Harness the benefits of passive real estate investing in this week’s episode with Amanda Han, CPA, as she details powerful tax strategies and a real estate perspective from a taxation standpoint. Dial in to be proactive with your taxes, start earning more, and reduce your taxable income legally today!

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The rewarding side of real estate from a CPA’s perspective
Depreciation: What it is and how to use it to offset your real estate income
How to choose the right CPA for your real estate business
Important things new real investors should understand about taxes
What is the ideal asset class for passive investing?


The Book on Advanced Tax Strategies by Amanda Han and Matthew MacFarland https://amzn.to/405VwdW
Rich Dad Poor Dad by Robert T. Kiyosaki https://amzn.to/3ZYqrsT
Cashflow Quadrant by Robert T. Kiyosaki https://amzn.to/3LFsEFk
The Book on Tax Strategies by Amanda Han and Matthew MacFarland https://amzn.to/3TwS9KC
BiggerPockets https://www.biggerpockets.com/

Access Keystone CPA’s FREE Tax Savings Toolkit and discover ways to save your taxes by clicking on this link: https://www.keystonecpa.com/eBook-Download 


Amanda is a CPA and tax strategist specializing in helping people use real estate to save massive amounts in taxes and keep their hard-earned money. She helps educate investors on how to maximize tax write-offs, legal entity strategies, tax-efficient ways to access profit, how to use 401K money for real estate, and much more. She is the author of the highly rated book “Tax Strategies for the Savvy Real Estate Investor” and has been featured in prominent publications, including the Forbes Finance Council, Money Magazine, Talks at Google, CNBC’s Smart Money Talk Radio as well as the BiggerPockets podcasts. Today, Amanda has helped thousands of investors nationwide to save on taxes with proactive tax planning.


Website: Keystone CPA  https://www.keystonecpa.com/
Instagram: https://www.instagram.com/amanda_han_cpa/
LinkedIn: https://www.linkedin.com/in/amandayhan/


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Full Transcript
Amanda Han  00:00
The most important thing for newer investors to understand is that any expenses you spend that are ordinary unnecessary to being a landlord could be tax deductible. And this is true regardless of whether you have a legal entity or not.
Greg Lyons  00:15
Welcome to the passive income brothers podcast.
Tim Lyons  00:18
Here we take the fear out of real estate investing using real life stories of everyday successful investors. Let’s go. Welcome to another episode of the passive income brothers podcast. My name is Tim Lyons and today I’m joined by two absolute rockstars, one of which is my brother, Greg, I don’t anybody. Them
Greg Lyons  00:35
I’m doing well today, and I’m fired up to talk about due taxes. It is going to be a great day today. So I want you to stay tuned in, don’t turn this podcast off, because you are going to learn a lot.
Tim Lyons  00:51
Yeah. So now that I’ve overcome my technical hurdles, getting this podcast started, we can dive into the world of something else I really didn’t understand until a few years ago, which was taxes. But as we were pre recording, just chatting, I told Amanda that I was made fun of relentlessly on a family vacation by my brother in law Bill, who I love, because I was reading Amanda’s book called advanced tax strategies. So without further ado, I’d like to bring on Amanda Hahn, who is a CPA with Keystone CPAs. How you doing today, Amanda?
Amanda Han  01:23
I’m really, really great. Thanks so much for having me, Tim and Greg, I’m excited to be here.
Tim Lyons  01:30
Awesome. Well, you know what, I’ve heard your story. I’ve read your story. But a lot of our listeners have not had the opportunity to do so. So can you kind of bring us because listen, let’s just be honest, we are in tax season right now. Everyone’s kind of going crazy. Everyone’s probably trying to call their CPA Hey, what should I do? And that’s really the wrong time to get involved with a CPA. But before we start on the CPA route, why don’t you take people back to like the real estate experience you had as a little kid with your family and how that’s kind of grown into what you’ve done today? Yeah,
Amanda Han  01:59
it’s really interesting, because unlike a lot of people who kind of haven’t ever had exposure to real estate, I actually come from a family of investors. So I’m the third generation actually a real estate investors in my family. So my grandparents invested a lot in real estate. My parents dabbled a little bit as real estate investors. But I was really taught to take the traditional route, go to college, get good grades, get a good job, that stable, right, stable w two. And that’s exactly what I did. What job is more stable than being an accountant? Right. So I started out my career as a CPA, one of the big four accounting firms. And I happened to end up in the real estate specialty group, which means that the clients I worked on were just some of the largest real estate developers and investment companies nationwide. But even then, I didn’t do real estate. It wasn’t something that was in the stars for me. It wasn’t until my husband actually read Robert Kiyosaki Rich Dad Poor Dad book when he said, you know, we should really do some real estate investment. Obviously, we saw the tax benefits of doing real estate, but honestly, growing up in a real estate investing family, it wasn’t really something that was attractive to me, I literally where I grew up, we were in the same community that my grandparents invested in. So we were kind of like the landlords, grandkids. You know, we did all like we did everything ourselves turnovers, fixing toilets, I saw my grandparents, be very active real estate investors that way, and it was just like, not something I wanted to do. But now fast forward years and years later, I’m really fortunate to be able to work with mostly real estate investor clients on how they can use real estate to save on taxes. And I’ve kind of taken the opposite route with my real estate is very, very passive. My husband, my job, we have properties we’ve owned for over a decade, where we’ve never touched the key. And we’ve never actually gone to the property physically.
Greg Lyons  03:55
Well, you came to the right place, being a passive investor, that’s for sure. to so many people have a different relationship with real estate, and you watching your grandparents, you’re kind of really be that hands on landlord, other people’s Uncle, you know, they used to dabble in real estate and stuff like that. There all sorts of stories out there. But I think the power of real estate is what it could do for each individual. And in your case, you really come at it from the tax advantage side of things. So high level for the people listening that either have single families, duplexes, stuff like that. What are kind of the high level highlights of being a real estate investor from CPAs perspective?
Amanda Han  04:42
Yeah, I mean, you know, one of the reasons that we love real estate when it comes to taxes is that two reasons one is that real estate is actually treated like a business in the eyes of the IRS. So when you always hear people talk about the tax law favors business owners, right business owners get all the benefits and all the incentives. Most of those actually apply to real estate investors as well. And that doesn’t have to be someone who’s like a large multifamily operator, it works the same way for someone who, you know, just has one single family home or even renting out an adu on the property where they live in. So just being able to have expenses to offset the rental income is very, very powerful, right, especially for some of the high income earners, the more income you make, typically the higher tax rate you’re in. So if we’re able to make some additional cash flow in real estate and not have to pay taxes on it, because of these business write offs, then we’re in a really good position. But of course, the other benefit of real estate investing is the whole concept of depreciation, right? Where we can take a tax write off on part of the purchase price of a property over time. You know, one thing I love to say is real estate appreciates in real life, but the IRS allows us to depreciate it and create a tax deduction to offset our income. So kind of the best of both worlds.
Tim Lyons  06:07
Well, I mean, I love that and I also like your husband, I read Rich Dad, Poor Dad, as did Greg and we got basically it was a paradigm shift. It was a whole different mindset that occurred to us like wow, like, this is something that we should be investigating. And very quickly, we read the Cashflow Quadrant, right. If anybody hasn’t read the Cashflow Quadrant by Robert Kiyosaki, that’s the next book you should read in the series. And then you can quickly follow that one up with tax free wealth by Tom wheelwright, and also man his books, right tax strategies for the real estate investor and that dense tax strategies. Because this is overwhelming. I work as a lieutenant in the New York City Fire Department, I’m a former ER nurse, Greg was a former college basketball coach. Now he’s a director, real estate for a family of car dealerships. If you this is not your everyday thing, if you’re not posting up every Monday morning at nine o’clock in the morning and focusing on taxes, this can be really overwhelming. So I think a lot of people who want to get started in real estate, they kind of know they shouldn’t be in it, right. But they don’t understand all the ins and the outs. And that’s where Greg and I, when we talk to investors, we’re always talking about setting up your team, right? You need to have a team, you need to have a tribe. And one of the first people that we always talk about is the accounting side, right? The accountant is so huge, because it’s one of those things that the tax code is written as a series of incentives to help investors kind of make money but also keep a lot more of what they make. Right? So we just touched on depreciation, but can you maybe just take a minute, and just let people know a little bit deeper about depreciation, cost segregation, bonus depreciation, and why that’s so powerful as a active investor, but also as a passive investor?
Amanda Han  07:53
Yeah, I mean, depreciation is basically what we call paper loss, right? Meaning we get to write that off against our taxes, even though we haven’t actually lost money. And the way it works is the IRS says, okay, you’ve purchased this property, and the building is going to deteriorate over time, right. So as it deteriorates, then every year, you get to write off a little bit of the purchase price of the property. So typically, if we’re talking about residential real estate, and residential would be single family multifamily, any property where people are living in for residential real estate, you can write it off over 27 and a half years. So meaning you take the building purchase price, you know, write it off 127, might a little bit at a time per year, for commercial real estate is typically over 39 years. And so it’s kind of a slow and steady way that we can write off the purchase price over time. Now, in addition to that, the IRS does allow for accelerated depreciation, sometimes referred to as cost segregation. And what that is, is when you have an engineering firm look at the building. And instead of just saying, hey, this whole thing is, let’s say it’s a $500,000 building, instead of saying the whole $500,000 building, but to break it down to the different components of what makes up that building, how much of that is specialty plumbing, how much of that is fixtures, and then taking faster depreciation on those instead of 27, half years, maybe I can write those off over five years or seven years. And so I’m accelerating the pace at which I can take some of these tax benefits. And then bonus depreciation is kind of that third layer on top of him where right now we can write off up to 80% of some of those assets immediately. And with these three strategies, on top of each other, is where you’re hearing people say wow, you know, I was able to pay no taxes, even though I made a huge amount of income, right? So we really love that about depreciation and one thing that’s really important for people to understand is depreciation. The calculation of it is based on the purchase price of a property and Not your downpayment. So if I had $100,000, and that used it to buy $100,000, property, all cash, I’ll get a small amount of depreciation. But if I use the $100,000, to buy a $500,000 property, now I’m gonna have a much larger depreciation, so I can basically depreciate the debt, right? I’m taking depreciation on the banks.
Tim Lyons  10:21
So Amanda, I just want to stack on top of that. So basically, you know, Greg and I, we have a lot of passive investors that basically invest 50 100 500,000 million, sometimes into these passive investment opportunities. And they might have a job that they love, and they don’t want to be a full time investor, they don’t want to be a full time real estate, their doctor, their firefighter, their whatever, and they love what they do, but they just want they know that they want to have active participation kind of in these properties, but they didn’t want to do it in the passive sense. So they work with a firm like ours. If that’s the case, and they make more than $150,000 a year, it’s my understanding that they can only take their their passive, you know, quote, unquote, paper losses, and apply it towards that rental income, or that distribution they get from the operators, right. And anything they can’t use is suspended and carried forward. What are some of the ways that a person like that can use those losses? Maybe upon sale? If they maybe do some other kind of passive investing? How are those losses kind of used? Because people I think, sometimes get stuck, like, Oh, if I can use it, I lose it, you know, type of thing. But that’s not necessarily true, is it?
Amanda Han  11:35
Yeah, that’s right. And we hear this a lot, unfortunately, even from tax advisers, right, will tell their clients like, oh, you know, you hear people talk about the benefits of real estate, but it doesn’t apply to you, because you have a job, because you’re only passive. And really, that’s not true, because you have to always look at the financial profile of an investor, holistic, right. So when someone when a CPA says, you’re not getting any benefit, they’re just looking at, you’re not getting any benefit in terms of offsetting, maybe your W two taxes right away. But you are always getting a benefit in when it comes to rental income. Right. So one of the things I mentioned earlier, well, if I’m a high income earner, and I’m typically paying federal and state taxes of 50%, if I’m gonna be able to get cash flow of $20,000, I paid no taxes on it, that’s great now make more income without increasing my taxes. And that’s available to everyone, regardless of whether you’re active or passive, or you have a full time job. But I think it’s also really important to understand that these losses, they never expire, they never go away. So for people who are purely passive, we’re only talking about a difference in timing, right? Meaning, if I was a real estate professional, right, that’s my main job, I can maybe use it immediately to offset income. But if I’m not, and I’m just a passive investor, I will always be able to use it to offset taxes from future income, whether in the future if it’s more rental income I’m getting, or when I sell a property, right when one of these deals exit, I’ll get to use all of my passive losses. Now to offset all the game that I’m seeing, or, you know, we even have other investors for maybe like physicians, who will invest passively in other deals, maybe, you know, invest passively in like a surgery center or something like that. So there are a lot of really great ways to use your passive losses to offset other types of income. Because I think at the end of the day, that’s what we’re all after, right? Creating more passive income without creating more taxes.
Greg Lyons  13:31
Oh, absolutely. Sure, words cannot have been spoken. That’s for sure. When people you know, we talk to a lot of investors they have, they always say, Oh, my CPA said this, my CPA said that. And what we’ve come to understand Gemini is that not all CPAs are the same, right? There’s different interpretations of the way different CPAs look at the tax code. And real estate expertise, I think is really important. If you’re going to get into the field, whether active or passive. What are the kind of the top things an investor or listener should look for when selecting a CPA when they want to get into the real estate field?
Amanda Han  14:12
Yeah, you know, it’s interesting, because earlier, I was saying that, you know, my husband, I were really fortunate, right? We’re really fortunate that we get to specialize in real estate tax strategies. One because we’re investors and two, because it’s kind of our passion, and unfortunately, not many CPAs get to have a specialty, the vast majority of CPAs will work with all types of clients. You know how a couple people that do rentals have a couple doctors, I have a couple who maybe own restaurants, and the tax code is it’s composed of so many things. It’s really difficult for someone to really be a specialist in one area. I mean, even for, you know, for everyone on our team, we’re always constantly educating ourselves because there’s still new things and changes a little intricacies that we’re always still constantly learning to, I think for the The investor who’s looking for an advisor well versed in real estate, you just want to be able to ask some powerful questions, right? Most people are, will come out and say, hey, you know, do you work with real estate investors? But 10 out of 10 CPAs are gonna say yes, right, they’re gonna know someone who invest in real estate or rent out a room in their home. That’s just to give it but you want to ask better question, maybe what are some of your successful investor clients doing right now, in light of the interest rate changes doesn’t have to be tax related. Just want to know, like, what are you seeing your investors do? And get them talking? Right, that I think you’ll quickly be able to see how much they know, or, you know, whether they know what you’re talking about at all? And also have them share? Like, what are some of the tax strategies that your clients in real estate are using? That’s worked out? Well, um, so I think having very open ended questions like that will allow the person you’re interviewing to showcase how much they know. And kind of the level, you know, how in depth they are, in terms of real estate and strategies.
Tim Lyons  16:00
Yeah, I mean, I think I want to stack on top of that, too, because, like you said, if you ask the CPA, hey, do you work with real estate investors? Yeah, of course I do. Because I’m not gonna, like turn anybody away, right. And what I always say is like, if you break your ankle, you wouldn’t want to go see a neurosurgeon, you’d want to go see an orthopedic surgeon, right? They both have indeed, next to their name, but one is much more inclined to treat you correctly than the other person. And that’s the same thing with CPAs, right? I mean, there’s generalist, there’s farming, type of focused CPAs. There’s, there’s all different types. But when you’re doing real estate, you really want to have somebody that understands Cost Segregation studies, are they using them? As a real estate investor, you shouldn’t just assume that your CPA like, Hey, I got a guy. And I know that every year he’s doing or she’s doing the right thing, like, you know, I’m saying like, you want to make sure that they’re really well versed in all the things and also have that conversation. Not right now when we’re in tax season. Right. And Amanda, you want to be having these conversations throughout the year doing some strategy calls, if you’re, whether you’re active or passive or both. It’s really important to kind of get on that get a blueprint ahead of time so that now you can skate to where the puck is going. With that being said, Amanda, you. I’ve heard you on other podcasts. And what I loved about it, and I really wanted you to highlight was that you and your husband both believe in real estate investing, that you in the past have done both active and passive real estate investing in syndications. But I thought it was awesome that your first single family wasn’t in your backyard. Can you talk about maybe some of the limiting beliefs that you had or didn’t have? And why you felt so confident in purchasing a cash flowing asset that wasn’t in your backyard? And kind of how you did that process?
Amanda Han  17:51
Yeah, that’s interesting. That was asked me that before, you know, I think for me, and my husband, Mike, we’re both CPA. So we’re just really numbers, people. And we started out investing, gosh, back in 2008. So for any of you who, you know, been around that long, it was the start of the last real estate crash, really, you know, like real estate was like a bad word. Nobody talked about it. And for us, at that time deals were, you know, abundant right everywhere. And so for us, it was more of just training the way we think and look at real estate, like any other business decision, right, as long as the numbers worked for us, then we were comfortable making that decision. Now, I don’t want to sugarcoat things, you know, because I use the word comfortable, but I was definitely not comfortable. When I first started. I remember when we were signing on our closing paperwork for the first property, like my heart was jumping out of my chest, I thought I was just probably should, you know, jump out of a building and probably losing my mind. But every deal thereafter just gets easier and easier. You know, I think it was really quickly where it’s like, yeah, we’ve you know, as long as the numbers made sense, I didn’t really have to look at the properties myself, I didn’t have to physically do a walkthrough myself. So even though it’s out of state, it was still in an area that I knew very well. And I think that helps quite a bit. And I had team on the ground. You know, for me, I’m a big believer of systems and teams. And so it’s because our first property was out of state really important for me to have a good team in place locally, so that I didn’t have to drive out there to fix the toilets or any of that the middle of the night. You
Tim Lyons  19:24
know, I just want to like say like that’s a huge limiting belief or I think 99% of real estate investors or potential real estate investors is I want to be able to walk through the property I want to touch it, I want to feel it, I want to clean it, I want to paint it I want to do the repairs myself. I want to know everything about the block the school district I want to know everything and they can get potentially tied up in this analysis paralysis. And you know, what I kind of liken it to when I’m talking amongst friends and family is if you’re gonna go buy Apple stock like are you deposing the apple board? Are you touring their properties? Are you touring there? or manufacturing headquarters? Are you taking note? Are you diving into p&l for the last five years? Like, you know? And the answer is probably not, right, because they have a brand awareness and whatever they just think Maybe Apple is a great stock to own. I don’t know, who knows. That’s me. But it’s mainstream, right? And then here, you just talked about it beautifully was you had a team and a system and a process market that was I believe in Las Vegas, and you said, I think you’re from California, right, Southern California. You had some familiarity with that area, because you think either grew up there, or you had spent some time there. And that helps, right. But I think it really makes sense. Like you said, it’s investing where the numbers make sense, it’s not so much investing where you know, where you’ve been, or you know, somebody lives there, it’s really building the team, understanding the market, understanding the numbers. So I just really want to congratulate you on that, because I’m the same way. Except I did it the other way around. I started with a three family property in my backyard, I wanted to be able to drive to it. And I very quickly realized that when there was snow in the forecast, I had to figure out was I going to be bringing the snowblower to the property or my partner, when the leaves had to be raked, I barely got the leaves raked up my own property. Now I gotta go to some other property, like, I kind of wished it might have been 2000 miles away. And I could just call the property manager and say, Hey, could you figure that out? Anyway, I just thought that was awesome. Because I really encourage folks, that can be a hard decision. And we call it the law, the first deal, right, you get the first deal done. And the second deal is a little easier. 30 deals a little easier. You’re getting that education, that experience along the way. And I think it’s probably the same for real estate taxes. Because as we’ve evolved, I used to do my own taxes that I got a guy to do it. And then I had a bookkeeper, and then we have software, and now, you know, evolved, you know, but we didn’t have to have all of that done on the first day. So to that end, when you work with a real estate investor, let’s say has a W two job, what are some of the things that you kind of let them know, like, what are the highlights that you let them know, like, here’s what you should be doing. For your first year as a brand new landlord or brand new passive investor, what a sort of like document retention,
Amanda Han  22:09
I think the most important thing for newer investors to understand is that any expenses you spend that are ordinary, unnecessary to being a landlord, could be tax deductible. And this is true, regardless of whether you have a legal entity or not. I think that concept really repeated time and time again, because you know, I say this all the time when I’m on podcast, but then I still meet people who say, Oh, I would have deducted that trip to the conference, you know, to the apartment conference, but I didn’t have an LLC yet. So it’s important, I understand the IRS doesn’t really care whether you have an entity or not, what they care about is whether you have real estate income. So that’s, you know, rental income, or if you’re doing, you know, real estate commissions. So if you have income, then those expenses are business expenses that can offset the associated income. So a really good practice to get into again, especially for newbie investors, is when you’re spending money, ask yourself, you know, is this something that’s ordinary and necessary for me as a real estate investor? And if so, make sure you keep a copy of the receipt, make sure you have a way of tracking that either in Excel or in QuickBooks, some kind of software, because really, as investors were the first line of defense, right, if we’re not tracking those expenses, our tax preparer will never see it. They never know what happened, because they’re not with you day in and day out when you’re spending money. Right. So that’s one thing. But yeah, I also think keeping, having a general knowledge of the tax benefits of real estate investing is really important. I don’t know if they have to be like you, Tim, where you’re reading the advanced tax book on vacation. But having a general idea listening to podcasts like this, maybe reading a book, The goal of the book that we wrote, was not intended for the reader to become a CPA and start preparing their own taxes. The goal was really to showcase what is possible, what are some of the potential tax benefits you can get as a real estate investor? And really the intention is so that you know enough to have a impactful conversation with your tax person.
Greg Lyons  24:19
I think that’s the biggest thing it’s expanding your knowledge base that it just perfectly right there. That’s why you read the books. That’s why you listen to podcasts is to have a general knowledge. So then you could find the actual expert like yourself to go to deal for help with with the old CPA things. You know, I like you as a as a CPA because you’re an investor. And you said you do a lot of passive investing as well. What are some of the things that you are personally investing in all the past upsides?
Amanda Han  24:52
Gosh, while I’ll tell you kind of a horror story, my first passive investment deal myself in an apartment deal through my 401k, as I work with investors, and I know we talked a little bit before the show, so you know, a lot of people can use their self directed IRA 401 K to invest in real estate. And, you know, I have a lot of clients who do that I help clients with, you know how to do that correctly from the tax perspective. Early on, you know, in my investing career, I thought, hey, I’m going to do this too. But before I teach other people how to do I’m gonna do it myself, and, and everything was really, really great. It’s a great way to invest your money, but I just happened to have picked the wrong deal. Because I invested in a deal where I just really liked the syndicator. And I thought, What could go wrong, right? This is a great guy, what could go wrong? So I’ve since then learned my lessons, when I invest in syndication stuff, I’m not just looking at the deal. I’m also looking heavily at the people behind the deal, because those are the syndicators, the sponsors. They’re the decision makers. So their integrity, their experience is really important. And I think
Greg Lyons  25:54
that’s, that’s really, that’s really interesting. Do you think you invested in the wrong deal or the wrong operator that first time around? Yeah,
Amanda Han  26:02
you’re right, probably the raw operator wasn’t able to make it to make it work. And I think that’s why it’s really important. What you guys do, right? Because for not everybody has the knowledge and insight to do deep analysis, especially on these large syndications, they could get very advanced. So it’s really important, I think, really beneficial for people like you who kind of help investors do that due diligence to make sure they’re in the right deals. But yeah, for me, personally, on the passive investment side, it’s a lot more of like larger properties, mobile, home parks, apartments, those are made me like the asset classes that that I am. And as a passive investor,
Tim Lyons  26:41
that’s amazing. You know, no one really starts off with their losses, right? And say, Well, you know, what, I got started passive investing. And it was a horror show, and I may have may not have lost money. But where was confidence? I’m sure. Well, I know you’ve done multiple deals after that first one, right? Because you talked about them on other podcasts. So I mean, that’s amazing, right? Because like, a lot of people would have been like, you know what, I tried out this passive investing, it was a horror show, I didn’t do well. And I picked the wrong horse. And that’s really why Greg and I started our firm cityside capital was because you know, if you’re, if you’re a CPA, or your, whatever, even a stay at home, mom or dad, right? Like you have other things on your mind, and then due diligence, and how do you actually expect an everyday investor to know, what does due diligence even mean, where do I start? Where do I go to do I type in Google? passive investing real estate? I mean, like, how do I even get started, right? And then to expect someone to know exactly the right questions to ask or to spend the money going on trips, or to go to the local courthouse and see if their taxes are paid. Like, that’s insane like that, that couldn’t happen. So that’s why we created our firm. And, you know, to basically, you know, kind of give that guidance to passive investors that say, Look, this is a vehicle, it’s very powerful. It’s very hands off, you kind of the hardest part of your day is betting the operator and betting the deal and betting the market, right. And then you’re done. Like, you know, you let the operator kind of do their thing. So what was it like then to really maybe have a false start as a passive investor? And then keep going, though, like, what made you keep going like, was it? You knew about the asset class, you knew you were on the right track? Like, what was it that made you keep on going? Yeah, I
Amanda Han  28:27
think just, you know, like with anything in life, right, you fail, but you just have to learn from the lessons. And so for me, you know, one lesson was the wrong operator, right? It was someone that was newer to syndication, but I thought it was just a great guy, right, who I thought was going to be very successful. And so from that, I learned how to pick the right operators. And also the deal itself, you know, at the time, the only way to make the deal work was to go from bridge financing into permanent financing. And I didn’t know how difficult it could be to get permanent financing on a property that has a lot of value add, right. And so So learning from those mistakes is what sort of gave me confidence to say, Okay, well, I can do better, right? Instead of saying, I’m never doing syndications. I’d never want to be a passive investor. I just learned from those mistakes so that my next indication investment was not going to be you know, repeating those same mistakes. I think you’re right. For me and a lot of clients I work with, you know, we have clients who are maybe physicians, right, and, and they have a spouse who’s a stay at home that we were they can be a real estate professional, and they can, you know, get all the tax benefits and so they grow their portfolio and pay no taxes. But it does for a lot of people get to a point in their lives where it’s like, well, I have so much of my own real estate that this is now turning into a job for me. And although I want to have the same tax benefits, I no longer want to continue to grow my own port. folio. And we’ve seen a lot of successful both from the investors perspective and the tax perspective, where people have their own portfolio of rentals to be a real estate professional, but they continue to grow their passive investment side to still get all the tax benefits. Without creating this, you know, very burdensome real estate job for themselves.
Greg Lyons  30:23
I’d say I think one of the most important parts of this podcast has been, you didn’t have a great experience in your first investment, but you kept going. So aside from all the knowledge you have about real estate, and from the tax perspective, the way you just kind of kept going and said, I could do this better, I can bet these people better. I think that’s really, really great. And it’s a great lesson for a lot of, because we hear that a lot. And you know, like, Oh, my uncle lost money 35 years ago, and in a scam. And so now that person doesn’t do real estate at all, and they just, I think they I think you miss out on a lot when you’re not, we’re not willing to explore what you could have done better or you know, which which operator that you place your money with. So, this has been a fantastic episode, I think we’re going to transition to our three questions right now three short answer questions. And the first question is, Tim, and I talk to a lot of investors as to you. And what do you say to people when they say investing in real estate is too risky?
Amanda Han  31:31
Oh, man, I don’t hear that a lot. I think because by the time people come to me, they’re pretty sold on real estate. I think the people think that way, they just have to do a little bit of research, right, historically, to take a look at the trends. I’ve been posting a lot of daily tips on social media. For any of you who don’t follow me yet, you can check it out. I’m usually on Instagram as Amanda Han CPA. So one of my most popular posts, it was just really silly what I even say it was a quote by no one. And the quote was, I wish I never bought my rental property 30 years ago, and it was said no one. And I think that’s, people love that. Right. It’s just a silly quote that I was thinking about in my head at night, and I just tweeted it out. And so that gives you a glimpse, right? Have we all think about it? Really? We don’t I mean, I certainly don’t know anyone who says, gosh, I wish I didn’t buy my property. X number of years ago, most people are saying, Gosh, I wish I would have bought more property. X number of years ago, myself included. I wish I would have bought a lot more back in 2008.
Tim Lyons  32:37
Yeah, it’s a stack on top. I mean, even when people lose money, I still I’ve heard a lot of horror stories from very seasoned folks. And they never say like, I wish I never bought and it’s like they kind of got their their stripes, they earned their stripes, they got that experience, they learned a ton from a disaster. So love that. Number two is from Robert Kiyosaki. And he can be a I mean, he’s certainly one of our de facto mentors, and he can kind of turn some people off when he says the following quote, he says that savers are losers and debtors are winners. What does that mean to you?
Amanda Han  33:15
I mean, obviously, I, you know, he’s a big proponent of leverage, right, using other people’s money to build your wealth to grow your wealth. And for me, as a tax person, I love that concept. Earlier, in our podcast, I went over the example of, hey, if you had $100,000, you can use leverage to buy $500,000 with a real estate. And then you can use the tax code as incentives to create large tax losses. So that’s an example of where other people’s money and the tax code to really supercharge your wealth building. But I think playing the devil’s advocate, it also really depends on the person and where they are in their life. So for example, an investor who is maybe younger, can afford to take more risks, right? Because if things go bad, they lose everything. And the worst case scenario, they have additional working years to make that money back versus another couple who might be retired and living on fixed income, then, you know, maybe we don’t want to have a huge amount of debt. If we’re more conservative, you know, we just want to make sure we protect our nest egg, right. So I think it also differs a little bit depending on where you are in life.
Greg Lyons  34:18
No doubt about that. No doubt. All right. Our third and final question is from Jim Rohn. And he said formal education will make you a living self education will make you a fortune. What does that mean to you?
Amanda Han  34:34
self education. Typically we talk about self education, you’re talking about people who are continuously learning, right? Formal education is required. It’s forced upon us we have to go to school. We have to do all these things. self education usually are people who are reading books and listening to podcasts because they want to better themselves. And I think this is such a huge point because I’m often asked as a CPA, I’m often asked like, what differentiates some of my most successful real estate investor clients from just like the everyday investor. And I think the one key thing is continuous learning. You know, my clients who are multimillionaires are the ones who are always learning, always reading, always asking questions. And so yeah, I think that’s huge. In terms of you know, what that quote really means.
Greg Lyons  35:18
You know, what’s interesting about that, is that Tim is a lifelong learner. And he’s one of the few people I know that can sit on a beach with all three of his kids running circles around him and get at least two chapters. And before you know, even put the sunscreen on, I mean, it’s unbelievable. total chaos. But he’s sitting right on the beach reading that’s been multiple vacations.
Tim Lyons  35:43
Well, that was one of the requirements for a to get married to my wife was, Can I read at least two chapters a day on the beach, even if we have 100 kids? And she said, Yes. And that was amazing, Greg, you know, she may
Greg Lyons  35:55
have forgotten that in the vows, because I’ve seen the chaos. But you got it done. And I love it.
Tim Lyons  36:02
I love that story. Amanda, I really wanted, I had a list of things I want to ask you. And I probably got through about 15% of it. But one of the biggest things before we go is, you know, you early on, we’re into the BiggerPockets community. And that’s the community that really helped Greg and I in the beginning in the early early stages, you know, a number of years ago, whether it was with the podcast or chat rooms, but they’re not. They’re almost like, what do you call those things, Greg? That’s the chat rooms. But you know what, you know what I’m saying? The bulletin boards are the posting rooms anyway. So that’s the message message boards got, I can’t even think about what I’m saying. Anyway, chat rooms, I know. So it does sound a little creepy, right. bigger pockets, chat rooms. I mean, I don’t know where we’re going with this. Anyway, so that was really helpful for us getting started getting a lot of questions answered. And then they have a ton of books, you know, basically for anything from the how to get started to advanced tax strategies. And that’s where two of your books, that’s where I found them. But, you know, tell us a little bit of just really quickly about how you kind of got into that ecosystem. And what that you know, ecosystem has kind of done for you as well.
Amanda Han  37:14
Yeah, it’s interesting. I, I didn’t actually know what BiggerPockets was, I think Brandon Turner had just reached out to me and said, we’d be on a podcast. And you know, I love being on podcast, because I just, you know, like today, I love sharing what I know. And if I can help even one person, then that’s awesome. So I one of the podcasts and you know, didn’t think too much about at the time I taught mainly for multifamily investors. And so I didn’t really think too much. And then over time, I started getting a lot of inquiries into our firm wanting to work with us, because they heard us on a podcast, I started looking into it and like, oh, there’s this thing called, you know, bigger pockets. I think I was on that podcast. And then I think Brandon and Joshua port approached me and say, Can you write for bigger pockets, we really want you to write for free, three articles a week. And I really thought they lost their mind. You know, I’m like, Hey, you’re not paying me. I’m really busy. As a CPA, I don’t know why I would even do that. But a really good friend of mine, Aaron Norris, who was friends with Josh at the time, and he said, you know, this BiggerPockets is really going to take off, I really think you should commit to writing for them, you already have so much knowledge. So yeah, I agree to do that. And, you know, obviously, we know, it’s the the the community itself has just really exploded and, and help so many people. But that’s kind of how my first introduction was a kind of, you know, by accident really?
Tim Lyons  38:37
Well, you know, sounds like you had a more academic use of bigger pockets since I was just perusing the chat rooms. But no, that’s awesome. I mean, I’m sure I’ve read some of your articles. And I just thought that was fascinating. Because that, you know, BiggerPockets community is one of those communities where, you know, if you’re starting off, you kind of you figure out how to, you know, use that the podcast or the article. So I just was, was curious how that happened. So thank you for that. Amanda, this has been awesome. I, as I said, I mean, I got through about 10% of my questions, we’re gonna have to have you back on at some point, because I really feel like you have a gifted way of presenting some of this material that sometimes isn’t the easiest to digest, as evidenced by your book. So if people want to get to know you further, or they want to learn more about you or your firm, what is the best way for people to get in touch with you?
Amanda Han  39:26
Yeah, I mean, if you want sort of quick daily tax tips from me the best places on Instagram, I’m Amanda Han, CPA. If you are looking to work with a tax advisor, then you know, our team really focuses on helping people with the tax planning side of things for real estate investors. We got a lot of great free downloadable resources on our website, which is Keystone cpa.com.
Tim Lyons  39:52
Awesome. Well, that’s gonna do it for us here today. Amanda, I’m grateful for the time that you spent with us today and we will look forward to serving all of you again next week. Thank you for listening to another episode of the passive income brothers podcast. We would be grateful for your support of our podcast by giving our show a five star rating and review and subscribing to our show on your favorite podcast platform. Don’t forget to take inspired action after listening to this show, so that you can start building out your passive income streams. Finally, head on over to cityside cap.com to connect with us and find out more information about how to get started passively investing in real estate