Show Summary

Many real estate investors hate the ‘business’ side of the real estate investing business. It’s an afterthought. Setting up legal entities, worrying about taxes, insurance, banking accounts, etc is not the fun or sexy side of the business. But, the expert investor knows those things are critical. Keith Borg joins us for this episode of the Expert Interview show to tell us how to set up your business properly to maximize profits, minimize headaches, and protect yourself and your assets. Check it out!

Highlights of this show

  • Meet Keith Borg, CPA, real estate investor, tax strategist.
  • Learn the right way to get your real estate investing business set up and structured to minimize taxes and headache, and maximize profits.
  • Join the discussion on new accounting rules that you may not be aware of yet, that can save you a ton of money!

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Listen to the Audio Version of this Episode

FlipNerd Show Transcript:

Mike: Hey, It’s Mike Hambright with Welcome back for another exciting expert interview where I interview successful real estate investing experts and entrepreneurs in our industry to help you learn and grow.
Today I’m joined by my friend Keith Borg he’s a CPA and a tax strategist that focuses on real estate investors through his firm, The Borg Firm. In fact, Keith is a real estate investor himself, owns some single family and recently some hotels, and so he very much practices what he preaches.
The reality is most real estate investors hate these parts of their business. They hate bookkeeping and accounting, and the banking side and keeping that all organized. But it absolutely will separate you from success or failure. These are the things that are the most important the end of the day, and getting this right is very important to your business.
So today Keith is going to share with us how to properly set up your business to maximize profits from an accounting standpoint, and a banking standpoint, and a tax standpoint, so we’re going to dive into that with my good friend Keith Borg here.
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We’d also like to thank Crestar Funding, MidAtlantic IRA, and Renters Warehouse.
Please note the views and opinions expressed by the individuals in this program do not necessarily reflect those of or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.
Hey, Keith, welcome to the show.
Keith: Hello, Mike, how are you doing?
Mike: Good, good to see you. What some folks don’t realize is we actually didn’t even talk about this beforehand but we’re really just a few miles apart right now, right?
Keith: That’s right, not far.
Mike: And you live actually pretty close to my office. I know your office is a little further away, but, hey, it’s great to have you on and we talk about this all the time, how important this topic is and there are so many real estate investors that are stuffing receipts into Ziploc bags and grocery sacks and stuff saying, “Hey, somebody else is going to take care of this down the road.” Is that a joke? People will actually bring you bags of receipts, right?
Keith: You know what? People try to bring that to me every single year, yes.
Mike: They try. Do you turn them away?
Keith: I ask for their sake that they go through things and summarize things a little bit more because sometimes you’re looking at a receipt, you don’t know exactly what this receipt at Home Depot was for or what house it applied to, so they’re going to have a better idea what that is and typically it’s more cost effective for them to spend a little bit of their time than pay me my rate to filter through that for them.
Mike: Yeah, yeah, great. Well, this is an exciting topic that we’re going to talk about today. Before we dive in to it why don’t you tell us about your background and how you’ve evolved in real estate, how you got started and where you are today.
Keith: Sure, sure. So I started my career with Deloitte & Touche way back when and I’ve been doing taxes since 2006. In 2010 I bought my first couple of rental properties, I since went on to purchase 11 rental properties. I’ve got experience with owner-financed flipping. My wife, in our relationship, is professional real estate investor so I cam focus on the accounting practice.
Then during my off-season a couple years back I was a director of acquisitions for a hedge fund. Through that fund purchased 875 houses mostly through MLS and courthouse steps auctions, and then most recently got my first hotel in August, purchased another one here a couple of months ago, and then most recently just started working on a third hotel which is probably a few months out.
Mike: That’s awesome that’s awesome. When did you kind of have the real estate bug? Was it something you had before you were an accountant or you kind of picked up along the way?
Keith: I read Robert Kiyosaki’s book back in college and it stuck with me, and then when I moved out to Texas from California, originally San Francisco, moved out here and I just saw some opportunities then there was a few guys that were teaching how to do real estate, and I just went, learned and put into practice what I was learning.
Mike: Yeah, yeah, and from your perspective you could see the tax strategies. I think a lot people that get into real estate investing, they know those things are there but they’re kind of down the line in terms level of importance, at least in their minds, in terms of sexiness maybe. I know my account, the account that I’ve used for a long time, he also invests in real estate and literally he gets giddy. He’ll start chuckling like a little kid sometimes about, like, telling me about tax strategy. I’m sure that you saw the value of that right out of the gate, right?
Keith: I did. Tax strategy, I hate to say, but governs my life more that I like to say. Actually, the year we got married is the year that I found it most favorable to get married because there was a good tax strategy implication. We probably dated a little longer than what my wife would like but it has worked out for us, yes.
Mike: Yeah, awesome. Well, I know we’re going to talk about how to properly set up people’s business and I guess what I would ask is if we can talk about it from the context of really two things. One is people that are just getting started because they are kind of starting with a clean slate. But I know we have a ton of listeners that are already real estate investors that are well down the road in terms of running their business, but they may have some kind of structural issues that they could do differently as well.
So if you could kind of talk about some of these things in the context of how it could serve somebody that is already in business, because once you’re out of the shoot, sometimes it’s hard to go back.
Keith: Sure, so just some of the real basic things and the most common questions I get is, “Do I need an LLC?” You don’t have to have an LLC. The attorneys will always push you to have an LLC and I’m not an attorney so I will always say follow the advice from your attorney, but in reality, I’m focused not so much on the legal structure as I do the tax structure. Obviously, I’m a CPA. In most cases, if you’re going to have legal entity it’s going to be an LLC and then how you’re taxed is the question your attorney is going to typically ask you.
So the main ways you can have an LLC taxed are either as a partnership, S-corp, C-corp or disregarded entity, and disregarded entities are typically filed through a personal tax return. Partnerships are typically best for holding long term assets and it allows you to pass through the most amount of benefits from your properties. So if you’re owning houses, hotels, apartment complexes, usually a partnership is going to be the best way through, plus it offers the most flexibility to structure things.
S corporations are typically what you want to do if you’re having any sort of earned income. So if you’re wholesaling, flipping where it becomes a business, there’s no set a set amount but probably somewhere around 10 or more a year, or where it is one of the primary drivers of your income, that’s when it can become a business and we can actually be hit with self-employment tax. So anything that will generate self-employment tax, an S corporation can help you save some money on your self-employment income.
C corporations are more helpful as a management company. So sometimes there are certain things you want to separate yourself from or you want to set up certain retirement plans or medical benefits plans, medical reimbursement plans, that’s where C-corps come into play. When you’re first starting out, you can have a lot of that stuff just flow through to your personal tax return.
So if you’re really not certain and you’re just kind of testing the waters, you don’t need to set up anything too sophisticated. I know if you go through some programs by some gurus you can come out having spent $10,000 or $15,000, $20,000 on legal and tax structures, but you don’t even have a business. So you may pay for the perfect business, but you’ve got to have the business to go along with.
So I’m a big fan of making sure the science and sophistication of your legal and tax structure matches the size and sophistication of your business. As you grow and get more sophisticated, there’s going to be more sophisticated things that you can do. So I’m going to talk about a few more of the basic things, but as you are more sophisticated and you have a lot more businesses going on, there’s a lot more opportunity for somebody as myself to add value.
Mike: Yeah, and although you’re not an attorney, you definitely would never advise anybody to start running a business as a sole proprietor, right, with no legal structure at all.
Keith: Well, it depends. If you look at rental properties, a lot of attorneys will tell you to put it in an LLC. But if you go talk to your lender they’ll say don’t put it in an LLC because then you could be potentially triggering the due on sale clause where the lender has the right but not necessarily obligation to take your house back from you, or at least they don’t take the house but they’ll ask for the loan amount back if they find out it’s been moved. In reality, they may not actually do that, but it’s something you need to be aware of. So talk to your attorney, talk to your lender, I’ll let you reconcile that. Sometimes I help investors sort through that but my intention is not to offer any legal advice here.
Mike: Yeah, yeah, I understand that. Awesome, so after somebody has their entity set up, how would you advise people, what’s a little bit tricky is if you’re already running a business and you realize that you have the wrong legal structure, sometimes it’s tough, especially if you have rental properties because, for example, all of our rental properties are in an S-corp. And we’ve talked about transferring before but it would maybe constitute it, it would maybe trigger a sale which be a taxable event for us. So without getting into the details of my situation, what are some kind of pitfalls or advice you say to people that realize that they might be set up incorrectly now and that those entities are actually holding properties, like any kind general guidelines on how to right that wrong?
Keith: You know what? On that one, either one you’re going to transfer it from one LLC to the other and sometimes you can transfer, look at purchasing the stock out, sometimes you outright buy and sell the properties, other times you just okay with it. If you’re going to hold the property for another few years anyways, maybe you just sell out outright. That’s really going to be a case by case basis that really needs to be evaluated. I don’t have any solid rules about that.
Mike: How about in terms of beyond a legal standpoint just things, maybe a couple of examples of things that could trigger a taxable event that would prevent you from making . . .
Keith: Sure, sure. So with an S-corp, if you don’t want anything in any sort of corporation, if you were to distribute that property outside of the corporation, you’re going to have to pay the fair market value of the property. So let’s you bought a house for $100,000, it’s rental, it’s now worth $150,000 a few years later. If you were to try to transfer that over to a trust or to yourself firstly for any number of reasons, then you would now have to pay the difference between the fair market value and your original basis, what you originally purchased it for, and it’s kind of this phantom gain.
If you do it as a partnership, that’s not going to trigger that same gain, and that’s one of the reasons why I’m a fan of using a partnership instead of a corporation to hold any sort of assets long term.
Mike: Yeah, okay, All right. So after somebody has their entity set up properly, where we go from here?
Keith: Simple things. Getting a bank account, it can be a business account if you’re actually using an LLC. If you’re just going to be filing it through your personal tax return and maybe doing a DBA, it can be a personal account that you set aside just for business. The main thing is that you’re not co-mingling your business transactions with your personal transactions. If you’re ever audited, it’s a lot easier to show the IRS that clearly organized, that all these expenses going through this personal bank account are business expenses, and maybe they don’t pick at it so much because they see that you got clearly a method versus if it’s all co-mingled with the personal they may pick at every single expense.
Then the next step is possibly getting a credit card, either get a brand new business credit card or taking an existing personal credit card, pay it down to zero and only use it for business going forward.
Mike: Okay. What do you think about in terms of different types of account accounts to do different things? One of the things that I’ve advised people of in the past is to have an operating account and then a property account because in my business we do a lot of advertising and you never want to get to a point where like, “Do I finish that rehab or should I pay for my advertising, or should I pay my employees?” To keep your operations of your business totally separate from the actual activities of your properties, any guidance there?
Keith: Yeah. I’ll speak to what I personally really like to do is I have one account that has my rents and expenses and any wholesale income, I’ll put that together or actually my wholesaling activity, what I used to do, was in a separate business account. But I keep all my income expenses going through one and then I’ll have separate reserve account. That reserve account is typically made up of like six months worth of cash flow on each my properties, six months worth of expenses for the lenders for the rentals, and then also be made up of maybe my tenants’ security deposits as well. If I had them all move out at once, then I’ve got enough money to cover it.
The other thing I found when going through lenders, is the lenders will typically ask, “Well, show us all your money.” So you give them all the bank accounts and they sit there and they pick at all your deposits. So what I found to do after some hard learned lessons and lots of answering lots of letters of explanation is to have a single account with a large chunk of money in it, with no income, nothing coming in or out.
So I show them a single account with $10,000, $30,000, $50,000, $100,000, whatever amount I need, I find that out when I initially purchase the property. Maybe I purchase it through a private money loan or a hard money loan. I’ve typically got maybe two or three months before I actually refinance I find out then how much I need to show, and I just don’t have any transactions going in or out of it. They got nothing to pick at. It makes the whole refinance process so much simpler.
Mike: Yeah, yeah. And in terms of keeping them separate, in terms of people that are doing repair draws and stuff like that, you probably want to not co-mingle that with your operating funds as well, right?
Keith: Correct. It’s good to have, if you’re doing a lot of rehabs especially, having a separate account for that too.
Mike: Yeah, yeah. Any kind of guidance on the types of banks to work with?
Keith: I personally like the . . . it depends on what it is. For the operations, I like working with small to medium size banks here where, especially if you’re looking to get loans from local banks, that’s extremely valuable in the beginning. In terms of if you have rental properties spread out all over the place or you’re doing businesses in multiple locations, that’s where it’s more helpful to go with one of the mega-banks. I don’t necessarily like them for the lending, but they’re great in having multiple locations or being able to have a tenant deposit the rents. That way they can go that method.
Mike: Yeah, we found out that too. We bank, not that I’m advocating banking with Chase, but we found that we work with some smaller community banks for funding our rehabs and lines of credit and stuff like that, but we drive past like 15 Chases on the way to that bank because it’s on the other side of town.
I remember, I don’t want to throw anybody under the bus, but one of the community banks we work with, the smaller banks, got all excited about this new app that they had that they just come out with, but it was like three years after like Chase and Wells Fargo rolled it out. It’s like you just can’t compete with those guys for ease. So we’ve always used them for more of our operating account of running things through there that are quickly that we almost never even go to the bank, we can do everything online and then of course we keep money in the community banks where we borrow money from. We usually have our rents go into there from some our rentals and things like that to kind of keep them happy as well.
Keith: We use a medium sized bank here in Texas and we’ve got a personal bank here, so that if we need something, we call them up they take care of stuff for us. Once we got that, that just makes things so much easier.
Mike: Yeah, yeah absolutely. Awesome. Okay, so we got your legal entity set up, we’ve got your banking structure, where do we go from here?
Keith: So from there we’re going to want to make sure that you’re keeping track of all your income, all your expenses. You want a method to do that, whether or not that’s QuickBooks. I do teach QuickBooks class for real estate investors. You can also do like  HYPERLINK “” There’s a number of a real cost effective sites out there.
Mike: That’s great, yeah. Can you comment of any of those? I’ve seen a bunch of ads for them but I’ve never used them myself.
Keith: You know what? They’re new, I’ve got a couple of clients that are trying them out now. I haven’t heard anything really either way on them so far. So I think the  HYPERLINK “” will be great for a standard business. I don’t know if they’re going to be so good or rentals, but if you’ve got like a wholesale or a flip business, that’s probably going to be a little easier for somebody like that to track where income goes to one account versus rentals having to sign the rents and expenses to a bunch of different accounts.
Mike: Any kind of guidance? We have an in-house bookkeeper here in my office. But I know literally every receipt I get, the first thing I do is that I turn it over and I write on the back what’s it’s for. Any kind of guidance even if they’re not doing the bookkeeping how to help themselves help their bookkeeper?
Keith: So the main thing is you want a way to keep track of what you spent money on? So I have my receipts so when I’m checking out at Home Depot, maybe I’ve spent some money on one of my rentals, then I will take an extra 10 seconds and maybe piss off the guy behind me in line, but I’ll write what house it was for and if it’s not clear from the description what it was for, whether it was plumbing or something, and then I can actually pull out my phone at that time, snap a quick picture of it and there’s actually an app I have, I forget what it is but it automatically zeroes [inaudible 00:19:57] receipt and now I have a copy.
That’s then set to automatically upload to Dropbox and then I’ve got everything I need. So then once a month I just go through it, based on the date that I uploaded it, I know month it applies to and if I have a bookkeeper, they can now go through just from the image of the receipts and state that.
Alternatively, if you’ve got your HUD-1s and whatnot, now I have everything, I just scan it, I have a nice scanner, scans everything in, and I’ve got everything is paperless. I don’t keep paper records on me that I just don’t need to.
Mike: Yeah, that’s great, I think, for people that are listening that this resonates with. Historically we used to have these for all of our properties whether we’re . . . when we were buying 60 or 70 houses a year, staying organized is even more important than when you start to get lots of rentals obviously. But we had this, it was like a mail room. We had all these like cubby holes for everything else. There were specific properties. Of course there’s a lot of easier ways to do that. Somebody called me an old guy the other day. Really? I’m like becoming that guy all of over sudden, so
Keith: No comment.
Mike: What’s that?
Keith: I said, “No comment.”
Mike: Come on now. Relative to you maybe.
Keith: And then I was also going to mention one other thing I like to do for the mileage. A lot of people are missing out on mileage but for 2015, you can deduct $0.5750 per mile that you drive. A lot of people find it a hassle. They’ll have some little book or something like that they can try and record that in. Everybody’s got their own method. I prefer a little app called MileBug.
When I get into the car I press start. It knows where I started and I drive over to my real house. Then most people, if you’re just doing like Google maps and stuff they just record the mileage there and back and they miss out some of the other mileage. So if I go to my rental house and I realize it needs repairs, then I have to go to Home Depot, drive back to the rental house, realize I got the wrong part, go back to the rental house and then maybe drive through the neighborhood to see if there were any other houses I wanted to buy.
So there’s no great way to do that just by tracking it through Google Maps or what not. But if you have this little app, at the end of the day I press stop, I write a little description of what it was for and I’ve got my mileage, at the end of the year I can export it all to an Excel spreadsheet and email it to myself.
Mike: Yeah, that’s great. That’s great. I think there’s another one maybe called MileIQ or something that I know a number of people have used.
Keith: There are several of them out there. Whatever works for you, that’s just the one I personally use.
Mike: I think that MileIQ one, maybe MileBug does it too, it actually will send you a summary report at the end of the month, at the end of the week of you can get in and say which property I went to or what I did or, anyway, there’s some really cool tools out there. It’s actually kind of scary to think where things might be in just a few years from now even.
Keith: That’s true.
Mike: Yeah, yeah. Talk a little bit about the relationship that people should have with their bookkeeper, their account and then we’ll kind of get into tax planning too because I tell you, for years, usually it’s November, we schedule a tax strategy meeting with our accountant and I always look forward to it because I know they’re going to find a way to save us money or tell us how to do something different. It’s always, whatever we pay per hour, we always get 20 fold that back in terms of benefit, but we’ve kind of gotten to this process where this is just what we do every year. The year is not finalized yet, we can adjust how we accounted for certain things, they’re going to tell us about any kind of tax rules that were different from the year previous and that’s kind of how our process works. Just talk about what a typical relationship is and what that should look like I guess.
Keith: That should be, you go to your accountant and he should be your go-to for tax strategy questions. You should be able to give him a call and he should be able to get back to you know in a reasonable time and really provide some value. There’s a certain amount of value of just being able to prepare your taxes in a way that is going to be beneficial. So there’s some small things I do with tax preparation to, one, make sure to review how your tax return looks to a lender if that’s a concern to you, you’re trying to qualify for loans.
There’s the other thing you just develop as a tax preparer that you know that maybe no other tax preparers know. So I know that a lot of hard money lenders are now charging two points with the refinance instead of at the backend. Well, you’re never going to see that broken down on any sort of interest statement. The only way you’re going to know that is by comparing the payoff to what the original HUD-1 is, and so there’s some extra steps you can do there.
Beyond just tax preparation, then there’s the tax strategy part. When you’re first starting out, there’s not as much you can do, but as you’re grow and get more sophisticated, that’s where I will do formal tax plans and I’ll sit down. For me, it takes anywhere from maybe between two and eight hours to put a tax plan for somebody, depending on what the level of sophistication is, and those plans have saved people anywhere between . . . I think the least I saved somebody this year was about $10,000, the most that I saved somebody this year was a little over $150,000 a year in taxes.
So those really depend and they’re priced depending on what the tax savings are, and it’s something that when you’re saving somebody that much money every single year, that’s where the real value is. I also like to meet with those kind of clients, I like to check in with them either on a monthly, quarterly or semiannual basis depending on how much they have going on. But I also want to be available to them should they have any questions and they’re considering doing this business or that business or how it’s going to affect them and we brainstorm together.
So for me, I ended up doing a lot more than just tax preparation sometimes. I act as investment adviser too so I know a lot more a lot of what the players are and so even the investment tax strategy kind of blend together sometimes.
Mike: Yeah, I don’t want to take that lightly because I know, again, he has sold his practice but our primary tax guy that we used for years, our accounting tax guy, owns a turn of rental properties, so he was a real estate investor as well so he knew. It was very common for us to go to those meetings and he would say, because we have multiple legal structures so we have a C-corp, and he’s like, “Don’t do that in your C-corp anymore.” There were a bunch of donations that we provide but you’ve got some limitations by doing it in a C-corp that we didn’t really understand.
So he was like, “Next year you need to do them in this other S-corp,” which for us it provided the same value to whoever we’re donating to, but it provides some tax benefits to us to do it one way versus another, or potentially running some wholesale deals through our rental entity because it puts some cash flow in there and there’s tax implications to that but we could pay off, if we’re looking to pay off rental properties faster, rather than just through kind of rental income you can do different things.
I think it’s a lot of value to work with somebody that really understands real estate investors, but it’s not that there are not a lot of those out there, but some of the best guys like you and some other folks around are kind of hard to find.
Keith: Yeah, yeah. But I think the value is worthwhile at the end.
Mike: Yeah. What do you recommend on how to find a great accountant and tax planner in the real estate space specifically?
Keith: Go talk to your REIAs, go talk to other investors. I feel with anybody, I tell anybody that wants to work, go talk with other investors and see what value they’ve gotten out of it and they’ll tell you to the good, the bad and the ugly. If you like that, then absolutely go work with them. Go check out I think you guys have some vendors on there. I know I’m on there.
Mike: Yeah, yeah. That is the actually the best website in the world to go to. So just drop everything, just hit pause on this interview, don’t close out the window and go to
So, Keith, tell us a little bit about your how your business has evolved. You started to buy some hotels recently and kind of tell us how that’s going.
Keith: Sure: As I’ve grown and evolved, I’ve started working with, just over the years I’ve been working with primarily with real estate investors since 2010, and so a lot of those clients that I initially had have grown and evolved. I’ve got a lot of people that started off doing single family rentals and have since started HomeVestors franchises that have gone into commercial. A lot of them own apartment complexes. I do a ton of apartment complexes. Raising capital, just people are just doing all sorts of things, mobile homes, just everything that you can do. There’s a lot of different things. It’s really interesting for me to see what a lot of these things are, but since I deal with a lot of these weird investors, weird type investments, not the investors themselves.
Mike: Some of us are a little weird.
Keith: That could be. There are certain things that are very commonplace for me that I deal with that are normally very complex that I work with on a regular basis, so they’re not that complex in that niche.
As far as the hotels, we were actually initially interested in multifamily, found that the market was just very tight here in the Dallas area a little while ago. Found that we did not find that same competition in hospitality, and went out and learned as much as we could about it, found other people that owned hotels that were doing what we wanted to do and so we chatted with them and we ended up getting our first deal. After the first one we liked it, so we’re just doing more of them.
Mike: Yeah.
Keith: So hotels, I was going to say, are a little higher cash flow than, say, multifamily. They are more volatility because you can have all your guests move out the next day versus an apartment complex, they’re locked in for 12 months. It’s much more of a business mindset, it’s much more of an active business. On the most recent hotel we bought here in Allen, Texas we got an SBA loan to help with that. Normally the Small Business Association actually just gives loans to businesses so they won’t loan to, let’s say, an apartment complex or something like that, so it’s a different structure.
Mike: What’s interesting and is inspiring for other people that are listening is, and I feel this myself, that as you get into the business you do one thing for a while and then you see what other people are doing. In fact I get some of the same things that you see through your clients like what is this guy doing? He’s buying a hotels? You start to see these other strategies, it really opens your eyes.
For me, a big part of that has been doing this show. We’ve done hundreds of shows now and I hear that somebody is doing something that I’ve never thought of before. Sometimes it’s really intuitive stuff, it’s like, “Why didn’t I ever think of that?” But it really opens your eyes up. Hopefully a lot of the listeners get that just from listening to the shows. Just inspires you to hear what other people are doing and helps you realize how many opportunities there are in the real estate space.
Keith: It seems like single family was the intro investment for a lot of people.
Mike: It’s a gateway drug.
Keith: Actually, I thought of that but I didn’t want to say that on your show. I didn’t think that was appropriate.
Mike: Yeah, then you start moving to the harder stuff.
Keith: Yeah, but no, it gives you an intro. HUD-1 forms I can say look the same for a single family house versus a hotel, they just have a few extra zeros after them and so getting that intro experience teaches you how things are supposed to work and then you go on and you find what your specialty is. I think the best way to make money is to find something that works that you’re good at, you’re really good at it, and then you do it over and over again.
Mike: Yeah, absolutely, and I think the key is to not let all the variety that’s out there to get in the way of getting started, but to be open-minded to all the opportunities that exist I guess.
Keith: Yeah, and it’s not as hard as you think it is. As long as you’ve got some business savvy, you can pretty much move on to just about anything. The biggest eye opener for me was when I was working with that hedge fund, and I was working with guys from Wall Street Harvard type graduates who were some of the smartest guys in the world. This was another fund that was doing this but they were evaluating houses at 100 times the gross monthly rent in Mesquite, Texas, which is not the nicest part of town. It’s an okay place to live, but it’s not known as being glamorous.
So they were paying $130,000, $150,000 for houses that you could go out on the MLS and find for $90,000 to $100,000 based on their pricing model. Sometimes you think these guys have these complex models and whatnot to figure out this all out. In reality they’re just making the best guess, and they’re just so high level that they don’t always know what’s going on. So I find the investors that are operating at the local level often have the best pulse on the market.
Mike: Well, Keith hey, if folks want to learn more about you, your firm or all the stuff you’ve got going on, where would they go?
Keith: Sure. You can go to is my website. I’ve got some strategies and tips up there on what people can do, and they can also contact my office from there if they’re very interested in learning about more whether or not investing in a hotel or tax preparation tax strategy.
Mike: Awesome, awesome. Well, Keith, thanks so much for sharing your insights today. I think there are some definitely some great nuggets in there for everybody listening, including me. It’s funny that whenever I talk about accounting stuff I get excited and the wheels start turning.
Keith: Me too.
Mike: So next time we just to do it over a beer, my friend.
Keith: Okay, sounds good.
Mike: Take care, Keith. Good to see you.
Keith: You too.
Mike: Bye, bye.
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