IAM2761 – 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

Previous Episode: https://iamceo.co/iam441-business-director-assists-property-owners-tax-savings/

Transcription:

 

Yonah Weiss 00:00
My secret sauce is just adding value and giving to others. And it's not a secret. It's just really what makes me kind of who I am, just kind of a personality. And I just love to give. I love to help other people.

Gresham Harkless 00:41
Hello, hello, hello. This is Gresh from the I Am CEO Podcast. I have a very special guest on the show today. I have Yonah Weiss of Madison Specs. Yonah, it's awesome to have you on the show.

Yonah Weiss 00:49
Thank you so much, Gresh. It's a pleasure to be on with you.

Gresham Harkless 00:52
Definitely super excited to have you on. And what I wanted to do was just read a little bit more about Yonah so they could hear about all the awesome things that he's working on. And Yonah is a powerhouse with property owners' tax savings. As business director at Madison Specks, a national cost segregation leader, he has assisted clients saving tens of millions of dollars on taxes and cost segregation. He has a background in teaching and a passion for real estate and helping others. Yonah, are you ready to speak to the IMCO community?

Yonah Weiss 01:18
Let's do it. I'm totally ready.

Gresham Harkless 01:19
Let's do it. Let's make it happen. And Yonah, you, you had many people telling me I have to interview this guy, so I'm super excited to have you on the show. I wanted to kick everything off to hear a little bit more about your story and what led you to get

Yonah Weiss 01:29
Um, so yeah, I mean, just to, you know, full transparency, I'm, I'm not a CEO, right? I mean, I, I'm the CEO of my own life and I think everyone is. And so that's what we all have this common ground. But, um, you know, I got started in what I do now, which is a very specialized service for property owners saving the taxes a couple years ago. And it really was more about the business itself or the company itself, even more than the specifics of the, of the task involved, which is You know, really my job is about teaching people. And so my background is as a teacher, which, which worked out perfectly. Right. Um, it kind of, I kind of fit in perfectly into this role, which is really, you know, being on podcasts and giving webinars and just educating people about these tax, you know, 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 met someone who I hadn't seen in, you know, years and told her I was looking for, you know, something new. And he's like, well, my friend just got a job with this company Madison, and maybe you should speak to them. And I did. It was just like, we hit it off immediately. And that was, that was it. So it all, all came from, you know, you never know where things are going to come from. So it's always good. I feel strong. Like if you have, um, have 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. You know, just tell some of your friends, just put it out there because you never know where the opportunity is going to come from.

Gresham Harkless 02:52
Yeah, you never know when that opportunity, where that opportunity's going to take you. So I definitely appreciate that. And I usually say like, especially for, you know, I've had people that have been on the show that have been like professors or former educators that I kind of feel like this is almost like one of the perfect times to be and have those, that skillset because people are thirsting for knowledge. And I feel like the consumer is so empowered now that they can do so much research and 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 to them, kind of have a leg up.

Yonah Weiss 03:22
Exactly. Yeah, I totally agree. Nice.

Gresham Harkless 03:25
So I wanted to drill down a little bit deeper, hear a little bit more about cost segregation. Tell us a little bit more as well too about medicine specs.

Yonah Weiss 03:33
Well, it's a 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's way, which they coined this term cost segregation, but I think it was like their way of deterring people from it. Because they're like, like, this is too good. Like, you, you don't know, you don't want to do anything else because it's really too good. Which, it's an incredible thing. It basically allows, uh, 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. And if you know about the rules and, and how that works, you can literally, you know, be making tons of money in real estate and 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 and you know how the rich stay richer, as they say. But the truth of the matter is, you know, 90% of the world's billionaires, you know, have real estate holdings and investing and have made, you know, at least part of their wealth through real estate. So it's of 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, and it just means we're taking the value of the building and 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's going down in value like the word sounds like. It's just that it's a tax terminology based on the fact that things go down in value. So the IRS says, hey, guess what? I'm going to 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.

Yonah Weiss 05:34
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. Cost segregation is a way to actually accelerate a large portion of that, or in, in, you know, in layman's terms, just take a large chunk of that in the first year or in the first 5 years as opposed to waiting 39 years. So, 'cause no one wants to wait that long. Like, I'd love to get all the tax deductions,, and I'm probably not even going to be holding the property, you know, owning it for, you know, I'm going to sell it in 10 years. I want to take advantage of those tax deductions. And so cost segregation is a way to actually break down the property into different components. That's right. Component depreciation that depreciate at a faster life. I can go into, you know, much deeper and much more if you have any questions or just, you know, keep going.

Gresham Harkless 06:23
Yeah, no, I wanted to hear, I guess, a little bit more. So these are, these are people that are looking to invest and it's kind of more of, I guess, an accounting aspect of how they, they, I guess they get to write off those different aspects of what they've invested in if they're like real estate investors.

Yonah Weiss 06:37
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, make $100,000 and you only have $50,000 of write-off, you still have to pay tax on the remaining $50,000. Now that's still great. You're not paying tax, you know, your 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. Like how many deductions can I create or come up with that are legal? Right. You obviously can't, you know, do things that are monkey business, but so yeah, it's coming into a property and finding, we actually, Madison Specs, we're, it's SPX is actually an acronym for Specialized Property Engineering Cost Segregation because it is actually an engineering-based service. So we have an engineer who's well-versed in the tax code and in construction or engineering and can come and actually break down every component of the property into, you know, structural and how much the structure actually costs, like the actual value to that. And like, How much are the lampshades and, you know, the carpeting and the windows and, you know, the furniture. And each thing has a different price to it, which is easy to do when you're, you know, constructing a new building. When you're developing a new property, it's very easy to break that down, right? You know how much you put in, you know 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. And so you're really missing out on on the tax benefits because you don't know how much you're actually legally allowed to write off on your taxes.

Gresham Harkless 08:23
Right. And you find like a lot of people end up maybe under— I don't know, that's probably not the right phrase, but underbidding or undervaluating maybe exactly what those cost savings could be so that they kind of need maybe an expert to come in to determine that.

Yonah Weiss 08:36
Yeah. Well, actually, I mean, you can't on your own. In fact, that's really the key of it, why cost segregation exists and why firms like Madison Specs exist because according to the rules, and they made up all these rules, and 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 going to, you know, do wonders for you. Um, it's part of the tax code and 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. And there's like, you know, it's like, you know, 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, you know, their expertise is this and they specialize it. Um, so yeah, so because it requires the engineering component of it, you can't just like take a number and be like, uh, I think about 10% of the building is like, you know, whatever, and I'm just going to write that off. No, you actually have to have it broken down. There's a whole nomenclature and numbering system and 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

Gresham Harkless 09:43
playing by the rules. Yeah, that makes perfect sense. And I'm glad you talked about the bridge version. I guess the bridge version is $600, 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 checks, but he cares who writes the laws. And understanding those laws, understanding the game, so to speak, and how to navigate that and do that in a legal way is something that very successful and affluent people have been able to do. So it's great to have, agencies and organizations to kind to lean on to do that. So, um, I wanted to ask you for what I call your secret sauce, and it could be for you or your organization, but what do you feel kind of sets you guys apart to

Yonah Weiss 10:18
make sure you meet? Um, for me, I mean, I'll speak to myself first and then maybe to the organization. My secret sauce is just adding value and giving to others. Um, and it's not a secret. It's just really what makes me kind of who I am, just kind of my personality. And I just love to give. I love to help other people. So if I can do that, And, you know, doing that by educating people is one very easy way, because I'm natural in doing that. But at the same time, if I can go ahead and, you know, help promote other people or help, you know, social media is a perfect example of how to do that because you can just, you know, go on, just help promoting other people. It doesn't cost anything, you know, it's 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. We have a team of over 60, you know, individuals, accountants and engineers and professionals, operations team. Nevertheless, you know, it's not like this huge massive organization, right? And 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. And they're going and making it happen and raising money and, and, you know, doing all that kind of stuff, networking. And we get that. There's a real great synergy between

Gresham Harkless 11:39
us and, uh, you know, and our clients. Yeah, definitely. And it helps to be like right in line with, uh, you know, the people that you work with and be able to kind of talk the exact same language, especially if you have this level of expertise and 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, uh, uh, two great examples of, uh, well, non-secret sauces, I guess I should say. So, um, I wanted to switch gears a little bit and I wanted to ask you for what I call a CEO hack. So this could be like an app, a book, or a habit that you have, but what's something that makes you

Yonah Weiss 12:09
more effective and efficient? Believe it or not, I love LinkedIn, right? LinkedIn. And I wouldn't call it— I'd call it a hack because the majority, vast, vast majority who are on the platform don't use it properly and don't know how to use it properly. And I think And that's, you know, that's okay. But there's so much potential, especially in the B2B or in, you know, networking. I feel LinkedIn is like a 24-hour networking event. Nice.

Gresham Harkless 12:33
So now I wanted to ask you for what I call a CEO nugget. So this is a word of wisdom or a piece of advice, or if you can hop into a time machine, what would you tell your younger business self? Get comfortable with being uncomfortable. Nice. And so now I wanted to ask you my absolute favorite question, which we kind of touched on a little bit, which is the definition of being a CEO. And we're hoping to have different quote unquote CEOs on the show. So what does that mean to you, Yana?

Yonah Weiss 12:56
Um, like I mentioned before, I'm not a CEO. I'm a CEO of myself, but I feel like more of an intrapreneur 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, and I kind of make my own schedule and, and do my own thing. Uh, you know, having a team who's working with you is probably one of the greatest advantages of being a CEO. Because you, you, you know, you're not meant to do everything on your own. You have to delegate. It doesn't work any other way. And so getting those systems in place are, you know, are so important. So for me, being a CEO, you know, just means having a team and, you know, being humble before them, you know, to know that I cannot do

Gresham Harkless 13:42
any of this on my own. Nice. I, 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. And I think that, you know, whenever you have that mentality, you understand that everybody, you know, has their own kind of zone of genius and you can tap into everybody on the team's zone of genius, then that allows you to be successful and for you as a team and organization to kind of hit your goals. So I appreciate that definition.

Yonah Weiss 14:11
I appreciate that perspective. Sure. Yeah, absolutely.

Gresham Harkless 14:14
No problem. And I appreciate your time even more, Iona. What I wanted to do was pass you the mic, so to speak, just to see if there's anything additional you can let our readers and listeners know, and then of course how best they can get ahold of you and find out about all the awesome things you

Yonah Weiss 14:25
guys are working on. 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 Weiss on LinkedIn, which is great, makes it easy for searching. 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 and, you know, 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. And 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. Literally every single one of them has had just incredible results from that. And it really goes to, you know, it goes to show you that you don't really know what you're missing until you try something new. And because of the incredible organic reach that LinkedIn has right now, it's not paid, 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, how you can grow your business with it. I mean, I'm a 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, any way, shape, or form, reach out to me. I'm very well connected in the industry and I'd love to, you know, try to see how I can help you, especially if you need cost segregation, 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.

Gresham Harkless 16:05
And Yeah, that's, that's about it. Nice. Well, thank you so much again, Yonah. I truly appreciate it, uh, for 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 ahold of you and, and hopefully see you somewhere in the world at a coffee shop. Uh, but Yonah, thank you so much again for your time and I hope you have a great rest of the day.