Review Crazy Real Estate Structures

All right, folks, one of the things I'd love to do is bring you new faces with new stories. And we actually have a great opportunity to talk to the first sales rep or account executive at Baseling. He is a real estate investor. He's seen lots of crazy and wild things. So Sydney, welcome to the show. How you doing? I appreciate you for having me. Thanks, Mike. And yeah, I'm the first sales rep here at Baseling, but the reason for that is I'm also an investor. I come from an investor first perspective. So I always try to create like an unbiased opinion. Whether that, you know, sometimes looks great for Baseling or not so much. So happy to be an open book. Awesome. Well, one of the things I want to do get into is some of the wildest real estate investing setups you've seen, obviously as an AE. But before we get into those kinds of stories, why don't you tell the audience who you are a little bit about your portfolio? How long have you been doing it? All that stuff. Yeah, I guess the short and ugly version is right now I own and manage 42 units. They're all long-term mental investments currently. It allows me to keep it W2 while, you know, continuing that passive growth. So that someday, maybe one day, I'll have the thought process of retiring, which doesn't seem likely any time soon. But yeah, I'm just trying to build equity over time and then, you know, set myself up for generational wealth. I meet about 10 to 14 investors every single day all day for the last seven months. So I've heard all kinds of cool stuff, all kinds of crazy stuff. And, you know, happy to break down some of those, like, different characteristics. Let's stay on your story first because we've kind of lost over 42 units. You know, that's certainly, as you know, more than most. How long has it taken you to cobble this together? Yeah, it's been about just over five years now. About six years, maybe, or closer to six years. But I think one of the advantages of sales background has been, you know, negotiating and getting creative with how to purchase certain properties and kind of leaning in on how to get the best deal. What is actually really important to the owner and, you know, maybe why the reasons they're selling is getting in there deep and then, you know, facilitating, you know, not just a great deal, but helping both parties. Well, that's one of the keys to real estate investing. And frankly, one of the reasons you're likely very good at sales is it's not only about what you want. It's trying to understand what they want, what they need and how you can cobble something together that's a win for them and a win for you. That's how you get, yes, answers. If you're in a world where it's a zero sum game, I don't like your chances of growing, at least growing very fast. You may get one or two, but it's going to be a slog. So if you have the right attitude and you're listening and you're asking probing questions, you mean, it happens all the time. People get into deals with zero down and, you know, all of that stuff, but it always starts with understanding the other party. Exactly. And everybody has their own story as we all know. And sometimes just like saying the right thing or being in the right place at the right time seems to work out a very, very quick story around that would be. There was a property needed a lot of work. So naturally, we're looking at it thinking, you know, is this something we want to get into, can we reduce the price? And then obviously that's a hot topic when you're trying to buy real estate is how much can you get off versus, you know, how much are they willing? And what it came down to is that they didn't want to sell the property because they didn't want their tenants to lose their home. So really just listening into that and understanding what they really wanted allowed us to say, hey, like, we're not going to kick anybody out. We won't even change their rent until they're comfortable. And we'll also give you a free place to stay until you're comfortable leaving. And they happen to be a little bit older. So really that was all that mattered and the price came significantly down. And it wasn't even just about the price at that point is that they felt taken care of. And my whole goal as a long-term investor isn't the near term or what's right in front of me. It's, okay, how do I look at this from like a 10 year, 20 year, 30 year advantage? And then just taking, you know, taking care of people, they'll take care of the back. So it's funny, it's funny. It's funny. I'll give you a story that my audience hears, but it just goes to show that you have to listen. So there's a little house I was tracking for more than a year. And I think I'd probably written, I don't know, 10 to 12 offers on it, right? Following up, basically trying to figure out where the seller was motivated. And I finally got to talk to him directly instead of through agents. And basically what it came down to is he wanted 120K for 100K house. He was, for whatever reason, he was locked on that number. And it just wasn't worth it, right? It just wasn't worth it. But he owned it free and clear. And just off the top of my head, it's just a moment of frustration. I'm like, dude, the only way I could pay that is if you give me a 30 year mortgage as 0% interest. And I said it just like almost as a joke. And he's like, oh, what is that? Tell me more about that. Long story short, I think it was 10% down, so 12 grand. So $108,000, no interest for 30 years. It's, you know, I won't gladly overpay 20 grand to get 30 year money at zero. Absolutely. I would agree with that. Yes. Very, very cool. Well, hey, we're here to talk about baseline. We're here to talk about your clients. Obviously, we've had many folks from baseline on the channel by now. But as the account executive, the first account executive, what are some things you've seen? You talked to 14 different people a day. What are the new investors and growing investors doing? Yeah, this is a loaded question, but I'll try to break it down as simple as I can. I always try to do things in simple steps of maybe like as simple as one, two, three, but if I had to like pinpoint and I've probably met over a thousand investors at this point in a pretty short period of time. So if I had to say there's like two characteristics of folks that work with baseline is one. Maybe you are very, very sophisticated. You have everything in order or maybe you're too sophisticated that everything's perfect and you get into like a analysis paralysis state where you never actually take risk because you've analyzed it too much and you realize that there's too many what-ifs. And then there's the other characteristic where this is kind of a two part where you're just starting real estate. You're thinking more about knocking down walls and fixing them. You're not thinking about the admin, the financials that come 10 years later or the bookkeeping that you have to, you know, the taxes that you have to pay and sometimes you don't realize you're now a business owner. And then there's that same area where regardless if you have one property or a thousand, the process doesn't really change. So we get a lot of folks with a ton of properties that just keep building and they never look backwards to the point where one day they sit down and say, "Oh my goodness, I'm behind three years on taxes. I am losing money everywhere. I don't know how much money I make and sometimes this is like a more money, more problem situation but sometimes they just make it work. Sometimes the risk takers get all the luck because they are just willing to jump in at first." You know, I think there's something that, I mean, again, I've, you know, talked to my audience now for eight years. Obviously, a lot of my community will have a buy box, which is what I talk about and they are very focused, right? So they know what they're looking for and they know what a great deal is. But where I will acknowledge there is some opportunity for improvement in myself as well is I was very much that last guy you talked about, right? I just kept doing the next deal, the next deal, the next deal. And now part of that, I could, you know, I could create a story to make myself feel better because my wife did the books, right? I found deals, I secured capital. She essentially ran the day to day. But that's not okay. We just kept building on a shaker and shaker foundation and, you know, it was okay when we had eight houses, but when we 1031 to 80 units, that was a problem. That was a rough year because we didn't, we, we, we, we just didn't have the systems, right? We were going fast enough that we didn't put anything in place. So that's, that, that almost crushed us. Yeah, that's the story I hear, unfortunately, every day all day. So I always try to say, you know, that generic or generalized question is like, what would you have done differently? How do I get started? And, you know, maybe you would have always lean in on like, you know, you should have started 10 years ago or there's no better time than right now. But also, there is that one underlying lesson I wish I could have taught myself is to get systems in place. And there are systems out there, of course, a plug in for Bayesling is that if you start the right structure early enough, you set yourself up for success in the long term. And if your core focus is really like that passive, trying to do everything to the best your ability in the right way, then there is no better place to start. It keeps it super simple. It does everything for you. And then, you know, we'll break that down a little bit more segmented here, but. Well, there's, you know, again, there's so much power in this because again, we started way back in 2000, 2001. And I mean, this is just how old we are. My PM was fact, faxing, I almost said FedEx, faxing our receipts and invoices and my wife was going in and putting it into these different Excel worksheets. And we, to your point earlier, right, we weren't sure we were making money or not most months. And we didn't know who was the drain and who was making money. And it was just, it was, it was unfun. And that's why I like, you know, today with your phones and all the very, app so you can just set it up once and then start running your reports and how do we do this quarter? Being done, we couldn't get there before. Exactly. I fell into that exact same thing where a lot of the folks listening to you in general probably do as well. One of the hardest lessons I learned specifically was I didn't like that. I don't like the bookkeeping. I do like knock me down walls and making something great. You get that satisfaction of a finished product once you're done renovations and it's great. You can, you know, that's a dopamine that you can get on repeat. But what I didn't realize is all those receipts that I was saving in a shoebox and basically winging every detail of, well, this is for this and this is for this, well try to tell an accountant that. We'll know it needs a purpose. It has to be this. It has to be categorized correctly. It has to do this and that in 19 units I'll never forget it. I had an opportunity to double my portfolio. I share the story all the time live where, you know, it was a 20-unit apartment and I knew I could afford it and I knew I had the money to purchase it, but I couldn't prove it. And when you ask an accountant to get that information for you, if you're an absolute disaster or you haven't been planning for it, it's really hard to prove it. So I didn't have systems. It took them four months to just clean up my books, get my taxes in order. And by that time, as you imagine, the seller lost faith and, you know, I lost that deal. That was a what opened me up to learning that, hey, I need to fix this now or else I'm never actually going to be able to keep going. It'll be a governor that will hold you back, right? You've got to be a bankable operator. And you got to be able to prove that you're a bankable operator, right? And that's one of the hidden costs, I think of messy systems, right? The shoebox, the, and again, it's very, I mean, we were faxing stuff. That's how long we've been doing this. And, yeah, it's so much better today with phones and apps and being able to kind of just set it up. And, oh, we got another one, right? We bought a triplex. So let's just put in the units, the address and, you know, just kind of put them together. And then you get an expense against that and shows up, you know, categorize it cat-backs versus operational expense. There's just so much more ease of use, right? Because again, I go back to the fact that Olivia ran our books. And it is just because I couldn't do it. I hate that data entry nonsense. And thankfully she was okay with it. And, you know, even, but today, it's not that it's not that drudgery. It's not, oh my god, here's the 19 faxes. And, oh, I can't read this one. What's this number? And it's just, it's just a lot easier today with systems and apps and things of that nature. A hundred percent. And with basically, you know, we have a lot of like AI integration now. There's a lot of automation. So if you don't know how to categorize something, it's at least going to set you up for success on your best guess. And it's going to figure it out for you. At the end of the year, you generate your tax package. And it's going to do a lot of that stuff for you, especially the boring stuff or the stuff we don't want to do. Even with receipts, you just chuck it in. It's going to take to that transaction and match it. And it is a large, you know, reason why a lot of folks do look at basin in the first place is because their books are mess. Maybe they've been using Google sheets. Maybe they have quick books or zero, but like a lot of investors look at that and they feel like they need a PhD to figure out how to actually operate an accounting software. And I agree with them. So just keeping things simple as my go to and every aspect is basically definitely allows you, you know, a fairly simple way to just structure everything. So it's right in your face. You have access to your own financials. You know, it's easy to manage. Yeah. It's funny when I think about 2026. And I've said this on my channel probably a dozen times. This is going to be the year of the operators. And, you know, part of operations is really cleaning up the flow of money, right? It is always fun. And I still get a dope with me. And every time we buy something, but you know, that's once or twice a year. And but you you probably have, you know, if you're me, you have hundreds of rent collects every month. You have hundreds of expenses every month. And to be able to, you know, pull out my phone and go, Oh, where's the money? Right? Where's the flow? And then, oh, by the way, we just did taxes. And I didn't need an extension this year, right? Because we, we've finally grown up and have systems in place now. And, you know, that's, that's a cool thing. And, you know, oh, by the way, I owed some money to the IRS. So, you know, I, I was a profitable operator. And, you know, I don't know that I could have said that 10 years ago. We got a huge hit of flux of clients in January and April. Mainly because you get folks that are years behind or, you know, they're like, they spent the last couple of weeks, weekends and pure stress anxiety. And just saying, I never want to do this again. How do I figure it out? They go to AI, they search for what's the best option. And then, you know, before they know it, they're meeting with me one-on-one trying to try to figure it out. I guess to stay on topic here, I would say, you know, where it really gets into quote unquote, like the wildest setups, it does correlate more on like the banking entity structure or your financial architecture structure. And then, really, how do you manage your bank accounts? Because there's so many different ways to do it. And I personally believe the cold hard truth is that nobody actually knows the best way. They have suggestions from your advisor, from a lawyer. But then you actually have to actually have to act in it that way. And then maybe if you go to a different CPA, they might have a different way that they do it. And then you go to a different real estate investor and they tell you something completely different. It's so funny you brought this up because again, this is something I suffered through 15 or 16 years ago. Right. You go to a lawyer. He says this. You go to your CPA, which, oh, by the way, I didn't have a normal CPA. I had a real estate operating CPA. So, it's, you know, I had that. And they said something completely different. And then I go to my couple of mentors who at the time had two or three X what I had. And they laughed at me. Right. About all of this. So yeah, at the end of the day, you do need to sit back and figure out what is right for you. Right. That pace more. Be always tells me, Michael, just know that I know that I sell what is comfortable for you. Because there is no, I don't think anybody knows what the right way. Because again, maybe it's right for them. But that doesn't mean it's right for me. I think even pace himself would say, I'm still, I still don't understand certain things. I'm still learning all the time. And, you know, even due to the incredible success, there's still always room for growth in real estate. And I don't know if there is a single source of truth on the best or perfect way. When it gets to wild stories, you know, I'll try to throw some digits without giving out specifics away. But really what it comes down to is I've seen folks that have maybe one or two entities that operate over 1200 properties, 163 short terms, one brother, the other brother, over a thousand long term rentals. And that's literally three LLCs max. And some are still in their personal names. They have no idea where their money is going. And when you get on that level, you know, we talk about the structure of like, you know, if you go from a hundred and twenty thousand dollar home and now you're starting to go to a hundred or one point two million dollars, it's actually the same process, just different zeros. But now when you're talking about like you have 20 different banking relationships, you have different minimum balance requirements, mortgage requirements. And then the mistakes get more, yeah, the mistakes get more gnarly. Yeah, exactly. Yeah, and it could be a twelve dollar fee on 20 different levels. And then it's just piece by piece, you're starting to lose hundreds of dollars that could be a completely different mortgage payment for another property that you didn't even realize. Yeah, you're right. So a common theme for us is like, if I meet with somebody and they have their, you know, pretty sophisticated setup where they have the quote unquote cookie cutter structure, a trust holding separate property LLCs, maybe a property management LLC to manage their entire operation funnel upwards. Great. We are the best solution out there right now. One login, credit as many entities as you want, throw off the IC and shirt right up to three million individually. Credit as many bank accounts as you want in them. It doesn't mean we necessarily recommend folks to create 50 different checking accounts, but it actually happens all the time. Folks will create 80 different checking accounts because they'll manage every single intricate feature. It's not that I always recommend it, but to your original point is like, you have to do it works for you. And if that's how you need to do it and really focus on a granular level and you're actually going to action on moving money out of any of those accounts. And that's what you need to do. That's perfect. That's exactly what you need. Other folks dump everything into one operating account. They have a large purchase that comes. They see they have a lot of money or they think they have a lot of money. They spend it six months later. They impacted their business in a negative way that they didn't even foresee. There's a different angle there in several ways. I'm just trying to think. Let me ask you again. It's, you know, there's always these kinds of stories out there and again the whole idea is totally earlier. right? You got to know what's going on. You got to know where the money is. That's really what I think about baseline is it's about the money. It's about taxes, right? And you know, who's the avatar? Who should reach out to you, Sydney? Is it the person who had difficulty with their taxes this year? Is it the person that for C's, you know, doubling their portfolio? They should be reaching who should be reaching out to you, Sydney? I think anybody ready to deposit a million dollars. I only collect 99% commission on it. Super happy to take those calls any day. No, what I would consider like our ideal client is it is a wide variety. So I don't think there is a one size fits all there. But really what it comes down to is just willingness for change because if you are noticing that you're coming to us for a reason. This is why I meet 10 folks today. Would you say would you say the reason generally speaking again is never one size fits all. They're just they just want to know where the money is. I would agree with that statement and another way to look at it is when we're talking larger landlords. So 100 units, 500 units, 1500 units. There's some great software out there to manage every aspect of that business. And they're great. The problem that I see is even though you might have 1000 units and you have not software already. I'm not going to brand batch today. But what it is is that you're not actually using that software to its full potential. So you're only using maybe 60% of that product that you're paying monthly plus per unit. So a lot of folks that I work with that are in the thousand 500 200 property range. They go back to their original foundation where they just want to keep it simple. They want to redesign their foundation and then build from there and that is your point. Follow the money. Yeah. Get your baseline with basically get that foundation set up a lot of folks don't face on the side. But get your foundation. You have access to all your financials that your fingertips. It doesn't mean you have to completely switch your entire operation of basically. And it just means you have a single source of truth. You can connect all your other bank accounts your credit cards use baseline for your organizational piece. A lot of what happens is folks say, oh my goodness. This is a lot easier. How do I just bring everything over. It happens every single day. And then based on becomes their primary bank and then they keep that other relationship that they've had for 20 or 30 years from origin's lines of credit. But the single source of truth is, where is my money. What is it actually doing for you. Makes total sense to me. Folks, you see it on the screen. They are baseline.com slash or at. But Sydney, if somebody wanted to reach out to you, do you have a phone number and email. What do you want to give people? Yeah, I probably won't get my phone number out here. Who knows where that would go. Yeah, you can absolutely email me at any time. It is my first name at basing.com. So it's sideanyway at basing.com email me. If you have any questions specific or you know, maybe you're one of those folks that co mingle personal and business and you're just learning real estate. Maybe just bought your first property and you're trying to say, well, how do I avoid all these mistakes that we talked about. Or maybe you have 300 units and you're like, hey, I'm with one of these stuff words that I'm paying a fortune. How do I actually keep it simple or how do I work and tend to win those other solutions. Just email me happy happy to answer. I always go from the bias that I'm an investor first. So I actually do group demos three times a week as well. So it's more of a group setting. Happy to invite folks to that too. They can just chime in and come and go as they please. But I do that way so that there's usually about 30 attendees and it's just. It's a really helpful resource just to get the full scope of how everything works. There you go baseline.com slash or at or Sydney at baseline.com. Thank you, buddy. Take care. Awesome. Thank you.