Major League Real Estate Podcast

Dave Van Horn shares his journey in the real estate industry, from starting as an agent to becoming an investor and note business expert. He explains how he accidentally entered the note business and the different types of notes he deals with. Dave also discusses the institutional buying process and the importance of due diligence on banks. He highlights the opportunities in the current market for distressed assets and repositioning the capital stack. In this conversation, Dave Van Horn discusses potential problems in the real estate market, the importance of preparing for risks, and how to get into the note business. He also shares insights on transitioning to a CEO role, building a self-managing company, creating a family investment company, and focusing on impact and freedom. If you want to reach out to Dave Van Horn, you can contact him through the PPR Capital Management website or connect with him on LinkedIn or BiggerPockets.   Takeaways Dave Van Horn's journey in the real estate industry started as an agent and evolved into becoming an investor and note business expert. The note business offers cash flow without the challenges of dealing with tenants, making it an attractive investment option. The institutional buying process involves analyzing assets, bidding, and funding, with a focus on managing risk and capital. In the current market, there are opportunities for distressed assets and repositioning the capital stack. The real estate market may face potential problems in the future, such as a reduction in interest rates not happening fast enough and a shortage of affordable housing. To prepare for potential risks, it is important to be cautious with financing options and consider fixed-rate financing instead of bridge financing. Getting into the note business can be challenging due to regulatory and compliance requirements, but exploring opportunities in hard money lending or private credit on the commercial side can be more efficient. Transitioning to a CEO role involves professionalizing the company, hiring a search firm, and forming a board of directors to bring in additional talent. Building a self-managing company requires identifying and focusing on unique abilities, setting up a family investment company, and creating a culture of ownership among staff. Creating a family investment company involves repositioning equity, simplifying and becoming more efficient, and focusing on impactful activities. Focusing on impact and freedom means prioritizing activities that align with personal goals and values, and considering the long-term impact of decisions. To contact Dave Van Horn, visit the PPR Capital Management website or connect with him on LinkedIn or BiggerPockets.

Pasha Esfandiary, and ex ex-professional poker player gone MHP investor, dives into why mobile home parks are his favorite opportunity in real estate today. We get into the concept of asymmetric risk, a principle drawn from Pasha's poker background, which he applies to real estate to maximize returns while minimizing potential losses. The episode highlights how properly structured MHP deals may offer resilience during economic downturns and an attractive risk-reward profile. Stay to the end to learn about Pasha's philosophy on American vs. European waterfall structures and how fund structures can better align LP & GP Interests.

Barrett Linburg, a real estate investor, discusses his journey investing in real estate and explains the decision-making process for holding or selling a project and the benefits of investing in Opportunity Zones. Barrett also touches on the potential extension of Opportunity Zone provisions and the types of gain eligible for investment. He provides insights into the timing rules for investment and the tax benefits of holding an investment for 10 years. Finally, he discusses the process of setting up a Qualified Opportunity Fund. In this conversation, Barrett Linburg discusses the tax deferral and reduction benefits of investing in Opportunity Zones. He explains the rules and requirements for qualified Opportunity Funds and the importance of deploying capital within specific timeframes. Barrett also highlights the role of qualified Opportunity Zone businesses and the flexibility they offer in cash management. He emphasizes the need for proper structuring and compliance in the Opportunity Zone space. The conversation concludes with a discussion on the adoption of technology to streamline business workflows and how to get in touch with Barrett   Takeaways Real estate investors can benefit from buying distressed properties and performing extensive renovations to increase returns and lower operating expenses. The decision to hold or sell a project depends on factors such as the tax structure, net cash flow, and return on equity. Opportunity Zone investing offers tax benefits, including deferral of capital gains taxes and potential elimination of taxes on appreciation after holding the investment for 10 years. Investors must have a capital gain to invest in an Opportunity Zone fund, and the gain can come from various sources, including stocks, real estate, and personal assets. Investing in Opportunity Zones allows for tax deferral and reduction until April 2027. Qualified Opportunity Funds must deploy capital into real estate projects within specific timeframes. Qualified Opportunity Zone businesses provide flexibility in cash management and have testing requirements. Setting up a qualified Opportunity Fund requires compliance with tax regulations and deal flow management. Awareness and adoption of Opportunity Zones are growing, but there is still room for more participation. Investors can diversify their investments by partnering with different Opportunity Zone funds. Personal qualified Opportunity Funds are suitable for individuals who are comfortable with compliance and deal sourcing. Adopting technology, such as Copilot, can streamline business workflows and improve efficiency.

Aleksey Chernobelskiy advises LPs on real estate investments and helps them understand the risks and opportunities involved. He provides feedback on transactions and guides LPs through the three pillars of LP investing: execution, alignment of interest, and the actual property. Aleksey's goal is to ensure that LPs are well-informed and aware of what they are getting into and to create a more transparent marketplace for LPs and GPs. In this episode, he discusses red flags to watch out for in marketing materials and emphasizes the need for honesty and alignment of interests between GPs and LPs.   Takeaways Aleksey differentiates himself from attorneys and CPAs by focusing on the business and investment aspects. Open and transparent communication is essential between GPs and LPs, especially in challenging circumstances. GPs should make underwriting easier for LPs by providing clear and comprehensive information in promotional materials. Red flags in marketing materials include missing or incomplete information, inflated track records, and misleading claims. LPs should consider metrics beyond just returns, such as downside protection and risk management. Target metrics in the real estate investment industry are shifting, with LPs seeking more favorable terms and higher splits. Technology, such as calendars, online payments, and tools like Airtable, can streamline business workflows and improve efficiency.

In this episode, Brandon and Dylan discuss carried interest in real estate investments. They provide updates on tax filing deadlines and the progress of a tax bill in Congress. They explain the concept and history of carried interest, as well as its key features such as crystallization, clawback provision, vesting periods, and catch-up provision. They highlight the benefits of carried interest for both investors and managers. The conversation also covers the tax implications of carried interest, including the provisions in Section 1061 and how to structure carried interest to avoid tax traps. They emphasize the importance of involving both attorneys and CPAs in the process.   Takeaways Carried interest is a mechanism used in real estate investments to align the interests of investors and managers. Key features of carried interest include crystallization, clawback provision, vesting periods, and catch-up provision. Carried interest is beneficial for both investors and managers as it incentivizes managers to achieve a certain return for investors. Understanding the tax implications of carried interest is crucial, and structuring it properly can help avoid tax problems.

Andrew Keel shares his journey in the mobile home park industry and how he scaled his business to over 40 syndications and $125 million in assets under management. He discusses the challenges and management of mobile home parks, the importance of building a strong team, and the use of virtual assistants. Andrew also highlights the benefits of offshoring and the role of technology in managing a large organization. He explores the potential of manufactured housing and the need for more efficient construction methods. Additionally, he addresses the affordable housing crisis and the challenges faced by cities in embracing mobile home parks. The conversation explores the challenges of mobile home ownership, the potential shift towards mobile home parks, the difficulties in addressing the issue, the changing perception of manufactured homes, potential solutions and financing options, the need for backing and advocacy, streamlining business workflow, and contact information.   Takeaways Building a strong team and utilizing virtual assistants can help streamline operations and increase efficiency in managing mobile home parks. Offshoring certain tasks can provide cost savings and allow for more dedicated and disciplined team members. The mobile home park industry offers unique investment opportunities, with the potential for high returns and lower expense ratios compared to other asset classes. Manufactured housing has the potential to address the affordable housing crisis, but there are challenges in terms of zoning and public perception that need to be overcome. Efficient construction methods, such as modular housing, can reduce waste and increase productivity in the construction industry. Mobile home owners face challenges in creating equity and relocating their homes. There is a potential trend towards mobile home parks as a solution to the increasing demand and dwindling supply of affordable housing. Addressing the issue of affordable housing in mobile home parks is complex and requires navigating local zoning regulations. Changing the perception of manufactured homes is crucial in promoting their affordability and quality. Potential solutions include offering financing for the purchase of manufactured homes and advocating for supportive legislation.

Summary:    In this episode, Brandon and Dylan discuss the roadblocks that can delay the delivery of K-1s to investors. They start by discussing an IRS announcement regarding tax returns and the potential impact of the House bill. They then identify five roadblocks that can hinder the timely delivery of K-1s, including delays in delivering financials to the tax team, processing owner information, third-party reports, and reviewing the final product. They also provide tips for choosing the right CPA firm.   Takeaways: Delays in delivering financials, processing owner information, and obtaining third-party reports can hinder the timely delivery of K-1s. Having a clear timeline and effective communication with the tax team can help overcome roadblocks. Choosing the right CPA firm that has efficient workflow management systems and prioritizes timely completion of returns is crucial. Notion automation and Markdown can streamline workflow and improve efficiency in managing tasks and documents.

Nathan Sosa, a CPA and Tax Pro at Hall CPA, joins Brandon and Dylan to discuss the concept of real estate professional status and how it applies to real estate operators at different points of scale. We discuss the requirements and implications of real estate professional status, including the limitations on passive losses and the need for material participation. The conversation also delves into the challenges of qualifying for real estate professional status at scale, such as when raising capital or managing large portfolios. It highlights the importance of understanding the specific activities and ownership structure that determine eligibility for real estate professional status.   We also explore the impact of ownership tests and the concept of employee ownership and its relevance to the real property trade or business.    Takeaways Real estate professional status allows individuals to offset passive losses with non-passive income, but it requires meeting specific requirements and material participation in real property trade or business. Qualifying for real estate professional status can be challenging at scale, especially for fund managers and large-scale operators who may be more removed from day-to-day operations. The determination of real property trade or business and the ownership structure play a crucial role in qualifying for real estate professional status. Seeking professional advice is essential to navigate the complexities of real estate professional status and optimize tax savings. Ownership tests and layering can impact eligibility for real estate professional status. Employee ownership may not be applicable to the real property trader business. Scale is a unique consideration when determining real estate professional status. Keeping detailed records is crucial to support claims of real estate professional status.

  David Gordon, a real estate developer, discusses his background and current projects, with a focus on qualified opportunity zones (QOZs). He explains the purpose and benefits of using the QOZ vehicle, including the ability to provide a higher level of impact to communities without financial assistance from local municipalities. Gordon emphasizes his long-term hold strategy, building high-quality projects with the intention of holding them forever. He discusses the challenges and market trends in Bozeman, Montana, and the importance of a well-structured team. Gordon also touches on the capitalization and exit strategy for his projects, including the use of crystallization and true-up provisions in operating agreements. In this conversation, the guest discusses the importance of upscaling advisors and finding an attorney who has the heart of a teacher. They also talk about future episodes and introduce the Streamlined Spotlight segment. The guest then shares how they have recently adopted Yardi Voyager to streamline their business and improve their accounting processes. Takeaways Qualified opportunity zones (QOZs) provide a higher level of impact to communities without requiring financial assistance from local municipalities. Long-term hold strategies allow for the development of high-quality projects and the ability to provide a wide range of housing options. Building strong teams and maintaining a sustainable structure is crucial for successful real estate development. Crystallization and true-up provisions in operating agreements can help align the interests of sponsors and investors. Simplifying operating agreements and ensuring transparency with investors is essential for building trust and long-term partnerships. Consider upscaling your advisors and finding an attorney who has the heart of a teacher. Implementing technology like Yardi Voyager can streamline business processes and improve accounting efficiency. Future episodes will explore additional topics related to real estate development and investment. The Streamlined Spotlight segment highlights the technology adopted by guests to streamline their businesses.

In today's episode, Mandy McAllister explains why she doesn't like the syndication business model and focused on accumulating a large portfolio of rentals without raising capital. She also dives into why she's testing out the car wash space and how much fun she's having operating them.

Isaac Weinberger, a cost segregation expert, discusses the benefits and considerations of cost segregation in real estate. He explains how cost segregation accelerates depreciation benefits and allows investors to frontload their depreciation deductions. Isaac also addresses the depreciation recapture and bonus depreciation, as well as the factors to consider when deciding on cost segregation for syndicated deals. He emphasizes the importance of quality cost segregation studies and the potential extension of bonus depreciation. Overall, cost segregation can provide significant tax savings for real estate investors. In this conversation, we discuss the benefits and strategies of cost segregation studies for real estate investors. We cover topics such as the allocation of bonus depreciation, partial asset dispositions, and the benefits of cost segregation studies throughout the ownership period.    Takeaways Cost segregation accelerates depreciation benefits and allows investors to frontload their deductions. Depreciation recapture and bonus depreciation are important considerations in cost segregation. The decision to do a cost segregation study should be based on factors such as hold term, property size, and tax liability. The quality of the cost segregation study and the expertise of the provider are crucial. Bonus depreciation is currently being phased out, but there is potential for extension in the future. Cost segregation studies can help real estate investors allocate bonus depreciation and accelerate tax deductions. Partial asset dispositions allow for the deduction of the value of replaced assets, and cost segregation studies make this process easier. Cost segregation studies can be beneficial throughout the ownership period, not just at the beginning. AI and virtual assistants can be used to streamline workflow and delegate tasks.

In this episode we bring on Elaine Stageberg of Black Swan Real Estate and discuss her firm's meteoric growth. She discussed how vertical integration is critical at scale and her unique fund structure that boosts LP returns compared to traditional models.

On this episode, Brandon and Dylan discuss common mistakes they see sponsors make related to their tax and accounting systems. We discuss relying on property managers for accounting, bank account utilization, investor documentation, operating agreements, and not getting the right service support.

This episode, featuring Mauricio Rauld of Premier Law Group, discusses the ins and outs of operating agreements and where sponsors tend to make mistakes and overlook details. We also discuss when you should pull a tax professional into your deal structuring.

This episode explores investing in small bay industrial assets with Daniel Kurkowski of Obsidian Group. Daniel leverages his extensive knowledge of small bay industrial to present a strong case as to why this asset class is positioned well for future success as well as why most investors overlook it.

On this episode, Brandon Hall and Dylan Brown, both CPAs with Hall CPA PLLC, discuss the various ways General Partners can take depreciation from the deals they sponsor. This episode explores common misunderstandings as well as ways to make the operating agreements work for you to ensure the tax component follows the economic deal you are trying to create.

We bring on Matt Brawner of Endurus Capital + Minnesota Capital Management to learn about how he vertically integrates real estate businesses to earn more money and drive efficiency into his organization.

Meet your hosts, Brandon Hall and Dylan Brown, as they introduce the MLRE podcast and what you can expect to learn on our weekly episodes. We hope you enjoy!