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Show Summary
In this conversation, Mariah Peaster shares her insights on real estate investment, focusing on strengths, tax strategies, and maximizing returns. She emphasizes the importance of understanding financial implications and leveraging properties effectively. Mariah also discusses the criteria for working with investors and the significance of networking in the real estate space. Common misconceptions about taxes and retirement planning are addressed, highlighting the legal advantages available to real estate investors. The conversation concludes with Mariah’s contact information for those interested in learning more.
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Investor Fuel Show Transcript:
Mariah Peaster (00:00)
⁓ Yeah, so the the biggest one is paying taxes There’s usually a good way around it legally, of course ⁓ But not taking advantage of those tax, you know people call them loopholes, but they’re not they are tax laws And if you’re not taking advantage of the tax laws that are out there that are for your benefit ⁓ Yeah, I’m not sure what you’re doing but at the end of the day, you know, I think peoplethink about it as a loophole
Michelle Kesil (02:01)
Hey everybody, welcome to the Real Estate Pros Podcast. I’m your host, Michelle Kesil. Today I’m joined by someone that I’m looking forward to chatting with, Mariah Peaster, who’s been making serious moves as a financial advisor for real estate investors. So excited to have you on the show today, Mariah.Mariah Peaster (02:21)
Yeah, thank you for having me. Appreciate it. Excited to be here.Michelle Kesil (02:25)
I think our listeners are really going to take something away from how you’re approaching teaching clients how to leverage their retirement assets into real estate. So let’s dive in. First off, for those not yet familiar with you and your world, can you share what your main focus is?Mariah Peaster (02:48)
Yeah, so I am a full-fledged financial advisor, Series 6, 7, all the Series license. So we try to help our clients leverage their traditional retirement assets. So before they got into real estate, maybe they had a W-2 job and they were building up that 401k or they’re in real estate and they’ve switched to contributing to their own IRA. So we teach strategies around those traditional assets.to help our clients be more tax efficient, and then also to kind of grow their real estate business over time. So thinking more in the future versus just one flip to the next basically.
Michelle Kesil (03:31)
Yeah, amazing. And do you support people in a specific market or nationwide?Mariah Peaster (03:38)
So we can work all over the world, ⁓ or all over the nation. But ⁓ our main focus right now has been between ⁓ Ohio, Florida, and Virginia.Michelle Kesil (03:53)
Awesome. What made you decide to focus on the real estate world?Mariah Peaster (04:00)
So my background is actually in real estate. I worked as a realtor for six years and my husband and I have done some of our own investing. I worked, partnered with another real estate investment group for a while and did like project management for them. My husband does construction, so he was also a part of that. So I’ve been around it for a long time. I always believed that this was like, you know, the future was gonna be making money in real estate.And then I started noticing some cracks in the realtor’s and investors that I was working with as far as their finances go. It was always, you know, this project’s running out of cash. We need to figure out how to raise more capital or this project’s not going as well as we thought, or I’ve got all these properties sitting out here, but I’m not making the living or the lifestyle that I want. So I really wanted to learn the financial side of things and get a better grasp on that.
So I went ahead and started working, ⁓ I said studying, got all my licenses for being a financial advisor. And I was lucky enough to come across another financial advisor who also owns a bunch of real estate and is very strong in the investment space, but also had the same belief that a lot of investors are running around not understanding their finances and not doing things properly. And the financial advisors that were out there, at least I’ll say a hundred percent of the ones I met other than the one I partnered with.
⁓ They have never really looked at real estate. They don’t understand it. All they see is, well, you’re investing all your money out here. You’re not investing it with me, so go away. I don’t want to deal with you. They didn’t see the long-term play there of how you can leverage both together. So that’s really where my passion for this kind of comes from is helping people figure that piece out.
Michelle Kesil (06:38)
Yeah, that’s awesome that you were able to blend the financial world with the real estate world.Mariah Peaster (06:45)
Yeah, it’s been a challenge, but it’s been a lot of fun figuring it out and getting to see people actually improve their lifestyles and not just run from thing to thing and be able to plan out the next five to 10 years and have those goals and ⁓ get out of properties that were dragging them down. So I really appreciate that side.Michelle Kesil (07:07)
What is the most common question that investors have for you in regards to finances and how do you support them?Mariah Peaster (07:19)
⁓ So being in the retirement account space, so your IRA is 401k, regular stock market, things like that, ⁓ I would say the biggest question people have is if they should do a self-directed IRA where you’re buying the properties in your investment accounts or be doing it on their own. ⁓ We come across this question a lot and ⁓ my answer of course is it always depends.But for the majority of people, ⁓ we prefer to see them actually taking loans out against what they have in their assets and using that as their asset protection and then buying the real estate on their own because you don’t want to be creating a tax redundancy essentially. So when you’re buying a property within your SEP IRA, you’re losing out on all of the cost segregation you could do on all the tax deductions you may have on all the potential for offsetting any W-2 income.
you’re losing out on all of that and it’s going straight into an investment. You’re also losing your basis in the property. So instead of being taxed on just your profit, you’re taxed on 100 % of the property whenever you do sell it. ⁓ Then there’s lot of management problems that come along with that of not being able to manage your own property, not being able to allow your own friends or family to stay in the property, things like that. So I…
try to get people to avoid it as much as possible. There’s just a lot of reasons to not go down that road. There are, I will caveat with every now and then it does make sense. Like if you have all of your money tied up there and it’s a good sum of money where you’re not going to be concerned about running out of money, because the other problem is you can’t just put more money into the IRA whenever you want, right? There’s limits that the government sets on how much money you can actually put in there every year. So if you’re buying a property and it’s depleting that entire account,
Well now if something goes wrong with the property, you don’t have any money to fix it and you’re not allowed to just go put your own money into it to fix it. So I really try to avoid that unless you have a really, really large sum of money in there and you’re comfortable with taking on those risks and comfortable with the idea of paying more in taxes later on but being able to reduce your tax right now.
Michelle Kesil (09:33)
Yeah, that’s definitely an important strategy.What are some of the ways that you’re helping these investors make the most from their properties? Are there specific strategies or money kind of management tools that you share?
Mariah Peaster (10:30)
Yeah, so ⁓ we’re not CPAs, caveat with that, but we do a lot in the tax space and we do understand it. So we try to advise one, either hooking up with a good CPA or an EA who actually understands the real estate side as well. We work with some fantastic people on that side that we refer out to. So definitely, you know, saving, making more money by not paying taxes and then also evaluating your properties correctly. So a lot of people, if theyyou know, say an investor bought a property with no money down and they’re so excited, they’ve got infinite returns on it. Well, at a certain point, you have to start looking at the equity you have in that property because you may actually be losing money. Like I’ve sat with a lot of clients and looked over a property that they’ve owned for a long time and they thought, you know, it’s great. I didn’t put any money into it. I get paid 500 bucks out of it every month. But when we go through the equity piece of it and what they actually have invested in it.
they’re making less than the stock market at that point. Like you could take this money out, sell the property, put it into the stock market and be making three times as much. So you’re not actually making the passive income that you think you are. So definitely it’s your return on equity. We really want to look at that piece and make sure the properties are working in the most efficient way for you and actually getting you the interest return that you want.
Michelle Kesil (11:50)
Yeah, that’s awesome. I think most people aren’t fully aware of all these things.Mariah Peaster (11:58)
They just kind of think, know, I’m a real estate investor and I own a bunch of doors, so I’m good.Michelle Kesil (12:04)
Yeah, totally. And when it comes to retirement, like how can these properties support people through them?Mariah Peaster (12:13)
So obviously the traditional way of having that passive income, right? You set up your management properly so you’re not having to go change toilets in the middle of the night, the old adage, know? But then also having a plan for basically getting those homes off your book. So whether that’s through just passing and then leaving this legacy for your kids, if that’s what you want.⁓ If we deal with some people that don’t have kids and aren’t interested in leaving anything behind, then it’s figuring out, how do we position you to pay the least amount of taxes when you’re selling out of these properties, get you into something else. ⁓ We will talk to our clients about oil and gas investments, different ways that they can start pulling that money out without just getting hit with this huge tax bill and giving it all to the government. So that’s the real.
strategy is figuring out, right, what do you want to leave behind? What do you want to spend now? What lifestyle do you want? And then, you know, helping them manage the taxes and when they’re selling those properties to get there.
Michelle Kesil (13:17)
Yeah, amazing. Are there specific types of real estate investors that you work with or is there any criteria that these investors need to have to work with you?Mariah Peaster (13:31)
So our criteria, we do have a minimum of $100,000. So you have to have that either invested in the stock market or one of your retirement accounts because that’s actually the only way we get paid. So again, all the advice and everything we give, we do that on the side for free, but our actual paycheck comes from the assets under management. So you have to have at least a minimum of 100 there. But other than that, we’ll work with pretty much anybody that is doing real estate investing.Fix and flippers usually aren’t the best because they need it the most because they’re getting hit with these huge tax bills, right? When they’re flipping. ⁓ But unless they have the mindset that they want to move up to the next level of actually holding assets or getting into multifamily assets or they said like motels, condos, RV parks, things like that. ⁓ We really want a growth mindset. So that’s our biggest thing. As long as you have the growth mindset and you want to get to that point, we’re willing to work with you to get there.
Michelle Kesil (14:33)
Yeah, absolutely. Growth mindset is so important in every space.Mariah Peaster (14:37)
Yep. We don’t want to work with somebody who’s just happy, you know, running around doing their thing, never thinking about the future. That’s not our clientele.Michelle Kesil (14:45)
Yeah, definitely. So how can people leverage real estate in like a different way maybe than their hearing or than they’re doing?Mariah Peaster (15:43)
I would say, you know, talking with a financial advisor who understands the space and figuring outwhich properties are dragging you down, which properties have potential for more, and figuring out a different way of setting those properties up. So whether it be like a pad split situation of, you know, you’re renting out every room because this property is not making as much, but you’re in a college town and you can do more. So just, think, sitting down with somebody who understands the ins and outs of it and has experience in a lot of different realms can give you a new perspective on your properties. And then you can take that new perspective and hopefully leverage it into the next level.
Michelle Kesil (16:22)
Yeah, absolutely.So what are you most focused on solving or scaling next in your business?
Mariah Peaster (16:33)
I don’t know about solving in my business. Like I said, I do want to reach out to more clients in the kind of weird spaces, not just the fix and flips or the long-term holds. I like the short terms. I like commercial properties and businesses, things like that. My husband and I are actually looking into buying our own commercial property and getting that up and running right now. So we’re kind of more focused on that.Yeah, we’re a little more focused on that right now than anything in the business, the business I love and I appreciate how my clients but ⁓ just continuing to ⁓ grow and keep growing with our clients.
Michelle Kesil (17:20)
Yeah, definitely. When it comes to your business growth, is there a specific networking strategy that you have found made the biggest difference for you?Mariah Peaster (17:33)
⁓ I don’t know if it’s a networking strategy as much as just networking, getting out there and meeting people, ⁓ going to all the local reas, going to different real estate groups that have popped up, ⁓ just trying to meet and explain to people as best I can what we do in a quick elevator pitch. yeah, just really meeting people has been the biggest thing, because you meet one person and they introduce you to somebody else and then…It just kind of keeps snowballing from there and I love that aspect.
Michelle Kesil (18:10)
Yeah, absolutely. Those meetups and the groups are so supportive and relationships are everything in this space.Mariah Peaster (18:19)
Yeah, 100%.Michelle Kesil (18:21)
Yeah. What do you think are some misconceptions people have when it comes to taxes or retirement and real estate?Mariah Peaster (18:35)
I think one of the biggest ones is that your money is tied up there or you can’t use it. A lot of people, for some reason, don’t realize that that is an asset you can put down when you’re going to get a loan. And they look at that as, yes, it’s tied up there, but technically if they wanted to come after you, if you’re gonna foreclose on a property or something like that, that asset is still there to pay them off and to cover you. So a lot of lenders…they want to see the paper assets. They don’t want to just see you have a bunch of buildings because the foreclosure process is a lot more difficult for them than just saying, pay me back from this asset. So banks actually look at having those assets growing and stable a lot more favorably than a bunch of properties that are all tied to one thing because then you also have diversification. So if anything happens in the real estate market, like you have another 2008 crash, God forbid,
something like that, they’re looking at you as, all of your money is tied right here in one spot. We’d rather see you have a spread of different things and different types of properties as well, which is why I really like the commercial campground, know, all the different kind of properties that you can get in there. So you have different avenues to if something shifts in the market, you’re not just tied to one thing. And so, yeah, banks look at that very, very favorably. And a lot of people…
think that they won’t or don’t even put it down or you know they’ve completely forgotten about it out of sight out of mind kind of thing. So just bring an awareness to that fact for people.
Michelle Kesil (20:09)
Yeah, definitely. That’s so important. Are there certain maybe financial mistakes that you often see your clients make that you support them with figuring out how to resolve?Mariah Peaster (20:28)
⁓ Yeah, so the the biggest one is paying taxes There’s usually a good way around it legally, of course ⁓ But not taking advantage of those tax, you know people call them loopholes, but they’re not they are tax laws And if you’re not taking advantage of the tax laws that are out there that are for your benefit ⁓ Yeah, I’m not sure what you’re doing but at the end of the day, you know, I think peoplethink about it as a loophole
or think about it as I need to pay more taxes. But they don’t realize that the laws are there because the government wants to incentivize real estate investors. The government wants us to be doing our jobs. They want us to do things that create taxes in other realms. But that’s why they give us those tax reductions, right? If you have a kid, you get a tax reduction. Why? Because that kid is going to grow up and become a W-2 employee. So it’s creating more revenue. So they’ll give you the deduction now.
to do good things that will create more revenue for them later. And the same thing when it comes to real estate investors. We do real estate investing because we keep the market at a good level. We have competition. We have to keep our properties up. We have to keep them looking nice or the people aren’t going to rent them because our neighbor is going to keep their property looking nice. And when the government has tried in the past to do any kind of rent management, like take New York, it’s been a disaster.
the government should not be in the real estate space. And they realize that, which is why they give us so many favorable tax deductions and ways to not pay taxes. So just helping clients figure that piece out of like, you’re not doing something wrong by taking advantage of the laws. They are laws, not loopholes. ⁓ That’s been one of the major, I think, aha moments for our clients.
Michelle Kesil (22:18)
Yeah, I love that how you are saying it’s the law, it’s not a loophole because I’ve heard many times people also refer to it as a loophole, so it’s good to know that, yeah, you’re doing it for the right reason.Mariah Peaster (22:29)
Mm-hmm.Mm-hmm, exactly.
Michelle Kesil (22:36)
Awesome. So before we wrap up here, if somebody wants to reach out, connect, learn more from you. Where can people find you and reach you?Mariah Peaster (22:47)
So I am on LinkedIn. I’m the only Mariah Peaster on there as far as I know so you can find me there pretty easy ⁓ Other than that, unfortunately the government SEC laws and stuff we don’t really advertise on Facebook or Instagram but we do have the LinkedIn and then You can also give out my email if that’s all right. Just yeah, so it’s mpeaster at optafinancial.com ⁓OptaFinancial is our financial firm.
Michelle Kesil (23:20)
Perfect. Well, listen, I really appreciate your time, your story, and your perspective. Thank you for being here.Mariah Peaster (23:26)
Yeah, thank you for having me, Michelle. It was awesome.Michelle Kesil (23:29)
And for those listeners that are tuning into the show, if you got value, make sure you’ve subscribed. We’ve got more conversations with operators like Mariah who are building real businesses. We’ll see you on our next episode.
