Silent Real Estate Investing

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Thomas Castelli – Hall CPA

Podcast Overview:

00:00 Attended real estate association, learned about syndication.
06:04 Creating value through strategic commercial real estate investments.
09:42 Review sponsor’s track record before investing.
12:44 Depreciation helps shield rental income from tax.
15:58 Depreciation recapture on $200,000 capital gain.
18:54 Depreciation calculation for $1 million property.
23:24 Property report details, desktop study for smaller properties.
26:55 Adapting tax reporting for past expenses possible.
29:29 Save $10,000 in taxes with tax strategist.
31:05 Leverage network, seek recommendations, vet through online content.
37:01 Joining community and listening to podcasts helpful.
39:28 Real estate plans changed due to COVID.
43:21 Avoid sponsors with consistent underperformance and issues.
44:47 Sponsors tested by asking extra questions.
49:53 Business success stories with sponsor acknowledgements and gratitude.

Podcast Transcription:

Thomas Castelli [00:00:00]:
Typically, these these cost segregation studies that you could there’s they’re done 1 or 2 ways, typically. The first way, is you would have an engineer who who is well versed in this in in this area. They would come down and do a they would survey your property. Think about almost like an inspection. Right? They’re coming down. They’re surveying the property. They’re taking inventory of every component, and they’re gonna go back to their office and they’re gonna give you a report. That report’s gonna say, okay.

Thomas Castelli [00:00:23]:
Well, your property has it’s gonna give you, like, an itemized report. Okay. This this amount of property is gonna be 27 and a half year property. This amount’s gonna be 15 year. This amount’s gonna be 5 year, and that 5 15 years was eligible for bonus appreciation.

James Kademan [00:00:37]:
You have found Authentic Business Adventures, business program that brings you the struggle stories and triumph and successes of business owners across the land. Downloadable audio episodes can be found on the podcast link from the draw in customers.com. We are locally and written by the Bank of Sun Prairie. Calls on call extraordinary answering service as well as the bold business book. And today, we’re welcoming slash preparing to learn from Thomas Castelli of Hall CPA. We’re talking real estate, and we’re talking taxes, which I guess in the end, if you’re making money with real estate, taxes go right there. So, Thomas, how are you doing today?

Thomas Castelli [00:01:12]:
Not too bad. How’s everything going with you? I mean, today’s a beautiful day in New York, so, I can’t complain.

James Kademan [00:01:17]:
Yeah. We’re, you know, we’re at a beautiful day in Wisconsin as well. So, I guess the meter’s running everywhere. So let’s get down to it here. You are in both the real estate investment world as well as the CPA side. So how does that happen?

Thomas Castelli [00:01:33]:
Yeah. So, this kind this journey started for me, back in college. So my during my during my teen years, my my parents always kind of herded me towards the college path. I always wanted to be a full time entrepreneur, but teachers, guidance counselors, parents, friends kinda made me feel that I was crazy for wanting that. So I went to college, and, I went to college for accounting because of business and accounting because that’s what, I was told to do. So I did it. And through, like, my sophomore year of college, what I realized was and or it’s, like, live the lifestyle that I wanted to live or write envision for myself, that probably just doing accounting wasn’t going to get me there. So I started reading books.

Thomas Castelli [00:02:11]:
I started with The Richest Man in Babylon, like, the personal finance book, and then it went into Rich Dad, Poor Dad. And from there, the rabbit hole went pretty deep, and I fell across real estate. And, it was a common theme in a lot of these books. So I started, then then what ended up happening around the time I was graduating, my great my great uncle had passed away. And he was 99, lived a great life. You know? And he had this small house on this relatively large plot of land that he never did anything with, and it was right down the block from the Long Island Railroad, which went right into Penn Station in New York City. So I knew that it was people are always trying to buy houses around there for that location. So I knew there was something to be done with it.

Thomas Castelli [00:02:51]:
So I went to a Long Island REA, which is, like, a real estate investment association, trying to get someone to help me develop or wholesale the property. But the the executor of the estate between that and my own lack of experience, that never transpired. However, 2 things came out of that meeting. The first thing came that came from that experience was at that re event, I met a group that did a real estate syndication. So they bought these big properties, raised money, renovated them. So I went to one of their 3 day weekends in between the summer where I was starting my full time job in accounting, and I fell in love with the model syndication. Started going down that rabbit hole, started attending their monthly meetings and everything like that, And, eventually, someone who would become my mentor within that group, brought me a deal that they were doing in Ohio, pitched me the deal, and I said, you know what? Let me take it to my parents, show it to my parents. They invested some money.

Thomas Castelli [00:03:42]:
I invested some money. It was, at the time, not that much money because I was just kinda coming out of college, but it got my foot in the door. He kinda showed me behind the scenes, and, we eventually syndicated an 82 unit apartment complex together, me and a few me, him, and a few other partners. So that was exciting. I was on the active side of that deal. And, also, just kind of quick tidbit, that house that my uncle’s house, someone whoever bought it ended up knocking down the house and putting up 3 houses. So, I at least I was on to something. I just couldn’t execute on it at the time.

Thomas Castelli [00:04:13]:
So that’s kind of how I got into, real estate investing. And then, like, some then I was working at a a large accounting firm, and I realized, okay, corporate isn’t for me. I wanna be more moving. I can have more mobility. So I said, how can I marry this passion for real estate with my background for accounting? That’s where I met Brandon Hall here at Hall CPA. And I came in when the firm was very small and, kinda worked my way up through the growth of the firm, and here I am today. I’m a partner at the firm. So that’s kinda how I got involved and kinda gotten you’ve got in this world.

James Kademan [00:04:43]:
Nice. That’s that’s awesome. Sorry to hear about your uncle. Yeah. 99 is a good run, so good for him.

Thomas Castelli [00:04:49]:
Yeah. He he he lived a good life. He lived a good life.

James Kademan [00:04:52]:
Tell me I guess, I have to apologize because I’m not terribly familiar with real estate syndication. For the listeners as well, what is real estate syndication?

Thomas Castelli [00:04:59]:
Yep. So real estate syndication typically involves buying large properties, like, large multifamily or commercial properties that one person couldn’t. Individuals certainly do take down these buildings or do buy them, but, it’s more challenging. So what happens is you’ll have, like, a you’ll have a a sponsor or a general partner. They might have real estate experience. They know how to how to look at how to, value properties, you know, identify opportunity. They know how to put renovations in place and everything like that, run the deal, and then they go raise money from, passive investors or limited partners, they’re called, who are pretty much just putting up the money for it and really don’t do much else, which is fantastic for for on a limited partnership side. So that’s kind of what a real estate syndication is.

Thomas Castelli [00:05:39]:
You know, your sponsors are buying large properties in order finance those properties. They’re get they’re getting financing from the bank, but they also need the money for the down payment and the renovations, and oftentimes that comes from investor capital. So that is kind of what a real estate syndication is in a nutshell.

James Kademan [00:05:55]:
Got it. So in the case of an investor, what typically are they expecting as a return from being a part of that syndication?

Thomas Castelli [00:06:04]:
Oh, yeah. It certainly it certainly varies depending on the investment opportunity. In the type of investments that I’m familiar with and that I invest in, we call it value add. So value add is where you’ll buy a property, perhaps it’s distressed or maybe it’s not distressed, but there’s additional value that you can add to it to either get the rents that are currently at the time of acquisition below market. Or, if they’re not below market, you can maybe sometimes push them above market through renovations. And, basically, there there’s a substantial amount of value that’s created because the way that commercial real estate is valued, it’s valued based on a number called NOI, net operating income. So the higher the net operating income, so the more you can drive the revenue or the rents and the more you can minimize those expenses, the higher the value of the property is. So, with with with within the strategy, you’d go in usually somewhere between a 3 to 7 year hold period.

Thomas Castelli [00:06:55]:
It kinda just varies based on the project. And investors can expect anywhere from, you know, if everything goes right, anywhere from 15 to, you know, 30%. Now I I will say this returns that, you know, over the last 10 over, you know, pre pandemic and kind of over this run up we saw, you know, over the last maybe 10 or 15 years, those returns were easy to get. Now to in today’s environment, you’re probably looking more at, like, 15 to 20%. I just got an email today that, a group wrapped up their fund, which is just syndicate where they’re buying multiple properties. And, they wrapped up their fund after running it for 10 years, and they they got a net 19.9% internal rate of return to their investors. So it it definitely varies, but if you’re investing in these things, you definitely probably wanna be looking north of 15%.

James Kademan [00:07:45]:
Gotcha. And you’re talking annual. Right? Or is that total?

Thomas Castelli [00:07:48]:
Yeah. Yeah. Annual annual internal rate of return. Yep. Gotcha.

James Kademan [00:07:51]:
Okay. Okay. Just so we’re making sure.

Thomas Castelli [00:07:53]:
Yeah.

James Kademan [00:07:54]:
So, I mean, that’s still 19%. That’s still nothing to sneeze at. That’s healthy. Yeah.

Thomas Castelli [00:07:58]:
Yeah. I know. It’s it’s definitely the the reason why I got involved in it is because of it’s in my view, the stock market’s harder. You can you know, they call it alpha in the stock market, which is beating the index. It’s challenging to beat the index as an individual retail investor. I’m sure people do it, but it’s certainly statistically speaking, less probable. However, in the private markets and private real estate, because the markets aren’t so efficient. You can’t just buy stuff at the click of the mouse typically, and there’s a lot more room for operational error, if you will.

Thomas Castelli [00:08:29]:
There’s more opportunity in that space. So, when I found out about that and found out about the potential returns, through my own experience as well as experience of others, that’s kinda what attracted me to that world because, certainly, a 15 to 20% return is much better than your, you know, your 10% on average roughly return you get from the S and P 500.

James Kademan [00:08:48]:
Yeah. Absolutely. Now tell me, when you’re a member, an investor of one of these, I am hoping, I don’t know for sure, but are you just fronting the cash and then just wait for the check to come in the mail a few years later? Or are you having to do something else besides that?

Thomas Castelli [00:09:03]:
Yeah. No. So in a long story short, yes, what you just said is how it works. However, what I would say is that, this this is, the private real estate markets when you’re investing in syndicates and funds. Once you give the money to the sponsor, you’re relying on them to run the deal. So, from my experiences, you know, what you wanna do if if someone’s considering this, the most important part of this is is vetting the sponsor. Right? Because they’re once you give them the money, you’re relying on them to produce the return, give you your money back. There’s certainly instances where people or sponsors have not done the right thing, whether whether just due to error or sometimes, mallet mal malicious intent or something like that where they stole the money.

Thomas Castelli [00:09:42]:
So you want to you wanna make sure that the sponsor has a track record of success in the market. So, for example, if they’re if they’re, syndicating multifamily properties, you want us in in South Florida I’m just making this up. You wanna see you wanna see or Jacksonville, Florida would be a better a more accurate representation. You wanna make sure they have a track record of, a, successfully doing these multifamily deals, probably over an extended period of time, like, maybe perhaps 10 years. I’m not saying you could go that that’s saying it’s a hard and fast rule, but the more experience they have demonstrating that they have the ability to to do this, the the better. So that’s kind of the most important thing is vetting the sponsor and making sure they have a track record record of success in the markets and the asset classes that you’re investing in. Because once you hand that money over, you’re not doing much. There’s gonna be usually quarterly updates.

Thomas Castelli [00:10:31]:
They’ll do, like, a quarterly webinar, send you a quarterly update on via email. But beyond that, there’s not much you you really have to do at that point.

James Kademan [00:10:40]:
And can you tell me a little bit about the timeline? So imagine you buy a property and they’re fixing it up and the market’s gonna change.

Thomas Castelli [00:10:47]:
So I

James Kademan [00:10:48]:
mentioned that timeline may be somewhat fluid Yeah. Depending upon where the market’s at and where the people are at with the, I guess, whether that’s the investors or the the person you had a name for it, but I can’t remember it.

Thomas Castelli [00:11:00]:
The sponsor.

James Kademan [00:11:00]:
The sponsor, the person that’s, I guess, making the deal happen. Are they saying, hey, let’s hold on to it for a year because the market’s kinda cooling down. Or, hey. We’re thinking about holding on to it for 5 years, but the market is cooling down, so let’s get rid of it now.

Thomas Castelli [00:11:14]:
Yes.

James Kademan [00:11:14]:
How does that timeline work?

Thomas Castelli [00:11:15]:
Yes. So the the the timeline’s certainly a little fluid usually in the in the legal documents and, usually, the expectations they set with investors and within the legal documents themselves. They’ll give themselves a room to wiggle some wiggle room. So you might see a you might see an opportunity that’s gonna run 5 to 7 years. And, it because it may be in year 5 when it’s come when they originally they might project to sell it in year 5. When year 5, it comes around in the macro economy, interest rates are up or whatever the case is, the market’s down, and it’s not the most favorable time to sell. They might say, you know, we’re gonna hold on to it for another year, and, we’re gonna sell in another year. And I’ve seen that happen before where things have been extended.

Thomas Castelli [00:11:54]:
I’ve also seen, timelines that have been collapsed. Because, also, I could for example, the 8 unit apartment community that I mentioned, we’re supposed to do that in 3 to 5 years. We ended up doing it in less than 3 years, and that was because we achieved that was, like, partially because we achieved our renovation, you know, I guess, ahead of schedule and our and our rent improve and our rent upgrades, but also the market at the time, was was so robust that the the properties, appreciated so much. Such a short period of time, we hit our goal, prior to prior to that 3 year mark. So we went ahead and sold around 2 to around 2 to 3 years instead of at the 3 year mark.

James Kademan [00:12:33]:
Nice. So from a tax point of view, if I’m an investor, is that considered capital gains? Or what is that con or is that just true income? Or how do they treat that?

Thomas Castelli [00:12:44]:
Yeah. That that’s a great question. So, when when the property is sold, there’s it’s usually gonna be con it’s usually gonna be considered a capital gain. Now within that capital gain, there’s something called depreciation recapture. So when you buy the property so, yeah, when you buy a property, it’s, there’s a a noncash expense called depreciation. It’s one of the biggest tax benefits of investing in in rental real estate, and that’s true whether you buy a rental property directly or whether you do it through a syndicate or fund. And, what that depreciation does because it’s noncash, it helps you shield your rental income from tax during the period of ownership. And in some cases, you can have multiple investments that are throwing off these losses due to this noncash expense, and that can actually help you shelter your capital gain from these real estate investments when it comes time to sell.

Thomas Castelli [00:13:30]:
So in other words, to get to give an example, what depreciation does, if you look at a profit and loss statement, say you have rental income, you’re gonna have all your expenses. These are typically gonna be hard expenses, like paying the property manager, paying the vendors. This is money that’s leaving your bank account. However, then there’s gonna be this big expense. It’s usually pretty large in the 1st year, a depreciation, which it only shows up on paper. So you might tell the IRS, hey. I lost money on this deal, where you might be pocketing cash flow. You might be actually putting money in your pocket.

Thomas Castelli [00:14:01]:
And what happens with this loss in many cases in the like, for these investors, is it’ll just carry forward to future years. And it’s not uncommon to see in the year of the property sold that the investor has a bunch of these losses, whether it be from that specific property, perhaps from another property they invested in as well, that are available to help offset the capital gain. So one of the unique things in I I I don’t wanna go down rabbit hole, but one of the unique things about real estate, compared to, other, investments like stocks that in a taxable account, if you will, or not in a retirement account, is that you can shell it’s easy to shelter and kind of defer taxes on real estate where it’s more difficult to do that on other assets.

James Kademan [00:14:41]:
Nice. So tell me, I’m just just learning about depreciation, and I feel like I learned about it late just based on the tax bills that I’ve had. So with this depreciation, the way that I understand it, which I’m certain is not correct or not the full story, not a CPA.

Thomas Castelli [00:14:58]:
Mhmm.

James Kademan [00:14:59]:
The idea is with depreciation, you take depreciation, but then when you sell, you have to recoup that depreciation or something like that. Can you help me understand that?

Thomas Castelli [00:15:08]:
Yep. So this is probably the best way to describe it. Let’s just say that we have and I’m just gonna use, simple numbers here. So if there’s any accountants listening, you know, I’m not doing this complex math right now. I’m just gonna give just to illustrate the point. Say you buy a $1,000,000 property. Right? Say you hold it for let’s just call it 10 years. You might have $200,000 of depreciation.

Thomas Castelli [00:15:29]:
So what they call that that that when you initially purchase the property, that’s called your cost basis. So you have a $1,000,000 up here. Right? Now you took $200,000 of depreciation. That depreciation reduces your cost basis and gives you your adjusted cost basis. So in this instance, you had a $1,000,000 property, $200,000 of depreciation. Now you have a now your justice basis is 800,000. Right? Now say you go sell that property, keep it simple, 1,200,000. Right? Hopefully, sell it for more than that, but it’s 1.2.

Thomas Castelli [00:15:58]:
You have now you you have a $200,000 capital gain. That’s from 1.221 minus 1,000,000. Right? But now you have an additional $200,000. It’s considered a gain, but it’s called depreciation recapture. Meaning, you have to pay tax a certain amount of tax on that on that $200,000 in depreciation that you had originally taken. However, I will say I will say this before before I before I move on from the before I end this. But is, is the reason why you do wanna take it even though you have to pay taxes on it is because if you can take the depreciation, you know, when you first acquire the property and use it to reduce your tax bills, a dollar today is worth more than a dollar tomorrow, thanks to the time value of money. So you can take that dollar and go reinvest it, you know, into another investment, and that investment could be earning a return while, you know, you own this property.

Thomas Castelli [00:16:51]:
And then eventually when you pay it back or when eventually you sell the property, there’s actually ways to defer that depreciation recapture or minimize its minimize your exposure to it rather. So there there are there are strategies to get around it.

James Kademan [00:17:04]:
Gotcha. So help me understand just to dig in this a little bit deeper with the simple math here. The $1,000,000 property dropping that to 800,000 with a $200,000 of depreciation. Is that because that $1,000,000 property was held for 5 years and you’re taking I’m thinking it was commercial properties like 39 years or 39a half or something like that, or I forget exactly the the term residential is different.

Thomas Castelli [00:17:27]:
Yeah. Yeah. So residential and that and multifamily is included in residential. That’s the property is depreciated over 27 and a half years. We’re commercial properties like retail, industrial, offices, things like that, that’s 39 years. So it’s depreciated over 39 years. However, since the tax cuts tax cuts and jobs act to 2017, there’s been something called bonus depreciation that has been available. And what bonus depreciation allows you to do is significantly accelerate that depreciation expense in the 1st year.

Thomas Castelli [00:17:57]:
So, it’s not uncommon to see people in the past, it used to be at a 100% bonus depreciation. So it wasn’t uncommon to see people depreciating significant amounts of their property in the 1st year and and having an an an outsized depreciation expense, which is maybe perhaps why you’d see a large number like 200,000 even if you only held it for 5 or 10 years.

James Kademan [00:18:18]:
So is it that number, the 200,000 in this example, when you’re talking bonus depreciation, are you just grabbing that number out of anywhere? Because up to a 100%. Am I understanding that to be Yes.

Thomas Castelli [00:18:30]:
It’s a $1,000,000? Yeah. So let me let me give a more realistic example. I just pulled those numbers out just to kinda illustrate the concept. If you had a $1,000,000 property so first thing is the land is never depreciated. Only the improvements on the building, the building itself, and some of the land improvements that are appreciated. So you might have a a 100 a $1,000,000 property. Now within that property, that would be typically depreciated. Let’s say it’s multifamily over 27 and a half years.

Thomas Castelli [00:18:54]:
So if you depreciate that over 27 and a half years so let me take a step back. So this $1,000,000 property, we’re gonna take out the land value. So the land Okay. We’re gonna say that the building is worth 80% of that $1,000,000. The and the land’s worth 2 $100. So that means you’re gonna be depreciating $800,000. If you did it over 27 and a half years, you’d be roughly looking at a $29,000 1 $29,000 depreciation write off each year. However, bonus depreciation so if you do a cost segregation study what a cost segregation study does is it breaks down the components of the building into their useful lives.

Thomas Castelli [00:19:29]:
Because you don’t just have the roof and the structural components. You might have appliances, carpeting, fixtures, decks, things like that. So and all that’s eligible for bonus depreciation. So say you do a cost seg study, you might you might be able to you might be able to bonus depreciate, let’s just say, 25% of that $800,000. So that’s $200,000. Now this year now it used to be at a 100%. So it used to be you’d be able to deduct that entire $200,000 in the 1st year and get this outsized depreciation expense. Today in 2024, it’s 60%.

Thomas Castelli [00:20:04]:
So you 60. Yeah. They they reduced its phasing out 20, percent per year next year in 2025, barring any, tax legislation changes. It’s gonna be at, 40%. But this year, it’s at 20 per excuse me, 60%. So you’re looking at a $120,000 of depreciation in the 1st year.

James Kademan [00:20:24]:
Gotcha. And then the subsequent years, how does that work?

Thomas Castelli [00:20:27]:
So in subsequent years, you would still continue to depreciate the property over 27 and a half years. So

James Kademan [00:20:32]:
Gotcha. Okay. So it’d just be normal. So you take a big boost in year 1, and then it’s little by little, the subsequent years. So then when you sell that property, tell me about that then.

Thomas Castelli [00:20:43]:
Yes. So when

James Kademan [00:20:43]:
you sell depreciation goes.

Thomas Castelli [00:20:45]:
Yeah. So let let’s just say, again, if there’s any accounts out here, I’m not breaking out the real calculator for the like, the the real depreciation calculator. Sure.

James Kademan [00:20:53]:
Just ballpark.

Thomas Castelli [00:20:54]:
But so so let’s just say you depreciate it. Let’s just say you dep so you took 2 a 120,000 in the 1st year. Now you’ll be left with this $800,000 property, and you have you took a 120, so now you have 680 left. So let’s say that over 27 and a half years, you’re gonna have an additional 24,000, roughly 25,000. And then you’re gonna let’s say we multiply that by 5 years. The 5 years you held the property, you’re gonna have a 123,000 plus the original 123,000 the 120,000 you took in the 1st year. You’re now looking at you’re now looking at roughly, like, a $145,000 of appreciation. Alright.

Thomas Castelli [00:21:33]:
Excuse me. I’m I’m doing I’m I’m, like, doing this math on the fly right now.

James Kademan [00:21:37]:
No. You’re good. You’re good. I’m putting you on the spot here. So sorry.

Thomas Castelli [00:21:40]:
It’s, you’re getting maybe 240,000. So let’s just say you sell the property for 1,200,000. Right? Now when you sell the property for 1,200,000, your your cost basis in this $1,000,000 property is going to be 760,000. So then now you’re selling it for 1.2. So now you have a total gain. They’re gonna call it a 440,000. However, $200,000 of that gain is gonna be considered capital gains from appreciation. That’s usually gonna be taxed, at rates up to 20%.

Thomas Castelli [00:22:17]:
And then this, this additional amount, depending on the type of recapture, it could be taxed at your ordinary ordinary rates up to 37% for the personal property or the 5 year property, as well as any other property that was bonus depreciation or accelerated depreciation was used on. And then the actual depreciation from the physical structure itself, the actual building, that’s gonna be taxed at a rate of up to 25%.

James Kademan [00:22:42]:
Wow. Okay. Interesting. So is there just with all that, let’s go down a couple rabbit holes here. First, the segmentation the cost of segmentation, do you how do you figure that out? I imagine you have to pay somebody to come in there and say, this is 5 years, this is 10 years, whatever.

Thomas Castelli [00:23:01]:
Yeah. Absolutely. So, typically, these these cost segregation studies that you could there’s they’re done 1 or 2 ways, typically. The first way, is you would have an engineer who who is well versed in this in in this area. They would come down and do a they would survey your property, think about almost like an inspection. Right? Coming down. They’re surveying the property. They’re taking inventory of every component, and they’re gonna go back to their office, and they’re gonna give you a report.

Thomas Castelli [00:23:24]:
That report’s gonna say, okay. Well, your property has it’s gonna give you, like, an itemized report. Okay. This this amount of property is gonna be 27 and a half year property. This amount’s gonna be 15 year. This amount’s gonna be 5 year, and that 5 15 years was eligible for bonus depreciation. So they’re gonna give you that report, and that’s how it’s done. Now on smaller properties, usually properties less than a1000000, it’s possible to do what they call a desktop study or a software cost segregation study, where effectively you fill out a form or you give the you give the company information, and they have, their their their national database and their algorithms and their proprietary systems to figure out what a cross segregation study would look like for your property without somebody physically going there.

Thomas Castelli [00:24:06]:
So, yeah, the bottom line is you’re typically gonna work with a company who’s either gonna come down to your property and do it in person, or they’re gonna do it virtually, if you will. And they’re gonna give you a report giving and telling you what what the breakdown of each of what each type of property is for you.

James Kademan [00:24:23]:
That is so interesting. And then the IRS, do they come in there with a flag, or are they, like, however you did this the study that’s cool with us, or how does that work?

Thomas Castelli [00:24:33]:
So the cost segregation study is, is actually how is actually how the property should, in reality, be depreciated. It should be depreciate but the thing is it’s so customary for people to just depreciate the entire thing over 27a half or 39 years that it it doesn’t matter. But, technically, it’s, like, the correct way to do it. Now the IRS is not gonna come after you for not doing it, typically.

James Kademan [00:24:56]:
But because they’re making more money that way. Right?

Thomas Castelli [00:24:58]:
Yeah. Yeah. Yeah. They’re not gonna come after you for not doing it, but, it’s the cost segregation that’s a 100%, a 100%, like, legitimate strategy. They the IRS has an entire audits techniques guide on how it’s supposed to be audited, to make sure that it’s that stands up. But most of these companies that do them, I can’t speak for everyone, but most of them, they know what they’re doing. They they they have the IRS guidelines. They have they have their their systems dialed in.

Thomas Castelli [00:25:21]:
They know what they they know what stuff costs. So you don’t I’ve seen it happen before, but you don’t typically see, many audits around cost segregation studies, at least in my experience.

James Kademan [00:25:32]:
Okay. And just is there a a guideline or hard and fast rule, one, for what a study would cost to make sure that it’s actually you’re coming out in the end better?

Thomas Castelli [00:25:44]:
Yeah. It it it definitely depends on on the property, the location, and the and the company you’re working with. I would say you’re probably looking at 2 to $3,000 minimum on larger properties. But on smaller properties, when you’re doing that desktop or that or that cost segregation study, it could cost anywhere from 600 to, you know, $1500 to do one, depending if you get audit support and and the size of your property. But yeah. So it’s most cases on properties that are above 500 $1,000, it’s it’s gonna come out to be cost. You’re gonna there’s gonna be a cost benefit there.

James Kademan [00:26:17]:
Gotcha. Awesome. I wanna dig in this a little more because it’s so interesting to me, because I just found out about this. And it’s one of those things where I looked at I had a commercial property before, and I learned about this after the fact. So I was thinking, wait a second. Does that mean, like, well, one, can you amend your previous returns and go back and say, hey. Funny story. We just did the depreciation over whatever 30 years, 29 years, whatever it is, and we should have done this cost segregation thing.

James Kademan [00:26:49]:
So can you go back? Or is it one of those things where you can, but you shouldn’t? Or what’s the place there?

Thomas Castelli [00:26:55]:
Yeah. It is possible to go back and do it if it was, like, a year ago or so. If it’s longer than that, typically, what you’re looking at doing is what they call a change in accounting method, which involves filing filing a form, called 31 15, and doing what they call a 481 a adjustment, which is just accounting speak for what you’re doing is saying, hey. I incorrectly reported this in this year, in this past year. So I’m gonna do the cost segregation study. I’m gonna bring the losses that I should have took in that 1st year into this year. Right? So with this method, you’re not necessarily going back and taking them back then on your tax return. You’re just bringing what you should have done up to the current year in which you do this.

James Kademan [00:27:40]:
Alright. And some of that could be substantial if we’re talking a 100% a couple years ago, then 80%.

Thomas Castelli [00:27:46]:
Yeah. I mean It’s not

James Kademan [00:27:47]:
not terrible. Right?

Thomas Castelli [00:27:49]:
I know. We when we see this happen all the time, people, you know, forget about it, weren’t aware of it. Sometimes there’s even strategic reasons to postpone it. I can well, sometimes, like so what happens is, like, when you do these cost seg studies, you know, you generate these large losses. And, there might be there might be reasons to not generate that large loss in that specific year you buy that property, but you may have more income, for example, in a future year, and you’re aware of that or you know it’s coming or it might happen. So you you postpone that and you go back and you do this kind of corrective method intentionally to bring to bring those losses into the future year when when there will be more beneficial for you.

James Kademan [00:28:27]:
Oh, got it. That is cool. You know, it’s interesting. Cause I was chatting, I guess I was chatting with John Casper before who introduced me to you. And I was joking with him a little bit about how the accountant said or the accountant that I have had and the accountants of a lot of business owners that I know, when I would chat with them and say, hey, I feel like I’m just giving my accountant the numbers for the businesses. And he’s just throwing them in a program and saying, hey, this switch over tax. And I don’t feel like there’s a whole lot of strategy involved.

Thomas Castelli [00:28:59]:
Yeah.

James Kademan [00:29:00]:
It’s just churning the numbers, but I feel like this is strategy that, smart people know, but, apparently, I wasn’t in that group or didn’t get the memo on that.

Thomas Castelli [00:29:09]:
Well, I don’t think that’s your fault. You know, there’s a lot of CPA most CPs out there, I’d say the majority, are are tax preparers. And what their job is, they take your like, you just like you just mentioned, they take your information. They put it in the tax return. They say you either owe the IRS money or you you are gonna get a refund. Congratulations. We’ll see you next year. And they don’t actually ever look at your tax situation and say, hey.

Thomas Castelli [00:29:29]:
Well, you know, hey, James. If you did x y z, you know, did you know that you could save, you know, $10,000 in taxes every year? That they they never do that. And that’s partially because, they’re partially because they’re so busy doing tax returns all the time that they don’t ever have time to step up and breathe. But, another part of it is is that many accounts are tend to be introverts. And not there’s nothing anything wrong with introverts, but, you you know, I’ve certainly worked with accountants who would prefer to sit behind their computer in a dark room and just do do the tax returns and not have to talk to anybody. And because of that, they never actually give strategic advice. So, it’s not only not only is it a timing issue for some peep for for many accountants, but it’s also, like, a personality slash skill set, thing that that they do many many accountants just don’t provide the service. So, really, you have to be working with a tax strategist who’s gonna give you that, like, here’s what you can do to reduce your taxes.

Thomas Castelli [00:30:21]:
And then what happens is when you go and you follow the advice of a tax strategist, you’re gonna make the moves throughout the year or throughout the years, in some cases, years ahead. So that when it does come time to file that tax return, when you do give that information to your tax preparer, Your outcome is coming out more favorable to you because, again, the the tax preparers in many cases won’t tell you what you have to do. They’ll just tell you what you owe, what you don’t know.

James Kademan [00:30:43]:
Gotcha. So how do you find a tech strategist?

Thomas Castelli [00:30:47]:
Yeah. So that’s a great question. So depends on the industry that you’re in, of course. In real estate, there’s a handful of tax writers out there. Our our firm, is is one of the bigger ones we do. We do tax strategy for investors. So I would say there’s 2 things you could do or 3 things. I would say, first, start with your network.

Thomas Castelli [00:31:05]:
If you have a network of people, chances are you have other real estate investors perhaps or whatever industry you’re in, and say, hey. You know, do you know any tax strategist? Do you know any CPAs who who provide the service? That’d be the first place I would start, because usually, that’s I found in my own personal experience when I hire people or or look for services, getting a recommendation often comes in the strongest. Not always, but often. And then, the next thing I would do is say go to Google. This Google tax strategist for, you know, for for real estate or for whatever industry you’re in and see what they have out there. And I would when you’re vetting the CPAs, I would look at what content they’re putting out there, and, you know, can they do they have demonstrable content, that kinda shows you that they know what they’re talking about, that they actually do the tax strategy? That could be in the form of podcast. That could be in the form of white papers. That could be in the form of of videos, like YouTube videos, for example, could be in the form of webinars or or or live conferences or virtual events, things of that nature.

Thomas Castelli [00:32:02]:
So you just wanna go out there. Those are the 2 ways I probably look at it. The third one is gonna be go on the pod look listen to podcasts. That’s kind of, that’s kind of built into the second one, I guess.

James Kademan [00:32:13]:
Sure. So just to clarify, though, these are gonna be people that have CPA in their title, their accountants, but they’re you gotta dig deeper because there’s no nomenclature or bunch of letters that say tax strategist versus just the number enter guy.

Thomas Castelli [00:32:28]:
Right. Right. I mean, they might have titles like not they might have titles like tax strategist or tax adviser. Those are those are typically the titles you wanna look for when you’re looking for this type of advice. And now having said that, there could just be, you know, there could be advisors who are just going by the name tax professional or tax or senior tax adviser excuse me, senior tax, accountant or something like that. But, usually, the advisers are gonna are gonna differentiate themselves by calling themselves a tax adviser or tax strategist to let you know or tax planner to let you know that, that that this is the service that they’re providing.

James Kademan [00:33:02]:
Gotcha. I wanna dig in this a little deeper because I imagine there’s a lot of business owners that that wanna know. I know I’m certainly one of them. Now the tax code is whatever millions of pages and no one person could possibly know all of it.

Thomas Castelli [00:33:17]:
Right.

James Kademan [00:33:18]:
So is it better to find a tax strategist or advisor, someone in your vertical, whether that’s real estate or I don’t know, hair salon, I don’t know, whatever your business is if they exist, or how do you figure that out?

Thomas Castelli [00:33:31]:
Yeah. I would say whatever your per primary business is, whatever your core business is, go try to find a tax strategist who specializes in that because that’s most likely where you’re gonna have the most impact is in your core business. Like, for example, at our firm, we we specialize in real estate, so all of our clients are real estate investors. Now some of them have other businesses. Sometimes they might have a medical practice. They might have an ecommerce business. They might have, an IT company. They might have these these investment these, businesses that are kinda like ancillary to to their, to their business, but, it’s not the core, if that makes sense.

James Kademan [00:34:10]:
I wanna dig into the, the real estate syndication a little bit deeper one step. I forgot to ask you. If I’m an investor or I’m I got a small business that’s bringing in not something like that, and I I need somewhere to put the cash, that doesn’t necessarily need to be crazy liquid. Is it or let’s just talk about minimum dollar amount that you would typically see in syndications? Because I imagine they’re not just taking quarters and dimes or $5 here. It’s gotta be there’s gotta be a comma in that number somewhere, I imagine.

Thomas Castelli [00:34:40]:
Yeah. So so where

James Kademan [00:34:42]:
Yeah. Go ahead. Where where is that number typically at?

Thomas Castelli [00:34:45]:
Yeah. So so most syndicates and funds, you’re probably looking at $50,000 as the minimum. There are some that will, like, have that are either just starting or perhaps they wanna get new investors in so they’ll have a lower amount of 25,000. So you’re usually looking at between 25 to $50,000 minimum. I’d say 50,000 is becoming more of the common number that that I’ve been seeing, but there’s certainly ones out there for 25,000 now. That’s if you’re invested now there’s something called crowdfunding. There’s crowdfunding websites out there that where you can actually put less in, like, fractional amounts, like $1,000 into some syndicates

James Kademan [00:35:19]:
Oh, wow.

Thomas Castelli [00:35:19]:
Which is which is I I I’ve I’ve never never participated in any of those, but they do exist. But for typical syndicates of funds, it’s 25 to, like, 50,000 minimal.

James Kademan [00:35:29]:
Okay. Gotcha. And then as far as vetting these sponsors, sponsors what you call it?

Thomas Castelli [00:35:36]:
Yes. Sponsors are syndicated.

James Kademan [00:35:37]:
Like your Yeah. Sponsor, I always think of advertising, but, turn into money either way. So to find a sponsor, I imagine there’s quite a few of these around there.

Thomas Castelli [00:35:48]:
Yeah.

James Kademan [00:35:48]:
But you have to find someone that one is not gonna run away with your money. But 2, I imagine it goes deeper that they know how to find the properties. They have property managers that can take care of them and all the things that go in there as opposed to headache that you’re trying to avoid. Mhmm. How do you figure that out?

Thomas Castelli [00:36:05]:
Yeah. So that’s a that’s a great question. So they’re the the first the first way to figure out the way I found out about a lot of these, sponsors was a podcast. Like, if you listen to a podcast like John’s, like John Kasman’s, he’s gonna have a bunch of sponsors, I’m sure, on the show talking about their business and what they do and and and how they evaluate properties and all that. So listening to podcasts is one way. Going to conferences, going to real estate conferences, like the Bigger Pockets Conference is is is one out there, that you can meet sponsors at. There’s also online communities. I’m part of one of them.

Thomas Castelli [00:36:35]:
It’s called Left Field Investors. I’m not affiliated with them in any other other way aside from the fact that I’m a member. But, they would they what this community does is they have sponsors that they they vet it’s a community that vets sponsors collectively. So they might say, okay. Hey. You know, I invested with so and so and here is my experience. And if you go into the forum, you’ll see, you know, dozens of these posts with dozens of sponsors. So that’s one way to find out.

Thomas Castelli [00:37:01]:
I I would say, yeah, that’s probably going joining community is probably the best way to do it because you’re kinda getting pre vetted sponsors a little bit. You still should do your own due diligence, but you’re gonna have a lot of pre vetting, going on, and, also, you’re gonna have a lot of access, to to what’s out there. However, again, also getting on podcasts and listening to podcasts by, you know, multifamily investors, or or commercial investors, that’s also how you’ll be able to find out about about him. There’s another podcast called the date the syndication show. It’s a daily show. At least last I checked, it was a daily show. And, the what they do is they basically interview sponsors all the time. So if you listen to that show, I’m sure you’ll find out about a lot of sponsors really quickly.

Thomas Castelli [00:37:42]:
There’s also another one called the best ever show with Joe Fairless, and that’s another show where there’s plenty of sponsors who’ve been on that show. And, yeah. So listening to podcasts, going to conferences, and joining communities or networking, is probably the best way to find these things.

James Kademan [00:37:58]:
The the best ever show, that’s gonna be the I’m gonna dare say the second best name of a podcast.

Thomas Castelli [00:38:03]:
Yeah.

James Kademan [00:38:04]:
Maybe even went up on us. Yeah. Authentic Business Adventures. That’s an incredible name.

Thomas Castelli [00:38:08]:
It is. It is. It is. It is definitely there’s a battle right there for it.

James Kademan [00:38:13]:
And it’s a real estate thing?

Thomas Castelli [00:38:15]:
Yeah. So the best ever. It’s called the best ever real estate investing podcast specifically if I’m not mistaken. But I just but I just I’ve I know it is the best ever. But, yeah. So that podcast is another good podcast to check out for that.

James Kademan [00:38:28]:
Gotcha. Now let’s dig into your life a little bit here. Are you a CPA by day and then real estate investor by night or by I guess, you really don’t have to stick a whole lot of anything in there time wise. Yeah. Tell me about your life and your investment strategy. What’s worked for you?

Thomas Castelli [00:38:43]:
Yes. So I’m, so I’m a CPA full time. So that’s my this is my primary occupation. I’ve been investing. So when I when I like, a few years ago, when I did that 18 Apartment Community, that was on the active side. Around that same time, we closed on that deal, the purchase side of it, I actually this is when I started here with this firm. So that that was a part time endeavor. Most of the leg work leg work was done.

Thomas Castelli [00:39:08]:
We only had to be on a few calls a week with property management, and one of my partners would go down and check out the property. So it was a light lift for me. Then COVID happened. We ended up selling that property during COVID. And we were we had it under contract to sell in March of 2020. Oh. Everything was going well everything was going well with the sale. Right? Everything was going well with things who were selling.

Thomas Castelli [00:39:28]:
Then COVID hit, and they executed their extension, to to to April and then forced us to May. We ultimately sold the property. My plan was I say that because my plan was to go do this again, right, on a part time basis with partners. Because when you’re dealing with partners, it’s easier to do or less time there’s less time commitment because each person plays their role. But then I started just investing on the limited partnership side. So I just started investing as a passive investor just with other sponsors or other syndicators, and they, and that’s what I was doing up until up until this year, actually. And one of the one of the sponsors that I was investing with, I had a long standing relationship with with some of their founders, And I said, hey. Look.

Thomas Castelli [00:40:06]:
You know, you need you need assistance on the marketing side of things. I know how to do marketing. Let me help you with investor relations. So I ended up teaming up with them. So now I’m on the sponsorship side with with them, their dual city investments, and we have a fund. And so I I’m my role there is to help, investor relations to generate leads, investor leads, as well as, build our investor relations process and systems out, so that we can find, so we could take advantage of the opportunities that are coming our way. Because dual city, the the partners there there, Keith, one of the founders, and and Mike, they’re they’re phenomenal operators. But where where the gap is is is the digital marketing side.

Thomas Castelli [00:40:46]:
Right? So and that’s kinda where I come in. So that’s more of a part time endeavor for me at this point. I’m doing it part time, nights and weekends type of thing. And, that’s kinda how it fits into my lifestyle, but I’m I’m predominantly day job as a CPA.

James Kademan [00:41:01]:
Gotcha. That is so cool. That’s impressive. It was always interesting to hear what people that are essentially in the money business. Right? Whether it’s accounting, financial planning, retirement, all that kind of stuff. What are they investing in? Yeah. Because a lot of times I’ll end up meeting people in the let’s just say financial services. Right? Somebody trying to hustle mutual funds or stocks or whatever it is that they’re selling.

Thomas Castelli [00:41:24]:
Yeah.

James Kademan [00:41:24]:
And I look at their lifestyle and what they’re investing in. And I think if you were really making as much money as you’re promising me, I don’t know that you’d be talking to me right now. Yeah. Just interesting dynamic.

Thomas Castelli [00:41:39]:
Yeah. No. It it’s it’s definitely interesting. There’s definitely different philosophies out there. I’ve seen financial planners and accounts invest in all types of things. For me, I tend to invest in real estate predominantly because it’s tax advantaged, because, you know, I I’m I’m getting taxed I get taxed as ordinary income on the income I’m getting from the accounting firm, and then the the syndicates and funds help kind of shelter that income from tax, making it tax tax efficient. Having said that, though, I’m not I’m not a real estate purist. I do have holdings in, like, in index funds or ETFs as as as as they’re called, or or, you know, also known as, I guess.

Thomas Castelli [00:42:14]:
And, so I I’m not a real estate purist. I do have holdings in stocks, and, I I so I I do I do kinda do both of those things.

James Kademan [00:42:22]:
Sure. Little diversity never hurt. It’s all good. Right. I do wanna dig into one thing, one other thing. I know we don’t have a ton of time, but I wanna ask you about the contract that if I’m throwing money at one of these these real estate things, I imagine there’s contracts with all kinds of provisions and stuff like that. Are there any things that I should look for specifically or things that if I do see them, I should run away and find somebody else?

Thomas Castelli [00:42:48]:
Yeah. So so these contracts that you might be signing when you enter in a syndication, they’re gonna give you what’s called a private placement memorandum or a PPM. And that PPM is going to tell you that basically, I’m I’m I’m gonna this is a joke here, but I’m gonna tell you that you can lose everything. Your shirt, your kids, they’ll come and take everything you own. Now, basically, what the saying is you can you can lose all your money in these investments. That’s what their PPM is gonna say, and that’s protect the sponsor in the event that that does occur. Now that that often doesn’t happen, but, that’s what you’ll see on the documents. So I I can’t say you would wanna run from that.

Thomas Castelli [00:43:21]:
What I would say is that if you have sponsors that, that you say go on a forum or you hear through, different parties, that they’re consistently lagging their own performance. Because, like, what happens is sponsors, they’ll project. They they they you know, the future is not perfect, but they’ll project what the returns will be when you’ll get distributions, you know, kind of the timeline of the deal. Now if they’re constantly underperforming, if there’s constant issues with these sponsors, that’s when you wanna run. Right? Or if, yeah, that’s when you wanna probably avoid them is when you hear constant issues. They’re constantly missing projections. They’re not transparent in their communication. Like, investor communication is crucial, because, you know, as a sponsor, you’re taking someone’s money and now you have to be a steward of their capital.

Thomas Castelli [00:44:07]:
If they don’t hear from you ever, right, you’re not sending out your quarterly emails, someone emails you a question and you’re not getting back to them, that’s a major red flag. So transparency, and timely communication helps build trust. So if you hear that people are not timely on communication, they never answer. Okay. Here here here’s a good way to do. Here’s what some spot here’s what some partners will do. They’ll go and they’ll vent a sponsor, and they’ll start asking this answering answering the sponsor, excuse me, Asking the sponsor questions, and they’ll see how the sponsor reacts to those questions. Are they getting annoyed? Are they getting frustrated? Are they timely in their communication? And if they they’re getting annoyed, frustrated, or not timely, then that could be a red flag.

Thomas Castelli [00:44:47]:
And, sometimes with the sponsor sometimes what someone told me they’ll do, is they’ll go as far as to get all the answers to their question that they need, then they’ll ask one more question just to see how the sponsor reacts. Oh. Just to test, like, kinda just to test, like, is this is this because they want to know they’re not trying to be a pain necessarily. They’re just trying to see, okay. Like, how how professional well do you know your stuff? Are you gonna treat are you do you respect me as an investor? Or am I just another number of, you know, the hundreds of investors that someone might have? So, I would say if they’re not timely in your communication, if they’re not patient with you, if they’re not within reason, of course, and if they’re not, and if they’re not answering your questions timely, I’d say that could be a good red flag too.

James Kademan [00:45:32]:
Interesting. I love it. This is great information, Thomas. Tell me, you, you have a website. Can you share that website with the crew?

Thomas Castelli [00:45:39]:
Yeah. So the the website for the accounting firm is ww. Therealestatecpa.com. So that that’s our accounting firm website. Dual city’s website’s dualcityinvestments.com. So those those are the those are the 2 websites.

James Kademan [00:45:56]:
That’s a dual city. Remind me what that is.

Thomas Castelli [00:45:58]:
So dual city investments, we have, we’re we’re we’re basically a sponsor, of a fund, and, we we have, we have properties, commercial and retail property excuse me. Commercial, residential, and retail properties in the fund. And, we’re we’re we’re chugging along here, so it’s it’s fun.

James Kademan [00:46:16]:
Alright. You I know we don’t have a ton of time, but I do wanna ask you about this. Residential versus commercial. Commercial, I’ve heard people are just getting beat up. I don’t know what your experience has been. Can you just touch on that a little bit?

Thomas Castelli [00:46:29]:
Yeah. So it definitely depends on the type of commercial. Office and retail have, have not fared as well over the last number of years, especially office has been getting beat up a lot. However, there’s been a lot of, excitement and a lot of positive momentum with industrial. Because in industrial, there’s a lot of, like, Amazon centers and there’s a lot of need for warehousing and and and things like that, manufacturing. So that has been do that has been doing better and has positive outlook. Now residential residential has also seen multifamily has also seen some turbulence due to the rapid rise in interest rates. That’s kinda true across all, asset classes, but multifamily has been a lot of syndicators who gotten themselves in trouble because they what they did is they took floating rate debt or bridge loans, they call it, which basically says you’re gonna have, this interest rate for 2 years.

Thomas Castelli [00:47:21]:
Alright? And we’re gonna go and, and at the end of 2 years, you’re gonna have to refinance the property. And, what happened was the people who took the the loans at these lower interest rates in prior years, thanks to this rapid rise in interest rates. Now their the interest rate is so high, they can’t afford the property anymore. They probably can’t support the debt that they have to refinance. So that has seen some turbulence, but, fundamentally, there’s so much demand for housing that the supply is just, in the long run is just not gonna keep up. So in the long run, residential still has a good runway, due to just the fundamental supply demand factors and and same thing with the industrial. But, Commerce office is office is definitely struggling right now.

James Kademan [00:48:07]:
Gotcha. And if you had to predict as far as interest rates go and all that jazz, would you say we’re stuck in 2024 where they’re at? Or stuck, I guess, depends on your position where you’re at if you’re putting money away if you’re trying to invest it.

Thomas Castelli [00:48:21]:
Yeah. Yeah. I would say I would say, like, I I don’t have a crystal ball. I think it’s a disclaimer. No.

James Kademan [00:48:27]:
No one does.

Thomas Castelli [00:48:28]:
But but I would say I’m I would be cautiously optimistic that they would decrease interest rates slightly before this end of this year. However, just looking at the track record of what the feds projected, they were originally projecting multiple rate cuts already that they already postponed. And so they’re gonna be taking in the the inflation data, and, they’re gonna be making, you know, assessments, I guess, judgments based on that on what they’re gonna do. So I would I I wanna say I I I wanna say that it’s it’s possible if they reduce interest rates this year, but I I I I I it’s anybody’s guess at this point what’s actually gonna happen.

James Kademan [00:49:04]:
Fair. Fair. Yeah. I wasn’t expecting to be like, this is how it’s gonna be. Right? Yeah. Everybody knows, but no no one knows. But it is interesting to hear when you’re in it on the CPA side and you’re also in and on the real estate side, I feel like you have your ear to the ground at least a little bit more than many people, arguably most people.

Thomas Castelli [00:49:23]:
Yeah. Yeah. I mean, I would say it could happen. I I would I would I would not be surprised to see interest rates fall a little bit this year, but I would also not be surprised at the same time if it didn’t just because of what’s going on. So, I’m cautiously optimistic that it will drop.

James Kademan [00:49:36]:
Fair. I get it. Well, Thomas, thank you so much for being on the show.

Thomas Castelli [00:49:40]:
Thanks for having me, James. It’s an awesome time today.

James Kademan [00:49:43]:
Yeah. Can you tell us those websites one more time?

Thomas Castelli [00:49:45]:
Yeah. So, our our CPA firm’s website’s www.therealestatecpa.com, and, our fund, dualcityinvestments.com.

James Kademan [00:49:53]:
Awesome. I love it. This has been Authentic Business Adventures, the business program that brings you the struggle stories and triumphant successes of business owners across the land. My name is James Kademan, and Authentic Business Adventures is brought to you by Calls on Call, offering call answering and receptionist services for service businesses across the country on the web at callsoncall.com. And, of course, the Bold Business Book, a book for the entrepreneur in all of us, available wherever fine books are sold. If you’re listening or watching this on the web, if you could do us a huge favor, give us a big old thumbs up, subscribe, and, of course, share it with your entrepreneurial friends and those friends that may need a little place to invest a little bit of cash so they can get that money to work for them. We’d like to thank you, our wonderful listeners, as well as our guest, Thomas Castelli of Hall CPA. Thomas, thank you so much for being on the show.

Thomas Castelli [00:50:43]:
Thanks again for having me. It’s a pleasure today.

James Kademan [00:50:45]:
Yeah. Past episodes can be found morning, noon, and night at the podcast link found at drawincustomers.com. Thank you for joining us. We will see you next week. Want you to stay awesome. And if you do nothing else, enjoy your business.