March 12, 2025 • 28 mins
Zach Lemaster is the founder & CEO of Rent To Retirement, the nation's leading turnkey investment company. Zach is a seasoned real estate investor and licensed broker that has accumulated a large portfolio of rental properties across multiple markets including single family, multifamily, commercial and new construction. Zach is a licensed Optometrist who practices on a volunteer basis.
Zach started investing in real estate while working as an Optometrist & Captain for the US Air Force. This eventually allowed him to retire early from his career in medicine to be a professional investor by strategically investing in markets that maximize cash flow, appreciation & equity. Zach went on to build a successful wholesaling, flipping & management business working across multiple markets which led to the foundation for Rent to Retirement.
He is considered an industry expert in real estate market analytics. Zach has been published across many exceptional national platforms including: Forbes, USA Today, Fox News, NBC, CBS, Veterans' Affairs, Think Reality, and Inc. 5000. He is passionate about educating others on the numerous benefits of real estate investing, and how to use real estate as means to create the lifestyle each person desires for their family!
During the show we discussed:
- Motivation To Choose Real Estate Investing Over Other Careers
- Approach To Real Estate Investing And Key Market Factors
- Using Data To Make Real Estate Investment Decisions
- Advice For New Real Estate Investors
- Most Important Thing To Understand When Starting In Real Estate
- Best Financing Options For Real Estate Investments
- Benefits Of Building Then Renting Vs. Buying Then Renting
- Expected Cash Return On Real Estate Properties
- Benefits Of Long-Term Vs. Short-Term Rentals
- Success Story Of A Client Achieving Financial Goals Through Real Estate
- Unknown Benefits Of Real Estate Investing
- Strategies For Experienced Investors To Grow Portfolios
- Teaching Real Estate Basics And Helping People Succeed
Resources:
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to the Business Credit and Financing Show.
Each week, we talk about the growth strategies
that matter most to entrepreneurs.
Listen in as we discuss the secrets to
getting credit and money to start and grow
your business.
And enjoy as we talk with seasoned business
owners, coaches, and industry leaders on a variety
(00:22):
of topics from advertising and marketing to the
nuts and bolts of running a highly successful
business.
And now, to introduce the host of our
show, financial expert and award-winning author, Ty
Crandall.
Hello, and thanks for joining us today.
I'm super excited you could be here because
today we're talking about some of the most
advanced tips and tactics that you should know
(00:45):
if you're already investing in real estate or
you're thinking about investing in real estate.
And with us today is really one of
the most diverse investors and trainers that I
know because he deals a lot of areas
of real estate and does a lot of
really cool things.
So with us today is Zach Lehmaster.
Now, Zach is the founder and CEO of
Rent2Retirement, the nation's leading turnkey investment company.
(01:06):
So Zach is a seasoned real estate investor
and licensed broker that has accumulated a large
portfolio of rental properties across multiple different markets,
including single-family, multifamily, commercial, and new construction
as well.
Now, Zach is a licensed optometrist who practices
on a volunteer basis, and he started investing
in real estate while working as an optometrist
(01:28):
and captain for the US Air Force.
Now, this eventually allowed him to retire early
from his career in medicine to be a
professional investor.
Now, by strategically investing in markets that maximize
cashflow, appreciation, and equity, Zach then went on
to build a successful wholesaling, flipping, and management
business working across multiple markets, which led to
(01:51):
the foundation of Rent2Retirement.
Now, he's considered an industry expert in real
estate and market analysis, and Zach has been
published across many exceptional national platforms, including Forbes,
USA Today, Fox News, NBC, CBS, Veterans Affairs,
Think Reality, and the Inc.
5000 as well.
(02:11):
Now, he is passionate about educating others on
the numerous benefits of real estate investing and
how to use real estate as a means
to create the lifestyle each person desires for
their family.
Zach, what's up, man?
Thanks for joining me today.
Hey, Ty, excited to be here.
Thanks so much for such the outstanding intro.
Yeah, let me ask, we're both Air Force
veterans, so what made you make the jump
(02:31):
here from where you were as an optometrist
into real estate?
Yeah, it was never an intention.
I was never one of these guys, Ty,
that was like, oh, I hate what I
do.
I just wanna retire myself early.
That was never the goal.
I started investing in real estate probably about
15 years ago at this point when I
was first commissioned as a captain in the
Air Force, because I came in, I was
on scholarship in optometry school at HBSP, and
then commissioned as a captain directly to the
(02:52):
Air Force, and I actually bought my first
property before I even got to my first
duty station, so it was almost immediately, but
I used a VA loan, bought a duplex,
lived in half, rented out the other half,
and really just fell in love with real
estate from that point on.
I mean, I kinda like the idea of,
hey, I can use someone else's money, i
.e. the bank, especially with no money down,
or the VA loan, to be able to
buy an asset that I can live in,
(03:13):
but I can also cover my rent by
renting out the other unit in it, and
then move out of it and keep it
as a rental property, that cash flowed well,
appreciated it over time, had tax benefits, all
the things.
So I just kept investing since that first
duplex.
I always tell people I've never taken a
year off.
I've purchased real estate every single year since
then.
I'm not saying I've made money on all
my deals, but I'm just saying that I've
never given up.
(03:33):
I've stayed consistent to investing, and that's allowed
us to build a very large portfolio now
that's really allowed us to transition full-time
into operating this business, being full-time real
estate investors.
My wife's also an optometrist.
I met her in school, but we're very
passionate about eye care still.
I mean, we have international humanitarian efforts for
setting up cataract clinics and things like that,
and third world countries.
So real estate has allowed us to create
(03:55):
a lifestyle that where we have the time
and the financial capability to have a bigger
impact through eye care and just do some
other things.
So it's been a journey, but just time
and time again, I'm reminded that real estate
investing, I think it's the most predictable path
to wealth, and that's certainly the case for
us.
So you've done a lot of different things,
multifamily, commercial, long-term rentals, I think maybe
(04:16):
long-term, I know you've done short-term
rentals even on the luxury side, or not,
I should say lifestyle type assets as well.
So do you still dabble in all of
it, or do you spend most of your
time in one area of real estate?
No, our core business rent to retirement, we
are a bill to rent provider and a
turnkey provider.
And as you mentioned, really the nation's leading
one, we did about 900 transactions this past
(04:38):
year across 18 different markets, helping our investors
build their portfolios, but that's mainly in residential
real estate, that's single family and small multifamily
properties that we either build or rehab, lease
and manage for our investors, strategically across the
best markets in the country where people can
maximize cashflow appreciation and equity, because that allows
investors to, regardless of their experience level, or
(05:00):
regardless of where they're geographically located, allows them
to invest in areas that make the most
sense and offer the best returns where our
team's handling everything for them.
And so because of that, our core business,
and probably a strong portion of my portfolio
will always be residential real estate.
I mean, it's predictable housing, right?
We're talking about providing a human necessity, which
is housing.
(05:20):
There's an undersupply of 7.5 million households,
houses in the U.S. right now.
So there's a huge affordability crisis.
So we love, there's the bread and butter
housing solutions.
I think that's the most predictable path to
wealth.
I think it's a great place to start
and scale.
We've done a lot of different things in
real estate.
We've done a lot of commercial industrial.
We've done a lot of retail.
We still own 11 retail centers, but going
(05:41):
through this whole cycle, Tai, I've kind of
come back to realize like single family, it
may not be the most like sexy thing
out there in real estate, but it's really
where I think the core wealth is built.
And we just love operating in residential real
estate.
And we'll always do that for the majority
of our investment portfolio.
So when you're working with, you have a
lot of investors under you.
(06:01):
So how does your model work?
Do you help investors get into the industry
and invest, and then you manage the properties?
We offer inventories.
We have a marketplace.
These are houses that we either build, I
guess on the build to rent, because that's
about 80% of what we do.
We mainly focus on new construction.
Yes, we have the traditional turnkey stuff.
Your 1970s house has been rehabbed.
It's $150,000 in the Midwest.
(06:22):
That's got a 15% cash on cash
return or whatever.
That's your traditional turnkey.
We certainly have those, but the core product
of what we do is build to rent.
And we do that in two ways, Tai.
One, we're a builder.
So we actually build houses, lease and manage
them for investors.
So we sell them to the investor, right?
And we also manage it for them, but
we give them all the tools and resources
and lending that they need.
We can dive into some of the unique
(06:42):
lending options we have where people could buy
multiple properties, like with as little as 5
% down, things like that.
So we either build properties, but that's about
10% of the builds we do.
The majority of the builds that we make
available to our investors on our marketplace are
actually built by national and regional builders.
These are well-known builders like LGI Homes,
D.R. Horton, Lenar, Toll Brothers.
And what we do is, because we are
(07:04):
doing large volume as a company with economies
of scale, we actually go to these national
builders and we're able to negotiate wholesale type
of pricing.
We have to commit and say, all right,
Toll Brothers, we're gonna take 250 homes of
yours this year in these select markets.
And because of that, we're able to get
preferential pricing that we can actually pass on
to our investors.
So for example, and that could be dramatic.
(07:26):
It's often 10 to 12% below market
value pricing.
So like on a $300,000 house in
the Southeast, like in your neck of the
woods, we could have an A-class new
construction asset that's brand new built, has builder
warranties, all the things, where the investor can
buy it, if it's a 10% incentive,
they can buy it $30,000 below market
(07:46):
value.
So on a $300,000 house, 10%
is $30,000.
They can buy that at $270,000 to
come in into immediate equity.
Of course, there'll still be great positive cashflow.
We'll at least manage the property for them.
So it can be a passive investment.
Or what they can do is they can
take that 10% incentive and actually get
it as cash back or use it to
buy down rates into the 3%, which is
a crazy low rate to maximize cashflow.
(08:06):
Majority of investors actually take the cash back.
Because if you're putting 20% down on
that property, which is $60,000 on a
$300,000 house, and you get $30,000
immediately back in your pocket, that's a great
way to increase ROI, to stretch your capital
further.
As I mentioned, we have loan options where
you can put those 5% down.
So if you're getting 10% back and
putting 5% down, you literally can be
into a brand new construction house for no
(08:27):
money out of pocket, working with local credit
unions that have portfolio loans to do that.
So that was really long-winded of me.
But basically, yes, we identify the markets that
have the best opportunities.
We build our local teams and systems in
those areas to be able to rehab properties,
lease and manage them for investors, where they
can make strategic investments and diversify and scale
their portfolio across the country.
So I love everything you said, and I'm
(08:47):
a finance guy.
So anything to do with that, I love.
So let me ask you this, when you're
doing these loans, when you're basically building them
and then renting them, are they doing like
a CP?
Are they doing construction per loan?
Or are they doing like end loan when
the construction is actually completed?
Yeah, we're building the products.
Either we're building it in-house or one
of the national builders is building it and
(09:07):
completing it.
So the investor is buying the end product,
right?
They're having a house that's completed day one.
Oftentimes homes are even rented prior to closing,
depends on the inventory.
So they're buying a house that's already done,
ready to go.
They can put whatever financing they want on
the backend.
So if it's a, it's traditional financing, right?
Most people use conventional loans, putting 20, 25
% down, or maybe some of these portfolio
loans where it's 5% down as a
(09:30):
long-term buy and hold investment.
So you did mention a couple of times
5% down, and then you also mentioned
some financing options.
So what type of financing is available for
somebody once the property is built for them
to actually be able to get financing?
Yeah, it depends on the investor.
We don't dictate what financing you use.
Our goal is to make the best options
available to you based on your goals.
(09:51):
So you can use whatever loan structure you'd
like.
I would say vast majority of our investors
are using your Fannie Mae, Freddie Mac loans.
They're putting 20% down on a 30
-year fixed loan.
Again, with that incentive of anywhere between 6
% to 12%, they can buy the rate
down significantly on that to really increase cashflow.
But we do have in our network a
lot of different creative loan options for people
depending on their scenario.
(10:12):
If you're someone who can't qualify for traditional
financing, say you're self-employed or you maxed
out your Fannie Mae, Freddie Mac products, there's
different investor loans.
We have foreign nationals.
If you're international, you qualify.
The 5% down loan I keep talking
about is just, and I mentioned that because
it's unique for people.
A lot of people think they have to
put 20% or 25% down to
own an investment property unless they're doing like
(10:33):
an FHA or like a BA like I
did.
This is a portfolio loan, and this is
just one of many examples where you can
finance up to five investment properties with a
local credit union.
This is available in most states, not all
states, where if you still have to qualify
for the loan, you still have to have
good credit, good DTI, but they will finance
up to 95% of the purchase price
on the property.
There's no PMI, which is really nice.
(10:55):
This is a portfolio loan that the credit
unions hold in-house, and it's a pure
investment property.
You don't have to live in the property.
You can finance multiple if you qualify.
So it's a really unique strategy to be
able to stretch your capital further.
If you had a 20% down payment,
instead of putting that all on one property,
in theory, you could do 5% on
four properties and have four streams of income,
own larger amounts of real estate.
(11:16):
We have a lot of investors that do
creative things like with the tax strategies, doing
accelerated depreciation and cost segregation studies because they're
high-income earners and they need a big
tax break.
So that's a great way to own more
real estate sooner and to get these massive
tax breaks, but also just to diversify and
scale your portfolio.
So we have the products available.
We have the inventory, which is a newly
built house or rehabbed home that we lease
(11:37):
and manage strategically throughout markets that we know
are in the path of progress, that are
growth markets.
We have appreciation both in home prices and
rents, but we try to set you up
for success by making available the best lending
opportunities based on your scenario.
Hopefully that makes sense.
Yeah, and like a lot of us are
entrepreneurs, I think everybody's an entrepreneur who's watching
this.
So that being said, you really focus on,
(12:00):
you have opportunities there too.
If I can't go Freddie or Fannie because
I can't go full dock, then there's opportunities
out there with DSCR or other kinds of
financing where I'm able to still get in
without a lot of money down, even if
I'm not able to prove my income as
a W-2 earner.
Yeah, absolutely.
Yeah, we have a lot of investors that
cannot get conventional financing for one reason or
another.
They're business owners.
(12:20):
They're limiting the taxes.
So we have plenty of loan options for
any investor.
Now, if I come in and want to
build a certain type of property, am I
working within what your builders build?
Meaning like you just mentioned 300K.
So let's just start there.
Are there all the properties that we're building
about that same amount?
Or what if I want to come in
and build high-end luxury property that's in
(12:40):
a destination location that I want to use
a lifestyle asset?
Maybe I want to spend a million or
2 million.
Do you deal with that?
Or are you looking at what typically rents
the most and then you're building those?
Yeah, I mean, we have a fundamental criteria
that is a proven path to success for
us.
So it's not like someone come in and
say, now we work all across the country.
We have 18 active markets or 18 active
(13:02):
states, actually more markets than that because we'll
work in multiple markets within a state.
So we do have a diversity across the
US, but we intentionally build a particular type
of product in a specific market that we
know is going to produce a specific return
on the backend.
So it's just the inventory available at any
given point in time.
We have 60 to 80 homes for sale
that are done and ready to go across
(13:23):
the market.
So you can choose from those or we're
always opening up new markets as well.
We have small multifamily and single family, but
these are first areas that we've identified that
have like the location is really important.
We want areas where you're below the median
house price point, right?
This is median house price point in the
US is roughly 400K, give or take.
So we wanna be below the median house
price point that gives us the largest demographic
(13:45):
of tenants, largest demographic of retail buyers when
it comes time to sell that house.
We wanna be in areas that are in
the path of progress that have population growth,
that have an undersupply of housing.
That way you can have strong appreciation.
You can keep your house rented to a
quality tenant, not have turnover and be able
to raise rents incrementally every year.
We wanna be in areas that have landlord
friendly legislation, low taxes.
So naturally a lot in the Midwest and
(14:05):
the Southeast are those are in the Southeastern
more growth markets.
Price points range anywhere from like 120,000
on that rehab to Midwestern house to anywhere
of, we do have some multifamily or some
high-end properties that go above the million
dollar price point as well.
It just depends on what you're looking for.
But like we have a process to follow
to ensure that we're going to provide predictable
results and it's working within those criteria.
(14:27):
Not a lot of people build the rent.
One of the only ones I know of
that does, I think it makes a lot
of sense.
One of my buddies does this on high
-end properties, just freaking kills it.
I mean, like he builds the thing and
makes like 700K just on the equity before
he even rents the thing.
And then luxury rentals, it's like, it's crazy
how much money can be made on what
you're doing.
Swears by what you're saying.
If you're gonna do this, you need to
(14:48):
build and then rent, not buy and then
rehab and rent.
So that being said, what is the benefit?
From your perspective, why build versus rent, versus
do what everybody else is trying to do,
which is buy and rent or buy and
rehab.
Man, we've just made such a transition over
the years.
As I mentioned, I've been investing for about
15 years now and new construction is just
(15:10):
the way to go for multiple reasons.
Yes, typically you come into new construction with
immediate equity, which is a benefit.
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Generally builders are building an area where there's
supply and demand discrepancy, right?
That's economics 101.
So you're building in an area that has
an undersupply of housing.
That means not only do you come in
(15:51):
with immediate equity, but your home is appreciating
quickly in value.
We wanna be in areas where you can
positively cashflow anywhere from an eight to 15
% cash on cash return.
You're using leverage.
So the cashflow numbers make sense in specific
areas.
So you truly can have cashflow appreciation and
equity in the right location, right?
A lot of people think it's a spectrum.
(16:12):
I gotta choose a cashflow investment or an
equity investment and they're chasing equity.
Like in the right market, you can have
all three.
But generally speaking, new construction, you attract better
quality tenants.
You have less maintenance, less turnover.
You'd have zero capital expenditures for at least
that first 10 years.
You have builder warranties on everything in the
house.
For that first year, you have structural and
mechanical warranties for sometimes 10 years.
(16:33):
Like it's just more predictable.
And over time, we found that new construction,
they appreciate better, they have more consistent income.
They just produce better results and you build
wealth quicker on new construction.
Focusing in the right markets and rehab properties,
we still do some of that.
We mainly started, we cut our teeth doing
that.
That's a lot of variability.
That's a lot of work.
(16:54):
Those houses don't have the appreciation potential that
new construction does.
And there's a lot of maintenance stuff that
comes along.
Even if you fully rehab a house, if
it's an older house, still an older house.
So that's why we like new construction.
Yeah, living in this city, these assessments are
crazy what people pay.
Like, I mean, I would never even buy
a place in the city, like 10 years
old.
So what you're saying makes a tremendous amount
of sense versus actually buying something and actually
(17:17):
building it instead.
Short-term or long-term?
It sounds like you're more of buy and
then put long-term tenant in it.
Yeah, our bread and butter is long-term
rentals.
I mean, that's just very predictable.
Short-term rentals, we do have some short
-term rentals.
In fact, we do have a whole short
-term rental program where people want to come
in and take accelerated depreciation and the tax
benefits, doing a cost segregation study and things
(17:37):
like that.
But they wouldn't qualify as a real estate
professional because they can't meet, you know, they're
full-time employed, both them and their spouse.
They can't meet that 750 hours, whatever the
case is.
We have a short-term program where people
can come in.
They kind of like self-manage for the
first few months or whatever that calendar year
is.
And then they turn it over to management
the next calendar year, but it allows them
to take that accelerated depreciation.
But we do have some short-term rentals.
(17:58):
That's just really unique to the market.
There's more variability and fluctuation with short-term
rentals.
Often it takes two to three to four
years to really optimize, like optimize the performance
on that property.
It's not really coming out of the gates
at maximal performance.
Long-term rental is just really predictable.
You have your cashflow every single month.
There's predictable returns, things like that.
So that's the vast majority of what we
do.
It sounds to me like I come to
you and I say, hey, man, this exactly
(18:19):
sounds fantastic.
And you helped me find the market.
You helped me find the property.
Actually, I say, this is the perfect property.
Then we go in, I'm able to then
buy that property.
Construction's done before or after that.
And then at that point, I close on
the deal using creative financing that you've been
able to help guide us through to be
able to figure that out.
Now I own the property.
(18:39):
And then you're able with your training to
guide me on putting a long-term renter
in there or you do it and then
take over the whole management of the property.
And then I just get a property that
has immediate equity in there and then start
getting like positive cashflow every month in rent.
Fairly accurate?
Yeah, I think you did a great job
Ty breaking it down.
I mean, when we talk about turnkey investing
(19:00):
and that's a buzzword that has a lot
of different definitions.
I think people historically think about turnkey as
like the a hundred year old house in
the Midwest that's in a C or D
class area that's got a little bit of
rehab done.
Like that's not us.
We're working in B and A class areas.
The majority is new construction, A class assets.
The goal is to build a portfolio that
you're not having to actively manage, right?
And diversify your portfolio and avoid a lot
(19:21):
of the common pitfalls and mistakes that people
make.
So we have brand new investors that need
a little bit of handholding and they wanna
get started.
They wanna expedite their success.
They don't wanna hit those common pitfalls and
mistakes is because they don't know what they
don't know.
Trying to do it all by themselves.
They just wanna have a straight line to
success owning real estate long-term.
We all know that wealth, true wealth is
built in real estate.
Holding assets.
You can do whatever you want with flipping,
(19:42):
wholesaling.
Like building wealth in real estate is building
a portfolio, long-term buy and hold portfolio
over a period of time in the right
markets with the right team.
So that's our goal.
So we have new investors that we help
get into that first property and build their
confidence and their foundation.
We have busy professionals that are like, hey,
I wanna own real estate.
I don't wanna actively manage.
We have full-time investors that are working
(20:03):
on their projects and their businesses, making really
good money, but they're like, I need to
buy more real estate for tax benefits or
I need to diversify my portfolio.
So we provide a very easy way for
them to acquire more assets where we're handling
everything for them, right?
So this is really more on the passive
end of the spectrum of real estate investing.
It's not purely passive.
I don't think anything is, but it's certainly
on the more passive end of like long
-term buy and hold real estate.
(20:23):
So give maybe a case study, an example
of somebody that in the last, let's say
in the last year, you have 900 of
those, an example of what this can look
like.
And again, before you share this, if you're
watching this, it's not to say this is
a standard of what's gonna happen.
There's a lot of variables and what kind
of returns and stuff you're gonna get.
But I just want Zach to be able
to give you an idea of an example
so we can kind of learn.
(20:44):
So Zach, do you have an example right
there?
Yeah, plenty.
I mean, it's not too exciting to talk
about the app.
We want things to be predictable, right?
And not overly challenging or exciting.
I mean, the typical house would probably, a
new construction house is probably be $250,000
on average, which that's hard to get in
a lot of areas throughout the country, right?
Like in Tampa, that's a more expensive market.
We work in some suburbs of those areas,
(21:05):
like in between Tampa and Orlando, like Poinciana
and Polk County.
That's an area where, hey, we can still
build a four bedroom, two bath house for
whatever, $280,000.
That's renting out for $2,300 a month.
So like that's good, good cash on cash
return in a market that's appreciating because people
are moving out to the more affordable suburbs
and has high demand.
So our typical deal, yeah, call it two,
(21:26):
$250,000.
You can put 20% down, or if
you're using conventional or you can use a
creative finance method to put less than that
down, you're probably gonna look at cash flow
in between four to $600 a month, depending
on the property.
So net, that's after all, management expenses, even
future vacancy, future maintenance, even though you shouldn't
have that on new construction.
So it's really a predictable way to just
consistently yield an eight to 12, possibly 15
(21:48):
% cash on cash return on a new
construction asset that's appreciating well over time.
Probably a better example, Tai, would be some
of our creative ways that we work with
some of our high net worth investors.
Like we had this surgeon couple in December
was a really good, it always is a
big month for us every year because people
are trying to fit those in for tax
benefits.
But this was a couple, a doctor couple
that came to us and fairly new to
(22:09):
investing.
They're obviously busy in their professional career path,
but they're like, their local market didn't make
any sense in the world to invest in.
They were based in, I think it was
LA or somewhere in California and just too
expensive.
They maybe could have bought one property.
We helped them buy five properties that they
closed on before the end of the year.
They put 5% down on all these
properties using the local credit union that I
(22:30):
talked about where they were able to qualify.
All of the new construction properties that they
bought had incentives between six to 10%
back, 10% cash back, or they take
it as a price deduction, whatever that's up
to you as the investor what to do.
So long story short, they were able to
put down 5%.
Their portfolio was roughly a million dollars that
they bought total assets.
At a million dollars, they were able to
(22:50):
put less than $50,000 down on the
properties to acquire those assets.
They got money back from the builder that
covered that $50,000 plus some.
So they virtually bought a new construction portfolio
of five single family homes that was just
over a million dollars in total value that
they put no money down on.
And they did the short-term loophole route
(23:11):
that we were talking about where they managed
it throughout the end of the year.
And then we took over management after the
end of the year.
So they were able to do accelerated depreciation
without being real estate professionals.
These were the first investment properties that they
bought.
And they did a, and I'm just kind
of rounding rough numbers here, but it was
like 1.2 million was a total acquisition.
Their cost segregation studies came in at 36
(23:31):
% on those.
So times 1.2, and we're not removing
land or anything like this for this purpose,
just for simplicity.
But they had a $4,432,000 tax
deduction.
Now that's at 100% bonus depreciation.
Last year was at 60%, moving faster this.
So their studies, I think I said 36
% on that 1.2, 432,000 takes
(23:52):
that times 0.6, 60% of that.
That was a $260,000.
That's a true tax deduction that they were
able to acquire with cash flowing assets in
an A-class area.
Actually, all of those they bought were in
Florida, where they got a $260,000 immediate
tax deduction.
So that was, they were super stoked about
that.
They still had their money to keep in
(24:13):
reserves and reinvest in other assets.
But we created a $260,000 tax deduction
for them with no money out of pocket,
acquiring five houses.
Like that's the type of creative stuff we
work with people on.
Well, that's a crazy example.
Like I asked you for an example, but
that's like crazy example.
That's awesome.
That's even possible.
And I think people underestimate the tax incentives
and benefits that you get with real estate.
(24:34):
100%.
When I think about building wealth, I'm interested
to hear your opinion on this.
But like, there's a few key things that
there's a few light bulb moments for me
as a real estate investor throughout my career.
I'm like, oh, I can do this.
And oh, by doing this, I'm saving a
significant amount.
Like I'm going to, this is where you
get this hockey stick growth in your portfolio
and your net worth.
Some of those things would be like investing
in locations that are in strong growth markets,
(24:55):
where you can really capitalize on appreciation.
And there are markets in any market cycle
that are appreciating very well.
You just have to know where to find
those.
Investing in new construction would be another light
bulb.
Like those are just better assets.
Reinvesting our equity.
So doing things like cash out refinance and
because there's a return on equity, right?
If you have equity, even in your primary
residence, equity sitting in a house, the return
on equity is diminishing over time as you
(25:16):
build equity and don't do anything with it.
So reinvesting your equity.
But the biggest thing certainly has been the
tax benefits in real estate investing.
We run a successful business.
Our goal every single year is to buy
enough real estate to offset all of our
tax liability.
Every single year, that's just way more money
that we can reinvest to buy more assets
that have additional tax benefits.
You get the snowball effect, right?
So like just being a tax conscious investor
(25:37):
because real estate has more tax benefits than
any other asset class out there, hands down.
And that's the best way to give yourself
an immediate raise, right?
Is limit your tax liability in real estate
investing.
That's just more money that you otherwise would
give to Uncle Sam.
Never see again that now you can reinvest,
earn a return on, earn cashflow on, reinvest,
have more tax benefits.
I can go on and on.
But that's one of those things that's like,
oh, I can do this.
(25:58):
Man, it's just trajectory of wealth.
Zach, really powerful stuff and stuff we've just
never heard before on the show.
So I appreciate you coming on.
Where can everybody go that's interested in jumping
in and learning more and getting started with
you guys?
Where should they go?
What should they do?
We always want to drive people tied to
our website.
That's renttoretirement.com, renttoretirement.com.
We have our own podcasts and YouTube channel
(26:20):
with hundreds of thousands of subscribers.
We've got a big community.
We're always putting out market data.
We've got investment calculators.
If you're just interested to learn about some
of the loan options I talked about, whether
you're interested in investing in Turnkey or not,
we're happy to share those.
Our goal is to add value to every
single person we speak with.
We don't charge investors anything to work with
us.
We make our money from building and selling
houses like builders would and managing them.
(26:40):
So if you just want to have a
consultation about learning about different markets or what
Turnkey does.
Also, if you're listening to this audio, you
can also text REI to 33777.
And the best thing to do is just
schedule an appointment with our team to learn
more and answer your questions.
I love it.
Zach, thanks for coming on all this today.
Hi, it's been a pleasure.
Thanks so much.
(27:01):
All right, so listen, if you're watching this,
make sure you go to renttoretirement.com.
If you go to renttoretirement.com, phenomenal site.
I mean, you can see they have a
video library there.
They have a podcast, blog, tools, and resources
that you're able to access right on the
website as well.
Plus on there, you're able to be able
to get in touch with them.
You're able to access frequently asked questions amongst
many other different resources to be able to
(27:21):
see how you can actually use this for
tax incentives, for wealth, for retirement.
Look, we both know that this is the
way to go with real estate investing in
real estate.
But what Zach showed you today was probably
something you've never heard or seen, which is
basically a clear path to be able to
do it the right way, to be able
to get into a property instantly and have
equity, which is very hard to do, especially
(27:42):
in a market in Tampa like where I
am.
It's hard to get into a property and
have instant equity.
You're able to actually do that and be
able to get a little to no money
down, potentially even no money down.
We're talking about the incentives coming back to
you to offset the amount of money you're
putting down.
This is like ridiculous.
And again, then you have somebody that can
help you manage the property in every different
aspect.
So this is one of the easiest, smoothest
(28:04):
ways to get into real estate and be
able to make money right away the minute
you're closing, and then be able to continue
to create more wealth as you accumulate more
properties.
It all happens in one place.
And the one place is rent2retirement.com.
Spell two correctly, it's T-O.
So rent2retirement.com.
Make sure you check it out right now.
(28:25):
Check out the resources and jump in on
this so you're able to get your hands
on the kind of wealth that real estate
investing can be able to bring for you.
So make sure you check it out, rent2retirement
.com.
Thanks for tuning in.
Take care.
Have a great day.
(28:45):
You've been listening to the Business Credit and
Financing Show with your host, Ty Crandall.
Watch for our next episode to get even
more insight on financing and growing your business.
And don't forget to check us out online
at creditsuite.com for even more business growth
strategies.
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to the Business Credit and Financing Show.
Each week, we talk about the growth strategies
that matter most to entrepreneurs.
Listen in as we discuss the secrets to
getting credit and money to start and grow
your business.
And enjoy as we talk with seasoned business
owners, coaches, and industry leaders on a variety
(00:22):
of topics from advertising and marketing to the
nuts and bolts of running a highly successful
business.
And now, to introduce the host of our
show, financial expert and award-winning author, Ty
Crandall.
Hello, and thanks for joining us today.
I'm super excited you could be here because
today we're talking about some of the most
advanced tips and tactics that you should know
(00:45):
if you're already investing in real estate or
you're thinking about investing in real estate.
And with us today is really one of
the most diverse investors and trainers that I
know because he deals a lot of areas
of real estate and does a lot of
really cool things.
So with us today is Zach Lehmaster.
Now, Zach is the founder and CEO of
Rent2Retirement, the nation's leading turnkey investment company.
(01:06):
So Zach is a seasoned real estate investor
and licensed broker that has accumulated a large
portfolio of rental properties across multiple different markets,
including single-family, multifamily, commercial, and new construction
as well.
Now, Zach is a licensed optometrist who practices
on a volunteer basis, and he started investing
in real estate while working as an optometrist
(01:28):
and captain for the US Air Force.
Now, this eventually allowed him to retire early
from his career in medicine to be a
professional investor.
Now, by strategically investing in markets that maximize
cashflow, appreciation, and equity, Zach then went on
to build a successful wholesaling, flipping, and management
business working across multiple markets, which led to
(01:51):
the foundation of Rent2Retirement.
Now, he's considered an industry expert in real
estate and market analysis, and Zach has been
published across many exceptional national platforms, including Forbes,
USA Today, Fox News, NBC, CBS, Veterans Affairs,
Think Reality, and the Inc.
5000 as well.
(02:11):
Now, he is passionate about educating others on
the numerous benefits of real estate investing and
how to use real estate as a means
to create the lifestyle each person desires for
their family.
Zach, what's up, man?
Thanks for joining me today.
Hey, Ty, excited to be here.
Thanks so much for such the outstanding intro.
Yeah, let me ask, we're both Air Force
veterans, so what made you make the jump
(02:31):
here from where you were as an optometrist
into real estate?
Yeah, it was never an intention.
I was never one of these guys, Ty,
that was like, oh, I hate what I
do.
I just wanna retire myself early.
That was never the goal.
I started investing in real estate probably about
15 years ago at this point when I
was first commissioned as a captain in the
Air Force, because I came in, I was
on scholarship in optometry school at HBSP, and
then commissioned as a captain directly to the
(02:52):
Air Force, and I actually bought my first
property before I even got to my first
duty station, so it was almost immediately, but
I used a VA loan, bought a duplex,
lived in half, rented out the other half,
and really just fell in love with real
estate from that point on.
I mean, I kinda like the idea of,
hey, I can use someone else's money, i
.e. the bank, especially with no money down,
or the VA loan, to be able to
buy an asset that I can live in,
(03:13):
but I can also cover my rent by
renting out the other unit in it, and
then move out of it and keep it
as a rental property, that cash flowed well,
appreciated it over time, had tax benefits, all
the things.
So I just kept investing since that first
duplex.
I always tell people I've never taken a
year off.
I've purchased real estate every single year since
then.
I'm not saying I've made money on all
my deals, but I'm just saying that I've
never given up.
(03:33):
I've stayed consistent to investing, and that's allowed
us to build a very large portfolio now
that's really allowed us to transition full-time
into operating this business, being full-time real
estate investors.
My wife's also an optometrist.
I met her in school, but we're very
passionate about eye care still.
I mean, we have international humanitarian efforts for
setting up cataract clinics and things like that,
and third world countries.
So real estate has allowed us to create
(03:55):
a lifestyle that where we have the time
and the financial capability to have a bigger
impact through eye care and just do some
other things.
So it's been a journey, but just time
and time again, I'm reminded that real estate
investing, I think it's the most predictable path
to wealth, and that's certainly the case for
us.
So you've done a lot of different things,
multifamily, commercial, long-term rentals, I think maybe
(04:16):
long-term, I know you've done short-term
rentals even on the luxury side, or not,
I should say lifestyle type assets as well.
So do you still dabble in all of
it, or do you spend most of your
time in one area of real estate?
No, our core business rent to retirement, we
are a bill to rent provider and a
turnkey provider.
And as you mentioned, really the nation's leading
one, we did about 900 transactions this past
(04:38):
year across 18 different markets, helping our investors
build their portfolios, but that's mainly in residential
real estate, that's single family and small multifamily
properties that we either build or rehab, lease
and manage for our investors, strategically across the
best markets in the country where people can
maximize cashflow appreciation and equity, because that allows
investors to, regardless of their experience level, or
(05:00):
regardless of where they're geographically located, allows them
to invest in areas that make the most
sense and offer the best returns where our
team's handling everything for them.
And so because of that, our core business,
and probably a strong portion of my portfolio
will always be residential real estate.
I mean, it's predictable housing, right?
We're talking about providing a human necessity, which
is housing.
(05:20):
There's an undersupply of 7.5 million households,
houses in the U.S. right now.
So there's a huge affordability crisis.
So we love, there's the bread and butter
housing solutions.
I think that's the most predictable path to
wealth.
I think it's a great place to start
and scale.
We've done a lot of different things in
real estate.
We've done a lot of commercial industrial.
We've done a lot of retail.
We still own 11 retail centers, but going
(05:41):
through this whole cycle, Tai, I've kind of
come back to realize like single family, it
may not be the most like sexy thing
out there in real estate, but it's really
where I think the core wealth is built.
And we just love operating in residential real
estate.
And we'll always do that for the majority
of our investment portfolio.
So when you're working with, you have a
lot of investors under you.
(06:01):
So how does your model work?
Do you help investors get into the industry
and invest, and then you manage the properties?
We offer inventories.
We have a marketplace.
These are houses that we either build, I
guess on the build to rent, because that's
about 80% of what we do.
We mainly focus on new construction.
Yes, we have the traditional turnkey stuff.
Your 1970s house has been rehabbed.
It's $150,000 in the Midwest.
(06:22):
That's got a 15% cash on cash
return or whatever.
That's your traditional turnkey.
We certainly have those, but the core product
of what we do is build to rent.
And we do that in two ways, Tai.
One, we're a builder.
So we actually build houses, lease and manage
them for investors.
So we sell them to the investor, right?
And we also manage it for them, but
we give them all the tools and resources
and lending that they need.
We can dive into some of the unique
(06:42):
lending options we have where people could buy
multiple properties, like with as little as 5
% down, things like that.
So we either build properties, but that's about
10% of the builds we do.
The majority of the builds that we make
available to our investors on our marketplace are
actually built by national and regional builders.
These are well-known builders like LGI Homes,
D.R. Horton, Lenar, Toll Brothers.
And what we do is, because we are
(07:04):
doing large volume as a company with economies
of scale, we actually go to these national
builders and we're able to negotiate wholesale type
of pricing.
We have to commit and say, all right,
Toll Brothers, we're gonna take 250 homes of
yours this year in these select markets.
And because of that, we're able to get
preferential pricing that we can actually pass on
to our investors.
So for example, and that could be dramatic.
(07:26):
It's often 10 to 12% below market
value pricing.
So like on a $300,000 house in
the Southeast, like in your neck of the
woods, we could have an A-class new
construction asset that's brand new built, has builder
warranties, all the things, where the investor can
buy it, if it's a 10% incentive,
they can buy it $30,000 below market
(07:46):
value.
So on a $300,000 house, 10%
is $30,000.
They can buy that at $270,000 to
come in into immediate equity.
Of course, there'll still be great positive cashflow.
We'll at least manage the property for them.
So it can be a passive investment.
Or what they can do is they can
take that 10% incentive and actually get
it as cash back or use it to
buy down rates into the 3%, which is
a crazy low rate to maximize cashflow.
(08:06):
Majority of investors actually take the cash back.
Because if you're putting 20% down on
that property, which is $60,000 on a
$300,000 house, and you get $30,000
immediately back in your pocket, that's a great
way to increase ROI, to stretch your capital
further.
As I mentioned, we have loan options where
you can put those 5% down.
So if you're getting 10% back and
putting 5% down, you literally can be
into a brand new construction house for no
(08:27):
money out of pocket, working with local credit
unions that have portfolio loans to do that.
So that was really long-winded of me.
But basically, yes, we identify the markets that
have the best opportunities.
We build our local teams and systems in
those areas to be able to rehab properties,
lease and manage them for investors, where they
can make strategic investments and diversify and scale
their portfolio across the country.
So I love everything you said, and I'm
(08:47):
a finance guy.
So anything to do with that, I love.
So let me ask you this, when you're
doing these loans, when you're basically building them
and then renting them, are they doing like
a CP?
Are they doing construction per loan?
Or are they doing like end loan when
the construction is actually completed?
Yeah, we're building the products.
Either we're building it in-house or one
of the national builders is building it and
(09:07):
completing it.
So the investor is buying the end product,
right?
They're having a house that's completed day one.
Oftentimes homes are even rented prior to closing,
depends on the inventory.
So they're buying a house that's already done,
ready to go.
They can put whatever financing they want on
the backend.
So if it's a, it's traditional financing, right?
Most people use conventional loans, putting 20, 25
% down, or maybe some of these portfolio
loans where it's 5% down as a
(09:30):
long-term buy and hold investment.
So you did mention a couple of times
5% down, and then you also mentioned
some financing options.
So what type of financing is available for
somebody once the property is built for them
to actually be able to get financing?
Yeah, it depends on the investor.
We don't dictate what financing you use.
Our goal is to make the best options
available to you based on your goals.
(09:51):
So you can use whatever loan structure you'd
like.
I would say vast majority of our investors
are using your Fannie Mae, Freddie Mac loans.
They're putting 20% down on a 30
-year fixed loan.
Again, with that incentive of anywhere between 6
% to 12%, they can buy the rate
down significantly on that to really increase cashflow.
But we do have in our network a
lot of different creative loan options for people
depending on their scenario.
(10:12):
If you're someone who can't qualify for traditional
financing, say you're self-employed or you maxed
out your Fannie Mae, Freddie Mac products, there's
different investor loans.
We have foreign nationals.
If you're international, you qualify.
The 5% down loan I keep talking
about is just, and I mentioned that because
it's unique for people.
A lot of people think they have to
put 20% or 25% down to
own an investment property unless they're doing like
(10:33):
an FHA or like a BA like I
did.
This is a portfolio loan, and this is
just one of many examples where you can
finance up to five investment properties with a
local credit union.
This is available in most states, not all
states, where if you still have to qualify
for the loan, you still have to have
good credit, good DTI, but they will finance
up to 95% of the purchase price
on the property.
There's no PMI, which is really nice.
(10:55):
This is a portfolio loan that the credit
unions hold in-house, and it's a pure
investment property.
You don't have to live in the property.
You can finance multiple if you qualify.
So it's a really unique strategy to be
able to stretch your capital further.
If you had a 20% down payment,
instead of putting that all on one property,
in theory, you could do 5% on
four properties and have four streams of income,
own larger amounts of real estate.
(11:16):
We have a lot of investors that do
creative things like with the tax strategies, doing
accelerated depreciation and cost segregation studies because they're
high-income earners and they need a big
tax break.
So that's a great way to own more
real estate sooner and to get these massive
tax breaks, but also just to diversify and
scale your portfolio.
So we have the products available.
We have the inventory, which is a newly
built house or rehabbed home that we lease
(11:37):
and manage strategically throughout markets that we know
are in the path of progress, that are
growth markets.
We have appreciation both in home prices and
rents, but we try to set you up
for success by making available the best lending
opportunities based on your scenario.
Hopefully that makes sense.
Yeah, and like a lot of us are
entrepreneurs, I think everybody's an entrepreneur who's watching
this.
So that being said, you really focus on,
(12:00):
you have opportunities there too.
If I can't go Freddie or Fannie because
I can't go full dock, then there's opportunities
out there with DSCR or other kinds of
financing where I'm able to still get in
without a lot of money down, even if
I'm not able to prove my income as
a W-2 earner.
Yeah, absolutely.
Yeah, we have a lot of investors that
cannot get conventional financing for one reason or
another.
They're business owners.
(12:20):
They're limiting the taxes.
So we have plenty of loan options for
any investor.
Now, if I come in and want to
build a certain type of property, am I
working within what your builders build?
Meaning like you just mentioned 300K.
So let's just start there.
Are there all the properties that we're building
about that same amount?
Or what if I want to come in
and build high-end luxury property that's in
(12:40):
a destination location that I want to use
a lifestyle asset?
Maybe I want to spend a million or
2 million.
Do you deal with that?
Or are you looking at what typically rents
the most and then you're building those?
Yeah, I mean, we have a fundamental criteria
that is a proven path to success for
us.
So it's not like someone come in and
say, now we work all across the country.
We have 18 active markets or 18 active
(13:02):
states, actually more markets than that because we'll
work in multiple markets within a state.
So we do have a diversity across the
US, but we intentionally build a particular type
of product in a specific market that we
know is going to produce a specific return
on the backend.
So it's just the inventory available at any
given point in time.
We have 60 to 80 homes for sale
that are done and ready to go across
(13:23):
the market.
So you can choose from those or we're
always opening up new markets as well.
We have small multifamily and single family, but
these are first areas that we've identified that
have like the location is really important.
We want areas where you're below the median
house price point, right?
This is median house price point in the
US is roughly 400K, give or take.
So we wanna be below the median house
price point that gives us the largest demographic
(13:45):
of tenants, largest demographic of retail buyers when
it comes time to sell that house.
We wanna be in areas that are in
the path of progress that have population growth,
that have an undersupply of housing.
That way you can have strong appreciation.
You can keep your house rented to a
quality tenant, not have turnover and be able
to raise rents incrementally every year.
We wanna be in areas that have landlord
friendly legislation, low taxes.
So naturally a lot in the Midwest and
(14:05):
the Southeast are those are in the Southeastern
more growth markets.
Price points range anywhere from like 120,000
on that rehab to Midwestern house to anywhere
of, we do have some multifamily or some
high-end properties that go above the million
dollar price point as well.
It just depends on what you're looking for.
But like we have a process to follow
to ensure that we're going to provide predictable
results and it's working within those criteria.
(14:27):
Not a lot of people build the rent.
One of the only ones I know of
that does, I think it makes a lot
of sense.
One of my buddies does this on high
-end properties, just freaking kills it.
I mean, like he builds the thing and
makes like 700K just on the equity before
he even rents the thing.
And then luxury rentals, it's like, it's crazy
how much money can be made on what
you're doing.
Swears by what you're saying.
If you're gonna do this, you need to
(14:48):
build and then rent, not buy and then
rehab and rent.
So that being said, what is the benefit?
From your perspective, why build versus rent, versus
do what everybody else is trying to do,
which is buy and rent or buy and
rehab.
Man, we've just made such a transition over
the years.
As I mentioned, I've been investing for about
15 years now and new construction is just
(15:10):
the way to go for multiple reasons.
Yes, typically you come into new construction with
immediate equity, which is a benefit.
And now a quick break to hear from
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Hey, it's Ty Crandall with Credit Suite.
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money to grow their business at the best
terms.
Whether you're looking for startup capital, low interest
credit lines and loans or business credit, we
(15:30):
can definitely help you.
So give us a call at 877-600
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money you can get approved for today.
Generally builders are building an area where there's
supply and demand discrepancy, right?
That's economics 101.
So you're building in an area that has
an undersupply of housing.
That means not only do you come in
(15:51):
with immediate equity, but your home is appreciating
quickly in value.
We wanna be in areas where you can
positively cashflow anywhere from an eight to 15
% cash on cash return.
You're using leverage.
So the cashflow numbers make sense in specific
areas.
So you truly can have cashflow appreciation and
equity in the right location, right?
A lot of people think it's a spectrum.
(16:12):
I gotta choose a cashflow investment or an
equity investment and they're chasing equity.
Like in the right market, you can have
all three.
But generally speaking, new construction, you attract better
quality tenants.
You have less maintenance, less turnover.
You'd have zero capital expenditures for at least
that first 10 years.
You have builder warranties on everything in the
house.
For that first year, you have structural and
mechanical warranties for sometimes 10 years.
(16:33):
Like it's just more predictable.
And over time, we found that new construction,
they appreciate better, they have more consistent income.
They just produce better results and you build
wealth quicker on new construction.
Focusing in the right markets and rehab properties,
we still do some of that.
We mainly started, we cut our teeth doing
that.
That's a lot of variability.
That's a lot of work.
(16:54):
Those houses don't have the appreciation potential that
new construction does.
And there's a lot of maintenance stuff that
comes along.
Even if you fully rehab a house, if
it's an older house, still an older house.
So that's why we like new construction.
Yeah, living in this city, these assessments are
crazy what people pay.
Like, I mean, I would never even buy
a place in the city, like 10 years
old.
So what you're saying makes a tremendous amount
of sense versus actually buying something and actually
(17:17):
building it instead.
Short-term or long-term?
It sounds like you're more of buy and
then put long-term tenant in it.
Yeah, our bread and butter is long-term
rentals.
I mean, that's just very predictable.
Short-term rentals, we do have some short
-term rentals.
In fact, we do have a whole short
-term rental program where people want to come
in and take accelerated depreciation and the tax
benefits, doing a cost segregation study and things
(17:37):
like that.
But they wouldn't qualify as a real estate
professional because they can't meet, you know, they're
full-time employed, both them and their spouse.
They can't meet that 750 hours, whatever the
case is.
We have a short-term program where people
can come in.
They kind of like self-manage for the
first few months or whatever that calendar year
is.
And then they turn it over to management
the next calendar year, but it allows them
to take that accelerated depreciation.
But we do have some short-term rentals.
(17:58):
That's just really unique to the market.
There's more variability and fluctuation with short-term
rentals.
Often it takes two to three to four
years to really optimize, like optimize the performance
on that property.
It's not really coming out of the gates
at maximal performance.
Long-term rental is just really predictable.
You have your cashflow every single month.
There's predictable returns, things like that.
So that's the vast majority of what we
do.
It sounds to me like I come to
you and I say, hey, man, this exactly
(18:19):
sounds fantastic.
And you helped me find the market.
You helped me find the property.
Actually, I say, this is the perfect property.
Then we go in, I'm able to then
buy that property.
Construction's done before or after that.
And then at that point, I close on
the deal using creative financing that you've been
able to help guide us through to be
able to figure that out.
Now I own the property.
(18:39):
And then you're able with your training to
guide me on putting a long-term renter
in there or you do it and then
take over the whole management of the property.
And then I just get a property that
has immediate equity in there and then start
getting like positive cashflow every month in rent.
Fairly accurate?
Yeah, I think you did a great job
Ty breaking it down.
I mean, when we talk about turnkey investing
(19:00):
and that's a buzzword that has a lot
of different definitions.
I think people historically think about turnkey as
like the a hundred year old house in
the Midwest that's in a C or D
class area that's got a little bit of
rehab done.
Like that's not us.
We're working in B and A class areas.
The majority is new construction, A class assets.
The goal is to build a portfolio that
you're not having to actively manage, right?
And diversify your portfolio and avoid a lot
(19:21):
of the common pitfalls and mistakes that people
make.
So we have brand new investors that need
a little bit of handholding and they wanna
get started.
They wanna expedite their success.
They don't wanna hit those common pitfalls and
mistakes is because they don't know what they
don't know.
Trying to do it all by themselves.
They just wanna have a straight line to
success owning real estate long-term.
We all know that wealth, true wealth is
built in real estate.
Holding assets.
You can do whatever you want with flipping,
(19:42):
wholesaling.
Like building wealth in real estate is building
a portfolio, long-term buy and hold portfolio
over a period of time in the right
markets with the right team.
So that's our goal.
So we have new investors that we help
get into that first property and build their
confidence and their foundation.
We have busy professionals that are like, hey,
I wanna own real estate.
I don't wanna actively manage.
We have full-time investors that are working
(20:03):
on their projects and their businesses, making really
good money, but they're like, I need to
buy more real estate for tax benefits or
I need to diversify my portfolio.
So we provide a very easy way for
them to acquire more assets where we're handling
everything for them, right?
So this is really more on the passive
end of the spectrum of real estate investing.
It's not purely passive.
I don't think anything is, but it's certainly
on the more passive end of like long
-term buy and hold real estate.
(20:23):
So give maybe a case study, an example
of somebody that in the last, let's say
in the last year, you have 900 of
those, an example of what this can look
like.
And again, before you share this, if you're
watching this, it's not to say this is
a standard of what's gonna happen.
There's a lot of variables and what kind
of returns and stuff you're gonna get.
But I just want Zach to be able
to give you an idea of an example
so we can kind of learn.
(20:44):
So Zach, do you have an example right
there?
Yeah, plenty.
I mean, it's not too exciting to talk
about the app.
We want things to be predictable, right?
And not overly challenging or exciting.
I mean, the typical house would probably, a
new construction house is probably be $250,000
on average, which that's hard to get in
a lot of areas throughout the country, right?
Like in Tampa, that's a more expensive market.
We work in some suburbs of those areas,
(21:05):
like in between Tampa and Orlando, like Poinciana
and Polk County.
That's an area where, hey, we can still
build a four bedroom, two bath house for
whatever, $280,000.
That's renting out for $2,300 a month.
So like that's good, good cash on cash
return in a market that's appreciating because people
are moving out to the more affordable suburbs
and has high demand.
So our typical deal, yeah, call it two,
(21:26):
$250,000.
You can put 20% down, or if
you're using conventional or you can use a
creative finance method to put less than that
down, you're probably gonna look at cash flow
in between four to $600 a month, depending
on the property.
So net, that's after all, management expenses, even
future vacancy, future maintenance, even though you shouldn't
have that on new construction.
So it's really a predictable way to just
consistently yield an eight to 12, possibly 15
(21:48):
% cash on cash return on a new
construction asset that's appreciating well over time.
Probably a better example, Tai, would be some
of our creative ways that we work with
some of our high net worth investors.
Like we had this surgeon couple in December
was a really good, it always is a
big month for us every year because people
are trying to fit those in for tax
benefits.
But this was a couple, a doctor couple
that came to us and fairly new to
(22:09):
investing.
They're obviously busy in their professional career path,
but they're like, their local market didn't make
any sense in the world to invest in.
They were based in, I think it was
LA or somewhere in California and just too
expensive.
They maybe could have bought one property.
We helped them buy five properties that they
closed on before the end of the year.
They put 5% down on all these
properties using the local credit union that I
(22:30):
talked about where they were able to qualify.
All of the new construction properties that they
bought had incentives between six to 10%
back, 10% cash back, or they take
it as a price deduction, whatever that's up
to you as the investor what to do.
So long story short, they were able to
put down 5%.
Their portfolio was roughly a million dollars that
they bought total assets.
At a million dollars, they were able to
(22:50):
put less than $50,000 down on the
properties to acquire those assets.
They got money back from the builder that
covered that $50,000 plus some.
So they virtually bought a new construction portfolio
of five single family homes that was just
over a million dollars in total value that
they put no money down on.
And they did the short-term loophole route
(23:11):
that we were talking about where they managed
it throughout the end of the year.
And then we took over management after the
end of the year.
So they were able to do accelerated depreciation
without being real estate professionals.
These were the first investment properties that they
bought.
And they did a, and I'm just kind
of rounding rough numbers here, but it was
like 1.2 million was a total acquisition.
Their cost segregation studies came in at 36
(23:31):
% on those.
So times 1.2, and we're not removing
land or anything like this for this purpose,
just for simplicity.
But they had a $4,432,000 tax
deduction.
Now that's at 100% bonus depreciation.
Last year was at 60%, moving faster this.
So their studies, I think I said 36
% on that 1.2, 432,000 takes
(23:52):
that times 0.6, 60% of that.
That was a $260,000.
That's a true tax deduction that they were
able to acquire with cash flowing assets in
an A-class area.
Actually, all of those they bought were in
Florida, where they got a $260,000 immediate
tax deduction.
So that was, they were super stoked about
that.
They still had their money to keep in
(24:13):
reserves and reinvest in other assets.
But we created a $260,000 tax deduction
for them with no money out of pocket,
acquiring five houses.
Like that's the type of creative stuff we
work with people on.
Well, that's a crazy example.
Like I asked you for an example, but
that's like crazy example.
That's awesome.
That's even possible.
And I think people underestimate the tax incentives
and benefits that you get with real estate.
(24:34):
100%.
When I think about building wealth, I'm interested
to hear your opinion on this.
But like, there's a few key things that
there's a few light bulb moments for me
as a real estate investor throughout my career.
I'm like, oh, I can do this.
And oh, by doing this, I'm saving a
significant amount.
Like I'm going to, this is where you
get this hockey stick growth in your portfolio
and your net worth.
Some of those things would be like investing
in locations that are in strong growth markets,
(24:55):
where you can really capitalize on appreciation.
And there are markets in any market cycle
that are appreciating very well.
You just have to know where to find
those.
Investing in new construction would be another light
bulb.
Like those are just better assets.
Reinvesting our equity.
So doing things like cash out refinance and
because there's a return on equity, right?
If you have equity, even in your primary
residence, equity sitting in a house, the return
on equity is diminishing over time as you
(25:16):
build equity and don't do anything with it.
So reinvesting your equity.
But the biggest thing certainly has been the
tax benefits in real estate investing.
We run a successful business.
Our goal every single year is to buy
enough real estate to offset all of our
tax liability.
Every single year, that's just way more money
that we can reinvest to buy more assets
that have additional tax benefits.
You get the snowball effect, right?
So like just being a tax conscious investor
(25:37):
because real estate has more tax benefits than
any other asset class out there, hands down.
And that's the best way to give yourself
an immediate raise, right?
Is limit your tax liability in real estate
investing.
That's just more money that you otherwise would
give to Uncle Sam.
Never see again that now you can reinvest,
earn a return on, earn cashflow on, reinvest,
have more tax benefits.
I can go on and on.
But that's one of those things that's like,
oh, I can do this.
(25:58):
Man, it's just trajectory of wealth.
Zach, really powerful stuff and stuff we've just
never heard before on the show.
So I appreciate you coming on.
Where can everybody go that's interested in jumping
in and learning more and getting started with
you guys?
Where should they go?
What should they do?
We always want to drive people tied to
our website.
That's renttoretirement.com, renttoretirement.com.
We have our own podcasts and YouTube channel
(26:20):
with hundreds of thousands of subscribers.
We've got a big community.
We're always putting out market data.
We've got investment calculators.
If you're just interested to learn about some
of the loan options I talked about, whether
you're interested in investing in Turnkey or not,
we're happy to share those.
Our goal is to add value to every
single person we speak with.
We don't charge investors anything to work with
us.
We make our money from building and selling
houses like builders would and managing them.
(26:40):
So if you just want to have a
consultation about learning about different markets or what
Turnkey does.
Also, if you're listening to this audio, you
can also text REI to 33777.
And the best thing to do is just
schedule an appointment with our team to learn
more and answer your questions.
I love it.
Zach, thanks for coming on all this today.
Hi, it's been a pleasure.
Thanks so much.
(27:01):
All right, so listen, if you're watching this,
make sure you go to renttoretirement.com.
If you go to renttoretirement.com, phenomenal site.
I mean, you can see they have a
video library there.
They have a podcast, blog, tools, and resources
that you're able to access right on the
website as well.
Plus on there, you're able to be able
to get in touch with them.
You're able to access frequently asked questions amongst
many other different resources to be able to
(27:21):
see how you can actually use this for
tax incentives, for wealth, for retirement.
Look, we both know that this is the
way to go with real estate investing in
real estate.
But what Zach showed you today was probably
something you've never heard or seen, which is
basically a clear path to be able to
do it the right way, to be able
to get into a property instantly and have
equity, which is very hard to do, especially
(27:42):
in a market in Tampa like where I
am.
It's hard to get into a property and
have instant equity.
You're able to actually do that and be
able to get a little to no money
down, potentially even no money down.
We're talking about the incentives coming back to
you to offset the amount of money you're
putting down.
This is like ridiculous.
And again, then you have somebody that can
help you manage the property in every different
aspect.
So this is one of the easiest, smoothest
(28:04):
ways to get into real estate and be
able to make money right away the minute
you're closing, and then be able to continue
to create more wealth as you accumulate more
properties.
It all happens in one place.
And the one place is rent2retirement.com.
Spell two correctly, it's T-O.
So rent2retirement.com.
Make sure you check it out right now.
(28:25):
Check out the resources and jump in on
this so you're able to get your hands
on the kind of wealth that real estate
investing can be able to bring for you.
So make sure you check it out, rent2retirement
.com.
Thanks for tuning in.
Take care.
Have a great day.
(28:45):
You've been listening to the Business Credit and
Financing Show with your host, Ty Crandall.
Watch for our next episode to get even
more insight on financing and growing your business.
And don't forget to check us out online
at creditsuite.com for even more business growth
strategies.
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