August 25, 2025 • 31 mins
Unlocking the hidden potential in your real estate portfolio could be the key to securing your financial future and creating a lasting legacy. In this eye-opening conversation, Noah George welcomes financial advisor Troy Wada of Impact Wealth to explore powerful strategies that transform property investments into wealth-building machines.
With 17 years of specialized experience helping property owners maximize their investments, Troy reveals how baby boomers sitting on appreciated real estate can leverage Delaware Statutory Trusts (DSTs) and 1031 exchanges to defer capital gains taxes indefinitely. The discussion peels back the layers of these sophisticated yet accessible investment vehicles that allow property owners to trade the headaches of landlording for passive income streams from institutional-grade real estate.
"Most people don't make a decision until procrastination meets motivation, and by that point, it's too late," Troy warns as he shares a cautionary tale of 124 beneficiaries unable to agree on what to do with inherited properties. This powerful reminder of the importance of proactive planning underscores the entire conversation, from tax strategy to estate planning.
Perhaps most fascinating is Troy's mission to impact 10 million lives annually through innovative charitable giving strategies. He explains how real estate investors can "take tax bombs and turn them into tax benefits" by combining property donations with strategic planning—often resulting in increased income, substantial tax deductions, and larger inheritances for heirs. It's truly a win-win-win scenario where "the only person that loses is the IRS."
Whether you're tired of managing rental properties, concerned about leaving a complex real estate portfolio to your children, or simply looking to optimize your investments for tax efficiency, this conversation offers invaluable insights into how the right team of professionals can help you transform your real estate wealth into a lasting legacy. Ready to be proactive about your financial future? This episode is your first step.
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Episode Transcript
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Speaker 1 (00:08):
Good morning and welcome to the George Real
Estate Group radio broadcast.
Thank you so much for joiningus this morning.
We have a special program foryou Before we get started.
The George Real Estate Group islocated in Flat Rock, right
next to the Flat Rock Bakery,hubba Hubba BBQ, campfire Grill,
the Wrinkled Egg all thosegreat independent local
businesses.
Stop by and say hello.
On Rainbow Row we serve all ofWestern North Carolina and the
(00:29):
upstate South Carolina.
If you're thinking about buying,selling, investing in real
estate or even a career in realestate, give us a call at
828-393-0134, 828-393-0134.
You can also find us online atrealestatebygregcom.
We also podcast all of ourradio shows.
You can find that on yourfavorite podcast platform and
follow us on social media.
But we'd love to connect withyou.
(00:50):
We know real estate happensaround life.
It could be a really positivereason why you're buying or
selling, or it could be achallenging reason, whatever
stage of your life it is.
Whatever's going on, we'd loveto and would be honored to walk
alongside with you and us a call, 828-393-0134.
Find us online atrealestatebygregcom.
We're going to go ahead andjump into the conversation.
I'm going to pause talkingabout what's going on in the
(01:11):
real estate market.
We do that every week.
Of course you can listen to allof our different radio shows,
but so grateful to have with usthis morning Troy Wada with
Impact Wealth.
Good morning, troy.
Speaker 2 (01:21):
Good morning, Noah.
Speaker 1 (01:22):
So grateful to have you and grateful to have you on
the radio with us and we'regoing to have a number of topics
we're going to cover thismorning.
But we've been helping so manyof our clients thinking ahead,
planning ahead and I've beensharing on my radio program
about 1031 exchanges and DSTsand estate planning and
(01:43):
charitable giving and I'm sograteful.
You and I got introduced and wemet last year and then we've
been diving into this world.
But for background and context,tell us a little bit about
yourself.
Speaker 2 (01:55):
Sure, so I am from Hawaii and I'm happy to be in
North Carolina, so thanks forhaving me.
I've been a financial advisornow for about 17 years, and in
the last I'd say 12 to 13,.
One of the areas we specializedin was the Delaware Statutory
Trust and 1031 exchanges.
As you may know, noah, thereare massive shifts in our
(02:17):
demographics, especially withthe baby boomer generation out
there.
So if any of you are listeningand you're a baby boomer, you
know exactly what I'm talkingabout.
And this demographic, as weknow, has accumulated a lot of
wealth, a lot of it in realestate.
So that forced us to specializein looking at their real estate
investments and how to bestmaximize those investments,
either for tax benefits estateplanning needs income benefits
(02:42):
today and eventually many babyboomers are philanthropic
because, as you know, everyonehates to pay taxes.
So looking at charitable plan,giving solutions is a great way
on how these people can leveragethese real estate assets to not
only create more income butalso to create tax deductions.
Speaker 1 (02:59):
I mean again, it's thinking, it's planning ahead,
is strategic and let's talkabout I mean the tax
implications.
Let's go ahead and talk aboutcapital gains from the
residential side and then let'stalk about it from the
investment side.
Speaker 2 (03:12):
Sure, on the residential side we have what we
call the Section 121 homeownersexemption.
That's Uncle Sam's gift for usbeing homeowners.
What that allows people to dois basically take the first
$250,000 of gain tax-free perevery person on title who is
using that property as theirprimary residence.
(03:32):
You know, a big misconceptionis that most people think that
this is only relegated for ahusband and wife, which is not
true.
But if we did have a husbandand wife on title, they would
get up to $500,000 in a taxdeduction once they sold that
property.
Now one option could be let'ssay we had a husband and wife
and two children on title whoboth, or they all, lived in that
(03:55):
property for two out of thelast five years.
Speaker 1 (03:57):
Clarify I understand it's 18 and 18 and above,
correct?
Speaker 2 (04:01):
They could get up to a $1 million exemption on that
property against their capitalgains tax.
Now, that regards, or relatesto, primary residences.
Now what about investmentproperties?
Those tend to be a little bitmore confusing, right, and the
tax code that applies toinvestment properties is one
called the 1031 exchange.
(04:21):
Now, under this big beautifulbill, the 1031 exchange is here
to stay, you know, which isfantastic, but what that allows
real estate investors to do isbasically swap one investment
property for another.
And as long as we swap oneproperty which is treated as a
business use for two out of thelast five years into another
property that we're going tokeep as an investment for the
(04:43):
next two out of five years, theIRS says we can defer 100% of
the taxes that's associated withthat property.
Speaker 1 (04:50):
This is one of the biggest advantages and
opportunities.
This is how people build wealthfor real estate 100% right 100%
.
Speaker 2 (04:58):
Leveraging the 1031 exchange tax code is a great way
to move gains into newproperties without having to pay
those taxes.
Now, the best part about owningreal estate investments
assuming it's titled andstructured a certain way is that
, upon passing, you could leavethose assets behind to your
beneficiaries 100% tax-free,because real estate and
(05:22):
non-retirement stocks aresubject to what we call the
stepped-up cost basis, whichmeans that the value of that
asset is determined on the baseor the day that you passed away.
Your beneficiaries get thisstepped up basis, which would be
the value of the day that youpassed.
They turn around, call you up,sell it the very next day for
that same value.
Speaker 1 (05:42):
They would bypass all the taxes that their parents
would have paid that theirparents would have.
And that's why so many peopleare like well, why would I ever
sell?
Because I don't want to pay thetaxes.
Speaker 2 (05:50):
And we hear that all the time and sometimes it's not
so much to sell, to pay the tax,but it might be to sell,
leverage, the 1031 exchange andsome of those other tools that
we talked about, like theDelaware Statutory Trust or DST,
or the 721 Upreet, which allowsthem to exchange and trade up
into maybe better quality assets, assets that might produce more
(06:12):
income after taxes.
It gets them out of theheadache of managing property,
you know, simplify their lifebut more importantly from an
estate planning perspective, youknow, it allows them to hold
those assets, to recognize thatstepped up in cost basis.
But when those three childrenor those children inherit those
types of structures like aDelaware statutory trust or 721
(06:34):
upread, because it's fractionalownership, we can let each of
the kids do whatever they wantto do with their own interest.
You know, as you know, we allhear the horror stories of how
real estate is usually thenumber one reason why kids fight
.
I can't guarantee your kidswon't fight, but we can
hopefully ensure that they won'tfight about their real estate.
Speaker 1 (06:54):
Less opportunities to fight.
Speaker 2 (06:56):
Correct.
Speaker 1 (06:56):
And they're solving so many problems with this.
But again, it's through the1031 and DST which we'll dive
into the DST Delaware StatutoryTrust.
But let's back up.
Why most people are hesitantabout doing a 1031 exchange is
because if you're going to getthe tax benefit, the government
gives you a few rules you haveto follow.
Speaker 2 (07:15):
Exactly, and the first rule, besides the fact
that we need to go from aninvestment to an investment, is
there are timelines we need tomeet, the first timeline being
we have 45 days to identify thatnext replacement or that next
investment property, and we havea total of 180 days to close on
it.
Now, as you know, closing on aproperty in 180 days is fairly
(07:36):
simple.
It's identifying that propertyin 45 that tends to be very
stressful.
Speaker 1 (07:41):
That can be the biggest challenge and the most
prohibiting factor why mostpeople end up not.
They think they're going to doa 1031 exchange Correct and the
money's in what's called aqualified intermediator.
Speaker 2 (07:52):
Correct.
Speaker 1 (07:55):
And then I'm going into a rabbit hole.
But I bet there's a significantportion of people that try to
do 1031 exchange that end updon't doing it.
Speaker 2 (08:01):
Exactly, and I always , over the years and over the
thousands of people that we'vehelped over the years.
One thing that is always commonis that I don't want to sell
anything because I don't knowwhat I'm going to buy and think
about it.
Speaker 1 (08:17):
That's true on personal homes.
We hear that all the time.
Correct Even more so oninvestment, though it's bigger.
Speaker 2 (08:22):
Because on investment property there is no exemption
on gains, right?
So if you don't identify thatproperty in 45 days, basically
you're done, you're forcedpaying those taxes, unless
there's some sort of naturaldisaster, which you folks had up
here we did.
There were certain counties inthat area that got an extension
(08:42):
on their 45 day, right, butthose things are acts of God,
right?
You can't really guarantee that.
These things will happen, butcertainly don't want to count on
them, don't want to count on it.
So you know, fortunately, aDelaware statutory trust.
At any given time we might have10 to 20 options available.
We know exactly what we'regoing to buy right before we
close on our property, whichusually means our closing on our
(09:06):
next investment property.
If it's a DST, we can identifyand close on that property
within five to 10 business days.
Speaker 1 (09:13):
And again for the layman, for the normal person
out there DST again.
Let's break it down intolayman's terms.
Because, it is real estate, butit's taking advantage of tax
code.
Speaker 2 (09:27):
Correct.
So the tax code that'sassociated to the DST for those
tax savvy people out there thatwant to contact their CPAs, it's
Internal Revenue Code 2004-86.
In 2004, the IRS said we wouldallow up to 500 accredited
investors, which means they havea million dollar net worth
(09:48):
minus the value of their primaryresidence Right and if they're
single, they made two hundredfifty thousand a year for the
last two years, intend to makethat the same this year, or
three hundred thousand for thelast two years in income.
If you're married and intend tomake that this year, they need
to qualify by either one ofthose, so it's not all three.
Now, assuming they're anaccredited investor, they get
(10:08):
access or they're privileged toinvest in these types of
investments.
What a DST basically is is ainstitutional quality grade real
estate asset that's beingprofessionally managed by an
institutional company, whichbasically they usually manage
several billion in real estate,but it allows investors to own a
fractional ownership of thattotal property.
(10:30):
But some of the biggest benefitsthat come with these DSTs are
number one no more what we callthe terrible T's, no more
tenants, toilets and trash.
We all know how much people lovetheir tenants right, and that
was meant sarcastically.
But they get to turn theiractive investments into passive
investments Because, as we know,most people who own real estate
(10:51):
investments, they don't wantany terrible tees, they want the
terrific tees, they want teetimes on the golf course, they
want to travel to Hawaii likeyou do right, several times a
year.
They want time with thegrandkids.
Dsts allow them that benefit oftaking those headaches away of
being a landlord and becomingpassive on their real estate.
Now, not to mention, there arecertain structures we can use to
(11:15):
increase things likedepreciation deductions, because
, as you know, it's never abouthow much money you make, it's
how much money you keep, andtaxes are one of those things
that take money away from yourrate of return.
If we can use depreciationdeductions to defer some of
those taxes on that income we'recollecting and, at the end of
the day, put more money in ourinvestors' pockets, hey, that's
(11:37):
a great day and we actually dothat for most investors actually
.
Speaker 1 (11:40):
Take advantage of the depreciation to reduce their
taxable income Absolutely.
And this is so interesting tome.
I want to dive in before I gothere, the institutional level
real estate investments, theseDSTs.
This is not.
This is the challenge.
With 1031 exchanges, one isidentifying properties and most
people think, oh, I'm going tosell one investment property
(12:02):
here in town, I'm going to gobuy another property here in
town, or I have vacant land andI'm going to go buy other vacant
land.
And this is where you haveaccess to these institutional
level properties and that'swhere we can introduce our
clients to you, because this isnot something people can just go
say I'm going to go buy a DST.
Speaker 2 (12:22):
Correct and I'll give you an example.
There's a property not far downthe road from here in Savannah,
georgia, which is basically alogistical distribution center
for Lowe's.
It's operated and purchased byHeinz Real Estate Investment,
not Heinz Ketchup, that'sH-I-N-E-S right.
It was bought for about $210million and our clients are able
(12:43):
to own a percentage of thetotal and in return they collect
their percentage of the marketrent.
You know this property has anewly constructed, newly formed
lease on it, about 10 years.
Left right Generates greatincome, professionally managed.
Our clients just get checksevery single month.
Speaker 1 (13:02):
It's amazing Again, these are the 1031 exchange.
It's great income,professionally managed.
Our clients just get checksevery single month.
It's amazing Again, these arethe 1031 exchange.
You can sell a local propertyhere, any property in the United
States, and then do a 1031exchange, defer the capital
gains and then buy in fractuallyinto the Delaware Statutory
Trust these institutional levelinvestments.
Speaker 2 (13:21):
Absolutely.
Speaker 1 (13:22):
It's incredible.
One specific example here thatwe see a lot here is a lot of
our landowners here.
Our landowners here don't getto take advantage of
depreciation if they have landleases or they own large
agricultural tracts.
Speaker 2 (13:37):
I mean like 100%, and that's because on a piece of
land, whether it's agriculturalor vacant, there's no structure
on it.
Depreciation relates to thevalue of the structure.
On a residential property,that's 27 and a half years of
depreciation.
On a commercial, it's 39.
So even if someone has aproperty let's say a residential
(13:59):
property has been treated as aninvestment for the last 25
years, although they got acouple years left on
depreciation, that depreciationvalue is based on the year that
they purchased it which meansthat although they're picking up
some depreciation, I can prettymuch bet it's very little,
because that structure is back20 something years ago was
(14:21):
probably much lower than it'sactually worth today.
So, moving into these kinds ofprograms, many times, especially
with vacant land, certainstructures would allow them to
get potentially up to a 100% taxdeferral on their income that
they're collecting.
Speaker 1 (14:37):
Incredible.
Again, this is thinkingcritically and strategically.
Again, so many of our clientshave been.
These are legacies.
These are families that haveput in the hard work, they've
built these real estateportfolios, whether it's the
family land, whether it's theinvestment properties, and now
they're, at this stage, againthinking ahead with their estate
planning and thinking aheadbecause it matters, and again
(14:59):
thinking you mentioned about thechildren and the step-up basis.
I mean there's so manycomponents that this solves so
many problems.
Speaker 2 (15:06):
Absolutely and we get that a lot that these are
legacy assets.
Many times these assets areacquired with the intent to be
kept as a legacy.
There's no better way to keepthe legacy than with high
quality institutional assetsthat are professionally managed,
that cash flow much better thanwhat it's currently cash
flowing at.
But having someone manage thatin a structure because, noah,
(15:30):
you and I work with some greatattorneys out here estate
planning attorneys that cancreate structures to keep that
intent of keeping these types ofassets as a legacy to help for
generations Because, as you know, most wealth is lost after two
generations, you know.
So it's about be exactly likeyou're saying being proactive
right on that legacy, looking athow your assets are currently
(15:51):
allocated and distributed andlooking at solutions that can
maintain that legacy, not letthe kids fight, create more
income, more tax benefits.
But if ever down the road weneed or we want to dissolve and
part ways, these types ofstructures make it very easy to
do so versus a physical asset itcreates so many options
(16:13):
absolutely we've even discussedoptions where some of our
clients were like yes, I'd loveto sell, yes, I'd love to do the
1031 exchange and is there away to get some cash out?
Speaker 1 (16:22):
and there are ways.
There are ways to still getcash out and still do this.
Speaker 2 (16:26):
There are ways.
Certain structures allow us totake our cost basis out of the
property utilizing a 721umbrella partnership.
Certain structures that mighthave debt allows you to access
equity through debt instruments,but we can exchange it to
properties with debt so that wedefer 100% of the taxes on that
debt.
There's multiple ways andthings that we can do, but of
(16:49):
course everyone's situation isdifferent.
Speaker 1 (16:51):
Unique and different.
Speaker 2 (16:52):
We should always consult with our tax and legal
professional.
But that's one of the benefitsof working right with you, noah,
is that we have that team puttogether.
Speaker 1 (17:00):
Well, and it's a collaboration of the tax
advisors, the estate attorneysthe financial advisors, I mean,
like in the real estateprofessionals, all the team
coming together for and it's notthese independent silos, it's
collaboration together 100%,because it takes a team to
implement things like this.
Speaker 2 (17:20):
And one thing people should know I mean, we get this
all the time.
This sounds too good to be true, which is why that financial
instrument or financialprofessional is so important,
because every DST is not madethe same.
Every property has its owninherent set of risks because,
at the end of the day, we'reinvesting in real estate and
(17:41):
every sponsor company, theprofessional manager, has their
own set of risks, you know.
So it's important to work witha qualified financial
professional and real estateprofessional that understands
these risks, understands the1031 process, because, going
back to the 1031 exchange andthe rules, yes, there is that
timeline we need to follow 45and 180, but there are other
(18:03):
rules we need to follow too.
There's certain things we needto set up when we sell the
property and if those things arenot set up, sorry, it's
irreversible.
Speaker 1 (18:12):
It triggers the tax event.
Speaker 2 (18:13):
Triggers the tax event right and even if there is
a natural disaster, that willnot help you, Right?
So it's understanding andworking with the right
professionals that know how toexecute these types of solutions
.
Speaker 1 (18:24):
And having all the ducks in a row 100%, so you work
again.
I'm so grateful Again.
Your home office and you'refrom Hawaii.
From Hawaii, you also have anoffice on the East Coast.
Speaker 2 (18:34):
I do In Pittsburgh, pittsburgh.
Speaker 1 (18:35):
And you're working across the United States and I'm
so grateful and honored to haveyou here.
I want to dive in also to thething that's so exciting to me
is how you're working withnonprofits and your bigger
vision of making an impact inpeople's lives.
Speaker 2 (18:49):
Thank you, noah, thanks for letting me share that
.
But yes, our firm's mission, mypersonal mission, is to impact
10 million lives a year and Ican't do it alone, but I can do
it with people like you andnonprofits.
As we know, especially afterthe big beautiful bill,
nonprofits need as much help asthey can.
But most nonprofits they're sobusy just delivering the
(19:12):
services that they specialize inin our community and
fundraising by putting on eventslike golf tournaments and galas
.
That charitable plan givingtends to kind of fall by the
wayside.
And galas that charitable plangiving tends to kind of fall by
the wayside.
Now, most people who are, youknow, in high tax brackets or
collecting required minimumdistributions or RMDs and
philanthropic, they're lookingfor ways to create tax benefits
(19:36):
you know tax deductions, youknow do IRA to Roth conversions
to create taxable assets, totax-free assets, so that they
can leave a bigger legacy totheir children or just make an
impact in the community.
But I truly believe that thebiggest underutilized asset in
anyone's portfolio is realestate.
(19:57):
You know, and no one.
We spent hours talking aboutthis and how.
Due to tax changes, changes intax codes and advancements in
investment structures and legalstructures in the charitable
plan giving space.
People that own real estateinvestments, who are
philanthropic kind of, aresitting on the best thing since
(20:21):
sliced bread.
They have a way to take taxbombs and turn them into tax
benefits.
They have a way to takeadvantage of these charitable
deductions and turn taxableassets to tax-free while still
not giving up the income,actually increasing their income
.
Speaker 1 (20:35):
Increasing their income, but also giving to our
nonprofits.
Speaker 2 (20:39):
Absolutely, and can you imagine if we help every
single nonprofit in yourcommunity here and the type of
change that could make in your?
It'd be incredible.
It is.
And again.
Speaker 1 (20:51):
Our, our and I have so many nonprofits on the radio
show regularly.
The nonprofit community here isincredibly strong and we're
excited about partnering withthem and making it even stronger
.
Speaker 2 (20:59):
Absolutely.
Speaker 1 (21:00):
Some of the it's so interesting to me.
72% of baby boomers regularlydonate to charities.
I mean like the philanthropicmindset that the baby boomers
have and again, how real estatecan come into play.
And then the solutions you have, working with donors and then
working with the nonprofits.
Speaker 2 (21:20):
Yep, that number was done by Dr Russell James out in
Texas Tech.
You know who does a lot ofstudying and research in the
baby boomer market andcharitable plan giving and you
know, as you can tell, most babyboomers or mostly everyone hate
to pay taxes, right, which iswhy QCDs, or qualified
charitable distributions, havebecome so popular.
Where baby boomers are willingto give away their IRA
(21:42):
distributions, give up theprincipal just so they don't pay
the taxes.
Speaker 1 (21:46):
They'd rather give it away than pay the taxes.
Speaker 2 (21:50):
Imagine a structure with real estate where we can
give portions of our real estateaway over our lifetime and get
tax deductions every year we doso.
While still collecting income,not giving up the income.
Think about a structure inwhich we can actually take our
cost basis back, which is ouroriginal investment, which will
always come back to us 100%tax-free, and only donate the
(22:13):
gain, where, in a highlyappreciated stock gift, not only
do we give the gain, we alsohave to donate the basis right.
That can create so many uniqueand powerful tax situations and
strategies that we can use, butagain, we would do that in
conjunction with their taxprofessional, legal professional
(22:35):
, real estate professional,because again, it takes a team
to implement these strategies.
Speaker 1 (22:40):
It's so powerful.
So again, real estate is soimportant for our nonprofit
community.
It's the high value, thesustainability, but the real
estate donations are.
It allows establishingendowments, large scale
initiatives, I mean like.
Speaker 2 (22:56):
But beyond that, you know, I always have this belief
that people can do well by doinggood.
Speaker 1 (23:02):
Yes.
Speaker 2 (23:02):
You know, and the common misconception I get all
the time is that if I donatethis piece of real estate which
I intended to leave to mychildren which most of the times
the children don't want becausethey're going to sell it the
minute they get it I'm basicallystealing from my children today
, which that's totally wrongMisconception.
Misconception With proper taxplanning, proper legal planning
(23:25):
and being able to utilize taxcodes like tax deductions
through tribal plan giving orcombining that with a 1031
exchange.
What most people end up findingout is they actually leave
their kids more net after-taxassets by donating today through
things like real estate giftsthan they would if they just
left things as is.
(23:46):
And not only that, they canmake use of those tax deductions
when they're alive, whichbasically no one benefits from
the tax deduction when you passand they can get more income
when they're alive.
Speaker 1 (23:58):
It's a win, win, win across the board, win, win, win.
Speaker 2 (24:02):
Because, at the end of the day, the only person that
loses is the IRS.
Speaker 1 (24:05):
Yeah.
Speaker 2 (24:06):
And that's another win.
We're fine with that.
Speaker 1 (24:08):
Wow, one of the things.
I mean money.
I've heard this.
Money's not good or bad, butit's good for the good it can do
, 100%.
And again it's about making adifference in the community and
that's what's driving you Againthis vision of how many 10
million lives a year.
10 million people lives a yearis your vision 10 million lives
a year.
And you're doing that throughhelping nonprofits across the
(24:31):
United States.
Speaker 2 (24:32):
Correct.
Speaker 1 (24:32):
And working with tax professionals and estate
planners and donors, I mean, andthis is how you're doing this?
Speaker 2 (24:38):
Yes, and we're excited because at the end of
the year, we'll be working withone of the largest
cryptocurrency donatingplatforms in the nation and
serving 110,000 nonprofits ontheir real estate gifts
nationally.
So it's exciting, it's amazing.
Speaker 1 (24:55):
There's so many things and, again, there's so
many layers to this and Troyjust grateful to have the
conversation.
What are some next steps, maybefor somebody to have this
conversation I mean we'retalking about?
Let's talk with your taxadvisor, talk with your estate
planner.
Speaker 2 (25:11):
I think the first step if you are a real estate
investor and interested in anyone of these concepts either
getting out of my headacheproperty and moving into
something because I'm tired ofbeing a landlord and, by the way
, they can get more income bydoing this or I'm philanthropic
and I want to understand how tobetter utilize these tax
deductions and tax benefits thatare available for me today.
(25:34):
If they own real estate, itstarts with the real estate
professional Right Because, atthe end of the day, we need to
know what we're working with.
Speaker 1 (25:41):
Right, what's the property worth?
That's where you come in.
Speaker 2 (25:44):
Right, and I lean on you for that.
And then, the minute we knowwhat we're working with and what
it is that our clients want toachieve with that real estate
asset, we will then determinewhich professionals we bring in.
Obviously, we'll always need atax professional.
Some cases we may need a legalone or may not, but at the end
of the day, again, it startswith you.
Speaker 1 (26:05):
Right.
Well, we're so grateful to haveyou as a resource for our
clients, because when we'retalking with our clients,
whether it's their personal home, their investment property,
their investment portfolio,their commercial or land it's
what's the bigger picture here,what's the plan.
It's not just about the firstdomino of selling that is.
That is which, again, a lot ofpeople just stop there.
Speaker 2 (26:24):
It's what's the bigger plan and purpose behind
this, and I remember you told methis one time you know what is
your exit strategy, right?
I mean, you know, for mostpeople they're just going to
hold on to the asset and passaway with it.
You know that sounds easyenough, right, but what about
you know?
Swapping till you drop, ordefer till you die, or upgrading
your real estate today, right,going from a you know a piece of
(26:47):
vacant land to something highquality, institutional?
Speaker 1 (26:49):
Well, right, and whatever motivated our clients
to do what they did to get wherethey've got?
Speaker 2 (26:54):
Correct.
Speaker 1 (26:55):
Why not think how many more people it can help,
whether it's with nonprofitgiving, whether it's for your
own?
Speaker 2 (27:02):
children and grandchildren, absolutely.
Speaker 1 (27:05):
Again the time and effort and energy that our
clients have put into their life.
They've worked hard, they'vebeen diligent, they've been
disciplined and here they are.
It's like let's take it to thenext step.
Speaker 2 (27:19):
Absolutely, and one thing I'm going to piggyback on
that with it's so important tobe proactive.
We're working with a group offamily members and beneficiaries
right now that consists of 124beneficiaries Wow, and we could
have solved this problem.
Well, maybe not because the taxcode didn't exist, but if it
(27:41):
did, we could have solved thisproblem 50 years ago but because
no one took any proactive steps50 years ago, fast forward
today- 100 years 124.
We're dealing with 124 differentopinions on what they want to
do with this portfolio of realestate.
I mean, can you imagine?
And we recently had a breakfastwith them and everyone.
(28:07):
Recently I had a breakfast withthem and it was the longest
breakfast I ever attended.
Everyone has their own say onwhat they want to do with the
property.
Of course they do, but at theend of the day, because none of
them can agree, they had to hirea third-party trust company to
make this decision for everyone.
Because if we left it, up to124 of them, we'd get nowhere.
(28:29):
And, at the end of the day, whatmade sense?
1031 exchanging those assetsinto these types of instruments
to increase the income get outof the maintenance and the
upkeep of these propertiesbecause it has so much deferred
maintenance needed and capitalneeded to bring these properties
back up to the standard togenerate great cashflow in which
the trust does not have themoney to do.
Speaker 1 (28:50):
Right.
Speaker 2 (28:50):
You know taking out debt in this interest rate
environment not as conducive.
But to make those investmentsback right through income is
going to take another generation.
Speaker 1 (29:01):
Yeah.
Speaker 2 (29:01):
Exit the asset now, but we never want our clients to
be in that position, right,right.
So it's so important to beproactive and, worst case
scenario, they meet with you,everything's in order,
everything's great, fine.
Speaker 1 (29:16):
They just learned some new information.
Speaker 2 (29:17):
Just got new information.
Speaker 1 (29:19):
It's another way.
I've said this.
I hear from so many of ourclients that say they're glad
they did it while they could,while they were the ones making
the decision before it was toolate.
Speaker 2 (29:28):
Absolutely 100%, and I think the problem for most
people is that they don't make adecision until procrastination
meets motivation, and by thatpoint it is a little too late.
Speaker 1 (29:38):
And it can, yeah, you can be behind.
And so, again, this is I lovethat Be proactive, have the
conversation.
We'd be honored to have theconversation.
We can introduce you to Troy,we can introduce you to our
state attorneys, our taxconsultants I mean it's an
entire team here to ultimatelyhelp provide clarity for our
clients in making the decisionthat's right for them.
Speaker 2 (29:57):
Absolutely.
Couldn't say it better thanthat.
Speaker 1 (30:00):
Troy, so grateful to have you on the radio with us.
Speaker 2 (30:03):
Thank, you so much.
I'm glad to be here.
Thanks for having me, Noahno-transcript.
Speaker 1 (30:19):
We can help you.
Give us a call, find us onlineat realestatebygregcom.
Follow us on social media andInstagram and we're going to
podcast this so you can find theGeorgia Real Estate Group on
your favorite podcast if youwant to learn more.
Have a great day and we'll seeyou next time.
(30:39):
Maybe the house feels a littletoo big these days, the stairs a
little steeper, the pace oflife a little too fast.
But what if your next movewasn't about letting go Stairs a
little steeper, the pace oflife a little too fast.
But what if your next movewasn't about letting go?
It was about making space Forpeace, for freedom, for what
matters most.
At the George Real Estate Group, we understand that real estate
(31:02):
isn't just about the house.
It's about transitions, timingand trust.
We've helped thousands offamilies in Western North
Carolina make smart, thoughtfulmoves Closer to nature, closer
to family, closer to home.
So when you're ready toright-size, simplify or start
fresh, we'll be here the GeorgeReal Estate Group, local,
(31:26):
trusted, proven.
Call us today, 828-393-0134.
Find us online atrealestatebygregcom, because
your next chapter deserves tofeel just right.
Good morning and welcome to the George Real
Estate Group radio broadcast.
Thank you so much for joiningus this morning.
We have a special program foryou Before we get started.
The George Real Estate Group islocated in Flat Rock, right
next to the Flat Rock Bakery,hubba Hubba BBQ, campfire Grill,
the Wrinkled Egg all thosegreat independent local
businesses.
Stop by and say hello.
On Rainbow Row we serve all ofWestern North Carolina and the
(00:29):
upstate South Carolina.
If you're thinking about buying,selling, investing in real
estate or even a career in realestate, give us a call at
828-393-0134, 828-393-0134.
You can also find us online atrealestatebygregcom.
We also podcast all of ourradio shows.
You can find that on yourfavorite podcast platform and
follow us on social media.
But we'd love to connect withyou.
(00:50):
We know real estate happensaround life.
It could be a really positivereason why you're buying or
selling, or it could be achallenging reason, whatever
stage of your life it is.
Whatever's going on, we'd loveto and would be honored to walk
alongside with you and us a call, 828-393-0134.
Find us online atrealestatebygregcom.
We're going to go ahead andjump into the conversation.
I'm going to pause talkingabout what's going on in the
(01:11):
real estate market.
We do that every week.
Of course you can listen to allof our different radio shows,
but so grateful to have with usthis morning Troy Wada with
Impact Wealth.
Good morning, troy.
Speaker 2 (01:21):
Good morning, Noah.
Speaker 1 (01:22):
So grateful to have you and grateful to have you on
the radio with us and we'regoing to have a number of topics
we're going to cover thismorning.
But we've been helping so manyof our clients thinking ahead,
planning ahead and I've beensharing on my radio program
about 1031 exchanges and DSTsand estate planning and
(01:43):
charitable giving and I'm sograteful.
You and I got introduced and wemet last year and then we've
been diving into this world.
But for background and context,tell us a little bit about
yourself.
Speaker 2 (01:55):
Sure, so I am from Hawaii and I'm happy to be in
North Carolina, so thanks forhaving me.
I've been a financial advisornow for about 17 years, and in
the last I'd say 12 to 13,.
One of the areas we specializedin was the Delaware Statutory
Trust and 1031 exchanges.
As you may know, noah, thereare massive shifts in our
(02:17):
demographics, especially withthe baby boomer generation out
there.
So if any of you are listeningand you're a baby boomer, you
know exactly what I'm talkingabout.
And this demographic, as weknow, has accumulated a lot of
wealth, a lot of it in realestate.
So that forced us to specializein looking at their real estate
investments and how to bestmaximize those investments,
either for tax benefits estateplanning needs income benefits
(02:42):
today and eventually many babyboomers are philanthropic
because, as you know, everyonehates to pay taxes.
So looking at charitable plan,giving solutions is a great way
on how these people can leveragethese real estate assets to not
only create more income butalso to create tax deductions.
Speaker 1 (02:59):
I mean again, it's thinking, it's planning ahead,
is strategic and let's talkabout I mean the tax
implications.
Let's go ahead and talk aboutcapital gains from the
residential side and then let'stalk about it from the
investment side.
Speaker 2 (03:12):
Sure, on the residential side we have what we
call the Section 121 homeownersexemption.
That's Uncle Sam's gift for usbeing homeowners.
What that allows people to dois basically take the first
$250,000 of gain tax-free perevery person on title who is
using that property as theirprimary residence.
(03:32):
You know, a big misconceptionis that most people think that
this is only relegated for ahusband and wife, which is not
true.
But if we did have a husbandand wife on title, they would
get up to $500,000 in a taxdeduction once they sold that
property.
Now one option could be let'ssay we had a husband and wife
and two children on title whoboth, or they all, lived in that
(03:55):
property for two out of thelast five years.
Speaker 1 (03:57):
Clarify I understand it's 18 and 18 and above,
correct?
Speaker 2 (04:01):
They could get up to a $1 million exemption on that
property against their capitalgains tax.
Now, that regards, or relatesto, primary residences.
Now what about investmentproperties?
Those tend to be a little bitmore confusing, right, and the
tax code that applies toinvestment properties is one
called the 1031 exchange.
(04:21):
Now, under this big beautifulbill, the 1031 exchange is here
to stay, you know, which isfantastic, but what that allows
real estate investors to do isbasically swap one investment
property for another.
And as long as we swap oneproperty which is treated as a
business use for two out of thelast five years into another
property that we're going tokeep as an investment for the
(04:43):
next two out of five years, theIRS says we can defer 100% of
the taxes that's associated withthat property.
Speaker 1 (04:50):
This is one of the biggest advantages and
opportunities.
This is how people build wealthfor real estate 100% right 100%
.
Speaker 2 (04:58):
Leveraging the 1031 exchange tax code is a great way
to move gains into newproperties without having to pay
those taxes.
Now, the best part about owningreal estate investments
assuming it's titled andstructured a certain way is that
, upon passing, you could leavethose assets behind to your
beneficiaries 100% tax-free,because real estate and
(05:22):
non-retirement stocks aresubject to what we call the
stepped-up cost basis, whichmeans that the value of that
asset is determined on the baseor the day that you passed away.
Your beneficiaries get thisstepped up basis, which would be
the value of the day that youpassed.
They turn around, call you up,sell it the very next day for
that same value.
Speaker 1 (05:42):
They would bypass all the taxes that their parents
would have paid that theirparents would have.
And that's why so many peopleare like well, why would I ever
sell?
Because I don't want to pay thetaxes.
Speaker 2 (05:50):
And we hear that all the time and sometimes it's not
so much to sell, to pay the tax,but it might be to sell,
leverage, the 1031 exchange andsome of those other tools that
we talked about, like theDelaware Statutory Trust or DST,
or the 721 Upreet, which allowsthem to exchange and trade up
into maybe better quality assets, assets that might produce more
(06:12):
income after taxes.
It gets them out of theheadache of managing property,
you know, simplify their lifebut more importantly from an
estate planning perspective, youknow, it allows them to hold
those assets, to recognize thatstepped up in cost basis.
But when those three childrenor those children inherit those
types of structures like aDelaware statutory trust or 721
(06:34):
upread, because it's fractionalownership, we can let each of
the kids do whatever they wantto do with their own interest.
You know, as you know, we allhear the horror stories of how
real estate is usually thenumber one reason why kids fight
.
I can't guarantee your kidswon't fight, but we can
hopefully ensure that they won'tfight about their real estate.
Speaker 1 (06:54):
Less opportunities to fight.
Speaker 2 (06:56):
Correct.
Speaker 1 (06:56):
And they're solving so many problems with this.
But again, it's through the1031 and DST which we'll dive
into the DST Delaware StatutoryTrust.
But let's back up.
Why most people are hesitantabout doing a 1031 exchange is
because if you're going to getthe tax benefit, the government
gives you a few rules you haveto follow.
Speaker 2 (07:15):
Exactly, and the first rule, besides the fact
that we need to go from aninvestment to an investment, is
there are timelines we need tomeet, the first timeline being
we have 45 days to identify thatnext replacement or that next
investment property, and we havea total of 180 days to close on
it.
Now, as you know, closing on aproperty in 180 days is fairly
(07:36):
simple.
It's identifying that propertyin 45 that tends to be very
stressful.
Speaker 1 (07:41):
That can be the biggest challenge and the most
prohibiting factor why mostpeople end up not.
They think they're going to doa 1031 exchange Correct and the
money's in what's called aqualified intermediator.
Speaker 2 (07:52):
Correct.
Speaker 1 (07:55):
And then I'm going into a rabbit hole.
But I bet there's a significantportion of people that try to
do 1031 exchange that end updon't doing it.
Speaker 2 (08:01):
Exactly, and I always , over the years and over the
thousands of people that we'vehelped over the years.
One thing that is always commonis that I don't want to sell
anything because I don't knowwhat I'm going to buy and think
about it.
Speaker 1 (08:17):
That's true on personal homes.
We hear that all the time.
Correct Even more so oninvestment, though it's bigger.
Speaker 2 (08:22):
Because on investment property there is no exemption
on gains, right?
So if you don't identify thatproperty in 45 days, basically
you're done, you're forcedpaying those taxes, unless
there's some sort of naturaldisaster, which you folks had up
here we did.
There were certain counties inthat area that got an extension
(08:42):
on their 45 day, right, butthose things are acts of God,
right?
You can't really guarantee that.
These things will happen, butcertainly don't want to count on
them, don't want to count on it.
So you know, fortunately, aDelaware statutory trust.
At any given time we might have10 to 20 options available.
We know exactly what we'regoing to buy right before we
close on our property, whichusually means our closing on our
(09:06):
next investment property.
If it's a DST, we can identifyand close on that property
within five to 10 business days.
Speaker 1 (09:13):
And again for the layman, for the normal person
out there DST again.
Let's break it down intolayman's terms.
Because, it is real estate, butit's taking advantage of tax
code.
Speaker 2 (09:27):
Correct.
So the tax code that'sassociated to the DST for those
tax savvy people out there thatwant to contact their CPAs, it's
Internal Revenue Code 2004-86.
In 2004, the IRS said we wouldallow up to 500 accredited
investors, which means they havea million dollar net worth
(09:48):
minus the value of their primaryresidence Right and if they're
single, they made two hundredfifty thousand a year for the
last two years, intend to makethat the same this year, or
three hundred thousand for thelast two years in income.
If you're married and intend tomake that this year, they need
to qualify by either one ofthose, so it's not all three.
Now, assuming they're anaccredited investor, they get
(10:08):
access or they're privileged toinvest in these types of
investments.
What a DST basically is is ainstitutional quality grade real
estate asset that's beingprofessionally managed by an
institutional company, whichbasically they usually manage
several billion in real estate,but it allows investors to own a
fractional ownership of thattotal property.
(10:30):
But some of the biggest benefitsthat come with these DSTs are
number one no more what we callthe terrible T's, no more
tenants, toilets and trash.
We all know how much people lovetheir tenants right, and that
was meant sarcastically.
But they get to turn theiractive investments into passive
investments Because, as we know,most people who own real estate
(10:51):
investments, they don't wantany terrible tees, they want the
terrific tees, they want teetimes on the golf course, they
want to travel to Hawaii likeyou do right, several times a
year.
They want time with thegrandkids.
Dsts allow them that benefit oftaking those headaches away of
being a landlord and becomingpassive on their real estate.
Now, not to mention, there arecertain structures we can use to
(11:15):
increase things likedepreciation deductions, because
, as you know, it's never abouthow much money you make, it's
how much money you keep, andtaxes are one of those things
that take money away from yourrate of return.
If we can use depreciationdeductions to defer some of
those taxes on that income we'recollecting and, at the end of
the day, put more money in ourinvestors' pockets, hey, that's
(11:37):
a great day and we actually dothat for most investors actually
.
Speaker 1 (11:40):
Take advantage of the depreciation to reduce their
taxable income Absolutely.
And this is so interesting tome.
I want to dive in before I gothere, the institutional level
real estate investments, theseDSTs.
This is not.
This is the challenge.
With 1031 exchanges, one isidentifying properties and most
people think, oh, I'm going tosell one investment property
(12:02):
here in town, I'm going to gobuy another property here in
town, or I have vacant land andI'm going to go buy other vacant
land.
And this is where you haveaccess to these institutional
level properties and that'swhere we can introduce our
clients to you, because this isnot something people can just go
say I'm going to go buy a DST.
Speaker 2 (12:22):
Correct and I'll give you an example.
There's a property not far downthe road from here in Savannah,
georgia, which is basically alogistical distribution center
for Lowe's.
It's operated and purchased byHeinz Real Estate Investment,
not Heinz Ketchup, that'sH-I-N-E-S right.
It was bought for about $210million and our clients are able
(12:43):
to own a percentage of thetotal and in return they collect
their percentage of the marketrent.
You know this property has anewly constructed, newly formed
lease on it, about 10 years.
Left right Generates greatincome, professionally managed.
Our clients just get checksevery single month.
Speaker 1 (13:02):
It's amazing Again, these are the 1031 exchange.
It's great income,professionally managed.
Our clients just get checksevery single month.
It's amazing Again, these arethe 1031 exchange.
You can sell a local propertyhere, any property in the United
States, and then do a 1031exchange, defer the capital
gains and then buy in fractuallyinto the Delaware Statutory
Trust these institutional levelinvestments.
Speaker 2 (13:21):
Absolutely.
Speaker 1 (13:22):
It's incredible.
One specific example here thatwe see a lot here is a lot of
our landowners here.
Our landowners here don't getto take advantage of
depreciation if they have landleases or they own large
agricultural tracts.
Speaker 2 (13:37):
I mean like 100%, and that's because on a piece of
land, whether it's agriculturalor vacant, there's no structure
on it.
Depreciation relates to thevalue of the structure.
On a residential property,that's 27 and a half years of
depreciation.
On a commercial, it's 39.
So even if someone has aproperty let's say a residential
(13:59):
property has been treated as aninvestment for the last 25
years, although they got acouple years left on
depreciation, that depreciationvalue is based on the year that
they purchased it which meansthat although they're picking up
some depreciation, I can prettymuch bet it's very little,
because that structure is back20 something years ago was
(14:21):
probably much lower than it'sactually worth today.
So, moving into these kinds ofprograms, many times, especially
with vacant land, certainstructures would allow them to
get potentially up to a 100% taxdeferral on their income that
they're collecting.
Speaker 1 (14:37):
Incredible.
Again, this is thinkingcritically and strategically.
Again, so many of our clientshave been.
These are legacies.
These are families that haveput in the hard work, they've
built these real estateportfolios, whether it's the
family land, whether it's theinvestment properties, and now
they're, at this stage, againthinking ahead with their estate
planning and thinking aheadbecause it matters, and again
(14:59):
thinking you mentioned about thechildren and the step-up basis.
I mean there's so manycomponents that this solves so
many problems.
Speaker 2 (15:06):
Absolutely and we get that a lot that these are
legacy assets.
Many times these assets areacquired with the intent to be
kept as a legacy.
There's no better way to keepthe legacy than with high
quality institutional assetsthat are professionally managed,
that cash flow much better thanwhat it's currently cash
flowing at.
But having someone manage thatin a structure because, noah,
(15:30):
you and I work with some greatattorneys out here estate
planning attorneys that cancreate structures to keep that
intent of keeping these types ofassets as a legacy to help for
generations Because, as you know, most wealth is lost after two
generations, you know.
So it's about be exactly likeyou're saying being proactive
right on that legacy, looking athow your assets are currently
(15:51):
allocated and distributed andlooking at solutions that can
maintain that legacy, not letthe kids fight, create more
income, more tax benefits.
But if ever down the road weneed or we want to dissolve and
part ways, these types ofstructures make it very easy to
do so versus a physical asset itcreates so many options
(16:13):
absolutely we've even discussedoptions where some of our
clients were like yes, I'd loveto sell, yes, I'd love to do the
1031 exchange and is there away to get some cash out?
Speaker 1 (16:22):
and there are ways.
There are ways to still getcash out and still do this.
Speaker 2 (16:26):
There are ways.
Certain structures allow us totake our cost basis out of the
property utilizing a 721umbrella partnership.
Certain structures that mighthave debt allows you to access
equity through debt instruments,but we can exchange it to
properties with debt so that wedefer 100% of the taxes on that
debt.
There's multiple ways andthings that we can do, but of
(16:49):
course everyone's situation isdifferent.
Speaker 1 (16:51):
Unique and different.
Speaker 2 (16:52):
We should always consult with our tax and legal
professional.
But that's one of the benefitsof working right with you, noah,
is that we have that team puttogether.
Speaker 1 (17:00):
Well, and it's a collaboration of the tax
advisors, the estate attorneysthe financial advisors, I mean,
like in the real estateprofessionals, all the team
coming together for and it's notthese independent silos, it's
collaboration together 100%,because it takes a team to
implement things like this.
Speaker 2 (17:20):
And one thing people should know I mean, we get this
all the time.
This sounds too good to be true, which is why that financial
instrument or financialprofessional is so important,
because every DST is not madethe same.
Every property has its owninherent set of risks because,
at the end of the day, we'reinvesting in real estate and
(17:41):
every sponsor company, theprofessional manager, has their
own set of risks, you know.
So it's important to work witha qualified financial
professional and real estateprofessional that understands
these risks, understands the1031 process, because, going
back to the 1031 exchange andthe rules, yes, there is that
timeline we need to follow 45and 180, but there are other
(18:03):
rules we need to follow too.
There's certain things we needto set up when we sell the
property and if those things arenot set up, sorry, it's
irreversible.
Speaker 1 (18:12):
It triggers the tax event.
Speaker 2 (18:13):
Triggers the tax event right and even if there is
a natural disaster, that willnot help you, Right?
So it's understanding andworking with the right
professionals that know how toexecute these types of solutions
.
Speaker 1 (18:24):
And having all the ducks in a row 100%, so you work
again.
I'm so grateful Again.
Your home office and you'refrom Hawaii.
From Hawaii, you also have anoffice on the East Coast.
Speaker 2 (18:34):
I do In Pittsburgh, pittsburgh.
Speaker 1 (18:35):
And you're working across the United States and I'm
so grateful and honored to haveyou here.
I want to dive in also to thething that's so exciting to me
is how you're working withnonprofits and your bigger
vision of making an impact inpeople's lives.
Speaker 2 (18:49):
Thank you, noah, thanks for letting me share that
.
But yes, our firm's mission, mypersonal mission, is to impact
10 million lives a year and Ican't do it alone, but I can do
it with people like you andnonprofits.
As we know, especially afterthe big beautiful bill,
nonprofits need as much help asthey can.
But most nonprofits they're sobusy just delivering the
(19:12):
services that they specialize inin our community and
fundraising by putting on eventslike golf tournaments and galas
.
That charitable plan givingtends to kind of fall by the
wayside.
And galas that charitable plangiving tends to kind of fall by
the wayside.
Now, most people who are, youknow, in high tax brackets or
collecting required minimumdistributions or RMDs and
philanthropic, they're lookingfor ways to create tax benefits
(19:36):
you know tax deductions, youknow do IRA to Roth conversions
to create taxable assets, totax-free assets, so that they
can leave a bigger legacy totheir children or just make an
impact in the community.
But I truly believe that thebiggest underutilized asset in
anyone's portfolio is realestate.
(19:57):
You know, and no one.
We spent hours talking aboutthis and how.
Due to tax changes, changes intax codes and advancements in
investment structures and legalstructures in the charitable
plan giving space.
People that own real estateinvestments, who are
philanthropic kind of, aresitting on the best thing since
(20:21):
sliced bread.
They have a way to take taxbombs and turn them into tax
benefits.
They have a way to takeadvantage of these charitable
deductions and turn taxableassets to tax-free while still
not giving up the income,actually increasing their income
.
Speaker 1 (20:35):
Increasing their income, but also giving to our
nonprofits.
Speaker 2 (20:39):
Absolutely, and can you imagine if we help every
single nonprofit in yourcommunity here and the type of
change that could make in your?
It'd be incredible.
It is.
And again.
Speaker 1 (20:51):
Our, our and I have so many nonprofits on the radio
show regularly.
The nonprofit community here isincredibly strong and we're
excited about partnering withthem and making it even stronger
.
Speaker 2 (20:59):
Absolutely.
Speaker 1 (21:00):
Some of the it's so interesting to me.
72% of baby boomers regularlydonate to charities.
I mean like the philanthropicmindset that the baby boomers
have and again, how real estatecan come into play.
And then the solutions you have, working with donors and then
working with the nonprofits.
Speaker 2 (21:20):
Yep, that number was done by Dr Russell James out in
Texas Tech.
You know who does a lot ofstudying and research in the
baby boomer market andcharitable plan giving and you
know, as you can tell, most babyboomers or mostly everyone hate
to pay taxes, right, which iswhy QCDs, or qualified
charitable distributions, havebecome so popular.
Where baby boomers are willingto give away their IRA
(21:42):
distributions, give up theprincipal just so they don't pay
the taxes.
Speaker 1 (21:46):
They'd rather give it away than pay the taxes.
Speaker 2 (21:50):
Imagine a structure with real estate where we can
give portions of our real estateaway over our lifetime and get
tax deductions every year we doso.
While still collecting income,not giving up the income.
Think about a structure inwhich we can actually take our
cost basis back, which is ouroriginal investment, which will
always come back to us 100%tax-free, and only donate the
(22:13):
gain, where, in a highlyappreciated stock gift, not only
do we give the gain, we alsohave to donate the basis right.
That can create so many uniqueand powerful tax situations and
strategies that we can use, butagain, we would do that in
conjunction with their taxprofessional, legal professional
(22:35):
, real estate professional,because again, it takes a team
to implement these strategies.
Speaker 1 (22:40):
It's so powerful.
So again, real estate is soimportant for our nonprofit
community.
It's the high value, thesustainability, but the real
estate donations are.
It allows establishingendowments, large scale
initiatives, I mean like.
Speaker 2 (22:56):
But beyond that, you know, I always have this belief
that people can do well by doinggood.
Speaker 1 (23:02):
Yes.
Speaker 2 (23:02):
You know, and the common misconception I get all
the time is that if I donatethis piece of real estate which
I intended to leave to mychildren which most of the times
the children don't want becausethey're going to sell it the
minute they get it I'm basicallystealing from my children today
, which that's totally wrongMisconception.
Misconception With proper taxplanning, proper legal planning
(23:25):
and being able to utilize taxcodes like tax deductions
through tribal plan giving orcombining that with a 1031
exchange.
What most people end up findingout is they actually leave
their kids more net after-taxassets by donating today through
things like real estate giftsthan they would if they just
left things as is.
(23:46):
And not only that, they canmake use of those tax deductions
when they're alive, whichbasically no one benefits from
the tax deduction when you passand they can get more income
when they're alive.
Speaker 1 (23:58):
It's a win, win, win across the board, win, win, win.
Speaker 2 (24:02):
Because, at the end of the day, the only person that
loses is the IRS.
Speaker 1 (24:05):
Yeah.
Speaker 2 (24:06):
And that's another win.
We're fine with that.
Speaker 1 (24:08):
Wow, one of the things.
I mean money.
I've heard this.
Money's not good or bad, butit's good for the good it can do
, 100%.
And again it's about making adifference in the community and
that's what's driving you Againthis vision of how many 10
million lives a year.
10 million people lives a yearis your vision 10 million lives
a year.
And you're doing that throughhelping nonprofits across the
(24:31):
United States.
Speaker 2 (24:32):
Correct.
Speaker 1 (24:32):
And working with tax professionals and estate
planners and donors, I mean, andthis is how you're doing this?
Speaker 2 (24:38):
Yes, and we're excited because at the end of
the year, we'll be working withone of the largest
cryptocurrency donatingplatforms in the nation and
serving 110,000 nonprofits ontheir real estate gifts
nationally.
So it's exciting, it's amazing.
Speaker 1 (24:55):
There's so many things and, again, there's so
many layers to this and Troyjust grateful to have the
conversation.
What are some next steps, maybefor somebody to have this
conversation I mean we'retalking about?
Let's talk with your taxadvisor, talk with your estate
planner.
Speaker 2 (25:11):
I think the first step if you are a real estate
investor and interested in anyone of these concepts either
getting out of my headacheproperty and moving into
something because I'm tired ofbeing a landlord and, by the way
, they can get more income bydoing this or I'm philanthropic
and I want to understand how tobetter utilize these tax
deductions and tax benefits thatare available for me today.
(25:34):
If they own real estate, itstarts with the real estate
professional Right Because, atthe end of the day, we need to
know what we're working with.
Speaker 1 (25:41):
Right, what's the property worth?
That's where you come in.
Speaker 2 (25:44):
Right, and I lean on you for that.
And then, the minute we knowwhat we're working with and what
it is that our clients want toachieve with that real estate
asset, we will then determinewhich professionals we bring in.
Obviously, we'll always need atax professional.
Some cases we may need a legalone or may not, but at the end
of the day, again, it startswith you.
Speaker 1 (26:05):
Right.
Well, we're so grateful to haveyou as a resource for our
clients, because when we'retalking with our clients,
whether it's their personal home, their investment property,
their investment portfolio,their commercial or land it's
what's the bigger picture here,what's the plan.
It's not just about the firstdomino of selling that is.
That is which, again, a lot ofpeople just stop there.
Speaker 2 (26:24):
It's what's the bigger plan and purpose behind
this, and I remember you told methis one time you know what is
your exit strategy, right?
I mean, you know, for mostpeople they're just going to
hold on to the asset and passaway with it.
You know that sounds easyenough, right, but what about
you know?
Swapping till you drop, ordefer till you die, or upgrading
your real estate today, right,going from a you know a piece of
(26:47):
vacant land to something highquality, institutional?
Speaker 1 (26:49):
Well, right, and whatever motivated our clients
to do what they did to get wherethey've got?
Speaker 2 (26:54):
Correct.
Speaker 1 (26:55):
Why not think how many more people it can help,
whether it's with nonprofitgiving, whether it's for your
own?
Speaker 2 (27:02):
children and grandchildren, absolutely.
Speaker 1 (27:05):
Again the time and effort and energy that our
clients have put into their life.
They've worked hard, they'vebeen diligent, they've been
disciplined and here they are.
It's like let's take it to thenext step.
Speaker 2 (27:19):
Absolutely, and one thing I'm going to piggyback on
that with it's so important tobe proactive.
We're working with a group offamily members and beneficiaries
right now that consists of 124beneficiaries Wow, and we could
have solved this problem.
Well, maybe not because the taxcode didn't exist, but if it
(27:41):
did, we could have solved thisproblem 50 years ago but because
no one took any proactive steps50 years ago, fast forward
today- 100 years 124.
We're dealing with 124 differentopinions on what they want to
do with this portfolio of realestate.
I mean, can you imagine?
And we recently had a breakfastwith them and everyone.
(28:07):
Recently I had a breakfast withthem and it was the longest
breakfast I ever attended.
Everyone has their own say onwhat they want to do with the
property.
Of course they do, but at theend of the day, because none of
them can agree, they had to hirea third-party trust company to
make this decision for everyone.
Because if we left it, up to124 of them, we'd get nowhere.
(28:29):
And, at the end of the day, whatmade sense?
1031 exchanging those assetsinto these types of instruments
to increase the income get outof the maintenance and the
upkeep of these propertiesbecause it has so much deferred
maintenance needed and capitalneeded to bring these properties
back up to the standard togenerate great cashflow in which
the trust does not have themoney to do.
Speaker 1 (28:50):
Right.
Speaker 2 (28:50):
You know taking out debt in this interest rate
environment not as conducive.
But to make those investmentsback right through income is
going to take another generation.
Speaker 1 (29:01):
Yeah.
Speaker 2 (29:01):
Exit the asset now, but we never want our clients to
be in that position, right,right.
So it's so important to beproactive and, worst case
scenario, they meet with you,everything's in order,
everything's great, fine.
Speaker 1 (29:16):
They just learned some new information.
Speaker 2 (29:17):
Just got new information.
Speaker 1 (29:19):
It's another way.
I've said this.
I hear from so many of ourclients that say they're glad
they did it while they could,while they were the ones making
the decision before it was toolate.
Speaker 2 (29:28):
Absolutely 100%, and I think the problem for most
people is that they don't make adecision until procrastination
meets motivation, and by thatpoint it is a little too late.
Speaker 1 (29:38):
And it can, yeah, you can be behind.
And so, again, this is I lovethat Be proactive, have the
conversation.
We'd be honored to have theconversation.
We can introduce you to Troy,we can introduce you to our
state attorneys, our taxconsultants I mean it's an
entire team here to ultimatelyhelp provide clarity for our
clients in making the decisionthat's right for them.
Speaker 2 (29:57):
Absolutely.
Couldn't say it better thanthat.
Speaker 1 (30:00):
Troy, so grateful to have you on the radio with us.
Speaker 2 (30:03):
Thank, you so much.
I'm glad to be here.
Thanks for having me, Noahno-transcript.
Speaker 1 (30:19):
We can help you.
Give us a call, find us onlineat realestatebygregcom.
Follow us on social media andInstagram and we're going to
podcast this so you can find theGeorgia Real Estate Group on
your favorite podcast if youwant to learn more.
Have a great day and we'll seeyou next time.
(30:39):
Maybe the house feels a littletoo big these days, the stairs a
little steeper, the pace oflife a little too fast.
But what if your next movewasn't about letting go Stairs a
little steeper, the pace oflife a little too fast.
But what if your next movewasn't about letting go?
It was about making space Forpeace, for freedom, for what
matters most.
At the George Real Estate Group, we understand that real estate
(31:02):
isn't just about the house.
It's about transitions, timingand trust.
We've helped thousands offamilies in Western North
Carolina make smart, thoughtfulmoves Closer to nature, closer
to family, closer to home.
So when you're ready toright-size, simplify or start
fresh, we'll be here the GeorgeReal Estate Group, local,
(31:26):
trusted, proven.
Call us today, 828-393-0134.
Find us online atrealestatebygregcom, because
your next chapter deserves tofeel just right.
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