Wealth Management + Tax Strategy: Real Advice for Real Estate Investors

Andrew Gold (00:00)
The big one that we really get all the time is somebody that’s looking at their return and we do tax reviews for all of our know whenever we go over their return and they just say I’m stuck. Like I’m maxing out my 401k at work, you I’m taking advantage of my HSAs.

COVID really opened up a lot of…you know, ideas for people to have that side gig that ended up turning from a passion project into, you know, maybe some revenue, you take somebody like that, have them go buy a and turn it into an Airbnb, you’re getting probably 20 to 40 percent in deductions off the sell price of the house the year that you close on that property. And you know that can reduce your tax bill by a significant way if you’re a high-income earner or in a high tax state.

Kristen Knapp (02:15)
Welcome back to the Real Estate Pros Podcast. I’m Kristen and I’m here with Andrew Gold of Prestige Wealth Management. So we’re going to get all into your money today. Thank you so much for being here, Andrew.

Andrew Gold (02:26)
Thank you for having me.

Kristen Knapp (02:28)
So how did you get in this industry to begin with?

Andrew Gold (02:31)
Oh yeah, that’s kind of a long story. feel like whenever I was much younger coming out of college, I really got into the world of finance and realized how big it was. think everybody, especially my generation, grows up watching different movies like The Boiler Room, Wolf of Wall Street, all those different types of things. And you start to see the life. I actually didn’t start out in the industry investment world until much later.

you know, kind of provided an interesting perspective, but my first inkling of getting into the investment world was ⁓ actually trying to understand everything that was going on. And I was studying in college and I was actually trying to find a quiet place on my campus and I ended up stumbling into a really dark room with a bunch of ticker symbols flashing around all over the time. And…

was just an interesting thing. It’s kind of like knowledge by exposure. Just absorb it, you know, from all the world around you. So that’s kind of cool.

Kristen Knapp (03:32)
and your background is in tax, correct?

Andrew Gold (03:35)
Yeah, so taxes, I did some financial consulting before I got into the investment advisory business, but yeah, a little bit of everything in the finance world.

Kristen Knapp (03:43)
I mean, I feel like that could be such an asset for your clients who are looking for both the wealth management advice and the tax advice as well.

Andrew Gold (03:52)
Definitely, yeah, it’s kind of unique in our space. ⁓ know, most people when they go in to meet with their financial advisor, if anything tax related comes up, they hand you a business card for somebody from their networking event down the road. And that just means for most people who are procrastinators by nature, we’re busy. That means more meetings, know, more time out of your day to focus on other things. It just makes it nice to have it all in one place.

Kristen Knapp (04:16)
Amazing. So, you know, a lot of people don’t want to talk about money or they’re embarrassed to, or maybe they leave stuff out. How do you, how do you establish trust, you know, as you’re bringing on a new client so they feel comfortable, you know, telling you everything.

Andrew Gold (04:32)
Usually, I think education is always like the best form of communication, especially when it comes to building new relationships. think, you know, if anybody that tries to almost like circumvent, you know, the topic in general, you know, it makes it really hard. So I usually go at it just like straight on and say, you know, it takes longer to build a trust bridge than it does to burn one. So let’s try to build a really strong foundation, get to know each other.

Kristen Knapp (04:46)
Mm-hmm.

Andrew Gold (05:46)
you know, we’re in a luxury business of being able to

kind of choose who we’re gonna be able to work with and the best fit. And so I think if you take it from an approach of education and let’s make a friend, ⁓ we’d see what we can do together and provide some value and then you can make that decision. I think it’s much better than trying to sell somebody over the phone, if that makes sense.

Kristen Knapp (06:07)
Yeah, 100%. And talk to me about your client base. Who are they and what are they trying to build or what are they working toward?

Andrew Gold (06:13)
Yeah, so I’d probably say, know, Prestige was founded, you know, around, you know, 50 to 70, more like retirement income planning. I think over time, you know, as the wealth has kind of built up in the country, you’re getting more and more people that have maybe worked traditional jobs and, you know, coming out of college and all of a sudden they look up, they’re 35, they got two kids, maybe they changed jobs for that competitor down the street and now they’ve got these funds which they’ve never really had to focus on thinking about.

They know taxes are terrible and now they’re trying to just find some things that make them feel good about you know, what’s making them work so hard every day. So that’s usually that like younger client that’s trying to gain some knowledge and strategy in their life. And if we can save money on taxes as well, then that’s a huge benefit.

Kristen Knapp (07:02)
Yeah, and what role does tax strategy play in long-term wealth building?

Andrew Gold (07:10)
I mean, I think it’s kind of like the gift that keeps on giving or as they would say, like the leaky sink, you know, of your wealth over time. ⁓ Most people are not even really too sure because of how much money they’re paying in taxes because of payroll, because of all the deductions. With taxes, I mean, the IRS tax code is three times the length of the Bible almost and it changes pretty frequently. So I think that’s something that’s really shocking.

And here we are with our CPAs and we know a lot of great CPAs out there. I’m not speaking on all of the CPAs behalf, but a majority of them don’t meet their clients until February, March of every year. A lot of the strategies that you can put in place to save money have to be done before December 31st. ⁓ having that conversation throughout the year really puts us in a position of strength to not only know what we’re paying, but also having those really productive conversations about

Kristen Knapp (07:54)
Hmm.

Andrew Gold (08:05)
Hey, if I can spend this money here rather than giving it to the IRS, then that’s a win-win for us.

Kristen Knapp (08:11)
Absolutely. ⁓ Can you share an example of a client who maybe thought they were doing something completely right until you came in and realized they were missing something? Like all the time.

Andrew Gold (08:21)
so many.

big one that we really get all the time is somebody that’s looking at their return and we do tax reviews for all of our clients whether we’re handling their taxes for them or not but ⁓ you know whenever we go over their return and they just say I’m stuck.

Like I’m maxing out my 401k at work, you I’m taking advantage of my HSAs.

I have these aspirations. I’m just kind of getting, you know, killed at the pump kind of thing, you know, of the money that I’m taking home after all these things are deducted. so

COVID really opened up a lot of…

you know, ideas for people to have that side gig that ended up turning from a passion project into, you know, maybe some revenue,

as well as a lot of people getting displaced in the workforce. Now those 401ks are coming out of these plans and they’re saying, now I have flexibility to go and buy that real estate property. Maybe I want to start that Airbnb either for revenue or just to have a second place to go and visit seasonally, which is really popular. ⁓

And so, you know, I’ll give you two scenarios. You know, working with super high income earners, you you look and think about like doctors, lawyers, you know, maybe anesthesiologists or something like that that are making really high W-2 wages. They kind of get tapped out after a while and they get sick of paying $100,000, $150,000 a year sometimes in these high tax states like California and New York. But, you know, if you can go and buy

you know, a long-term rental or something like that, you go from being a W-2 earner

over to having passive income. And that can open a lot more doors for depreciation, for expenses, and kind of like complicating your tax environment a little bit differently. Also, you know, speaking of Airbnbs,

you take somebody like that, have them go buy a

and turn it into an Airbnb, you’re getting probably 20 to 40 percent in deductions off the sell price of the house the year that you close on that property. And you know that can reduce your tax bill by a significant way if you’re a high-income earner or in a high tax state.

Kristen Knapp (11:09)
Yeah, I mean all of this stuff, really pays to work with somebody like you. I’m sure there’s a lot of people out there who are like, I could just do it myself or I’ll figure it out. What would you say to those people?

Andrew Gold (11:19)
yeah, so I mean the good old quote, you know, when you’re paying for advice, I mean it’s one of those things where it’s like, you you get what you pay for. ⁓ But I think doing due diligence and finding somebody that is gonna be able to provide enough value for you, we always tell our clients that we try to make sure that each of the relationships that we bring on

We’re striving for net zero or net positive to where that when we’re looking at managing money better in good times, managing money better in bad times is kind of where we really feel like we outperform the market is by avoiding risk when we can. But if we can find an extra couple thousand dollars a year just by tax savings and being able to make you a little bit more money tax free, mean, those are those things that add up over a lifetime. ⁓

you know, talk about that one, two, three percent extra a year. You know, that’s a lot of money over, know, a 20, 30 year time when you’re working.

Kristen Knapp (12:14)
Yeah, and you can really plan for your future rather than just kind of going month by month, year by year. It seems like you can actually make a plan and look ahead.

Andrew Gold (12:23)
100%.

Yeah, and there’s a lot of deductions out there which people qualify for that they just aren’t even aware of.

So we always have like this, you know, running joke with our clients where it’s like, you know, is your CPA working for you or the IRS? If you hear something on Instagram or TikTok and you go say, hey, how can I put my kids on payroll? And, you know, they say, no, you know, that’s too high risk. We don’t want to do that. ⁓ How much time is spent convincing you to stop talking about it versus figuring out if you do qualify or how to do it? Those are those little things which we love to kind of go down in the weeds on.

⁓ You know, no tin foil hat is required by any means.

Kristen Knapp (13:02)
Yeah,

and how do you kind of balance that? Because I’m sure some of these things are high risk and you obviously want to keep everybody very safe. How do you balance that?

Andrew Gold (13:12)
Oh yeah, think it’s, you know, at first, you know, the expectation of document, document, document, anytime that you’re building out, you know, a tax strategy. The last thing that, you know, the IRS wants is, you know, 300 million people with side gigs. And so, you know, being able to have like a really built out plan to be able to say, this is what I took advantage of, why.

Here’s my documented hours and receipts. ⁓ know, in social media, you know, we always talk about keeping those receipts, you know, on those old tweets and comment boxes from the haters out there. But, you know, it’s one of those things, we’ve got to do the same thing in our life, you know, in our finances and our expenses, especially if we have a small business and family to fight for.

Kristen Knapp (13:43)
Yeah.

I’m sure you get a lot of people who get some advice on TikTok and come to you with a lot of stuff. Is some of that credible? Some of it’s not credible, I’m sure.

Andrew Gold (14:01)
Now, yeah.

No, it’s funny, your followers can probably Google my name. Once they get past all the pages of the guy who ⁓ wrote the Golden Girls theme song, they’ll see some little bits of ⁓ posts and we have some fun with different financial gurus out there. A lot of people providing financial advice. Obviously Dave Ramsey is the elephant in the room.

you get both sides of it where it’s like, you if it sounds funny, it probably is, and you probably don’t want to go ahead and do that. ⁓ You know, at an IRS audit, the last thing that’s going to help you is saying, I saw this guy on TikTok. ⁓ So we got to have a good process and got to some good team in place to protect you.

Kristen Knapp (14:42)
Right.

Yeah, I think it’s important to remember that anybody can make content on TikTok and they’re not necessarily, you know, super knowledgeable about what they’re talking about. In your case,

Andrew Gold (14:56)
one million percent.

Kristen Knapp (15:39)
you are, but you know, there’s a lot of people out there that aren’t.

Andrew Gold (15:43)
For sure.

Yeah. And it’s usually those ones that kind of like go against the stream that are meant to be those shock and awe pieces which get the most attention. Unfortunately, usually those aren’t the best advice piece that you want to take and do an audit or implementing right away without talking to a professional.

Kristen Knapp (15:51)
Mm-hmm.

Yeah, and like kind of in that same realm, what about AI? Do you see people kind of trying to rely on like chat GPT to help them manage their wealth?

Andrew Gold (16:08)
yeah, I mean we get asked that all the time. I Tax GPT came out and

You know, the most important thing is yeah, it can be like a shortcut answer to finding some good information, but you know, it’s still right now in its current phase is only about 90 % accurate. And there was a situation, you know, just recently, and I’m gonna kind of butcher this quote, I’ll paraphrase. ⁓ There was a couple of attorneys that were going into a situation where they were building out a case and used Chad GPT to make its references on some certain things in the past. And you know, after it went through it, they ended up going,

and looking for the sources of the previous cases that were quoted in it came back that it was a, ⁓ you know, a chat GPT reference and it wasn’t accurate at all. you know, there’s no better way to make a judge’s day, you know, so let’s not take that as anything more than a grain of salt to verify with some professionals for sure.

Kristen Knapp (17:04)
Yeah, it is wrong sometimes. It’s not always right all the time. Okay, so switching gears a little.

Andrew Gold (17:07)
Yes.

Yeah, the AI entire

vision lost me whenever they started making videos. If anybody’s ever looked at an AI photo or video, they can’t master the hands, you how can we master our tax code?

Kristen Knapp (17:20)
Yeah,

exactly. They really can’t figure out those fingers. It’s always too many or not enough. ⁓ Switching gears a little bit. I know you guys do real estate consulting in-house. Like, what does that look like? How do you work with real estate professionals?

Andrew Gold (17:25)
Yeah.

yeah, so a lot of our clients kind of start either with what they know ⁓ and either they end up really concentrated in real estate looking to diversify into traditional stocks or they start with really dense portfolios of stocks and looking to take advantage of diversification in real estate. And so I think the beautiful thing about us is that there’s a lot of different ways with which we work.

clients so it’s not just a percentage based fee on assets in-house. We can do a lot of things like quarterly tax planning, we can do annual once-over reviews and we can help introduce people not only to good funding sources, they’re looking to raise capital but also really expansive people in their market to be able to find good deals and anybody that’s looked into real estate, there are real estate agents out there and I’m not pouring hot water.

CPAs and realtors all over the country by any means, but you know there’s a lot of real estate agents out there that just aren’t as savvy with like the investment world. They’re just working with individuals on primary residences and it is a huge you know mindset shift. you know employing good people in markets and trying to just find ways to find good deals that maybe not have hit the MLS yet, those are the great ones.

Kristen Knapp (18:28)
Light them on fire.

Yeah, and what are some of the financial blind spots that you see that a lot of these investors have?

Andrew Gold (18:59)
yeah, think the misconception of thinking that you have to liquidate a 401k in order to buy real estate, that is probably one of the ones that, you know, and the only person that’s celebrating that event is the IRS. Whenever you pay, you know, 20 % in taxes and a 10 % early withdrawal penalty just to go buy that rental property, it breaks my heart every time that happens. But being able to really just focus on and dedicate time and learning more about how do I gain access to my money that I

Kristen Knapp (19:20)
Yeah.

Andrew Gold (19:27)
years ago and use it to my advantage. Also looking at 401k is for what they are. I you can access, most 401k plans can give you access up to $50,000 or 50 % of your vested balance. Self-directed IRAs as well to be able to buy those and defer the tax on them, treating them as a traditional investment. Those are all just obviously scratching the surface but great ways to be able to avoid paying the tax man for sure.

Kristen Knapp (19:57)
Yeah. And then what are some of the opportunities you’re seeing in the current landscape or market? Yeah.

Andrew Gold (20:03)
And the real estate market?

Yeah, so you know I think right now that there’s you know a really significant portion of the homeowners right now that are holding on to two and three and four percent interest rate mortgages and a lot of them especially as they get older their kids move out they’re looking to downsize and get into smaller houses or maybe looking to go someplace tropical and you know the problem is that most of them

because of the appreciation on real estate in general, they would have to go down in size and either be at the same price point at a higher interest rate than they were five years ago and they may be even refinanced. So there’s a lot of pent-up demand and supply in that space right now.

But what it’s creating, and this kind of ties back into taxes, is that there’s a lot of people that have paid off houses that would much rather sell or finance it to somebody so they can spread out their taxable gain over multiple years rather than having to rotate it in an exchange over to a new property.

or just pay the taxes upfront and capital gains. So there’s a lot of creative strategies that people are looking into, sub to being able to use creative finance, seller financing to be able to get access to those great deals and take advantage of, you know, migration patterns across the US.

Kristen Knapp (21:20)
Amazing. Well, I feel like you have such good insight on the market and just all this in general. have such a good, from the tax side and the wealth management side, you have such a well-rounded view of it. ⁓ And you guys service the country, correct?

Andrew Gold (21:34)
Yeah, yeah, we actually just onboarded a client in Japan who’s in the military. Shout out to all of our military fam. But we work all over the country. We have a lot of hubs in some of the big metros, California, DFW obviously, the Northeast, Florida, Colorado.

We work with clients all over the country and it makes it super easy to meet via Zoom and just tell everybody that we meet online and get referred to. My time’s free, so if we can spend an hour, make a friend, let’s do it.

Kristen Knapp (22:05)
Yeah, so how can people find you?

Andrew Gold (22:07)
Yeah, so we can look at our website. It’s a pwealthmgmt.com. Also, I’m pretty active on Facebook. So if you go into Facebook and search for professional pages, the tag is at pwealthmgmt. ⁓ Try to put a lot of good content on there for business owners, real estate investors, as well as our newsletter. Pretty active out there. So just happy to connect with anybody that’s looking to learn a little bit more about the space.

Kristen Knapp (22:34)
Awesome, well I encourage everyone to reach out to Andrew and learn more about this and thank you so much for being here today, this has been awesome.

Andrew Gold (22:41)
No, absolutely. Thank you for having me. This is amazing.

Kristen Knapp (22:45)
Yay, well, we will, we’re so happy everybody tuned in. Thank you so much and we will see you next time.

Andrew Gold (22:51)
Awesome.