Latest / Coffee Playdate Podcast with Dr. Olga Deengar / One Property. Huge Tax Impact. Ep. 43: Amanda Han, CPA on Real Estate Tax Strategy
Transcript
- Dr. Olga Deengar: Welcome to the Coffee Playdate Podcast. I'm your host, Dr. Olga Deengar and I have a very special guest with me today, Amanda Han. Welcome! Amanda Han: Thank you so much for having me. Super excited to be here. Dr. Olga Deengar: I'm really excited for this episode and I have to ask, do you drink coffee? Amanda Han: you know, I love coffee flavored everything, but I don't drink coffee. 'cause I I don't do well with caffeine, but I do drink decaf tea, which I have here with me. Dr. Olga Deengar: and what flavor is the tea? Amanda Han: it's pineapple strawberry today. Dr. Olga Deengar: Ooh, sounds delicious. Amazing. So we're gonna jump into our first game. It's a rapid fire questions game. I'll ask you to choose between one answer or the other. You don't have to give an explanation as to why. Just go with your gut instinct. Ready? Amanda Han: Yep, I'm ready. Dr. Olga Deengar: First question, writing a book or recording an audiobook? Amanda Han: Writing a book. Dr. Olga Deengar: Cool. Next one, which excites you more, a short-term rental loophole or cost segregation? Amanda Han: Ooh, cost segregation. Dr. Olga Deengar: Next one is tax planning in January or last minute tax conversation in December? Amanda Han: In January, please. Dr. Olga Deengar: And the last one here is learning tax strategy before buying a property or learning it as you grow. Amanda Han: before buying your property. Please. Dr. Olga Deengar: Amen. Amanda Han: my answers be phrased as please. Dr. Olga Deengar: All right, the next game is take a sip. So it's similar concept, but here we both answer and if our answers match, Amanda Han: Okay. Dr. Olga Deengar: we take a sip from our coffee cups. All right. The first Amanda Han: Okay. Dr. Olga Deengar: one is early morning numbers or late night creative thinking. Amanda Han: Early morning numbers. Dr. Olga Deengar: I'll go with late night creative thinking. Amanda Han: I hope I choose both. Depends on the day. Dr. Olga Deengar: That's true, yeah. a dream vacation home or a dream investment portfolio? Amanda Han: Dream investment portfolio. Yay. Dr. Olga Deengar: Yes, me too. Cheers. Next question Financial independence at forty or work you love for life? Amanda Han: Can I ask follow up questions? Like what am I doing at forty? Dr. Olga Deengar: Yeah. Amanda Han: I'll go with Financial independence at forty. Dr. Olga Deengar: Good. I'm gonna go with work that you love for life. Yay. Amanda Han: I picked that because I thought, okay, maybe after financial independence at forty you could then just do whatever you love, but maybe that wasn't the intent. Dr. Olga Deengar: That would be the dream, that's for sure. And the last Amanda Han: Yeah. Dr. Olga Deengar: question here, a food focused trip or an activity packed trip? Amanda Han: food focused trip for me. Dr. Olga Deengar: activity packed for me. That's awesome. Cool. Amanda, I'd love for our listeners to learn a little bit about you and the incredible work that you're doing. Amanda Han: well, I have been a CPA for over twenty-five years. and my firm is Keystone CPA. We most people come to us because they're looking for ways to reduce taxes and they're not getting proactive tax strategies from their accountant. So what we do is we work with people nationwide on ways to use real estate, entity structuring, retirement planning. and alternative investments to build wealth while saving on taxes. yeah, that's I feel like that's what most people come to us for. is, you know, how how can I pay less taxes? Dr. Olga Deengar: Would you say that you you're probably the real estate experts in the field of accounting? Amanda Han: I don't know that you know it's difficult for one person to know everything there is to know about taxes, but we're definitely specialists in that field because most of our clients have real estate as one of their wealth-building vehicles. So whether it's you know someone brand new looking to acquire real estate, all the way up to people who own, you know, thousands of units in in rental portfolio. but you know, I think the fact that real estate investing comes with a lot of tax perks is not a secret, right? I think we all know wealthy people invest in real estate, politicians invest in real estate. but I think what the average taxpayer doesn't really know is how do you actually apply those things to get the benefits legitimately. and so that's a lot of what we do in working with clients is helping them understand what are the benefits, and I think mo more importantly, how do you actually qualify? to benefit those. 'cause that's you know, that's the piece that not that many people talk about is how do you actually you know, what are all the things you actually have to do and document to utilize those? Dr. Olga Deengar: Yeah, and there's so many myths, you know, going around and like you have to make a certain amount of money or less than a certain amount of income. And there's there's so many different aspects of kind of the tax code as it relates to real estate. what do you feel like are some of the the myths that you commonly hear about? Amanda Han: I think two common things. One is a lot people tend to think that real estate tax benefits are are only available for people who have large portfolios. And that's you know, that's not true at all because you know, we have clients even I was so I'm working on a client today. I'm gonna meet with him for the first time. They bought one rental property in twenty twenty six, just closing on it right now, and we're estimating an a reduction to taxable income of about 900,000. So that's just with one rental property. Now that for him was a pretty expensive property. but nonetheless, you know, if you buy a $500,000 property, you might be able to offset, you know, a hundred and thirty thousand or more of income just one property one year. so, you know, it is available to people. And then I would I would say the second myth I hear a lot is people think you have to Do real estate full time in order to benefit from real estate investing, but you actually don't. Earlier you mentioned the short-term rental tax loophole. So we have a lot of business owners, physicians, attorneys, just high-income individuals who are able to continue in their career path, right? Because that's what they went to school for. They're passionate about. But have real estate as a side hustle, using it to build wealth and to save on taxes if done correctly. Dr. Olga Deengar: Yeah. it's true. I mean, one property can make a huge impact. And like you said, people can use real estate as a way to grow their wealth and it can be one of the vehicles to do that. So yeah, I I totally agree. I I love real estate. I I I wanna buy more properties, that's for sure. Amanda Han: Yeah, I think you rarely meet someone who says, you know, I regret buying that property ten years ago, right? somebody might say I regret buying a property a year ago if they're just looking at the market value, you know, that happened in the short term. But I I I think I you rarely meet someone who's bought property and then years later say, I really regretted buying that property Dr. Olga Deengar: So I'm curious to know what brought you to the space, you know, being a chartered accountant within the real estate world? Amanda Han: well, my my mom was an accountant. and so I kind of she always encouraged me to be an accountant because I was, you know, good with numbers, as my mom said. so I started my career at one of the big four public accounting firms, and I happened to end up in the real estate specialty group. So it wasn't by design at all. So there I worked with a lot of the you know, the larger national real estate investment firms and the owners, you know, behind those and really got a chance. To see, you know, my experience in doing accounting, unlike a lot of people, is I started working with people who really did tax planning. You know, the people who are super wealthy, talking to their accountants, calling them all the time to ask for feedback on decisions is is super common. You know, they're they're kind of all taught to do that. And so when my husband and I started investing in real estate ourselves and meeting just you know, everyday investors who don't have a large portfolio, we realize that average folks don't really have that mindset, nor do they have the ability to call someone to bounce ideas off of and and really get the planning. So that's where we started our passion in starting our own practice and we wrote our book specifically really just to spread the message and let people know this is how you should approach taxes. It doesn't just have to be something that happens to you, it is something you can absolutely control, right? If you do the right things that the government incentivizes us to do. Dr. Olga Deengar: Wow. Yes, I love your book. I I do have to show you here. I have both of your books Amanda Han: Ha ha ha. Dr. Olga Deengar: that you and Matthew wrote and they got so much value from them. I mean, so many golden nuggets, things that I never even thought could be things that you can deduct and different strategies in there. So I highly recommend that for everybody. Amanda Han: Yeah, thank you. I mean the reason we wrote the book actually was because you know, as a CPA we read a lot. So we we read a lot of books by other accountants. And you know what we w we felt was you know a lot of the accounting books and tax books specifically are so boring, you know, a lot of tax code and just the all the jargon that it it's very hard to follow. And we thought, you know, if it's boring for us as accountants, how do we ever expect a regular investor to want to pick it up or even understand it? So then we decided to write our book in more plain English, you know, just it's just a lot of case studies of clients, you know, what happens when you do things right and and what happens when you do things wrong. and I think it's, you know, our that's the way we found best to really educate people while keeping them interested. So it's not like a boring textbook. Dr. Olga Deengar: Yeah, it was really interesting to read and it was written in language that you can actually understand. It it definitely took away Amanda Han: Mm-hmm. Dr. Olga Deengar: all of that jargon that you know a lot of the different accounting textbooks are all about. So appreciate it. Amanda Han: Mm. Dr. Olga Deengar: Now Amanda, I would love to know what is it like working with your husband? Amanda Han: my gosh. you know, it's we've always worked together. so we met at work actually when we were at the Big Four public accounting firm. So I think I'll say I don't know what it's like to not work together because we've always worked together. But we work together really well. We are extreme opposites when it comes to working style. So I'm more of the creative one and he is very technical and very detailed. So the way we were together is like I come up with some crazy ideas and then he'll kinda do all of you know the vetting and research and and let me know if that's actually workable or if that's just, you know, actually crazy. So it's a good balance. Dr. Olga Deengar: Yeah, it sounds like you're the visionary and he's the get it done person. Amazing. Amanda Han: Ha ha ha Dr. Olga Deengar: Now you mentioned mindset a little bit, but is there a specific mindset tool that really helped you grow your business and kind of or something you had to overcome along the way? Amanda Han: A mindset change. I think it's really more about, you know, you having a vision for where you want to be and really doing, you know, taking action today based on where you know you want to end up. So I think unlike a lot of accounting, you know, accountants who start their own company, we hired our first a team member, even when we were not really operating in the positive yet. so we hired our our first accountant to help with client work and then we quickly hired a salesperson because we kind of knew that was the cost that we had to take on in order to free us up to do more of the higher level work on the planning side. and you know, on kind of building the business and the systems and all that. So that's what I encourage people to do for those starting out. You know, don't be afraid. And and also when it comes to hiring, don't think of hiring as a cost because that's what a lot of our clients talk about. Like, well, I can't afford to hire this person or that person. And we really have to analyze it from the perspective of profit. If I hire this person, how much revenue would I generate? because that either that person is helping to bring in revenue or it is freeing up my time so I can then generate the revenue or, you know, bring higher dollar value to the client. Dr. Olga Deengar: Yeah, that's a very different way of thinking because you're right, people are stuck in kind of that analysis stage. They're like, I really want to hire a VA or an assistant or my next, you know, team member, but they don't want to give up the immediate cost, like the immediate money that it'll take to pay that person, because they don't really see the big picture yet. Amanda Han: Yeah, and I would say that it also equates a lot to investing as well. You know, I think everybody I meet a lot of people who always say, I've always wanted to invest in real estate. something I always wanted to do. But then when it comes down to it, sometimes it's difficult for people to pull the trigger because they get sidetracked by the noise of the media, you know, with interest rates going up, or we think that the the the market is going down. versus just taking a look holistically historically as well and and say, okay, you know, what are these different asset classes I can do and historically how has each performed to be able to make those decisions by looking ahead versus, you know, today or the fear of the unknown. Dr. Olga Deengar: Yes. And I I know a lot of people have a fear of buying their first property, making that initial investment. and people kind of stay away from investing out of state and they would they would rather invest in state even if the deals are not as good. What would you say to someone who is in that position? Amanda Han: I would say that, you know, you have to just be aware an investment property is different than shopping for your own property. I oftentimes see people who say, Well, I really you know, short term rental, for example, I really want to buy a property in the local mountains because my family I love my family and I love to ski there and you know it'll be a short term rental. And that's great if the numbers work out for the property. But if the numbers don't make sense for the property, I would much rather you buy another one that your family does not utilize, you know, it's not close to you. and you can use the income generated from that property to stay at whichever cabin you want when you go skiing. So it's really just taking a look at it from an investor's lens rather than, you know, me as an individual, what I like. if You know, for investing out of state, I would say the one major thing you want to make sure you have is good boots on the ground for repairs, right? Because that's the one thing you are not going to be able to do. But really with all of the automation and AI that we have, long-term rentals, short-term rentals, midterm rentals, so many of our clients are surprised at how little time it actually takes you know, to kind of manage and run a property, even if it's out of state. So like with any business, it's just about setting up the systems that take you out of, you know, the day to days. Dr. Olga Deengar: Yeah. You mentioned AI. I'm curious to know how does AI play a role in real estate investing? What are some of the tools that you've seen? Amanda Han: I mean there's so many, right? All of the different SaaS platforms are, you know, implementing AI as part of what they do. you know, hospitable is one example that you know, a lot of our clients work with for those who are operating in the short term rental space where the platform obviously knows your bookings, check-in checkout date. It could be connected with your cleaning crew so that they could be pinged on when they should clean, when they have to be done cleaning by. Same with answering guest inquiries. So there's a lot of AI built into those types of platforms that you can kind of curate it right to how you would normally reply and into your own SOP process. Dr. Olga Deengar: Very cool. I wonder if there's an AI out there that helps you analyze deals and how accurate or how good that is. Amanda Han: I'm sure there is. I know for short term rentals, S T R IQ is one that a lot of our clients use. I don't know like how much AI is involved in it, but you know, sort of like a deal analysis tool for those investing in short term rentals. But yeah, I mean I'm sure there are ones for long-term rentals too. Dr. Olga Deengar: Yeah, anything that can help you save time and effort. Amanda Han: Mm-hmm. Yeah. Yeah. Dr. Olga Deengar: Now I want to shift gears a little bit here. I'd like to ask you, can you tell me about a time when you've gone above and beyond either for your team, for your loved ones, to really create an extraordinary experience? Amanda Han: goodness. above and beyond. So my team at the firm, everybody works super hard. And so usually after tax deadline, we'll have a celebration, you know, where we kind of bring everybody together. typically we would do, you know, like a magic show or a Disneyland or something that's really fun, kind of a team building, and then also let loose. but a few years ago we decided to take everybody on a cruise. So we had our team members, they were able to bring their spouse and just kind of like a fun, you know, cruise getaway where we all got to hang out. ended up being so amazing because everybody had said it was just such like a memorable moment, you know, that we got to all not just spend time together with ourselves but with spouses. You kind of get to see coworkers on how they are. with their spouse and, you know, get to know the others, the more personal side of of everyone's family. so that was a lot of fun and it's just something that even now, you know, a couple of years later we still kind of refer to it sometimes in stories of, you know, remember when this happened Dr. Olga Deengar: Everyone still talks about it. Amazing. Amanda Han: huh, yeah. Dr. Olga Deengar: Do you think you'll do that again at some point in the future? Amanda Han: Yeah, yeah. It's funny because we actually tried to do it, we tried to do it again recently, but it you know, as our firm grows with more and more team members, it becomes more and more difficult because somebody's always out on maternity or somebody has to travel, you know. So we I feel like we have to plan almost like two years in advance to make sure everyone is gonna be available. Dr. Olga Deengar: Yeah. Well I'm sure you'll come up with a different celebration, a fun way to celebrate everybody this year. Yeah. Amanda Han: Yes. Dr. Olga Deengar: Now I know you've already given some advice along the way, but I wanted to ask you, if someone is stepping into a similar space as you, what advice would you give them? Amanda Han: you mean somebody who's starting out as an accountant? Dr. Olga Deengar: Yes. Yep. Amanda Han: what I would say is become an expert if you can. You know, one of the things I said earlier is tax. The tax code is, you know, very, very large and expansive. And you really can't be someone who becomes an expert in all things taxes. You know, you think of it as like a physician. I can't be like the best doctor in the world. You know, you have a specialist in cardiology or nephrology, whatever it is. And then it's so strange to me that in the tax world, that's not how it is. Most accountants kind of like, I can do everything. You own real estate, you own a medical practice, like I can do all of it, you know, manufacturing, restaurants. but if you're starting out, try to have a specialty. You know, pick a specialty of something that you love that, you know, like for me, we love real estate. We were doing real estate. So it had a dual purpose. You know, we became experts in in real estate. taxes also helps our real estate investing. So I would say pick something that you love to learn because you'll find yourself spending a ton of time and really enjoying becoming an expert in that subject matter. And then also think by doing that you become a lot more valuable to your clients, right? Because now you are the expert, you're a trusted voice on whatever that ex you know topic area is that they need help with. And as a result, you can charge more for it. Right. So it's kind of a win all around. You get to do something you really love. you get to bring extreme value to the clients that they can't find anywhere else and you get paid for the valuable work that you provide. Dr. Olga Deengar: Yes. Win win win. Amazing. Amanda Han: Mm-hmm, yes. Dr. Olga Deengar: So what are some of the ways in which you've gained that expertise? Were there books that you were reading? maybe conferences that you were attending? Just give our audience a few things. Amanda Han: I think it's all of those things, right? It's reading books, learning from other accountants who have had more experience than me when I was starting out. going to the conferences really allowed me to learn just real estate strategies and business strategies. You know, I love we my husband and I teach at probably a dozen conferences every year. And when we go, you know, we're not there just to s to teach. we also try to attend as many of the sessions as we can. Because we're always learning something ourselves too, whether it's like how to scale a business or you know, how do you manage your properties that are out of state? And I think you know, again, because we're passionate in business, real estate and taxes, all the stuff that we learn we can then share with clients as well, right? So I would just say, yeah, getting as much exposure. one thing people always ask me, like, what separates our successful client, like super successful clients from those who are you know, just we'll say like average, I would say the super successful people are always learning. You know, they might be super, you know, respected in their industry, but they're always the ones that are learning and taking notes and just kind of trying to get to that next level. Dr. Olga Deengar: Yes, the more you learn, the more you grow. And like you said, the more expertise you gain along the way. Amazing. So speaking of books, is there a book that you'd recommend for our listeners who are just starting out in the entrepreneurship world? Amanda Han: starting out, let's see. I have so many favorite books. I would say The One Thing by Jay Papasan it is an amazing book. And you know, I think for people starting out, I mean, when I was starting out in my own business, what's the first time I realized I had to wear many hats? You know, when you work for a big accounting firm. You just did one thing, which is, you know, taxes. That's why you did you had a you know, a department that answers the phone, someone else who does admin. You know, you kind just did your own thing. But when you start out in your own business, you then realize, you know, you're it. You're doing all of the things. And that book, The One Thing, was really good about how, you know, every day you should make sure that there is one thing that you you you identify that you have to do. not administratively, but the one thing to kind of move all other things forward. So that's one of my favorites. Dr. Olga Deengar: Yes, I love the one thing. I I read it many times and I think every time you reread it you get new the thoughts and new ideas coming through. So it's it's really incredible. Amanda Han: Mm-hmm. Dr. Olga Deengar: Definitely want to make sure that you have one focus that you carry through for each day. Amanda Han: Mm-hmm. Yeah. Dr. Olga Deengar: Amazing. So if our listeners want to get in touch with you, what's the best way to do that? Amanda Han: my company is called Keystone CPA. So you can go to KeystoneCPA.com. We have a lot of great free resources. I can also be found on Instagram if you're looking for daily tax or financial tips. My handle is Amanda Han CPA. if you're looking for you know longer form content, I am also on YouTube, Amanda Han CPA. And yeah, if you want more and you want to get a copy of our book. It's tax strategies for the savvy real estate investor. You can find it on Amazon, Barnes and Noble, anywhere books are sold. Dr. Olga Deengar: thank you so much for joining us today, Amanda. It was such a pleasure speaking with you. I learned so much from you and I'm really excited to see what else comes next. Amanda Han: Yeah, thank you so much for having me. Dr. Olga Deengar: Thank you.