The Hidden Tax Strategy Real Estate Investors Use to Reinvest Profits and Scale Portfolios

Adam Hubschman (00:00)
You know, we’re working to educate the world. Well, at least at least the continental United States and all those other and— and so with that education, we’re hoping to bridge that gap. I don’t want to get any more phone calls, “Hey Adam, I closed last week. Can I do a 1031?” You know, I don’t wanna get those calls of, “Hey, I’m selling my residential, my personal residence.” You know, I want the community to know what it— what they’re eligible for and how to take advantage of it. Because the wealthy get wealthy through 1031 exchanges. And as a beginning investor, that’s how I grow— grew my portfolio. And that’s how others can grow theirs, you know, one step at a time by compounding through the 1031 exchanges.

Michelle Tack (02:13)
Hi, everybody. I’m Michelle Tack. I am the host for today’s Real Estate Pros Podcast. I have a great contributor today, Adam Hubschman, who is specializing in 1031 exchanges. Before I turn it over to Adam and ask him some questions, Adam really has a passion for communicating a variety of components relative to 1031s. Number one. Number one, I learned from Adam only one out of seven that— folks that really can take advantage of 1031 exchanges do so. And that— Adam is very passionate about helping folks in the market today to learn and to be able to take advantage of this. So with that, Adam, for those that may not know about 1031 exchanges and don’t come from your level of knowledge, maybe you can explain to folks what you do and what markets you serve.

Adam Hubschman (03:16)
Of course, Michelle, thanks for having me. Absolutely. You know, I cover the whole country. We as 1031 Specialists cover everywhere from Guam to the US Virgin Islands. So that’s Hawaii and all across the United States. We have processors on the East Coast and West Coast and in the middle. So that allows us to be open from eight AM East Coast to five PM West Coast. And so in the end, the 1031 is a great way for investors to defer their capital gains by acquiring another property and jumping through some hoops that the IRS has provided us as a great gift to help us compound wealth.

Michelle Tack (03:55)
That’s great. Can you tell me a little bit about the basics that’s are required to do a 1031 exchanges for those that may not have done it to date?

Adam Hubschman (04:03)
Of course. I think the— two of the most confusing words in the IRS and 1031 exchanges language is like-kind. And so what it— what you’re eligible for is if you hold your property for business or investment purposes or even raw land, it is eligible to defer the capital gains exposure when you sell. You can then go purchase another property within 180 days, and that will give you the ability to compound your portfolio and grow your wealth.

Michelle Tack (04:32)
Interesting. What I was impressed by when we got prep for this meeting today, this podcast, is that you’ve got a long history in commercial real estate. And I’m wondering if you could talk about how that has helped you in terms of operationally becoming efficient in what you’re doing today, if that has contributed to— you know, real estate is up and down business, right? But in terms of insight that you bring into the 1031 Specialist operationally today.

Adam Hubschman (05:03)
Of course. As we talked about, I was a commercial investment broker for fifteen years, doing deals across the Southeast and in the Mountain West. I’ve done deals in fifteen states on the investment sales side. So that means that I’ve not only navigated this as a Qualified Intermediary on the 1031 space, but also understood the ins and outs and the requirements to do it as a real estate broker. So that means that I understand the— the time pressures and then leads to responsiveness that our clients may need when it comes to navigating this could be costly process if not done correctly. So our ability to treat this more like a brokerage relationship, understanding how to help the brokers be the rock stars they are, or help the CPAs, financial planners know that they have the team built around them to get the deals done correctly. That brokerage approach has really allowed us to understand what it takes to build a community to really get deals done, maybe not necessarily by us, but by trusted individuals to know that they’re gonna get the job done correctly.

Michelle Tack (07:00)
Appreciate that. Can you talk about— you know, your— your, you know, I know that you have— we’ll talk about this in a minute, you know, sites on expanding and getting more, as you call it, boots on the ground and the messaging about 1031 exchanges out there. But as you grow and expand, we also often see that, you know, from commercial to this, there’s challenges, right? I mean, if we weren’t in business, there wouldn’t be challenges, right? But can you talk about maybe a situation that occurred where a deal was starting to go south on you and you had to pivot really quickly to rectify it, or if you weren’t able to rectify it, what lesson you may have learned through that process?

Adam Hubschman (07:42)
Absolutely. You know, some of the hardest deals are the ones where you gotta stay light on your toes. You know, being able to make that hard pivot, whether it is blowing up the deal completely because you found something you don’t like, or just some extra assurance on the phone to let you know that you’re doing it all okay. I have a quick story I’d love to share. On Sun— on Sunday night, I got a phone call at ten thirty at night, which was close to— which was close to twelve thirty their time. And I was asleep, but for some reason Divinity woke me up to answer the phone. And it was a client of ours, an attorney, who for some reason thought he screwed up the process. And that screw up would have costed his client four million dollars. So I picked up the phone. I don’t know how I woke up, but you know, in the end, we walked through the process and assured him that they’ve done everything correctly, that even though their identification period has been completed, that they were still on the right tracks, even though they felt like they made some missteps. You know, and having that voice of reason and voice of calm really didn’t require a true pivot, but was definitely— he’s like, “Adam, I was about to throw up on the side of the road. Like, I just like— my stomach was in my butt. My butt was in my ears.” Like, he’s like, “I had no idea what was going on, and I just needed a calm voice.” You know, and sometimes when it comes to these stressful transactions, a voice of reason from completely outside the picture was what he really needed.

Michelle Tack (09:17)
Yeah, and I think that, you know, what you just talked about is the essence of pivoting. You probably didn’t want to get up at 10:30 at night. You’re in a dead sleep, right? and— and there you go. There you have a guy saying, “Hey, you know, I need your help,” right? But that’s how— that’s how service, great service, is developed. That said, can you talk about your network— you know, if your network before is contributing to your network now or just overall— you know, what that network looks like and how you continue to be of service to the network and how they’re being of service to you.

Adam Hubschman (09:54)
Absolutely. Me personally, as a recovering commercial real estate broker, I really leverage my real estate communities. We have other people at our company who come from Title and Escrow, who come from the CPA world or the legal field, and they’re really working to leverage their own histories and business backgrounds to help provide better service. So when I’m talking to a CPA who really wants to get in the— in the trenches when it comes to IRS code, I bring him in. You know, when we have an attorney who really wants to talk about the statutes when it comes to air rights in a certain area, you know, I’ll bring in our— our legal team. You know, so with all those pieces, we’re able to put together a complete picture where I am the one who comes with the most real estate background. So as a team, we all specialize a little bit to be the true specialists we want to be.

Michelle Tack (11:19)
Do you have a couple of people that you’ve had long-standing— you know, years of relationships with that are helping you?

Adam Hubschman (11:26)
Absolutely. You know, without those trusted allies, we as a company probably wouldn’t even exist. You know, asking for favors when we need favors, asking for things when we need it, or even providing those things on the reverse, whether it’s coming in and teaching classes for people who really want them. You know, like, “Hey Adam, we have a bunch of new hires. You know, we really need to get them trained up. Can you come to our city and come in and educate our team?” You know, we’re willing to pick up and get our— our boots on the ground in anyone’s office to help them win. Same way they helped us win, we’re here to help anyone else.

Michelle Tack (11:59)
Yeah. Understood. Can you tell us before we close today, you know, what opportunities that you’re looking at over the course of the next twelve months that you’re really excited about? Where are you going?

Adam Hubschman (12:16)
You know, we’re working to educate the world. Well, at least at least the continental United States and all those other and— and so with that education, we’re hoping to bridge that gap. I don’t want to get any more phone calls, “Hey Adam, I closed last week. Can I do a 1031?” You know, I don’t wanna get those calls of, “Hey, I’m selling my residential, my personal residence.” You know, I want the community to know what it— what they’re eligible for and how to take advantage of it. Because the wealthy get wealthy through 1031 exchanges. And as a beginning investor, that’s how I grow— grew my portfolio. And that’s how others can grow theirs, you know, one step at a time by compounding through the 1031 exchanges.

Michelle Tack (12:57)
So what are you gonna do to actualize that in terms of getting your voice out there? You’re one man, you know, you— you have a— a group, but you know, what are you gonna do to do that, Adam?

Adam Hubschman (13:08)
Yeah, well, we teamed up with a national educator to be the provider of 1031 education. We’re working in every state to provide in-person education and get those approved as well for our attorneys, our CPAs, and our real estate professionals. And we’re just trying to get the information out to everyone we can. You know, there’s— you know, in the end, I truly want them to work with us, but if they’re gonna do a 1031, they need to do a 1031. So I’m here to just spread the good word and hopefully they work with us. If not, you know, they’re gonna go do one and we need more 1031s because that’s the way we grow our economy. That’s how we grow as investors and that’s how we keep this train moving.

Michelle Tack (13:46)
I— I love that. Before we conclude, can you provide for those that are interested in the 1031s, that may need your help or want to invest in your company or what have you to— or just level up their game to contact you at— and could you please, depending on if you’re giving an email, what have you, spell that out.

Adam Hubschman (14:07)
Yeah, we have a tons of great tools available on our website or from me directly, including our 1031 Bible, which is an 11-pager that gives you a 101 on 1031, a lot of great one-pager trifolds. And so the best way to reach me via phone is stick— 631-438-1031. That’s 631-GET-1031. And you can reach me by email at [email protected].

Michelle Tack (15:22)
That’s great. You’ve been a wonderful contributor. And it’s not always top of mind, is it, the 1031s, but it should be. so we— I want to thank you on behalf of Real Estate Pros. For those that are subscribers, we hope you enjoyed the content today. And for those that are not subscribers yet of Real Estate Pros, we welcome you in to take advantage of other content by subscribing. Again, Adam, good luck in the future and hope to hear more about you actualizing more 1031 exchanges in the future. Thanks so much.