361. You Don’t Need 10 Units: What One STR Can Actually Do for Your Taxes with Jason Smith

You're now listening to the TaxMart REI Podcast, the number one tax podcast for real estate investors. Your source for all things real estate, accounting, and tax. Here we reveal our secrets that can save you thousands in taxes, streamline your accounting process, and help grow your business. Stay tuned to hear insightful interviews with industry experts, successful real estate investors, and current clients on what strategies they used to grow their business, and how they steer clear of all those things. Hey everyone, thanks for tuning into this week's episode of the TaxMart REI Podcast. Today we're joined with special guest Jason Smith, one of our clients here at Halcy Pay to discuss his journey and his first year of operating his first short-term rental, and navigating the realities of self-managing in order to achieve significant tax savings while remaining in compliance with the IRS. We're going through all that, and much more, stay tuned. We'll be back in just one minute. 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I imagine there's a decent amount of people who have a similar story to me of, you know, I've been lucky enough to have a career that makes a fairly decent income, you know, for the first 10, 15 years of, or the last 10, 15 years or so, I have, you know, done the standard like save some money, you know, put a little torch retirement, you know, that started as 3, 4, 5 percent every year that I'd get a raise. I would put another 2, 3 percent in, and that's quickly bumped up to like, you know, 15, 20 percent, and then I started maxing out retirement savings there, and so moved into the next zone is, you know, max out Roths. That happened fairly quickly, and my wife and I keep up fairly simple life. We have a fairly modest house. Alex, you and I have talked about this. I think we're both one-car families. I've walked to work or had my bike to work. If we ever had a second vehicle in our household, it was always paid for with cash. And so as income started creeping up, we were looking for other ways to reduce our taxable income. So this is our story of getting into our very first unit. Yeah, love that. I love that. You are outing me on the podcast, right? I am a single car, a single car family. I actually love it. Our friends kind of make one of us a little bit from time to time, but we've never had any issues with it. It's been awesome. So it has been awesome getting to know Jason working with you as well. You're not, you know, to your point, you know, you don't have 100 units under your belt. You got the one that you're rolling with you. You're coming off that first full tax year. Let's call it with the short terminal under your belt. What gave you the confidence, right? To move forward to maybe change what you were doing because you just made the great case of, hey, I was doing all the right things. I mean, you probably could have kept on that same path and had a, you know, great beautiful retirement, you know, 30, 40 years down the road. What led you to make that change, the confidence to make that change and what maybe almost stopped you from going forward? Yeah, I think there was a little bit of a, a, a, a moment that happened for me a couple of years ago. And I was sitting there kind of thinking, you know, looking at at our income, looking at the taxes that we were probably going to have to owe that year. And as I started peeling through the internet and, you know, finding out about short-term rentals, that light bulb went off of, wait, I kind of have a choice here. Like choice A is to take this amount of money and give it to the IRS or choice B is I can take this amount of money and apply it to a piece of real estate. And I was like, it can't be that simple. Like something feels off here. And then as I peered in more and more, got super intrigued by it. I did super interested by it. I should mention that my like, my day job has always had a through line of hospitality. I grew up around hospitality, around hotels, restaurants. So this was a little bit natural to me too. But yeah, I like, I literally, I got on, I stumbled upon Hall CPA, I started listening to this podcast. I took the short term rental tax course that was offered and bought that package. My wife was on a business trip that week and I like, I crammed through the whole thing in like the first night or two, including all the other supplemental things and got super intrigued by it. So then as I peered in and kept listening a little more, you know, one thing I love about this podcast is the diversity of things that you hear. And there's, you know, stories we heard a couple months ago or a couple weeks ago from Marty Guyier that, you know, he had this thing. He acquired six or seven rentals in two years and he was starting a new business every year. And some of that just sounded so overwhelming to me. So kind of in the beginning, it was, it was a little too much. But, you know, I think I educated myself enough and my wife. And then we like kind of took the jump, the dive in. I should mention that 2024 was when we acquired our first property. And like, it wasn't the easiest year to get started in short term rentals. You know, that wave of COVID had already kind of come. We had seven percent interest. We were down to 60% bonus depreciation. The real estate prices were still kind of hanging pretty high. And there really wasn't that much inventory. So that's probably why it took us a little while to dive in the combination of all those factors, you know, education, timing, and then just like kind of getting over that initial hump or that initial fear. Definitely that wave that wave that came and went. And then like when as bonus depreciation started phasing down, it seemed like short term rentals were getting less and less lucrative or less and less desirable as an asset class. At least that's what we started to see. And then with the return of 100% bonus depreciation, everything kind of started to come back full circle. And the man kind of spiked back up a little bit once people had that level of clarity. But I shipped in gears just a little bit here. And she was still staying on the topic of deal structuring. It looks like I know you did another deal. One with 10% down, 4% interest, no bank involved. It seems like a lot of seller financing or subject to as some people would call it. Would you mind taking us through a brief overview of how that deal came together? Oh, absolutely. Yeah. I mean, this was our first deal and really are only one. So like this is our only short term rental unit. We were looking for properties. Again, it was 2024, 7% interest rates above 7%. And as I was consuming all this content and getting educated, I did stumble across pace more B and his sub two and seller finance stuff was always intriguing to me. You know, I didn't dive super deep down that road, but like kind of kept that in the back of my head. And as we started to look at different deals, I was super intrigued by it because what we were starting to see in our area was there were properties that were starting to linger and they had been on the market for 200 days. And I had a hunch that there might be some like motivated sellers and didn't know if it would work or not. But we found this piece of property that we liked. I think it kind of slipped through the cracks a little bit like a little bit of a hidden gem. It was, you know, it need a little bit of renovation. You know, it might have been priced a little bit higher than the market. You know, it kind of missed that wave for a second. And so I worked with our realtor and I was like, hey, let's propose a seller finance deal. And the realtor was like, no way that will never work. It never works. It's not a thing. Nobody would take that risk. Like, why would anyone do that? And I was like, let's just let's try it a little bit. And so this deal almost fell apart probably three separate times. So we floated an offer to the seller and they were super skeptical at first. So then I, you know, wrote a little email to like kind of get, hey, here's the details. Here's what I'm thinking. Let me walk you through this. If it sounds good, let's continue conversation. And I threw out something crazy. I was just like, hey, we'll give you full asking price. And if you carry the loan with a 4% interest rate and to my surprise, they said, yes, there's a lot of things that are buried in here. We, we did propose a balloon payment at three years. So like, there was kind of a safety net there for them for the seller. Like, they weren't holding this loan forever. And, you know, kind of another interesting part that I grabbed straight from pace was we put in a clause that said, if the property doesn't appraise for its full sales value in three years, the loan automatically extends to five years. So in the event of a real estate dip, we had a little bit of a safety net too. And so they initially accepted said, all right, sales price 4% good to go. We started writing it up. Attorney started reviewing it and their attorney nearly killed it and said, no way, you know, we can't give a loan below apical federal rates. This was a zone I had no clue about. I didn't know that the IRS has a minimum interest rate for certain private or family brought like loans. Is that a zone that you guys come across or deal with much? Yeah, it's something we have to, we do come across that a lot a lot of times. People want a structure like zero interest rate deals. It's something very common, at least that I've heard in my experience. And then we always have to deal with when we're talking to clients from a tax perspective and say, wait a second, there's something called the AFR rate. Are you aware of that? And let's go pull the AFR rate, make sure that's in there because if you don't state an interest rate, the IRS will impute one for you based on the AFR. And you're effectively going to start paying at small, you know, usually a small tax on the payments that the seller receives, they're going to have to be subject to a small tax. So this was like, I had no clue about that. I didn't know it existed. I, you know, I just, again, Thomas, you've been so good at like, hey, like it's good to get information off the internet, but like go double check it. Yeah, 0% loans. There's a little bit more to it than just that. So in order to like kind of keep this thing moving around, I came up with the idea of like, hey, let me like move some numbers around. What if we reduced the selling price of what we agreed to, but we hit that AFR. And at that point in time was a 5.09% AFR. So we've restructured it a little bit. The numbers came out the same for kind of both of us. So we ended up with a little bit lower selling price. Instead of 500, we came down to 45. We did the 5.09% AFR. And so we secured this loan in July of 24 while everyone else is getting 7% interest rates. It was super interesting. And so just for fun, I pulled up those rates yesterday. And so, you know, the current AFR is some, is a range somewhere between 3.66% and 4.55% today. So like, this is a technique and strategy that can be used. And I think that there's a lot of motivated sellers out there at this place in time. We'll see what happens in the future. But like, I'm ready to give it another shot to see if I can sell our finance again. Yeah, a couple of cool things I want to follow up there. That was a lot, a lot to unpack. That was awesome. So I wanted to write the, basically if you went to the bank, got a traditional mortgage, it was, you know, 7% plus percent, right? And you were able to secure, let's call it five, right? You were able to secure five, you're able to basically secure the price that you wanted and that they wanted as well. And then on top of that, from a tax podcast, I just looked, I won't give any numbers away, but you basically cut your tax bill in half for the year that you applied the short-term rental strategy. So the outcome here is incredible, right? To your point about the, I was going to ask you the question I'm trying to get to here is, do you see that same type of setup today? And on top of that, how, that was your first deal, right? That was your first deal. It's not like you were, you know, sell, you know, doing sell a finance you forever, how much work effort energy did you put into learning this stuff? And can't, is this repeatable by other people, you know, going to look for their first or second problem? Totally. And like, this is definitely repeatable. There's a lot of benefits on both sides of this. And so not every deal is going to like, it's probably a small portion of deals that can actually work this way. But if there is a 10% chance of it working, like why not give it a try? So like, you might go to a couple properties or a couple sellers and it's just, they're not interested, they're not in a position to do it. But the person that is in a position to do it, you know, let's give an example of this particular property. Like, why would it benefit them? Why would they even consider it? Well, this property sat on the market for 200 days. This seller was ready to move on. You know, the kids have grown. This property had become a little bit of a ball and chain for them. The monthly HOA just kept coming in. There were assessments up and coming. Like, it was, it was dragging on them is what I assume. So now if we come in and they get full asking price for their unit, there is a safety net there. Like, they're holding the note. If something goes wrong with it, they get the unit back. What we ended up doing and setting up was that gave us a little more money to go start on renovations. So theoretically, if everything goes as planned, the property's worth more. So now they're sitting with a property that's worth more. And they're getting mortgage interest as well. Like, instead of us giving that money to the bank, they have become the bank. And so we ended up finding why this is the sales pitch is like, Hey, would you take $550,000 for your $500,000 unit? The caveat is, I just need terms. I need three years to get you that full money. Does that sound good to you? So like, very interesting from their side, but from our side, like, super interesting too. Like, we had no mortgage application, no financing contingency. There was no proof of income, no tax history, no credit check, no loan closing costs. There was no appraisal. And then we ended up structuring this so that we put 10% down so that we could use the rest of that money to make improvements immediately and furniture, fixtures and equipment and things like that. It really was a crazy thing that I'm shocked that more people don't try, but easier said than done. And it did take some financing and took a lot of education to the realtor, to the listing agent realtor, to the seller. Like, like I said, it kind of almost fell through three times and I had to kind of, I had to do the legwork to kind of bring it back. Hey, real quick, if you've been a long time listening to this show, then you know, we give everything away for free from how to use the real state professional status and the short-term rental loophole to save tens of thousands of dollars on taxes to upcoming tax changes. We don't hold anything back. And the only way we would help more real estate investors is if you rate, review and share the show. It just takes 15 seconds to leave a quick rating, review or share with a friend who may find this information useful on their real estate journey. That's all for now. We'll dive right back into today's episode. Yeah, I love that, love that. And you did choose a from a tax perspective as well. This is this obviously going to help your situation here, but you chose the self-manage that into your background. You get a lot of hospitality, you know, love being involved in the property itself there. How did you make that work, right? How did that look from a day to day? Weekends nights. And why did you choose to self-manage that property? Yeah, this is this is another zone that I think hasn't been explored that much of one of my favorite things about short-term rentals compared to other investments is there is a host of other benefits that is kind of buried in there. If I go invest in the stock market, I can't go use that stock market for personal days. I can't use the amenities. I can't make a trip out of it. So one of the criteria that we were looking for when we were looking for a property, our family is a big water family. Like we like to be close to the water. We like to get on the water. And so we were trying to figure out a way to like how do we combine our interests with getting in the water to this other investment. And so we'd looked for a property that was close to a lake. And then it also just started unfolding some of these other amenities. Like I'll go and flip the house and do the cleaning and stuff. And the kids can go hang out at the pool or play at the local arcade or you know like there's other things that are benefited in there that I just found so intriguing. Now you have to be really thoughtful of personal use and you know those rules you want to be super aware of that. But if you get into some of those details and like I don't know Thomas now like some of the things I like is like when you know the rules then you know how to like use them and play with them. One of my favorite episodes that you've done was episode 300 was back in 2024 was that 14-day rule and the personal use. When you know how to use this to your advantage you can go and strategically make it a work trip or make it repairs and maintenance that doesn't count as personal use days. So this kind of lent into, I know this is a long-winded answer, but this lent to why we chose the self-manage was it wasn't just because we were on the self-manage it was because we can make a day of it and like let's go get on the lake then we'll go flip in the middle of the day we'll get back on the lake in the afternoon and like it worked into a lifestyle that we were trying to work toward. Does that make sense? Yeah I love that Thomas. I'm gonna have you hop in here with the personal use the tax side of the update here but that's that's exactly I can't take credit for this one because you already had the property here before you you came to me but that is exactly what I went on with clients right is like if we do go down the short-term mental strategy route the tax benefits are probably going to be there for you probably for sure right it's like how can we make this a long-term strategy by where do you guys like to travel what do you like to do let's start there right and then build out from there so time I'll let you hop in on the the personal use and why we say they'll personally use that first. Yeah yeah yeah yeah so there's nothing wrong with personal use you just have to be aware of the rules into Jason's point when you know the rules you can have a graded degree of control and how you kind of how you kind of set the stage for yourself and how you utilize those rules but long story short if you have a for if you have a property with an average period of customer excuse me I almost went through the short-term mental thing right there. The long story short intersection 280A of the tax code it says that if you have a property that use more than 14 days personally then it is considered a residence and once a residence you cannot take the losses the losses are capped effectively at the income that that property generates which doesn't allow you to create a loss that you've been taking against your W2 or your active business income so maintaining 14 days or less a personal use is critical but also the Jason's point if you do work there if you are working at the property for more than four hours a day or it's on a substantially full-time basis that it's not counted as a personal use day so that's something else to have your tool belt when you're kind of structuring your trips and how you want to plan to use that personally so knowing those rules are certainly critical to knowing how things work but also kind of shifting here is just a little bit here I know that a lot of people who are investing in short-term mental of course they want the tax benefits that's ultimately in many cases a motivator for going into that asset class but also you typically want to turn a profit I would imagine most people want to do that and I know that on Airbnb there's the very coveted status of super host right and what all the benefits of being super host allows you to do in terms of getting your property listed in and getting it seen by the right people and I know you hit super host the top 1% listing within four months you know what would you say maybe your top two to three things that helps you get there yeah this I think we kind of stumbled into and got lucky so like that's my first disclosure and like I'm not an algorithm expert we didn't do anything crazy but like little details of like just paying attention to a great guest experience it really wasn't that hard to outcompete the competition so like in our area there's not many hotels like it is a very tourist destination you know think lake and ski resort so like that rental market drives the whole community so because of that there's you know a couple big property management companies and those big property management companies just cannot deliver the little details it is all about turning and flipping and you know getting the unit flipped and ready for the next person so when we slowed down a little bit and paid attention to little things like snacks and welcome notes that really was the basis for it the other thing that I again I'm not an expert and I think we kind of stumbled upon was a strategy that the property management companies do is use all of the platforms so like you know of all these property management companies use multiple the sites to drive revenue you know drive rental listings including their own platforms so one thing that we kind of stumbled upon back and it was we only stuck with Airbnb one of it was just to be simple and I think because of that and we put energy into it you know did all the things that you got to do you got to have photos and you got to have good descriptions and have it accurate but like because we are engaging with it so much we kind of zipped up to the top 5% you know top 10% top 5% top 1% and I think part of that is because we were you know it was it was getting lots of hits within that one platform I don't know how to describe that but like it's funny you say that because I've heard both ways right and oftentimes what I hear is when somebody gets a short-term rental either like I'm gonna you know blast out every possible channel which very well could be a great strategy but usually like what I hear from like professional people are like in books and whatnot like it's like I'm gonna post on just Airbnb and I'm going to optimize Airbnb and I'm gonna get all the listings that come to Airbnb so that's kind of what you're saying I think from that point of view which which makes a lot of sense from whatever yeah there's there's something there with the algorithm of like when you put days available and then it books somewhere else and then you come and manually take days away I think there's something there that you know like yeah like we're more engaged or committed or I don't know how to I don't have to describe it but someone knows this but anyhow whether whatever it was just being staying consistent and then paying attention to little details I mean we are obsessive about how clean the unit is and you know making sure that it's like those little details of there of like all right there's a fireplace and you know fire pit we make sure there's firewood stocked and like super easy lighted fire and little s'mores kits and things like that those big rental companies are not able to keep up because we're just we can pay attention to the little details no love that yeah so yeah we get that a lot you know one of my buddies he has a you know pretty large portfolio and he said the property managers are never gonna take care of your stuff the way that you want to right and I should have sent a long-term rental portfolio and then we had a salary on the net on from thanks for visiting and they were so had an emphasis on this is a hospitality business all those little details matter in a hospitality business so it just goes to show that the devil's in the details and sometimes you have to realize hey no one's gonna do it as good as it's a sweeping statement but oftentimes people in that space are not gonna do it as good as you do so awesome let's go to the tax the fun the fun side of things right now yeah items we like to talk about here you would potentially right track your time and you did to get to you exceeded 500 hours material space and time that that first year for listeners who you know aren't maybe intimidated by it there's things that count that don't count how to track it you know how do I be prepared for an audit what does doing it the right way look like since you crushed it yeah I mean this was like to me almost too simple like just record it simply like as you do it and go along what is so easy like it's it's the most simple spreadsheet it has time in time out details of what we did if we reference to anything like receipts or whatever you know if we went shopping at lows we do that we track our mileage all at the same time it like it really doesn't have to be overly complicated and then we had other tools that like help us a little bit too of like the door locks have a log on them so now like if I forgot to enter something I can go back to log oh we got there at 12 17 and we left it 345 great super simple tools but like I have even caught myself of like if I don't put it in for two or three days or you know a couple weeks then you start you instantly forget what you did and it just becomes a mess like my best advice is like just do it do it in the moment get in the habit of doing it and we had a substantial number of repairs and maintenance in that first year so we were neurotic about how to keep it and track it and just wanted to make sure that we were dotting our eyes and crossing our teeth because if we ever got into an audit we want it to be so easy to just hand over the records and go yep we were there and here's the proof and we have a receipt from lows to prove that we changed the light bulb like it was really just that that simple yeah we always get we always get questions on that like how do you track other people's times it's great to hear you know a good case study and how someone actually did that so you know I know you know this is an interesting one right so we talk a lot about a hundred percent bonus depreciation here on this show but as you mentioned at the top of the episode when you parted in 2024 we're at 60 percent bonus depreciation and you know you ended up using section 179 strategically in this case when you were working with Alex who's you mind kind of breaking down how that all came about yeah I'm I'm gonna defer to you guys instantly but the you know it was 2024 we had 60 percent bonus depreciation I think that you were discovering inside your firm that there are certain situations where commercial property can use section 179 and so I don't even know what we fully did I know there was an episode on it that the episode I have it written down was 291 that was like diving into an alternative use so yeah and I think Tom was really spearheaded this as well but yeah we were able to you know figure out that those five year assets was personal property assets in non-residential real estate which will include short term rentals right our we get our eligible to take section 179 now that's super high level Tom if you want to add to that if you have yeah yeah yeah long story short with section 179 is that if you're an individual and you have your business in this case a short term rental in your individual name or through a single member LLC you are the same taxpayer and long story short with the section 179 rules is it allows you to take the losses in that case like normally the deduction for section 179 is capped at the amount of income that your business generates so if you're a partnership or an S corporation that does not flow through to your 1040 so you cannot take the loss if you will against your W2 income or what have you in that case but if everything is under you as an individual name long story short you can do that so it is something you use strategically and something that frankly we do not talk enough about on the show but again that's why you work with the tax strategist because all these things are more nuanced than meets the eye right it's not just all about what people say on the internet and that goes for us too because there's a lot of details that go on behind the scenes that you may never hear about on the internet so in the main reason why you can use a may if it's on your personal return is because let's say you have a W2 right we have to have other income but in your case like a W2 income right that goes on your 1040 that is what we're able to utilize as quote unquote we're using air code to your main topic a couple of times it is this income and we're able to utilize section 179 to create a tax loss at your rental so really you know be 23 24 and maybe if you put your property service right in January of 25 and where under the old bonus rules that is where the section 179 rules come and would be a big player for you now going forward with a hundred percent bonus it's gonna be more rare we go down that rabbit hole at different episode there are still advantages to maybe using it sometimes but not not what we want to dive into too much here today I did I still some thunder here I did mention you cut your your tax bill in half it generated roughly a hundred thirty eight thousand dollar tax loss for you between the section 179 the bonus utilizing some safe harvors the minimum is in and such if you don't mind just speaking to that that piece there especially maybe the safe harbor piece getting this thing up and going what that looked like for you I really be helpful for I was totally the you know as I said we create a hundred thirty eight thousand dollars in loss you know at our tax bracket that was somewhere in that thirty to thirty three thousand dollars of tax savings which essentially I viewed as like let's take that money and like put it directly in we did have repairs and you know maintenance in that first year especially getting it up and ready and things like furniture fixtures and equipment and I think gosh I think almost all of it was de minimus because you know if it was a piece of drywall like there was because de minimus is twenty five hundred about I don't know what the number is and it's all individual pieces so like one sheet of drywall is less than twenty five hundred one you know electrical plate is less than twenty five hundred so like all those things started up and I think we had probably twenty thousand or so in repair materials we did all the work ourselves too on that which is you know an aside I enjoyed that home repair remodeling is something that I like got into as like just total aside from my day job and so you know we weren't doing anything crazy a little bit of drywall stuff you know light electrical painting cleaning things like that the time added up actually a time you know like we said we had over five hundred hours in that first year between me and my wife and so we didn't set out to do five hundred hours but like just kind of got there and an interesting door that opens up at five hundred hours that we haven't spoken about today is it really does open the door to a grouping election which we didn't take advantage of but a really interesting thing of like if we wanted to add a property late in the year and we had that five hundred hours already it would have been really easy to add a property in November or December is another thing that we were kind of keeping in mind as we go into the future that's a really good point I don't think a lot of people think about that like that right like if you get the five hundred hours as you don't doesn't matter how much time anybody else spends and on top of that you can group your properties together so if you did acquire something at the year and you don't have to worry about the material participation test on that late stage property you acquired thanks to the grouping election so that's really good insight to note there hopefully some people could take away some cold nuggets from that and that was an Alex one that we were discussing too because we have our primary residence and you know at a point in time we were playing with the idea of like do we take our primary residence and like plug it in toward the end of the year to do that now we didn't actually pull that strategy off this year but definitely something that we're keeping in mind for the future for sure so we know it's not all joy right with a short time until there are certainly things that you don't hear about on social media the things that nobody talks about so after dealing with all the leaky toilets turnovers and just general guest issues as you've had especially as yourself manage the property what are the biggest systems and things you've put into place to help you kind of manage all this sure in general I just wanted to state that like we really haven't had that many issues which we feel really lucky about we've they've only really had one issue with a guest out of I don't know 30 stays last year but there are little things there nobody on the internet tells you about cleaning hair hair is a nasty thing that you got to figure out how to deal with and I feel like I could write a whole SOP on like how to clean bathrooms now with little tips and tricks we have of like a little mini shop back is my best friend in the bathroom it's the first thing I do clean you know hair on like beds and bed frames and things like a lint roller is a great thing no one talks about these or at least maybe they're not hitting my feed but there's things like that of like the less sexy parts I will tell you the you know some of the things that have really helped us are some of the automation door locks that automatically sink to Airbnb is so easy us being able to control thermostats remotely is so nice and then just kind of you know there's a bunch of little things like that but I will say that like us getting in and doing the work ourselves really gives us an insight of like what needs to be done how it should be done how much time it should take so that if we ever hand off to a property management or cleaning we can reasonably expect the like problem areas I can tell you the two or three zones in our unit that we pay attention to every time we flip it so that's why I enjoy it and again the big reason that we did it is we had a kind of ulterior motive too like we're trying to get to the water and get to the lake so this you know doing a little cleaning while we get a day at the lake was you know easy for us to build into it worked for us it worked for our family love that you're you know watching hotels maybe gain some ground back from from short terminals if you will I believe you're still very bullish though on this asset class where do you see yourself I know you have some things in the works but where do you see yourself going from here and especially over the next handful of years I know you maybe have a move coming up here sooner rather than later so what where do you see yourself going and where do you see the market going here in general totally and you know again I'm not an expert anything I know our little market in detail like our little market there's not many hotels in our area it is driven by like rental homes and property management companies so for our area it is so easy to outcompete these big management properties the other thing that we're starting to see is like there was a wave of people that got into Airbnb during the Covid times that realized how much work it is and they're starting to drop off so like our bookings have continued steady or even going up and now we're getting repeat customers because we've been established for a little while so like I feel really solid on our area I obviously I can't speak to other zones or other markets but this is definitely something that is intriguing to us and we're going to continue looking into cool cool it's been a journey and it seems like you learned a lot over that time and you shared a lot of great wisdom here on the show and hopefully some of our listeners will be able to take that where they're currently operating short-term rentals or about to jump into the game or considering jumping into the game but if you had to go back and give yourself one piece of advice before buying that first property what would it be and why? Yeah I would definitely start with like what we would do again and what I would definitely do again is getting tax strategy with Alex that has you know we've talked a lot about short-term rentals today and that was one piece of the strategy but oh my gosh we have so many other areas that we focus on you know I have some 1099 income we've set up an S corp you know we've looked at using vehicles strategically we can put our kids on payroll we've explored a guster rule with some of my business work primary residence strategies you know tax home office I can go on and on of like so many things that we've set up and so like number one is great planning you know number two if we look at for another property in our particular case I'd be super aware of like HOAs and neighboring properties we never got into any challenges with our HOA but there were times where we were going eek like I'm not sure if we want that like the threat of something going wrong there and that being kind of out of our control again this is in our like kind of situation and then there was an episode that I love that you did probably a little over a year ago I think it was episode three on nine was John Bianchi he was saying that like instead of aiming for break even which is honestly what we were aiming for like that was our goal like aim for something better he said something on lines of like if the worst case scenario is a scenario that still works like do that like what if your worst case scenario is making 20% profit so like as we move into the future definitely continuing that analysis we knew exactly what we were getting into but our like our target was pretty low like break even target so that we could use the other amenities and you know lifestyle was part of the plan so our our acquisition went as part plan but aiming up a little bit higher and then we continued to like blend what we enjoy so like I would do that again of like I really enjoy repairs and maintenance we really enjoy hospitality we like doing this you know I haven't ever seen anything the IRS code that says that the kids can't enjoy the arcade while you're cleaning the unit so like putting some of that in is is also part of our strategy one kind of line or piece of advice that I have for people is like get educated and like learn understand know what you're getting into but also don't let that paralyze you and like jump in and get going when we first started this we we were looking at this you know $500,000 property was so big we couldn't even wrap our heads around it it was more than our primary residence and it was a big scary step and now a year and a half into it you know we're for our next property we're looking in the you know 750 to 1.5 million dollar range is less scary kind of all because we got started you never know what challenges you're going to find so like get in and learn them and get through them and you know if there's a supportive community like this group oh my gosh it's like go in and get do it and make some mistakes from them yeah absolutely they say they had a lot like you know the the path unfolds as you take the step forward so you've got to take that first step and you know one step at a time and oftentimes that you know the path will the next step will always unveil itself and sure enough even in my own personal situations I find myself and whenever I follow that advice I'm like oh it wasn't that big of a deal you know once you start taking those steps forward so definitely great advice you know Jason wanted thank you so much for coming on the show today and and sharing your knowledge with our listeners we'll have to have you back for the next one I actually that next acquisition and see what insights you have there but yeah thanks again for joining us and for everybody who's tuning in today thanks as always for listening to the TaxMart REI Podcast we found this episode useful go ahead and leave us a review on Apple Spotify wherever you're tuning in also if you have anybody considering jumping to the game with short rentals or maybe you're on the fence go ahead share this episode with somebody and you might just help them on their journey so thanks again for tuning in we'll catch you on next week's episode of the TaxMart REI Podcast the TaxMart real estate investors podcast is for general information purposes only and is not intended to provide and should not be relied upon for tax legal or or accounting advice information on the podcast may not constitute the most up-to-date legal or other information no reader user or listener of this podcast should act or refrain from acting on the basis of the information on this podcast without first seeking legal and tax advice from counsel in the relevant jurisdiction used of an access to this podcast or any of the links or resources contained or mentioned within the podcast show or show notes do not create a relationship between the reader user or listener of the podcast and the host 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