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Posted over 4 years ago

How Successful CEO Transitioned to Multifamily Real Estate

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Our previous show guest Dan has had built up a couple of different businesses, so he had got to the point where he was tired of writing these quarterly checks to the government, these large six-figure checks and was to the point where he was trying to figure out a way to reduce his taxable liability and really multifamily was the way to do that.

It was because of his main kind of motive was not necessarily cash flow or trying to double his money in five years or whatever for these types of properties, but really trying to take advantage of the taxes, if you look at some of the projections that come out on some of these assets, if you baked into it the tax savings side of things, after doing certain things like cost segregation on your assets, it really is a game-changer. From an IRR perspective and a return perspective for investors that do have these large attacks, had taxable liabilities, so for him in the very beginning, it was like "what can I do to reduce my taxable liability", Dan knew just to going small and doing some of the single-family homes and things like that was not gonna allow him to achieve and to get to the level that he wanted to be.

So doing this, a lot of people in Dan's position would look to take a passive investment as a first choice, you're busy in your life, you have a growing family, but he went the opposite way and he decided to be active. So he said that he was sitting at a conference and heard somebody talking about it, they were talking about how to become the general in your business and he said "I think I am the general, I'm running the day-to-day operations, I'm doing everything", but what he really quickly realized is that he was the one that was tied to the business and he couldn't really step away and so he decided that he wanted to promote his CEO position so he could step out and do the multifamily side of things that will allow him to be able to have that flexibility.

So he was playing with the real-estate investing for a couple of years, but never had the time, because he was so busy growing the practices and growing the business and getting it to the point where he was pretty much not doing very much at all, he was doing a few piddly things and going into the office and putting out fires, but nothing that anybody else couldn't already do and so he started to delegate a lot of those tasks that he was doing as the CEO and now he is still the president and he still owns those planks a hundred percent, but he hadn't really been in any of the clinics in the last year and a half. As he mentioned, he has a good team behind him, he has about 50 employees and that entity in that organization and he still looks at financial reports every Monday morning.

He also mentioned that he had a flaw in my mentality, that he thought that he can do everything better than everybody else and he thinks a lot of entrepreneurs get caught up in that mindset and although it may be true you might think it's true and so to him even to this day he still feels like that's true. Like he can do everything better than everybody else, but there's no way for him to be able to scale if he continues with that mindset, he sais, so what he learned earlier on is, once he started to delegate certain tasks that he didn't necessarily have to do, that somebody else could do and even if they could only do it to 80 to 85 percent the level that he could do it, it allowed him to be able to focus on a different area and so when he transitioned into the multifamily space right out of the gate he started to delegate things and he started to hire people.



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