Master Tax Strategies: 5 Essential Tips for Real Estate Investors

Mike Hambright (00:00.846)
Hey everybody, welcome back to the show. Today I’m here with Michael Plaks. He is a tax strategist and a CPA and we’re going to be talking about kind how to navigate these waters. I know there’s a lot of confusion with the new president, the new administration, what’s going on. I think generally entrepreneurs are hopeful that there’s going to be a better taxing environment, a better business environment for us, but there’s a lot of confusion and Michael is going to try to help us clarify a little bit of that today. So Michael, glad to have you here.

Michael Plaks (00:28.037)
Yes, okay Always pleasure to be on your podcast Mike, you know, we’ve known each other for a while and That’s cool. Now interesting times indeed because we are in 2025 we have new administration and since you brought that up Yeah, let’s let’s start with that, right? I would look slightly like rolled back eight years because like the first time Trump came

Mike Hambright (00:45.901)
Yeah.

Michael Plaks (00:54.181)
to the office and there was a lot of campaigning based on Amazing tax reduction all of these ideas that he first time campaigned on people who have long memories may remember 15 % business tax across the board no matter what entity and these and that and well then there was the first reform from 2018 during his first term which did not come out exactly as promised but it was a great

reform for most business people, particularly real estate investors. And for those who don’t know me, I work exclusively with real estate investors. That’s all my clients. All my clients are in real estate. So that’s my specialty. And real estate investors, that was great, great reform back in 2018. Now, the way it was structured is it had a sunset. OK, so like

Mike Hambright (01:39.938)
Yeah.

Michael Plaks (01:50.278)
about now we are entering the period where a lot of things that came with that reform are supposed to disappear. Okay, so and some of them are phasing out, some of them are scheduled to disappear in a year or two and some of them are gradually phasing out like everybody

knows and loves bonus depreciation and it used to be 100 % and 80 then 60 now we are in 2025 it’s only 40 % and like then it’s going to be 20 and disappear okay so there is a lot of talk so what is going to happen now so the new administration comes are they going to extend the original reform or is it going to fall off the cliff when the initially scheduled time comes what happens with bonus depreciation we got a lot of questions about that

I’m totally amazed when I listen to podcasts, not yours, you know, but you know, some podcasts are like articles pop up like social media crap, all of that. And people say, this is what’s going to happen to me. How do you know? Like, how do you know that it’s going to happen? Because what is happening is this first, it needs to go through Congress. OK, yes, fine. OK, technically, Republicans have White House and both.

chambers of congress right now yes it does not mean that they get a free like ride and can do anything they want besides even within republican party there is no consensus on a lot of things you know sometimes there is voting across the aisle you know between the parties you don’t know besides we still have laws even though the government can print money and they do right but we still have laws that the budget needs to be balanced right so if you extend these tax breaks you need to

Mike Hambright (03:32.366)
Right.

Michael Plaks (03:35.011)
take some other tax breaks away or like generate money in some other way so it’s a complete unknown right now right so what is happening

Mike Hambright (03:42.554)
Or, God forbid, cut expenses, which our buddy Elon’s trying to do, so we’ll see.

Michael Plaks (03:47.142)
Yes, but we are in such funny uncertain times, right? So we don’t know they have to Define the plan first then they need to push it through Congress then even when it comes let’s take bonus depreciation For example, let’s say they are going to restore bonus depreciation. Okay first maybe right they want to You want to I want to write well wants to do it, but they need to create

bill that balances that they need to push it through Congress right and then when it comes the question is when do they restore it as of the day when it becomes the law or is it retroactive to the beginning of 25 what about 24 24 had 60 percent right is it going to retroactively restore it for 24 what about 23 when it was 80 percent now

If they are going to apply it retroactively, does it mean we are amending all the returns, like redoing them? Or are we applying it all as a catch-up in 2025? Nobody knows. So you cannot make predictions right now until those things happen. So to me a little bit, oh, I will show you strategies how to plan for the new law. Which new law? We don’t have it yet. Now, maybe by the time we are recording this in March of 2025, by the time like…

Mike Hambright (05:00.974)
We don’t know you.

Michael Plaks (05:07.845)
recording is released maybe some certainty will appear but that’s work in progress it’s a moving target you know so I really don’t know one thing though which is interesting that happens and

Also got a lot of questions about that is okay the IRS all of those like Fire rings or federal employees and how that yeah also interesting dynamics right for people who watch because couple years ago They hired this brand new army

of new IRS agent and everybody was freaking out like okay now we’re going to have all of these armed people you know with guns on their on them like knocking on our doors and getting all of that is okay of course none of that happens but now we are in opposite right the government always swings right one extreme to another extreme so now we are instead of hiring more people firing everybody right so IRS like I network

With all of tax professionals and former IRS people and current IRS people, right? So yes, there are already real layoffs, right? So that they are planning to cut right now the IRS Existing employee force in half. Okay. What does it mean? Okay, you can also we don’t know you can speculate. What are you going to fire people?

Trying to answer the phone that easiest to fire right are they going to actually fire auditors? Okay, what what is going to happen to all these cases right now now? As we are speaking today, which is again March 25 when we are having this conversation The IRS right now is frozen, you know on the inside due to that uncertainty Nobody knows there

Mike Hambright (06:40.802)
Mm-mm.

Michael Plaks (06:56.855)
Are we auditing? Are we not auditing? Are we getting fired? What is going on? People there are paralyzed with the same fear and uncertainty that everybody else, right? So they don’t know. Question is, does it mean we are not going to have audits now because they are firing all these people? Don’t ask me. I don’t know. People at the IRS don’t know and people at the government don’t know today. We have to see how it will pan out.

Mike Hambright (07:16.45)
Yeah.

Michael Plaks (07:24.355)
But all the current cases, for instance, in my firm that I have dealing with the IRS and sometimes people wonder is, okay, what is all these things? Like, why am I wearing a blue gi like from martial arts? You know, we skipped that introduction part, but I am known as black belt in real estate taxation. So when I speak live, like, yeah, I wear that. Like here is my actual black belt that I wear and I put on my sparring gloves and no co-op uncle Sam who is right now social distancing.

Mike Hambright (07:52.322)
Yeah, let’s knock them out.

Michael Plaks (07:54.75)
behind me yeah somebody needs to knock him out but right now is okay so i do have cases right now with irs but we right now cannot move on those cases we cannot reach irs people all of them are like it’s completely chaotic on their side right now so we don’t know again so does it mean we can become reckless today you know and like stop paying attention because okay

Mike Hambright (08:12.842)
Sure, yeah.

Michael Plaks (08:23.811)
The guard dog is not there anymore, so the door is open, we just like take everything and, you know, and loot the treasury because nobody watches anymore. I don’t know, right?

Mike Hambright (08:37.26)
Yeah, time will tell. Yeah. It’s interesting because obviously, you know, it’s been pretty widely speculated that Trump would like to end the IRS, which I would love that too. yeah, I mean, you know, there’s nobody that was going to know how that will work out. mean, if there was more of a flat tax or consumption tax.

Michael Plaks (08:50.393)
Nobody. All for Don’t. I don’t believe that it’s… Sorry, man. Yeah.

Mike Hambright (08:56.32)
No, just saying there’s so much that’s not known. I think, and obviously the thing that I’m about to say benefits you as a tax strategist, but as a small business, is, it’s a burden to, just to track all of our, just the administrative burden on a small business is ridiculous.

Michael Plaks (09:17.935)
Sure, absolutely.

Mike Hambright (09:18.38)
I think if there was ever anybody that knew that, it’s Trump, like in terms of all the presidents, because most of them have never run a business in their life. So he knows that more than any other president. So if there was ever a chance to make some massive strides to simplify things for entrepreneurs, I have a feeling it’s during this administration.

Michael Plaks (09:33.38)
Yes. Again, it’s not just Trump and not just Musk. Yes, are still Congress, right? And remember that after this administration, there will be next administration and also no idea what kind. So and things tend to swing like you’ve been in business for a long time. I’ve been in business for a long time. We have seen those things. You know, they go left to right.

Mike Hambright (09:39.564)
Sure. right. Right.

Mike Hambright (09:49.196)
Right.

Michael Plaks (10:02.605)
You know, yes, pun intended when I saying left to right and right to left. It’s like political statement too. Yes, things change. We don’t know. It’s just, but I, as much as I’m voting for, like if anybody counts, okay, here is my vote. I raise my hands. I can raise both hands. I do vote for abolishment of the IRS. I just don’t think it will happen. You know, but isn’t my job security? No, I have plenty of work without it.

I would be happier if I don’t have to deal with him. I would just deal with you guys, you know, and help you develop it. But I don’t think that IRS is going anywhere. What might happen is that for a while, due to this upheaval, you know, nobody knows what’s going on, there may be some period of like diminished activity because like a year ago,

Mike Hambright (10:35.042)
Yeah.

Michael Plaks (10:58.181)
a whole not a year ago like when I say a year ago we are in 2025 I mean in 2024 right suddenly the IRS woke up after COVID and the whole stack of IRS letters started coming like our clients started receiving them we started receiving them suddenly because like during COVID time there were no audits no like serious concern about IRS then then next last year 2024 there was a lot of that right now 2025

Everybody including the IRS is on hold like things. Wait a minute. Let’s see what happens. Yeah, so but to me the strategy has always been like my business next year will celebrate 30 years like in my tax business So during this time I have always been of the same philosophy and you and I talked about that before like we are on the same page Mike right big because and like and like some people from

Mike Hambright (11:33.506)
Yep. Yep.

Mike Hambright (11:43.138)
Nice. Congratulations.

Michael Plaks (11:58.724)
the investor fuel, you know, your, you know, community, my clients. So like we’re all on that same page in that respect, because I don’t tell my clients how to treat their business. That’s their decision, you know, and I can be as aggressive or as conservative as my client wants to be. My client wants to be aggressive. Great. We will walk that line together.

You know, I will guide you, I will show you where the line is and I’m willing to walk up to the line, obviously not crossing it. The problem is that the line is blurry. You know, it’s not a bright line where it says yes or no. Sometimes it’s… And I have a lot of conversations with our clients which saying is like, boy, qualify, I’m saying is okay. Frankly, this is controversial. And then we’re saying is but…

Mike Hambright (12:35.608)
Right.

Michael Plaks (12:53.099)
Isn’t it written in IRS publications? No, first, IRS publications are useless because this is IRS interpretation of the law. It’s slanted towards the IRS interpretation. It’s not the law. It’s how the IRS wants you to read the law, right? So it’s not the actual law. who decides the actual law? The courts. let’s see what the courts say. And then you’re looking…

Mike Hambright (13:06.414)
Hmm.

Michael Plaks (13:18.085)
Okay, this judge in this case said it is and that other judge in that other case said that there and you put the two together they are contradictory So what do we do? You know when one court case says one thing the other one says another thing you exercise your judgment Right saying is you want to be aggressive. Let’s push it this way. No, you don’t want to find you know, it’s your decision we are going like You know push it in the other direction

Mike Hambright (13:26.53)
Hahaha.

Mike Hambright (13:46.178)
Right, right.

Michael Plaks (13:46.246)
But there is a lot of room, always have been, like always there was like white gray area in turn, like, and you know, I joke when I do presentations about those 50 shades of gray. Yeah, there was like 150 when it comes to the IRS, you choose your shade. You know, you won’t like be almost white, almost black. Yeah, there are all kinds of shades and it’s important to understand because people ask me all the time. So.

Mike Hambright (14:01.228)
All right.

Michael Plaks (14:15.711)
Is that okay by the IRS? Yes, there are some situations where we can answer that question. But a lot more situations where we can say, well, depends how we slant it. I like to tell people that a lot of IRS representation work when we deal with them is the art of storytelling. You know, how you frame things. You know, that’s important, you know, because

Mike Hambright (14:42.467)
Yep.

Michael Plaks (14:44.547)
Because depending on how you do that, the interpretation can be in your favor or against you.

Mike Hambright (14:50.414)
Right. Well, let’s dive into some strategies because I know there’s some information out there that people think is either black or white, and it’s not necessarily. But let’s talk about some kind of common strategies for folks that might be listening to this around some things that are trying to provide some clarity here. So let’s talk about, first off,

Michael Plaks (15:05.253)
Sure, sure,

Okay.

Mike Hambright (15:13.87)
There’s a lot of belief on like, a lot of people are trying to get a lot of like costs using cost segregation, accelerated depreciation. There’s obviously the bonus appreciation, all those things that in theory help most of us save taxes, but it depends on a lot of things, right? What are some of the things that those things are better strategies for than other people? Like give some examples of that.

Michael Plaks (15:34.04)
Of course. Yes, Mike. OK. Thanks. Like perfect question. OK, I will address that in a second. I just want to add one thing as a like background for all conversations about strategists. We used to have those like cocktail parties for investors like in our meetings where exchange was like between two guys drinking beer, you know, and saying is like, have you done segregation? No, dude.

Yeah, you’re an idiot, like you have to do cost segregation. Now it’s much worse because now we have AI. So what people believe is, let’s just ask our favorite AI agent like chat, GPT, whatever like you prefer. So they type and what happens right now, again, it’s early 2025. Now AI is in its infancy right now. All it can do is like a kid, you know, what infants do.

They repeat what they hear from adults, right? That’s what happens with AI. AI looks online, whatever information they find it, it aggregates that, edits that and speeds out. But that information that it feeds on is garbage. So you get garbage information and it speeds it into garbage reply. Even some of my colleagues started using AI.

Mike Hambright (16:48.375)
Right.

Michael Plaks (16:57.869)
like to answer clients questions or like online questions. You can tell like if you look, I’m number one contributor to tax forum on bigger pockets. Like everybody knows bigger pockets. There is a tax forum where we talk about taxes and I’m like for number of years have been number one contributor there. Some of the people they are answering. If you look at the answer, you can see if every phrase has like two words that are involved.

Okay, then the guy didn’t type it. That’s AI. And then you read them, that sounds like, no, that’s BS. That’s not real answer. That’s not how it works. So be careful, you know, when you get information which is produced by AI, because like it gives an impression, computer did research, computer doesn’t do research yet. Maybe a couple of years from now, AI will be smart enough to actually

Mike Hambright (17:30.83)
Mike Hambright (17:38.22)
Right.

Michael Plaks (17:55.586)
evaluate validity of information and get real tax advice. So for writing your resume it’s great, but for answering your tax question it’s not. Right, yeah, now strategists, what you asked me about, Mike, so okay, you brought up great example, cost segregation, let’s talk about that. So much talk about cost segregation starts with this. Let me give you an example how much money

Mike Hambright (18:05.356)
Be careful, Yep.

Michael Plaks (18:24.855)
It saves you. Okay, I can play that game just as well as anybody else. I’ll play it right now. Absolutely. Let’s do that. Okay, so you’re buying a property. The property costs 400k. So about a 400k property, how much cost segregation normally identifies that? By the way, I don’t want to waste our time right now. If you guys are listening right now and don’t know what cost segregation is, please Google it like there’s so much material.

Mike had one of the guests explaining, you know, that in one of the prior episodes, there is a lot of information. I’m not explaining the concept. I want to just give an example. So it says like 25 % is pretty standard thing that cost segregation identifies. So 25 % of 400 is what? Polycalculator, that’s 100, right? So suddenly, okay, we have 100, which can be depreciated right away. Okay, so we get 100,000 right off.

Mike Hambright (19:03.457)
Right.

Michael Plaks (19:23.821)
Wonderful. What is our maximum tax rate? We will copy people’s and okay somewhere like close to 40 percent. Let’s say 35. Okay 35 percent of hundred thousand. What is that? 35,000 I just saved myself 35,000 dollars. Great Isn’t co-segregation great? Yeah, I mean that’s the typical

conversation and that’s like two investors can talk to each other and question is like immediate equation asks Michael I used to like Michael I’m talking to myself right now things like so I was saying that’s not how it works no I’m not saying that’s not how it works I’m saying is it’s not always how it works it can work this way or but sometimes it does not so let’s talk about that because when people talk about because segregation they are missing the framework

And example would be, again, two guys talking and I’m saying this, do you see how much gas costs? I don’t have to pay anything. You know, I drive Cybertruck, I just plug it. There is electricity. So the guy goes with his Ford 250 and saying this, where do I plug it? Dude, you cannot plug it. It’s not electrical. You know, you have to put gas in your in order to take benefit of plug in electricity instead of gas.

Mike Hambright (20:29.281)
You

Mike Hambright (20:38.968)
All right.

Michael Plaks (20:46.947)
You understand that right? You have to have an electric car. Well, cost segregation is similar. If you want to use cost segregation, you need to have a vehicle that you can plug into cost segregation and not everybody has it. So what is that? Perfect example when it works. When it works would be this. You are a full time investor. Wasn’t previous, am I right at the previous episode? or like, you know, one of the early ones.

You had Jason McDougall?

Mike Hambright (21:19.928)
Jason McDougall, yeah, he was recently, yeah.

Michael Plaks (21:21.571)
Okay, example. You’re Jason Magdelo, full-time investor, right? Like, all you’re doing is like bunch of investments. Okay. You’re Mike Embry, you know, doing like full-time investing. It’s okay. What is great about you? Because all you do is real estate. Okay. You guys don’t have W-2 income. You don’t work for a guy. Okay. So what you do all day long, you are making deals. You are doing this, you are doing that.

and you also hold portfolio of properties. So what is great about it, because if you go and do cost segregation for your

Rental portfolios then what you can do right now is you take the loss in my example, right? Was hundred thousand right off and you apply it against your other income What are the income like something that you generate from flips from wholesaling from in your case? mentoring people like you know for like any other income because it’s not W to income now, let’s change an example bring somebody else and saying is

Instead of you guys being full-time investors, right? We’re talking somebody who is a physician by day. Okay, so they’re making half a million a year working for emergency room. and nobody is more pissed about taxes than physicians. I can tell you like among my client.

Because these guys are making real cool money but they’re also paying absolutely insane amount of taxes. Like they are desperate and they are by the way if any physician is listening to me understand because they are so desperate to reduce taxes you are very easy mark for scams. You know for somebody who’s like let me show you away because like I don’t know well let’s be careful without that. So let’s be careful with those type of

Michael Plaks (23:23.973)
Suggestions like they need to be looked at carefully. So again, you’re a physician making your half a million Like justifiably upset about taxes and looking for a way and you just read it. Okay I’m going to invest in syndications because syndications do cause segregation. I’m a physician. I don’t have time perfect

Somebody else runs that for me, does cost segregation, gives me a K1, K1 shows great loss and it’s going to wipe out my taxes. Then they come to an evil CPA, you know, and we tell them, no, no, sorry, cannot do that. Why? Because the losses from that syndication, that is cost segregation based and all of that, right, but they are called, quote unquote, passive losses. They cannot offset W2 income, but it’s a…

But wait a second, why Mike himself just did it? Mike does not have W2. know, Mike is a full-time investor. is perfectly positioned to take advantage of that. The guy who runs your syndication, the sponsor, he is a full-time guy. He is actively running syndication. He is perfectly positioned. But you, who just give him 200k check,

Mike Hambright (24:25.454)
Yeah, consider it a real estate professional.

Michael Plaks (24:39.205)
and receive K1 with a big loss, that loss is not helpful to you right now. And people are completely shocked and saying, but they gave us this presentation, said, losses cause segregation, bonus depreciation, yada yada. Yes, it all exists, but you cannot take advantage because all you do is W2, you are not full-time investor. Now, is it the end of the road? No. We change example one more time. I’m saying, but I’m married.

Mike Hambright (24:44.078)
Right.

Michael Plaks (25:07.677)
I’m an investor, I’m a physician, you know, I spend all my days saving people’s lives. Good for you, you know, I’m super grateful for what you do, And I’m married. Okay, my wife does not have a job, you know, does not a physician, and she is the one who is running our real estate business. Can we benefit from that now? Now we’re talking, now that’s a different thing. Because your wife…

Mike Hambright (25:34.115)
Right.

Michael Plaks (25:35.786)
may be able to qualify as quote unquote real estate professional. Many people heard about it, but the way it’s presented, like people saying this, you check the box on the form and your loss is unlocked because you say you’re a real estate professional. Of course you can check the box. If you can check the box, you know, and we are in the times where you can identify as anybody, right? Hey, I identify as a real estate professional. I check the box.

Mike Hambright (26:00.846)
or anything.

Michael Plaks (26:06.059)
does not quite work that way because if you check the box, yes, it will allow you to take all of the losses. But then we have again this guy who tells you, wait a second, there are qualifications. You cannot just be a real estate professional. Now, Mike, you can because that’s what you do all day long. Now, can I? I said I only work with real estate investors. But question is, wait a second, Mike.

Am I doing deals like real estate deals? No, I’m doing taxes for people who are doing deal. that doesn’t So even though I don’t have W2 I run my own company But no, I’m not a real estate investors. I can’t now Physician who works all day as a physician but has wife who is a full-time real estate investor that works beautifully So when you guys are looking for a wife

or you full-time invest, I mean, or you like high-income ladies are looking for a husband, choose wisely. You want to find somebody who is unemployed, who you can make in the real estate, like full-time real estate investors, then those things work. So all of it just tells you, are those great strategies, real estate professional, great strategy? Yes, but that’s not a strategy. You need to qualify.

Mike Hambright (27:12.205)
Hahaha!

Mike Hambright (27:21.614)
Yep. Yep.

Michael Plaks (27:30.968)
If you qualify, yes. If all you have is W2 job, sorry, you can’t qualify unless you have a spouse who can qualify. So what means is like I urge people, yes, that’s great to be educated. You you want to be educated, yes, the way to get educated is this. Buy some books. Okay, I said like I’m a contributor on BiggerPockets. BiggerPockets publishes books.

some pretty good books. Option two, maybe even better one, go to one of the investor fuel conventions. Because Mike brings great speakers, colleagues of mine, who explain that explains it for real. Not like some BS that you can find online, like actual people from the field, like speakers who know what they’re talking about.

So that’s how you get educated. If you don’t invest in that kind of education, then don’t trust like Facebook and Instagram and TikTok, you know, all of that education. That’s garbage. Okay, then talk to somebody like me. One-on-one, we will tell you that’s what you can do in your situations. So examples, let’s go back to that physician who is single. Okay, doesn’t have a spouse. So is everything like closed?

Like no way to save anymore? Well, there are ways to save. What’s the most common one everybody talks? STR loopholes, like short-term rentals. Loopholes they say is, well, it’s not quite a loophole because to me a loophole is something with unintended consequences. No, that’s intended. That’s how Congress wrote that. But yes, physician can possibly…

Mike Hambright (29:11.916)
Hmm.

Michael Plaks (29:20.229)
Do that so does all it take is buy? Somebody else’s STR in a different state. So, okay. Okay Mike and me like we are both in Texas. So somebody says, okay our client is in Let’s say Ohio, you know and buys the property on the Gulf Coast where we are Okay, makes it a short-term rental. Is that like is that the solution? No, it’s not

still will not work. But didn’t I just say that it would work? Yeah. Again, with conditions. In order for that to work, there is a condition that you need to be quote unquote, materially participate in that. Okay, if you are several states away and somebody else manages that STR for you, yeah, that can make money, but you will not qualify as material participation in that.

Mike Hambright (30:15.458)
Hmm.

Michael Plaks (30:15.597)
So can you work around that? Yes, but that’s where it comes to one on one planning. Let’s figure out a way. Is it possible? Yes, if you have time, if you do it correctly, yes. you know, that game is people want to make it simple and to me is I’m all for it. I like simplicity. Unfortunately, it does not exist when it comes to this guy. You know, Uncle Sam doesn’t like things simple.

And maybe, like, Elon can succeed in his, like, officially announced quest to make government more efficient. Okay, I’m reserving my judgment until I see. Okay, you know. No, the idea is great. The implementation remains to be seen as far as I’m concerned. Okay, but… Okay.

Mike Hambright (30:58.634)
All right. We’re hopeful. We’re hopeful.

Michael Plaks (31:10.519)
I like simplicity, like less hustle, so to me it sounds like I’m self-serving, I’m encouraging investors to hire expensive people like myself. You know what? No. If you don’t want to, you don’t have to. But just like with everything else, you know how they say, you either hire a professional, you save money and realize what happens when you hire an amateur.

Like in anything, like have you ever like done a rehab and saying as well, real general contractor is expensive. Yeah, they are, you know, they’re in very few good ones, same for accountants, same for doctors, you know, same for anybody. Good ones are difficult to find and are expensive. Cheap ones end up costing you more a lot of times. You know, like in anything in life. So I don’t have to preach that, you know, everybody knows that. So yeah.

Mike Hambright (32:01.334)
No doubt. No doubt.

Mike Hambright (32:08.835)
Yeah.

So Michael, I feel like we could talk for hours, we’re going to have to, we can’t go too much more. But any other kind of words of wisdom as folks are, we started this off by saying, we don’t know what’s going to happen here. So is it really just a matter of time just kind of waiting and seeing what’s happening? And obviously working with a professional so that they, because guys like you are, you have your finger on the pulse of exactly what’s going on or what’s going, you know, what’s possibly going to happen, right? So just kind of not relying on CNN for

tax advice or what’s going on relying on guys like you that are professionals, right?

Michael Plaks (32:44.695)
Okay. Look like when you say words of wisdom or keeping on the pulse, like, you know, you could see my facial expression like I was smiling a bit because like first wisdom is relative, right? You know, you know, I consider something wise and then my adult kids who are half my age may have a different opinion about that. And when I was their age,

Mike Hambright (33:11.65)
Ha

Michael Plaks (33:14.517)
I have had more of their opinion than what I have right now. Yeah, wisdom is subjective and so is like on the pulse. actually, honestly, I don’t keep things, like don’t keep my fingers on the pulse, so to speak. And when you tell words of wisdom, that would be my words of wisdom. I actually suggest that people don’t overthink, you know, trying to…

anticipate what is happening because it’s extremely difficult I would even say in my opinion impossible to anticipate that correctly. So if all you do is stressing out and I’m saying is like my god I read this lender who says that our rates are about to finally go down yes and I like can’t wait to refinance finally so the rates go down but then I listen to that lender and he says it’s like no

They are going to go down, you know, misinform… In reality, the Netherlands really knows, you know, they are making informed opinion prediction, but it’s not reliable information. And to me, if you are counting on that, you are gambling and more importantly to me is this, you are wasting your time and energy on trying to die, you know…

Mike Hambright (34:14.274)
Right.

Michael Plaks (34:38.969)
dissecting news and extract like Actionable tips from that the way I have always run my business and have done it for 30 years like those things this is changing you need to change strategies to me. You know, I’m keeping the course You know, I’m making some adjustment everybody does of course. We’re all Entrepreneurs, well business people we are making adjustment, but never panic type of adjustment

my god, the world is crashing, you know, I need to like urgently drop this completely and start something like totally different. To me is like, no, people who tell you this are probably standing to benefit from you making that switch. They are trying to encourage you to me is this you know how to do something well, whatever that is. OK, like you are a great wholesaler. Keep doing that. OK.

But wholesaling is going to be outlawed across the country. Do we have like examples? Yeah, sure. Dallas is a great example, right? Okay. Houston, where I am, seems to be going that way. So does it mean wholesaling is dead? No, there are plenty of places where you can do that and continue to do that. So how do you adjust? You choose the areas where it work, right? Okay.

rates are going up to crazy level my god i cannot hold properties anymore what do you do okay then you don’t go to the bank you’re trying to find different source of financing you know so there are adjustments but never adjustments that like make you abandon what you became good at right okay so you know i’m good at doing taxes and tax strategies

You know, you’re good at teaching people how to become investors and gain financial freedom, you know, through being real estate entrepreneurs. You know, other people are great at buying apartment complexes and turning them around. You know, so whatever. OK, other people great at STRs like Airbnb. OK, whatever it is to me is tune out the noise.

Michael Plaks (36:56.791)
not completely so like you can still hear when it’s really important but don’t spend like hours watching every detail when it’s important enough somebody will put enough memes online where you will learn from memes that’s what happened now i know

Mike Hambright (37:16.152)
Yeah.

That’s great. Michael, so there’s always guys. I think one of the things that Michael just said is at the end of the day, do what you do and do it well. And, you know, don’t worry about like you should never go invest in anything real estate wise just because of the tax benefits. Like it has to be the underlying foundation has to be a good deal. And that’s you just rely on the tax stuff for, you know, icing on the cake possibly. But there’s also, you know, we’re in real estate. So there’s asterisks next to everything. Right. And so at the end of the day, you just have to work with professionals like Michael.

Michael Plaks (37:32.822)
Absolutely.

Mike Hambright (37:48.256)
that can help you kind of navigate those waters and can diagnose your situation to be able to help you kind of, know, we have, you know, there’s plenty of tax folks out there that once they understand what you’re doing, they could advise you on how to navigate those waters. Definitely nothing is one size fits all. So if you’re interested in learning more about Michael, Michael, tell us your website. Where can they go to learn more?

Michael Plaks (38:11.919)
Okay, I named my firm very easy to remember, REITaxfirm, real estate investment. So REITaxfirm. So you type REITaxfirm.com, you will get on my website.

Mike Hambright (38:23.585)
REITaxfarm.com

That’s great. That’s great. I know you put a lot of great content out as well. So thank you for joining us today.

Michael Plaks (38:32.899)
No, thank you for giving me a chance to discuss those things with you. And again, thanks for everything you do for the investor community, you know, and building up all of the people who are creating generational wealth through real estate. So, you know, always happy to collaborate with you. Thank you, guys.

Mike Hambright (38:37.069)
Yeah.

Mike Hambright (38:49.612)
Yep. Absolutely. Thanks for sharing with us today. guys, Real Estate is a great business and it can be even better if you’re working with people that can help you navigate the waters that are a little bit choppy sometimes and you may not know exactly what you’re doing. So appreciate you guys a bunch. We’ll see you on the next show.