86. Financial Planning Uncovered: Your Guide to Net Worth Tracking

So , as we head into the final two months of the year , I'm just excited to continue accelerating with my teams .

I can tell you that a lot of the goals that we set for this year have already been accomplished or are very close to it , and so it's truly exciting to start thinking and turn the page for next year and thinking how we can take this Acava Home thing to the top and keep growing from there .

But this is going to be an open session , so if you want to drop any questions , comments or thoughts into the chat , feel free , and or if you want to join live , just hit the join live button and we can make it happen and we will pause for a second for that . One thing that is semi-top of mind .

That happened today was Cobb County , which is like Marietta Smirners of the World , things of that nature rolled out some short-term rental ordinance earlier this year and now they're starting to actually put it into effect and , I guess , work to enforce it .

And so Airbnb sent out a message to anybody that has an Airbnb in Cobb County , and so I own one I think we've talked about it before the Luxury Sports Art Gallery , and then also an in-law suite behind it , and manage a couple more out that way , and so went through the process of getting those permitted , and I gotta say it was one of the more simple ones

to date . This was not even that hard . I think I filled out all the paperwork in one day and sent out the letters and then earlier today actually went into the office to kind of get the documents finalized and delivered to them , and they're going to have the certificate in the next week emailed to us . So it's not that hard .

It's not the whole owner-occupant thing that Atlanta was trying to push . It's very simple actually and the process makes sense . They just want to understand who's doing it so they can find you if there's excessive noise and things of that nature .

But long story short , cobb County , str ordinance and the way that they are handling it is a lot better than what I've seen from Metro Atlanta so far , and so it's encouraging to see that they have a whole process .

I paid for the rest of this year and also next year , so I'm not going to do this again until 2025 for renewal , and the renewal is not that hard as well . But please feel free to join , live and or drop any questions in the chat . This is an open session , so this can go in many directions . Hello , leibon , welcome .

But as we head into the last two months of the year , one of the things I always love to do at the end of the year and this year is going to be significantly needed , right . So , as many of you know , I left the W2 in August of last year and so I still had , you know , majority of the year was W2 and then I had the businesses on the side .

But this is the first full year fully into business and there's been a lot of income coming in but then a lot of expenses just randomly popping up , and so one of the things I like to do at the end of the year is audit all the expenses , figure out where the dollars were going and what was the value or the ROI on it .

So I've already started renegotiating a couple of the contracts that I had in place for this year ahead of next year , cutting some things out so that we can spend in other areas , and I'm looking to really optimize kind of this last two months of tax season heading into 2024 to make sure I move things around in the correct way to lower kind of the tax burden

headed into next year . But this is something I highly recommend that piece . And then also , this is something I used to do back in 2020 . But I recently , in 2020 and 2021 , I was pretty consistent and then I fell out of it and now I've gotten back into it over the last month and a half . But tracking your net worth , this is huge , right .

I read this book , millionaire Fastlane , right , and also just listen to a bunch of podcasts and they talk about the importance of just being able to track kind of your net worth over time . And so , yeah , christian , great , great thought that Mint app is awesome for automating that .

But I took it even a step further , because sometimes the Mint app it's not great for real estate purposes . If you own a bunch of property or for , like , businesses that may be worth something . So I actually have a spreadsheet .

It's a little bit manual , but it's a great exercise that me and my wife do and kind of pull this thing together is we once a month have a vision dinner but we update that spreadsheet with everything . We look at the home bot for the home values to see where it is right now .

We look at all the accounts , we look at any investments that we're in and put all that together to see what that net worth is , and we also set net worth goals yearly . So it's like , okay , what net worth can we get to ?

Because at the end of the day , that's the piece that really is going to allow you to kind of retire super early , right , and be able to kind of live off of that portion and kind of go from there . But leave on , can you hear me ?

So what was kind of your definition and what do you and your wife use and track as that kind of network ?

you owe , whether it's student debt , whether it's credit card debt , anything like that . You want to go ahead and track that piece and it shows you where you can really hear you go okay , so this one again , I've whitewashed this , but this is the exact sheet that I use for tracking this , so can you see my screen ?

Yeah , I can , you can see my screen , okay so this is the sheet I use and you can see like , hey , you've got dashboard , you've got assets , you got liabilities , ages .

Plug that in across the board and it pops out your dashboard and basically all it does is just subtract you know your asset , your liabilities from your assets , and it gives you a net worth number and it shows you where most of it relies right , oh , okay , so if anybody ever wants something like this to check it out , happy to send it your way .

But it's a good exercise . The first time you do it it's going to take forever . I highly recommend you can see that recommendation in the chat to get something like the Mint app so you're not having to log into 15 different apps . But if you do this , then you stay consistent with it .

All you're doing is updating and it shows you where you can get the most Like for me . I'm pretty heavy in real estate and so that's where a good portion of the net worth is . But stocks were a big portion at one point when I was working , then W2 , cash was a big portion at one point before I started investing heavily and things of that nature .

And then is there a mark how you doing .

So that way you're so satisfied , or is it ? You're not really paying too much attention to that in store . So the overall total number , and is the total number going up ?

I do want to have X amount in these other areas , whether that be stock like Vanguard that you can pull on quickly , whether that be your company stock , whether that be even retirement accounts that you can pull on in a time of need as a backstop . But the main thing is for me , I like specializing .

If you're going to get really good at something like real estate investing , you can take it to the moon . My whole thing is , I think we're eliminating a lot of the risk by focusing there and understanding how the whole process works and then having the other things as ancillary .

I'd say I'm probably like 90% real estate or 75% , 90% real estate , especially with the commercial projects that we got going on in Louisville , the other percentages between cash stocks and things that nature , to make sure that we have a reserve if anything happens .

It's funny how the bigger the job , the less hands on , because you can play around with the capital , because you have more available to you . It's something that's very I learned . It's very true . The real money is made , and not being there , it's in the arbitrage , yeah , which was very interesting . That's the key .

For example , you could be on site doing all the work , or you could be going out and finding more right . If you go out and find more work , the guys are happy to do it and you're able to make more without your time being tied up Exactly , yeah , exactly To that point .

It's a win-win for most of the investors that we've worked with , at least , I would say . I've never had a client only work with us one time . It's been consistently repeat . That's been good .

We can't go back and forth , so we're going to trigger that piece out . But if they do end up moving out , I'm going to need to update that unit . We'll definitely talk . That'll be like a February conversation . But , desmond , how are you doing , man ? What's up ? Man , I'm hanging out , happy .

We worked out an agreement with the owner and it's kind of been a win-win so far , and then it really the goal is to have them work and do flips now for me and him .

So that way , now we're doing our own and now , as we need more work and truly the way I'm trying to look at it is the little remodel like a kitchen remodel , bathroom remodel the crew can knock that out in a week , two weeks . So those would be the jobs that I would be feeding them while we're doing big picture at my own flips , hopefully in the future .

So , yeah , yeah , but we're just trying to keep it on mind . Please , please , do . We do good work . I'll send you pictures I have some .

I could tell you about that on the side . I've already kind of dug into it here . But yeah , I know you said , like Airbnb , list out some of the complexes that allow for arbitrage , um , but really you know that was two or three months ago and I started to shift my focus toward the next purchase , right , cause I purchased my property last October .

So I started to think about , okay , let me , you know , start getting the MLS searches set up . So , need you know , hook me up with that ? Let me start seeing where my financing is at and whatnot . So I'm digging into that right now . We've actually got an offer out , um , that expires on Friday .

Um so hopefully I don't get accepted , or at least it's on a four plex that is literally across the street from the property that I own now .

Like he's an older guy , I'm also a lot of properties , but if he doesn't accept it , I'm at least hoping that he will counter with something that's reasonable , right , and I he's a reasonable guy , right like we be chatting , like we will have sidewalk conversations here and there , so even if he doesn't say yes on the first go , I'm at least hoping that he will

, you know , come back With something that's in the ballpark of the number that we're offering off . So we'll see fingers crossed for that for sure . But no , I haven't dug into the arbitrage piece more . I do think there is merit there , though , and I think in the new year I might try that out again .

I didn't have the lease as tight as it needed to be to compel her to Do everything that she needed to do on her end , to pay me the money back and whatnot . So in the day , yeah , I want to try to take that learning , probably set up another one and you know see where that goes .

But right now I'm definitely focused on just like acquiring a property and you know , maybe even I just brought on a tax advisor . We're literally having a meeting tomorrow . She's a CTA , not CPA , which is certified tax advisor , not certified public accountants . So I had to go what's the difference there ?

Finra offers the biggest one , the biggest certification for certified tax advisors , but there are some other smaller certifications as well , but basically the idea is that they specialize only in tax code , you know , reducing your tax burden , and all of that versus . I had . I did interview a good amount of CPAs , right , certified public accountants .

But they offer a range of services , right , kind of a broad scope , not just tax planning . They got the accounting thrown in there . They might even offer you some bookkeeping and whatnot , like they do a range of things , but right now my focus is the taxes . I don't need necessarily an accountant , right .

I just brought a mayor on separately as a bookkeeper , right ? So I'm like yo , I'm trying to get my tax bill down and that's the focus . That's the only focus , at least , that I want to have them on . So that's kind of why I decided to Go with her . Like all , the only language she speaks is , you know , reducing tax burden .

So I'm like yo , that's exactly what I'm trying to do . Yeah , let's see if it'll work . Spent a amount of money that I'm not really ready to talk about To get this tax plan . So when we do , you know , hop on the call .

I'm like yo , like you need to become most solid strategies that we can afford this year and like I need to see , I need to see some of this money come back in strategies that you're bringing to me and , if not , like it's gonna be a difficult session . Um , but yeah , we'll see . And yeah , it's kind of where I'm at right now , man .

Even just with doing that cost segregation , there's a lot of dollars that can be saved from that . Um that could be rolled forward , depending on how much you make with the w2 , things that nature . But , yeah , a lot coming your way . I'm happy that you're setting the systems up now because the quicker you can do that man , the better it's gonna be .

It's painful right now . It's truly painful when you have like 10 , 15 properties and you're like all right , now I need to get a cpa and now I need to get a bookkeeper and try to set it up that right . That took forever with the , with the whole thing trying to sit , I was like this is like a three month project , so you're doing it right .

And yeah , man , when we're able to lock this foreplex down , because I definitely Think it is the right next play , um , but yeah , man , it can definitely like even , I think , trusting someone to , you know , add value and , like you know , paying someone to add value has been a little tough for me , but I see the benefit in doing it now Versus , you know , on

down the road and especially with my personal income , I'm like , dude , just that alone , like we need to make sure like that is in its right place and I'm not giving too much to uncle sam . And with the cost segregation piece , I think it's something that I've thought about , it .

Um , and actually she had a word on this one just in our consultation call Excuse me and sam that like I don't know that that's gonna be beneficial for me right now , given how much I'm making on the personal income , because I won't be able to take advantage of those losses Right now . Right , because my shit's too high . So I'm like , do I ?

I don't think that's a play I want to pay for right now because I know that cost day can be Expensive . Right , they want , like I think I asked a guy about and he's like , yeah , like at least 34k . I'm like Jesus , like .

The tax code puts those at like like 15 or 10 years .

You know the rug , the carpet , the uh , like the other fixtures that are within the house , like the light fixtures and things that nature , it all has a certain value and you're able to accelerate the depreciation of those and take it as a tax credit earlier in the process than you would have to wait over the 27 and a half years , like the way I used to do

it before , kind of to this point now is I would just leave the house right and so they'd give you 127 and a half each year as the depreciation .

With the cost segregation I was able to fast forward about 75K from both of those houses , so about 150K , and take it all in one year and really write off taxes , which allowed me to actually get a check back from the IRS last year , which was awesome First time it's happened in a long time Now .

The risk with that , though , is , if you sell that house right , it's gonna recapture all that as part of the like tax burden that you're gonna have to pay . So you wanna do this in something you plan to hang on to for a little bit , and or you wanna keep doing this as you acquire more real estate , so that you can offset it .

How did we find the deal initially ? Did we just go direct to seller , call them ? How did we find him ? You know , how do we find this property specifically , Et cetera .

Like , literally , he owns the property that is adjacent to mine . It's a 26 unit . He was out here last week just checking it out . Question and just , we have had , you know , sidewalk conversations here and there just about , like not even really about acquiring property or nothing like , nothing like that .

Like I've just told him my interest in , you know , continuing the scale , he saw that I brought my current property . We partnered on getting a fence built between our properties cause the one that was there prior was just falling down .

So we've , like you know , just shot the shit back and forth here and there and like one day he was like yeah , man like I'm looking to , you know , start offloading , Like he's looking to get into like nail salons or so like a different business venture . And I'm like man , like that's interesting .

You know , I'm looking to potentially purchase a property this year and kind of just left it at that , Right Like we're , we're just starting to go to the station right there Like I didn't even , I wasn't even like , oh , like you know , let me buy your house Like nothing , like that , it just really developed organically , like after that he's like yeah , like you

know , everything's for sale . Basically is literally what he , what he said at his mouth . I'm like shoot . Like I know you own this fourplex , like you know what's up . Basically , like you know time's coming up Trying to buy another crib . Yeah , basically like . I didn't , I didn't come out and just directly say that .

Like I get a text from me one morning . I'm on my balcony chilling , I'm like , oh shit , like they literally changed the game , where now you can put this 5% down on these small multifamilies where , like literally before that , I was crying about man , it's like 25 .

I literally just talked to the lender , like two weeks prior , about it being having to be 25% up from the 20s . That it was . So I'm like man , like this is perfect . So , yeah , man , it really just kind of fell into my lap , I don't know . I'm grateful for that .

A lot of people say that , but when you actually start practicing that and letting people know like , hey , this is what I'm into , things that nature , like it'll build from there , right , it'll build relatively quickly , Like before I even left the W2 , when I was around Atlanta and people were asking , hey , what do you do ?

It wasn't , hey , I'm in medical cells . I was like , hey , I'm gonna invest a friendly realtor right , that's the friendly realtor . And then when I left , now it's kind of built up to where it's like , hey , this is what he does , right .

And that would have never happened if I didn't make a post just saying hey guys , I just put in a toilet , Look at me , you know . So yeah , letting people know what you're doing is very key . I agree , I think we just lost Leibon .

They officially have released it , right , it came out earlier this year , but I actually went and got the license for the art house up there which you saw , and I'm working on getting a couple others that we manage licensed . I gotta say it was one of the smoothest and easiest processes ever . It's like 11 pages .

You fill out like five of them , you get a couple of notarized Handle that all in a day and then you go into the office and it's not a lot of what-ha-la . Right Came in hand . The documents over showed that , hey , we sent the letters and handed them a check for like $55 and they gave us a whole year . So Cobb County I like how they're doing theirs .

It's good .

So outside of that , no restrictions , and I think it's really just to kind of mark and see hey , how many people are there doing this Now . The restrictions will probably come into play later if there's like a lack of housing or you know there's parties all over the place that they're shutting them down .

But as for right now , I think it's so early on like I'm sprinting to get everything fully approved , get the licenses in same thing in Atlanta , to make sure that we're gonna be grandfathered again .

So I actually took that , posted it on Next Door , which I'd never go on , but I've used those . That was my first post , right , and some people had chimed in saying , hey , they've been saying this kind of for a while . Like I saw this like a year and a half ago . They had mentioned this . But I know that's not going to fly .

I know they can't just come out and say , hey , look like we're going to all outband this , especially given that Atlanta , especially the major city in the state , is , you know , going through a big battle to . You know , untangle the ordinance method they've seen to create and , you know , try to figure out what makes the most sense .

Sounds like Cobb County is doing the ordinance and I feel like surrounding counties are going to start adopting a similar model . So I know in College Park they can't just say or at least I don't think it'll go over . Well , them just saying , oh , this is completely illegal .

I don't want to be the one to see a city , but you know , I'm hoping to take note of what's going on in some of these other places and adopt , hopefully , a similar reasonable ordinance model . So we'll see . I'll keep you all posted if I do hear anything .

And then they realized , as we got closer , that this could turn into a New Orleans situation . Right , and for those who we have not talked about this before , back in 2019 , new Orleans introduced short term ordinance that said you had to be an owner occupant , right , you got to live in one of the units and you can only have one more . And it was .

You know , they were shutting down Airbnb's , left and right , and then they the people sued and went to a higher court and they lost because it was unconstitutional , and so the city actually lost , and so when I see things like what's happening in New York and what Atlanta was trying to do previously , I look back to that precedent that was set at a higher court

. It wasn't even like a hey , this is a , you know , a county or state court . It was like a higher district court , whatever you want to call it . That kind of sets the precedent .

And the reason it's unconstitutional is if we changed up the language to hey , you can't have a longterm rental right In college park unless you live in college park , that doesn't make any sense .

It's like , oh , people live , like in California that have longterm rentals out there , and so with the short term rental ordinance it makes sense to say , hey , we're going to limit the total number in the city where it's still fair play . Or hey , you know , you can only have X to your name , something of that nature .

But to say , hey , you have to live here to have that , that's , that's slippery slope . And to your point , desmond , I think they would get sued . And I'm interested to see what happens with the New York piece over time . You know , going through courts takes like a year or two , but we'll see what happens over time . And I see a question from Kareem .

I don't have the answer on this one . Kareem , has anyone done arbitrage successfully ? I knew a guy that was doing it before , semi successfully , but he was doing it before the apartments started . Quote , unquote .

Allowing it but then taking 25% of your profits make meaning that you would have to basically clean the place and do all the maintenance yourself If you want to make any money bro is the profit doesn't work out long term .

I heard them on the bigger pockets podcast the other day talking about like four they just got into and he just set them all up or like got into that play for like five grand total just from like the least fees . You know that he had to pay . So , no , I haven't done one .

I don't even personally know anyone of you , know any friends or anything that is doing them , but I know it's freaking possible . Especially , I feel like the game changer could be like I wouldn't I mean , I'm not , I wouldn't necessarily go to like one of these big high rises .

I feel like they're going to want to like take some of your profit and like they're going to I don't know , just be more savvy and like understanding what's going on .

They're going to want to take some of your money , but I feel like if you go to you know a mom and pop investor and like the one of the issues with my property that I had is like they had cameras on the building so like on the property . So they had ring cameras , they had ring floodlight cameras . They could see very clearly what was going on .

I feel like if you get a mom and pop investor , maybe they live out of state . As long as you pay the rent , don't set the place on fire . They kind of leave you alone and it's in a semi desirable like an area you know is going to do . Well , man , I swear you could be . You could be making some serious money .

I haven't found that yet , but I am going to look for that next year Cause I know , just like you know , any Airbnb , like the guests come , they leave , you know , and usually things are fine . So like I know it's possible , man , I stand by it .

I think it would just be in how you even just presented , like when I first started with the short-term rental management , it was just a solo game at that point when we had like three , and then I got a lead to hey me , can you talk to this person about potentially managing theirs ?

Um , I just put together documents and you know , not a full out presentation , but I put together like a PDF that was nice and kind of had like a background story and talked about different systems that we use and talk confidently , cause if you have one short-term rental that you've been managing , you know a lot , man .

Like you , you know how to get it up and running . You understand , hey , we're going to automate 80% of the messages . This is how we control access to the home . We've got cameras everywhere . This is how we vet our guests . Like it's the same questions you would ask somebody else if they were like hey , I want to use your home for a short-term rental .

That's what you got to be prepared for , and if you're able to show kind of a visual and walk through that piece , even on the front end , I think it'll comfort someone and the fact that you can pay a little bit more . So the first place I would look is , especially in the wintertime , right .

I'd look at places that are listed , that have been listed for rent for you know X number of weeks you know maybe three weeks or more , four weeks and reach out to those guys and say , hey , I love this area , I love this property .

Would you be open to having a discussion about you know me leasing this back to you know corporate folks or me leasing this back to individuals that are coming to to stay for a couple of weeks , right , and then when you get on the phone , you can talk about what you're trying to do , which is Airbnb arbitrage , and how you can pay a little bit more , how

you can put maybe a higher security deposit so they're protected . Kind of make it go from there .

And I think a big thing that you want to emphasize is one hey , we bet our guests very seriously , especially if you're using something like auto host , you are , you know , using some sort of , you know , sophisticated verification process . I would definitely emphasize that and just mention that , hey , like we don't , we want this to go well as much as you do .

Like we don't want to bring in anyone that is going to track the place or , you know , disrupt the income that you know you're looking to bring in . That's definitely the first thing I would emphasize .

And then also , I would pose it as and I saw this because really , really the idea that I , how I got this idea of like , oh , this arbitrage , it can be very well , Cause I just saw this like a random , like Instagram ad , like , oh , you , hey , you want to hear how to make $20,000 in like a month . Those kinds of guys .

I'm like I will listen for those next 30 seconds and then he's got me thinking like man .

But one of the things he mentioned was pose it as you're doing them a favor and really , when you look at it , you kind of are right , Like mentioned that , hey , we're getting the place professionally clean , Right , None of our guests tend to stay more than a week , Right , and you know , we , you know constantly monitor the place and I think the idea just that

, like , the place isn't going to be worn and torn by someone who's just in there all the time .

You have people coming in and going out and also you know , in that same sense , that you have people coming in and going out , mentioning that , hey , like we do , you know a very you know we're watching the property , right , we're not just going to let people come in and , you know , do whatever they want and , you know , be causing a ruckus in the neighborhood

. So I would emphasize , hey , like we are looking at this , we want us to go where we have cameras set up and we take care of the property , because we have it clean , because , you know , just have the nature of Airbnb . So yeah , Karim , let us know if you're going to end up doing one man .

I'm really interested to hear how it works out , Because obviously I don't know how to do it . I don't know what I'm doing .

So rent typically in Gainesville is like 1500 . But me , you know , looking at some properties that we've helped people purchase in Gainesville , the Airbnb numbers are really high because of Lake Lanier . So it's like maybe places like that you can maybe pitch to give more money because they generate way more money .

I think Desmond Leibon are spot on with that and I'd be remiss not to say and this is because you mentioned like vacation markets if anybody's looking for a vacation home fully furnished pretty new , I think it was 2021 build we're going to be listing one up in Blue Ridge in about 24 hours , right ?

So I think the picture should be in if they're not right now , so hit us up if you are looking for something like that . This home is actually pretty dope , planning to drive up there just to go hang out at some point . So I'll be doing an open house , literally just so I can hang out in the house because it's so cool At some point .

But , leibon , what's the final word ? Man ? What you got ?

Really , it's just it's just a numbers game because there's definitely going to be some people who all they care about is , hey , get me my money on time , that's it , you know .

So I think finding , like you mentioned , the pain point in a seller , or being able to find a creative situation like vacation homes , where you can get more for the property and say , hey , you know , instead of giving you 1500 , I'll give you 1800 . I'll give you a $300 premium , and they're looking at it like I'm not going to get this anywhere else .

Meanwhile , you're making X , some difference , you know ? Yeah , no for sure . I think that's the way .

And you know , we've realized that across the portfolio , from cleaning costs to maintenance costs , to even being able to leverage that portfolio to get more midterm renters in . And when you get those midterm renters it's sweet man . People were in there for six months . The cash flow is consistent and it's just like you don't have to message anything .

I mean , desmond , you've had a couple of those and , yeah , the more units you have , the easier it is to start to leverage to the insurance companies and things of that nature , because that way , I know , they can call you not just for one property but you can leverage them to others .

And I think I talked about it last week but we had that most recently happened one that we didn't even get to list because they were calling on a different property that was already booked out and we were able to just redirect them and say , hey , we got this other one coming to market . Will this work and kind of make it happen from there .

But , guys , I appreciate you joining on November 1st . I'm so pumped to finish out the rest of the year strong and I hope that all of you will continue to achieve your goals and kind of crush the end of 2023 . But I will catch you next week and I appreciate you joining . Well , let's get it . Catch you next week , get it , see you . See you , man .