How Real Estate Investors Can Save Thousands in Taxes Using Advanced Tax Strategies

Cathi Korelin (00:00)
A doctor who came to me and he made two million dollars a year profits. That’s after expenses. The total profit. His taxes were one point two million dollars. That’s federal, state. And all the little taxes, the more money you make, the little taxes that get added onto it. And so we rearranged his life. He was a sole proprietor, we made him a corporation, he had real estate which wasn’t being rented out properly. And we just we changed his wife’s work, we changed his kids, we changed everything around. And it dropped his taxes from one point two million a year to three hundred and fifty thousand a year. And that’s not a one time savings. This is gonna be a continuous every year savings.

Issa Hann (00:36)
Welcome back to another episode of the Real Estate Pros Show. Today I have Cathi Korelin a tax advisor, who’s decided to open a family office. And we will get into what a family office is very soon. Cathi, welcome.

Cathi Korelin (02:28)
Well, thank you very much.

Issa Hann (02:29)
I am super excited to have you. Yep. And I am super duper excited to have you. ⁓ you we talked a little bit ⁓ before we we we went on air, and you are a wealth of knowledge in the tax advisory field. you educated me on what a family office was. ⁓ so for people at home, ⁓ kind of give them your spiel, you know, your tax advisory services, and then what is a family office?

Cathi Korelin (02:55)
Thank you. So a family office is something that in the b past has always been reserved for the super wealthy. We kind of started the time of Rockefeller. You know that when you talk to your financial advisor, your tax professional, your insurance professional, they all give you different advice and none of it works together. So Rockefeller decided to hire all these professionals and put them under one roof, and it was called the family office. Very wealthy people have these family offices. Bezos has it.

Oprah Winfrey has it. You know, Bill Gates has one. And you had to be the super wealthy to afford it. So there’s a new trend in family offices to make it more affordable for the average person. So now we call them multifamily offices or virtual family offices. So essentially I have a family office that you can subscribe to. So you don’t have to actually hire your own people and spend hundreds of thousands of dollars a year.

You can now come and to subscribe to my family office where you have access to seventy seven professionals right now. Any time you need for b essentially any service that you need. Risk mitigation, which tends to be insurance for your business, or any type of other insurance, wealth management, so taking care of your money, tax advisory, insurance, any need that you have, ⁓ attorneys, estate planning, we have it all at

your fingertips and they all work together and we have a dashboard so that everybody can communicate and be on the same page with your needs.

Issa Hann (04:23)
Wow, what a revolutionary idea. So you’re I mean, it’s not an original idea, but you’re taking the family office that was only previously available to the super rich, the super wealthy, and you’re making it available to the common American. ⁓ I I love that. I love that. And then ⁓ multifamily offices is is something you were telling me about where multiple families can be in your family office now. Is that correct?

Cathi Korelin (04:48)
Right. So y I have the family office so you don’t need to pay for you don’t need to hire them yourselves. And you could just come and subscribe to the use of my family office.

Issa Hann (04:57)
Beautiful, beautiful, beautiful. I love that. and I wanted to get a little bit into how you got started. So how did how’d you get so knowledgeable in the field? You know, we all didn’t start off ⁓ up here. We we had to we had to start at the bottom of the ladder. So when’d you start at the bottom of the ladder?

Cathi Korelin (05:18)
So I had actually now been in the industry for about eighteen years. I actually used to be in the travel industry and I w y I did pretty well with the wholesaler, but then nine eleven happened and travel just fell apart. And that was when I actually had started kinda looking about going to taxes. I had been interested in taxes since I was a little kid actually. And I wanted to be a tax attorney, but that that never happened. So after nine eleven I started looking more into

changing industry because it it was so bad it was actually costing me to go to work. And so I started off just like everybody else in the low levels. I started off H and R block. I went to Jackson Hill, then I worked for other people, and then eventually about five or six years I started my own company. And I became an enrolled agent after about two or three years. An enrolled agent means I’m federally licensed.

Issa Hann (05:49)
Mm.

Cathi Korelin (06:10)
Attorneys and CPAs are s licensed by their state, but I’m licensed by the Department of the Treasury. And I’m required to take a certain amount of education every year. I take about a hundred thirty to one hundred fifty hours every year because I believe in being educated so I can help my clients to the best of my ability.

Issa Hann (06:28)
Definitely. ⁓ and and just talking to you briefly before we started the show, ⁓ you struck me as somebody that is super knowledgeable in in in the tax field and somebody that, you know, a real estate guy like me ⁓ would definitely want to use because you save people money and and it’s not just a little money, it’s thousands and thousands of dollars. ⁓ a number that stuck out earlier when we were talking is eight hundred and fifty thousand dollars you saved one of your clients. Can you shed some light on that?

Cathi Korelin (07:44)
Certainly. So I am I cer I’m a certified tax strategist. So I’ve actually gone through programs for me to relearn how to apply my knowledge. It’s a different mindset. So I had a doctor who came to me and he made two million dollars a year profits. That’s after expenses. The total profit. His taxes were one point two million dollars. That’s federal, state. And all the little taxes, the more money you make, the little taxes that get added onto it. And so

We rearranged his life. He was a sole proprietor, we made him a corporation, he had real estate which wasn’t being rented out properly. And we just we changed his wife’s work, we changed his kids, we changed everything around. And it dropped his taxes from one point two million a year to three hundred and fifty thousand a year. And that’s not a one time savings. This is gonna be a continuous every year savings.

Issa Hann (08:31)
Pass.

Cathi Korelin (08:36)
Then now ⁓ he could take some of that money and put it towards practice, he could put it towards or put it to a lot of things. And in five years, when he’s rebuilt, now we’ll come back and address what he’s doing. Is there something that we can now implement to change and improve what he’s doing to save him money again? Just because you save once doesn’t mean you won’t won’t need us again. I’ve also helped the smaller guys. I have one client.

with a janitorial service. I mean, I saved him ten thousand dollars. And for him, that was a lot of money. So whether you’re making two million or making, you fifty thousand, if you have the right setup, if you have things we can do for you, absolutely. And if I can’t help you yet, I’ll tell you, and I’ll be honest if I I can’t help you yet, there’s really not much you can do. But maybe help put you on the track to where

you think you need to be. And that one of my biggest things is not just what can we save you now, but where do you want to be? Because there could be multiple tracks. It just need we have to know where you want to be. I think back to the Alice in Wonderland where Alice says, Well which path do I take? And they say, Well Matt has a Where do you want to go? Well I don’t know where I want to go. Well if you don’t know where you want to go, then why does it matter which way you go? Which path you take. So it’s really important to know. And I put people on

Knowing their goals actually changing the whole idea of where they thought they would be. Because once I knew their goals, I’m like, well, maybe you’re not thinking on the right track. What if you were to do something like this? And they were just like, Whoa, okay. And and that’s what makes me feel good.

Issa Hann (10:10)
Definitely. And you’re an owner operator, you care about your clients, and you also ⁓ very knowledgeable tax person. So not every tax advisor is created equal, y’all. you need the the experience that somebody like Cathi has to be able to save you if you’re the small guy ten thousand dollars, if you’re the big guy almost a million dollars. ⁓ you know, not everybody has the knowledge and the know how to do it.

And I love the fact that you said you take extra C E courses just to stay on top of the game and knowledgeable. ⁓ that’s somebody who’s going above and beyond in their field. And that’s the kind of person that that you would want to deal with ⁓ in your own business because like I said, money makes the world go round. So why not save as much money as you can, keep it in your pocket and spend it on more important things like family, you know, ⁓ and good times and and whatnot. So

amazing, amazing stuff, Cathi, for sure. ⁓ and that’s also something that separates the ⁓ you know, somebody that kind of just dabbles. I might advise in taxes to somebody who’s been in the game ⁓ for so long, you know, is is that knowledge that that Cathi has and then she keeps staying on top of to attaining. So like I said before, I love that. ⁓ Cathi, can you tell us a time where a client maybe came to you ⁓

And you know, and I know you kind of told us this already with with the doctor, but ⁓ another time maybe you clean somebody’s financial life up and and really help them out.

Cathi Korelin (12:14)
Well, I’ve had people that for to for this people that think they can’t afford things. I I’ve actually done I do some budgeting with people and how to rearrange their life rearrange their finances to put priorities where money has to be a priority. ⁓ and get them started on the right path. If you need to be working with a financial advisor

I I’ve I have a lot of experience. People come to me and say, Well my advisory recommended this and I ask details, I don’t know. And I’ll go I’ll go with them to the advisor appointment. You know, I will I will help my clients. Yeah. I mean if you know, if especially if it if it’s local, I’ve had I have actually gone with my clients to their appointments. Or if it’s virtual, I’ll sit in on it. And it’s not that I want to talk to your person, but I’m just a second set of ears.

So I know what’s going on. I’m not gonna tell you to do or not do something, but I’m gonna tell you how it’s going to affect you financially. You know, I can take your financial statements, your books, and look at it. When I’m doing somebody’s taxes, like if I have a trucker client, I know that fuel is gonna be around a third a third of their expenses. If it’s not or if it’s more, I’m gonna find out why.

I had a client who had nine thousand dollars in income and four thousand dollars in meal expenses. I’m like, I know, that’s awful high. Why? It doesn’t mean it’s wrong. I’m gonna find out why. I need to but we fix things that need to be fixed. I had a client and every new client I check all their documents through the Secretary of State, make sure that everything’s up to date and clear. I ⁓ so you’d be surprised how many people I’d find out that their entities had been

dissolved because they didn’t fall through their paperwork. So

I’m watching out for my clients from the bottom up.

Issa Hann (13:58)
I love that. I love that. And I can tell that, that that you care about your clients. I mean, the fact that you would go to a meeting with a financial advisor, just to be a second set of ears or even sit in on a Zoom call, ⁓ a lot of people don’t go above and beyond. And that’s why you’ve been so successful and and have been in the game so long, because of things like that. another thing we were talking about, ⁓ because you have so much knowledge, you co wrote a book and you’re currently

writing a book of your own right now. So can you tell our viewers a little bit more about the books?

Cathi Korelin (14:31)
Yeah, so the one I co wrote is called DeTaxify Your Life and it’s going to give you a lot of tricks and knowledge about tax deductions. My chapter was actually on tax deductions and credits. And so a tax deduction lowers your income, a credit lowers your taxes. They’re both good things. ⁓ I’d always say a credit’s better because it lowers your tax, the actual money out of pocket. But you have less money out of pocket if you got a good deduction.

And then the whole book will help guide you on other tips tips and tricks to help you with your financial life. I have another book in production that I’m hoping to have out within the next month. And it’s called Can You Deduct My Pet? Can I Deduct My Pet? It’s going to be a series of books called Can I Deduct? So we’re looking at, you know, maybe coming up with

Can I deduct my wine? Can I deduct my gun? Can I deduct and they’re gonna kinda read like taxes for dummies type little books. They’re gonna be smaller, ⁓ easy to read. But the so it it’ll be really easy for the average person to enjoy.

Issa Hann (15:38)
Definitely. And ⁓ what a smart idea because ⁓ as professionals, you know, ⁓ sometimes we assume people have the knowledge just in their brain that we have rattling around and and a lot of cases ⁓ and and it’s not their fault, you know. ⁓ they don’t, you know. So a lot of people don’t know the first thing about taxes, the first thing to do. So this educational series of books is definitely a great idea and you’re the right person to be writing with all your knowledge.

Cathi Korelin (16:06)
I get these questions all the time. Can I deduct my pet? Well really no. But the other instances where pets can be, you know? And so I just thought these these are questions I get all the time. And so why don’t I just put that in and I didn’t see a lot of books out there on this or any really so that I thought this would might be kind of a fun series to write and when my clients ask I say well here take a look at my book.

Issa Hann (16:32)
Definitely, yeah, exactly. Take a look at the book. ⁓ and that’s the thing too, is is when you when you are so knowledgeable, you already have been asked these questions so many times that you can write a book about what are the questions that people want answered because you’re constantly answering them. So once again, amazing stuff, Cathi. An opportunity we talked about on the horizon. AI. can you shed some light on why you think that’s an opportunity?

Cathi Korelin (17:39)
So a lot of people are asking us, are you afraid that AI is going to g keep you out of a job? Because it can do a simple it could do simple taxes now. Not all of them, it could do some simple taxes. And we actually there is software out there we could actually subscribe to now that will help us do simple tax simple parts of the taxes, but not a whole tax return. And if people want to use AI to do their basic taxes, that’s fine. I’ll I’ll show you how. It’s not really my job to do just W two.

That should be simple enough for the average person to learn how to do. So I think there is maybe a lot more opportunity for AI out there. A little bit in tax planning, you know, organization.

Putting things together, like putting forms together, putting charts together, manipulating data quicker. I don’t think it’s going to completely replace people because I don’t think that AI thinks by itself, at least not yet. It doesn’t think by itself, but you still are asking questions of putting together parameters for it to work. And we have to know what we’re asking and why we’re asking it. I s I ask questions that people don’t give me the right answers to because they don’t understand why I’m asking the questions.

But I think that AI will will all will put up the opportunity there for us to just process more faster and get accomplish work and be able to maybe able to expand advisory and help people faster and get more work done. I don’t think it’ll it’s ⁓ it’s going to replace any of us at this point. Unless it’s, you know, the lower volume and I’m that I’m okay with that.

Issa Hann (19:11)
Definitely. And in the professional Yeah, and in the professional field, we’ve had to embrace tech constantly, right? So ⁓ when the internet came out, you know, ⁓ all this email, all this kind of stuff ⁓ was embraced embraced by the professional industry. So AI is to be treated just like the net and the web when it came out, you know. people were a little bit scared of it when when that came out and and here we are.

thirty years later almost, ⁓ since since the boom and and we’re doing just fine, if not better. So ⁓ if you use AI as a as a tool, it can definitely level your business up. ⁓ I I share that same feeling with you, definitely, Cathi. ⁓ now, five years down the line, ⁓ you’ve got a lot of stuff cooking up, you’re doing you’re doing so well for your clients. Five you’re you’re starting to write your own books.

Five years from now, where am I gonna see you when I look you up on Google?

Cathi Korelin (20:04)
Hoping that you’ll see me maybe on I’ve I’ve done I’ve done a few podcasts, so hoping you’ll see me on more podcasts. ⁓ I would have to have to do more books written and the whole series by then. ⁓ I would I do a little bit of lecturing. So I would like to do a little bit more traveling around and talking to groups. I’ve talked to real estate investment groups. I have talked to ⁓ like real estate offices, I’ve talked to doctors’ groups.

And so I would like to do more of that. Do more traveling around and talking to and and educating people about tax. People I find that the more they’re educated, the more they realize they just can’t do it themselves. But I like my clients people think if I teach them if I t people have said well if you teach them everything, then you they don’t need to. No, you’re teaching them the fact that they don’t. They can’t do it. And I love letting people understand

You know, I try to get people to understand their tax returns and they just look at me with a blank face. So people need to be educated and I love going around and talking about it, do presentations, ⁓ lectures around the country. That that’s I would like to be, you know, I would like to have a list of cities where you can find me at.

Issa Hann (21:16)
Cool. And ⁓ five years from now, if you’re ever speaking somewhere, I’ll buy a ticket. ⁓ so new people just starting out in the professional field. a lot of people, real estate agents, even new accountants, even new tax advisors. our field is is dependent on on bringing clients to you, right? So you can get all the designations you want. You’ve got to have people come to you for your services.

For people kind of struggling to establish these kind of relationships and grow their network, what advice would you have as somebody who’s been able to do it for so many years?

Cathi Korelin (21:47)
it’s not gonna happen overnight. It it takes a while. And you just have to get exposure, you know, you have to be out there talking to people. I see a lot of new people who start businesses like bookkeeping and beginning tax companies and they’re like, well, I I don’t know where to find anybody. It used to be you could open an office and people were just gonna walk in. You know, when I worked for Block we had lines that were two or three hours long. But I think with the more virtual now

People are working from home in any industry, they’re working from home and clients aren’t just walking in your doors anymore. And they think that all they have to do is market online. And I hear I I guess a lot of people say, I’ve I joined these these Facebook groups, I’ve done this, I’ve done that. And I’m like, Have you actually left your house? Have you gone out and talked to anybody? And they’re like, Well, no. It’s like, Well, do that.

Issa Hann (22:32)
Yeah.

Cathi Korelin (22:38)
Whether you join a like a B and I group or Gold Star group, you know, ⁓ and get out there. I I joined Gold Star when I there is no Gold Star where I am now, but it’s like B and I if you’re familiar with B and I. And we had fifteen clubs in an hour and a half drive. I was at meetings four days a week besides my own. I joined and I was at four it meetings four days a week. And I did

Forty thousand dollars a year in referrals just my second year in the club after networking. If you’re going to the chamber of commerce, think of the chamber as other professionals and they’re not out there looking for clients for you as like B and I’s people are out there looking for clients for you. And if you go to these groups, have a plan. Don’t just go and wander. What I was taught was look for three people that you could help.

Because you can go and click twenty cards and you’re not gonna remember who they were and nobody’s gonna do anything for you, you’re not gonna help anybody. But go with the intention. Intention is a huge part. Go with the intention of meeting three people that you can help. Get to know three people and maybe then you’ll have business with them afterwards. But you have to get out there. I just recently moved. I’m in a new town, nobody knows me. I have

a set plan now to go out and meet other people in my industry in the financial services in the business owners of town. Because you just can’t rely on everybody coming to you through your front door and you have to get out there and say hello to people.

Issa Hann (24:06)
Definitely, yeah. great advice. You got to get out there, guys. You got to be seen. ⁓ you can’t be sitting in your house ⁓ posting on Facebook and thinking that’s gonna do it for you. ⁓ so amazing advice. And all my successful people that come on this show kind of echo the same words. You gotta hit the ground and you got to be out there and you gotta put it out there and market yourself. So ⁓ I I love that advice, Cathi. Now, if people are at home and

No, they’re watching us and they’re like, you know, I want somebody knowledgeable like that to advise me, or they want to become part of the of your family office. how could they reach you?

Cathi Korelin (24:42)
My company is Elite Tax and Family Office. My email is [email protected] That’s Cathi with an I, [email protected]. And my phone number is (573) 797-9977. And you can email or text me there.

And I’d be more than happy to help you. If I can’t help you, I’ll send you the direction that I can help you.

Issa Hann (25:13)
I love that. ⁓ if you guys want somebody super knowledgeable, who cares, who can save you thousands of dollars, ⁓ and and this conversation ⁓ you’re ear, you know, you’re listening to and you’re like, yeah, I want her. Make sure to check Cathi out. she just gave you all her info. Go check out her her email, give her a call. She can do a lot for you. just by talking to her a little bit. is one of the most knowledgeable people on the on taxes I’ve I’ve spoken to in a very, very long time.

time. So Cathi, thank you so much for coming on the show. I appreciate ⁓ you coming on and sharing your knowledge with our viewers. I would like to invite you back on the show at a later date if you’re interested.

Cathi Korelin (25:53)
Well, thank you for having me, and I would love to.

Issa Hann (25:55)
Definitely. I would love to have you. and we’ll work that that out. And to our viewers at home, if you guys enjoyed this conversation with Cathi and want to see more just like this, make sure to hit like and subscribe. I talk to people every day. That could bring us different knowledge on every aspect of the real estate industry. Until next time, the Real Estate Pros are out.