Ep22: Protecting One's Generational Wealth with Matt Van Maanen CFP®, WMCP®, CAP®, ChFC®, CASL®

[00:00:00] [SPEAKER_03]: Multifamily is pretty safe. It's never varied much from what we thought it was going to do.

[00:00:04] [SPEAKER_03]: It's never been amazing or terrible. Office and retail that we have is more amazing or terrible.

[00:00:10] [SPEAKER_02]: From cornfields to high rises, office to industrial, houses to hotels,

[00:00:14] [SPEAKER_02]: and every other asset class in real estate, we cover the people, the projects, and the profit.

[00:00:20] [SPEAKER_02]: Welcome to the Investing in Iowa Show. This show is for go-doers, action takers,

[00:00:26] [SPEAKER_02]: and business owners. It's for people like you who are sick of Uncle Sam taking a huge bite of your

[00:00:32] [SPEAKER_02]: apple. If you're looking to get ahead of what's taking place in Iowa, learn who is doing what

[00:00:37] [SPEAKER_02]: and how you can get in on the action. You're in the right place. Hosted by Neil Timmins,

[00:00:43] [SPEAKER_02]: an Iowa native who has been involved in over $300 million in real estate right here in Iowa.

[00:00:49] [SPEAKER_02]: Recording in studio from West Des Moines, here's your host, Neil Timmins.

[00:00:55] [SPEAKER_04]: I've got Matt Van Maan in here on the show. Matt, welcome.

[00:00:58] [SPEAKER_04]: Thanks for having me.

[00:00:59] [SPEAKER_04]: I'm excited you're here. See, for the audience today, who are you?

[00:01:02] [SPEAKER_04]: Where are you from? What do you do?

[00:01:03] [SPEAKER_03]: All right. I live here in Iowa, a town called Pella. I've lived there most of my life.

[00:01:09] [SPEAKER_03]: I lived in Des Moines for about six years, but mostly in Pella. I live there now on real

[00:01:14] [SPEAKER_03]: estate, but I also have a business where I mostly focus on working with business owners,

[00:01:18] [SPEAKER_03]: families on growing their wealth, protecting their wealth, minimizing taxes, all that kind

[00:01:23] [SPEAKER_03]: of stuff. Real estate is another thing that I do. They kind of are intertwined a little bit,

[00:01:28] [SPEAKER_03]: which I like, but yeah, that's what I do. I've been doing real estate for about nine years,

[00:01:32] [SPEAKER_03]: but I've been doing the financial wealth strategy side for about 17 years.

[00:01:37] [SPEAKER_04]: There's a lot to unpack there. Are you originally from Iowa?

[00:01:40] [SPEAKER_04]: Yeah, more than Iowa.

[00:01:42] [SPEAKER_04]: Would you grow up in Pella or not?

[00:01:43] [SPEAKER_03]: I grew up in Pella, yeah.

[00:01:44] [SPEAKER_03]: Okay. Where'd you go to school then?

[00:01:46] [SPEAKER_03]: Are you talking about college?

[00:01:47] [SPEAKER_03]: Yeah.

[00:01:48] [SPEAKER_03]: Okay. College, I did go to Central College, which is also in Pella.

[00:01:51] [SPEAKER_03]: I didn't get out of Pella until after I graduated college.

[00:01:55] [SPEAKER_03]: Yeah.

[00:01:55] [SPEAKER_04]: Let's talk about the real estate side of things. Tell me about the very first

[00:01:58] [SPEAKER_04]: investment on the real estate side.

[00:02:00] [SPEAKER_03]: I'm going to talk about the first time I basically started a business because I did buy into

[00:02:05] [SPEAKER_03]: my building with a group of investors that already had done everything, very passive.

[00:02:09] [SPEAKER_03]: They're like, hey, you're renting from us so you can join in. That was just probably

[00:02:13] [SPEAKER_03]: about eight years ago, but seven years ago when I was working with clients who was very

[00:02:19] [SPEAKER_03]: successful, didn't go to college, worked, but just built up a nice real estate portfolio

[00:02:25] [SPEAKER_03]: and was one of the most successful people I was working with.

[00:02:28] [SPEAKER_03]: I knew that the property that he had, one of the properties that he had was just really

[00:02:35] [SPEAKER_03]: providing a ton of cash flow. He was like, I don't want that one anymore. I just don't want

[00:02:41] [SPEAKER_03]: it. So I said, well, just hire a property manager. He's like, well, no, I want to

[00:02:49] [SPEAKER_03]: be done with it. I want to sell it.

[00:02:50] [SPEAKER_04]: And you're giving him this advice largely because on the financial side of things,

[00:02:53] [SPEAKER_04]: you're providing him some options and maybe about what to do past sell.

[00:02:57] [SPEAKER_03]: Yeah.

[00:02:58] [SPEAKER_03]: Because it incurs some tax consequences among other things.

[00:03:00] [SPEAKER_03]: Oh yeah. But he was like, no, I just, and so I was like, all right,

[00:03:03] [SPEAKER_03]: I think that's a good property. I think it's the timing is right. I knew I had

[00:03:07] [SPEAKER_03]: the money. I knew it was a pretty big property. It was a big one for the first one.

[00:03:11] [SPEAKER_03]: Most people don't go out and buy a 40 unit apartment complex as their first

[00:03:15] [SPEAKER_03]: property. But that was it. I had the money. I knew I had the down payment. I could

[00:03:18] [SPEAKER_03]: pay the bar for my life insurance. I knew I could finance the rest with the bank.

[00:03:22] [SPEAKER_03]: And so I took it over and that's been great. It's always cash flowed more than

[00:03:26] [SPEAKER_03]: cash flowed. It's almost doubled in value. And if I sold it, it would

[00:03:31] [SPEAKER_03]: definitely double what I paid for it. But yeah, and since then I've added

[00:03:35] [SPEAKER_03]: more, but yeah.

[00:03:36] [SPEAKER_04]: Tell me, I'm curious. So you're right. Most people don't jump in with

[00:03:39] [SPEAKER_04]: the 40 unit to begin with. How did you manage it from the get go and how

[00:03:43] [SPEAKER_03]: do you manage it today?

[00:03:45] [SPEAKER_03]: So I did. I mean, the key, the first step of getting into real estate is getting

[00:03:49] [SPEAKER_03]: some of the systems down, right? The management. So I found a manager,

[00:03:54] [SPEAKER_03]: made them they went in as part owner because I was just wasn't real

[00:03:57] [SPEAKER_03]: comfortable with them leaving. Nowadays I have a whole list of managers I'd go

[00:04:01] [SPEAKER_03]: through. But at the time I was like, I want to make sure that this property

[00:04:03] [SPEAKER_03]: manager sticks with me. And if they're an owner, then they'll do that.

[00:04:07] [SPEAKER_03]: And so they were part owner and they've done an amazing job of managing

[00:04:10] [SPEAKER_03]: that property and worked it out, talked to some local banks. I've built some

[00:04:15] [SPEAKER_03]: relationships up there that I know how I'm going to utilize them to finance

[00:04:19] [SPEAKER_03]: the purchase.

[00:04:20] [SPEAKER_04]: The purchase. Yeah. All right. So you brought the property manager in as a

[00:04:23] [SPEAKER_04]: partial owner. And so I sure assume, right? They're still in that position

[00:04:26] [SPEAKER_04]: today. Yeah. Both ownership and managing the property. Right. Yeah.

[00:04:30] [SPEAKER_04]: Okay. Have you employed that strategy in since then or is that the only

[00:04:36] [SPEAKER_04]: time that the property manager came in as an owner?

[00:04:38] [SPEAKER_03]: So I have about seven LLCs and definitely not always. It's not always, but I'd say

[00:04:43] [SPEAKER_03]: that yes, I've done it and I've done another time. The other one very small

[00:04:48] [SPEAKER_03]: ownership stake, but just some ownership state just to make sure that

[00:04:51] [SPEAKER_03]: they're thinking of the property management, not just how they're

[00:04:54] [SPEAKER_04]: getting paid, but as an owner. Right? Yeah. I've heard the strategy

[00:04:58] [SPEAKER_04]: utilized from a number of folks. And I always found it to be interesting

[00:05:02] [SPEAKER_04]: to have this conversation about that you touched on some of the pros.

[00:05:06] [SPEAKER_04]: I get that. That's easy to understand. What are the cons of bringing a

[00:05:10] [SPEAKER_03]: property manager in as an owner? Well, you're giving up ownership, right?

[00:05:13] [SPEAKER_03]: You could have been 100% owner. Now depends on where you bring them in.

[00:05:17] [SPEAKER_03]: Are you bringing them in as such a small ownership stake that they have

[00:05:19] [SPEAKER_03]: no voice or do you want to bring them in as a 50-50 owner? And then

[00:05:23] [SPEAKER_03]: you have to run everything by them. So that's a big thing is just the

[00:05:26] [SPEAKER_03]: same thing as going in with anybody. Do you want to go into business

[00:05:29] [SPEAKER_03]: with that person? Sure. Right. I've been pretty happy with the ones

[00:05:33] [SPEAKER_03]: that I've gone into business with. In the other cases, I didn't feel like

[00:05:36] [SPEAKER_03]: it was needed in those cases. So got it. Where is that?

[00:05:40] [SPEAKER_04]: The 40 unit? What cities that happen to be a Knoxville, actual Tennessee,

[00:05:44] [SPEAKER_03]: Knoxville, Iowa, Iowa. There we go. Small town. This is investing in Iowa,

[00:05:47] [SPEAKER_04]: right? You to say I deserve that one. I don't know why

[00:05:51] [SPEAKER_04]: Knoxville, Tennessee comes to mind. Certainly. Well, no, that's

[00:05:55] [SPEAKER_04]: that's fair. Well deserved. I appreciate that. All right.

[00:05:59] [SPEAKER_04]: Let me ask you a question. Another one about Knoxville, Iowa, small town,

[00:06:03] [SPEAKER_04]: Iowa. What's the pros and cons of investing in small town, Iowa?

[00:06:07] [SPEAKER_03]: Yeah. So the cons would be that maybe there's

[00:06:12] [SPEAKER_03]: a little more risk in what's bringing people into that town.

[00:06:16] [SPEAKER_03]: Cities are always growing. It seems like the right cities, I guess not

[00:06:19] [SPEAKER_03]: necessarily all cities. But if you go to a larger city

[00:06:23] [SPEAKER_03]: in places where they're doing things right,

[00:06:26] [SPEAKER_03]: growing, one business leaving is not going to affect things that much.

[00:06:28] [SPEAKER_03]: You go into a place like Knoxville and they have 3M. They don't have a lot of

[00:06:33] [SPEAKER_03]: other things. They have a lot of people travel into

[00:06:36] [SPEAKER_03]: Pella where I am, but there's a little more risk there.

[00:06:39] [SPEAKER_03]: Is that town going to grow or shrink? The plus side

[00:06:43] [SPEAKER_03]: of investing in Iowa and small town Iowa is I think

[00:06:46] [SPEAKER_03]: you can find properties that will cash flow better. I mean the cap rates

[00:06:50] [SPEAKER_03]: are always a little higher it seems like for multifamily. Not

[00:06:55] [SPEAKER_03]: necessarily comparing industrial to multifamily, but just

[00:06:58] [SPEAKER_03]: multifamily to multifamily. If you're talking about big city versus small town Iowa,

[00:07:02] [SPEAKER_03]: you tend to get better rates. That means the property is going to cash flow

[00:07:06] [SPEAKER_03]: better. It may not appreciate as much, but in the cases that I've had, they

[00:07:11] [SPEAKER_03]: actually have appreciated very well. And it's in Iowa. I like Iowa, live in

[00:07:14] [SPEAKER_03]: Iowa by choice and so it's kind of nice to have real estate

[00:07:18] [SPEAKER_03]: around Iowa. I know I could have it anywhere and still be in Iowa, but-

[00:07:21] [SPEAKER_03]: Even in Knoxville, Tennessee, you could. That's true. But you choose to be here

[00:07:25] [SPEAKER_04]: in Iowa. Well, so why Iowa? Because you do have choices. You have choices about

[00:07:29] [SPEAKER_04]: where you can live, where you could do anything.

[00:07:31] [SPEAKER_04]: Yeah. So why live in Iowa?

[00:07:32] [SPEAKER_04]: Yeah. Why here? Why live here and why invest here? What keeps you here?

[00:07:36] [SPEAKER_03]: You know, I like the attitude. It's a little bit more laid back,

[00:07:41] [SPEAKER_03]: friendlier. I have my wife both have family that live in Iowa so we can be

[00:07:45] [SPEAKER_03]: closer to family. Family is probably the biggest thing, but I like Iowa. Iowa's a

[00:07:50] [SPEAKER_03]: great place to live. You know, it's not New York City and I don't want to

[00:07:53] [SPEAKER_03]: live in New York City. So I visited, I can visit a few days, but I can't live there.

[00:07:58] [SPEAKER_00]: Hi, it's Ava Baukamp, the investment relations manager for Neal's firm,

[00:08:02] [SPEAKER_00]: Legacy Impact Investors. I'm inviting you to join us for our next investor

[00:08:06] [SPEAKER_00]: workshop, our monthly Legacy Briefings. In these tactical Zoom calls, we cover

[00:08:11] [SPEAKER_00]: topics and case studies for subjects such as taxes and depreciation,

[00:08:15] [SPEAKER_00]: navigating macroeconomic shifts and evaluating deals as a passive investor.

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[00:08:47] [SPEAKER_00]: Tuesday of this month, visit LegacyBriefing.com. Go to LegacyBriefing.com to register. If you're

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[00:08:59] [SPEAKER_04]: and I'll see you soon. I think you and I spoke in the fall,

[00:09:02] [SPEAKER_04]: if I remember correctly, when you visited New York City. You were like,

[00:09:04] [SPEAKER_04]: I've been there, done that now! Just after you returned.

[00:09:09] [SPEAKER_04]: So what does your portfolio consist of today? Largely multifamily?

[00:09:13] [SPEAKER_03]: Yeah, largely multifamily. I have about 310 renters.

[00:09:16] [SPEAKER_03]: We say renters, doors? Yeah, doors. But some of them are,

[00:09:20] [SPEAKER_03]: so like 280 of those are probably multifamily. And those are all, they're not quite as big.

[00:09:25] [SPEAKER_03]: I have some office, I have some retail. Those ones are rent for a lot more,

[00:09:31] [SPEAKER_03]: but I include them in that 300 number because there's probably about 15 businesses that rent

[00:09:35] [SPEAKER_03]: from me. Okay, got it. No, that makes sense.

[00:09:38] [SPEAKER_04]: All right, so real estate is kind of like your side hustle.

[00:09:42] [SPEAKER_04]: Well, so my question with it, you got a day job is, how does one go about building their

[00:09:48] [SPEAKER_03]: portfolio when they do something else? Yeah, I think that you probably have to

[00:09:52] [SPEAKER_03]: look and find a good manager, right? Because you can't handle the management yourself.

[00:09:56] [SPEAKER_03]: Correct. You can kind of try to do that for a

[00:09:58] [SPEAKER_03]: while but you're going to find that you're going to have to exit one of those two things.

[00:10:02] [SPEAKER_03]: So you have to find a good manager, but if you find the right manager, you can say,

[00:10:06] [SPEAKER_03]: this is what I do, I'm going to help, the manager knows I'm there to set up the LLC,

[00:10:11] [SPEAKER_03]: help with some tax stuff, get the loan. But the day-to-day stuff, I can hear about

[00:10:16] [SPEAKER_03]: it but I don't want to hear about daily. They're going to take that on, that's part

[00:10:19] [SPEAKER_03]: of management. It's pretty easy if you can find a manager. The thing is,

[00:10:23] [SPEAKER_03]: people really don't want to manage a house. They want to manage an apartment complex.

[00:10:28] [SPEAKER_03]: So that's the thing that you have to kind of try to get to is,

[00:10:31] [SPEAKER_03]: when can you get a manager to handle that? When can you get big enough, enough renters

[00:10:36] [SPEAKER_03]: that a manager will be happy in that job so that you can keep them and

[00:10:40] [SPEAKER_03]: so that you can not have to hear about things to deal with that?

[00:10:44] [SPEAKER_04]: Nope, that makes sense. What's been your experience? You've got some office

[00:10:49] [SPEAKER_04]: exposure and you mentioned it so I'm going to ask because all you read today in the headlines

[00:10:53] [SPEAKER_04]: is a terrible office happens to be in the environment. What's your experience though?

[00:10:58] [SPEAKER_03]: Well, yeah, I'm not in the big cities so mine is more, it doesn't correlate because

[00:11:04] [SPEAKER_03]: right now it's amazing. Right now it's probably doing the best of what I have

[00:11:10] [SPEAKER_03]: but go back a year, you'll lose one tenant. There's more risk than apartments and one of

[00:11:15] [SPEAKER_03]: the buildings I have that has offices, there's basically four tenants in it. You lose one of

[00:11:19] [SPEAKER_03]: them. Now that property does not cash flow and you're having to, so multifamily is pretty

[00:11:24] [SPEAKER_03]: safe. It's never varied much from what we thought it was going to do. It's never been

[00:11:29] [SPEAKER_03]: or terrible. Office is more and retail that we have is more amazing or terrible,

[00:11:36] [SPEAKER_03]: right? Not as bad as what I think the big cities that they've been more affected. I mean,

[00:11:40] [SPEAKER_03]: I just don't have enough that I've lost one tenant. That was bad, got somebody in there

[00:11:44] [SPEAKER_03]: within a year and so I had one bad year but since then it's been great and can't really

[00:11:48] [SPEAKER_04]: complain about that. Yeah, well your experience is similar to ours in our office portfolio

[00:11:52] [SPEAKER_04]: or what we have in the portfolio that is office. It has been performed very well.

[00:11:57] [SPEAKER_04]: It's kind of interesting when you read the headlines and then to couple that with

[00:12:01] [SPEAKER_04]: one's own personal experience. Talk to me about planning. I think part of your day job

[00:12:07] [SPEAKER_04]: is planning and planning for the future. I know I've certainly had conversations about this,

[00:12:12] [SPEAKER_04]: some of the things you've done for your own self or your family. How many kids do you have?

[00:12:16] [SPEAKER_04]: Five kids. Five kids. When you build your portfolio and the size it is today,

[00:12:20] [SPEAKER_04]: you've had to give in especially with five kids, you have to have given thought to building

[00:12:24] [SPEAKER_04]: a legacy and what that looks like. The plans are going to place there. Maybe give me some

[00:12:29] [SPEAKER_04]: of your experiences of where you want to go with that in terms of what you've done and what that

[00:12:33] [SPEAKER_03]: looks like. Yeah, I think that that's kind of you build up. The first thing is you get into

[00:12:38] [SPEAKER_03]: real estate and you get the systems down and then you start to take that cash flow and multiply

[00:12:43] [SPEAKER_03]: it and build up because you're comfortable. You have the systems down now you can start to

[00:12:47] [SPEAKER_03]: expand and use leverage and multiply. The last step though to consider is what's going

[00:12:51] [SPEAKER_03]: to happen to this if I'm not here? That's part of what I do for my day job is working with business

[00:12:58] [SPEAKER_03]: owners and just helping them with how do we reduce your risks? What legal things do we need

[00:13:04] [SPEAKER_03]: to get in place for you? I'm not a lawyer. I don't give legal advice, but do you have

[00:13:08] [SPEAKER_03]: trusts, LLCs, buy-sell agreements? Do we need to protect against what happens if you die

[00:13:15] [SPEAKER_03]: earlier? What happens if you get sick and can't do what you're doing? What if you get

[00:13:20] [SPEAKER_03]: sued? How do we protect you from those things? How do we, along with how do we protect you

[00:13:25] [SPEAKER_03]: with increasing your cash flow and liquidity? Where I'm going with that is we can build up a

[00:13:29] [SPEAKER_03]: huge real estate portfolio and it might ruin our kids or it might not be a good thing,

[00:13:34] [SPEAKER_03]: right? Or certainly it could be not appreciated. What I've done personally is I have multiple

[00:13:40] [SPEAKER_03]: trusts, multiple LLCs, multiple trusts on different LLCs. And what I'm trying to do

[00:13:47] [SPEAKER_03]: there is protect not just from state taxes, things like that, but also provide protection

[00:13:53] [SPEAKER_03]: from creditors and keep centralized management. Have the family come together to talk about the

[00:14:00] [SPEAKER_03]: business and keep it a business and not have it get so spread out, dispersed that it starts

[00:14:06] [SPEAKER_03]: to get sold and all these different owners come in and it doesn't have a focus. And so trying

[00:14:12] [SPEAKER_03]: to build that in for people. The estate planning is not just about reducing the taxes,

[00:14:17] [SPEAKER_03]: getting things out of your state, but also how can you really benefit your kids or the world

[00:14:23] [SPEAKER_03]: in the way that you want to? And it's not all just, it can't all be done on a legal document.

[00:14:27] [SPEAKER_03]: It's got to be taught, right? You have to teach your kids, but there's a lot we can do

[00:14:32] [SPEAKER_03]: with some of the documents that it's the last thing we do is we want to build up.

[00:14:37] [SPEAKER_03]: Most people get to that point and then they go, maybe now I should start to,

[00:14:40] [SPEAKER_03]: maybe it's too late or too early. And so they never do the estate planning or teaching of the

[00:14:45] [SPEAKER_03]: kids and that's the last step. And so trying to create a legacy, that's one of the things that

[00:14:51] [SPEAKER_03]: we really want it that I've done through documents and moving things around, but also

[00:14:56] [SPEAKER_03]: in talking to my kids about here's what I've been building and it's hard to earn a dollar.

[00:15:01] [SPEAKER_03]: So I want you to appreciate these dollars coming in. And so just making them appreciate

[00:15:06] [SPEAKER_03]: seeing if they want to be a part of the business, all that kind of stuff.

[00:15:09] [SPEAKER_04]: Well, we're going to leave our kids something, right? So mine is well be a legacy.

[00:15:14] [SPEAKER_04]: And what you sounds like you've done is given thought to that and followed probably a framework,

[00:15:19] [SPEAKER_04]: a blueprint that you and people in what you do get a layout for folks and have

[00:15:26] [SPEAKER_04]: conversations where are you going to build intentionality into what you do and give some

[00:15:29] [SPEAKER_04]: thoughts to what do I really want this to look like? Along with you touching a lot of things,

[00:15:34] [SPEAKER_04]: along with the ability to reduce some of the tax liability upon death, upon transferring,

[00:15:40] [SPEAKER_04]: growing things outside of the estate. So what I hear you saying is some things go into trust,

[00:15:45] [SPEAKER_04]: so that they can grow outside the estate. Certainly it's a big deal when you look for

[00:15:50] [SPEAKER_04]: what are the estate exemptions right now? Some things are supposed to sunset coming up

[00:15:55] [SPEAKER_04]: and there's rollback exemptions taking place.

[00:15:58] [SPEAKER_03]: Yeah. I mean, it doesn't look like there's a lot of agreement going on.

[00:16:04] [SPEAKER_03]: Yeah, between the two political parties, correct.

[00:16:07] [SPEAKER_04]: We have a little bit of time before things really start to happen.

[00:16:10] [SPEAKER_04]: Maybe put a number on that for the audience's sake so everybody understands what that means

[00:16:14] [SPEAKER_04]: in the call to death benefit provisions taking place.

[00:16:17] [SPEAKER_03]: Well, and just rough numbers. I mean, I don't have the exacts, but basically

[00:16:20] [SPEAKER_03]: rough numbers are good enough. Right now, if you're married, each of you gets

[00:16:25] [SPEAKER_03]: about 12 to 13 million that you can pass on. So a household could pass on 24 million.

[00:16:31] [SPEAKER_03]: In a couple of years here, if nothing happens, that's going to go back down to its original

[00:16:36] [SPEAKER_03]: or pre, I guess the passed under the Trump administration that time period,

[00:16:41] [SPEAKER_03]: going back to about half of that. So then you're passing on about 12 million.

[00:16:46] [SPEAKER_03]: Total.

[00:16:47] [SPEAKER_03]: Yeah.

[00:16:47] [SPEAKER_03]: Total.

[00:16:47] [SPEAKER_03]: Yep.

[00:16:48] [SPEAKER_03]: So 6 million each. 6 million if it's just a single person,

[00:16:51] [SPEAKER_03]: 12 million if it's a married couple, which is 24 million doesn't impact a lot of people.

[00:16:57] [SPEAKER_03]: 12 million starts to impact some people.

[00:16:59] [SPEAKER_04]: I think I'm going to interject here. Good job. I agree with exactly what you're saying,

[00:17:03] [SPEAKER_04]: but then I'll also take it one step further. If it doesn't change, if it sets at 12,

[00:17:08] [SPEAKER_04]: we've all seen what inflation has done to everything in the last three or four years.

[00:17:12] [SPEAKER_04]: You've seen what's happened in real estate values in the last three or four years.

[00:17:15] [SPEAKER_04]: Well, 24 impacts a segment, yes. 12 million impacts a bigger segment, yes.

[00:17:20] [SPEAKER_04]: But what might be two, three, four, five million dollars today could be 12 in a hurry.

[00:17:26] [SPEAKER_04]: Yeah.

[00:17:27] [SPEAKER_04]: Some of that just goes into the planning stages.

[00:17:30] [SPEAKER_04]: They need more money. The deficits are huge.

[00:17:33] [SPEAKER_04]: Government needs more money, yes. The deficits are enormous and they're going to find,

[00:17:39] [SPEAKER_04]: especially if, it doesn't matter who goes in. Over some period of time,

[00:17:43] [SPEAKER_04]: the math will just add up in such a way that taxes are going to have to go up.

[00:17:47] [SPEAKER_04]: And they're going to find it from one avenue or another and the death tax is a piece of

[00:17:51] [SPEAKER_04]: that avenue. And so planning for that to take place and getting things out of your state,

[00:17:56] [SPEAKER_04]: benefits, your kids or whoever that legacy, however you want to give that.

[00:18:01] [SPEAKER_03]: Yeah. Right. You said they have to get the money from somewhere.

[00:18:04] [SPEAKER_03]: Are they going to get it from people who can't even afford to give it? Right. So

[00:18:07] [SPEAKER_03]: they're going to have to go to the people that have it.

[00:18:09] [SPEAKER_03]: That's right.

[00:18:09] [SPEAKER_03]: Right. And so they're going to look at things like the estate tax,

[00:18:14] [SPEAKER_03]: people that hire income earners and they might even look at some of that business income.

[00:18:19] [SPEAKER_03]: Fortunately, there's a lot of value. I believe a correct belief that

[00:18:23] [SPEAKER_03]: the government partnering with people doing housing, providing businesses is a great thing.

[00:18:28] [SPEAKER_03]: And so they give some tax benefits, but we'll see what happens as they need more and more money.

[00:18:33] [SPEAKER_03]: And there's only a certain amount of people that can actually afford to give

[00:18:36] [SPEAKER_03]: that much more money.

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[00:19:11] [SPEAKER_04]: Correct. Yeah. You know, I read a stat at one point with something like

[00:19:14] [SPEAKER_04]: 48% of the country doesn't pay tax at all.

[00:19:16] [SPEAKER_04]: Right.

[00:19:17] [SPEAKER_04]: You're not getting out of that segment.

[00:19:18] [SPEAKER_04]: Right.

[00:19:19] [SPEAKER_04]: Correct. So they've got to go someplace.

[00:19:20] [SPEAKER_04]: Yeah, you're exactly right.

[00:19:22] [SPEAKER_04]: What are you most excited about this year?

[00:19:25] [SPEAKER_04]: In real estate?

[00:19:26] [SPEAKER_04]: Anything. Real estate, life, answer them both however we want to take it.

[00:19:29] [SPEAKER_03]: Well, most excited about probably my family. Most excited about my family.

[00:19:34] [SPEAKER_03]: My kids are at just such a fun stage that it's going to go quick.

[00:19:38] [SPEAKER_03]: So I got to appreciate that.

[00:19:40] [SPEAKER_03]: What are the age ranges?

[00:19:42] [SPEAKER_03]: And just like a week or so, it's going to be 15 to 6, but it's 14 to 6 right now.

[00:19:46] [SPEAKER_03]: Okay.

[00:19:46] [SPEAKER_03]: It's like every two years spread out that way.

[00:19:49] [SPEAKER_03]: It's fun ages.

[00:19:50] [SPEAKER_03]: Yeah.

[00:19:50] [SPEAKER_04]: Right. All throughout and you're right, time flies.

[00:19:53] [SPEAKER_03]: Yeah. People keep telling me that, but then I'm like looking back and I'm like,

[00:19:56] [SPEAKER_03]: yeah, I'm experiencing it already. I can't believe I have a

[00:19:59] [SPEAKER_03]: kid that's going to be three years from leaving the house.

[00:20:02] [SPEAKER_04]: So yeah.

[00:20:02] [SPEAKER_04]: Different experience. Our eldest is a senior going to college next year.

[00:20:07] [SPEAKER_04]: I won't say where, it's not in the state.

[00:20:08] [SPEAKER_04]: Okay.

[00:20:10] [SPEAKER_04]: Going to college and yeah, it's a whole range of emotions.

[00:20:13] [SPEAKER_04]: You're right. You graduate like in 10 days or so and it's excitement and slight

[00:20:16] [SPEAKER_04]: depreciate or depression, if you will.

[00:20:19] [SPEAKER_04]: Yeah.

[00:20:19] [SPEAKER_04]: It's just a range of things all at the same time.

[00:20:21] [SPEAKER_04]: Yeah.

[00:20:22] [SPEAKER_04]: All good at the end of the day that it's fun to see all the years and

[00:20:25] [SPEAKER_04]: of energy effort poured in somebody and becoming a fine young person.

[00:20:30] [SPEAKER_04]: Yeah.

[00:20:30] [SPEAKER_04]: It's tremendous.

[00:20:31] [SPEAKER_04]: Yeah.

[00:20:32] [SPEAKER_04]: Let's do this final three questions. You ready?

[00:20:34] [SPEAKER_04]: Yep.

[00:20:34] [SPEAKER_04]: If you had one piece of advice for your 20 year old self, what would it be?

[00:20:38] [SPEAKER_03]: I think I questioned myself a lot when I was younger

[00:20:41] [SPEAKER_03]: and I wish I could have just said, just be more confident.

[00:20:43] [SPEAKER_03]: What you think your instincts didn't know everything back then.

[00:20:47] [SPEAKER_03]: So it wasn't as smart as I learned a lot.

[00:20:49] [SPEAKER_03]: Sure.

[00:20:50] [SPEAKER_03]: But I think I was timid to get into real estate, for example,

[00:20:54] [SPEAKER_03]: to do things in business on the other side.

[00:20:56] [SPEAKER_03]: And I wish I would have maybe had the courage

[00:20:58] [SPEAKER_03]: to do some of those things I was dreaming of instead of just kind of being safe.

[00:21:02] [SPEAKER_03]: Two books that changed your life.

[00:21:04] [SPEAKER_03]: There's some books by Garrett Gunderson. Have you ever heard of Garrett Gunderson?

[00:21:07] [SPEAKER_03]: I haven't.

[00:21:08] [SPEAKER_03]: He's not really talking about real estate necessarily, but just kind of

[00:21:11] [SPEAKER_03]: different mindset than traditional financial planning.

[00:21:14] [SPEAKER_03]: I was a traditional financial planner for the first five years that I did this.

[00:21:19] [SPEAKER_03]: I was no different than anybody else.

[00:21:22] [SPEAKER_03]: And I read a book called Killing Sacred Cows that he wrote,

[00:21:25] [SPEAKER_03]: and that was a New York Times bestseller.

[00:21:27] [SPEAKER_03]: That's his most famous book.

[00:21:28] [SPEAKER_03]: And I was like, this makes so much sense,

[00:21:31] [SPEAKER_03]: but it goes against a lot of what Wall Street says.

[00:21:34] [SPEAKER_03]: I have to be careful what I say there.

[00:21:37] [SPEAKER_03]: So I'm going to leave it at that.

[00:21:39] [SPEAKER_03]: But that book definitely changed a lot of things professionally for me.

[00:21:42] [SPEAKER_03]: And even just how I started to take courage and fall into some of my dreams.

[00:21:47] [SPEAKER_03]: I've read a lot of good books.

[00:21:48] [SPEAKER_03]: I definitely value, you know, Seven Habits of Highly Successful People.

[00:21:51] [SPEAKER_03]: That's such a common book though, that I would say that

[00:21:54] [SPEAKER_03]: another one that he did was What Would Billionaires Do?

[00:21:57] [SPEAKER_03]: Steven Cubby?

[00:21:58] [SPEAKER_03]: Well, Steven Cubby is Seven Habits.

[00:22:00] [SPEAKER_03]: I'm talking about Garrett Gunderson.

[00:22:01] [SPEAKER_03]: I'm getting two books.

[00:22:02] [SPEAKER_03]: Yep.

[00:22:03] [SPEAKER_03]: I'm really pushing them.

[00:22:04] [SPEAKER_03]: White the hat tip.

[00:22:05] [SPEAKER_03]: But he wrote a book called What Would Billionaires Do?

[00:22:06] [SPEAKER_03]: Which talks about a lot of things that I talked about today with.

[00:22:10] [SPEAKER_03]: He kind of compares the two well-known families,

[00:22:14] [SPEAKER_03]: billionaire families in American history.

[00:22:16] [SPEAKER_03]: How one of them faded off.

[00:22:18] [SPEAKER_03]: There's no nothing there for that family anymore.

[00:22:20] [SPEAKER_03]: And the other one is prospering.

[00:22:21] [SPEAKER_03]: And just kind of compares the two.

[00:22:23] [SPEAKER_03]: Really inspired what I'm doing with my estate planning.

[00:22:26] [SPEAKER_03]: Yeah.

[00:22:26] [SPEAKER_03]: Well, the wealthy certainly do things differently.

[00:22:27] [SPEAKER_04]: Yes.

[00:22:28] [SPEAKER_04]: Yeah.

[00:22:28] [SPEAKER_04]: If you were cast away on an island,

[00:22:30] [SPEAKER_04]: you could only get three pieces of data about your real estate business each and every month.

[00:22:35] [SPEAKER_04]: What three things must you know?

[00:22:38] [SPEAKER_03]: About my real estate business?

[00:22:39] [SPEAKER_03]: Yep.

[00:22:39] [SPEAKER_03]: Well, I almost feel like that's already true of me.

[00:22:42] [SPEAKER_03]: I'm not on an island.

[00:22:43] [SPEAKER_03]: As somebody that lets the management, the day-to-day stuff go to somebody else,

[00:22:47] [SPEAKER_03]: what I am looking at is I'm looking at rents.

[00:22:51] [SPEAKER_03]: I'm looking at unusual expenses.

[00:22:52] [SPEAKER_03]: I'm probably getting a different viewpoint,

[00:22:54] [SPEAKER_03]: but I still want to probably know if I'm starting to see some unusual expenses,

[00:22:58] [SPEAKER_03]: why is that?

[00:22:59] [SPEAKER_03]: We've had some weird things happen in our real estate this past year.

[00:23:02] [SPEAKER_03]: Just with some incidents that the insurance claims, how's that going?

[00:23:07] [SPEAKER_03]: Give me an example of one.

[00:23:09] [SPEAKER_03]: One unusual thing that transpired in the last year.

[00:23:11] [SPEAKER_03]: I think the most unusual would be we had one of our tenants

[00:23:14] [SPEAKER_03]: ran their car into our apartment complex.

[00:23:18] [SPEAKER_03]: The expenses were probably about 45 to 50,000 to repair it.

[00:23:24] [SPEAKER_03]: His insurance said it was 35.

[00:23:28] [SPEAKER_03]: Our insurance, if we would have gone with our insurance,

[00:23:31] [SPEAKER_03]: would have said hit the deductible and you're going to get 30.

[00:23:34] [SPEAKER_03]: We had to take a pretty big loss, but that's a unique thing.

[00:23:37] [SPEAKER_03]: Somebody ran their car into your building.

[00:23:39] [SPEAKER_03]: Yeah, it's happened.

[00:23:40] [SPEAKER_03]: I had it happen.

[00:23:41] [SPEAKER_04]: Somebody ran a car into their Dollar Tree that I own.

[00:23:45] [SPEAKER_04]: Those things happen.

[00:23:47] [SPEAKER_04]: They do.

[00:23:47] [SPEAKER_04]: You need insurance.

[00:23:49] [SPEAKER_03]: It's good to know that it's happened to somebody else.

[00:23:51] [SPEAKER_03]: Sometimes I feel like I'm losing my mind with some of these expenses that come up.

[00:23:55] [SPEAKER_04]: Yeah.

[00:23:55] [SPEAKER_04]: Old lady went to hit the brake, hit the gas,

[00:23:58] [SPEAKER_04]: and straight through the front of Dollar Tree.

[00:24:00] [SPEAKER_04]: I didn't get the story on ours.

[00:24:02] [SPEAKER_04]: There are uniquenesses, especially you probably end up with far more unique stories.

[00:24:07] [SPEAKER_04]: When you have 280 some odd apartment doors, that's a whole bunch of bodies,

[00:24:13] [SPEAKER_04]: and then people just create things.

[00:24:15] [SPEAKER_03]: Yeah.

[00:24:15] [SPEAKER_03]: It really depends on the segment that we're dealing with in those.

[00:24:19] [SPEAKER_03]: We have all different segments.

[00:24:21] [SPEAKER_03]: We have higher rent segments and we'll have what we call lower rent segments.

[00:24:26] [SPEAKER_03]: It just so happens the lower rent segments usually have some of the incidents.

[00:24:29] [SPEAKER_03]: And that's why I'm glad I'm not the property manager of those.

[00:24:32] [SPEAKER_03]: Yes.

[00:24:32] [SPEAKER_03]: Right?

[00:24:32] [SPEAKER_03]: But those do pretty well cash flowing.

[00:24:34] [SPEAKER_03]: That was my first deal was the low income one.

[00:24:37] [SPEAKER_03]: It's been doing well, but there are some headaches with that.

[00:24:40] [SPEAKER_04]: Well, that's property management is a job.

[00:24:42] [SPEAKER_04]: It is.

[00:24:43] [SPEAKER_04]: Owning and operating a real estate business.

[00:24:46] [SPEAKER_04]: It's a job, although it's different.

[00:24:48] [SPEAKER_03]: Yeah.

[00:24:48] [SPEAKER_04]: It's very different.

[00:24:49] [SPEAKER_03]: Yeah.

[00:24:49] [SPEAKER_03]: It's worth every penny to not have to do those things.

[00:24:52] [SPEAKER_03]: That's what you have to think about is, especially if you have a day job that

[00:24:56] [SPEAKER_03]: you want to keep and I love my job, I cannot have those things come up, the property management stuff.

[00:25:02] [SPEAKER_03]: Right.

[00:25:02] [SPEAKER_03]: It is so worth it for me to just share some of the wealth, not have to deal with that.

[00:25:06] [SPEAKER_04]: And when you underwrite a deal, there's a line item or

[00:25:09] [SPEAKER_04]: property management on an apartment complex.

[00:25:10] [SPEAKER_04]: Yeah.

[00:25:11] [SPEAKER_04]: It's in the deal.

[00:25:12] [SPEAKER_04]: Yeah.

[00:25:12] [SPEAKER_04]: Somebody's going to do it.

[00:25:14] [SPEAKER_04]: Somebody's going to get paid it.

[00:25:15] [SPEAKER_04]: So either you're going to pay a third party.

[00:25:16] [SPEAKER_04]: Right.

[00:25:16] [SPEAKER_04]: Or you're going to earn those pennies yourself.

[00:25:18] [SPEAKER_04]: Right.

[00:25:19] [SPEAKER_03]: It's what drove the owner of the previous, he didn't hire it out.

[00:25:22] [SPEAKER_03]: He did it himself.

[00:25:22] [SPEAKER_03]: Didn't want to keep the building.

[00:25:23] [SPEAKER_03]: I kind of understand if you were not going to, but that's why we hired management.

[00:25:27] [SPEAKER_04]: Yeah.

[00:25:28] [SPEAKER_04]: If you're going to manage with that thing, it can tire you out in a hurry.

[00:25:31] [SPEAKER_04]: Yeah.

[00:25:31] [SPEAKER_04]: Yeah.

[00:25:32] [SPEAKER_04]: Matt, it's been a great conversation.

[00:25:33] [SPEAKER_04]: We talk all day about all sorts of things.

[00:25:34] [SPEAKER_04]: Yeah.

[00:25:35] [SPEAKER_04]: For people, they want to find you, they want to follow you,

[00:25:37] [SPEAKER_04]: they want to connect with you.

[00:25:38] [SPEAKER_04]: Where can they go?

[00:25:38] [SPEAKER_04]: What should they do?

[00:25:39] [SPEAKER_03]: Okay.

[00:25:40] [SPEAKER_03]: Probably the best way would be I have a website, www.matt.binmonon.com.

[00:25:44] [SPEAKER_03]: So that's M-A-T-T-V-A-N-M-A-A-N-E-N.com.

[00:25:50] [SPEAKER_03]: That is my professional website.

[00:25:51] [SPEAKER_03]: You can definitely go there and there's a place to contact me,

[00:25:55] [SPEAKER_03]: send me a message.

[00:25:56] [SPEAKER_03]: Happy to connect that way.

[00:25:58] [SPEAKER_04]: Great to have you here.

[00:25:58] [SPEAKER_04]: The link's below in the show notes for everybody.

[00:26:00] [SPEAKER_04]: I appreciate you being here.

[00:26:01] [SPEAKER_04]: All right.

[00:26:01] [SPEAKER_04]: Thanks for listening.

[00:26:03] [SPEAKER_04]: If you're enjoying the show, may I ask a favor of you?

[00:26:05] [SPEAKER_04]: Naturally, subscribe so you never miss an episode.

[00:26:08] [SPEAKER_04]: But would you rate and leave an honest written review on Apple Podcasts?

[00:26:13] [SPEAKER_04]: There's a lot for us here at the show and I appreciate reading your thoughts.

[00:26:17] [SPEAKER_04]: Great guests make for a great show.

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[00:26:26] [SPEAKER_04]: Visit Investing in Iowa to fill out an application or recommend a guest.

[00:26:32] [SPEAKER_04]: And if you want to connect with me one-on-one, go legacyimpactinvestors.com.

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[00:26:40] [SPEAKER_04]: and there you can pick a time for the two of us to get on the calendar and connect.

[00:26:45] [SPEAKER_04]: Until next time, keep investing in Iowa.