Passive Income Stream: Buying In and Staying Committed with Jason Yarusi

CGT 16 | Passive Income Stream

Many investors struggle to find actionable content and tools to build and strengthen their business and also gain a passive income stream through commercial real estate investing. In this episode, Jason Yarusi, real estate syndicator, investor, and the host of The Multifamily Foundation podcast, joins Brett Swarts as they talk about passive income streams and generational wealth, deciding to dive in and staying committed to the process. Jason shares how he helps people create a vision and the practical steps to achieve that vision.

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Passive Income Stream: Buying In and Staying Committed with Jason Yarusi

I’m looking forward to you guys reading this. We have Jason Yarusi. He is a great guest, full of wisdom and expert in commercial real estate and multifamily investing. He’s going to talk about why focus is key, why having a patiently aggressive mindset or attitude or strength is a key that has helped him help others grow their wealth through multifamily investing real estate and how finding the right partner, the right property, right property management and the right contractor are the keys to your success to growing your commercial real estate portfolio. Also, he’s going to share with us his best book, his best podcast to listen to and the best cities to invest in the next 2 to 5 years. He has some thoughts on that as well. I look forward to you learning from Jason. Feel free to share this with anybody who you think might help. Thank you so much.

I’m joined by some of the top wealth advisors, whether it be commercial real estate, financial advisors or business brokerage. We’re focusing on helping you create and preserve more wealth by having a clear exit strategy with capital gains tax, whether it be selling your business, your commercial real estate or a high-end primary home. I’m joined by a guest who has tons of experience and lots of knowledge to share with us. Many investors struggle to find actionable content and tools to build and strengthen their business and also gain a passive income stream through commercial real estate investing. Our next guest is an expert in helping others do that through his podcast, The Multifamily Foundation podcast. He has active experience as a real estate syndicator and investor. He founded Yarusi Holdings. It’s a multifamily investment firm with over 800 units under management since 2016.

One of the big hiccups for people is that they need to get focused on what they want. Click To Tweet

The focus for our guests and his team is to reposition properties through operational efficiencies, moderate to extensive renovations and complete rebranding. He’s also the Founder of the New Jersey’s Multifamily Foundation Club with over 2,000 members and that focuses also on real estate syndication and multifamily investing. He also trains other successful investors on a formula for buying apartment buildings. You can find him at MultifamilyFoundation.com. Please welcome, Jason Yarusi. Jason is out of New Jersey. He also has a special report you can check out at YarusiHoldings.com, it’s how to become financially independent with apartment buildings. Jason, welcome. Will you give our readers a little bit about your story and your focus?

I appreciate you having me. We are all on buying apartment buildings. We are located in New Jersey. However, we do buy outside the state. We have holdings in Texas, Georgia and in Kentucky. We started this focus back in 2016 when we found that the real estate objectives that we were doing were not paralleled with our future objectives. We want to create legacy for our investors and for our family so we could choose our schedule and create a dynamic future that is on the precursor of what we’re looking for.

What had happened is that we grew up in a family construction business. After Hurricane Sandy, which was a huge hurricane that happened on the East Coast back in 2012, our business ties directly a lot to flood work. We got busy with that work that it was almost mind-blowing. If we could work 25 hours a day and eight days a week, we could have done it based on the inflow of work. I met my wife. I married my wife. Having a small family, having our first kid in a way, we knew we wanted to get our time back. It got to the point of, “What can we do in real estate to assist with that?”

We started taking on active roles. My wife, Pili, became a realtor. We started flipping houses, wholesale, Airbnb. It occurred to us that we were creating ourselves more jobs. We went from busy to busier. It took us to start buying some rentals out of state to learn the process, learn what we’re doing and then look at that process and say, “If we could take this process of buying 2 and 3-unit and expand, what would that do for our future?” That’s how we dove into apartment buildings. We went from buying a three-unit to buying a 94-unit as our first acquisition, which was back in May of 2017.

I connect with buying more jobs, maybe having more of a passive investing strategy, which truly frees up your time and energy. I can relate. You mentioned you have some kids. Being parents and having kids, you want that time, but you also want that energy. If you’re starting a new business venture or a new real estate deal or whatever it might be within real estate, oftentimes the idea of passive is not even close to passive. It’s even more active, especially in the beginning. It’s important to know that there are different levels of passive that you can achieve depending if you’re doing single family flips, wholesaling or multifamily. Walk us through the moment when you said, “It’s multifamily and it’s going to be more on this passive strategy versus the other strategy of single-family flips.”

The word passive doesn’t necessarily exist. Nobody says, “I got this thing going and I’m on this beach.” It’s this preconceived notion. I probably drive myself and my wife crazy if we’re sitting on the beach. That said, it became a point when we started getting checks in the mail when we were having properties that were in the Midwest. What we had done is we aligned ourselves with the right partner to help us find the property. The right property managers have guidance on what we’re going to do to manage property. The right contractors to reposition the property and get the property back on par. What this did was take me out of the picture of the things that weren’t the highest and best use of my time. I was able to focus on putting together the process and put together the plan and that plan was able to circumvent in us having income coming in.

What I could do is I could use my resources, not only I could that one time, I could do that 2 or 3 times. If you’re buying a single-family or two-family, if you do want to scale and create that legacy and generational wealth, that’s going to take a lot of resources. There’s going to be some pinnacle where I’m on a plateau or have some diminishing returns. Looking at that, we said, “This is great, but we only have two units under one roof. What if we took that and we made it into 50 units?” That was that first moment where we said, “How can we learn more about this process?” We found partners that were doing it. We watched the process with them. We asked good questions. We started getting as much like podcasts, like yourself, diving in for podcasts that were on the subject. We got focused on our minds, and that’s part of it.

CGT 16 | Passive Income Stream

Passive Income Stream: Everybody has great ideas, but the “we” circumstance means no one’s going to do it and no one’s going to take responsibility.

 

One of the big hiccups for people that I see, especially even people who train, is that they need to get focused on what they want. If you get focused, then we can create a map to get there. If you’re not focused, that’s why nothing gets accomplished and you feel like you’re wasting time or you don’t have enough time. I will speak at a REIA and I may focus on multifamily, but the people that are at that REIA, the next month they’re going to say, “Someone’s going to talk about Airbnb.” The following months, somebody’s going to talk about tax lien. From a real estate approach, there are so many great ways to do things but there are so much content and so much information available that you can get lost in the mix of never starting. Stop starting continuously because everything seems like a rosier picture. For us, we knew multifamily gave us what we wanted. It has allowed us to use our resources and grow with others. We can do this with our friends, families and investors to help them meet their goals as well and have a pattern that we can replicate this process from property to property.

That’s amazing and that’s a great reminder that focus is key and not looking at if the grass is greener or the new rosy, shiny object to grow wealth. Pick a focus and be a specialist in that. Dive in and stay committed to the process and then also picking the right partners, property managers, contractors and properties. Hopefully, buying when the market makes sense and finding deals by being patient. Before your success as an entrepreneur, an educator, a multifamily syndicator, an investor, who was Jason growing up? I want you to tell us maybe that one strength that you were given. Everyone has been given a certain strength. Some people call it a superpower. It’s God-given gifts. What was that one strength that you were given and how does that connect how you help people?

I will say patiently aggressive. I set my mind with something and it may take my energy but I’m going to get it done. I will put in the work to get it done. I’m a big runner. I’ve done a ton of marathons and just got in my mind that I was going to start running an Ultra. I did run a 100 mile. My first 100-mile and I said, “I’m going to do it under 22 hours.” I did it in 21 hours. It’s the points you need to tell yourself that you’re going to get something done and then it’s going to be, “I’m going to get it done. It’s not going to be a perfect path, but how can I get to push to the yes even past all the noes?” That goes a lot with what I do with business. It’s for our business. You’re going to have a lot of noes, but it’s how many noes do I need to get to the yes?

Who is the right person that can provide me with the right answer that I need to move the project along? Where I found my faults is not another’s. Growing team members and bringing on team members, you’re only going to be as good as the questions that you can bring up to them. If you can’t ask good questions, then they may think that they are giving you all the information you need. Since you didn’t ask the right question at the right time, and some of it may be on the novelty side where you haven’t learned it yet, but other parts, you’re not doing your homework. The better I get at questions, the more successful ourselves and our partners will be because then I can make sure that I’m laying out all the pieces and also bringing more to the project because I can think about other ways to add value.

What’s one of the best questions you ask an assistant or a new team member? In general, what’s something that’s going to help delegate your time and your energy? I know a lot of our readers are business owners, entrepreneurs, real estate owners. What are maybe 1 or 2 questions that are going to propel them forward?

Pili and I met in New York City. I had done a lot in the restaurant industry. I’ve opened a brewery and a restaurant. I worked at a big place. We’d have people come with the idea of, “We should do this.” The question would be, “That sounds like an awesome idea but I’m not doing anything. If you want to take it on, I support you. You get it done and then we’ll see how it turns out.” It’s putting people and empowering them to take the step on. Everybody has great ideas, but the circumstance means no one’s going to do it and no one’s going to take responsibility.

Empowering and putting it on them versus, “We have this vague notion that this might be something to do.” That’s not getting anyone anywhere. “You do that. I’m not a part of that. Emotionally, I support you. I give you the authority to go do this. Go lead and make that happen and report back and let’s talk if you need help along the way.”

It’s important because if you are going to grow a team, you need to be a manager of people’s best performance and you don’t want to be a task provider. If you’re a task provider, then every time they have something, they’re going to come to you and you’re going to provide. They’re going to go get it done, then come back to you and you’re never going to get outside of your growth pattern because you’re going to be stuck assigning tasks all day.

I absolutely have learned through the fire with that one. When did you become fascinated with helping others? You went from succeeding by yourself to educating people. What happened in that shift there? When did you become fascinated with reaching out, helping others, particularly in real estate wealth, and getting more passive or getting additional income coming in for them?

It’s always been a pattern. Growing up, I’ve always had an aptitude. I like to help. I like to see people through their process. We started getting a lot of questions about this. We started to meet up to give back. We said, “We’ve learned all this great stuff, we’ll start it.” This was the precursor for a lot of other things happening like events and others because people were looking for more. People can do things. Sometimes it’s them getting permission to do it. For some reason, they don’t have the permission in their mind to do it, but if I can stand here and say, “You want to buy ten units? I believe in you. Do you want to buy 50 units? I believe in you. Let’s create an actual process. What does that look like? Do you want to buy 50 units? Where is that? How much is that? How much loan do we need to get? How much money do we need to get? How many investor talks are we going to need?”

We can make it real. You hear this a lot about, “I want to get 1,000 units.” What does that mean? Is that going to solve your problems? Is that going to create generational wealth for you? Is that going to create cashflow? Is that going to be ego? What does that even mean to you? If you don’t have a meaning behind it, one, it’s not going to happen and two, you’re not going to be able to build an actual plan to get there. If it’s, “I want to get 50 units because I want to have cashflow to replace my income from my job that I still want to stay at because I love my job. If one day I get hit by a car or I want to step away from my job, I can make that choice.” let’s go after that plan.

You help people create the vision and give them permission to jump into that vision, but then give them the practical steps to achieve that and some accountability and some encouragement, which we always all need, which is good. Maybe give us an example and some of the services that you provide in your training or even a deal story that you that you’ve done that encapsulates a little bit of what you’ve been talking about. Let’s start with the deal story. Maybe talk about an apartment complex and the opportunity from start to finish. If you happen to have one that closed out and see what that looks like.

We’ve done three. I’ll talk about the smallest one because it was interesting. Generally, it was a 32-unit townhome project, smaller, but in a great area. The reason it got brought to us is that we have been positioned that we’ve gone in there and we’ve done what we say. What becomes important is that you’re not going to get the best properties on day one. The brokers are going to test you and put in front of you and see if you reply. Believe it or not, sometimes it’s half the battle. If someone sends you something, get back to them whether it works or not.

We’ve done this over a number of properties where they know we can close and they know what we’re going to do and what we’re going to say. We had this property that came off-market when the owner had passed away. It was a probate deal. We thought it was his fifth wife, but it ended up being a sixth wife who had the property. She didn’t want to keep it anymore. It was a little bit farther away from where she was. We came into this property and it was 90% occupied on paper, got it under contract, and went in there.

What had happened here is that by the time that we had gotten to inspections, which wasn’t long, the paperwork trail was old, so we were down to 72%. We went back and changed the story. We still like the product, 1985 townhome units, and attractable area. Starbucks is right down the road. We want to see how we can make this deal work. It was a win-win here because they had another 48-unit property, which we didn’t like, but we were able to create a scenario where our management company can take on all those assets.

There are so much content and information available that you can get lost in the mix of never starting. Click To Tweet

The third-party management company got properties based on ours where they were taking on the 44-unit and they’re taking on the 32-unit that we were going to buy. They were going in there and were able to reposition the seven vacant units. They got them occupied so I could keep my existing loan strategy. That was a big part. I was going to go get an agency loan. When they went from 98% down to 72%, that killed my opportunity to do that. We worked this back in. We’re able to get these units online, working with the lender where we had a relationship with the lender, get an exception to do a one month of the rent roll, and show that the property is occupied.

The owner had to come to the table to get this. They need to get out of this property because they need to go into those other properties. They didn’t have time to go fish around with someone who’s going to play games with them. We said, “We’ll get it done if we can do these.” They ended up coming to the table with $40,000 to clean up all the units that didn’t have deferred maintenance. We walked in to be able to get a loan and close the deal with it fully occupied.

Those seven units got rented at market rate, which proved our concept that we’re going to be able to get the market rate. They were repositioned by the other owner prior to our takeover. We walked into the deal with a stabilized cashflowing property from day one. We could go in there and make this a better property for anybody else. It was a safe haven for our investors because we’re able to even prove the strategy prior to buying.

It worked for the owner because the owner was able to still keep their timeline to be able to get money out to go take care of their other properties. It worked with our property management company because the property company got our property and also had the other 44 units. They were able to take on. I was able to get the kinds at scale because they had those 44 units and these 32 units and I’m able to have a maintenance guy that services my property and that property and split the difference for what they’re paying against for the maintenance person.

I love that story, a win-win for everybody involved, and looking beyond the challenges and how we can make this even a sweeter deal for everybody. I found that 75 units, sometimes 100 units for investors, that’s the part where some won’t go lower than that because of scale. If you can find properties that are nearby and/or add on, then you can get that property manager and/or maintenance person working all of the units, and then all of a sudden, you’re back into scale again. Is that where you’re still in? Are you able to sell it? What’s the plan there for disposition?

It’s been a huge home run. It’s cashflowing phenomenally from day one in value. We’ve already had an offer. I have a one-year blackout in a loan. We’ve already off marketed, had soft offers in the property that was well at our pro forma mark. The anticipation was, I had such a great loan on this property that I was aiming that I was going to stay in this for a while, but I have to always look at what’s going to be best for investors. If I can meet pro forma numbers well ahead of schedule, then for the investors, I’ll look at the plus-minus of selling this early.

Let’s dive into capital gains tax a little bit. Discuss your strategies for that. Maybe we can talk about either a different deal or this deal, but what is the strategy to defer the capital gains tax, either for your carried interest or your amount and/or for any of the investors? Walk us through how you help to mitigate some of those.

Looking at the whole pattern, we’ll do a cost seg study. We purchased a 58-unit that we had the study done. Why has that study done? Based on working with accounting to make sure we’re picking the best philosophy of taking the 5, 15-year categories and whether we’re going to go up there and catch them in year one or other. For that point, we’ll look at that, make the best decision for the property based on our whole pattern and then put that into play for each property. If it’s something that’s going to be a quick turn, then we’re going to be into it for a year. We’re not going to go through that because it’s a lot of up and go to recapture that in the end. We’re always making sure that we’re looking at these timelines to help investors because we want this as part of the strategy. Plus, we’ll talk with investors. This is one of the main reasons that they have deals. They may be active flippers or active wholesalers in other markets and they’re getting crushed on capital gains so they’re looking at other ways to offset that. They’ll come in with us on investments so they can have the benefit of a cost seg study.

CGT 16 | Passive Income Stream

Passive Income Stream: You can do everything on your side, but you can’t always be prepared for how everybody else is reacting to it.

 

What Jason is referring to, for our readers, is you have 15, 10, 7, 5 years and sometimes if you’re going to be holding for a short period of time, that cost segregation cannot be good because you’re not giving time for the schedule to catch up from what you’ve already received. Therefore, it could be a higher tax. On average, we find 3 to 5 years is a good hold period if you’re going to do a cost seg and then you’re going to be able to take full advantage of that without getting all of the negative consequences, which is the recapture.

All that being said, it’s important to work with a syndicator like Jason who’s going to walk through that, have a timeline in place, and make sure you’re maximizing your capital gains tax deferral options. When you do sell though, are you guys doing a 1031 exchange? Are you paying the income out or the gains out to everybody? Walk us through that next step for either investing with a next deal or doing a 1031 or cashing out and everyone paying the tax.

It’s been hard to align, to put that in where we’re going to have a property where everybody can split off and go into another property with us based on that. It doesn’t work out in the perfect world. In the perfect world, we could take this and roll 1 to 1 to 1. Generally, we’re going to do a cash-out based on the allocation there. However, if the opportunity comes up, we would use that opportunity, but we have to look at what’s going to be out there.

Another reason why a lot of people aren’t selling is that they don’t have a good way to replace their income with that property with something. They’re going to have to downgrade or take a step down. Their choice is either to take the tax hit or take a property that’s not performing like this. They’d rather hold on to this. There are opportunities that you can go and take some other things they can give you, these points of rolling into those other opportunities but that’s a safe haven. That’s not filling the role if people want to still be active as an operator.

Every tax strategy has its own pros and cons, but it’s particularly tough, especially here in California, probably for you too on the East Coast, to find a lot of deals that make a lot of sense. Meaning the cashflow, the intrinsic value, and the value-add opportunity and the price per square foot, everything seems to be high priced, especially in multifamily. Not saying you can’t find it in certain places and certain cities. You can always find a deal, but it’s particularly difficult, especially if you’re at a 1031 exchange to do that.

I had a client, we sold for them a $1.9 million multifamily property. We were looking at a $4.3 million up the leg. The challenge became that there was too much deferred maintenance inside the deal. What was a 4.5 cap quickly became a four cap. Interest rates were about 4%. He’s going and borrowing and buying at the same cap rate. “I feel like I’m overpaying. I’m taking all this debt. There’s this deferred maintenance that could be $50,000. It could be $150,000 and that kills my cashflow. Why am I doing this?” We said, “Exactly. Maybe we should look at the alternative.” They end up doing a Deferred Sales Trust and they’re happy. They’re debt-free and tax-deferred.

You want to look at the pros and cons and figure out, “Am I buying this based upon the intrinsic value of the real estate, or am I buying it to defer the tax? Am I doing this deal to save this amount of money or am I doing it because this makes sense?” This is part of why a lot of people got hurt in the 2008 run-up, before the crash. They were buying and selling via 1031 exchanges and overpaid for properties. They love to be a seller, but they hate to be a buyer. They end up feeling forced and trapped and taking on more debt, which is the second challenge with the 1031. It’s the equal or greater value, which often means equal or greater debt.

The debt is not your friend, especially if you’re overpaying and you don’t have a clear exit strategy to add value and do that forced appreciation. It becomes the perfect storm for people to get hurt. You want to be cautious in this marketplace, not to overpay. That being said, look at all your options and also look at cost seg as a way to offset as well. We mentioned a scenario where it didn’t work out well for the capital gains tax. In other words, what was the biggest mistake you or a partner or a client made over the years in regard to capital gains tax deferral?

We haven’t had a directly affected result of it that’s been on our side, but we have been in a position where we faced other ownerships. We’re closing on another property that was supposed to happen. The seller was working with an intermediary that was going to roll them into a 1031. The timeline almost blew up the deal because we’re ready to close and unfortunately, through some scenario, the intermediary had some family issues, was out of town, the paperwork wasn’t prepared. Even though we had precision that we were going to close at this timeline, it seemed everybody was surprised by it. The paperwork wasn’t ready. The intermediary wasn’t able to be reached. From there, it created a scenario where we had to hang in there, had some additional cost in there, but we had a way. What we had in there isn’t worth it for the timeline, but it did almost blow up the deal. We got it closed, but it was one of those points. You can do everything on your side, but you can’t always be prepared for how everybody else is reacting to it as well.

People can do things. Sometimes, it's just them getting permission to do it. Click To Tweet

What was your backup plan? Imagine you were in a 1031 and you were depending upon that and they didn’t deliver because they didn’t have their 1031 for whatever reason. Seller doesn’t deal. The lender doesn’t lend. Do you have a backup plan? What would you have done there?

The backup plan is, how can I assist this guy? The plan was, I had another intermediary who I had on the sideline that could have helped and got this done quickly. As you know, if the scenario is set up, it doesn’t take long to get the paperwork done. Because this gentleman had a family emergency or struggle, whatever happened that called him out from this that delayed it, we had someone that could step in and get this done quickly. One, I had my connections. Two, I had a local law firm that had another one. We had ways to get this done. It’s getting the owner on board saying okay to do this and he was ready. If it got to that point and it was going to create a scenario where he’s going to blow things up, then we would have gotten in that route. Luckily, the gentleman who was having the issue came back in the picture, got it was done quickly and we’re at the close.

Talk a little bit about how your services help other business professionals, some of the best people that you work with. Maybe they’re financial advisors or residential luxury realtors. In other words, people who help high net worth individuals. How did those folks work with you to best serve the client?

For best serving the client, we have to understand what the client needs. The point is it’s not so much helping me. The last scenario is that when we’re looking to bring investors onto a project, it’s not for us raising money. We don’t do that once we have a project on the contract. We’re constantly talking with people to see how we can help them. For me to speak to an investor, I may think I had the best opportunity in the world but that’s not fitting with that investor’s needs, it’s all for naught. I could talk to an investor and they may be looking for cashflow, depreciation, portfolio diversification, or some form of tax benefits. They may just like me, but if I don’t understand what is the scenario that I can help them with, then I can’t bring them opportunities that are going to align with their focus.

CGT 16 | Passive Income Stream

Passive Income Stream: Keep following great podcasts. There’s so much available info out there that you do not need to have something that you can trackback to because it’s all right there on Google.

 

Communicating and making sure you’re putting the client first and then creating some plan in your head with this ongoing dialogue. It’s not just a strategy or a deal. It’s the ongoing relationship and it’s building that team around you and working with those professionals to make sure you’re achieving your goals. That I can definitely attest to. Are you ready for the lightning round? We’ll finish our last question.

Let’s do it.

The best book you’ve read in the past.

Go-Giver.

The best podcast you’re listening to.

I’m always keeping an open agenda. David Meltzer has a business podcast, The Business Playbook. It has been interesting to listen to.

Best city or two cities to invest in for multifamily the next 2 to 5 years.

It’s got to align with your focus and your goals if you’re going to bigger projects or go into smaller projects. There are a number of good markets out there. I would be bullish on the southeast. I’d be bullish on North Carolina, South Carolina, Georgia to Florida, especially if I was looking at the I-4 corridor between Tampa and Orlando. You look at the metrics and everything stands. If you’re on the West Coast areas in Arizona, that pushes those metrics as well. Phoenix has a high demand for units and is behind the eight balls on being able to upkeep with bringing those units online another attractive resource.

Last question and this is my and our readers’ most favorite question. It centers on back to you, Jason. How do you stay centered in your values and then encouraged to reach new heights or new goals? You’ve accomplished a lot, learned a lot, and given a lot. You’re out there making it happen. How do you stay centered in your values? Second, to that, how do you stay encouraged to charge forward to reach new goals and new heights?

I start my day with a morning routine and I feel that that sets my day up. Having that gives me the space to get ahead of it. Three young kids, a lot happening with our business that if I started the day in chaos, my day was going to be chaos. To be able to get my mind the ability to think and to reflect on where I am keeping me on board for our path and our progress. When we need to pivot, it gives me the opportunity to think about the options and what we need to do to continue to take it forward.

If you are going to grow a team, you need to be a manager of people's best performance. You don't want to be just a task provider. Click To Tweet

How many kids do you have?

Three kids.

One hundred percent of work and joy is the way I put it. I have five kids myself. It’s nonstop. It’s the best type of work but it’s absolute joy too. I want to thank you for being here, Jason. Any last thoughts for the readers? Also, remind them too where they can find you.

I appreciate that. You could find me at YarusiHoldings.com. If you want to go across social media channels, find me on Instagram, @JasonYarusi. Follow me there and see about our multifamily, all the running I do, and the workout stuff. I would keep it there. Keep following great podcasts. There’s so much available info out there that you do not need to have something that you can trackback to because it’s all right there on Google or on the podcast. Follow a show like Brett’s and you can get a ton of great info.

Thanks, Jason, for the kind words. I want to thank our readers for reading Capital Gains Tax Solutions. As always, we believe in most high net worth individuals and those who help them struggle with clarifying their capital gains tax deferral options. Not having a clear plan is the enemy and having a proven tax deferral strategy is the best way for you to create and preserve your wealth. Until next time, go out there and make some great choices and some great investments and take action on what you learned. Thank you so much for reading.

CGT 16 | Passive Income Stream

The Go-Giver, Expanded Edition: A Little Story About a Powerful Business Idea

Focus is key. Picking your business model or your business plan and focusing on that and diving deep and not getting distracted with a shiny object. I know that is something that, in the past, is always a temptation. You got to stay focused. I like the fact that he was patiently aggressive, doing the work necessary to achieve his goals, running 100 miles, real estate syndications, the podcast, shifting from single-family rentals, flips, and fixes to multifamily. Also, realizing that it takes hiring or partnering with or finding the right partners, property management, contractors, and property, building a team that’s going to help you achieve your goals. Working with others well and making sure you’re being that good team member for them as well.

Also, as a reminder, having a backup plan is important in case you have a failed 1031 exchange. Most 1031 exchanges, you’re in the three-property identification and I would say 85% at least that I’ve worked with us that. That being said, having a Deferred Sales Trust to help you save a failed 1031 exchange, it doesn’t take one of your three positions. I was leading him a little bit on that question, but I wanted you guys to learn that there wasn’t a true backup plan. They had a different QI company lined up to help make that work.

In his scenario, it wasn’t necessarily they failed a 1031 exchange, but it is important. Once they’re with the QI Company, you want to be with the one who’s going to allow you to have a backup plan for a failed 1031 exchange and has dealt with Deferred Sales Trust. The neat part is the Deferred Sales Trust doesn’t take any of your three positions. We highly encourage you if you’re going to do a 1031, make sure you have a true backup plan that doesn’t take up any of your positions, doesn’t affect your 1031 at all. In case this seller doesn’t deal or the bank doesn’t lend, you’re not stuck with the tax bill. You can default into the Deferred Sales Trust. It truly is an amazing tool for a failed 1031 exchange. Isn’t that cool?

Keep that in mind as you’re out there navigating the 1031 deep glasses of water of challenges that you’re faced with. That’s it for the notes. I appreciate your guys reading. It means a lot to me if you could share this with any friends or family who is looking to build their wealth in real estate, but also defer taxes when they sell their highly appreciated property, business, primary home, investment real estate. I look forward to having you next time. Thank you so much.

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About Jason Yarusi

CGT 16 | Passive Income StreamJason and Pili are active Real Estate Syndicators and Real Estate Investors. In 2016 they founded Yarusi Holdings, a multifamily investment firm. They are General Partners on over 800 units with 450 units under management. The firm repositions properties through operational efficiencies, moderate to extensive renovations and complete rebranding.

Hosts of The Jason and Pili Project. A project to serve those looking to lead a Fit, Rich Life.
Jason and Pili are founders of the New Jersey Multifamily Foundation Club with over 2,200 members that focuses on Real Estate Syndication and Multifamily Investing.
Jason has started and exited multiple businesses in the past 15 years and the family construction business has a niche industry position in raising and moving structures. The company has elevated over 2,000 homes in the last 7 years alone.
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