David Richter
speaker
79 appearances
1 recordings
1 series
first heard Jan 2025
last heard Jan 2025
David Richter’s voice in public audio — every appearance, attributed to the second.
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Appearances
I don't think the IRS is there to protect you and help you, but we have to follow. We have to follow what their guidelines are, and that's where I also say, too— then get into rentals, get into long-term eventually, like get into the passive side. So that way you can legally literally get your taxes either to zero.
I have multiple clients that like, they have so much depreciation and carry, they carry over losses for years because of what they're buying or like the syndications or the big deals or like, even if they buy a portfolio for themselves. So if you want to legally do it, you're in the best industry and you're already have the skill of acquiring properties.
Usually like if you're listening to Justin or, you're warning that skill. You're pumping that muscle every time you listen to them. So it's like that's where go out there and flex that a little bit because that's where the real tax savings can come into play.
Yeah. So another one is how to mess up profit first for real estate investing. And the number one thing I say is just don't do anything from here. Just listen to it and be like, okay, that was good. I either read this or that was a good podcast, inspiring, but I don't do anything with it. That's the worst way to mess it up.
The second one is you set up the bank accounts and then you don't do anything with them. That's where I give in the book and specific to my book, I give what's called target allocation percentages. That's not the specific part, but the specific part is I give it for if you're selling the property or if you're buying it and holding it.
And like, OK, for those bank accounts, like depending on the size of your business, how much money should go where into those bank accounts from every, you know, like we were saying before, it comes into income. How much should I physically transfer to those other accounts? So it gives you a little roadmap in there.
That's another big one, especially if you're in the real estate space, because a lot of people buy and hold, not just sell real estate. So that's another big one to mess it up. The other way to mess it up is like making it too complicated. Like you go out there and you set up 15 bank accounts. It's like, wait a second, what are you going to do consistently?
If it's one, I'd rather you do one and get it set up and start to get good habits and then have that progression where, you know, Justin is now like down the road and has multiple bank accounts. We have had people set it up. And then I've had people set it up where they set it all day, assist them up. And then they come back to me at some other event, like, Oh, how's it going?
Like, oh, I set up the accounts. Did you do anything? No, like I didn't really. And I'm like, oh, man, I don't do that to yourself. Don't overcomplicate it. The other thing I would say is that really like derails people. And this might not be well, this could be how to mess up profit first. But you get the wrong financial people around you that don't really have your best interest at heart.
Whether it's a bookkeeper, like if you have a bookkeeper and you're in real estate and they don't know real estate investing, you could probably be looking at like from anywhere from $1,000 to like $10,000 to $15,000 of cleanup down the road because they probably don't know how to enter everything in the real estate space.
Exactly. That's where it's like you got to have those right people in place that are supporting the profit first mentality, I would say, too, of like they support that you want to set all this up and do it. But then they also need to know real estate like that's the other big one.
If you have a CPA who doesn't know real estate and you're buying real estate, especially to hold it like good luck, like getting the actual tax benefits right. from the IRS because you have that CPA that's in place. And I'm more on the CFO side, which is more business and money management.
So it's like, I even see this all the time where people have the bookkeeper CPA, which you need those people in your life. But if they're not real estate investing specific and that's the industry you're in, then that could end up costing you like what Justin said there. I could tell you story after story now of just people where they thought it was right or they didn't even know.
And honestly, a lot of times people don't care. Honestly, the real estate investor is just like, let me make money. Let me do the deal. And I'll get to the books when I get to the books. And then it bites them in the butt big time. And they come back and they're like, oh, shoot.
You know, like maybe I should have been paying attention to this the whole time because it's not just a bill they get slapped with. It's like, oh, I could have done a better business. You know, I could have built something that actually served me, you know, versus like the mess and chaos that I'm in right now. So it's like hitting it from multiple angles.
Yep. Yes, indeed. And we see that a lot of people don't, like you said, they don't have that good foundation, which is why I'm so adamant. And I love that you brought that up, that even if you're just doing your first deal, like you're in the middle of your first deal or you're about to set up your LLC, the EIN and all the banks, you know, bank stuff, it's like, set up this system.
Like, have good habits from deal one versus, okay, I was 850 deals into my real estate career before profit first even entered my, you know, headspace. And I'm like, good grief. If we would have had this from deal one, that could have been 850 deals where we had more profit and a system for it.
And I'm like, please, for the love of God, if you are doing this now and getting into it, set it up from deal one. If you're a thousand deals into it, don't let your next thousand deals be not as profitable as they could be because you didn't do something from this podcast.
Yeah, it's literally my book and the Profit First Cheat Sheet. So if you're like, here, let me distill this down into one page because I know I'm an entrepreneur. Like, just give it to me. The bottom line, what is it? There you go. You can go there and get that one-page cheat sheet and the book.
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