Inside Secrets From CPA Who Oversees 100s Of Millions

Inside Secrets From CPA Who Oversees 100s Of Millions | Disruptors Podcast

Full Transcript

25398 words

Marcus Crigler: We didn't actually get taught that in school. Nope. I didn't get taught what a balance sheet was in high school. I went through accounting classes, but when I actually learned what a balance sheet is and how it worked was when I was actually working in the business every single day. Like, yeah, from a philosophical standpoint, I knew what a balance

Steve Trang: sheet was. I knew what a p and l was. I knew what the cash flows

Marcus: did. But in order to actually understand how it works within your business, you actually have to study it. Every answer you have to where your money's at and where it's going is in those books. It is the most important book you can read on a monthly basis, especially about your business.

Steve: Welcome, and thank you for joining us for today's episode of disruptors where millionaires are made. Today, we have my good friend Marcus Crigler, with BEC CFO and CPA, and Marcus flew in from Springfield, Missouri to talk about the insider secrets after overseeing hundreds of millions of dollars from real estate investors. Now, guys, I'm I'm on a mission to create a 100 millionaires. The information on the show alone is enough to help you become a millionaire in the next five to seven years. If you take consistent action, you will you will become one.

Before we jump in, if you're here to learn how real entrepreneurs built real empires, hit that subscribe button because every week, we drop lessons that could help you create your first or your next million. And, guys, in case you didn't know, we are also on iTunes and Spotify. You ready? Let's do it. Alright.

So first question is, what was life like before you went to business for yourself?

Marcus: Ah, well, so great question. I was a CPA as I still am. I was working for I was a partner at another CPA firm. And so, longer story there, I graduated college, got out of college in 2008, joined the CPA firm, worked my way up, worked my butt off, kind of the the story of a a CPA firm and and the accountant in a CPA firm, worked for a a decade in that firm, worked my way up to a partnership, which is what every CPA's desire is. And then I made partner and then I decided, Hey, this is not exactly what I wanted.

I wanted to be my own business owner. And so I went from kind of being a a partner in a real estate business or a real estate CPA firm to, you know, going out on my own and starting a real estate CPA firm. So that's kinda how it how it started.

Steve: So you started as an intern? Yes. Right out of college. So didn't know who you were. This wasn't, like, nepotism.

This is just you just straight started from the bottom and made all the way to the top.

Marcus: I did. I got a great opportunity. The the gentleman that worked with me still, talk to them to this day, still friends with them to this day. It was a great, great experience for me. Got out of college 2,008.

Right? So 2008, we all know what was going on in 2008. I saw my father-in-law, who was an accountant at the time. He wasn't my father-in-law. He was just my girlfriend's dad.

But he wasn't he wasn't worried. Right? 2008 was going on. The world was kind of in a in a in a struggle, and he wasn't worried. So I was like, you know what?

I'm gonna marry your daughter. I knew that. Right? So I've been with my wife since we were 16 years old. I knew I was gonna marry his daughter.

And when I was, you know, 2,008, 2,009, said, hey. I gotta get a job. We're gonna have kids early. We're gonna do all this stuff. So accountant's gonna be what I'm gonna do.

Right? And so jumped right into it. And then, ultimately, that's what kinda got me to, you know, where we're at today. Right? Is is jumping into that that that business and and trying to trying to make head headway towards it.

And I got kind of that entrepreneurial niche from my mom. So my mom was a mortgage broker. Right? She did mortgages for, a lot of years. And, again, 2008 comes around.

That's not a great time to be a mortgage lender. And so you know? But all of the networking and, you know, going to the after hours things and all of those things, I learned that just because you're an accountant, right, CPA, you don't get out of the office. You stay behind the computer. I looked at it a little differently.

I got out. I became an intern. My first conversation with my boss was, hey. Can I get some business cards? I wanna tell people where I'm at, what I'm doing, bring them in here, and and start that process.

And, basically, I figured out that, hey. Being an intern and and and being an accountant is great, and having that skill is great, but learning how to sell and learning how to bring clients into the organization is what's gonna grow you within the organization. So once I figured that out, I grew from being an intern to a a staff to a a senior to a partner and, ultimately, you know, got to where I'm at today.

Steve: Why did partnership not make sense for you? Because that's like you were saying, like, that was the dream. That was the goal. Imagine a lot of people have that as an ambition.

Marcus: You know, that's a really good question. I don't know that it was that partnership didn't make sense for me. I think that partnership just didn't make sense. And that's not a negative thing. I think it was those two guys.

Again, I I can't think them more for what they did for me in my life. Mhmm. But those two gentlemen basically had a vision for what they wanted in their business, and they're the primaries. Right? And I had a vision for what I wanted in in in my book of business that I had kinda grown.

And and as we were looking at it, we saw that we were just weren't on the same page a 100% of the time. And and they were doing some things that were their way, and I was doing some things that were my way. We're like, hey. We're kind of running two different businesses here. Let's let's make this make a little bit more sense.

And so it wasn't necessarily a negative partnership thing. There's always complications when it comes to partners. Right? But that one was just, hey. I think we're both better off separate than than together.

Let's make this happen. And to this day, they are running a very successful CPA firm. I'm running a very successful CPA firm, and neither one of us are competing against each other. So it's it's really great, actually.

Steve: So I met you through the Collective Genius. Sure. Right? And I believe towards the tail end of your partnership there. Yeah.

So, I guess, first question is whose idea in the group was it for you as a partner to be in Collective Genius?

Marcus: Well, that was mine. And, again, this is a very forward looking CPA firm that I was a part of. Right? If you think about, your traditional CPA firm, you're probably not thinking about them being a part of a mastermind. Right?

They're they're not going out. They're typically not networking. But this group, they were forward looking. They looked at things completely differently than what a traditional CPA looks like looks at it like. And that's really where I got my my philosophies from.

Right? Where, hey. We're not just here to punch some numbers into your calculator and tell you that your tax return's done. We're here to actually help add some value to your to your life. And so once I think I lost my your question there.

So you might

Steve: The whose idea was it joining CG?

Marcus: Oh, so as as we were growing and as I was networking, I got involved with some members of CG that were actually in my local area. Right? And if you guys aren't familiar with CG, there's CG members across the country everywhere. Right? And so I got to working with these.

These guys had 300 plus single family rentals. They had multiple flips going on in wholesales. They have the whole works. Right? You think of some of the biggest companies that you've dealt with.

That's that's kind of the the first introduction I got to single family investment. Right? And so they were part of CG. The current CPA inside of CG decided to bow out, and they were like, hey. This guy's doing a really good job.

He's helped us organize. He's helped us save a lot of money in taxes. Give him a shot. And then kind of from there, I met Jason. Jason and I have hit it off, become good friends, and and ultimately, heck, we've been in CG for since 2017.

So, a long time, it's been it's been a great partnership.

Steve: Yeah. Because you say, you know, some members in CG were already in Springfield. Like, for me, I what comes to my mind is is Andrew Newland. Yeah. Right?

Was he the one that helped you get in there?

Marcus: He wasn't. He it was actually some of his old partners that, that were there. Andrew was not I don't think he was actually a business owner at the time, but he certainly wasn't the business owner that he is today.

Steve: Yeah.

Marcus: But his old partners were, Brian Powers and Chad Mellentine. I don't know if those names ring familiar. They probably watch this podcast and be like, heck yeah. Yeah. Got my name shouted out.

But, no, that's that's how I got in there. They they introduced me to that group and then, you know, was that able to, like I said, meet with Jason and tell him how what we believe in and how we believe and put me on stage a few times. And then, you know, we've been riding ever since.

Steve: Yeah. And then, you said that, you know, you got your your became a CPA. You worked at a firm, and it didn't quite fit. If I remember correctly, on a predictive index profile, you're a maverick That's right. Which is not a typical accounting profile.

Marcus: That's right.

Steve: How does this line up? Was it because of job security that you went in this direction?

Marcus: Yeah. So, yeah, it goes back again, it's it's back to the story of 2008. Yeah. Right? I I am a while I am a maverick, I am pretty conservative at heart.

I'm pretty laid back. If you see me in a crowd of people, I'm literally gonna generally be in the corner. You think typically think of a maverick. They're probably the the party. Right?

Steve: Yeah.

Marcus: That's not necessarily me unless I'm really close with you. And if I got my small group, then I can kinda come out of my shell a little bit. Yeah. But, you know, where I'm actually more comfortable, I was actually a little surprised when I got the the Maverick, response. Now I'm a little bit more outgoing than the typical CPA, but, you know, I wouldn't necessarily a 100% agree with it.

But to that being said, what I believe that allows me to kinda be in the position I am is because I do have those tendencies. I do have the ability to communicate. I do have the the desire to go out and and and meet with people and and enjoy doing that on a on a small level setting. Right? And so I think that's what has driven me to where I'm at Mhmm.

In in the success that we have had because, you know, so much of life is about more than just doing the what you're doing. Right? Yeah. It's about communicating. And one of the things that I find with being a maverick in this industry is that most CPAs are bad communicators.

Yeah. Well, as a maverick, if that's what you wanna call me, I'm a I'm a pretty decent communicator. I'm I'm good at going out and saying, hey, Steve. You don't have any money. Or, hey, Steve.

You got a lot of money. We need to do something. Right? A lot of accountants won't even say anything about it. They're just kinda

Steve: you'll figure it out. It's just it is what it is. Yeah. Yeah. So because, like, one of my favorite things about you, right, and I don't compliment you a lot.

Yeah. But one of my favorite things about you is that you've got no qualms calling BS. Someone says something, you don't agree with it, there's no, like, maybe I shouldn't say anything.

Marcus: You're not tight lipped. That's true. That's true. I I have been accused of that before. Yeah.

Some people really like that. The clients that I work with, that we work the best with, they really appreciate that I'm I'm pretty straightforward with them. Jimmy Vreeland is a very good example of somebody that that I think about a lot that just loves, you know, if I can't be anymore I can't be anymore blunt with that guy. Right? Jimmy is a guy, and, you know, and there's a lot of those clients out there that, they just want the facts.

They don't want the fluff. They don't want the BS, if you will. They just want, hey. What am I doing right? What am I doing wrong?

What are you seeing? Let me get back to business. And those are the ones, quite honestly, that are quick adapters and and and make action take action and and actually move the needle. The ones that maybe get their feelings hurt sometimes, you gotta know it's out of love. Right?

I'm I'm never saying anything to anybody that I haven't personally seen with my own hands behind the in the numbers. Like, the advice I'm giving is because I've seen hundreds and hundreds of real estate businesses and their numbers and what works and what doesn't. And so when I'm saying, hey. What you're saying is wrong, it's not because I'm just my opinion. It's like, I got, like, a dozen people that did exactly what you did and failed.

So I'm trying to tell you not to do that. I may be not always the most tactful with it, but it's because I love you. Right? It's just because I love you.

Steve: Well, you got empirical evidence. Yeah. Anecdotal evidence. Sure. Right?

You're not making things up. You're not conjecture hypothetical. Hey. I saw this in a study. It's like, hey.

The last 12 people that did what you're saying you're about to do, here's how it worked out for them. Right. Yeah. And so and I think that's probably why then you do really well with real estate investors. Right?

Because we look in that room, we had a room full of Mavericks and Ventures in there. Right? That's what you got. And so and I bring this up because you realized at some point that accounting alone was enough for you. Like, you gotta do something else Sure.

On top of that. You gotta be a business owner. Yep. And that was me in engineering. Like, the things I said was, like, you know, I went to school, got my math a bachelor's degree, get my master's degree.

I worked at Intel for three and a half years. And what was pretty obvious to me the whole time was that I am not like everyone else here. Yeah. Right? So, like, running a sales organization, I am relatively an introvert.

Sure. In a sales organization, introverted. But, man, in engineering, I was, like, sticking out like a green thumb as an extrovert. Like, I was way more extroverted than all of them. So I imagine you kinda had a similar experience.

Marcus: Yeah. It's the exact same experience. Right? And and part of working in an environment where you're you stick out is you also rub people the wrong way. So it's very it was very common when I was, you know, an employee.

It's a little bit different to rub people the wrong way as the boss. Right?

Steve: Yeah.

Marcus: Like, if you rub people the wrong way, you're like, you know? I don't think that, but it's not you don't get the feedback as much. Right? When you're, you know, one of the team members and you rub somebody the wrong way so

Steve: we need to have a conversation.

Marcus: You go you get the conversation from the boss. Hey. You rubbed them the wrong way. You need to watch how to say I'm like, I'm I'm sorry. Yeah.

You know? So, yeah, it is. You do stick stick out like a sore thumb, but, like, most businesses need those people. Right? They need those people in there.

They're gonna make them stick out like a or that stick out like a sore thumb because that's what drives the businesses in a lot of ways. Like, I was listening to your podcast earlier with Jason Lewis. Right? I love Jason. And he was talking about the COO CEO.

Mhmm. Right? Well, that that COO and that CEO, they're both, if it's working well, they're both sticking out like sore thumbs differently. Yeah. But they're both sticking out like sore thumbs, and that's that's what the magic is.

And I think that's why I was never gonna be destined to be an employee is because my sore thumb was I was gonna be a CEO. I was gonna be a business owner, and my craft is accounting. But what I think I'm the best at is being a business owner. Yeah.

Steve: And then before we get into the financing accounting part, let's just talk just one last thing here. Partnerships are really hard, to to sustain and to maintain. Right? Yeah. Generally speaking.

And so there are people that are listening that might be in partnerships where it's time to say, hey. This isn't working. And, like, it's not like you're a bad person. I'm a bad person. Like, the visions are no longer aligned.

Yep. Right? We're no what you're trying to get out of this business is very different than what I'm trying to get out of this business. Yep. So how did you broach that conversation?

Marcus: Well, first off, you know, maverick personality, this is why I I'll argue that I'm not a maverick. Maverick personality is that you make quick decisions. Right? This is not a decision I made quickly. This was a decision that I it it was a lot of time.

It was a lot of effort. It was a lot of debating. It was a lot of pros, cons list, all of those types of things. But why why I say that and why that's important in this is that you need to figure out what you need want as a partner. Mhmm.

Because once you let that cat out of the bag, once you go to your partner and says, hey. I wanna I wanna be done. There it's hard to come back from that. Mhmm. Your partner no longer will trust you.

And so as soon as you say, hey. This just isn't working out for me, the partnership's over.

Steve: Mhmm.

Marcus: And so you have to make sure that that's exactly what you want. And not only if that's what you want, but what's the next thing? You can't just go and say, hey. This isn't working out. We're done and not have a next thing because, quite honestly, you're you there's no backing.

There's no going backwards. And so what I did was I really sat down, and I know it's unbelievable to think about a finance guy doing this. But I I looked through and I looked at my finances. I looked at what it was gonna what I was gonna make in the business over the next multiple years. I looked at what it was going what I was gonna make now.

And then, ultimately, I just did it from a black and white perspective of, hey. This is what it's gonna look like if I go this path. This is what it would look like if I, you know, take this path. I'm gonna take this path because this makes sense for me. Could might not have.

And maybe one, two, three years before that, it didn't. Mhmm. But at this point in time, it did. Then I just sat down. And the best thing you can do is have the hard conversation.

Yeah. Once you make the decision, you don't wait, you don't, you know, quietly quit, you don't do all those things, you give maybe even more effort to help this transition out because partnerships don't work. Right? You know, the only the only partnership I got into until until death was my marriage. Mhmm.

Other than that, I've I've gone into every partnership thinking, hey. We're going to exit this at some point in time. Hopefully, it's in a positive way, but we're gonna exit. And so no matter what, when you start that partnership, you know you're gonna have that hard conversation. So if you're not willing to have the hard conversations, don't be in a partnership.

Yeah. Right? So communication is key. Right? And and, yeah, you gotta you're gonna have to sit there and look up in the eye and say, hey.

This isn't working out for me. And and when you do that and you give everything and you, you know, you don't halfway do it, you're you're not kinda two feet out the door already, then you can make that that transition really seamless and make it work really, really well for both parties.

Steve: Yeah. So was it well received?

Marcus: Yeah. I mean, listen. I think it was a surprise. I think anytime

Steve: Is there a age gap? Significant age gap?

Marcus: Not a significant age gap. Okay. No. That was the cool thing about it was we were we were young we're fairly young firm. Our ages were fairly similar within a decade.

Yeah. And so it it just worked out the way it needed to. And I think they were surprised, but I think there was relief as well. Right? I think anytime you feel that that strain of, hey.

You got one going this way, one going this way. At some point in time, the conversation just gotta happen. And and once the conversation happened and and the initial shock is over, then, you know, everybody's got the 30,000 foot view again and saying, okay. Yeah. This makes sense.

Let's this is how it can work. This is how it can make sense for everybody. Let's all win here.

Steve: Yeah. Gotcha. Alright. So right now, you've done you've looked at hundreds of books. Is that accurate?

Marcus: Yeah. And not thousands at this point in time.

Steve: Okay. So, one of the things you know, we have our friend, Jason Miller, we brought him up earlier. Right? Like, making money is a skill, keeping is a dis Oh, yeah. Right?

It's a completely different skill set. You know, the expression what got you here won't get you there. So going through finances, I guess the first thing, because people don't like talking about finances, is why should they care about finances?

Marcus: Well, you you hit the nail on the head. People don't like to talk about it. It's the easiest thing to kinda bury your head in the sand, because there are so many different ways of judging your finances. Right? You can you can judge your finances by looking at your bank account.

You can judge your finances by looking at your personal financial statement. You can judge your finances by looking at your balance sheet, p and l, cash flow statement. Name it. Right? So part of the reason why people don't understand their finances and they wanna hide from their finances is because they don't actually know which one to look at and why.

Mhmm. Right? Because we didn't actually get taught that in school. We know I didn't get taught what a balance sheet was in high school. I didn't get I I mean, I went through accounting classes, but when I actually learned what a balance sheet is and how it worked was when I was actually working in the business every single day.

Like, yeah, from a philosophical standpoint, I knew what

Steve: a balance sheet was. I knew what a p and l was. I knew what the cash

Marcus: flow statement did. But in order to actually understand how it works within your business, you actually have to study it. Mhmm. And that's not something a maverick wants to study. Right?

It's not something that you want to spend a lot of time with because it is boring. It is the stuff that isn't sexy. But I will tell you that what Jason says is is absolutely right. When you have a business that is consistently making money

Steve: Mhmm.

Marcus: But you're consistently trying to find it, that's exactly what he's talking about. And and where the answer is is always in your financial statements. Yeah. If your financial statements are correct now bad financial statements is another story. Right?

But if your financial statements are correct, every answer you have to where your money's at and where it's going is in those books. It is the most important book you can read on a monthly basis, especially about your business. Right? We all read self help books. Right?

We never read our financial statements.

Steve: Yeah. So let me drive the point home just a little bit further. Sure. Okay. So you've looked at a bunch of books.

Right? What is the difference you've seen in net worth within the people that know their books really well and the ones that don't? What is that gap in net worth on average? Oh, I

Marcus: mean, it's millions of dollars.

Steve: Multiple 7 figures.

Marcus: Millions of dollars.

Steve: I mean, it's I mean, that right there alone. So the difference between knowing your books and not knowing your books, on average, in your experience, after even hundreds of books, if not a thousand, multiple 7 figures.

Marcus: Absolutely.

Steve: So that's so, yeah, they should pay attention.

Marcus: A 100%. A 100%. I mean, listen. Your business is an is a stinking car. Right?

Everybody compares your engine your business to a car. One of the the biggest thing that drives your car is the engine. What's the engine? Not finance. Right?

I'm not even here to say it. It's what you do. It's sales. That is what gets the car going. Yeah.

But the reality is go to the junkyard. There's a lot of engines in the junkyard that don't work.

Steve: Mhmm.

Marcus: Great. Or they do work, but they're in a crappy car. Mhmm. Well, if you don't if you have a business and you're just good at doing deals, you're just good at doing sales, but you don't have operations, you don't have the you don't have the finance. You don't have the leadership.

You don't have all these other things. You just got a great engine and a crappy car. Mhmm. Right? And so that's where, you know, Jason's talking about, hey.

You've got a it's it's it's not just about making. It's about keeping it. Well, you can make it through sales. Right? We you're excellent at teaching people how to make it, but what you gotta get great at is get great at keeping it.

Steve: Mhmm.

Marcus: And that's really all the other pieces of the car that are not maybe as big and as important as the engine, but it's still important to get down the road and get where you're going.

Steve: Yeah. Get there in one piece. A 100%. Alright. So then let's talk about, let's start with the newer person.

Right? Yeah. What are the things they need to know as a newer, wholesaler, flipper, investor? What are the things they need

Marcus: to know as finances when they're getting started? Yeah. Well, the the first thing is you need to understand that don't you can't compare yourself to other people. Right? So why do I say that for the newbie?

Well, the reason why I say that for the newbie is because when you compare yourself to somebody that's been doing this for five years and their results and their actions, their actions are based on five years worth of experience, maybe five years worth of cash management, maybe five years worth of, debt reduction. Maybe they have a net worth much larger than yours. Right? And so they can take a certain level of risk that you shouldn't be taking as a newbie. Right?

And so that newbie, the first thing that you should be thinking about we talk about this in our business a lot where, you know, as an entrepreneur, you start in the hustle phase, you go to secure, you go to expand, and then ultimately, we all hope to exit. Well, as that entrepreneur, you're in the hustle phase, which means you've gotta just get the simple stuff figured out. You've gotta get your LLC lined in. You've gotta get up your the right bank accounts organized the right way. You've gotta get your, a simple set of financial statements.

You don't need, you know, some you know, multiple LLCs and all these complicated things. You just need an LLC, a to to run your business out of. You need a simple set of books. You need a couple bank accounts with, organization within those bank accounts, and then focus on the hustle. Right?

So many entrepreneurs get into this, and they see, you know, the five year, ten year guys. They're out there hiring COOs, and they're out there spending all this money in marketing, and they're doing all these things. That's not the that's not the newbie's goal. They're in the expansion phase. You're in the hustle phase.

And that's why the same decision for two different people, one could be catastrophic, and one could take them to the next level. Same decision, two different people, and the difference is where they're at on that scale of hustle, secure, expand, and exit.

Steve: Yeah. So I remember many, many years ago. Right? So Russell Shaw, he's the big name in town. Always done really well.

Like, he's been in business longer than I've been alive, I think. And, I remember one time where where we're talking, and he's like, oh, yeah. You know, we spent 80,000 a month in marketing. And I was what? How much do you spend?

He's like, oh, yeah. It's a million dollars a year in marketing. And he could see that look on my face and a few other people's faces. He's like, okay. Let me just take a step back here.

I didn't one day decide to start 80,000 start spending 80,000 a month. Like, I worked my way here from free marketing and eventually over time, 80,000. I think that's kinda what you're alluding to. That's right.

Marcus: Yeah. I I think that's exactly right. In that hustle and secure phase, your more focus is on generating cash. Like, that really should be the focus of that phase is cash generation and storing cash in a place where you're safe. Once you get your cash to a spot where you're strong and I have some have some thoughts on what that cash position needs to be.

But once you get your cash to the right position, then that's when you start increasing your expenses, and you only increase your expenses as your cash is going up. And so as your cash is increasing, cool. That means my expenses expenses is another name for an expense is an investment Mhmm. In business. In our personal life, we call an expense an expense.

We never get money back. We shell money out on food. The best thing we get back is a full stomach, maybe an upset stomach. Right? But in business, when we put money into something, we expect something back.

It's an investment.

Steve: Yeah.

Marcus: And so when we are looking at our our business that way, as we're growing our cash, the only way to know if our our expenses are giving us a return is that our cash is growing. So if your cash isn't growing, you shouldn't be saying, okay. Well, last month, I did $20,000 in marketing. This month, I need to do 25, and my cash didn't grow. Well, your 20 didn't give you the return that it needed.

So you need to sit there and make sure that the $20,000 in marketing or $10,000 in marketing or $2,000 in marketing works before you start expanding to 4,000, 10,050 thousand dollars a month in marketing. And the decision the answer to that question is, is your cash account growing? Mhmm. Right? If your cash account's not growing, you're not getting a return on your investment.

Steve: That's one of those things that's really obvious after you hear it. Yeah. Sure. But isn't something that you think about, like right? It sounds very much like common sense

Marcus: Yeah.

Steve: When you hear it, but no one acts. Right. Very few people act

Marcus: Mhmm.

Steve: And behave this way. Sure. Yeah. So you mentioned that you have some thoughts on what's the right cash amount. What are what's your perspective?

For someone that you said it was hustle and survive what did you say? Hustle and secure. Hustle and secure.

Marcus: Yeah. So as you're going kinda going through that phase, what I really want people to first off, let's talk about let's go backwards just a second. Sure. What do we get? What do most of us get in business for?

Steve: Some sort of freedom. Time freedom, financial freedom.

Marcus: Make our money. Make money and pay for our things. Right? We just want us we we wanna make enough to take care of our family, take care of us, maybe go on a couple nice vacations. Right?

Steve: Also not have a boss.

Marcus: Not have a boss. Right? But it comes down to, like, we got even not having a boss and not making money, you're gonna go get a boss and make money. Right? So it just at the end of the day, we gotta make money.

And so first things first is I want you to not have a business when you are personally broke. You have got to get yourself into a personal position to where your business ups and downs because every business has ups and downs. I have about as stable as a kind of company you can have in an accounting firm, and it has ups and downs. So real estate, what may be the biggest business of ups and downs of all the businesses. Yeah.

Huge ups and downs. So to solve for that, you know, one of the biggest things that people come to me and say, hey, Marcus. I'm having a cash flow problem. K. Well, that that really means I'm not able to take the money out of my business consistently and put it into my personal account.

That's actually what they're saying. And so we gotta solve your personal money first. Three times your fixed expenses personal. That is where you need to be at any given time. So if you spend $20,000 a month personally, food, cars, utilities, mortgage, everything else, you need to at least have $60 in the bank sitting there for a rainy day.

Right? I'd love for you to get to six months, but three months is a good start.

Steve: Yeah.

Marcus: That that keeps you squared away. Now let's move to the business. Alright? On the business side, I don't complicate it. I wanna see the same thing.

Three months worth of fixed expenses. So why do I do that? Why do I say that? Well, if you've got three months personal in your yourself and you've got three months in the business as minimums, then you've got six months of no revenue coming in your business and that you don't have to worry about upsetting your family. Mhmm.

Well, for most entrepreneurs, six months, they can figure out how to make money in six months. Right? And the reality is that's not really six months. It's probably more like twelve or eighteen months because you're gonna cut expenses.

Steve: They're gonna go to zero.

Marcus: You're never gonna go to zero. Right? And so you're gonna cut expenses, and your revenue is gonna at least gonna have some. And so you put yourself in this cash position to where you don't ever have to worry about these huge fluctuate fluctuations. And by the way, the bigger you get, the more reserves you have to have.

But the ones that the ones that understand that are the ones that don't come to me with cash flow issues. They don't have that risk. They don't have that concern. I'm I was I was preparing for this podcast, and I can't remember who I was listening to. I think it might have been Luke Winters.

I I believe it was Luke.

Steve: Mhmm. I

Marcus: like Luke. He's a good guy. And he was talking about well, you know, one of the things that you need to have is a cash flow forecast. And one of the things that will solve all your cash problems is is having a lot of cash. Mhmm.

I'm like, yeah. Yeah. Absolutely. It's it but it's so easy. But at the same time, we don't do that as real estate entrepreneurs and real estate investors because we're always told, get rid of cash.

Cash isn't making you money. And if you just look at, okay. I have a $100,000 in the bank, and I made 1% interest on that. Yes. It didn't make you money.

But what you don't see is the opportunity cost of your mind Mhmm. And what your mind is limiting you on because you feel broke. Mhmm. And because now you don't have the ability to go and make the decisions that you could have made if you had the financial cash flow or the financial cash to actually execute on that decision. Right?

Steve: I think you're kinda talking about a little bit of cognitive burden Yeah. Cognitive load of being stressed. Mhmm. And then also, like, the common piece to make a sound rational decision. Right.

I was reading something earlier, and who knows if it's accurate because it's on social media. Right? Yeah. But allegedly

Marcus: It's right.

Steve: For sure. Supposedly, Berkshire Hathaway sitting on, like, $300,000,000,000 or something like that. Yeah. Right? Something something astronomical.

And they're like, why aren't you putting it out? Why aren't you spending it? It's like, because I'm waiting for the right opportunity.

Marcus: Mhmm.

Steve: And the worst place to be is for an opportunity to come along and not be able to take advantage of it.

Marcus: Yeah. You know, it's funny that you you say that because I've probably done a dozen presentations at this point in time over the last three years. Berkshire Hathaway has been storing cash for a long time. Not just recently, a long time. Because I've been presenting on them storing cash for a long time as an example of, hey.

You guys need to be thinking. Like, this is what the big boys are out there doing. Now I understand that it's a bad idea to compare those big businesses to your small businesses, but they also leave clues as to what's going on in the market. And if they have that much cash, it might be worth just kinda taking a look and seeing if that makes sense for you and your business. And and I'll tell you, a lot of people, they are running thin on cash right now.

And you look at a Berkshire Hathaway, they're certainly not. And and that's up. Right? I I remember a presentation I did not that long ago, maybe a couple years ago, and that was a 185,000,000,000. Yeah.

So they've almost doubled their their cash reserves if that's correct.

Steve: They've been increasing their cash positions. And so but, yeah, I think that's a a lesson there. And it's it's interesting, like, just the human behavior. Like, why why do we are we so adverse to this? Are we so adverse to to the money part?

Because and going back to the point earlier is that the difference in the guys that know their finances and the guys that don't is literally multiple 7 figures.

Marcus: Yeah.

Steve: And then, you're talking about so we're talking about, like, you know, what that that that journey looks like for the new guy. What are some of the and maybe you touched on this a little bit. But, like, what we say are the top three mistakes, you know, maybe it goes far as say, what are the top three sins that business owners would do in regards to finances? Like, when you violate these principles, is that your own peril?

Marcus: Yeah. So I'm gonna broaden this out a little bit. So when it comes to finances, the the number one thing is just gonna be wrong numbers and or and or not looking at the numbers. Right? So if you have incorrect or if your financials are simply for your tax return, you got a problem.

Right? We need we need more than that. And so that's mistake number one. Right? You you met

Steve: the 2009 version of Steve.

Marcus: That's if that's what it is. And that's okay. By the way, a lot of entrepreneurs in the hustle phase, that's kinda where they need to be at, by the way. Right? They but they do need the financials.

They need the financials for taxes, but what the secret, if they wanna get out of that hustle phase faster, keep up with it. Keep up with those financials. Understand those financials. Study those financials. Find somebody out there that's willing to talk to you about those financials, and get as much information about what they mean as possible.

So that's number one. You gotta have those financials. You gotta have them dialed in. I I couldn't tell you the number of people that come to me with bad financials, and they're making millions of dollars. It's not uncommon.

It's not uncommon. And so you can have bad financials. And by the way, you may not even know it. Mhmm. That's the other scary part is not knowing that you have bad financials.

We see that a lot too. That's a mistake. Mistake number two is and I I know this is specific for real estate, but I if you're in another industry, I think you can apply it, is investing too fast. What's that mean? When in real estate, investing too fast is maybe buying a rental too early.

Maybe it's buying a flip when you should have wholesale it. Right? Those types of items in real estate take cash, and so when you're new and even in the BRRRR method, the BRRRR method is a substitution of cash. I I don't know if everybody's familiar with that, but the only way to BRRRR property is that you leave equity in that property, which means you're deciding not to take the cash out of the property.

Steve: Mhmm.

Marcus: Right? And so as a newbie, we see a lot of newbies get caught up in that. Oh, well, I bought this piece of real estate. I didn't put any cash in it. Well, it's actually not cash flowing.

So every month, you're putting cash in it. Plus, you could have made $20,000 on the deal and put that $20,000 into your business that you're now starving and you can't pay yourself and you can't invest in marketing, you can't do all those things, but you ended up with a rental. Right? And that's great, but there's always gonna be an opportunity to buy rentals. There's always gonna be an opportunity to buy a flip.

Get yourself into that right cash position first, and then you can go make those investments. I think I think that's another point of the puzzle here, and and and maybe this will eliminate my third my third failure, if you will, or my third issue. But real estate investing, I think a lot of us forget about the investing part. Right? That we in order to own a piece of real estate, you have to invest.

Well, in order to invest, you need money to invest. You need cash. Could you imagine saying, hey, Steve. I'm gonna go invest in the stock market, but I don't have any money to invest. Right?

Like, it doesn't work that way. No. And so real estate, you kinda gotta look at it similarly. Just because you can, doesn't mean you should. Right?

Because you can go get a private money loan at a 100% of the value, and you can go do a BRRRR, and you can do all these things, that doesn't mean you should. And I've seen so many times that newbie end up with five, six, seven, ten rentals, maybe $500,000 in equity that they can't tap. And they got a nice net worth, nice little net worth for them, but they got $5,000 in the bank. And they gotta either exit all these properties. They gotta try and come out with some sort of refinance, which then you're relying on the banks and see if that's gonna work.

You got DSCR loans to see if that'll work. It's all a mess. And so now you got $500 that you don't have access to unless you sell it. Well, now you gotta pay a tax guy. You probably took bonus depreciation on it.

So you've got all this you've got all these issues that come up Yeah. Withholding this property, and now you wanna sell it and you can't.

Steve: Yeah. I think one of the things that, Jason and Medley were talking earlier is that, his his what he shares is that it's too like, some a lot of guys are trying to buy rentals too early. He's like, you know, what's the easiest way to buy rentals? Have a lot of cash. Yeah.

When you have a lot of cash, it's really easy Yeah. To buy rentals.

Marcus: It it makes it really easy. And, by the way, you get better discounts. Mhmm. You know? You notice you notice when you have cash, that's right.

We're all buying for cash anyways. But when we really have cash, we get the best discounts. And so those are typically the best properties we get. And I will tell you one more thing about rentals, and I don't maybe this is just my clients, but it is becoming more and more common with my clients is that the philosophy of having all this debt on your single family rentals and, you know, really leveraging those out, it's starting to come go away. I'm seeing people that are like, hey.

I used to wanna have a 100 single family rentals or 200 single family rentals leveraged at 70%, and they're cash flowing. I'm good to go. Now I'm hearing, well, how do I get rid of these hundred, two hundred rentals, get down to, like, 40 paid off ones? Mhmm. You know?

And so it's interesting just the markets that you're seeing and how people's philosophy changes so quickly when you go from 2% mortgages to 6%

Steve: I think 5% mortgages. The the seasons. Right? Like, what season are you in your career? Yeah.

Because, like, Nathan Brooks wrote out a long post about it. And, like, the when you're an early part of your investment journey Yeah. Right, like, cash flowing assets, leverage, I think that's all great. And then once we go through an appreciation cycle like we just had, well, now we can cash out on all that appreciation. So, like, really the benefit, like, you know because we have Brent Daniels and he wanted this whole rant about how he hates rentals.

Yeah. Which he wasn't really totally wrong, was that the greatest thing about rentals is the appreciation

Marcus: Sure.

Steve: Not the cash flow. Yeah. Alright. So as long as you're cash flowing and it's appreciating, you're in a good spot. And then you get to a point where, like, hey.

I don't need any stress. I'll leave the tenants. I don't need phone calls. Like, even for myself, this is something so, like, I don't know, first world problems. You know?

But, like, when a property manager asks me a question, I was like, what am I paying you for? Yeah. Right? Like, like, hey. They need a new, they need, like, a sprinkler line a new sprinkler line for, like, the front yard or back or whatever it was.

Again, email. It's, like, $750. Like, hey. We already got the quote, this and that. And, like, should we do it?

And the fact that they sent me an email, like, should we do it? Like, already bothered me.

Marcus: Yeah.

Steve: I get it. Right? I'm paying you 10%. Take care of it. Make my problems go away.

Anyway, I think you get to a point where, like, hey. Instead of having a 100 of these that are levered, let's just have 40 of these that are paid off. And now it doesn't matter what pandemic hits. It doesn't matter what's going on in the market. It doesn't matter we get into World War three.

You don't have to sleep over it. I've got some big news, and you'll want to hear all of this because I'm gonna give you the best bonus ever at the end of this video. You all know that I've been providing sales training for six years now, and I've had the opportunity to train hundreds of the best teams in the country and thousands of individuals as well. And they've all had wild success along the way, some of which you've even seen on this podcast. You also know Ian Ross, who has been coaching alongside me now for over two years.

He is the biggest sales geek ever, and he's been training business owners and individual contributors ever since he started working here. He even runs the Close More Sales podcast, but we had a problem. There was a lot of confusion. What is it exactly that we sell here? Is it disruptors training?

Is it Steve train training, or is it closed Marcel's training? It's none of those. It is objection proof selling. Ian runs objection proof selling for business owners and individuals. I run objection proof selling for teams where I coach their entire team.

And to celebrate the rebrand, I want to give you something that I never would have thought been possible until recently. We've been training this AI bot for over a year now to score all of our sales calls internally. Every call we run, we have the bot review the call to Ian and mine exact standards for sales. We run every one of our team members' calls through the same exact AI bot, and now we're giving it to you for free. This bot will review your calls based on dozens and dozens of metrics.

It will tell you what you did well, what you can do better, again, by the standards of the objection proof selling formula. And if you want to use our bot for free, just head over to our website, objectionproof.ai. Again, objectionproof.ai. I want to emphasize here, you're getting access to our bot, which allows you to get better in sales for free so that you can make even more money now without having to spend another dollar. Go check it out now.

Marcus: Yeah. I mean, a paid off single family home is is an annuity. It's as simple as that. Right? I I I don't think they go down in value at least for long periods of time.

I think

Steve: They don't stay down.

Marcus: They don't stay down in value. There's always gonna be a need for them. Right now, you know, the the problem with the rental working is that the rents have not kept up with appreciation. So, you know, you're always gonna have people that need the properties. They're always going to continue to to pay you.

But your returns on a single family paid off home is not gonna be great. If you look at your return on equity, if you look at that, those actual returns are not they're not super great. But to your point, the risk is much lower. It's an annuity. And, you know, if you get the right property management company, hopefully, it's not a headache.

Steve: Yeah. So infuriating. It's like, what am I paying you for? It's just it's what I always think. Right?

So I'm not a maverick, but I do have those tendencies.

Marcus: Fair enough.

Steve: It's like, why are you giving me this information? Just just do your job. Anyway, so, one of the things that, actually, before we get into strategic CFO, you didn't know I was gonna ask you this question. So many years ago, you and I were talking, and I was telling you about my structure. I got this thing going on and this over here.

I got my Wyoming LLCs and this and that. And he says something I don't know if you've ever said this on the air before, but you have an opinion to asset protection companies.

Marcus: You are gonna take me down that road, aren't you? Alright. Fair enough. What are

Steve: your feelings about asset protection companies?

Marcus: So first off, let me disclose that

Steve: You're not

Marcus: a lawyer. I'm not a lawyer. I'm not an attorney. Attorney. I don't even play one on TV, and I didn't stay in a Holiday Inn Express, if you guys remember those commercials.

Here's the reality. There are bad folks in every industry, that are out there to make the biggest dollar not provide the biggest benefit. And I think there are certain asset protection companies out there that while they are accurate and that they are providing you asset protection, where I think they missed the boat is that your ability to actually maintain that asset protection is very, very complicated. You have ten, fifteen, 20 entities that all have different bank accounts, that all have different books, and you end up paying an absolute fortune in your entity structure just to maintain the the the day to day operations of that entity structure. And and quite honestly, if you start doing things the incorrect way, you you end up in a potential issue.

And so when it comes to asset protection companies, I think it's important that you find a a group, an attorney for firm, a law firm that doesn't just come in and set up your business entity set up, but they look at your entire life. Right? From your trust to your state to your wills and everything underneath that because all of those need to kinda correlate and roll up into into one one main location. And the more complicated you make that and the more, you know, more LLCs they set up sometimes, the more they get paid. Right?

Steve: Mhmm.

Marcus: The more complicated you make that, the more complicated it is for all that to kinda roll up into that central spot. And so I like simple asset protection companies make it complicated for a good reason, probably to keep you safe, but I think a lot of people kinda fall victim to not being able to actually keep up with those structures because they're too complicated.

Steve: Yeah. I think one of the things I've heard, with asset protection is that it's a different, form of fear mongering, where they're selling something. Does this happen? Do people do burglars break their legs and sue you? Yes.

Yeah. Do tenants have parties and someone broke their foot and they sue the landlord? Yes. Yeah. How often is this happening is the flip side of that question.

Marcus: You know, it's a it's a great question. I don't have a lot of those lawsuits in my practice as far as clients that are getting sued from these nefarious things. Mhmm. I I got clients getting sued all the time, but it's, you know, they're it's part of business. Right?

And so, you know, you do everything you can, to protect your you know, everybody should be insured appropriately. Everybody should, you know, take care of those things. You should have a correct entity structure.

Steve: Yeah.

Marcus: And you should maintain the books within those entity structures correctly. And all of that is critically important to ensuring that you are as safe as possible. But when you go overboard and you, you know, try and get too complicated with your entity structuring, that is where you you you can all honestly fall on your face, and you end up paying I mean, I've had people paying $20.30, $40,000 a year just to maintain the complexity of their structure. They're not really getting any additional value out of it. It's just the amount of the cost of maintaining how complicated their structure is.

Steve: Right. And, I mean, again, we're not saying that we shouldn't ever be concerned. Right? You should have some structure. Right?

But a lot of those structures are in place for a reason.

Marcus: Mhmm. And

Steve: maybe you look at an umbrella policy or whatever. But I'm trying to think, like, you know, within CG, I haven't heard anyone go through any crazy situations. And these are the biggest operators in the country.

Marcus: Yeah. Yeah. And, you know, I think even when those things happen, I think insurance pops in. I think, you know, a lot of the people that we're working with, they're you know, we're not we're not talking about people that are kinda doing things halfway. Right?

They're doing things the right way. They're they're they're doc they're dotting their i's, they're crossing their t's. They're if you do things the right way, generally, you're gonna be okay. Right? When you it's the ones that you know, if if you're a bad person, it just is what it is.

You're gonna you might get caught up in that, and there's no entity structure in the world that's gonna save you anyways.

Steve: Yeah. And then, you recently, released a product that I'm using, strategic CFO. So this seems to be a bit of a a passion project for you.

Marcus: Yeah. Yes. It's it's a it's a funny it's a funny project because, you know, it really started it really started from CG. CG started, I don't know, three or four years ago, they started CG Select. And as part of CG Select, I I was fortunate enough to be asked to be the finance trainer Mhmm.

For CG Select. And that meant that I jumped on a call with all of the CG Select members, and I taught them finance, everything from and I'm still doing it to this day. I jump on once a month and and get the opportunity to teach. I teach on balance sheets, p and l's, financial statements, tax strategies, tax structure, anything in in kind of what I do in my day to day world. I I I taught on it through CG Select.

And what I I found was a big passion for teaching and teaching these principles because, the reality is is that we don't get to work with every single person. As much as I would love to you know, there are people that just aren't the right fit for us. We don't we don't like them. They don't like us. Right?

That happens in every business. We're too expensive for some people. We're not expensive enough for other people. Right? There's always reasons why we we aren't a good fit.

But what I do know is that the information that we have because of the background, because of the decade of working with real estate entrepreneurs, because of the hundreds and thousands of flips that we've helped manage and and manage the finances for, because of the wholesales, because of the multi because of all of these things that we've seen, what I wanted to do is create a program that would ultimately take those teaching and make them available to people outside of the collective genius. And and so we built a whole, kind of a whole module around, and it's seven different modules around everything from tax planning to financial strategies to cash management, cash position, all of these great great kind of focuses. But then we come together every week, and then we we talk about some of those strategies. And I'll be honest with you, Steve. I don't know what the what the longevity of strategic CFO is because I I think we were talking about this a little bit before.

Some a little bit before. The the reality is learning is not enough. Right? I think finance is a is a tough thing to want to learn more about. We know.

We talked about it. Right? It's a it's a seven figure decision to understand finances or not understand finances. I can factually tell you that's the case. If you're listening today, you know it's the case.

You're you can argue with yourself in your mind, but you know it's the case. But the reality is we're we're gonna stick our head in the sand. And and that's natural because it's a scary thing. And so I don't know if that's going to be if strategic CFO hub is gonna be around for a long, long time. I hope it is.

I hope, you know, it gets some adoption. I think my my biggest focus right now is we've got the the education out there. We've got it there for people that that want it and that can can get a little bit of their value out of, a little bit of financial education specifically for real estate. That's the cool thing about that. It is it is specifically for real estate.

But what I will tell you is as I've gone through that process, and I think you found this in your process a little bit as you've grown your businesses, is that I've gone through the process, what I'm what I'm finding is the people I'm talking to, they're like, hey, Marcus. I really appreciate the education. This is great. Like, I really like it, but I just want you to do it. Mhmm.

I just want you to I don't I don't I'd rather just pay you a little bit more and just have you get take care of it, and you tell me what's going on. And I don't wanna mess with it. And so I'm seeing a lot of that pushback on that particular service altogether. So we'll see what the longevity of it is. But I will tell you no matter what, what that looks like, I don't somebody may be listening to this podcast in two years from now, and this is a far thing.

And it's already been gone. But I can tell you this, no matter what, my goal remains the same and is I wanna educate people on finance, right, on what it takes to understand finance because I do believe it's a 7 figure decision. And it might not be, hey. I understand finance. I didn't understand it last year, and I understand it now.

And now I'm making a million dollars more. It doesn't work that way. No. But over the course of your life, those little decisions that you're now able to be more informed on, in that in that room in there, I got to sign your wall, and I and I put underneath my signature. I said, better decisions, better results.

Yeah. And that's what it's all about. If you can just incrementally, by understanding your finances, make just a little bit better decision, you can get much significantly better results. And when you compound it over year after year after year after year, it it is well into the seven figures. It's not eight figures just depending on how far you wanna go.

Yeah. But what I will tell you is the more that you focus on understanding those fine that's why strategic CFO was there, and that's what we're gonna continue to be in business for as long as I'm around in this company is to help people make better decisions to get better results. And if if strategic CFO doesn't help people do that, we'll cut it. I I'm not I'm not so proud to to keep that. I just wanna make sure that no matter what we're doing, we're giving people that opportunity Yeah.

To continue to get better at their finances.

Steve: Well, I went through your program. Right? And, there's one spreadsheet alone that jumped out at me. It's like, if I was using this before, I'll be in a much better financial position. And what it was, it was talking about how much money you should have in your tax account.

Yeah. Right? Because until I went through your spreadsheet because, like, I've gone through Profit First. Yeah. Right?

Like, Mike, Micaliway's a fantastic book. Mhmm.

Marcus: And

Steve: I was following that process, and I was using my own prescribed numbers on how much I should set aside for taxes. Right? So I was saying 10% because historically, 10% has worked. Right? 10% of the revenue just stick in the tax account, that should work.

And where yours is different is, like, you put in your profit every single month, and then based on your profit every single month, here's how much should be in your tax account this month. Mhmm. Throughout like, for the duration of the year. If you lost money last month, hey. You don't have to have that much money in your bank account or in your tax account.

Yep. I wasn't doing that. And so '21 was one of the best years I had. And, of course, in '22, I had a crazy tax problem. Sure.

That whole problem could have been avoided Mhmm. Had I been using that one spreadsheet alone. Now I've gone through, Verne Harnish's scaling of two point o. Right? And then I went I went through that book, and there was another one that was the finance guy.

Now I wanna say simple numbers. It's been a while. I went through I went through that book. And then Keith Cunningham, I'm a big, big fan. You know, the insane the blueprint for an insanely successful business.

Marcus: One One of the best books out there.

Steve: Yeah. One of the best books out there.

Marcus: That nobody knows about, by the way.

Steve: Yeah. Right? But one of my if, like, I went through that book, it's like, oh, man. Like, I got a Incredible. Much more information about finances.

But then when I went to your program, like, for me, that's when, like, the the switch flows like, oh, it all comes together. Oh, yeah. I mentioned, like, you know, Profit First. Like, I've gone through all the different finance books Yeah. But your training, that course, help it all go together.

Marcus: You don't

Steve: even need to sell it for anything crazy. Sure. Right? So, like, you know, someone wants to find out about it. How do they find out about it?

Yeah. If you just go

Marcus: to beckcfo.com, over the top right, there's a strategic CFO, link, or you can go to strategiccfo.com. Like I said, there's I'll be honest with you. I don't know I don't know how long it's gonna last, to be honest with you, Steve, because, there there could be a time where just the effort that I'm putting in just doesn't does doesn't make sense, and I can go do it in another in another area within my business. So, hopefully, you guys if you guys are listening to it and you wanna be a part of it, strategiccfo.com or strategiccfohub.com is the place you can go visit, or you can just go to beckcfo.com, reach out to us, and we'll get you in touch with whatever you need. Right?

If we don't feel like you're a a good fit for what we can do internally in your business and we help you, then maybe strategic CFO is a good fit. But, ultimately, our goal is gonna remain the same, better decision, better results. If we can help you make better decisions, we're we're winning.

Steve: Yeah. But I will still say, for you guys watching, you guys should go check it out. Yeah. And then, you know, the one of the things also is you saved a lot of people a lot of money. How do you go about saving, you know, your clients?

I think I'm reading here average 50 k.

Marcus: Yeah. So it's that's probably actually low because we're you know, you gotta be careful when you're actually putting out numbers, especially in finance. But I had my my tax director, Caden Hackney, which, some for those of you guys that, work with me and I met Caden, you guys know who I'm talking about here. He's a brilliant, brilliant guy when it comes to tax strategy. He I had him run the numbers last year of the people that went through our tax strategy program.

And, ultimately, that's I'm not gonna give you a number, but it was above $50,000 on the average of what, what our clients saved through our tax strategy program, which was absolutely phenomenal. But how did we do it? What is it that we do? And and I could come on here. We could talk about these, you know, various strategies, if you will.

We're gonna

Steve: go into that later.

Marcus: And and and if you want to, let's we can talk a little bit about it, but what I what I want to make you aware of is that there's really three three three pizza pieces of the process. And I don't care who you're getting tax planning from. The the process really is the same. And so step one of the process is entity structure. Mhmm.

And so, you know, we talked a little bit earlier about the legal impacts of entity structure. Well, there's a whole other side of entity structure, which is the tax impacts of entity structure. And I can tell you that if you don't have the entity structure right, that could be a $100,000, $200,000. I had somebody lose $300,000 in in their in taxes just because their structure was incorrect.

Steve: Are they a partnership?

Marcus: They were they were it's gonna get really complicated if you really wanna get boring into how it works, but, ultimately, they were the wrong entity structure for the wrong type of business, and it cost them a fortune. And so, for those of you I'll go into it very quickly. Ultimately, they own rentals in an s corp, and that creates a ton of problems if you're a real estate investor and you want to do things like a cash out refinance or you wanna move that, particular property to another LLC. Or

Steve: Oh, so taxable events.

Marcus: Yeah. You create taxable events. And so you anytime you have, the incorrect entity structure, you could create unknown taxable events. You could pay extra taxes on income that you shouldn't have had to pay on. So there's a lot of different issues that that comes in with entity structure.

So that's where you start. Mhmm. Then this next thing is what we call and everybody calls them a little different, but we call them entrepreneur tax strategies. These are the tax strategies that it you don't have to be a real estate investor. You don't have to be, you know, you don't have to be in a specific industry, but you just have to be an entrepreneur.

You have to say, hey. I'm a business owner, and I'm making revenue, so I have the right to say take some of these, to have some of these opportunities. Right? We all talk about, oh, business owners get all the all the best benefits. You're right.

Steve: Mhmm.

Marcus: But only if you take them. And so when you're when you're a business owner and you're you're like, I I'm I get all the tax strategies, but you don't know what they are. That's that's what they are. Those entrepreneur tax strategies are a group, and there's, 10 to 12 of them that we look at for all of our clients. And and that is kind of what we start helping them implement.

Are those gonna be huge tax savings dollars? No. But most of the time, what those are is those are dollars that you're already spending that is found money that you're getting deducted. Right? And so you're basically taking money that you're already spending anyways, and you're able to get a better tax benefit for it.

So that's what those entrepreneur tax strategies are. And then once we've exhausted those, now we gotta look at you. Right? Steve, what do you do for business? How do you make money?

What's your goals look like? Maybe maybe you're just gonna have to pay a lot in taxes right now. That might have to be the answer because your goals you don't wanna go buy a bunch of real estate. You don't wanna go invest in this syndication. You don't wanna go, you know, put your money into this place.

The secret that most of us have to know is that in order to save money in taxes, we have to spend money. Well, if you don't wanna spend money, you're gonna have to pay some taxes. Mhmm. Right? And so that was those custom strategies start to come in, and you start to say, okay.

Well, for this individual, they're a real estate professional, and they have half $1,000,000 worth of income. And so we could go in, and we can do suggest they do this and this and this and this and this. Right? Or they're not a real estate professional. And but they've got this income.

So we could suggest they do this, this, and this. Or they've got this many kids, so we could suggest they do this and this. So it all comes down to what does that individual look like. Then you that's where the creative part starts coming in. A lot of the entity struts structure stuff, you'll find on YouTube.

Right? Even the entrepreneur strategies, you'll find pieces of that on YouTube. A lot of you guys probably get ads for, you know, these tax planning strategies all the time. I get them too. Right?

So those two but the it's the custom ones. That's where you really gotta sit down with somebody, and you gotta say, hey. You know, my goal is to do x, y, and z. I I'm gonna work for the next ten years. I'm gonna work for the next thirty years.

I'm gonna put x amount in retirement. I'm gonna put zero in retirement. I'm gonna you know, these are all things that matter in long term tax planning, and long term tax planning is not 2025. Right? We're not talking about just how much money am I gonna save this year.

We're talking about, okay. Am I gonna save money in 2025, 2026, 2027? How do I have a system where I'm consistently paying the least amount of tax as possible? Also, doing that within managing towards my goals.

Steve: Yeah. So let's talk about some of the biggest ones. Right? The we're talking about, like, the insider secrets. Sure.

What are some of the strategies that, you've helped some clients do that have had some

Marcus: of the biggest impacts? Oh, man. There it's never one. Right? So one strategy is never enough.

I I I should say that. Let's get past, you know, buying a piece of real estate and taking accelerated depreciation and writing all that off. Right? We can we can do that. By the way, let me go backwards just like I'm making an assumption here.

Not everybody knows what we're even talking about. And so what's the big strategy? If you're a real estate professional, the biggest strategy that's been out there for the last five four or five years since, you know, Trump was in office in 2017. I guess he's he's enacted it that long ago. Gosh.

Time flies. But when he enacted that, the Tax Cuts and Jobs Act in 2017 and enacted a 100% bonus depreciation, that's when, you know, you got massive depreciation benefits. And then, you know, we did some incredible things of showing people how to buy properties, how to buy properties, and basically get paid to buy the property from the IRS because of the tax savings that you were gonna have. I remember doing these examples where we would show okay. You can make a a $20,000 wholesale fee on this, or you could keep it, put it in your real rental portfolio and save $30,000 in taxes.

Those were the type of things we were able to do, and that and that was a big, big thing. Now that that benefit is has waned. And so a 100% bonus depreciation went down to 80%, went down to 60 percentage, now at 40%. We'll see if that changes. But what that does is that allow that eliminates a huge amount of deductions that real estate entrepreneurs were were utilizing for the last, again, half decade.

It's 2017 even. So what are the big strategies? Well, that was the big one. That was a big one. We do a lot when it comes to exiting these properties.

So, like, ten thirty one exchanges, those kind of things to where we're not, we're not taking that tax burden when we sell. We're gonna roll it into another asset and ultimately keep that going. That's what a lot of people do. Maximizing deductions when you buy a piece of real estate. Some people don't realize that there's parts of a a a piece of real estate that you can expense immediately.

When as you own that realist piece of real estate, there are parts of it that you have to capitalize, and and that's just a fancy word for saying you gotta put it on your balance sheet, and you can only deduct a little piece of it over time. Right? And so we do a lot of, like, maximizing deductions. And then, ultimately, we look at and and see what those true goals are. So we have people that look at charitable strategies and look at how they wanna maximize their charitable deductions.

Steve: Mhmm.

Marcus: We have people that look at, alternative investment opportunities. So here's a here's a fun one. We've got people that how about a story? Here's a here's a good story. So I have a client.

They had a large tax bill. Let's call it I think it was, like, $495,000 is what they were gonna what they were gonna achieve from that from that year. Right? That's an achievement, by the way. When you owe $495,000 in taxes, that is an achievement.

Steve: Mhmm. Right? Fantastic.

Marcus: It's not a bad day day, but there's still it's still a problem. It's a good problem, but it's still a problem. And so what this particular investor did was they they said, hey. I've got a problem. I've got cash.

You don't make $495,000 and not have cash, and he and he was smart. Right? He didn't just go blow it on a bunch of bad things, and he went and bought a car wash. Oh, why a car wash? Well, because through the planning, we realized that buying real estate was not gonna be the best fit for you.

You had you had too much money that you made, and you didn't have enough real estate that you could buy. And the the car wash actually made a lot more sense for this person in particular. So they went out. They they sourced a car wash, found a great car wash in a great location. I think they bought it for around $1,700,000.

That $1,700,000 created $1,300,000 worth of taxable deduction for them, save them I think I got my numbers wrong. Their tax liability was $300. They saved them 495,000 in taxes, so they actually got paid a 195,000 and ended up with a with an asset on top of that. And that that car wash ultimately cash flows every single month well in excess of what a single family rental would have done or a group of single family rentals would have done at $1,700,000 of asset value. And so that's a fun one.

Here's the kicker. The bank liked that asset so much. The down payment that he put in, he put in basically, I don't know, 20%. The down payment he put in, they gave it to him in a construction draw that he could draw on to ultimately improve the car wash. And so, you know, he got out of his 300 plus thousand dollar tax bill, ended up with an asset that he still owns today, and he cash flows every single day.

By the way, he's out of he doesn't have a job anymore. Mhmm. Right? He's that that w two income that generated that huge tax bill, he was able to leave it because of all his real estate investments. And part of that is not having to pay a half $1,000,000 tax bill or close to half $1,000,000 tax bill.

Steve: Well, the reason why it's so important, you know, for everyone else, like, who cares? Some people don't care. Right? Like, tell me what we're saving tax. You know, we actually have people that listen that are, like, leans to the left in this, politically.

And so, like, why should we avoid paying taxes? Right? Well, for those of you guys, it's because net that money that's not taken out of your pocket, you can grow. Yeah. Once it's sucked out of your pocket, that money cannot grow on its own.

So, like, tax deferral. And, again, this sounds obvious for a lot of our listeners, but there are some people that, again, are not opposed to paying taxes, is that you can take that money and watch it grow and then pay the taxes later. Yeah. Right? It's it's a it's an interest free loan from the government that you can grow.

Mhmm. And when you defer it, later on, the government will always get their money. They'll get their money later. Yep. Just let's let's keep it and grow it a little bit before we give it all back.

Marcus: Sure. And there there are plenty of strategies where we don't have to give the government money later. Mhmm. Right? There's opportunities to do that.

You know, it's interesting that you say that, and it doesn't really matter politically where you lean. But I have a I'll tell you, it's the wealthiest person I know, the wealthiest person I've done business with. I have a I approached them for years about doing tax plan. Years. They overpaid in taxes by millions of dollars.

They have an excess of a $100,000,000 in cash in their bank. Not a 100,000,000. Yes. No. In excess of a $100,000,000 in cash in their bank.

They have never done tax planning. They don't care. They just write the checks and go on. Why? It's not because they want to pay the government.

They they they don't wanna pay them more, but they don't want the distraction of having to go through and change their business model in order to save money in taxes. They'd rather just pay the tax bill. And so because of that, that's the decision that they've made. If you're in that boat, that's okay too. Yeah.

I I don't know that it's for everybody, but this particular individual and and it's hard for me to argue with them, but there's two Hard

Steve: to argue with the results.

Marcus: It's hard to argue with the results, but there's two that I know that are in my portfolio that are two of the highest wealthiest people in my portfolio. Neither one of them do any tax planning.

Steve: Mhmm.

Marcus: They refuse to do it because they feel like it's a distraction. I don't know if that's the advice I would give everybody, but for those couple people, it worked out for them, and they kept the main thing the main thing. And I think, you know, if you're gonna take any advice from that, staying focused in your business is also a good piece of advice. That's actually why they were so successful. It wasn't that they weren't they didn't do tax planning.

It's because tax planning was just one of the things they said no to. Mhmm. They said no to so many things. Yeah.

Steve: Right? So I'm gonna hit you with a few different things. So at one point, I was talking to you about a problem I had. And you say, well, maybe now is a good time to look at a mobile home park. And maybe this is when we're talking about earlier about bonus appreciations.

Marcus: Mhmm.

Steve: So we haven't talked about that. Yeah. Mobile home parks, still good?

Marcus: Well, I like mobile home parks. I love mobile home parks. But it has been a while since I have investigated a mobile home park. So I got an opportunity. Again, this has probably been five or six years ago to be the a fractional CFO.

And so fractional CFO is ultimately, if you need a CFO in your business, but you're not ready to hire a $350,000 CFO, maybe, and you want somebody just to come in and help you with your numbers, they come in and, and they come in and help you with your numbers different than a bookkeeper. Right? A bookkeeper tells you what your numbers are. A fractional CFO takes your numbers and tell you tells you where you're going. And so I got an opportunity to work with one of the biggest mobile home parks indicators in the world and saw how they did what they did and saw the numbers behind them and saw how they worked.

And on on top of that, I saw the depreciation results of those asset classes. And they may not like me talking about this because it's gonna give them some competition. But, ultimately, the mobile home park industry is a industry that I liked a lot because of the affordability of the housing. Right? Everybody needs affordable housing.

They're not making any more of these assets. You don't see mobile home parks getting built.

Steve: They're all getting destroyed. Cities are shutting them

Marcus: all down. They're shutting them down as soon as they get an opportunity. And so what that does is it eliminates your competition because you can't. There's not a cheaper place to live than a mobile home park generally. Right?

And so if you're the cheapest place in town, you're always gonna be full. You're the price of the parks generally are pennies on the dollar compared to maybe a multifamily or something like that. And so you can get in them a lot less, and they actually generally cash flow. Right? You gotta always look at your numbers.

You gotta do your pro formas, all of those things. But the reason why I liked them was because on top of all those things and on top of the cash flow, on top of the the security behind the asset was the depreciation benefits. Mhmm. And the depreciation benefits were significantly higher for mobile home parks than they are for single family, single families or even multifamilies because the value of a single family or of a mobile home park is underneath the ground. Right?

It's the land improvements. It's the infrastructure that is what creates the value. So that's what when we do depreciation and we do cost segregation, which is another thing that we haven't really talked about. But when we do those things, that allows us to take a much larger deduction on that asset. So I love that class.

Probably, when we were talking about this, I I remember being with a, a couple clients. They hired me as a different group, but they hired me as a fractional CFO, and they were flipping 40 or so properties a year, and they were tired. And they said, hey, Marcus. I'm I'm we're ready to be done. What do you think?

How do we do this? And we did a full full full day planning. We sat down, and we looked at their business. We looked at their cash position, and they're and we looked at everything that they wanted to do in life. And we said, okay.

You guys we've got all these assets on the books. You can exit these assets. That's gonna generate this amount of cash. You can then go turn this amount of cash into one of these two areas. Right?

And we basically picked out we were looking at multifamily. We were looking at self storage, and we were looking at, mobile home parks. And because I was a part of this mobile home park fund, which wasn't a conflict of interest, they weren't competing by any means. I was telling them about, hey. You should really consider these mobile home parks because it's, you know, higher cash flow, you know, really you know, gave them all the points that I just gave you.

Right? And they they bought in. Well, they sold all their flips. They generated them 7 figures worth of of profits. They bought mobile home parks.

They eliminated the taxes from those profits, which means they kept more of their dollars just like you were talking about so that they could invest in more mobile home parks. They ended up buying three mobile home parks. I wanna say they bought them all in for around $5,000,000. Three years later, they sold them for 12,000,000, and they're done. Right?

And so today, they're private money lenders, and they don't have a full time job, and they don't do any fix and flips, and they don't do any of that. They just simply have have won the game of monopoly in their opinion. Right? And so, that's why I like those assets, but but it worked out for them because their goal, they had a tax problem. They wanted to go into a certain asset, and then, you know, they had some luck.

And they you know, the market from the 2019 to 2022 was nice. Yeah. Very kind to them. But, also, they worked their butt off. They held those properties.

They built a little portfolio to where they could sell it to somebody that was bigger. They had a strategy behind it, and they took a a a successful flipping business and then basically turned that into retirement within three years. Yeah. It's pretty cool.

Steve: And then you mentioned something about a foundation or a charitable deal. And so I've had people pitch this to me, and I don't understand it. How is this a tax benefit to start a charity or foundation or whatever?

Marcus: Yeah. I think it just all depends on the scenario of what you are trying to do. It is never a tax benefit if you're not charitable.

Steve: Mhmm.

Marcus: Simple as that. And so if you are a charitable person, there are a number of different charitable giving opportunities that you can provide value to a charity in a a bunch of different ways. Right? And then I we can get to into the complicated things, but I I don't think it I think it makes sense to stay high level here. But, you know, there are different ways of contributing to charity where you get larger deductions today, but the charity doesn't have access or doesn't have all the capital today.

Right? They may get drips of the income, off of it. There are situations where you can there's also situations where you can donate assets to the charity, but you get drips of income off of it until you die. There's a lot of different structures. So it just depends on what you're trying to do.

But I can tell you the most important part of a charitable structure in any of these foundations, in any of these, situations is if you're not charitable, it doesn't matter because you cannot you let me repeat this. You cannot take a charitable deduction and not be charitable. Yeah. Right? And so, you just have to plan.

If that's one of your goals and you want to, take massive tax deductions through charitable giving, there's ways of doing that to get the best deduction. But understand you are giving to charity and you are going to do clear.

Steve: You're not eliminating taxes. Reducing taxes. You are reducing taxes. To charity. Exactly.

And another one I see every once in a while is, like, some sort of land is, like, environmental protection.

Marcus: Talking about conservation easements.

Steve: There you go. Conservation easements. That that's that's that's been something that kinda kinda buzzes back and forth.

Marcus: Yeah. So you you're starting to talk about, items that hit on the dirty dozen list. This would be fun for your listeners to do some exploring. So the IRS one of the most creative things the IRS has ever come up with is the dirty dozen list. Can you believe that?

So the dirty dozen

Steve: list list that they're like, they're not fond of.

Marcus: Exactly. They every year, the IRS comes out with their dirty dozen, which is the top tax schemes that they are going after.

Steve: So they're aggressively invested. Like, I remember one of those for a while was captive insurance.

Marcus: Captive insurance. Exactly. You're exactly right. So captive insurance, some of these charitable structures, they they are on the list, monetized installment sales, if you've ever heard of what that is, is on the list, and captive insurance. Or captive insurance is on the list, and then your conservation easements are on the list.

And and so just so with every single tax strategy that's on that list, what you have to understand about that tax strategy is IRS has not said that that tax strategy is not allowed to be done. It is they're not saying it's against the law. What they're saying is that there are people take advantage taking advantage of the strategy beyond what the IRS is going to allow you to take advantage of. And because of that, it's gonna be a high audit risk.

Steve: Yeah. It's a red flag for them.

Marcus: Red flag. Right? And by the way, the they not only is it a red flag, but if it's on the dirty dozen list and you participate in that red flag, you get to raise your hand and send a letter in with your tax return saying, hey. I'm doing this. Just FYI.

Right? That's not the thing you necessarily wanna do, but there are people that do it because these the transactions can be legitimate that are on the dirty dozen list. Now you want to make sure if you're doing something that's on the dirty dozen list, number one, you're taking a lot of risk, and you're taking that risk. As a taxpayer, this is something that you everybody listening must be very clear on. And you told me not to pound on the table, so I'm not gonna do it.

Must be very clear on. You're you sign your tax return. Note that you're the signer. Mhmm. The buck stops with you.

If something's on that tax return that is illegal, that is that wasn't right, that was against the law, any of those kind of things, it's on you. Mhmm. You're the signer. So you have to be very, very it's very, very important that you understand what you're getting into, the risk, the rewards, the downsides. And I always tell people, listen.

If you can't write a check to get the IRS to go away, don't get sideways with the IRS. Yeah. Right? And so what does that mean? That means don't take don't take risk.

Mhmm. Right? If you're somebody that, hey. You've made your first dollar, and now you've got a a tax bill, but you don't have a whole lot of cash and and and you're not sure what you're gonna do, going and taking a doing an aggressive tax strategy is not the thing because guess what's gonna happen? You get audited.

They go against you. You don't have the ability to pay. Now you're maybe you got up to that expansion phase that we talked about earlier. Now you get dumped back in the hustle phase because you got a huge IRS bill that you gotta make up for. Now you're back grinding again.

Right? We don't want that. And so you asked about the conservation easement. I took you around a long circle there, but, ultimately, the conservation easement, the monetized installment sale, all of these things are tax strategies that IRS doesn't like, but there there are there there are legitimate ways of doing them. I conservation easement, I actually love the strategy if it's done a certain way.

Here's a way you could do it if you own the land. Right? So what the IRS doesn't like is what they're gonna call a syndicated conservation easement, which just means you pay me money, I go secure the land, and then I give you the deduction. Right? IRS doesn't like that.

So but if you own a piece of land and then you put a conservation easement on that piece of land, there's no issue. As long as you do it legitimately and you do the whole process. But the it was the the whole point of that law was to allow for the government to, in essence, seize land that needed conservation. Mhmm. And you can donate that land.

You know, they got actually want it. They can't just donate whatever you you know, can't donate your backyard to the the government. Right? But if you have conservation land and you, you know, you got some something to give, you may be able to donate it. A lot of times, you still get access to it.

Right? And so you may be able to donate it, take a deduction, take a charitable deduction, and still, you know, kinda have access to it knowing that the government kinda has the easement on it at that point.

Steve: Got it. Let's see. I wrote down a couple other things too. So a couple of big ones, that you hear a lot more about on YouTube is the Augusta exception Yep. And paying your kids.

Yep. So you wanna touch on those real quick?

Marcus: Yeah. So the Augusta rule, I've gone a lot of areas. We we do the Augusta rule. I go back and forth on this one because most of the time, it's actually not done correctly. Right?

And so most people kind of I hate to say it, but fake the Augusta, the Augusta rule deduction. None of our maverick friends would Okay. Good. But if they were to do it, you know, it's an easy one to kind of fake, if you will. Right?

So the Augusta rule basically says, hey. You can rent out any of your personal residence. So if I own my own personal if I own a second dairy resident, whatever, I can rent it out to myself for fourteen days or to anybody, not just yourself. Doesn't have to be yourself. The benefit is if you do it to yourself.

We can talk about that. But to anybody for fourteen days tax free. So you get fourteen days worth of income. You don't pay any taxes on that. Well, the reason why you rent it to yourself or your business is because you take the deduction on the business, but you don't take the income as the individual.

So you get, let's say, you know, it was $500 for you to rent out your house for the day. You get to take $500 out of your business, but you don't have to pay taxes on it. That's the benefit. Well, what I think happens is in in in our program, we show you how to document it so that we don't have to deal with it being faked, if you will. But what I think happens a lot is the Augusta rule is like, okay.

Well, I rented out my house for fourteen days to myself. And so at the end of the year, I'm gonna make a entry on my books to say I it cost me roughly $14,000 is a thousand dollars a day. Right? There's no comparables. There's no real research in it.

Right? And so that's one that I've gone back and forth on. If it's done legitimately, I love it. I love it. I think it's a great deduction.

I see it a lot, yeah, a lot with, coming up more and more with, like, instead of used to be people would rent out their office like, their home has, like, their office space. Well, if you do a comparable for an office space in your location, it's not very comparable. Right? You might spend it might be a $500 comparable, so it's not a huge deduction that you get. But now you start thinking about, okay.

Well, what's it cost to run a podcast studio for a day? Mhmm. What if you need to rent your what if you have a podcast studio in your house? You need to rent it out for the day. Yeah.

Right? That's a much more expensive, day rental. So maybe that's a thousand, 2,000, much larger deduction. Yeah. So there's things like that that we look at in the Augusta rule to help increase the deduction and depending on what they're doing.

Kids. You asked about kids. I love the kids too. Mine is just now getting old enough to where I feel like I can legitimately have them working in the business and give them the the benefit of and take the benefit of them working in business or my oldest at least working in the business and, you know, kinda getting getting them paid that way. So let's talk about what that what the kid's strategy is.

So hire your kids. Ultimately, every single human that breathes on this earth, the day they're born, they get a deduction, a standard deduction. Every year it increases. Don't quote me on it, but it's somewhere around $1,213,000 dollars this year. It might be 14,000 in 2025.

And I usually don't start, looking at those numbers until a little later in the year. But what you can do and what a lot of people do is they will pay their kids a certain amount of money for working in their business. Now what that does, it's the same similar situation to the Augusta rule where I take the deduction. I don't I the money comes out of my business. I take the deduction in my business.

It goes to my kid, but he gets a deduction because he's breathing. Standard deduction. Well so I pay him up to $1,314,000 dollars. He doesn't pay any taxes. She doesn't pay any taxes.

So in essence, I created a deduction here. No taxes here. That's not even a deferral. That's taxes you'll never pay again.

Steve: Mhmm.

Marcus: And so what does that do? I I called this getting your, having the IRS pay for your your kid's 16 year old car. Right? When they start turning 10 or 11 years old, and they can start working in your business, and you can start legitimately paying them, it's all legitimate. Alright?

You'll never hear me talk about a strategy that you're not legitimately doing. You're gonna they're gonna be in your business. You're gonna pay them a right rate. You're gonna it's not some I took a picture of them and put them on a postcard. That doesn't work.

Right? You gotta be a little bit more specific than that. And you pay them. Well, guess what? Over four or five years of paying them ten, eleven, twelve thousand dollars a year, you've been deducting it.

That's in their piggy bank. No 10 year old needs $1,011,000 dollars a year. There's your there's your 16 year old new car. Right? And your business paid for it.

They got a deduction for it. Yeah. Your kid gets to go buy their own car with their own hard work that you've allowed them and showed them the effort that they've put in to doing that, and you've gotten a great benefit. There's some other things that we do with that with like, you can contribute your kid can contribute to a Roth IRA now because they have earned income. And so now you can start saving for their retirement forever, and that's now that's income that's never ever gonna be taxed.

It can grow tax free. There's just a lot of really cool things you can do with it if you legitimately employ your children. And I encourage all of my clients that once their kids are 10, 11, 12 years old, to start getting them in the business and start having them work because it's gonna teach them life lessons. Get them into doing the books. Yeah.

Maybe you don't want your kids understanding the financials of your what you're making and what you're not making. Don't show them everything. Maybe you can just give them one set of books to help them do the bookkeeping honors. Help them code some transactions in your books. Have them do some of the things that, you know, we you and I have been talking about AI all day.

Have them do some of the things that you're training an AI bot to do. Don't have AI bot do it. Have your kid do it and pay them to do it. It's it's family. You don't need a an AI bot stealing your kid's job.

Right? Like, don't have the you know, have that those little tasks that, you know, maybe, you know, the office cleaning. Who's doing the office cleaning? Somebody's gotta take out the trash. You don't need the office manager do that.

Have your kid come in and and and get the office cleaned up. All those things are gonna teach them valuable life lessons, but, also, it's gonna give you a huge tax deduction. I quite honestly, I don't know which which one's more important. I have my opinion on it. But,

Steve: Yeah. And then the other thing before we get back on track is I have a pet peeve of mine. Oh, I love it. I've got friends whose accountants tell them, hey. You have a major tax problem this year.

Go buy a car. Yeah. How do you feel about that one?

Marcus: Well, as long as the car is a Ferrari or a Lambo, I'm good with no. I'm kidding. As long as it's as long as you legitimately need a car, that's great. But the IRS is pretty clear. If it's a personal use vehicle, it's not a deduction.

Mhmm. And so if you go out and you're buying a bit a a car that is gonna be a a sweet Yukon, right, for the wife to drive to get the kids to soccer, that's not a tax deduction.

Steve: Yeah. It's not. Well, it's for me, it's not about, like, tricking the IRS. Now you do whatever you wanna do. For me, it's the fact that a $100,000 left your bank account.

Your net worth went down Mhmm. So you could save taxes. Yeah. Right? So, like, you know, the way I always try to explain to, you know, our younger entrepreneur friends is, like, you can buy everything with a 30% coupon.

That's the benefit. Big business. Approximately a 30% coupon if you're doing well. Yeah. Right?

But make no mistake. Money is leaving your bank account. 100%. Your net worth is going down. Yeah.

You're avoiding taxes, but your net worth is going down. Yep. That's my problem. So I just wanna see, like, are we on the same page here? In this market, every dollar counts, and bad data kills your leads and minimizes your deal count.

Quality skip delivers fresh, accurate, never recycle skip tracing data unlike some other companies nowadays, which allows you to reach real sellers and increases real conversations leading to more deals. And right now, for a limited time, get 50% off for the month of May, just 3¢ per skip using the promo code red. If you're serious about closing more deals, this is your edge. Go to quality skip today and level up your lead pipeline.

Marcus: No. You're a 100. The the counterargument that I don't agree with, but I'll give you the counter, is that most of the time, you're gonna put down 10% on your vehicle. Right? So you're gonna go buy a $100,000 vehicle.

You're gonna put $10,000 down. You're gonna pay interest in principal over the next I don't know. They let them let you finance them for fifty years, it seems like, anymore. But you you you get a $10,000 cash out, but then you get this massive full deduction because it's not based on the cash. It's based on what the actual purchase price is.

So that's where the the the CPA is making the argument. Hey. You can shell out 10. You can save 30 for this year. It makes a lot of sense.

But what they what you don't talk about and this is why we talk about, hey. We're not talking about '25. We're talking about '25, '26, '27, '28. What happens if you gotta sell that vehicle? Well, guess what?

You're gonna you're gonna recognize a 100% income on that vehicle now. What happens if you don't need a vehicle? Well, I mean, you get to the end of the year, you don't just need a view not need a vehicle on thirty first of the year. Right? So why did you need the vehicle now?

And so what I my counterargument is vehicles aren't the answer. Equipment is the answer. Mhmm. So if you're somebody that is in business and you want to take deductions, take deductions for things that are going to generate you income in the future. A vehicle, that vehicle is going to reduce in value.

Machinery is going to reduce in value. The difference between the two is the machinery will will provide income. Mhmm. The vehicle, any vehicle can get you place to place, generally. Right?

Steve: Yeah. So we got a mutual friend who is very big into tractor equipment. Yeah. Right? Every year, he just buys more and more tractor equipment because he like you said, once he buys it, he can get rental income on it.

Mhmm. He's leasing it, and he gets depreciation on the whole deal even though he's not shelling out of pocket for the whole purchase.

Marcus: Yeah.

Steve: Yeah. So there's ways around it. Totally. Just don't buy a stupid car. If you don't need it.

Marcus: If you don't need a car, it's not the best thing to do for tax planning strategies. However, if you're like, hey. I'm gonna buy a car in the first quarter of next year and you got a big tax bill, go ahead and get it done by the end of the year. Right? Get it done.

Get get it in service. That way, you can take that benefit and take that depreciation deduction and get all of the the mass benefits. I will tell you those benefits have gone down a little bit since the the depreciation changes. But the point being is only buy a car if you're planning on buying a car. If you're not planning on buying a car, it's not a great tax strategy.

Steve: Yeah. And then, you know, we talk about a lot of different things. So at a high level, for everyone else listening, what exactly do real estate investors hire you for?

Marcus: Oh, man. Great question. So, we have a full service CPA firm. And so what that means is that we do bookkeeping and counting. So we'll do everything from the time the money hits your bank and or leaves your bank encoding it and and helping you understand what your financials are.

We have a way of organizing our financials that we believe are the is the best in class industry as far as how to organize your financials. So we put all those together. And then, you know, for some for others, we go through and we do tax planning. We do tax strategy. We have our entire back tax strategy process that we go through that, you know, hammers through the the entity structure, that hammers through the entrepreneur strategies, and then ultimately creates that custom strategy to where we're we're creating that whole process with you.

And then we're keeping that up with you year over year and and adjusting and changing it as as your life changes because your life's gonna change. Right? You're gonna have another kid. You're gonna you might get divorced. You might get married.

You might buy a house. You might sell a house. You know, all of these things happen and change so that we gotta keep communicating throughout the years. And that's the tax planning and tax strategy side. We also do tax prep.

I will tell you, we believe tax prep is a byproduct. We never just do debt tax preparation. That's one of the things I almost look at it as kind of the blacklist. Right? Like, if we're if we only do tax preparation for you, all we did was enter numbers into a form and submit it.

That's not value.

Steve: Mhmm.

Marcus: And so what we don't do is just tax prep. We always add tax prep with tax strategy as a byproduct of what we've done for you through the year. And then lastly is our fractional CFO services where we come in, where bookkeeping and counting is hindsight. What did we do? Fractional CFO services is what are we going to do?

What's the forecast looks like? What's the cash flow of the business look like over the next thirty, sixty, ninety days? What's my we tap into people's CRMs. We look at their business models to see, hey. How many leads are you've have have coming in?

How many acquisitions do you have coming in? How many what's your back out rate? These are things that I don't I don't talk to a lot of other CPAs, but they're not talking about these that I can tell. Right? We're looking at it, especially from the fractional CFO level of more than just I almost look at that as business coaching.

Right? It's more than just, taking your numbers and telling you, oh, you made $30,000 this month. It's, hey. You made $30,000 this month. That was on budget, off budget.

And then based on the next, based on your CRM, it looks like you have this many things going on. This is where I forecast your next three months. Right? And and that's what the CFO side of the business does. And so we do that for real estate entrepreneurs across the country.

I don't At one point in time, we're in 44 different states. I don't know if that's still the case or not. We may be a little less now, but, we do it across the country, and we our staff's across the country. Right? Actually, across the world.

But we've got about 36, 35 staff across the country, and, we get after it every day. That's what

Steve: we do. And one of my favorite things about working with you is that there's a lot of context. And that's like, hey. Here's what we're thinking about. Here's what we're doing.

Hey. Here's what we're running into. You've seen that.

Marcus: Yeah. You've seen

Steve: this movie before. You've seen this movie multiple times. Yeah. Where I'm coming in is like, hey. Here's what we're dealing with.

I'm unsure. I'm thinking about this. This might happen. That might happen. You already know sure, what's going to happen.

Yeah. Right? So for me, that's such an incredible, incredible value add for everything that you do.

Marcus: Well, I think it's the reason why we made the decision. So accounting, you do you go a couple different ways. You can go location. Right? So a lot of accounting firms are location specific, and then you can go niche, niche specific.

When we I I was coming up through accounting in a time that was maybe different than any other accountants that are twenty years superior to me. Right? Technology changed so fast, which allowed us to work across the world, which allowed us to instead of niching in a location, we were able to niche in an industry. Yeah. And so that's what what has given us the competitive edge is that everything that you know, real estate is hard.

Why is real estate so hard? Because everything you do in real estate like, every real estate business is different. You got one one real estate business that is, you know, acquiring properties and selling selling them on owner finance, and you've got another real estate entity that's having multifamily properties. You got another one that's wholesaling. You got another one that's wholesaling and fixing and flipping.

All of those have different treatments. Right? And so if you don't understand the treatment and you've got just kind of the local CPA doing it that maybe does a couple

Steve: idea how that works.

Marcus: Does a couple real estate clients locally, they're not seeing it all. And if they do see it, maybe it takes them a lot longer to figure out the right answer and get to the right answer. They they'll probably get to the right answer, but maybe they've gotta spend an extra three, four, five hours researching it to get to the right answer. Maybe they're willing or maybe they're not willing to do that. For us, we feel like our competitive advantage is that we see it all, and we've gotten the the really good fortune of we've been trusted by a lot of really great real estate entrepreneurs, a lot of which have been on your podcast.

Yeah. And we've gotten the ability to see what they're doing, how they're doing it, how they think, why they're doing it. That's why when you come to me and say, hey, Marcus. I'm thinking about doing this. And I say, hey, Steve.

I wouldn't do that because I've seen it not work out here, here, and here. Why don't you think about doing it this way? And and that, to me, is is the thing that separates us maybe from from from the competition, in my opinion. I think that's where we can really make hay. And the great thing about that is every single day, we are waking up trying to figure out what's that new thing.

What's that four years ago, nobody knew what innovation was. Right? You go to most CPAs today, they still don't know what an ovation is. We knew what an ovation was before it was even a thing because we knew Eric, and we knew at what the principle behind that was. So we knew how to account for an ovation before it even became mainstream.

Yeah. Right? And that's a small piece of the puzzle, but that's just a great example of how the industry continues to change. I mean, ten years ago, everybody was doing short sales.

Steve: Mhmm. It's a

Marcus: whole different process too. It's gotta be accounted for differently. So over time, we feel like because of our experience, because what we've seen, and we've pretty much seen it all at this case. And when we don't, we we're kind of the forefront of getting to see the new transactions, seeing how they're working. You know?

You're seeing all these, these workarounds of wholesaling that that people are having to do, and now we're seeing how those transactions need to be changed in the books. And so, you know, I think that's that's really a great great opportunity for us and a great benefit for us. And that's why we wanna continue to work with the real estate industry specifically because I think that's where we can continue to gain that knowledge.

Steve: Yeah. So just to, summarize. Right? So the accountant inside of Collective Genius, the accountant that I think probably about half of our guests on the show

Marcus: We've worked with a lot of them. It was fun going through as I as I was going through, I'm like,

Steve: oh, I

Marcus: don't know. There's so many of them that are on here.

Steve: Yeah. And then also my tax person. Right? So, honored to have you on,

Marcus: on on the show. Honored to be here.

Steve: So for if you're wondering who to use, like, you got some impressive people on your on your list. So, wrapping up here, what would you do if money was no object?

Marcus: Oh, man. Well, I'll I'll give you two answers to this. So I really like going to the lake. I really enjoy getting on a boat. So if money was no object, I'm I'm gonna be spending more time around water.

Not an ocean. I'm a lake person. And the reason why that that whole process of being able to do that with my family and enjoy that is something I grew up with, something that I just love, and I could do that for my whole life. And so money was no object. I would figure out something with that.

Maybe I'd be a professional wakeboarder or something. But but in all seriousness, I stinking love what I do. Right? You know, we talked about strategic CFO earlier as to whether, you know, that is of a truly a viable revenue stream of of what we do. And, you know, so much of that project has nothing to do with money.

Right? The the reason why I would let that go is because I've got teammates that rely on me to to do certain things within the business. And if I'm not if that's not generating revenue, that I'm failing my team. Right? So I've gotta make that decision, but I love it.

I love teaching. I love sitting there. If I could be on a phone call and I could have a conversation with Steve and I could have a conversation with all of these clients that are struggling with their finances and business, and I could actually sit there and do it and money wasn't a problem, I would do it all day because I love it. And and and and I think it's because of you know, I don't really know. I don't know why I love it so much.

That's the thing. Because it's it's a weird thing. Like, I love like, if you said, hey, Marcus. After the show, if you said, hey. Let's go look at my financials for a little bit and let's just talk.

I'd be like, where? When? What time? Yeah. You know?

Like, I just like, I feed off of that. Now I had to figure out a way to make it profitable. So, you know, there's I I don't I can't do it for free, but

Steve: Yeah.

Marcus: Man, that if I if I was sitting over the lake and doing, doing, financial calls and helping people with their financials and helping them understand their financials, that'd probably be the best day that I could have.

Steve: Jimmy Vreeland, on episode part of the disruption, set I wanna say was it Branson, Missouri? What's Yeah. Is it that's the best place on Earth.

Marcus: Yeah. Table Rock Lake. That's where that's he comes down there. We'll we'll meet up this weekend or not this weekend, this summer. He goes down there several times a year.

That's where our boat's at. Mhmm. We it's a great lake if

Steve: you guys That's where you're hanging out.

Marcus: If you love, if you love the lake lake, though, it's funny that you said that, Caden. We talked about Caden earlier. He lives in Virginia. So our team's all over the place. He comes to Springfield.

Springfield's forty five minutes away from Table Rock Lake Branson, and he said the exact same thing. It is the best place on Earth. And so we're we're kinda spoiled. We live there, so we may may not feel the exact same way.

Steve: Oh, he was pretty adamant.

Marcus: A pretty amazing area.

Steve: He was pretty adamant about that. What do you wanna be remembered for?

Marcus: Well, I think the easy answer to that is and the most important answer to that is a father and husband. Right? I think, you know, that makes all the difference in the world to me. What I get to do on a day to day basis, is driven by what I want to do with them.

Steve: Mhmm.

Marcus: Right? And so, you know, if if a lot of people talk about, hey. At my funeral, I'd love to have as many people out the door as possible. If I just make sure that my kids and my wife are at my funeral and said, hey. He did it all.

I'm good. Right? The other people out the door, they're gonna have that if they got that option. Right? But if I make that impact on those four people, I'm I'll be I'll rest easy.

Above that, beyond that, it's it's helping others. I think that's I think I grew up I'm a big guy. Right? You may may or may not be able to tell on the podcast, but I'm six foot four, two hundred and something pounds, pretty pretty big guy. I've always been looked at as a protector.

When I was younger, I was always the biggest kid. I was six foot two in eighth grade. Right? So I was always a big kid. Everybody always kind of looked at me as a protector, and I think that naturally rubbed off on me as, like, I wanna protect my people, my clients.

And so, you know, if if that's what I was looked at as, hey. You know, this guy helped protect me, helped push me into a better business. I became a better business owner. I became a better person. I had a better life because of some of the advice that that he gave me.

That'd be that'd be awesome. But really and truly, these four. Yeah.

Steve: What's your biggest struggle today?

Marcus: Time. Time is the biggest struggle. You know, twenty four hours in a day. Everybody's got the twenty four hours in a day. It's how you prioritize that time.

And so there's so many things that I go to bed, and I wish I had gotten done for the day. And I think that's probably that maverick personality. Right? That's that maverick coming back out. But I think my biggest struggle is just simply, I don't feel like there's enough time in the day to get it all done.

Mhmm. And so, you know, I put a lot of focus on trying to be productive. Right? We talk about that in our team. How do we be productive?

How do we be efficient? How do we get the most out of our days so that ultimately, we feel like we won't win. Right? We don't feel like we don't have regrets. And so that's one of the things that I'm working on is really being able to lay my head down at night knowing that, hey.

The hours that I got today, I made the most of them, and I won for the day.

Steve: What are you doing to improve your productivity?

Marcus: I think it's the simple stuff. I don't I don't think it's complicated. Right? You can go you can go to the Darren Hardys. You can go to a lot of these places and and and get an a a process for improving productivity, but really comes down to making list and following a list.

What I like to do is I like to make a list at the beginning of the week of everything that I wanna get done, and then I like to take that list, and I like to break it up every day. And not only do I do that, but on that list, if I've got, hey. I'm gonna review this tax return. I'm gonna put how much time it's gonna take me. Because if I'm gonna have an eight hour day or if I'm planning on having an eight hour day, I wanna know what that eight hours looks like.

Yeah. And so I might start my it's not uncommon for me to start my morning at 05:00 in the morning, and we'll you know, it'll start. Okay. I'm gonna do this. I'm gonna do this.

I'm gonna do this. I'm gonna do this. And, you know, you'll find out that, hey, this project only actually took me fifteen minutes, but this one took me an hour and a half. And so you get to the end of your day, and you're like, okay. What's left?

What didn't I get done? Oh, man. I got three hours worth of work. I gotta move over to the next day. Do I need to wake up earlier?

Or, hey. Maybe I got some stuff in for the day, and I'd I only got five hours work tomorrow. I'm I'm gonna go get a round of golf in.

Steve: Mhmm.

Marcus: Right? And so I like doing that. That helps kinda keep me centered. It kinda helps keep me focused. But I will tell you, I get to the end of my day a lot, and it's not always complete.

So Yeah. I gotta get better at that.

Steve: Yeah. I I've joked that one day I'll get caught up. Sure. One day.

Marcus: Yeah. And then you'll be dead.

Steve: Yeah. Exactly. What is your superpower?

Marcus: Oh, I I would I hope it's financial communication. I hope that I am very good at communicating people's financial position. And so, I think it is. I think that's my superpowers, the feedback I get. That's what I hope it is.

Right? I hope that's what I hope I'm that's what I've centered my whole business around for sure.

Steve: Yeah. That makes sense. What would you say is, your your biggest failure?

Marcus: Oh, man. So we talked earlier about that your business is a car. Right? And your sales is the engine, but then you have all the other pieces, and then one of the pieces is leadership. Right?

I don't think and I think I still struggle with this. As a leader, I think that's where I I come up short. I think that's the spot where I consistently say, hey. I need to find a better way to improve that. And the reason why I say that that's the biggest failure, and it's not a point in time, it's just an overtime, is because my inability to effectively lead, whether it's at home or in the business, has a bigger impact on other people than it does me.

And so me not leading very well, it doesn't really, like, doesn't really affect my day.

Steve: Doesn't really change your life?

Marcus: Not for the day. Right? Long term, yeah, I don't maybe I they maybe an employee quits. Maybe my wife gets mad at me. You know, those things.

But, like, in the moment, being a bad leader is not obvious. Right? And so, you know, over time, you start to see where you were a bad leader, and you're like, I can't believe I did that. I can't believe I said that. I can't believe I approached that situation that incorrectly, or I can't believe I read that situation so incorrectly.

And so I would say and I would say for any business owner, like, once you kinda get past that hustle and secure phase, that expansion phase is all about being a leader. And it is and it's about managing those people and and and making the right having the right conversations at the right time, and and and it's hard. And I can probably tell you, if you ask me this question in ten years from now, I might give you the same answer because I don't think there is a stoppage of getting better at being a leader. No. And so

Steve: Yeah. It's probably the single most valuable skill in any organization.

Marcus: Sure.

Steve: What book have you gifted more than any other?

Marcus: Well, the book I talk about, we brought it up earlier. Right? The, The Ultimate Blueprint for an Insanely Successful Business. It's a long title. The Ultimate Blueprint for an Insanely Successful Business by Keith Cunningham.

It's probably his least known book of all of his books. It's I don't even think it's on audiobook. If it if it is, it's recent.

Steve: No. When I looked, I had

Marcus: to buy it. Yeah. And it's phenomenal. It talks about I mean, it it is legitimately gives you your financial understanding. I mean, I've told people before, he he wrote a book that I wish I would have wrote.

It's a great it's an excellent book, and and he's got some really, really good information. And you'll be a better you'll be a better business owner by reading it. No doubt.

Steve: It is crazy. Like, no one talks about that book. Like, I only read that book because I read, The Road Less Stupid. It's like, man, I really love this book. See what else he has.

And I picked up. I was like, wow. This book's really good too. Yeah. No one talks about this.

It's what he talks about. Finance is not it's it's

Marcus: it's kinda like the strategic CFO. Right? That that ultimate blueprint for an insanely successful business. You notice that he didn't put anything about finance in it, But it is his most finance driven book, and it still collects dust. Right?

And I think just it is hard. Right? And he does talk about some concepts that are a little complicated in the book, but I think he does such an eloquent job of explaining him that I think, you know, I'm coming at it from an accountant, so it was really easy for me to understand. But I do you know, the people that I've that are entrepreneurs, that aren't accountants, that aren't necessarily finance experts have read it and have have really understood it and taken a lot of the pieces from it. And, you know, I read it probably once a year just to refresh myself because I take stuff from it differently every time.

Steve: Oh, it's an amazing book. I want you to think about something you wanna lead listeners with. Guys, if you got value from this episode, make sure you subscribe. We got even more disruptors coming on. We'll break down the exact moves they made to win.

What are the last thoughts you wanna leave all the listeners with?

Marcus: Yeah. I think it's very simple. If you wanna get better results, you gotta make better decisions. Mhmm. Being a good decision maker is the driver of your successful business, and being a bad decision maker is what is the detriment.

And so if you want to be good at making decisions, I think you need to understand all of the parts of your business. Yes. Sales. Yes. Leadership.

Yes. HR. Yes. Operations. And, yes, finance.

I think you gotta have all those things, and you put them all together and you, you know, have that full aired up tire. You don't have that flat tire, if you will. It allows you to make the best decisions and you will get the best results.

Steve: Perfect. How can someone, connect with you?

Marcus: Yeah. So beccfo.com. I would love love for you guys to reach out to us there. If you guys have any questions or you guys need anything, you always find me on Facebook. I'm always trying to cause some trouble on Facebook.

I I I post quite a quite a bit on Facebook. So, join me. I'm always giving, content out there that I that is relevant. If I'm posting something, it is because I'm literally in somebody's financials and that is an issue or something that's popping up in the biz that I'm seeing, and I'm like, hey. FYI.

Don't do this. Right? Sometimes people argue with me about it, but it's hard to argue with what I'm looking at. So

Steve: Perfect. Thanks so much. Appreciate you. Thank you guys for watching. I'll see you guys next time.

Shout out to Steve train. Jump on the Steve train. Disrupt us.

Inside Secrets From CPA Who Oversees 100s Of Millions

Key Takeaways

Want to close more deals?

Never miss an episode

Quotable Moments

Full Transcript

From Owing $60M To Funding $4B In 2025

Inside Secrets From CPA Who Oversees 100s Of Millions

Key Takeaways

You Might Also Like

$6M in Profit in 2025 with Only 12 Employees

1 In 4 Motivated Homeowners Reach Out To Us Before Selling

Want to close more deals?

Never miss an episode

Quotable Moments

Full Transcript

From Owing $60M To Funding $4B In 2025