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Becoming a Millionaire by 30 · The Capitalizing Your Life Podcast

• “All the information is basically out there you need to know to do whatever you want, for free. There's not really any excuse, I think, for not succeeding in what you want because of how accessible information is.” 00:00:12 Glenn Hello everyone. I'm Glenn, your host of the Millionaire Journey podcast. The goal of this podcast is to guide and empower you on your journey towards financial independence. Today my guest is Jeremy Taggart and welcome Jeremy. Jeremy Hey, Glenn, thanks for having me. Glenn Yeah, I saw you on Twitter, and I found it. Really good Tweets about house hacking and figured I'd have you on the show. So if you could just tell me a little bit about your background and how you got to where you're at today? Jeremy Yeah, for sure. So I started out, I guess we can go back to college, got halfway through school. I went to school to be a financial analyst, so kind of like the standard track I guess. Go to school, get a degree, working on it, find something that's good paying and something I'm good at. Kind of halfway through school, read Rich Dad, Poor Dad. So that kind of - the light bulb went off at that point - and up to that point I was raised by a middle-class family and everything, so I wasn't really exposed to entrepreneurship, investing, business, anything like that. But once I read that book, it was kind of like, “Alright, there's - there's possibility I don't have to work for 40 years after I graduate. I could invest in real estate.” And basically, have financial independence within 10 - 15 years if I do it right. So that was kind of - I caught the bug there - and then the next two years basically went down the rabbit hole, just educating myself on real estate investing mainly. And I was always kind of interested in finance math to begin with, so that kind of sparked my interest. And I just basically self-educated myself on real estate investing with the plan to start investing as soon as I graduated school. So fast forward six months before graduation, I was actually working full-time. I was doing an internship in college and then they just hired me full-time the last semester because I was able to get credits for working. So that was like 3 classes worth of credits. I was working full-time and I actually qualified, got pre-qualified for a mortgage because I was technically a full time employee. So I got pre-qualified before school was even over. Had a house hack under contract - three units before I even graduated, and closed on it right after I graduated basically. So, started the investing career right after that. The first one I bought was a 3-unit building, moved into one of the units, rented the other two out and kind of from that point just scaled my portfolio. I did get my agent license after I bought my second house hack, which was a duplex. And then my agent license, I started doing that part-time. After a year of doing the agent thing part time, in addition to work, I made as much money being an agent as I was at my job. So I'm like, might as well do this full time, and I actually got fired from the 9-to-5 job because I was doing the agent thing at the same time. Like cause you know, I'm sure you're familiar with the corporate world, it's not really about what you produce, it's how much hours you put in. So you finish all your work in two or three hours and then begin in the beginning and they expect you to stare at the wall - Glenn Oh, yeah - Jeremy Rather than do something productive. So I used that time to kind of build the agent business and they weren't happy with it, so we went into the agent thing full-time. This was in 2018 and since then just been doing, being an agent, working primarily with investors to help them buy properties in Pittsburgh and then building my own investment portfolio at the same time. So we're doing that since 2018, and up to this point I have 40 units portfolio here kind of. Single families up to some bigger buildings with a partner I own is like we have a couple 7-8 unit buildings and then pretty much the strategy with that was I've done a house hack per year. So, I'm actually closing on house hack #7 today. I thought six was going to be the last one, but it turns out we're doing the 7th year. So, been doing the house hacks like pretty much my entire 20s, I just turned 30. And alongside that, doing kind of the bird model with single family homes. And then like I said with the partner value - five plus unit buildings at the same time and then I've done a couple house flips, but I primarily tend to want to hold them. So really, just that's kind of been it. I do other investing. I do a little bit of index fund investing, like retirement accounts and stuff, but probably primarily real estate focus. Glenn That's a lot to unravel. I think they've got a great story. First thing I was thinking is - What age did you read Rich Dad, Poor Dad? 00:05:00 Jeremy Probably when I was - I think I was 20. Glenn Ohh yeah, so then it's like you had the picture-perfect start to getting out of college. Jeremy Oh yeah. Being able to discover that so early, and the fact that I was still in school. So I'd like - some people are too antsy when they're getting into real estate, they don't educate themselves first and then they do stuff they regret later. But like, I didn't have the choice to buy a property, so I had two years to educate myself, and that greatly reduced kind of any mistakes I could have made when I did get started. So in the end it, just kind of, I was that much more knowledgeable. So I think it was a good thing that I kind of discovered it before I was actually able to purchase a property. Glenn Yeah, it's also for your, I guess, your real estate agent resume. I think there's, it's such a rare occasion that you come across a real estate agent that invests in real estate. And you know when you get someone that invests in real estate, it's you know, generally they're great agents because they're treating it as it's their own, you know…you know how to underwrite a deal, you can find them. And when you have a buyer, you're able to assist them the same way you would do it for yourself is, which is great. Jeremy Yeah, it made it very easy to be successful as an agent, cause like you said, it was essentially what I was already doing. Like I'm looking at properties myself all the time to buy them. It's essentially the same process, it's just helping other people do it at the same time. So it's very easy to gain credibility when you're so knowledgeable in it. And it was kind of - that's why I niched down with just working with investors because, like you said, there's not a lot of agents that do know that space, so it just makes complete sense to kind of make that my active income source at the same time to be able to obtain more money quickly to put into the real estate investments. Glenn Yeah. So there's… I have like 20 things I want to ask you because I'm like, just as you're talking, I'm just like - yeah, it's great - And the first one would be is about the first job out of college. What was your starting pay there? Jeremy Like 46,000. Glenn Yeah. So you were able to…And how long were you there until - and you used that job to buy your first house hack? Jeremy Yeah. So, I actually got three before I went full-time to being an agent. So I had three house hacks. I that job I left right after the third house hack basically, and at that point, like Pittsburgh is a really good cash flow market, especially pre-COVID. So I literally had all of my expenses covered from three house hacks. Like I was, I didn't have a housing payment and my expenses were pretty low, so I didn't have really any risk of going full-time as an agent just because I had everything covered already at that point by my rental properties. 00:08:03 Glenn Yeah, I think that's also a great thing to take away from this conversation, I - from my experience – I also, I have a broker’s license as well, and I tried to go on my own to do regular real estate. And I was unable to. I did it, but my risk tolerance… Like if you looked at how I invest today, you would think my risk tolerance is very high, but because of the income, it makes you be able to take bigger risks that most people would say, “You're going to go to 100% commission job?” But really, your overhead’s paid for, so you're able to go out, and you know, make better decisions, and you're not being irrational based off of your financial fear of not being able to pay your overhead, because you have the rental income that comes with it. So for me, I decided, I left and uh, I didn't have a lot of rental income. I had like a couple maybe like a couple $100. It wasn't anything to be, it was like paying a cable bill, you know? And, but you know, I ran out of my reserve because I, you know, there was months where you go without hitting a deal and stuff as a real estate agent. And I learned then, that the income was very important to me for my risk tolerance. And then I started really focusing on, I went back to a regular job, and I had to add rental income to it and that's why that's why I always think to myself that how important that house hacking is. You know, with your story, the house hack was the thing that that was able to make you go out and do the career that makes you $0.00 on day one and able to leverage it up so. Jeremy Yeah, for sure. Like I haven't paid my own mortgage since ever basically. So it enables you to get into, like you said, a career as an agent, which has no ceiling on the income; although it can be a roller coaster at times with the variability of it. But having that high ceiling, not having the housing payment is huge, and it I think it actually enabled me to perform better as an agent too. Because agents - if you're struck, if you're up against, you're fearing a crunch to pay the rent - you might act differently with clients to make a sale if you need to pay liabilities every month than if you're covered and you're kind of acting in the best interest of the client. So I think that that enabled me to build trust with clients more also because they didn't ever. I wasn't really ever pushy or anything because I didn't need to be basically to survive. So I think that that helps on both sides. Glenn Yeah. And the…so, so you left, okay, so you left the job after you had three - was it 3 properties that were how many units? Jeremy 36 units. Glenn Awesome. And did you actually, how did you buy? How did you buy into them? Did you move into each one of those? Jeremy Yeah. So, at the beginning, the first one was an FHA loan, 3 1/2% down. And then the next two were 5% down conventional and then 10% down conventional and I got the full seller’s assist on all of them. So really I only needed the down payments, and real estate is pretty cheap in Pittsburgh, especially pre-COVID. Like the first one I bought was 125,000. Second one was 47,000 and the third one was like 85,000 so these…It didn't need to save a ton of money to buy the property, but yeah, the mortgage financing was definitely easy on the first route because of the job, and then I kind of had to wait another year afterwards, because I needed two full years of agent income to get mortgages at that point. So like after I left, it was basically, I knew I wasn't getting financing for another year, so I kind of just put my head down and really focused on building the agent business and that's when I really got that up and running because I didn't really have any distractions outside of that. So it was just kind of head down focused on the agent business, got that up and running, and then I kind of did the two in tandem after that point whenever I could get mortgages again, conventional mortgages at least. Glenn And how? How long? How long have you been on your own with being a real estate agent? Jeremy I got my license in 2018 and I just recently started a team also last year. So now it's a team model kind of got to the point where it was too much for just me as a solo agent. So now I have a team with the few agents underneath me on the agent side. Glenn So, I guess we could talk a little bit about that. How's the business going? Is it you, do you have working with a lot of buyers at this time? Because buyers right now is what you want, compared to listings I would imagine? 00:13:00 Jeremy Yeah, we're primarily buyers just being on the investor side. Like we'll list properties, but kind of more so just investment properties like our clients want to sell or anybody selling investment properties for the most part, but it's still pretty decent here. There's still demand for properties, and Pittsburgh market hasn't really… It's kind of just stayed flat like the past year and a half since rates went up. Starting to see a little bit of distress, I guess, in the multi-family space, so it's getting a little better, but they're still pretty… Not as much transaction volume as there was the past couple of years, but I don't know if we'll ever get back to that craziness? But it's still a pretty strong market here. We have a lot of out-of-state investment just being a cheaper market. So I think that it's that's kind of keeping things pretty strong here compared to maybe some of the higher end markets that aren't really investor focused. Glenn So also with your own personal properties, have you raised funds outside of your own funds to buy properties? Or how does that work? Jeremy Yeah, once I discovered other people's money, kind of in 2020 was when I went down that route. Like was still learning like, up to that point, it was just my own money put into down payments. But then I kind of got more exposed to using private money, hard money. And then at that point, it was really, I didn't use a ton of my own money because I was house hacking, which is very minimal. And then most of the properties I've bought were the BRRRR model or value ads, so it was primarily mostly other people's money for the most part, like I always had my money reserves and whatnot. But I think if I look back at it, I definitely didn't use it anywhere close to like the standard 20-25% down of my own cash. If anything, I put a lot of money like in the index funds and stuff. As far as actually putting my own money into investments. But the real estate, if you discover how to use other people's money and know how to get good deals. I think that's the beauty of that is you can really scale up not only on the equity, but cash flow side at the same time, especially with how the market was past three years with the appreciation. It was just kind of like rocket fuel. On top of that, the timing obviously plays a role, like we're not going to see that the next three years appreciation wise, but being able to utilize leverage smartly without getting out of control in a rising market at the same time it was just like that was kind of the basis of building up the rest of my portfolio up to that point. 00:15:41 Glenn And the thing about the market, is that I feel that in the past, we'll say between 2020 to 2022, it was like a hard time to buy. Like it was very hard to buy. Like you have - I mean - I don't know what it was like in Pittsburgh, but it was like trying to make the numbers work. How is this happening? You're seeing other people doing deals and you're thinking how is this? How is this happening? And then now we're taking a shift, and you know the deals are starting to come out, is what I would say is. And now people are becoming more fearful to buy. So it's like, this is the time to really be, you know, building the systems and stuff like that, that ramp up the purchases. Because we bought a handful in 2020 and then it got very hard in like 2021. Like I actually left my job in, I think 2021, and because we were buying enough and I started, my background’s property management real estate, and I went full time to go manage this portfolio of properties that we own, and it just turned into a - it was like a dry spell of buying deals. It was like I had this idea that we're going to do the same thing we did the last year. Ramp up 100 more units or something like that, and then it's slowed down because we're, you know, you have to stick to the numbers. The good thing about real estate investment is you put it in a spreadsheet. If the, you know, if the numbers don't work, it's not like you can force it. You know, it's like it's either cash flowing or not cash flowing. And I've heard a lot of good things about Pittsburgh. And I've seen this one guy on YouTube where he's always walking through these buildings, and these buildings that you see look like they would be like multi-million dollar, like $20 million buildings. And it's like he's buying them for - I think he was buying for like $500,000. It was just the type of construction. It just looks like, it seems like well-built construction, because we're used to like either wood frame apartments to block. And out there it's like the historic look to all their stuff. It just it, it just looks. But it's amazing how cheap I guess price wise it is out there in Pittsburgh. So. 00:18:07 Jeremy Yeah, definitely good quality housing stock. It's a lot of them need renovated. But as far as the struct for that, they're solid for sure. And we didn't really. I think probably we didn't have a huge run up. Like I think just maybe within that last maybe 12 months period of the low rates is where I was like really noticing like these numbers don't make sense at all. Like I think Tampa was probably a little bit ahead of it, especially with. I think you guys kind of got more institutional buyers and stuff buying there too. We have we have some of that but nothing crazy. But yeah, it definitely gets to the point where you're like, “Who's buying these? How are the numbers making sense?” Which just doesn't add up unless you're putting like 50-60% down. So we didn't kind of start noticing that until recently. And like you said, it started to kind of soften up a little bit too, so I think you just got more uneducated buyers getting into the market and that was just like any cycle ups and downs since people jump in. But then those are typically the first people to jump out when things aren't looking as rosy. So just kind of weeds itself out - ups and downs of the cycles basically. Glenn Awesome. So and I saw on your Twitter you, I think you said that you have done six house hacks. Was it 6 house hacks that you did? you moved? I think that's what I read now. Jeremy Yeah, I've done six. I've moved every year basically into a new one, kept the other one as a rental, and I'm about to close on #7 today. I said six was going to be my last, but seven is gonna be my last. I highly doubt I'm gonna do another one because I'm 30 at this point. I need to, like, do adult things and stuff, but yeah my entire 20s, I was house hacking. Glenn Yeah, I mean for me, it was once you start having kids, then it turns into a whole other thing. And you know, there's different ways to house hack, I would say, but obviously when there's less people to think about it, it makes it a lot easier is what I would say. So you know, with the kids being with you. It's like… I -there was one time, I almost did a real house hack, because I have ways of like that I've done the house hack, but it was pretty much was going to move into this really bad area and I was going to bring my fiancée, wife now but fiancée at the time, and I thought to myself, “Is she gonna be able to walk her dog out here? I don't know if that's gonna be okay.” You know? So, hey, I had to back out. But yeah, that was my first, one of my attempts of house hacking. I've tried many times and I've always not been able to pull the trigger because most duplexes you know could be in, you know, not all of them that, but there could be in rougher areas and but the numbers still work. You know, you can, you can still get the rent next door neighbor to pay your mortgage that you don't have to pay it, you know so. 00:21:11 Jeremy Yeah, they were. Definitely there at the beginning, I was looking at more cash flow from the areas too. So there were, they were definitely some questionable areas at the time, although a few of those areas have gentrified since then, so they were good calls. It was just our work around for that - me and my girlfriend, we've been together for like 8 1/2 years, so she actually bought her own single family house because she didn't want to move every year and she wanted to live in… some of the areas she didn't want to live in that I was house hacking, so she bought a single family house, which is like kind of like my second home. So like, I'm there half the time. So it made house hacking 7 times more tolerable, basically because technically wasn't even there full time, it was kind of half and half, so that was kind of our hacking the house hacks, I guess. Glenn Yeah. Awesome. So where I guess from here - where what are your goals today? Like what are your plans and what would you like to be in a year? five years from now? Jeremy Yeah. So I'm at, I'll be at 43 units total after I close on the house hack today. I don't think I necessarily want to add more units. I think if anything, I'll either sell the properties that are maybe in lower rent areas, so I - just to give you some number of examples here - like in a C class area a half hour from downtown, you're probably renting a two-bedroom unit for say 800 bucks. Whereas if you go in an A class area in the city, you a two-bedroom for 13-14 hundred. So same amount of work management wise. Mentally, just keeping track of these things is arguably even less work in the A class area. So I think maybe getting the portfolio same number of units, but higher rent per unit is something I was thinking about because we have like, I'm really involved in the 1 to 20 unit space here as an agent. So I kind of have an unfair advantage, you could say in that space. So maybe continuing to focus in that space because I know I can get good deals just being so involved, you tend to have opportunities that the general public doesn't have just naturally. So I think maybe staying in that space, but kind of trading up to more quality units but keeping the same number of units - or selling the smaller stuff and just getting one or two bigger buildings that are under one roof, like apartment buildings, at some point to kind of make things more efficient. So I think like I'm good, like if I work backwards, assuming all my portfolio was paid off. At this point, it's plenty enough cash flow to for me to live off of, so I don't necessarily need to add more units, but I'm thinking those are kind of 10/15/20 years down the line, maybe where I want to get to just to simplify my life and maybe even do… I'm not a huge fan of the stock market, but I like it because it's 100% passive. So maybe get a little more exposure to that, but I will never probably be a majority stock market, I'll always be kind of real estate. Like I said, unfair advantage doing it myself -- it's almost like insider trading basically. So I think that's kind of where we'll get to but like right now I'm kind of satisfied with portfolio maybe let those things kind of get paid down and overtime transition into the high quality or apartment buildings again. 00:24:43 Glenn So do you have a property manager or are you managing them yourself? Jeremy So pretty much all of them are with the property management company. I outsourced that January of this year. I still manage some of the higher end ones, like single family homes in A class areas. I think I manage like ten of them. But those are kind of the ones that I still self-manage because they're relatively passive from a real estate management perspective. Just they're higher end areas, quality properties, those are the ones that I figure I can still continue to manage. It's not too much of a help for me. And then I, me and my team, still do the leasing on them as well. So I will lease out those units. So property management I definitely wanted to outsource the majority of things, because that can get very close after so many years. Glenn Oh yeah, yeah. Okay, so I'm just kind of playing it through because I understand what you're saying about paying them down but I'm more of a bigger unit count guy. So what would be the thing that's keeping you from buying more. Like, why? Why would you not want to buy more? Like, why would you not want to take your 40 units to 100 units or 100 units to 500 units? Jeremy I think for me it's simplicity because I know that if I wanted to get to that point, I need to kind of turn it more into a real business rather than just kind of like a lifestyle business, I guess. So I think like, I think that's kind of the breaking point is once you go above 50, you really need to systematize things, turn it into a true business and having a true business comes along with maybe less flexibility in a way. So that's kind of the - going back and forth like I'm the type person, like type A personality, I want to build, build, build. So it's kind of hard for me to, I guess, pump the brakes a little bit, but I'm also looking for simplicity at the same time and that may change in the future, but that's just kind of what I'm thinking now is just focusing more on lifestyle, flexibility, simplicity - rather than squeezing every penny out of the money side of things. If that makes sense. 00:27:00 Glenn So I had this realization the other day, my business partner, his dream when we first started was to start a REIT, which sounds insane in my opinion. And I used to work for a REIT, so I kind of, I don't know like all the details, but I knew like there's like 1500 employees for the company, you know, so. But I think to myself that there was this guy, his name is Wayne Hughes, he's the founder of Public Storage, which is the second biggest REIT in the in the world. And then he started the company I worked for buying single family homes. And I thought about how he did it. I would say that this guy bought, and it I put quote un-quote, bought houses, 100 houses a month in Tampa. And it was probably other markets, 100 houses a month in those markets, Atlanta…And I thought that guy he was probably - I don't - I think he was like 80-85 years old when that happened, I was like, there's no way Wayne Hughes went out and bought all these houses himself. You know, he hired the right people grade A people. And I think to myself him - And I have also - there's been times where I've when I've been in management where I had managed like 1500 people - not 1500 - 15 people at one - like it was insane. There were just so many people and it was very, it was exhausting. But I had have the people that I worked - that I managed - they would always say to me something along the lines of, “Oh, I would never want your job.” And my thought to myself was, “I would never want their job.” You know? So it was like, cause they're working, they're working hard too. I pretty much kind of managed the sales team and they're working their butts off. And I think to myself I didn't want their job, and they kind of thought the same thing. And it was like I thought to myself, maybe I'm that person that's saying I don't want to make - build a REIT because I look at all the work that that's included. But you get, you get the right people behind you… Like Alex Hormozi calls them “Sandras.” You know, the “Sandras” that you give them something and then they take it, they take it from you and they've run with it. And that, “those are the people that I'd like to have,” he said. All you need is 6 Sandras. You know, “If you have one, Sandra, you've gained a level, but if you had six Sandras,” he said, “You're infinite wealth.” - type thing. And I think to myself that. The goal is to, for me would be to like find those people that want to run with the dream and then let it go. And I think that this guy, Wayne Hughes, owned a bunch of horses in Kentucky. And I'm like, no way is this guy buying, you know, thousands of houses a month. But he had the right people to do it, and it was a good lesson, and a mental barrier for myself to think through this limiting belief to myself. So I, and I'm not saying that you have to do that, but I would say that that's kind of the thought that I had too. I was like, “Do I really want to have 1000 units? Or do I want to get to 5 or 10,000 or 50,000?” And it turns into - it gets to a point where it's more, it's empowering to be able to hire people and build up their own lives, as well. To get them to where they want to be as well. So that that was kind of like my “aha” moment. It was about two weeks ago, and I, you're the first person I told this to. I just thought of it while I was driving. I was just, like, my mind was like blown. I was like, I'm limiting myself because I feel like I'm going to be doing the work, but it turns into I just need to find the right people to do the work for me and they will run with it and be happy to do it. You know, so. 00:30:55 Jeremy Yeah, I think the key there is finding good people. Whereas if you're trying to build a business but you don't have good people, you're actually… it's going backfire. But if you have good people, it enables you to be less, less hands on with the business. So I think that as far as if you are going to scale, you really have to focus I think on that as the most important piece because that's going to drive everything the results of everything else. Glenn Yeah. So if you could just, do you have anybody like mentors or anybody that you follow? 00:33:05 Jeremy Yeah, like locally and kind of nationally. Glenn I was also thinking with that scenario too is like I was thinking of these people like this, like these influencers like Ryan Pineda, the Alex from Moses. And I like listen to him every day. And I'm like the I feel like I know these people, but I've never talked to them in my life. Jeremy Yeah, that's how a lot of it is with podcasts and YouTube and stuff social media. It's like you have indirect mentors. Not only people that are, like, local, you know them on a first name basis, but like, I guess that's the that's the cool part about the technology and stuff where we are now is you have access to people you otherwise wouldn't have, if we were, say, 20 years ago. So it's pretty cool for sure. And that's the thing now is like information is so accessible, it's just a matter of all the information is basically out there you need to know to do whatever you want, for free. It's just not so we absorbing the info and taking action on it at this point. So I mean, I don't think anybody -there's not really any excuse I think -for not succeeding in what you want it's just because of how accessible information is like. You, like you're saying, you have access to people that they're doing huge things, and they're willing to give out information of how they've built things for free. And just like, take advantage of that. Glenn One of the things I did see you…I mean, it was about the Student Loans, were did you ever pay those off or did you - are you just letting those ride or…? Jeremy Yeah, they're mine are like 3 ½ - 4%. So I know I can get way higher return on that by not paying them off. So I got that, I got a car loan at 2 ½ percent. Like I was glad to get a car loan at 2 ½ percent, so I'm never paying that thing off until it's just making the minimum payments. So I'm kind of like, I think if the interest rate is like below 7-8%, I’m cool with my pride if I have to make minimum payments on something. But if they were to go higher than that, like some of the line of credits I have now are kind of at 8% - then it's kind of a debate of like “Eh, I should actually pay those off.” Guaranteed 8% starts to get a little different than when it's 2 ½, 3 ½, 4, under 5% basically. You know what I mean. Glenn What advice would you give to somebody, I guess, just starting out and how do you think the best way to start today would be? 00:34:00 Jeremy For me, I think house hacking if you can. If you're interested in real estate, I think that should always be - if you're able to do that - it's a no brainer not to. And then I think, like I said, I kind of discovered using other people's money to scale specifically with real estate. I think using leverage smartly is how you're really going to scale things quicker rather than relying on your own money. So I think those are definitely two keys. And then at the same time, when you're just starting out, I think that gaining knowledge and skills is almost more important than money. So I think the sooner you can gain focus, make that the focus at the beginning, is gaining these valuable skills, skill sets, and knowledge that are going to make you tons of money over the course of the rest of your life. Rather than, say, taking a job that might pay $5.00 an hour more or something, but realizing that you're not going to learn as much in that position. So I think, look thinking long term really with anything, not being short sighted, thinking of the long term opportunity costs than anything you're doing now. I think just really focusing on that. But those are probably just some key points and I think something like that was big for me. And I think everybody when they're first starting out, is just living below your means in general. It's very easy now, especially with higher interest rates and prices of cars so high, houses so high, to almost shoot yourself in the foot from the beginning. Like I see a ton of people graduating college, $200,000 student loan debt, that they go and buy a $50,000 car payment. They're living in an apartment that the rent is 30% of their income. They're basically strapping themselves to this starter job that they're getting right out of college because they immediately have all these monthly liability payments that they have to keep up with. They don't have options to do what I did - go be a real estate agent or something with an unlimited ceiling or more opportunity - because they're kind of strapping themselves basically as prisoners with monthly liability payments that they got to keep up with otherwise. So, they don't really have a choice at that point, so I think that's super important at the beginning as well. Glenn Yeah. Also, as you were talking, I was remembering one of the tweets, I guess, that you did and it kind of goes along exactly with what we're talking about right now. Because first you were saying that you have a car payment now…and then we have, but in one of your tweets, you're saying to NOT have a car payment when you start. And I think that's the value of what we're talking about is getting a cash flow, getting it, you know, it's where your income and your expenses are being taken care of and there's margin in your expenses. And where you're able to make, I think this it's more of a wealth play, when you're looking at an interest rate on a car. It's like it's a 2%, so you won't pay it. But say if you don't have 500 bucks to pay every month, and it doesn't matter what the interest rate is, it could be 0 and it would still not be a good investment, you know, if you're not able to pay it. I think that's the one thing I always think of. Like you hear it on Twitter all the time where people arguing, “Oh, car payments are good or whatever. It's like using other people's money.” And it's like, well in this scenario of you don't have $500 to pay for a car is a bad idea, but if you have the abundance of cash flow it opens up the doors to maybe make something that you don't have to fork up as much money, but at the same time you have cheap money that you're using so. 00:37:54 Jeremy Yeah, like I didn't get a car payment until I was at least a handful of years into it, and that was the point where I actually needed a new car. And that was, I used the tax deduction that for real estate professional, 100% bonus depreciation, at that point in time. So basically, the IRS paid for half of my vehicle. So it was like, I was okay with, especially doing the car payment at that point because I got a huge tax deduction. 50% of what the vehicle actually cost, but the fact that I financed 100% of it at 2 ½ percent, I basically got that money in investing that money is over and above paid for almost the whole payment essentially. So if you can kind of work the tax system as well. But yeah, don't buy anything before you need it. And I think especially with cars, even if you are getting financing at 2 ½ percent, I wouldn't recommend purchasing something that you wouldn't otherwise be able to purchase in cash. I think that's something that, in cars specifically, that I'm a big believer in. Glenn Yeah. What kind of car is it? Jeremy It's a Chevy blazer SUV. Glenn Okay, I'm thinking like at first, I was like, it's a Tesla, because I was thinking that it was a tax deduction and then, but that doesn't seem over the top. Jeremy Nah. Yeah. Nothing wild, I guess over the top for what I was used to as far as that goes. But the thing with the tax deduction is it has to be over 6000 lbs. So we're looking at actually, plus in Pittsburgh and sports cars aren't really practical, so that that was actually 6001 lbs. It's like they designed it for that tax deduction. Glenn How does that - I'm thinking about for myself. I have kids and I have a truck, but it's not very kid friendly, but what is the tax story on that? I've heard it and I've always thought try not to let the …what is it? The tax? The “tax tail wag the dog” or something like that. This is what they say, but… 00:40:00 Jeremy Yeah, like buying something just for the sake of getting a tax deduction. Glenn Yeah. What actually, is the benefit? There - yeah, go ahead. Jeremy So, it's phasing out now, it's at 80% bonus depreciation next year, then it goes to 60%. But basically what it was is if you purchase a vehicle that's over 6000 lbs., whatever the purchase price of the vehicle is, you can deduct from your gross income from that year. So, say you buy a vehicle for 50,000. Buy a vehicle - a.k.a. you can finance the whole thing. So that's what I did. I had a tax deduction straight off the top of my income of the purchase price of the vehicle for that year. So I flipped the house that year and it was real. And it was also 2020 and my agent income was going up pretty good. So I was getting hit pretty hard with taxes as far as that goes. So and I flipped the house I made like 93,000 on the house flipped that year too, which was, that definitely helps scale things along, profiting 93 grand from house flip. But that's why I utilized it because I needed a new car and it helped offset income. So, 80% now if you buy something for 50,000, you can deduct 40,000 off of your taxes for that year. But the cool part is you can finance it if you want. It’s not as advantageous now with interest rates on cars and like we have 8, 9, 10%. But back then it was definitely advantageous. Being able to borrow 2 ½ and get that full deduction in that tax year. So it's only available to like business owners, but like me as a real estate professional, go take advantage of it. It applies to apartment buildings as well. If you get expensive real estate, you could do the same thing with that, with the cost segregation. Get the deduction as much as you can up front that year, so it's time value money basically. You get that money in your pocket. This year can invest it over time instead of having to kind of appreciate over the course of the lifetime of the asset. You can do it all up front in one year and that was something that, that part of what Trump passed back when he was the president. So, it's phasing out now. Glenn So, we'll just say we'll just say the car is $40,000 and so, if you were to make like $100,000 that year, you, that means that your tax basis would be based off of 60,000. Is that how it works? Jeremy Yep, exactly. Glenn OK. Yeah. And it's not towards your tax money, it's towards the income basis and then yeah, awesome. Jeremy Yeah. So and you actually you're paying less taxes on it that year. Glenn Yeah, exactly. There's a part of me I'm in a situation right now where I feel like it might benefit me and I'm like, well, give me one good reason to buy this truck, you know I - Jeremy Oh yeah, people were going crazy with it. Like G wagons, and like, were popping up all over the place, especially like down in Miami with all the crypto bros down there. Like you would saw G wagons everywhere, so it was, and that was the thing is, it's 6000 lbs. or higher was the requirement. So, you, everything 6000 lbs. and higher was like going crazy. 00:43:09 Glenn Yeah. And the other thing that I always think of with that is that - it was like 2006 - you saw all these H2s and all these gigantic SUV's and then, you know. And just, and then people getting criticized for that tax benefit because it, you know, it just straps those payments on the people and because they're doing it for tax advantages. But you still have the payments to pay for - Jeremy And they didn't even need the vehicle. Yeah. Glenn Exactly. Yeah. But no, it sounds awesome. You're doing great and I think -I bet if we - I'm making a prediction, you don't agree with it, but you'll probably be at 80 units before we know it. Jeremy No. Yeah, that the plan was to stop at 30. My girlfriend gives me shit about this all the time, and she goes, “Oh, we're stopping at 30, and now you're, you blew past that right away.” I'm like, right. It's so addicting. Like when you're in the business. Yeah. Like it's just something about the money. At a certain point, just kind of the art of the deal. And I wouldn't - I wouldn't be surprised either. 00:44:15 Glenn I would say that a lot of people, I think I sent it a tweet out today about it, but it was - people are critical on like all you need is 10 rentals, but I can tell you that I managed 330 units, and 330, or 350 something like that, but I don't have to do much. I literally talked. I have 3 girls in the office and they manage most of it, and I have to oversee a lot, and I might drive to properties, but nothings pressing for time, you know? Like I drove literally. I drove all day yesterday, but other than that, most of my stuff is a couple hours of work in front of the computer and making sure that the bills are right and then putting those systems in place. And it's like I say to myself, I have 350 units and 1000 would make this easier. Like that's - I know it would because I can hire this a solid, you know, we can get quality property. You know, all these people in place and better systems, higher pay for everybody and it will make it easier for myself as well. So it is, I would imagine that the person that has 1000 would say that 2000 would make it easier. So you know it's, there's a never ending, you know, need But it was great having you on. I love the conversation. If people could follow you, I'll have all of this contact information in the notes below or in the podcast notes and, yeah, I appreciate you coming on, Jeremy. Jeremy Yeah, no problem at all. Thanks for having me. Glenn All right, thanks for listening and make sure you rate, subscribe, like and comment below. Thank you.