TJ:

I think there are probably three stages, more or less of being an entrepreneur out there. Everyone thinks they're an entrepreneur, at stage one, when they're basically the hustler stage trying to do everything themselves. They're negotiating with sellers, maybe they're negotiating on the back end with buyers, they're trying to source private money, they're talking to lenders, they're thinking maybe they don't even know what they want for an exit strategy. Maybe they want a burger rental, or whatever. If you're really, again, these are all the mistakes that I've made, it's no offense to anyone. But if you're really like, maybe not as focused as you should be, you're dropping off paint buckets, and you're dropping off flooring at your flip properties or your rental properties. You're changing a doorknob yourself, if you're there in the doorknob needs change, that's fine. But that's not a business model.

What hiring and expanding really does is, so that's step one, the hustler step, step two is taking it to the business owner phase, and that doesn't necessarily mean that you're an entrepreneur. But it means that you start to figure out well, what can I outsource? The easiest thing to outsource construction, I mean, relatively easily, I can put in title I've, I've done it because I'm not the smartest guy I like doing. I like making mistakes first. But you don't want to do that necessarily yourself. If you want to scale and expand. Now if you want to have a couple of rentals, that's a different issue. But what we're bringing on operations guys and sales guys and acquisitions guys really does for the company, is it allows you to free up more of your time your most valuable resource for pursuing what your core competency should be, which is actually building the business itself, and building the business again, it goes back to in my market anyhow. lead gen and scaling the top of the funnel kind of products.

Brett:

First stage hustler stage doing everything yourself an entrepreneur. Entrepreneur wannabes, are we also number two business owner or starting to become more of a business owner by outsourcing, you'd say certain things that are less, less gonna move the business for them with the business for they're necessary, but they're not the highest and best use of your time and your energy, and this is in part of how you get out of that is get some sales and operations, some acquisitions, sales professionals, and those are all separate. Maybe she defined that sales operations acquisitions. How are they separate or do you have some overlap?

TJ:

There's always some overlap, I'm gonna share with you like an org chart, if you want might be useful. By the way, kind of stuck in the so the third phase would be the entrepreneurial phase, where you kind of phase yourself out of the day-to-day operations, and that's probably one of the toughest steps to actually get to. That's what we're working on. Everyone's working on, I think, our first hire was acquisitions, because if we're good at generating leads for distressed sellers, then everyone thinks, well, no one can negotiate the deal better than I can, and no one can take care of this lead better than I can, and all that stuff. That's all the mental lies that we tell ourselves about why we're the best at this, and that's not the case, we're maybe really good at generating leads. But some of those leads if you have too many of them, they're gonna fall through the cracks, you're not going to follow up.

Maybe we're catching and cherry-picking the best deals when we're doing all these different like horizontal aspects of the business when we hire an acquisitions individual of their entire job is converting leads to deals, and that means that you know, inherently they should ideally be better than you, and that was one thing that I found out once I started hiring out for that job, is they would negotiate sometimes better deals than I would and they would definitely catch more deals. That would, maybe not the biggest profitable deals are the ones that are like catching like bonuses. But the extra little bitty deals help pay for some of the operating expenses and pay for them, and obviously, frees up your time for expanding into the business.

Brett:

Let's talk about that converting leads to closings, I think that makes a whole lot of sense. Because we're all naturally had different strengths, whether that be, and I think there are really four phases, every business, there's the attract, there's the convert, there's the delivery, and then there's the collect. If you're the entrepreneur wearing all those hats, the business is really owning you and all your time and your energy, and you're probably not serving your, your ideal client or customer or partner or a no investor at the highest and best use of what you could be, you're probably going to fall behind. Let's focus on the conversion part, because there's a lot of attraction, and there's a lot of leads, sometimes for businesses, but then sometimes you're right, they're all coming in, and so what was the I guess, either in the job description and or the training? How did you separate yourself from having me the person who was the attraction and conversion, what is the key, I guess, or either metric or KPI that you're doing to make sure that you don't fall back into the conversion part?

TJ:

I'm at a higher level than that. I just really don't like talking to sellers anymore, because they all have the same problems, and I just get really kind of tired of hearing it. that was more my like, my initial motivation, and then once I realized that some of these acquisitions, guys can actually convert and deal with things better than I can, then it became an aspect of well, now our next step is maybe I'm a sales trainer, where we're taking like sales training program as a company, running through scripting running through, like how to converse with sellers, really digging into again, fundamentally, the job is not necessarily solving problems for home sellers, but it is providing solutions, and providing solutions and a framework that that really works for the sellers. It's not like a one-size-fits-all, but you still have to cater what you are able to do to what the seller’s needs are. Then the training goes into how do we train acquisitions, guys to do that part?

Brett:

It's an art and a science. With all of these answers. It's not just like a one size fits all, but it is that focus on your role, and your responsibility here is to take a lead who has an interest in some motivation to actually convert and move the deal forward, and that's going to make scripting and take training, it's going to take a focus on that, and when again, just like the back to the niche part, it's almost like you're niching down each individual's role within the company, like the niche, in the beginning, finding your niche to focus on building the business, and as you niche down on the roles, and those focus naturally, if they're like if they're a pitcher, and there's, they're pitching, throwing 150 200 balls a day, versus an outfielder who's feeling 200 balls a day, or somebody who's just focusing on hitting, they're going to be better at what you put your time and energy in any thoughts, or is that a fair summary?

TJ:

I think that's absolutely the case. I think and I think there's a lot of value to being acquainted with each piece of the business. I started out, I know how to lay tile. Now, if a tile guy is actually doing the job, right. did a lot of acquisitions back in the day? I think there's a lot of value to inserting yourself into different pieces of the business and you have to spend some time there. I don't know if there's a lot of shortcuts. There are accelerants where you can go faster, but I'm not sure if there are really shortcuts where you can avoid really understanding what the different kinds of aspects of the business development are shortcodes obviously, I suppose or maybe coaches or mentors or like following someone else's pattern of success. But how do you know an acquisitions guy is really having the right conversation with the seller if you've never had that conversation? How do you know? I think our like third or fourth hire was operations How do you know an operations guy is really tracking the KPIs if you don't even know what KPIs you want to look at, or what list you want to pull or how you want to, do like the I don't know do cold call marketing or whatever. If you don't if you've never done that then you don't know what that job role entails. It's a tough thing to really grow any faster than you're able to almost mentally and also just the nature of how the business operates.

Brett:

I think it's very well said like getting out in front and leading first I remember did a first house renovation for my house and I actually grew up in the real estate business my dad custom Homes room additions rentals on my life, but I still had never done it from my own house and someone was like Why don't you hire someone else out like your dad could do it all my well I really want to be able to do this myself so that in the future I know I experienced it even more so on an intimate level so that when I do hire it out it I am not am I getting over you know over overcharged and MB I'm understanding the value and until you've done that and what's I guess even like defining the wind right if you don't know what you're aiming for to find the wind unless you've done it yourself. It's hard to have someone else come in and do that because they're looking for you're defining the wind. Is that a fair summary?

TJ:

That's a good point, and a lot of people don't like taking control of their projects. We see it in the Facebook forums or whatever. On the like renovating side, a lot of talk about contractors screwing over investors and the work quality not being done and all this other stuff or the scope not being appropriate, and most of that stuff, and obviously alluded to, I guess before, spending money on marketing for distressed deals, and not knowing if your money is being spent effectively. We're almost I'm sorry, I want to say if I don't want to victim blame, but if your project goes wrong, it's probably because of something that you had wrong on the expectation from either a lack of experience or a lack of ability to perform whatever, whatever the task was. I don't think there are bad contractors don't get me wrong. But if, if a foreign guy says you can do it for such and such a price, but the market rate for an investor is 30%, more than that price, and that's what I have to pay every day to get it done, then, maybe you got a great guy that doesn't know his value. But more than likely, you have some of the things they can do everything that's not going to do anything very well for you. I think I think that expectation, understanding what's entailed in all the different job tasks, and again, all across the business side. From acquisitions to management, to operations to the rehab and construction side, I think it's very important.

Brett:

I couldn't agree with you more is a book called Extreme Ownership, where it's at the end of the day like if its mission fails, it's on you, and it's like empowering your team members to be at the highest level of performance in their leadership and in their performance by setting clear expectations. But by leading from the front, and being able to train properly or oversee properly make sure that that I know, for me, it's I grew my business over the years. It's like no, the reason perhaps some of the team members didn't actually succeed or perform in the beginning, was because you weren't properly leading your trading, and so it's starting with the attitude that, this is on, this is my business, this is on my ability to grow. This is on my ability to be a great leader and be able to train and empower others, and so I couldn't agree with you more. That being said, we're going to shift a little bit to Capital Gains Tax. Just curious about some of your thoughts on the 1031 Exchange, because that's part of what we do. For you, what's been the biggest frustration for yourself, partners. Family when it comes to the 1031 Exchange, or lack of Capital gains Tax Deferral Options for highly appreciated real estate.

TJ:

It's kind of annoying, isn't it? I mean, it's a fundamental eminent transactional business where we're paying, for the most part and ordinary income tax, and that's, that's frustrating. In terms of tax deferment, rentals, defer some of our income, taxes, tax obligation, I suppose. We've done a lot of 1031, and I think it's a great wealth of legacy-building opportunities. We've made, I think my favorite deal probably is a deal I bought at the bottom of the market. We spent 45k for a deal in California, actually and Hemet put 10k. Down had a hard money loan for the 35k. It's kind of crazy. Property in California. appreciated sold it three or four years ago, I think, and then sold it for 130 something another 1031 that money into a property that actually our company is sourced out here, through our marketing, and that property is worth 225 I think right now. You know, no capital gains tax on that one. That's nice. I don't know. It's fun. Anytime you can turn 10k into 225k. without really a lot of risk, then, and without the tax obligation. It's awesome. I think it's, I think it's a fantastic tool.

Brett:

It's an amazing tool. Especially if you have a deal lined up like that. You were able to buy low and find an opportunity. The challenge becomes when you can't, or you'd run out of time, or you don't have that thing lined up to roll into that. Have you ever enrolled in 112 units that you bought? Maybe you still own it? But have you sold anything larger and faced 1031? Or is any challenges with that?

TJ:

That sort of, for a family thing? Really. We sold a large property in California back in the day, and we turned 31 out of it, and yeah, there's definitely a struggle what I liked about that single-family deal, definitely, what you kind of touched on was we control pretty much every aspect of us, we control the sale, we control the acquisition of the corresponding buy property. the timeline wasn't really an issue for us. I guess the issue that people definitely bump into is in the identification and the closing timelines that are set out in the 1031 requirements. that's always a bit of a struggle. I mean, there's a risk of I've seen other investors where they get put into maybe deals that they may be really shouldn't be in because they think that they have to place their money in a certain time frame. I think I think there's a lot of kind of lack of understanding about the urgency and requirement for knowing what you can place your money and I know what on the commercial side, some times folks say, 1031 money, they think, well, that means that I can charge you more because you have to buy my property. There's a risk to that without knowing kind of what you're getting into. You want to talk about that. I do that much.

Brett:

That's exactly right. We call it the shotgun wedding, TJ where you got to get engaged in 45 days and married 180, and when the seller knows you're in a shotgun wedding, you're probably gonna make the best decision, and oftentimes, you're buying something that you don't you wouldn't necessarily purchase if it wasn't for the tax tail wag the investment dog. We liken that to the blockbuster way of doing things and but there's no, there's a way that's pretty cool. It's called a Deferred Sales Trust, we liken it to Netflix, there are no more timing restrictions, you can buy and sell whenever you want, you can get a brand new depreciation schedule by partnering with this thing called a Deferred Sales Trust. You can also just sit and wait and wait till a deal actually comes up. You can do hard money lending. You can invest in securities, I have a client where he's at a $2.6 million dollar deal in Alabama, he sold a business that doesn't qualify for 1031, and he's building 70 multifamily units all tax-deferred in Tennessee, which is pretty remarkable, right? So it's kind of like you can 1031 out of just about any asset and you can invest it into multiple assets to diversify. It also works for cryptocurrency, by the way, you can learn more about that at CapitalGainsTaxSolutions.com that's capitalgainstaxsolutions.com. That being said, Are you ready for the lightning round?

Brett:

Are there fast questions?

TJ:

There are some fast questions. If you go back to your 20 or 25-year-old self, TJ, what's the one Golden Nugget, make sure to tell yourself to do?

TJ:

Pick the right market to be in.

Brett:

Second question. Number one book you've recommended or given it the most of the past year?

TJ:

I read a lot of history. Actually, I read a really fascinating biography on President George Washington and Benedict Arnold, which I thought was really informative about kind of the formation of the country. I read a lot of business books, but not as many as I used to because, at some point, they kind of say the same thing, I guess.

Brett:

By the way, what's that book that you read on George Washington?

TJ:

Well, the title remembers on my nightstand, it's just a dual biography on George Washington and then Benedict Arnold, a really interesting kind of parallel lives and a lot of ways but obviously different paths in a different outcome for both of them. It's kind of a bit of a victim of circumstance, but a victim of bad decision making I think, on Arnold's part.

Brett:

I'll check it out. I haven't studied George Washington, but I haven't studied been a bit in our world. Next question, what are you most curious about right now?

TJ:

Trying to predict the future. I mean, interest rates are low, inflation's ticking up trying to predict the future and see what's going on. I'm not really sure. It's gonna be fun to say,

Brett:

For sure. Number one leadership quote, or theme that you strive to live by?

TJ:

the long one from Teddy Roosevelt, it's long, it's like a paragraph, and but they're, they're one with the boxing and all that stuff, and they're the Teddy Roosevelt quote, I love that one.

Brett:

Last question. After all, your success, helping all the people you've helped, do and all the deals you've done, and coaching and helping people build businesses in real estate, how do you stay centered in your values? How do you stay encouraged to charge forward to reach new heights?

TJ:

Family is huge for that one. We just had my son three weeks ago, and then my daughter's two and a half. That really reevaluated kind of priorities, when I don't know if you can really even grow up without having kids, no offense to people that don't have them. But when you really have something that's 100%, like requiring of you, it really changes your mindset. I'm not a big believer in maybe wealth legacy as I am, I mean, which was interesting for you to kind of tax show. I think it's important. I think that's obviously important. But I think a lot bigger believer in leaving a memorable legacy and in a skill set legacy for other people. I think that provides so much more value.

Brett:

Amazing, TJ. I want to thank you for being on the show. I want to keep encouraging. I want to encourage you to keep using the gifts of helping others build and grow businesses, as well as keeping your learning and curiosity head-on to continue to grow yourself. You can help more people as well. For our listeners who want to get in touch with you, would you remind them one last time what's the best place for them to find you?

TJ:

You can find me on Facebook is actually really easy, TJ Kosen. Our website TJKosen.com would love to help out any way I can.

Brett:

TJKosen, thanks for being on the show, and also want to thank our listeners for listening to another episode of the Capital Gains Tax Solutions Podcast also streaming eXpertCRESecrets.com, or we believe most high net worth individuals and those who help them they struggle clarifying their capital gains tax for options not having a clear plan is the enemy and using a proven tax deferral show such as the Deferred Sales trust the best way for you to save 1031 exchange eliminate the 1031 Exchange, Defer Capital Gains Tax on the sale of cryptocurrency primary home or business so that you can create and preserve more wealth you can go to CapitalGainsTaxSolutions.com to learn more about that and we look forward to connecting with you please soon please rate review subscribe, and we will talk to you again.