind all of this that comes together. They’re not isolated companies trying to figure out what this one’s doing and what this one may be doing. They’re all working together to fit a tax strategy. It’s my tax strategy. It’s not yours. Yours is different from mine. Anything that we’re saying is ideas to get people thinking about how can I get mine to have those types of synergies?

As your business grows or slows, whatever it might be, that could change. You have to stay on top of this. This is not a set it and forget it. Logan mentioned something where I don’t do. I have rentals inside my LLC and a short-term rental inside my LLC as well, but I don’t charge a management fee personally through my LLC, which is a great idea. It’s another way to move money over and pay your salaries out of your S corp. That’s the thing you got to think of. Maybe my accountant should have caught that and said, “Why aren’t we doing this? Maybe we should be doing this.” In a way, it’s one way, half dozen the other because it’s not a huge deal but these are great strategies that you can use.

You can start maneuvering that money into other deals. Why leave the money in your LLC where it’s not getting any tax benefits out of that LLC? You can maneuver that money into your S corp, and then the S corp, you can invest that money into 401(k)s and stuff like that. That’s awesome. We gave a ton of information. We got to spend two days in a seminar giving this information. I’ll have an accountant and an attorney with us so they can verify it. There’s so much more. We’re just giving basics when we talk about paying your kids and the $12,400. You can pay them more than that. There is a lower tax bracket. There are so many ways to pay more.

Let’s say you pay them $16,000 and they get $3,600 over the minimum. You pay tax on the $3,600. They’re at 10% and so it’s $360. There are many other ways you can do things. Logan and I want to open your eyes to what’s out there. We’re not able to teach this all to you because we can’t teach it all to you. We don’t know everybody’s situation. When I mentor somebody in my mastermind and I get a one-on-one, I go through the situation. I have friends that I sit down with. We have other friends that are doing business and have been doing it for years. They don’t want any personal names. They’re not getting any tax write-offs or anything on us. Now it’s getting real. I’m like, “You got to set something up.” Even if you set up a sole proprietorship at first, you got to start something. You got to roll it into S corp. Start thinking about long-term investment vehicles or retirement vehicles.

On the S corp, C corp, LLC, a CPA is going to help you figure out which way is the best way to go. For years, I had my business that wasn’t ready to go as an S corp. The threshold at the time when we did the test was $45,000. It’s net income, not gross. After you take out all of your expenses, we were consistently doing better than the $45,000. He said, “It’s time to convert your S corp.” We could retroactively change it for the prior year. We did different things. You’re not going solo. For somebody who’s coming out of traditional W-2 income or if you’re still in it, it doesn’t matter. You’re able to go on TurboTax and you’re like, “Why would I ever pay a CPA?” I had that same thought years ago. Why would I ever pay a CPA? TurboTax walks me through 100% of it. They do but they don’t. They don’t know these other strategies that are going on because it’s not for that. TurboTax is for the 95% of the workforce that has married, filing jointly, filing separately, all the questions you’ve gone through, you answer and you’re done in 30 minutes with your taxes. I’m still ongoing. We filed an extension because we’re still working on it.

Most of the time you will be. You’re going to be working on this. You have multiple investments. You have syndications where you’re a limited partner. You’re waiting for the K-1s on that or 1099s. It’s okay to file extensions. It’s not the best thing. They don’t have to get your K-1. You can’t have your taxes on time if your K-1s aren’t even there. Here’s the thing with TurboTax and this online. I used to do that. I was submitting it because it was easy. The fact is you want to be able to sit with a CPA or an accountant that says, “You’re doing this but if you start thinking about this, maybe we could save on here.”

TurboTax is allowing you to put in what you put in instead of for a pure basic. There’s nothing that comes out and says, “You’re doing a side business. You’re making t-shirts and selling them. Have you ever thought about starting a business?” In that business, you can write off losses up to three years where it’s not a hobby. Maybe you start buying real estate rentals. You know that your real estate rentals with the depreciation, you can show a loss for a certain amount of years, even though you make income because you’re depreciating. You have a bunch of properties. Do you know if you’ve got a multifamily property or commercial building, you do an accelerated depreciation in year one? If your accountant is not doing that, you want to start looking around for an accountant that fits wherever it is.

PTP 14 | Tax And Retirement Strategies

Tax And Retirement Strategies: Take control of your business, your retirement, and live in prosperity.

 

If you’re an Amazon store, if you do one of those stores, you want an accountant that’s familiar with that. If you’re doing short-term rentals, you want accountants who are familiar with that. I know you have loyalty with your accountant and your attorney, but it’s okay that you outgrew them. A good accountant should say the same thing. “Logan, I love everything you do and you grow in the great lens. I’m not the best fit for what you’re doing now.” The person who used to do my personal tax returns doesn’t do my tax returns anymore. They can’t handle all the businesses and properties I have. I said to them, “If this is not for you, let me know because I don’t want to put something on you that you’re not comfortable with or don’t know how to do.” We both get ourselves into some hot water because something’s not followed correctly, then I have an audit. I have to pay a penalty.

Unfortunately, the accountant is never responsible for the penalties or late fees. They put these tax returns together. We don’t know what the heck they’re putting together. It’s a shame. It’s like a foreign language when I look at the tax returns. I don’t know what they’re putting together. I tell them everything I’m doing, they put them together, we sign off on them. If there’s a penalty or interest that comes back to us. This whole thing, we can sum it up and say take control of your business, your retirement and live in prosperity.

That’s what this show is all about. Everything falls into one of those two verticals. It’s living in prosperity and living in passive income. A lot of this is going to help you live in passive income. If this is not one of the best shows on business that I’ve heard, done or been interviewed on, I don’t know what it is. We’ve done some great shows on beliefs. Go back, read this again, write notes. Make sure you ask your accountant or attorney. If they say no, trust and verify what I’m telling you. Go to Google. Type in, “How much can I pay my minor under eighteen years old tax-free? How much is the HSA? How much can I put into a self-directed IRA? How much can I put into a Coverdell account?”

Look up all those things. There’s a ton of information out there. If your accountant is saying, “You can’t do that,” and you’re self-employed or even if you’re not self-employed, if you can’t do things like IRAs and stuff like that or life insurance policies, then you might need to look at a different accountant or a different attorney. Your financial advisor, it’s the same thing. Trust and verify everything we tell you but challenge them. Don’t just take what they say with a grain of salt. I love when people trust and verify me. I want people to question me. People make me proof up things. I’m not 100%. I could be wrong on some things. I’m very careful because what Logan and I were telling you might not work for you because of your situation. At least you understand it. You can ask those questions and you research them.

Change your situation. You’re maybe in a position where your CPA is giving you advice or you’re willing to do X, Y, Z. We can do exactly what you brought to me but you need to change something so then you can be more focused on your business that next tear and take advantage on some of these strategies. There are even more strategies than we could talk about. These are some of the more powerful ones that we’re putting in place for us. My whole thing with this, I love sharing these topics. We’re just planting the seed and getting somebody thinking about how they can do it outside of what you see on a TV commercial. All you see is what comes over on TV, free online trading, this and that. There’s more to it. There’s more out there.

Do you have anything else? I think we gave so much. You’re drinking from a fire hose on the show. This is Logan’s idea. He’s like, “Let’s bring this up to people.” I’m like, “We’re going to crush them with information.” I hope they take it. We love doing this. The only way we can continue to do this is if you show the love so we can keep coming up there on the rankings. If you like what you read, give us those five-star reviews. It’s so important. Share this out. Share the link out on social media and with your friends. We ask that every one of you share it out with at least five people so you can live that true Passive to Prosperous mindset. You can share this information with your friends and family. There’s not one person who shouldn’t read this show. I’m pulling and share it out with at least five friends. I would love to see you share it out with 100–plus each because that means you want to help the world live that better life. Thanks so much for being on. We’ll see you next time. Take care.

Important Links:

About Logan Hassinger  

PTP 13 | Business PivotFrom the beginning, Logan had a goal to work in real estate doing what he loves, and wanted to share the passion of real estate with others. Through the years, he has developed a solid foundation of real estate knowledge, the expertise necessary to navigate any transaction; and have the integrity to follow up on promises. Early on, as he began to develop the company and carve his niche in the vast world of real estate, he quickly realized that there is a distinct need for certain real estate services he originally did not foresee. After the 2007-2008 financial crisis, it become apparent that millions of homeowners were losing their homes. So he transitioned from owning rental properties in the Dallas/Fort Worth market to buying distressed mortgage notes with the intent of working with the homeowner to keep them in their home.

Completing in excess of 4 Million dollars in real estate transactions since 2013, Logan and Sage Notes, LLC is excited to be assisting homeowners experiencing financial hardship. We aspire to continue contributing to the continued goal of home ownership along with economic rejuvenation of the areas we serve and its neighborhoods.

As he began to pursue the Chartered Financial Analyst or CFA® designation, he realized that Real Estate was the path for him. They say we grow more from our failures than our successes, and this is a testament to that very saying. He failed the Level 1 exam and the rest is history. He began with a rental property 5 months later acquiring a distressed property and assisting the seller in their situation. Logan continued to add small multifamily properties to the portfolio and protecting his Lenders over the 3 years.

Logan loved the idea of being able to do what large financial institutions couldn’t provide. He was able to provide modification plans to distressed borrowers and keep them in their homes. The portfolio quickly grew to 60+ mortgages in less than a year working with Banks throughout the country.

May 20
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PTP 13 | Business Pivot

Pivoting Your Business: Having The Correct Mindset During Market Changes With Logan Hassinger

By | Passive to Prosperous Podcast, Podcast | No Comments

 

When the economy throws you a curveball, do you clam up or make a pivot in your business to adjust with the times? When COVID-19 hit the world, businesses of all kinds were affected, forcing most companies to adjust. Logan Hassinger is one of those people who learned how to adjust and pivot his company, Sage Notes. Join your host Dan Zitofsky and his guest Logan where Logan shares how he found his niche in the real estate industry from distressed debt and notes to pivoting into short-term rentals. Find out how he achieved the scarcity mindset for his business. Learn how to invest in yourself, build a dedicated team, and go from a newbie in the industry to a master. 

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Listen to the podcast here:

Pivoting Your Business: Having The Correct Mindset During Market Changes With Logan Hassinger 

Logan and I haven’t seen each other. We have been both so busy in our businesses. We still work on our businesses but we are both adding layers to our business because, as we know at this time and date, things change in the economy and real estate. Logan and I both talk about this offset all the time and it’s how we add ventures to our business but we stay laser–focused in real estate. I think we are both of the same mindset as you. You’ve got to learn who Logan is over the last couple of episodes and leaving his 9:00 to 5:00 job and who I am over the last several years. 

If you're good at something, share your skill with others. Click To Tweet

One thing we both agree with is don’t force the market. I talk about don’t force or shoehorn a deal together. Don’t force the market to work for your strategy if it’s not there or if right now prices of houses are through the roof. Wholesalers are charging an exorbitant amount of money. Banks might be charging a ridiculous amount of money for non-performing notes. Make your own deals. In 2020, I have been making a lot of my own deals in both build-to-rent and short–term rentals. Logan is crushing it. I will let him talk a little bit about what he’s doing in the short–term rental game. I bought my first two short–term rentals, so it’s the student teaching the teacher at this point. Logan got my juices flowing. We’ve got some big things happening out in Broken Bow, Oklahoma. 

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Logan, it’s great to see you again. It has been a little while. 

It has been a while since we last talked and things are changing quickly. You’ve just got to roll with it. I have been up to Broken Bow and it’s about a three–hour drive from where we are here in Dallas–Fort Worth. Over the last couple of days, I have been up 4 or 5 times, trying to hammer out some stuff and making sure we’ve got a good pulse on contractors and all the moving parts with the people that we are partnered up with from agents, builders, vendors and land developers. There are a lot of moving pieces up there but all good stuff. To Dan’s point, this has all come about since June or July 2020. We went up there on vacation with some family and friends. I left with like, “How do we own one of these things? These are pretty cool.” 

We have been doing that for years but this time I looked a little bit harder into it. After seeing what COVID had done to the travel industry, this place was packed. I was like, “I don’t understand. No, I do understand why it’s packed. How do we get into it?” I made some phone calls and here we are. It turned into buying one, putting one under contract for build and then got that finished up in February 2021. I have partnered with a builder to build even more of them. It has been a good relationship with both the builder and the agents. They have been there for a long time in Broken Bow and they have seen how it could evolve into what it is now. I have been able to with trust, connections and relationship-building to fly in with them and see some stuff that I wouldn’t otherwise see. Exciting stuff is happening and we will have some things to share very soon. 

PTP 13 | Business Pivot

Business Pivot: When markets change, you have to maneuver. Go to a new market, not shut your business down.

 

I’m looking forward to sharing them. I’m looking forward to what we do together on this thing. It’s funny because we build our teams and we get so satisfied in building on our teams. As entrepreneurs, I call it the entrepreneur’s curse. I get so damn bored. We do it so well in the note space, the private money space and the passive income space. You get to the point where you say, “I want to get to this point where I enjoy that.” I don’t care what we say. We can’t go out on a boat 24 hours a day, seven days a week and vacation seven days a week. It is not feasible for most people. 

No matter what we say, we love building, doing things and creating. You and I are very similar like that. I think what we both align with so much is that we enjoy creating an amazing experience for others. We enjoy going above and beyond. Money is not our object as crazy as it sounds. People who are reading now, you were like, “Yeah, right.” There are ways to make so much more money in what we do. We can make more money, shortcut certain things and cannot put all the best. When you build a cabin, you could maybe go a little bit less on the finishes. You can get a piece a lot that’s not as advantageous for people to come up and see it. You do it because you want people to have an amazing experience. It’s not about, “I want to do it because I want to make the most money.” 

It’s the same thing at what I do. We build these teams because we did it in the note business and the turnkey rental business. We built these teams that I call in emerging markets. You can’t be in your backyard. It’s really easy if it’s your backyard but markets change. People ask me all the time, “Dan, why don’t you stay in the same markets?” When markets change, I’ve got to maneuver. I’ve got to go to a new market. I don’t shut my business down. 

Once I learned how to build, people, I’m talking about four things, the four pillars of starting a business. One is the culture. You have to have that culture. Once you build that culture, then you have the three pillars. It’s like a bar stool. It’s always people, processes, and systems. They never change. There’s no rocket science. I’m not the smartest guy in the world but I do the same thing in every business I’m involved in. Not to give too much here but you had a potential person that was partnering with you and he didn’t have the right mindset. He wasn’t the right person because he was chasing the money.  He was screwing clients, so you had to cut ties with somebody like that. You can stay with him and made more money but that wasn’t what your vision is. Your vision is not about chasing money. It’s about chasing the experience, being helpful with people, doing the right thing and mindset. 

That’s why I asked you to be a co-host with me on this show. I have had a lot of people ask me to co–host podcasts and I haven’t done it because there are people I love out there but I don’t feel like we align 100%. It’s crazy because all the people in this industry I know for many years now, the students I have had, the partnerships, the deals I have done, there are two people, you and maybe one other person I would do this with. I appreciate you being who you are and always playing full out and being honest with everybody. You are a giver. You always give and I say it, you were like, “Why am I putting all this out there? It’s because I want you to have the right content. I want you to know for real what it is.” Enough so that you have even been pissed off a couple of property managers, I believe. 

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There has been some turbulence. We’ve got up there and like any new investor to a market, you start joining some Facebook groups or you join some real clubs or whatever it is that ties you to that market and learning with everybody. I’ve got a background in corporate finance, rentals and using property managers or not using property managers, just a different perspective. I was sharing my perspective and that didn’t align with somebody else’s agenda at the end of the day. I was removed from the groups and I was like, “I don’t know where this leads,” then you suggested later, “Why don’t you create your own group?” 

I was like, “I don’t know.” It’s a lot to do and to manage. To me, there’s a decent amount of responsibility with that, too. I said, “I do still want to keep giving the information that I have.” I created the group and I think we are close to 900 members in about 3 or 4 months and I provide as much information as I can. I own two rentals and a lot of the people that are joining the group are looking at it from, how do I gauge if it’s a good rental or not? What are the numbers? What is occupancy? What are average daily rents? What are the fees? What are the expenses? All this different stuff. 

I basically produce my P&L on my cabins and put it into the group and say, “Ask questions.” Let me know what you see and it’s a learning opportunity for both of us like, “I think you need to look into your number over here.” I have people every day saying, “Thank you for sharing. Actually, I don’t want to do this. I don’t want to build a cabin.” That’s great. I’m glad I saved you the heartache of having to go build a cabin and realize you didn’t want to do it or vice versa. I can’t wait to get started then they get 2 or 3 under contract and they get rolled one. 

I had somebody message me, “I found one of your threads in the old group I have been removed from. I tried to tag you in it and it wouldn’t let me tag you and then I noticed that you were not in the group.” They were like, “What happened?” I was like, “I have been removed.” Come over here. They were like, “I don’t understand. You are being so helpful and everybody seemed to like what you were sharing.” I said, “Yeah.” 

I’m not going to sit here and bad–mouth the other person. That goes against everything that I have tried to build. I’m not here to try to stop anybody else’s growth. Even if it doesn’t align with how I want to do things, it’s different. I’m right back into what that person is or what this group is, is if I’m on the other side talking bad about them or trying to stop any growth that they may have. You go do what you want to do and I will do what I need to do, what I think how a business should be run and it’s okay. We are not the same. 

It’s crazy what’s going on with people. People live in such scarcity right now. It’s like the minute you share something that doesn’t help them make money or they believe in competition. We have almost 50 people now in the mastermind group. I was on a call with people and they were like, “I will share it.” They get into that, “I don’t mind sharing with you because I’m not in your market.” I’m like, “No, absolutely not. That’s not how it works. I don’t care if you are my next–door neighbor.” You share what you share your content with people. People think. Why do you think Lowe’s and Home Depot open next to each other all the time? Why do you think Burger King and McDonald’s are next to each other all the time? There’s something to this. 

That’s a great way to look at it. 

You can’t look in scarcity. I never look in scarcity. If someone says, “Who’s your lender?” I’m not going to give you that. If someone says, “Who’s your contractor and who’s your property manager?” 

Can’t wait to share those, people. 

If they do a great job, why wouldn’t you want to pay them back by referring them to somebody else to help them with their business? I watch people that live in that and they never see success. 

I partnered with five people when I did this group, a mortgage lender that people wouldn’t need to go out and get a loan on, I’m a property manager, an agent, a builder and a designer. I called each one of these individuals up and I explained to them what I wanted to do. I wanted to share how they have helped me and I want to put them out to others so that they could reach people. They were like, “I don’t understand why. How much do I pay you? What are the referral fees?” I don’t want anything. I want people to experience the awesome experience that I received during my build. I said, “You guys did a phenomenal job in your respective areas. Go crush it for others.” They were like, “We’ve got to give you something.” I was like, “No, you don’t.” I said, “We are going to grow together because every person that wants to work with you is going to call me in. For every person that calls me in is going to want to work with you.” It’s going to be this circle of continuous giving and there’s nothing that we need back from each other, other than to grow each other’s businesses. What more do you want? 

PTP 13 | Business Pivot

Business Pivot: Scarcity and limited beliefs are the two things that will destroy any entrepreneur or a person in business.

 

People lost that and once people get that back, we can start getting on with this world. I say, “Hakuna Matata.” It’s like the circle of life but it’s really true that in that mindset, people aren’t used to it because there are not many people. I challenge you all reading to look in the mirror and think about it. Be honest with you. Don’t say, “I’m doing this. That’s me.” This is not you probably, to be honest, with you, I’m not going to start mouthing off and cursing and get mad but it’s not you. 

I see it out there. I watch social media and watch people in my groups. I can’t tell you how many people I have helped. I see they have a so-and-so. Maybe they have a really good paint guy. He’s like, “I can’t. He’s busy now. I can’t even do my stuff. I can’t share.” You don’t live in the right mindset. Don’t make that decision for the paint guy. Let the paint guy say, “I can get to you in a month from now.” He’s not going to give him to you. You take him. 

He never comes back to my jobs. I don’t want to lose a good painter. 

You are never going to grow that way. I can tell you this. I’m doing this for a long time, not in real estate investing, banking and lending I am. I have been doing this a long time in business and I have been part of Corporate America. I have been a Vice-President of sales. I built some big companies. I have taken the company to a multimillion-dollar sale. We won 500 entrepreneurs a year. I have done a lot. I’m not saying this to impress. I have never seen anyone in business who doesn’t share their expertise or people they know with a team do very well. They live in scarcity. There are only so much you can do yourself. You have two things that they fell on. I’m going to give you two things. You can pick. You walk down the street, have a conversation with somebody and said, “This girl lives in this or this guy lives in this.” You are going to live in scarcity or you have limiting beliefs. Those are the two things that will destroy any entrepreneur or a person in business, scarcity and limited beliefs. They are different spans. 

Limited beliefs, I will give a really easy. You don’t believe that you are enough to be successful. You want to invest in yourself, believe everything is a cost, don’t join masterminds and don’t go to a coach. You don’t do anything because you don’t believe that you deserve enough. You have these limited beliefs that you are not going to be successful. That’s a real overview. I can go deep into this for hours. Living in scarcity is exactly what I said before. Logan is not going to share any of his people because he’s living in scarcity. He wants to hoard them all to himself. You are doing short-term rentals, but you are doing in your market so I could share how to do it but I’m not going to share it here in this area. 

Logan, if you want to make a business like a short–term rental consultant, there’s nothing wrong with it. People would like to come to you and pay you, so they are hands–off and they don’t have to worry about, “How do I design it? How do I handle the belt or how do I handle the bank? Why wouldn’t they pay?” If you don’t want to pay Logan for that, he’s not charging but he doesn’t have this business right now. Maybe in the future, he will. If you want to pay him, why wouldn’t you pay him? It’s because you have limited beliefs. That’s living in limited beliefs. You don’t believe it’s an investment. You believe it’s a cost. In all honesty, Logan was one of my students. He paid me for me to help him and by doing that, I don’t think that’s the only reason but it’s one of the reasons that he has gotten to where he’s at. How much money were you able to raise? 

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We are probably somewhere between $5 and $10 million. 

If Logan didn’t invest in himself a few thousand dollars, now he’s still might have done it. It might have taken him longer. 

My issue was a little bit limited belief. I think it was more of the scarcity mindset of, “I don’t want to share my strategies, my tactics, my secret sauce of how I’m getting deals done whether it was buying rentals off–market, doing fix and flips, buying notes, trying to network with people and now here with the short-term rentals.” It was more scarcity and I was trying to figure out a way to get over that. One of our 1st or 2nd sessions was you’ve just got to share your information and people will, in turn, look at that as you as an expert in your field and your marketplace. I didn’t believe it, we started doing it and it wasn’t overnight. Now, I’m starting to see the fruits of all of that. It’s cool. I never want to go back to a place where I’m hoarding information and not allowing people to benefit from the same guidance and the same information that I was receiving. 

There were a couple of things. I was trying to figure out how do I take it to the next level and I didn’t know. I was looking at somebody that seemed to be at the next level and wanted to pick their brain. It wasn’t a cost. It was like, “We are going to do this. We are going to see what this investment turns into.” If it comes back in six months or a year, I will get my money back and we will figure it out from there. It’s done more than that. 

It wasn’t easy, I would say. I didn’t make it easy on you. I made you work and it was probably three months’ worth of work and then for you to get out of school at that point. Now you had to go do the work and you did it. You are one of the people every time I talk about raising private money, I use your story. I hope you don’t mind because I love that you were working that 9:00 to 5:00, making six figures a year with a wife and two kids. Your wife got pregnant, had another baby, you would come home and then you built the note business, enough that you were able to leave Corporate America. I do that because, in your own mindset, that’s where you didn’t live in limited beliefs because you believe you deserve more. Everybody comes to me and says, “I don’t have time.” The first thing I said to them, “Go watch the videos with Logan. Go listen to the podcast about how Logan left his 9:00 to 5:00 to give himself a life.” 

It wasn’t fun. It was hard. It took a lot out of me but at the end of the day, I had a goal where I wanted to be and I’m enjoying that every day now. 

You have to take your daughter to school. I hit you up. You were like, “I’m at my daughter’s soccer game.” That’s what it’s about. That’s living. I call it lifestyle but my point is a lifestyle by design. I would say living your best life but that’s my buddy, Steve’s point, too. I can’t do that. I believe you will live in lifestyle by design. You design what you did. When they were talking about crushing it, you were crushing it. You were grinding, I’m talking about working a full-time job, coming home and doing this on the weekends. Let’s be honest. We met together at a mastermind. You spent money to go to his mastermind that I was invited to come to speak at to the people. You always invested in yourself. That’s one thing I look at. 

Do you believe enough? Why would I partner with you if you don’t invest in yourself? I had people all the time that come up to me and say, “Dan, will you partner in this deal with me?” If I had my mastermind open, which is literally dirt cheap. It’s no money at all. There are two things. That money goes to pay for the technology and my team. It’s $97 a month. I’m having the most fun in the world I have ever had to do a mastermind because I have almost 50 people that are actually excited about doing deals together. 

If people won’t even invest $97 a month, why in the world would I ever partner with them on a deal? Here’s the thing. How many times do people pick up the phone or hit you up on messenger and say, “Dan, can I take you out to coffee and pick your brain?” That’s the most disrespectful thing you could ever say to me. You are going to buy me a cup of coffee and pick several years of my brain. I have a friend, Larry. He has a real estate school, the best at school, and he says, “I love when people ask me that because I’m sure, I will send you my reservations. You book me on a first–class ticket to Paris. I don’t care of you meet me in the coffee shop. You can buy me coffee.” It goes to mindset. Every time we get on a call, we have a topic and we start going into the mindset. 

That’s where it is. One of my best friends, I wouldn’t say he’s struggling with it but he’s getting there. He’s trying to get through the scarcity and the limited beliefs mindset. Every day I remind him. We talk every day. I also do business development with a real estate brokerage here in town and I’m helping them grow as well. Whether it’s helping real estate agents, I’m not an agent but I’ve got some contacts and ways to help them grow in their business. He’s trying to find a way to get there as I did years ago. It starts with mindset. It’s just the way it is. 

PTP 13 | Business Pivot

Business Pivot: In order to be successful, you need to give back to the people who helped you grow.

 

That’s what I said. It keeps coming back to mindset. Everything we talked about, the root of everything is a mindset. I didn’t plan to say that but as we were talking and I’m like, “We have this show. We want to talk about how to pivot in this market.” That’s really where our topic was. We talk a lot offline. We don’t get on here and talk the talk. We don’t want to hear ourselves. If we have nothing to say, we don’t do a show. We are not like everyone else out there and it’s like, “We have 2 to 3 shows a week. We’ve got to sell ad space on here.” We’ve decided upfront that we don’t want to sell ad space right now. 

Now I don’t know in the future if we will because I’m not going to say we never will and it would have to be a company that we either use or we would use. Those are the only people we put on there but obviously if we put them on there, you have to have an investment in it to grow it. We paid to put our show out there. Every time we talk about it, it comes back to this. I’m thinking about mindset and every topic we talk about, leaving Corporate America, stop chasing the money, vision and building a team are mindset. 

I pivoted from distressed debt and notes, not to say that I would still don’t own notes now and it still provides me a good amount of income. I pivot into the short-term rentals and my first thing was, how do I build a team? I know how to do that. Share what I have learned and what I have experienced and then grow this team based on relationships, trust and honesty. Again, it starts with the mindset side of things. It was about giving back to the people that had helped me grow in my little two–cabin, short-term rental space and saying, “How do we make this bigger for everybody that’s involved?” I may not know you but we can all work together to help everybody. It just came together, slowly but surely. People look at me still with like, “You have only been here for maybe a year and you are further along than I ever was in this market years ago when I came up.” 

Be honest, why are you further along than others? I see it too because, as I said, I had the mastermind with almost 50 people in it right now. We are going to go to people and then do live events again. I watch it in the mastermind people. Do you know who’s further along than most? It’s the newbies. 

They have the ground to make up in a short amount of time. It’s amazing. A newbie misjudges how quickly they can make up ground. I was a newbie in this little Broken Bow cabin market. I was a nobody. There were 1,300 cabins, call it 1,000 different owners and everybody is up there trying to do the same thing. Make some money with some short–term rentals. We were going up there because the returns look good. I put money into solid investments that I see panning out over the long-term but it was, “I want to be involved long-term outside of just owning some short-term rentals. “How do I give back to people that have helped me?” It was as simple as that. That was my question. 

The real estate agent I partnered with, was the number one Oklahoma agent for Keller Williams in 2020. Do you think she needs a couple of referrals from me? No. It was this simple gesture of, “I want to help you grow and you are number one, so where else are you going to go? I just want to partner with you.” From a property management standpoint, I said, “I have had an awesome experience with you. You have a lot of knowledge. You have been in the marketplace since 2003. I want to share your services with anybody else out there.” There are ten–plus property management companies you could pick from as an investor there. Why choose you? I helped communicate why I chose you and how that relationship has grown something, the same thing with the mortgage lender and my interior designer. We’ve got a cabin right now that started up in February 2021. We’ve got our owner statements on the fifth with a check and we are bringing in revenues that are unheard of. 

Are you thinking you want to see these all year long or is these twelve months a year you are going to see this? 

Our worst months, January, February and March 2021 are behind us. We’ve got a strong year ahead. I tell most people on short-term rentals in this market specifically, look 65% to 70% occupancy. Now, we are experiencing 85% to 95% occupancy. Don’t pencil that in for long-term analysis but we are hitting numbers that we would never have thought. COVID was a great thing for short-term rentals. It wasn’t a great thing for the virus. It helped the market get a face. 

You said COVID is a great thing but that’s a really good point you made. I’m joking about it. I made a little joke to bring light to something terrible. I want to say this because what this show is about is pivoting a little bit. COVID did hurt our note business. How it hurt our note business is the courts got closed down. They weren’t doing foreclosures and evictions. What did the people like us do that are buying nonperforming notes that need to foreclose? We are not buying performing notes. We are nonperformers and we need to go to foreclose on these from people that aren’t willing to make payments. After that, we have to now do evictions to courts that aren’t doing evictions. Put our head in the sand and did nothing. 

That’s where we pivoted. We said, “People are traveling. People still need to get away. They want to be outside. They don’t want to sit in their house anymore.” That’s why COVID has been a great thing for the short-term rental business. Here’s the thing. What happens when everything opens back up? That area will sustain. Logan has done a ton of research in the market. He doesn’t throw a dart on the board. This is not the show for how to do the short–term rental. We would do it on a webinar, maybe in the group on why that market is good. We were having people hitting us up, “How do I invest my money in that market?” I don’t want to own it but I want to invest in you. I get that too because I’ve got my second short–term rental now on the contract out by the beach. I liked that market that Logan’s examined and I like the opportunity that’s out there. Think about it because it’s pivoting. 

When something happens, I don’t believe that in any market, good or bad, that you can’t make money and you can’t reach what you are doing. We don’t want people to think that we are all over the place like a dog chasing its tail. It’s not shiny object syndrome. It’s adjusting as the market. I have students that tell me like, “Dan, you said you are not doing this.” Now, I’m very careful. I said, “It’s not that I won’t ever do it again but this is what I do now.” I might in the future change and start buying these types of assets again or I might stop lending these kinds of assets again. Right now, this is what I do. You were all in on Cleveland 100%. I was like, “Yeah, I was but that was a few years ago.” 

It’s very expensive and I had a point of sale inspections. I put my money in all the places that were easier for me and more profitable. At this point, I made a lot of money in Cleveland and in Memphis, Tennessee. I did very well now at Birmingham and Huntsville, Alabama. I’m trying to do very well in Charlotte, North Carolina but it’s so expensive already. It might be that point of too expensive. I adjust. It’s not a shiny object. I pivot to what the market gives. It’s like stock traders. The market is high. They are putting boots on. If the market is low, they are buying calls. It’s the same thing. You have to learn in this market. This is what this show is about. How do we pivot? 

In 2020, I thought short-term rentals were silly. 

I still think they are a little bit silly. I don’t think they are 100% because I tell people this whole time and I’m very careful. They were like, “Dan, you are a passive income guy but that’s not passive income.” You are right. It’s not passive income. It’s a business. Short–term rentals are a business but if you have the right team in place, it’s all about your team. You have to have boots on the ground. Logan and I are putting that together. You have to have the right team in place. 

That goes back to a show topic that I want to do next. In the group that I mentioned, I didn’t align with the agenda of the group. The majority of the people in that group were self–managing their own rentals. I wouldn’t have proponent either way. I was, “I can’t afford.” I don’t mean money-wise. I couldn’t afford to manage time myself. My thing was, “You can still make money with having a proper manager in place, even when they are taking 30% of my gross revenue.” People were just like, “There’s no way. I can’t part with 30% of my gross revenue.” I’m like, “The minute that I part away with the 30%, I can go focus on the things that make me 60%, 70%, 100% more than what I was doing.” It’s not about chasing the dollar. It’s about freeing my time up. Again, lifestyle by design, I didn’t want to manage a short-term rental. I don’t want to have phone calls with tenants. There are experts in that field waiting for me to hire them. I found a good one and I put them in place. 

You say 30%. Let’s say, it’s $1,000 a month. You are paying $300 that you made. I’m not for the net and all that stuff. You made $700. You went and you’ve got yourself ten properties. Now, you are making $7,000. You wouldn’t have made $10,000 because you wouldn’t manage two properties with 30%. You made $1,000 yourself instead of paying 30% on two properties. Let’s say even four properties, three hours away from you, self-manage, things are going to break. You just can’t do it. You made $4,000 a month on four properties that you self-manage, but now you took your time back and you were able to get 10, 20, 30 properties at $700 each a month. Ten properties are $7,000. Wouldn’t you rather take $7,000 to the bank than $4,000? 

I didn’t have to. You were thinking about it but then again, you were not. 

I’ve just got a text as I’m sitting here now that says someone is checking in my Airbnb. Ensure they have to check details and so on. Automatic messages go out. I don’t even have to think about it. They have their check–in details. They have their check–out of the details. If anything goes wrong, the property manager will take care of it. I think about it. You are right. It’s not really hands-off. I could turn around and I could save money by doing it myself 100%. 

There was a cost thing. It’s a limited belief of this is a cost to hire a property manager. No, it’s an investment for me. 

Every dollar you invest should bring you back $2 or $3. Your question after that should be how many dollars can I invest then? If I give you $1 and you give me $2 back, my next question is, “How many can I give you?” That’s the mindset. As you said it, Logan, you hit it on the head. That’s limited beliefs. You think, “I will have to give you $1.” No, that $1 bought me back my time to go make $2. I can go out and cut my lawn unless I really love cutting lawns and say $40 a cut. For me, to cut that lawn because I don’t have all the equipment will probably take me a few hours. Even if it’s only an hour, is my time only worth $40 an hour? Everybody can do the job and make $40 an hour. Why the hell would I go cut the lawn that I hate doing? I can go and cut my lawn every week and say, “I save $40.” That’s limited beliefs. That’s your answer to what limited beliefs are. We are coming up almost on the hour and I know you are busy. I’ve got some stuff going on now, too. I love these shows. I love the mess. I love giving back content as you do. That’s what I have. Do you have anything to wrap it up with and we will jump on. 

The root of everything is a good mindset. Click To Tweet

Hopefully, nobody gets tired of us talking about mindset because it is funny, you brought up a great point. Every show has come back to it and it’s not by design. It’s because that’s the way you and I think, and that’s how you and I have got to where we are. We are going to have topics. We are going to jump on and we are going to discuss them. Somehow, they are going to lead back to mindset and all that stuff. If there are things that you want us to talk about a little bit more or have a webinar in the group or whatever, shout out, put something in the comments or review and let us know. We would love to hear some feedback, good or bad. 

Once again, our cost to you is because we don’t have ads now. We just ask that if you enjoy this, you give us a good review. If you don’t enjoy us, let us know why. Share this out with at least five friends. By you doing that, it allows us to keep putting on the show. If we put up the show and nobody is hearing it, we are wasting our time. We love doing it but Logan and I could be on the phone for an hour masterminding and come up with a business plan or help some of our students out. Probably raise a couple hundred thousand dollars making an investor calls for what we are doing. We ask that you help us help you because we love bringing this. We do get feedback that people tell us, “I love that episode you had. That was a great topic. You opened my eyes or you put me in the right direction.” We want to do that for more people. As I said, we don’t charge. We don’t have ads on here. We are not wasting any time listening to ads right now but we want you to share this out. We will see you next time. Thanks so much for spending your time with us. 

Thank you. 

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About Logan Hassinger  

PTP 13 | Business PivotFrom the beginning, Logan had a goal to work in real estate doing what he loves, and wanted to share the passion of real estate with others. Through the years, he has developed a solid foundation of real estate knowledge, the expertise necessary to navigate any transaction; and have the integrity to follow up on promises. Early on, as he began to develop the company and carve his niche in the vast world of real estate, he quickly realized that there is a distinct need for certain real estate services he originally did not foresee. After the 2007-2008 financial crisis, it become apparent that millions of homeowners were losing their homes. So he transitioned from owning rental properties in the Dallas/Fort Worth market to buying distressed mortgage notes with the intent of working with the homeowner to keep them in their home.

Completing in excess of 4 Million dollars in real estate transactions since 2013, Logan and Sage Notes, LLC is excited to be assisting homeowners experiencing financial hardship. We aspire to continue contributing to the continued goal of home ownership along with economic rejuvenation of the areas we serve and its neighborhoods.

As he began to pursue the Chartered Financial Analyst or CFA® designation, he realized that Real Estate was the path for him. They say we grow more from our failures than our successes, and this is a testament to that very saying. He failed the Level 1 exam and the rest is history. He began with a rental property 5 months later acquiring a distressed property and assisting the seller in their situation. Logan continued to add small multifamily properties to the portfolio and protecting his Lenders over the 3 years.

Logan loved the idea of being able to do what large financial institutions couldn’t provide. He was able to provide modification plans to distressed borrowers and keep them in their homes. The portfolio quickly grew to 60+ mortgages in less than a year working with Banks throughout the country.

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