IAM441- Business Director Assists Property Owners’ Tax Savings

Yonah is a powerhouse with property owners' tax savings. As Business Director at Madison SPECS, a national Cost Segregation leader, he has assisted clients in saving tens of millions of dollars on taxes through cost segregation. He has a background in teaching and a passion for real estate and helping others.

• CEO Hack: LinkedIn
• CEO Nugget: Get comfortable with being uncomfortable
• CEO Defined: Getting systems in place, having a team and being humble

Website: http://www.madisonspecs.com/

http://www.yonahweiss.com/

LinkedIn: https://www.linkedin.com/in/cost-segregation-yonah-weiss/
Facebook: https://www.facebook.com/yonah.weiss.1
Biggerpockets: https://www.biggerpockets.com/users/YonahW18

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Transcription

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Intro 0:02

Do you want to learn effective ways to build relationships, generate sales, and grow your business from successful entrepreneurs, startups, and CEOs without listening to a long, long, long interview? If so, you've come to the right place. Gresham Harkless values your time and is ready to share with you precisely the information you're in search of. This is the I AM CEO Podcast.

Gresham Harkless 0:29

Hello, hello, hello, this is Gresh from the I am CEO podcast, I have a very special guest on the show today. Yonah Weiss of Madison SPECS. Yonah, it's awesome to have you on the show.

Yonah Weiss 0:38

Thank you so much, Gresh. It's a pleasure to be with you.

Gresham Harkless 0:41

Definitely super excited to have you on. What I wanted to do was just read a little bit more about Yonah, I care about all the awesome things that he's working on. Yonah is a powerhouse with property owners' tax savings, as Business Director at Madison SPECS, a national Cost Segregation leader, he has assisted clients in saving tens of millions of dollars on taxes, and cost segregation. He has a background in teaching, a passion for real estate, and helping others Yonah Are you ready to speak to the I AM CEO Community?

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Yonah Weiss 1:06

Let's do it. I'm totally ready.

Gresham Harkless 1:08

Let's do it. Let's make it happen. you're gonna have many people telling me I have to interview this guy. So I'm super excited to have you on the show. I want to kick everything off to hear a little bit more about your story, what led you to get started?

Yonah Weiss 1:18

So yeah, I mean, just to full transparency. I'm not a CEO, right? I mean, I'm a CEO of my own life.  I think everyone is,  so that's why we all have this common ground. But, you know, I got started in what I do now, which is a very specialized service for property owners saving the taxes a couple of years ago, it really was more about the business itself, or the company itself, even more than the specifics of the task involved, which is really, my job is about teaching people.  so my background is as a teacher, which worked out perfectly. I kind of fit in perfectly into his role, which is really, being on podcasts,  giving webinars, and just educating people about this tax, and related things that most people don't even know about.

So how it came about, was really through I mean, literally divine providence, like, I've met someone who hadn't seen in,  years, I was looking for,  something new,  he's like, Well, my friend just got a job with this company, Madison,  maybe you should speak to him,  I did, it was just like, we hit it off immediately.  that was that was it. So it all came from,  you never know where things gonna come from. So it's always good, I feel strong, like, if you have kind of an urge, like you want to try out something new, or you want, you're open to like a new opportunity, you want to get a new job, whatever it is, just put it out there,  just tell some of your friends put it out there because you never know when opportunities gonna come from.

Gresham Harkless 2:40

Yeah, you never know when that opportunity where the opportunity is gonna take you. So I definitely appreciate that.  I usually say like, especially for  I've had people that have been on the show that have been like professors or former educators that I I kind of feel like this is almost like, one of the perfect times to be in have those skill set because people are thirsting for knowledge. I feel like the consumer is so empowered now that they can do so much research, homework, and due diligence, that if you are able to teach people and educate them about certain resources, and things they didn't know were available, you kind of have a leg up.

Yonah Weiss 3:11

Exactly. Yeah, I totally agree.

Gresham Harkless 3:13

Nice. So I wanted to drill down a little bit deeper here a little bit more about cost segregation, tell us a little bit more as well about Madison SPECS.

Yonah Weiss 3:22

Well, it's pretty cool. First of all, the name is really weird, right? I mean, I don't know who came up with this. But I think it was like the IRS which coined this term cost segregation, but I think was like their way of deterring people from it. Because this is too good. Like, you don't know, you don't want to do anything else. Because it's really too good, which is an incredible thing basically allows property owners investment property or business property owners, not personal residents, but anyone who owns or invests in any type of real estate, it allows them in, I mean, it's almost ridiculous, but allows them to not pay income tax, it's like a legal way to like, kind of manipulate not even manipulating, it's using the rules that the IRS set up, you just have to follow the rules. If about the rules, how that works, you can literally,  be making tons of money in real estate, not even paying income tax on it.

So this is really one of the biggest secrets to how real estate people are making so much money how the rich they richer, as they say, but the truth of the matter is, 90% of the world's billionaires, have real estate holdings and investing, have made at least part of their wealth through real estate. So it's no surprise that the government is incentivizing them. So, I mean, let's just get over the name, and then I'll tell you a little bit more about what the actual thing is right? Cost Segregation. It used to be called component depreciation. It just means we're taking the value of the building. we're able to write that off as a tax write off the entire amount that you spent on a building is called depreciation.

It's a deduction, it doesn't actually mean, the property is going down in value as the word sounds like, it's just that it's a tax terminology based on the fact that things go down in value, as the IRS says, hey, guess what, I'm gonna give you a whole tax write off of your entire building, okay, the entire you bought a building for $10 million, you can write that entire thing off your taxes, meaning you don't have to pay taxes on $10 million. But you can't do all of that in one lump sum, you have to spread it out over 39 years, that's like a random number they came up with, or 27 years for residential properties across irrigation is a way to actually accelerate a large portion of that, or in layman's terms, just take a large chunk of that in the first year, or in the first five years, as opposed to waiting 39 years.

So no one wants to wait that long. Like, I'd love to get all the tax deductions, I'm probably never going to be holding the property, owning it for, I'm going to sell it in 10 years, and I want to take advantage of these tax deductions.  so conservation is a way to actually break down the property into different components. That's right component depreciation that depreciates at a faster life. I go into much deeper and much more, if you have any questions or just,  keep going,

Gresham Harkless 6:11

ya know, I wanted to hear I guess a little bit more. So these are people that are looking to invest in it's kind of more of, I guess, an accounting aspect of how they get they I guess they get to write off those different aspects of what they've invested in if there's like real estate investors,

Yonah Weiss 6:25

correct? Yeah. So it's an accounting thing. It's something like, if you make a tax deduction, right, if you make, let's say, you make $100,000, right? But you have $100,000 of tax deductions, that means you pay zero income tax, that's, I mean, that's how it works. If you have, you know, made $100,000, you only have $50,000, of write-off, and you still have to pay tax on the remaining 50,000. No, it's still great, you're not paying 10,  you're 25% or 39%, whatever your tax rate is, on that full amount, you're still but you're paying less.

So getting more deductions is really the name of the game, how many deductions can I create or come up with that are legal? Right? You obviously can't do things that are monkey business, but so yeah, it's coming into a property and finding we actually, Madison SPECS were its specs is actually an acronym for specialized property engineering, cost segregation, because it's actually an engineering based service.

So we have an engineer who is well versed in the tax code, in construction and engineering, he comes, actually break down every component of the property into, structural, how much the structure actually costs, like the actual value to that, like, how much does the lampshades, the carpeting, the windows, the furniture, each thing has a different price to it, which is easy to do when you're constructing a new building, when you're developing a new property is very easy to break that down. But how much you put in,  how much you have the invoices you have.

But when you buy a building, right, that has everything in it already, you don't know, what's the breakdown of all that value. so you're really missing out on, the tax benefits because you don't know how much you're actually legally allowed to write off on your taxes.

Gresham Harkless 8:12

Right, you find out like a lot of people end up maybe under I don't know, that's probably not the right phrase, but under bidding, or under evaluating maybe, exactly what those cost savings can be. So they kind of need maybe an expert to come in, to determine that.

Yonah Weiss 8:25

Yeah, well, actually, I mean, you can't, on your own. In fact, that's really the key of it, why concentration exists why firms like Madison SPECS exist, because according to the rules, they made up all these rules, there's a whole tax guideline to this called the Cost Segregation Audit Techniques Guide, you can Google it, it's especially you know, it's a great read, especially if you have insomnia, it's gonna, do wonders for you.

It's part of the tax code, the IRS broke down all of the rules that go into how you have to do this, if you want to do it, you have to follow the rules. there's like, it's like, 600 pages long, so you're not going to, you're not going to be able to do it unless you actually hire a firm that expertise, their expertise is this and they specialize in it. So, yeah, so, because it requires the engineering component of it, you can't just like take a number, I think about 10% of the building is like whatever. I'm just gonna write that off. No, you actually have to have it broken down. There's a whole nomenclature, a numbering system,  it's like crazy the rules they have, but just goes to show you if you want to play by the rules, you can actually benefit yourself by playing by the rules.

Gresham Harkless 9:32

Yeah, that makes perfect sense. I'm glad you talked about the bridge version, I guess, the bridge version of 600 pages. But it kind of reminds me of this quote, I think Robert Kiyosaki said where he said he doesn't necessarily care who writes the cheques, but he cares about who writes the laws, understanding those laws, understanding the game, so to speak, how to navigate that, do that in a legal way. It's something that very successful and fluent people have been able to do. So it's great to have agencies, organizations to kind of win you don't want to do that. So I wanted to ask you for what I call your secret sauce.  it can be for you or your organization, what do you feel kind of sets you guys apart to make sure you meet?

Yonah Weiss 10:08

For me, I mean, I'll speak to myself first,  then maybe the organization. My secret sauce is just adding value and giving to others. it's not a secret, it's just really what makes me kind of who I am just kind of a personality. I just love to give, I'd love to help other people. So if I can do that, doing that, by educating people is one very easy way, because I'm natural at doing that. But at the same time, if I can go ahead, you know, help promote other people, or help,  social media is a perfect example of how to do that. Because you can just,  go on just help promote other people. It doesn't cost anything,  time, but so I think that's really my secret sauce.

From our company's perspective, it's a very interesting company, we're the largest national company doing this. I mean, we've done we work in all 50 states, and we have a team of over 60, individuals, accountants, engineers, health professionals, operations team, yet nevertheless,  it's not like this huge, massive organization, right. we have this entrepreneurial spirit. So we understand real estate investors, because most real estate investors have that entrepreneurial spirit in them, because they're going off on their own. They're going and making it happen, raising money, doing all that kind of stuff, networking, we get that. So there's a real great synergy between us in our clients.

Gresham Harkless 11:30

Yeah, definitely.  It helps to be like, right in line with,  the people that you work with, be able to kind of talk the exact same language, especially if you have this level of expertise, you don't know, they may not necessarily know how to understand it, but you want to be able to kind of communicate on that same page. So I think that's two great examples of non-secret sauces I guess I should say. So I wanted to switch gears a little bit. I wanted to ask you about what I call a CEO hack. So this could be like an app or book or habit that you have. But what's something that makes you more effective and efficient?

Yonah Weiss 12:00

Believe it or not, I love LinkedIn. Right? LinkedIn, I wouldn't call it I'd call it a hack. Because the majority, the vast, vast majority who are on the platform, don't use it properly, don't know how to use it properly. I think that's okay. But there's so much potential, especially in the b2b, or in networking. I feel LinkedIn is like a 24-hour networking event.

Gresham Harkless 12:22

Nice. So now what it asks you for what I call a CEO, nugget. So this is a word of wisdom or a piece of advice. Or if you could happen to a time machine, what would you tell your younger business self?

Yonah Weiss 12:31

Get comfortable with being uncomfortable?

Gresham Harkless 12:34

Nice. So now I wanted to ask you my absolute favorite question, which you kind of touched on a little bit, which is the definition of being a CEO. We're hoping to have different, quote, unquote, CEOs on the show. So what does that mean to you, you know,

Yonah Weiss 12:46

like I mentioned before, I'm not a CEO, I'm a CEO of myself,  I feel like more of an entrepreneur because I work for such an awesome company. Yet at the same time, I have the freedom to kind of do you know, I do business development, which kind of makes me do my own thing anyways,  I kind of make my own schedule and do my own thing. You'll be having a team who's working with you is probably one of the greatest advantages of being a CEO. Because you're not meant to do everything on your own, you have to delegate. It doesn't work any other way. So, getting those systems in place is so important. So for me, being a CEO, you know, just means having a team, being humble before them, you have to know that I cannot do any of this on my own.

Gresham Harkless 13:35

Nice, I definitely appreciate that definition. I know, when we talked offline, I was definitely looking forward to your perspective on this, because you talked about how entrepreneurial the organization was that you're working with.  I think that you know, whenever you have that mentality, you understand that everybody, you know, has their own kind of zone of genius, you can happen to everybody on the team zone, a genius, then that that allows you to be successful, for you as a team and organization to kind of hit your goals. So I appreciate that definition. I appreciate that perspective.

Yonah Weiss 14:03

Sure. Yeah. Absolutely.

Gresham Harkless 14:04

No, Robin, I appreciate your time even more Yonah, what I wanted to do is pass you the mic, so to speak, just to see if there's anything additional, you can let our readers and listeners know. then of course, how best they can get ahold of you and find out about all the awesome things you guys are working on.

Yonah Weiss 14:17

Yeah, so I'll kind of combine those two into one, which is reach out to me find me on LinkedIn, there's only one Yonah waste on LinkedIn, which is great and makes it easy to search. I do a lot of I like to try like I said, I like to give back. I like to try to help other people at no cost, no anything. I'm not, you know, I don't have a marketing business of any kind. I just like to help people learn about the platform, and how incredible it is.

In fact, I just finished up a 10-day challenge where I challenged a few dozen people to post every single day for 10 days straight on LinkedIn and engage with the community, and literally, every single one of them has had just incredible results from that, it really goes to you know goes to show you that. You don't really know what you're missing until you try something new, because of the incredible organic reach that LinkedIn has, right now, it's not pay, you don't have to pay for it. You don't have to pay for advertising. It's personal branding, to the next level, anyone who's a CEO, anyone who has their own company needs to use this platform, because it's incredible what you can do with it, and how you can grow your business with it.

I mean, I'm living proof of it. But I know dozens of other people like that who have literally created, you know, multimillion-dollar businesses from just utilizing LinkedIn. So yeah, find me there. If you're in real estate whatsoever, anyway, shape or form, reach out to me, I'm very well-connected in the industry. I'd love to, you know, try to see how I can help you, especially for the conservation reach out, we do free estimates on your property, which allows you to see what the tax benefits would be. So there's really no reason not to get that. yeah, that's, that's about it.

Gresham Harkless 15:57

Nice. Well, thank you so much again, yeah. I truly appreciate all the words of wisdom that you gave to us, and all the information that you gave, as well. So we will have your link, and information in the show notes just so that anybody who doesn't type in Yonah Weiss correctly can make sure that they click directly in the show notes and get a hold of you and hopefully see you somewhere in the world at a coffee shop. But Yonah, thank you so much again for your time, and hope you have a great rest of the day.

Outro 16:22

Thank you for listening to the I AM CEO Podcast powered by Blue 16 Media. Tune in next time and visit us at iamceo.co I AM CEO is not just a phrase, it's a community. Be sure to follow us on social media and subscribe to our podcast on iTunes Google Play and everywhere you listen to podcasts, SUBSCRIBE, and leave us a five-star rating grab CEO gear at www.ceogear.co. This has been the I AM CEO Podcast with Gresham Harkless. Thank you for listening.

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