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Show Summary
In this episode of the Real Estate Pros podcast, host Mike Stansbury interviews Lance Morgan, founder of College Funding Secrets. They discuss Lance’s journey from the IT industry to financial services, driven by the need to fund his children’s college education. Lance shares insights on how real estate can provide tax benefits and free money for college, particularly for high-income families. The conversation covers the advantages of short-term rentals, the importance of strategic real estate investments, and the unique challenges faced by families navigating college funding. Lance also shares personal anecdotes about his family life and hobbies, providing a well-rounded view of his experiences.
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Michael Stansbury (00:07.378)
Hello everybody and welcome back to the Real Estate Pros podcast. I’m Mike Stansbury and today with me is Lance Morgan. Lance, how are you sir?
Lance Morgan (00:34.402)
Doing great.
Michael Stansbury (00:35.778)
Awesome man, and first we gotta do the run through of who our sponsor is and that’s Investor Fuel. Investor Fuel, help real estate investors, service providers, and real estate entrepreneurs 2 to 5X their businesses to allow them to build the businesses they’ve always wanted and allow them to live the lives they’ve always dreamed of. So Lance, before we get into collegefundingsecrets.com, tell me your origin story. What were you doing maybe before you went down this yellow brick road of real estate?
And how did you get steered that way?
Lance Morgan (01:08.066)
Yeah, it’s interesting. So it all started when I had five kids. And then of course that led to a lot of panic when it came to the cost of college as they started getting older. I actually left the IT industry, went into the financial services industry to learn a little bit more about how I could help my kids pay for college and the best way to save for college and specifically how to get free money for college. And it turns out the financial industry is teaching a lot of very traditional methods that were not necessarily the
best. So I created this college funding secrets company because it’s all about the secrets that nobody ever talks about or tells you about. So for example, you know, it’s all about getting free money for college. But the problem is, is that most families make too much money to qualify for any sort of free money. So then of course, that led me once I started making over seven figures myself, I started looking at tax savings strategies and that led me down the rabbit hole of real estate and the short
term rental loophole, you know, and ways to get bonus depreciation and, all that kind of stuff to reduce my income. And then I had that aha moment of, Hey, this could help my high income families to use real estate to get free money for college. And so we ended up in this, we went from, you know, the financial industry to the college funding industry to kind of this real estate niche inside the, college funding.
industry.
Michael Stansbury (02:38.898)
Okay, so great, so let me ask you about that pivot, right, when you had that aha moment. What was that first transaction like? Did you do it for yourself or did you do it for somebody else? I’ll let you pick your poison there. Tell me a little bit about that.
Lance Morgan (02:42.626)
Yeah. Yeah.
Lance Morgan (02:53.784)
So was definitely for myself. Like I said, at first I was just trying to reduce my own taxes. And so I was starting to look at all these tax strategies and all the real estate strategies to reduce my own taxes.
And then it was on one of the webinars talking about short-term rentals where they kind of broke down five years to financial freedom. And I thought, man, five years, wait a minute. My families are sending their kids to college for five years, you know, or four years, hopefully. And so anyway, I thought, man, this lines up perfectly with what we’re trying to teach. And so it started out with, of course, myself and it wasn’t to try to get financial aid. It was to try to just reduce my taxes.
And then I realized that reducing taxes meant getting free money for college.
Michael Stansbury (03:38.867)
So you correlated the fact that that bonus depreciation, that taking off the top line of your income tax can now make you have you access to more funding available. And you’re adding to your real estate portfolio. I’m sure the benefits are just a laundry list. for somebody out there that’s now, they’re listening to this and they’re having their aha moment, talk about those benefits real quick. And give me one of your real world examples where you’ve helped somebody recently.
Lance Morgan (04:06.83)
Yeah.
Yeah, so in fact, I just got off the phone right before this with a client who is an attorney for a development land development company and they make $600,000, you know, between her and her husband and their kids are looking at top tier private schools like Vanderbilt and that’s a $96,000 a year school and these high income families that have lots of money in brokerage accounts and college savings plans, they
they plan on just cutting the check. So they’re gonna pay 90 grand a year for these top tier private schools. And so then we come in and say, hey, how about you put that 90,000 a year instead put that towards a investment property and it will literally give you about 80 grand a year in free money from a school like Vanderbilt. So a school like Vanderbilt that’s normally gonna be in that 90, 90,
six thousand a year range is going to cost maybe ten ten to fifteen thousand a year range if you buy enough real estate to offset your income enough right and obviously some families you know only need to reduce their income by a couple hundred thousand a year and some families need to reduce their income by half a half a million a year but it still is kind of adding these big eighty thousand dollar a year in college savings on top of that tax savings
Michael Stansbury (05:35.571)
So this is the thing that I love that your moniker is collegefundingsecrets.com because so many people I run into and they are folks that make a really good amount of money because they do really well what they do because they’re very focused on how they’re solving problems in the marketplace. But what they don’t realize is when you put a little bit of capital toward real estate, there’s all these benefits that can help them not only with their high income,
Lance Morgan (05:49.848)
Yeah. Yes.
Yes.
Michael Stansbury (06:05.148)
But now, to make sure Bobby and Susie and Joe have an easier time going to school, and it’s more affordable, it also, as I think through this, because I’m processing this in real time, it helps them with their personal financial statement. So some people don’t like the fact, they’re ego-driven, that their number goes down in the IRS. I love that.
Lance Morgan (06:22.691)
Yes.
Lance Morgan (06:32.012)
Yeah.
Michael Stansbury (06:32.122)
I’d love for it to be zeroed out. But some people don’t operate that way until they realize that, OK, that’s how we should operate. So yeah, for a family that’s making $600K a year, is it just one or two properties? Or what is the value that they need to purchase in order to really make that work? Or is that how it works?
Lance Morgan (06:53.134)
Yeah.
Yeah, no, that’s very interesting. That’s what makes this so unique is that the way financial aid works is that they calculate your income and your assets every year that you have a kid going to college. And so this lady I was just talking to as an example has two kids, but they’re spaced four years apart. Sometimes there’s an overlap, right? Like sometimes you might have kids that are two years apart. So they’re only going to be going to school for six years total. In her case, you know, she’s going to have a student in
for a solid eight years and that means that they need to buy eight properties right or maybe instead of just one big property they buy two or three a year or something like that smaller properties but nonetheless they need to buy real estate every year to be able to get those you know the depreciation and the you know using that cost segregation study and and taking advantage of these tax savings that’s an annual thing
And so our clients, you you mentioned, you know, some of these high income families, they’re W2 income, right? W2 income with really good credit scores typically, and plenty of money to qualify for a traditional real estate property.
after the first couple of properties, you know, and after implementing some of these strategies, now all of a sudden we shift more for the creative financing options, you know, the seller finance and things like that. So it starts out maybe traditional where they hand select that, you know, that property that they’ve always wanted in the cabin in the mountains or whatever it is, you know, and then eventually we get a little bit more creative as we need to keep adding to the real estate portfolio.
Michael Stansbury (08:37.616)
So that’s interesting. let’s say that I’m your typical client. I know first part is the education. Hey, you know what? We’re looking at what you make on your W-2, or we’re looking at your overall income, and this is how we can help you. So how do you marry them with the properties? Do you guys work with other service providers for that? How does that work?
Lance Morgan (08:55.928)
Yeah, so we’ve partnered with real estate coaches and professionals that can bring that inventory to our clients and give them options, working with nationwide real estate agents and stuff that can help with not only just the traditional purchases, but some of these creative purchases. We like working with people who understand the traditional side and the creative side, because we need both.
for our clients and then it’s a matter of you know so what we offer as a service is we offer that that coaching program and that mentoring program and a lot of it is done for you we’ve partnered with some companies that will they’ll just manage and maintain the whole you know short-term rental property of course the client will have to do the minimum to qualify for the participate you know the material participation to get the tax benefits but we go we have a range anywhere from
me help you find a property to here’s a property that you could just invest in and it’s a 98 % done for you and there’s a couple of options because you know our clients are very busy.
Michael Stansbury (09:57.478)
Okay.
Lance Morgan (10:03.668)
So we don’t offer a course or a lot of videos for them to watch. It’s more of that hands-on, you know, working with them one-on-one to be able to help them find a property, maybe underwrite the property. You know, it’s interesting. A lot of these clients of ours, they’ve always been intrigued and interested by real estate, but they just didn’t have the time to try to learn it, you know, and
Michael Stansbury (10:24.06)
No time.
Lance Morgan (10:27.532)
They don’t feel confident that they can go out and get the right property without making a mistake or anything like that, right? So no, not their will has. Yep.
Michael Stansbury (10:33.712)
Yeah, it’s not what they’re used to. Yeah, it’s not what they’re genius. Yeah, absolutely.
Lance Morgan (10:38.828)
Like you said, they might be an attorney or a doctor or engineer in IT, whatever. And so they have their specialty that they focus on. so then, so our program is more of a hand holding program, done for you and a done with you, to where we can help them identify the ideal property as well as maybe even offer some inventory to them that has already been through the underwriting that would maybe make a good short-term rental property.
We give them some choices like that. So anything we can offer to them, including the tax strategy advice and all that kind of stuff.
Michael Stansbury (11:17.862)
So why short term and not maybe a long term? Because I know there’s a lot of turnkey operators out there in the nation and every major city. In Memphis, we have a few that we deal with. So is it strictly focused on short term rentals?
Lance Morgan (11:23.064)
Yeah.
Lance Morgan (11:32.822)
So in order to qualify for the bonus depreciation and not be a real estate professional.
there’s the short-term rental loophole where you only need to put in 100 hours. And so, for example, a family that’s a W-2 income, right, a family that’s making a traditional W-2 income, have an active income. so, can’t, know, don’t, real estate, traditionally, you could write off passive income, but since they have active income, there’s this, without having to be a real estate professional,
there’s the short-term rental loophole that allows them to get that bonus depreciation on the short-term rental properties. However, and of course I’m not a CPA, but my understanding is that they could do a short-term rental maybe towards the end of the year, for example, and then turn it into a long-term rental or do a co-living or something like that if they wanted to change courses. But it at least needs to start out as a short-term rental property.
we usually recommend is we’ll give them like a template to have like a guest book and most of their hundred hours could be creating that guest book, you know, and finding the restaurants and the activities in the area, you know, and things like that. So it makes it very easy to get a hundred hours, a little harder to get the 750 hours. But that’s possible. So some of our clients could qualify as a real estate professional and then they have more choices.
Michael Stansbury (12:58.93)
Yes. Yeah.
Michael Stansbury (13:06.49)
Right, I could imagine that if you had maybe a spouse that wasn’t fully employed, that that may be something that they could look at as an option. And then maybe, go ahead.
Lance Morgan (13:14.51)
Yes, and we do run into that. No, I was going to say we do run into that, right? Where one spouse doesn’t work, you know, and then they might be able to qualify for that real estate professional status. Yeah, so that is an option as well.
Michael Stansbury (13:20.284)
Yeah.
Michael Stansbury (13:27.462)
Yeah, so it’s interesting, is there anything in this bill, this package coming through Congress that alleviates, that is an obstacle to this or that adds on to it that we know of as of yet?
Lance Morgan (13:38.658)
Well, I think I’m with everybody else just hoping for that 100 % bonus depreciation, you know, to come back. I think we’re days away from what I’ve been told. I’m trying to stay on top of it, but I think we’re all just keeping the fingers crossed that that goes through.
Michael Stansbury (13:42.651)
Yes.
Michael Stansbury (13:52.435)
Well, that’s awesome. So it’s very neat. So it’s collegefundingsecrets.com and you’ve been doing this for 10 years. so of all the places, have we hit all lower 48 as far as states that we’ve invested in or what does that look like if you even knew what that looked like?
Lance Morgan (14:11.392)
Yeah, yeah, it’s pretty much across the board across the country, typically in the areas that are better for short term rentals, you know, since that’s kind of the niche. But yeah, pretty much across the board across the country.
Michael Stansbury (14:23.28)
Okay, great. So Lance, me, so you live in Utah, tell me Lance outside of real estate, what does Lance do, what’s your family, you said you have five kids, that’s amazing. I’ve got four, so you got me Pete. But what is, do you work with your family, what does life look like for you outside of real estate?
Lance Morgan (14:31.714)
Five kids.
Lance Morgan (14:41.792)
Outside of real estate, I actually live on six acres. have a little hobby farm with lots of horses and chickens. you know, with the theory, the theory was teach the kids work ethic, you know, put them on a farm, teach them work ethic. I think my wife and I are the only ones that really do the work, but so that may have backfired. But, but we do have like an acre garden and, you know, an orchard and, we, our family loves boating.
is boating. We have a surf boat, wake boat that we like to surf behind and we’re actually on our way to Lake Powell, so that’s our favorite place to go boating. yes, yes, yes. You have to spend a week in a houseboat and go boating every day and you can’t beat it.
Michael Stansbury (15:21.852)
Beautiful there, I’ve been on that lake, that is an incredible lake. I’m very jealous.
Michael Stansbury (15:30.522)
Okay, so you’ll have a houseboat and you’ll have your ski behind boat. that sounds really, really fun. So what are the ages of the kids?
Lance Morgan (15:38.786)
So I’ve actually, so I’m almost 50 this year and my oldest is 22 and she already has a kid. She’s married with a kid. So I guess I’m a grandpa and I’m still trying to get used to that title. But then my second oldest is also married and she’s 20. And then I have a high schooler, middle schooler and an elementary schooler. So I’ve got a wide range.
Michael Stansbury (15:52.39)
Yes.
Michael Stansbury (16:02.158)
Nice, nice, that is, you and I are parallel lives. My son just got married last week, no kids yet because they’re on their honeymoon right now. And then I’ve got kids the same exact age. And yeah, I’m knocking on the door as well to 50, so that’s awesome. So yeah, so Lance, where can people find out more about…
Lance Morgan (16:08.846)
you
Lance Morgan (16:12.438)
Really?
Really?
I
awesome.
Michael Stansbury (16:29.394)
college funding secrets, you and your business. Where can we find out a little bit more about you?
Lance Morgan (16:31.906)
Yeah. Yeah. So collegefundingsecrets.com. There it is.
Michael Stansbury (16:36.152)
Alright, there it is folks. It’ll be in the show notes. So if you are like me, like Lance, you have kids and eventually they’ll be in college, why not try this strategy out? go there, you can find out more about college funding secrets and Lance and the team, what they do there, and see if it’s a right fit for you. So folks, thanks again for watching the Real Estate Pros podcast. Lance, thank you for being on the show, sir.
Lance Morgan (17:00.514)
My pleasure, my pleasure, thanks for having me.
Michael Stansbury (17:02.906)
Yes sir, well we’ll see you guys next time. Remember, like and subscribe and do all the things the influencers tell you
