Maximize Your Investment Returns with This Tax-Deferred Strategy

You can make loans to yourself, you can make loans to businesses, you can do all kinds of things in a family foundation. You just need to make sure that you follow the rules so that you don't have the IRS breathing down your neck.

Welcome to Truly Passive Income. I'm Neal Henderson.

And I'm Clint Harris.

Shannon. Rob Nett. Welcome to Truly Passive Income, sir. How are you?

Good, guys, thanks for having me on.

Absolutely. So, first question. You've got over 27 years in the real estate industry.

Could you share a pivotal moment or a project that significantly shaped your investment strategy?

Well, you know, when I say I've got 27 years, I really have more than that when you count my indentured servitude to my parents, who My father was a real estate developer. My mother was a third generation real estate broker. I have my license, my son has his. So there's five generations of real estate in our family.

But I truly remember my very first deal that I did because of the impact it had on me and not in a good way. I was working on a project for my dad.

I was building a warehouse, and next door to the project was a little old lady who lived in a house in an industrial area that was about three acres.

She had a mentally handicapped son and she was trying to get out of this industrial area, get into a home where he could live after she was gone and trying to figure this out.

And I was also talking to my crane operator on the site, and he was looking for a place, you know, with an old house on it, three acres maybe that he could park all his equipment and run his office out of.

So I put this deal together and guys, I got to tell you, I didn't use my last $500 to tie this deal up back when that was what an earnest money was because that would insinuate that I had another $500. I was newly married. We just bought a one bedroom condo. I had no money and I used the only 500 bucks I had to tie this deal up.

Anyway, the deal was successful. I made more than I made working for my dad that year. And I thought, man, real estate is phenomenal.

About nine months later, Uncle Sam came knocking on my door and said, hey, Mr. Rob Nett, we understand you made $80,000 and we'd like our Share of that.

And since that was an active income to you, we'd like a really big chunk of it.

And it was at that point I was 20 years old and I realized that any idiot could make money, but protecting it was really going to be my life's journey in how do you get Uncle Sam out of your back pocket so that you can utilize your funds to grow them and do that in a tax efficient way that made sense so that your money would grow faster? Because if you're constantly cutting off 25, 35% of what you made and giving it away, I love all the things that people do.

I hate what the government does with my money. And if I can be in control of that, I will create much better results. And so that's really where I have spent a majority of my career.

While I'm in the industrial and the multifamily space for development and for value add, I'm really in the tax space because that's what gets my investors a higher rate of return than anything else I can do is by being able to help them eliminate that 20 to 30% in taxes that they would otherwise owe.

That's so impactful, especially in real estate. People don't realize you've got a partner in every deal that you do.

His name's Uncle Sam and he's going to come after his portion one way or the other and he gets his first. So you do all kinds of development. You've done multifamily office buildings, city halls, police stations, schools, industrial, mini storage.

Are there overlapping tax strategies you use across the board that give you advantages across different asset classes? Or is there a specific strategy that you hone in on with your investors?

Well, you know, we hear everybody talk about strategies, right? A tax strategy here, depreciation there. There's a couple levers you can pull in the actual real estate.

But I really think that it has more to do with form over function. And what I mean by that is setting your entities up properly, making sure that you're taking advantage of the way to set things up.

There are things that you can do in an LLC vs. A C corp vs. An S corp. There's different ways to set that up.

And I'll give you a perfect example that has nothing to do with real estate, but everything to do with real estate. I recently was talking with my parents and they had sold their primary residence. They'd been there for 12 years.

They bought it at the bottom of the market. They, they sold it at the top of the market and they made A million dollars.

And they came and they were like, man, you know, we just had to pay our taxes on this. That really sucked. And I go, guys, do you remember what I told you? And they go, no. What was it that you said?

And I said, you guys made a million dollars and you were only allowed a $500,000 exemption.

But if you would have opened a family foundation, a nonprofit, you could have donated that other 500,000, because you can donate a large portion of your income that you make every year into a family foundation that is yours to completely control. That foundation can buy real estate. That foundation can buy gold and silver. It can buy stocks, it can loan money. It can do all the things.

And this is really a Bill and Melinda Gates tactic, a Warren Buffett tactic. But here you're able to protect that from $100,000 in capital gains tax just by how you do what you do.

That then allows you to invest in real estate, right? And so there's a lot of things there that people look at it and they go, well, you know, I need to invest in real estate because of the tax benefits.

And you are 100% correct.

But there is so much more that goes into the actual form of how you do it and why you do it to get you to that place that allows you to get yourself to a zero tax bill that now allows you to invest 100% of that and still be in complete control of it.

Now, let me ask a clarifying question, because this is totally new to me. Are you able to benefit from that family foundation?

Well, absolutely. If you look at the board members of Bill and Melinda Gates, their children are on there.

You can take distributions from that foundation, you can dissolve that foundation at some point. The proceeds are taxable, but you've allowed it to grow tax free.

You have to make a certain, I believe it's 5% of the value of the foundation has to be a donation every year. But I haven't met too many people that aren't benevolent anyway, that now they're just making it out of a foundation.

But what it literally does is it stops that tax bill from coming due. Now, if you think about this, if I give you $400,000 to invest versus $500,000 to invest, how long does it take you to catch up to the 500,000?

With only 400, you've got to do really well for several years just to get back to 500 if the 500 does nothing.

But since you can do all the same things in a family foundation, you can employ your children you can employ yourself, you can take benefit from that as a director of that foundation. But a lot of people don't think about that because they go, well, I don't have $10 million to start a family foundation with.

Yes, but do you have 200,000? Do you have 300,000? Are you taking something that you could put into the foundation? Let's say that somebody wants to.

I had this question just an hour ago with a doctor and he's got a lot of stocks that he wants to liquidate. And I said, whoa, whoa, don't liquidate the stocks. That's going to cause a capital gains event to you. Donate the stocks to the foundation.

There will be two things that will happen there. Number one, you're going to donate them at their highly appreciated amount. When you make that donation, that's going to come off of your income.

You have a basis in there that you won't have to recognize. Thereby putting all the profits and the proceeds into the family foundation.

The family foundation then sells those and buys real estate with them in a non taxed event. It's just that simple.

We jumped right into the deep end here.

Oh yeah, this is okay. This is fantastic. So you can pay yourself a salary out of the foundation. Obviously that's taxable. You can pay your kids out of the foundation.

That's going to be any income coming out as taxable. But it's perfectly legal for you to compensate yourself that way. That's going to be taxable.

Any of the capital that's in the foundation is going to grow tax free if you ever dissolve the foundation and that's all going to become taxable, but only the amount that's in there, not on the growth that you've had along the way. What about from a legacy standpoint? Can you change the board members and change it so that, you know, I started a family foundation.

Can that foundation transfer to my kids at some point?

And is the idea that one day you're going to close it and you're going to have a capital event or is the idea that it can be a legacy play that continues to pass forward?

Well, when I set mine up, I set it up to be a legacy. There are rules and I am not an accountant. I do play one on podcasts.

But I would suggest that you guess that with your accountant about this, because there's rules as far as what percentage of the value of the foundation you can take as compensation. Right?

But when you're looking at that, and that is compounding tax free, let's say that you put in a half a million dollars and I was going to invest $400,000 after taxes into an investment with you guys who was going to pay 7% cash on cash. I do the same thing in the foundation.

It's now going to compound tax free, which Warren Buffett says is the eighth wonder of the world, or I could take it. And now I've got to find something else to offset my ability to negate that income in the foundation. It's doing that.

And most investors that I know are in that era of we want to create and accumulate when we get to 65 or 70, when we want to retire now we're going to deal with a different segment of our life where taxes are lower. Everything is about that now. We can use some of those other tactics with bonus depreciation and things like that.

But I think that a lot of people miss out on the fact that anytime you can get that tax bill to zero allows you 30% growth because you're not paying Uncle Sam. Right.

So it doesn't really matter what I do for my investors, year one, year two, I can't beat the growth of just getting them a zero tax bill on that money. And that, I think is the biggest thing that people have to look at. So let's say that we put the 300 or the half a million dollars in there.

We were getting a 7% cash on cash. That's all compounding in there. We make our donations to our church, our arts departments, whatever we want to do, we make those donations.

We're still way ahead of the game. And that money is continuing to grow. You exit the deal, you don't have to find somewhere else to put the money. You don't need bonus depreciation.

You don't need any of those things because you're in a nonprofit. So as that continues to grow, it will grow to a point that at some point you will pay taxes on it.

At the end of the game, if you dissolve the foundation or you let that grow like the Rockefellers did, throw in some other things of, hey, let's put life insurance paid for by the nonprofit on the directors so that when you reach the end of your life, you just added $3 million tax free to your foundation, that's going to put your kids in a better place to receive the kind of monthly income that you're wanting for them and make it really more of a legacy tool.

This is fantastic. Oh, man. We get this like a three hour episode.

Yeah, yeah.

Turn this into.

So Shannon, I was going to kind of wrap it up. Do you have a follow up question?

You better not.

No, no. My question is, obviously, we are not CPAs. We're not lawyers, we're not tax strategists, as you said. We just play one on podcasts.

Is there a specific type of CPA or is there a CPA that you have used that is familiar with this kind of strategy?

I'm glad you brought that up because. And I'm actually going to come to the defense of CPAs everywhere. Okay, so I'm ready for the hate mail.

But most people expect more from their CPA than their CPA really is designed to do. Accountants, most people visit their accountant in February. They say, oh my gosh, save me, I had a really good year. That's not fair, right?

The cake's already baked. They're just decorating it. At this point, what you need is a tax strategist. You need somebody that is all about how to set up prior to your end.

And most CPA firms are not set up that way. I've got a great connection with a great group of people that they have two sides to the house.

They've got the strategy part and then they've got the accounting part. They can help you.

If all you want is the formation, the entities, all of the structures that then allow you to continue to use your own cpa, that's perfectly fine.

But you really, really need a strategist, not just a cpa, because a cpa, they're going to organize your receipts, they're going to put them in the boxes, they're going to fill out the forms, they're going to get you through that process. But they're not necessarily your creative thinkers, if you will.

They're very organized people and they don't tend to get outside of that and get very creative to come up with the strategy.

Then you go to a strategist, comes up with what you need, you take it back to your accountant, your accountant will read it and go, yeah, we can do that. And then the urge to choke them really becomes strong because you're like, why didn't you tell me about this?

And they will say to you what I will say to you. It's not their job, so you need to find that other key component.

Great advice there. Let me walk through a scenario with you. I've got 14 Airbnb properties at the beach locally where we live. One of them is a quadplex. It's four units.

I bought it three years ago for 550, and I'm selling it now, closing in May at 1.2. So in theory, if all this was done ahead of time and I had a family foundation set up, I can donate that property to the family foundation.

The family foundation is going to take that property and at 1.2, liquidate that property. All the income from that sale goes into the family foundation.

That's going to be tax free, and that can continue to compound, and I can invest that into other deals moving forward.

Well, here's the great news. Because tax years run from January 1st to December 31st, you still have time to do everything you just described.

So you can still get that done very, very easily in that time period and then sell just like you want to. You can look at how much you made that year. You can meet the criteria of how that happens.

The other thing that you could do is you could look at this and go, hey, you know what I'm going to do next year, I'm going to donate one of my houses to the family foundation, and I'm going to put it in there at a value that I want, but I still want to keep it. So it doesn't always predicate you having to sell it. So in this particular instance, you could donate that to the Family foundation at 1.2.

Consider that $600,000 as a write off to you because Your basis is 500 and still own the property on both sides.

So I just got a $600,000 and.

You just got a $600,000 tax credit? Yes.

You just wound him up.

No, because you look at it, what did the foundation get? The property at the foundation has a basis in the property, but that's irrelevant to the foundation.

The basis is relevant to you because the foundation received a tax donation. They write a receipt for the tax donation and they're done.

So your accountant is going to look at you and go, you only have a basis of $300,000 in this thing. Well, that's even better for a donation to a foundation, because now you're donating $900,000 to the foundation.

And you want to be careful because there are limits as to how much you can donate to a foundation every single year. But if you abide within that and talk with your tax professional, they'll walk you through that.

So you literally could take the amount of your previous ten 31s and basically be donating that amount, that basis, to a family.

You're not donating the basis. That's the one thing you're going to keep. Your accountant is going to say to you, say, hey, you've got $300,000 basis in this. You donate 1.2.

You're getting credit for the $1.2 million donation, but you're also going to have a $300,000 basis. So you really only made a $900,000 donation. Right.

Correct. But what you need to look at is that $1.2 million donation only cost you 300 grand. Cause that's all the basis you have in this thing. Right.

The IRS is still gonna look at it and say you made a $1,200,000 donation. So you're gonna take that donation against your active income. Let's say you're at 37% or 40%. Cause you guys are in New Jersey. Right? 40%.

That's going to look like a $550,000 real tax dollars you will not have to send in to the IRS. And you only paid $300,000 for it? I would assume so. Right. You're going to want to make sure that. You're going to want to check.

But those are the kind of things that you could look at. And this is why you just go back and look at what Warren Buffett did, what Bill and Melinda Gates did.

When they're making these donations to family foundations, they're doing that. And then the family foundation is selling the Stock, Stock.

This conversation has gone in a completely different direction.

When I talked to someone that's got your level of development, chops and syndication, I figured we were going to be talking about a lot of development, and frankly.

And we can. We can. Let's shift gears.

No.

Oh, no.

There's no.

No.

This game.

No, no.

Stay on this level.

Yeah, you got a dog with a bone now, and he's not going to let go of it.

You should come with a warning label. Don't talk tax unless you want to get the rest of the hour.

Yeah. All right. So, Shannon, this all sounds fantastic. It sounds magical. Okay, first question is, what is the cost of setting up a foundation?

And then two, what are the bad parts of this?

Well, I mean, you know, you can find the bad in anything. Right. I've got family members that you could give them a new Mercedes and they would whine because it's the wrong color.

So I think the reality is you need to be working with qualified professionals. Right.

I know that early in my career, I made mistakes because I heard information like this and I did not get with the qualified professional and ferret out all the steps and make sure that I followed all the steps. Like I said.

If you guys want to shoot me an email, I can connect you with my professionals and they'll create a roadmap for you that will make sure that you make positive. Because if you violate those steps, that can be very bad.

But you want to make sure that you're exploring it and then you're wanting to make sure that it works long term. It's not something where, you know, you can throw the money in and then three years later, you can pull the money back out. Right.

You can make loans to yourself, you can make loans to businesses. You can do all kinds of things in a family foundation.

You just need to make sure that you follow the rules so that you don't have the IRS breathing down your neck.

Got it? Yeah. I think this is one of those things where the only way to do this is to dot all the eyes, cross all the T's and get it right.

And this is a who, not how situation. This is not a how do I do this? How do I follow these rules? How do I find out what type of foundation this is?

A who do I know that can connect me with the right professional that can do this in a way with integrity and clarity and making sure you're not exposing yourself or creating future problems.

100%.

Yeah, absolutely. Wow. I'm sorry. Yeah. I think you mentioned It. What did you say the cost is to get started?

About 10 grand.

About 10 grand. Timeline takes what, months, weeks?

The biggest thing is you've got to file the letter to get the nonprofit recognized, the foundation recognized. There is some. I think when we did ours, I think we filed it thinking we weren't going to have enough time to get a response by the end of the year.

But that was okay because we filed it. I believe we did get a response by the end of the year.

So I don't know the true answer to that, but it's always something that, again, planning is the best way to do it.

You're going to be able to, in your situation, you're going to be able to donate the proceeds, but you're not going to be able to donate the full amount.

Where if you had planned a little bit better, you could donate the whole building into the nonprofit, and the nonprofit could then sell it for full realization of all the capital while you were just able to, you know, offset profits. So there is some planning there that can help you, but it's not a difficult process, especially with the right people. Very good point.

We ready to shift gears?

No, I don't think so.

One more question.

Go for it.

What about a minimal amount? Like, is this worth somebody? Starting with a small transaction, you have a brrrr property or something like that, you're going to make $50,000.

Or like, at what point is it worth the. To create velocity behind that money?

You know, again, that becomes a question for the person, right? So if you're looking at it going, hey, I got 50 grand, I'm going to wipe off 20% of this.

So I'm going to write a check for 10 grand so I can pay for the family foundation. I can use the money on myself, or I can give the money to Uncle Sam where they're going to piss it away. Right.

My version of that story would be, absolutely, I would do it even if I had to put $1,000 with it, because now I have something set up and I have something in my quiver that I can use moving forward multiple times again and again. Some people may look at it and go, man, all the bookkeeping, everything else, it's going to cost, it's maybe not worth it. And I respect that.

For me, I'd actually spend two grand to make sure Uncle Sam didn't get eight.

From a vehicle standpoint, like as a financial vehicle, if that's the way that you're choosing to use this is you're basically doing this one time and then you're utilizing that throughout the rest of your real estate investing career. There's no reason to set up multiple foundations.

You have one, you can add people to it or take people off as the board and then just use that as your vehicle moving forward.

That's correct, yeah. Because the reality is, I mean, most of us that are investors are not looking to live off of the principle at any point ever.

We are investing with excess cash. We are out of that investment wanting a return.

So if you can take 15% of the value or 7 or 8% of the value of the foundation as a salary, aren't you getting the same thing?

Is there an ongoing CPA and legal fees annually?

Yeah, I mean, there's definitely costs involved, but you've got ongoing costs with your LLCs and meaning minutes and all that kind of stuff anyway. And again, I have people that take care of that. So I don't know that it's that arduous. It doesn't seem to cost me any more. Maintain that.

And then remind me what the percentage you said that has to go to charitable giving.

I believe it's 5% annually. So if you've got a million dollars in there, you've got to give away, you know, you've got to make donations of $50,000.

But I think, I mean, most of the people that I've met that are doing very well in the investment space have an abundance mindset and are very charitable people. Anyway, it just comes from what side of the wallet do you make those donations out of?

Right. I mean, you're still not going to touch the principal even giving away that much per year if you're good at what you do. So great.

All right, Neil, I give you permission to change the direction of the conversation. I've had my curiosity peaked and fulfilled enough for now. All right.

You come from a development background. Is that strictly what you do? Pretty much. You just do development.

That is the majority of what we get accomplished in our real estate experience. We develop large scale multifamily and industrial properties. We are the original value add. We take the sticks and stones.

We're currently building an industrial product in Florida. We're taking a $5 million building, we're adding the tenant to it at completion, making it worth about six and a half million dollars.

We're getting a decent refinance on that and we're getting cash flow. We're in brand new products. We've got 10 year lease on that particular asset with 3% rent bumps.

So we're in a really, really good spot on that triple net lease. And when you look at, you know, lately we've seen a lot, you know, 18, 19, 20, 21, you could raise rents on anything, right?

We've kind of come to the top of where rents can be raised on D and C and even B minus properties.

When you look at nationwide what you can get or what tenants are contributing for their income to rent, the highest percentage is coming out of the D properties and that subsides as you go into the A properties.

So the last stat that I saw, tenants in an A plus property or an A minus property are contributing somewhere between 22 and 27% of their income to rent. That's a choice. When you look at people that are in the D properties, they were 35 to 42%. They don't have any more blood left in that turnip.

So when we're developing out A class brand new properties, we're staying in that place, we're creating brand new, we've got the latest and greatest amenities, we've got all the WI fi and I mean the zoom rooms and we've got everything like that in our clubhouses. So we're, we're of the highest demand and we're mostly dealing with a category of people that have more disposable income.

So continuing to be able to raise rents in those areas isn't as hard. And we're not seeing the collections rise in that genre as much as we are in C and D properties.

How do you balance the high potential that you get with development projects with the risks involved, especially considering, I assume you're bringing in investors. Correct.

I think that there are three types of investors. There's those that, you know, everybody comes to you and says, hey, I want cash flow. Right? That's what they're all programmed to think is cash flow.

But you've got the, I would call them the younger investors, the 20 to 35 year old investors that really all they need is appreciation. They have 50 grand, they have 100 grand, they need that to turn into $5 million at some point and they need appreciation.

Then you've got the 35 to 55, 60 year old investor that has really hit their stride in their business. And they have tax problems. And so if you can solve their tax problems, you're doing everything for them that they could really get.

And so you need to look at tax conscious investments. And then the last investor is the, they're at the retirement place, they have enough capital in a pile, they just want to return on that capital.

And so they are looking for true cash flow.

And so we look to talk with the appreciation investors about development because it does have a higher risk depending on who you're working with, what their track record is, how many times they've done this, what markets you're in. All of those things should be considered because real estate is, does have risks involved and then you're able to.

What we typically do is we transact between entities. We've got our appreciation investors. They get it built, they get it full, they get it stabilized.

And then oftentimes if the numbers work and everybody's happy with it, our cash flow investors look to buy that. There's also a 45L program that is a tax deduction for developers only on new product based on efficiency of the new product being built.

So there's tax deductions that can come with those that help offset some of the taxes that happen.

Because it is purely an appreciation play, we also set up when we're exiting one deal, we've usually got another deal so that we can look to defer taxes for our investors. But that's really kind of how we look at it.

So we really don't like to get people that are looking for cash flow involved in development deals because there's not cash flow during the development deal. It's purely an appreciation play that gets you higher than normal returns.

Does have a bit of risk to it, but again that depends on the track record of who you're partnering with.

Are you doing that with individual deals or do you like as a 506C or do you have funds set up with those different investors that they're transacting back and forth forth between those funds?

No, we do individual syndications. We open all of our deals as 506 Bs. We have a lot of 506 B investors.

Once that is, we've got everybody in that wants to get in, then we go to the 506C and advertise if we need to find further funds. But then that entity has. In our ppm, we spell out very clearly what the plan is for this development. This is what we're going to do.

This is what we think we're going to be for duration. This is our exit point, this is how it's going to function. Right.

And so all of that is spelled out that's very clear that hey, this is probably a shorter, you know, 30 to 42 month investment. These are the kind of returns we're looking for. This is how we're going to see the value of the property, appreciate this is what's going to happen.

I love that. Yeah, we do the same thing. A lot of our projects originally were just small projects. We're picking up a Kmart for 1.5 million.

You don't need to generally solicit for that.

So we started off as 506B with all of our deals, and now we do 506B, get those people in there that want to be a part of it, and then we convert and do that rollover. Because that general solicitation is important, especially when you're doing big deals as large as the ones that you're doing now.

You mentioned a deal in Florida. Are you guys nationwide? Like, how are you pick your areas? How do you pick your assets?

Are you listening to the market or because you're a developer, do you just have that room for forced appreciation and you can pretty much do whatever you want, wherever you want?

No, we definitely listen to the market. And, you know, one of the things that we look at that I think is a little bit different take than most.

Most people look at the market and they go, hey, I really like Phoenix, Arizona, because, you know, people are moving to Phoenix. And that's true. Right.

But I think the biggest thing that people are missing in their thought process is what is happening to the wage growth in that area.

You know, I hear a lot of people love Kansas City and they love Memphis and they love this because there's great cash flow, and that's true, but there's no wage growth. So how are you going to raise rents in two years, three years, four years in a place like Memphis when they don't have wage growth there?

So we look at places like Raleigh, North Carolina, we look at places like Florida that are experiencing great wage growth. Boise, Idaho, we're getting phenomenal wage growth here. Right?

Because what I want to do is I want to raise rents because that makes my asset worth more money.

And if I'm going into an area that may produce a better than normal cash flow, but I don't have wage growth that's on par, at least with the nation, let alone exceeding it, then that means that I'm going to be stagnant in my rent, means I'm going to be stagnant in my price. And let's just be honest, the biggest amount of money that we make in real estate investment is not in the cash on cash. It's in the sale.

It's at the transaction where the asset has leveraged through 60 to 70% bank debt and has now gone up 20 to 30% in value because the rents have appreciated.

You know, that's one of the things I don't think people focus enough on.

It's a really unique metric that you brought up is that, you know, we focus on population growth or residential density, but nobody really talks about wage growth. And you bring up a really good point. Wage growth is probably one of your top indicators for future appreciation.

You're going to have forced appreciation from, you know, swinging the hammer in the properties, but you're going to have natural appreciation in the market as well. And you can speculate as to what that's going to be.

But obviously the areas that have the highest wage growth are going to have the more consumer spending in areas and increased rents, increased net operating income, probably compressed cap rates as a result of that. So massive value add using wage growth as a metric. That's brilliant. That's a good nugget.

Well, you look at it, let's talk about demand. When you're looking at somebody that is, they don't like where they're living, right? They're living in New Mexico.

I don't know, I'm not picking on New Mexico if you live there. But they're looking at it going, I'm never going to get ahead here.

I need to move somewhere else that has higher wages to start with and has the ability for me to earn more money in the future. You're also seeing a bigger demand of people. So now you've got the two biggest factors you need is supply and demand and the ability to raise rents.

You've got both of those in those kind of markets.

So really there's nine markets across the United States that we're really even willing to look at because otherwise we get shiny object syndrome and we see great deals everywhere. But without those key factors of wage growth, you know, it's just like, let's take Texas.

We did a deal in Houston, but we didn't do a multifamily deal in Houston because I didn't feel that there was enough wage growth in Houston. Houston is a very blue collar town.

It's got a very strong industrial presence and industrial is going to do very well there for a long time in my opinion.

And so because of that, because of the lack of what I consider to be enough wage growth for an A class apartment, we went into the industrial space there and we've done very, very well with the repositioning on that project.

Well, Shannon, this conversation has been very interesting and as Clint said, a very different direction than I expected it to go. And we could continue talking for probably another couple of hours.

But in the interest of your time, our time, and our listeners time, if you're still with us, let's wrap it up there.

But I want to give you an opportunity to tell people if they have an interest in finding out more about you, what would be the best place for them to do that?

Yeah, it's really simple.

You just go to my website, it's shannonrobnet.com and if you want to get more tax information, get connected with the people that I was talking about earlier in the show. Just put connect me with your tax people, send me an email. You can also get access to my calendar.

If you want to chat for 15 minutes, I'd be more than happy to talk with you about what's going on in your world, how maybe we can help. But that's just all. All my socials are there. It's all just right@shannon robnett.com well, thanks Shannon.

This has been great conversation.

Yeah, really appreciate your time and your expertise, Shannon. It's very generous of you. And man, this has been my favorite one that I can remember. So thanks so much man. Appreciate your time.

Thank you guys for having me on.

Thank you so much for listening and watching the Truly Passive Income podcast.

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