Jennifer De Jesus – Growing Empires Podcast – Part 2
Welcome to Episode Five of Season Nine of the Growing Empire Show. Today I’m back with my special guest, Stephanie Walter from ERBE Wealth for part two of our segment on creating financial freedom and having the life you’ve always desired. So stay tuned.
Welcome to Growing Empires hosted by real estate entrepreneur, and trusted investment advisor, Jennifer de Jesus. Growing Empires provides insight to building wealth through passive income producing real estate investments for those who want to build and manage a more profitable real estate portfolio.
So what changed for you that allowed you to get from maybe the first unit that you purchased to the volume of real estate that you are a part of now or own personally now? What changed for you?
Well, yeah, mindset. It didn’t none of it really happened overnight. You know, I think, in 2016, I was open to the possibility of the multifamily. And then there’s an enormous amount of education that goes into knowing what you’re doing. It’s different than single family. So I think I’m a, I’m a pretty stubborn person, and I wanted to figure it out. Because it was hard to figure certain aspects of it of it out. Not as an investor, I think investing is probably one of the more simple things to do. But putting these deals together can be very complicated. But yes, I would say that,
Absolutely. Okay. And are you solely focusing on investing in syndications now? Is that your primary and only focus right now? And you’re doing a variety of them?
Yeah. So no, I mean, all I can say is I just found a niche in this industry where I was able to raise money. And I attached myself to a really good partner who is really great at finding off market deals. So after our purchase next month we’ll be at over $100 million in real estate. And I went from basically a couple million dollars when I was a single family. And that is really the beauty of multifamily syndications as you can get into much larger, much larger properties. Which are going to appreciate and do better than owning your single family rental property. And that’s, that’s a hard thing to get through to some investors who have their rentals and are getting tired and getting PTSD from managing these rentals. But I, you know, I try to, that’s what I look at sort of as what I want to do with the rest of my life, which is just let more people know that this option is out there.
Yeah, I completely agree. And it’s about creating passive wealth too, right? You don’t really like you said, you can retire, right? You can just lay back on a beach if you wanted to. But you’re still making money and you’re still wealthy. Right? Yeah. And you really don’t have to do anything for it, because you’ve created this passive wealth through your syndications. So what didn’t I ask you that I should have asked you?
Oh, I was just thinking to just it’s not a huge thing. But I did think I didn’t make it clear when you said what is a myth that something that the wealthy think about? I thought, you know, I didn’t actually come right out and say it, but wealthy people like to invest in tangible assets. Tangible assets being a building a business is something they can put their hands around something that has value. And a lot of people don’t realize that, you know, these commercial buildings that we buy the value, they’re like, Well, what if there’s a recession and like that one in 2007 2008, when all the you know, homes were in foreclosure and everything. And I simply say that there is the value of these properties is determined differently. The value of these properties is determined about the ratio between the income in and the expenses paid out. And that is the value. So that doesn’t change just because the person down the street forecloses on their house. It has zero effect on it. And so, I’m saying that because stocks would you think you get like a piece of paper, like, that isn’t really a tangible asset. So I just would put that, I guess, a little tickle in someone’s brain to really think about. What what is it that they own, you know, in in their 401k. Because there are ways of taking the 401k and actually investing in this type of, you know, having more control in the self directed IRA, which which I would highly recommend, rather than the stock market.
was just gonna ask you that too, you know, so we talked about, you know, not planning to have all of your money sitting in a 401k. Not that it’s a terrible option, right? But it shouldn’t be your end all be all decision for your money, right? So if you’re not investing in a 401k, what are you doing instead? What are you doing differently? Or what are you doing instead? What are some of the options that you would recommend to people,
I would recommend, definitely, if they, if they can get into a syndication with some of their money I, I work with a lot of first time people too, as well as the ones that have been around the block a long time. But just get into that first one, like I talked to some people just get that 50 or $100,000. And just get into that first one, see how it goes. And what I’ve seen is when they see that cash flow, and then they see that huge check at the end, when we sell the property. They just, they want to roll in double, triple the money that they had into that first investment, because they’re like, Oh, my God, this is so much easier than I thought it was. And but yeah, the 401k I, I’m more, I guess, controversial in the in the sense that I believe, get, get rid of the 401k. Get out of the 401k pay, whatever kind of fees you have to pay and, and just get out of it. And you know, pay your taxes or whatever the penalties and get out of them and start investing this way. Because there’s a topic we didn’t even really address yet, which is the tax issues. Which is another huge reason that people invest this way is because of the tax benefits that they get from investing in these properties each and every year. But if that’s too, you know, scary on the leap and just baby steps actually is if you have an old 401k, that’s just, you know, not with your current employers just sitting around, you can actually convert that very, very easily into what’s called a self directed IRA. And from that self directed IRA, you can invest in one of these deals. And that could also be a way for someone to just kind of ease in and try this type of investing out.
Yeah, that’s a great point.
The episode will continue in just a moment.
I recognize that as an active investor, you want to implement best practices that drive the highest returns on your profits. Everything we do at Empire is designed to make life a lot easier for you so you make sound decisions regarding your portfolio. Whether that’s through this Growing Empires podcast, our company services of property acquisition, construction and management, or by becoming an Empire Capital Fund investor, we want you to be as successful as possible. However, using the right methods is critical to achieving your ROI. There’s a lot of advice out there, and it can be overwhelming. Especially if you’re using a method that isn’t working. Don’t take a chance on an approach that may not be right for you. If you want to be sure I can help you assess if your current strategies are a fit to your properties end goals. Book a call with me today to see if there’s a better way. Go to JenniferdeJesus.com and click book a consult and I can confirm that the method you are using is the right one for you or suggest a simpler, more profitable alternative. One quick conversation and you’ll feel better about the choices you’re making regarding your real estate investment portfolio and the value in comparing to long term.
So do you want to talk a little bit about you just were referring to that some of the tax benefits as well. I mean, there’s so many, obviously, reasons to do different types of syndications and have your money in things that allows your money to work for itself. But do you want to talk a little bit about some of the advantages to these types of deals?
That’s just, you know, probably another myth, but something that people are like, well, wealthy, just, they just care about, you know, what their return is at the end of the day? And yes, that that is that is true, but equally and even more importantly, they’re looking at a tax mitigation strategy to get them out of there at that property in the most efficient way that they can. And that’s the beautiful part about multifamily investing, is we have I won’t go into great detail about it, but it’s a strategy that all experienced multifamily syndicators should be doing which is doing what’s called a cost segregation study. Blah, blah, blah. I won’t go into all the boring details about that. But the exciting part of it is that it accelerates your depreciation to from say 27 years or 39 years. It accelerates this depreciation from one, five, to seven years. So what that means for our investors is they get tremendous tax benefits from investing in this they can literally get sometimes depending on the property they if they invest 50,000, they can get close to $50,000 in tax benefits from investing in that property, and then they continue to get tax benefits, though it’s not as great as that first year.
Right, more cash in your pocket means more money to reinvest. Right. Yes.
So exactly Yeah, that’s correct.
That’s awesome. So is there anything else that we didn’t cover that you think is necessary for my listeners to know?
I, you know, I can’t think of anything, I just would just start by, you know, maybe going to my website, which is www.ERBEwealth.com. I have tons of stuff on there. I have a series of videos where I answer questions that are most asked to me. You can also go on there and download a report that just goes over the five reasons that this type of investing might be for you. But I think the first part just comes from educating yourself. And it’s really not as difficult as you might think it is to do. But I’m happy to help educate them. That’s what I feel like I’m here for now.
So you would say that that’s your mission with your company is really to just help educate and help people live a healthy lifestyle, right? Financially healthy lifestyle?
Yeah, well, the name of my company, actually, is that that’s the German word for legacy. So I’m trying to help people, every, every person, I need to build a legacy of wealth. And that’s not just, you know, saved for the for the rich. And I think the thing that hits me hard in the heart is when I was an insurance agent, I would see people doing the right thing, the whole way through doing the 401k, retiring. There they go. They’re in their 70s and 80s. And they don’t have enough money to make things work. Because, you know, inflation has taken over. Taxes have taken much more than they thought they were. So that always like, hit me hard to see that. And I don’t want anyone else to to ever go through that. And by I mean, I’ve kind of even talked to my mom into investing along in in the a lot of these syndications. She has a really healthy amount of cash flow coming in, and I don’t need to worry about her. And I mean that that’s what I would tell people is that that cash flow just makes all the difference in your in your daily life. You don’t have to wait until you’re 70 or 80 to start getting that money either.
Yeah, that’s so true. So are there any last thoughts that you’d like to share with my listeners?
I mean, I would just be open to you know, doing doing some research and actually doing something. And a lot of people are interested in trying to put syndications together. But I always say it’s great to just start as start as being an investor. And you can’t really learn in a better environment than just being brought in as an investor and seeing how how one of these properties performs.
Well, I certainly appreciate all your insight and your wealth of knowledge. And I will definitely make sure that all of your information is in our show notes page so that our listeners can reach out to you and get some more advice privately.
Super, thank you so much for having me.
Thank you so much for all your information. It was great talking to you.
Yes, you too.
Thank you for listening to this two part segment with Stephanie Walter from ERBE Wealth. I hope you got a lot out of both of these shows. And until next time, take care.