How to Maximize Your Real Estate Portfolio | Josh Rogers’ Lending Secrets

Josh Rogers (00:00)
It’s a really interesting situation where they had to have a house and they were…

just about to lose it. The sellers were losing patience, right? And so when I get the deal, I look at their tax return and I’m like, OK, so you have these other rental properties, but how many do you have again? She’s, I have three. Well, two, and one’s a duplex. And so it’s really three, but kind of two. And I’m like, well, on your schedule E on your tax return, where you put your rentals, I only see one.

And I said, OK, so who did your taxes? Well, my husband did. OK, how do you do them? Turbo tax. OK, all right, great. So where’s your rental property that you’re missing?

Kristen Knapp (02:16)
Welcome back to the Real Estate Pros Podcast. I’m Kristen and I’m here with Josh Rogers, who’s the founder of Rogers Mortgage Group and also the author of Make It a Yes, which is a great tool for investors. So thank you for being here, Josh.

Josh Rogers (02:28)
Yes ma’am,

thank you so much, Kristen. I’m really excited to be here with you.

Kristen Knapp (02:33)
Amazing.

So let’s start at the beginning. How did you get into the real estate industry?

Josh Rogers (02:39)
Well, it’s been a long journey. I’ve been in it over 20 something years. And when I started, I started with a lady that was

an amazing lady. she was a real estate investor herself and she had a mortgage company and she would help tons of investors. She was closing like 30 loans, selling like 30 houses a month at this time. It was insane to watch her and to learn from her. And so that’s, I kind of always been in the space of real estate investing ⁓ when I got into the business in the early two thousands. And so, yeah, so it’s, it’s, it’s been a long journey and,

I’ve done a lot of learning. And I do ⁓ some flips and things like that. And I’ve done some neighborhood flips as well, some land development and things like that. And ⁓ in my book, yeah, we talk about all kinds of things. Yeah.

Kristen Knapp (03:32)
Amazing.

That’s awesome. So you kind of found this right away and you really found your passion.

Josh Rogers (03:41)
Yeah, yeah, I love it. know, and the thing that that always got me for lending when I started lending, it was like there’s always a how, there’s never a no.

Kristen Knapp (03:55)
Mmm.

Josh Rogers (03:55)
And so that’s

the premise behind Make It Yes. If you want to own real estate investment, if you want to grow your portfolio, there’s a how. There’s never a no. You just have to figure out what you’re missing and where the gaps are. And as soon as you know that, can solve for x, basically.

Kristen Knapp (03:58)
Yeah.

Yeah,

so what issues were you seeing or what problems were you seeing that inspired you to write this book?

Josh Rogers (04:23)
Well, ⁓ so many people, so I started thinking about it. I started thinking about how, okay, so let’s say we have a high income earner, let’s just say $300,000. They’re making 300,000 a year. They want to get into real estate. They want to start building portfolio and their portfolio and start taking some of the tax benefits and things like that. A lot of W2 earners, you know, they want to get in the real estate game, save on taxes.

But I started to think about it. was like, well, how many houses could they actually buy if they don’t know how to structure debt? So if you think about it, I mean, I’m in Nashville. So the average loan size is $300,000. Now the average house is $500 plus.

So it really doesn’t, you’re really not going to be able to buy but one to two houses. And so how can you really build a portfolio when you have the average person at your, you know, that you’re using, you know, your average CPA and average.

You know, those people they just don’t know and the average lenders out there aren’t going to tell you and the CPAs aren’t going to tell you. And I was just had a conversation with a guy that’s building his portfolio just right before we talked. He was, you know, I said, okay, did you, what kind of depreciation did you guys use? What, what, what did you, did you depreciate your vehicle? Did you, what kind of angles did you take to help you save money and help you, um, you know, keep your income up?

And he’s like, well, I don’t know. I said, OK, well, we need to kind of look at that. And the sad thing is that if they don’t know, if the customer doesn’t know, the borrower doesn’t know, most of the time, the tax preparer is not going to ask them, hey, before we get started, Kristen, to do your tax returns, what are your goals? The answers would be different if someone asked you what your goals are, right?

Kristen Knapp (07:12)
Mm-hmm.

Josh Rogers (07:19)
Hey look, I want to build a real estate portfolio. You know, I want to save on taxes but I can’t kill my income too much so where I can’t get a loan. And if you look at it that way, that opens up a whole different…

angle, you know, and there’s certain ways and certain things that how lenders look at tax returns at CPAs and, and people don’t know. And, and, and to be honest with you, a lot of lenders don’t know how to tax returns. And so there’s a, there’s a problem. And so it’s, it’s a problem of how do you really build your portfolio if you’re, if your whole Rolodex doesn’t know how to get you there. And that’s why I wrote the book.

Kristen Knapp (08:01)
Right.

amazing. So you kind of have all the different advice all in one.

Josh Rogers (08:09)
Yeah, yeah. So the book is Make it a Yes, ⁓ not to hop too much on the book, but it’s to learn bankers secrets, to maximize your income. And so that’s for lending, but lower your taxes at the same time. Protect assets, so setting up the right entities, and how to qualify for loans. And so that’s debt structuring.

Kristen Knapp (08:15)
Yes.

Josh Rogers (08:33)
⁓ That’s the title of the book. It’s quite long, you know I couldn’t think of anything better than it encompasses everything that we’re talking about you know that I want to discuss in the book Yeah

Kristen Knapp (08:41)
Hey, you know what you’re getting into for sure. And I think

there’s something that people don’t really, I guess, realize in your line of work in lending is that it really is creative. You really do have to take a creative approach and every deal is a little bit different and you have to figure out how to get it done. Is that correct?

Josh Rogers (09:02)
Yeah, that’s a good point. That’s a great point. How can you get creative to have that balance for all of it, right? How can you get creative to save money on your rehab costs? How can you get creative on seeing something that someone didn’t? They passed on the deal and you were lucky enough to get a deal with enough room so you can make profit.

Then on top of it, you’ve got to, what’s that dance between my tax return and my tax savings and what the difference is, what a lender’s going to look at? Now, the reason we bring that up is because DSCR loans, ⁓ hard money loans, those are great. Hard money loans are great if you have the margins.

Kristen Knapp (09:57)
Mmm.

Josh Rogers (10:32)
But the cheapest money is Fannie and Freddie. And Fannie and Freddie will let you borrow and have 10 mortgages. So why wouldn’t you start there if you could? Now, not everybody’s going to be able to. But if you could, why wouldn’t you start there, build up your 10, then expand into other options that are more pricey?

But if you’re definitely going to do hard term, excuse me, long term loans, get into the rental game, you want a cash flow. it’s going to be really tough to cash flow with a DSCR loan. It just.

the high interest, the points, everything else, it makes it a little more difficult. But it’s not impossible. There are people that cashflow DSCR loans. That’s the whole basis of them. But that was the point of making the book is how can you get what you want and maximize it at the same time?

Kristen Knapp (11:36)
Yeah.

Yeah. What’s an example, maybe like a real life example you’ve seen of somebody taking that creative approach, like some, like maybe something that the average person would have missed and you were able to get it done.

Josh Rogers (11:51)
⁓ well, this one’s kind of crazy. It’s kind of sad, too. So I had a customer, excuse me, a real estate agent. So I teach a class, too. So this is a class as well. And so I teach it for real estate CE. I have a bunch of classes to teach for real estate CE. And this is the one I’m most proud of. I love it.

Someone took my class and they had this client that was turned down by eight different lenders. So I was the eighth lender, so seven previous lenders. And when I get to the customer, they’re in a situation that they have to have this house.

It’s a really interesting situation where they had to have a house and they were…

just about to lose it. The sellers were losing patience, right? And so when I get the deal, I look at their tax return and I’m like, OK, so you have these other rental properties, but how many do you have again? She’s, I have three. Well, two, and one’s a duplex. And so it’s really three, but kind of two. And I’m like, well, on your schedule E on your tax return, where you put your rentals, I only see one.

And I said, OK, so who did your taxes? Well, my husband did. OK, how do you do them? Turbo tax. OK, all right, great. So where’s your rental property that you’re missing?

It’s not on your tax return. So you’re getting hit for the mortgage.

on your debt to income ratio on the mortgage application, but your income is not showing for it. It’s not accounting for it on your tax return. So you’re not getting the income. So there’s no way in the world you’re ever going to get approved using this tax return. And I’m so sorry that no one told you, but you’re missing a whole property off your tax return. And so I was able to get with them and

We looked at, I was able to prove that they had 12 months of rent. So really you can’t use amended returns with loans, with lending. ⁓ But in this case, we could because we actually had the canceled checks. We had all that. And so I was able to amend their returns, and we closed the loan in 10 days from start to finish, from taking a phone call.

Kristen Knapp (14:01)
you

that.

Josh Rogers (14:20)
Yeah, and figuring out the issue. And I have a CPA. I have several CPAs I work with. And so there’s a lot of tax strategy I do. ⁓ this is one of them. Now we’re talking about cost segregations and stuff with that client, because she’s buying another property. But that’s what happened with her situation.

And there’s countless self-employed situations where they’re just taking the wrong deductions. I can give you more. I live in this world and I love it because it’s such a… People aren’t getting the right service and they’re not getting what they think they’re getting when they talk to taxpayers.

Kristen Knapp (14:52)
Right.

Yeah,

what would you say to someone who wants to, like an investor who does their taxes on TurboTax?

Josh Rogers (15:16)
Well.

Kristen Knapp (15:59)
I’m sure there’s a lot of mistakes that can get made.

Josh Rogers (16:00)
Yeah, well see the thing is is that it

would be good to do your do it on TurboTax and kind of so you kind of have an idea of where you’re at Then get someone else to look at it

Because Turbo Tax, they take you down these rabbit holes and it will seem completely correct. Ha! But here’s another issue. So this year for the new property, they were doing Turbo Tax again. And I said, OK, well, I need to see the Turbo Tax. And they’re like, OK, here’s my logins. And I looked at it. I’m like, I can’t see the returns. I can’t see the boxes. So I don’t know how to, but here’s something else, Kristen.

What happens from a tax return to a lender is what CPAs don’t know. It’s this thing called the income calculation worksheet. So an hourly employee that doesn’t know anything about taxes or now it’s AI, okay, it reads your tax return and takes certain information from the boxes.

Kristen Knapp (17:06)
you

Josh Rogers (17:07)
and does an income calculation worksheet so it’s completely separate from your tax return. So there’s each of these boxes has a plus and minus and no one knows it.

that no one understands that that’s a reality. And so I built an actual financial calculator that does all that on my Make It A Yes website. And you’re the first person I’m actually talking to about it. It’s built so people could actually run through, say, hey, wait. Don’t file your tax returns until you looked at this through a lender’s lens, and so you can see what happens to your debt to income ratio.

Kristen Knapp (17:36)
Nice.

Josh Rogers (17:51)
And it’s the first calculator I’ve seen that takes in all those different schedules from a tax return and will spit out your debt to income ratio. So that’s, yeah, I geek out over this, okay? So total, total tax return nerd in a sense, but it’s so real life. It’s so real life because if you don’t know that answer,

Kristen Knapp (18:00)
Wow.

Josh Rogers (18:20)
You’re just throwing stuff up against the wall and seeing if it’s going to stick. And you don’t know. Here’s another reason why I started this and wrote this book is because I had a very experienced real estate investor, worth several million dollars. And he’s like, hey, we need to switch some of these loans from hard money to mortgages. And he said to me, do you think I’ll qualify?

Kristen Knapp (18:26)
Yeah.

Josh Rogers (18:54)
Do you not know if you qualify or not? How can you just be in this world using your credit, using your tax returns for your income? Because you can’t do anything without your credit, right? In real estate investing, that’s your lifeline. And so I realized, holy cow, if this person doesn’t know, who does? And why wouldn’t they know?

you know, can I help them know and how can I share this information? I hope that answered your question. ⁓

Kristen Knapp (19:29)
Yeah, absolutely. It’s cool how you seem to have a very like 360 approach to it. You have the book, you have the classes, and now you have this online calculator. You seem to really be helping people through this in a very holistic way.

Josh Rogers (19:44)
Yeah, I’m trying. I’m trying. You know, I’m trying to, you know, scream from the mountain tops, but actually you’re the first podcast I’m doing. I really don’t get out enough and snow. I’m really trying to now, you know, I’m kind of wearing my make it a S shirt, you know, around and, know, kind of like, look, you know, last class I taught a lot of people wanted the book. It was, it’s, it’s been a lot of fun. It’s in it’s, ⁓

Kristen Knapp (20:00)
Yes.

Josh Rogers (20:11)
What’s really cool is when it can help someone. ⁓ Here’s another example. I had a person that took my class. She is a real estate agent that’s in a real estate investor. She was buying another property. But this was her dream property. It was her mountain property up in the Smoky Mountains. And she dealt with this particular lender.

and gave him over $11 million in business last year. And this is in, this is in May. Okay. This is just a couple of months from, from now and a couple of months ago. And so she was turned down the day before closing.

She called me and I said well, so what happened, you know, and she was I don’t know and he just you know started asking me about my real estate business and I was like, ⁓ They were really filling out a P &L a profit-loss statement and no they weren’t and I was like, yeah That’s what they were doing. So basically your profit-loss statement killed your deal And so there’s a check

there’s checks and balances for everything. And if you don’t really realize what you’re doing, you’re going to say this other, this other thing that’s going to kill, cancel out all the hard work you did. And so our tax returns were good, but

her PNL wasn’t going to match. actually, I redid her tax returns because she left off a lot of depreciation. ⁓ And so she hadn’t filed them exactly. So she was right before she filed them. But anyway, was luckily we saved her some money on her taxes and able to get her loan because her PNL.

She just didn’t understand it. And they didn’t say, hey, look, your P &L is not really matching here. so that, and it’s sad. I just don’t understand how some lenders can, they can have the philosophy of, I’m sorry, it’s just not going to work. And not tell them what’s going on, why, or how, or what.

Kristen Knapp (22:11)
Thank

great. ⁓

Josh Rogers (22:32)
And so that’s the other part of what I’m doing is trying, hey, if you know the answers before asking the questions, that’s where you need to be, right? That’s where I would want to be. ⁓ And so that’s another scenario how it helps. ⁓

Kristen Knapp (22:42)
Bye.

Josh Rogers (22:51)
There’s another guy that was buying a trucking company. No, he has a trucking company buying another investment property. And I said, OK, before you file, let me see your returns. And sure enough, he bought three trucks that year, last year, over $150,000 in trucks. They’re big box trucks. And he didn’t depreciate them at all.

They weren’t there. There was just mileage and fuel charge. And so all those things are all minuses off his income. So he was negative $100,000 or whatever. So we switched it so he could use depreciation. He didn’t pay much more in taxes, maybe a couple hundred dollars more in taxes. But his income went from negative to $130,000 a year.

with that one move. So he had like this $194,000 in fuel charges. I was like, bro, just switch that same thing over here, which you’re not even taking advantage of. And then in 24, he could only take advantage of 60 % of the depreciation. I don’t know if you know about that, but the depreciation’s been slowly coming off. But now with the big, beautiful bill,

Hey, from the mountaintops, you want to buy real estate because real estate offers you bonus depreciation. You can do a cost segregation and wipe out your taxes. You can really help your tax situation with real estate. That’s book number two, Kristen, that is going to be explaining how real estate is much better than the stock market.

Kristen Knapp (24:31)
Yeah.

Josh Rogers (24:37)
Because if you take your 401k, your IRA, and all that kind of stuff, that’s not a tax write-off.

Kristen Knapp (24:37)
Mmm, yeah.

Josh Rogers (24:45)
yeah, and so that’s the fun stuff. How do you kind of play chess and kind of work your whole scenario out? And that’s not even getting into the asset protection piece. That’s just lending. And ⁓ you know.

Kristen Knapp (25:01)
Yeah. ⁓

Josh Rogers (25:06)
One of the other things I teach is to start off with, just imagine if your CPA asked you what your goals were. And if you asked them, if that really happened, you could say, hey, look, I’m trying to build a real estate portfolio. And I need my tax returns to help me get the best loans. OK, great. How do we do that? I don’t know, but we can figure it out. It’s a different conversation of,

Hey, here’s my information. Fill out the boxes. Try to save me as much money as possible. And what that usually does is that kills your income. And you’re not using depreciation stuff. Now, here’s the magic about depreciation. Pull the curtain back. Depreciation lenders, all lenders, can use depreciation dollar for dollar for income.

Kristen Knapp (25:40)
Yeah. ⁓

Yeah.

Josh Rogers (26:02)
So here’s an example. So I had a customer a long time ago. He made $38,000 a long time ago. This is 2004 or something like that. But he bought a FedEx truck that was $38,000 because he was going to be a FedEx driver. So he bought his own truck. So his taxable income was zero.

because he made $38,000 and wrote $38,000 off. During that year, you could do that with that heavy truck.

But his lending income, his taxable income was zero. But his lending income was $30,000. Because that depreciation box on the tax return, I can add back dollar for dollar. That’s what makes real estate so special and what makes depreciation so special. You can’t do that with an IRA or 401k.

are buying Apple stock, are buying Tesla stock. You can’t do that. It doesn’t give you the same benefits. So that’s my angle to help people understand why you would want to invest in real estate.

Kristen Knapp (27:20)
Yeah, mean, yeah, you’ve given

such good real world examples. I feel like it’s very helpful for people of all of all experience levels. Even the most experienced person can still slip up or not optimize their deal the correct way. So I mean, this is gone by really quick. We’re already at 20 minutes. So tell people where to find you and how to find your book.

Josh Rogers (27:41)
Okay, yeah.

MakeitES, makeitas.com. Yeah, makeites.com. And you can reach me from there and get the book and see the loan calculator.

Kristen Knapp (27:56)
Yes, blown calculator seems awesome. That seems like a great tool for everybody.

Josh Rogers (28:00)
Yeah,

wonderful. I really appreciate your time and I’m excited. I’m glad we could do this. And sorry for the technical difficulty.

Kristen Knapp (28:07)
Wonderful. ⁓

no problem. And everybody, please check out Make It a Yes. I mean, it sounds like your income relies on it. You need to check out this book. You’re going to lose money if you don’t. So and check out Josh as well. So thank you so much for being here, Josh.

Josh Rogers (28:23)
Yes, ma’am.

⁓

Kristen Knapp (28:26)
You too, and thank you for everyone for

listening. We will see you next time. Bye.

Josh Rogers (28:30)
beautiful.