On average in the last eight years, it's been about 92, 93 cents on the dollar for every dollar invested, right? Pretty decent, right? You invest a million bucks, you get 930,000 passive loss.

Investor puts 100 grand in, they get $92,000 worth of losses on their K-1.

And that loss isn't, they didn't actually lose $92,000, right? They actually, they just got tax losses for those $92,000.

And why this matters for the rep status.

And so becoming a real estate professional allows you to take these large losses that would have been passive.

We talked about, hey, I put money into a syndication.

That's passive.

Maybe unpack that a little bit, even if they've got four or five, six other different individual LP investments, maybe expound upon the idea and the concept of the grouping election and how it applies in different situations.

Yeah

... yeah, so, you know, I tell people all the time, and real estate's one of those funny industries where it's okay to kinda be both, but you gotta decide.

In real estate, you can be a deal person, right? Where you go out and you can do some deals, and you can be successful being a deals person.

And you don't have to kinda do all of the back-end work, right? Like, you're not gonna do a bunch of hiring.

You're probably not doing a ton of marketing.

You're probably just deal by deal, maybe one or two deals every quarter or something like that.

But then there's those ones that say, "Okay, I wanna be more than a deal person.

Right.

What do you see going on in the industry? Do you think that's accurate? I mean, it is accurate.

Absolutely.

So here's what happened.

And the smaller companies didn't have to deal with this.

The bigger companies, all the bigger companies that I've dealt with didn't have struggle because here's what happened.

As when we were in 2020 through 2022, we inflated our expenses because of an inflated economy that really was giving us deals that it wasn't that our skill set was there.

It was that the market was there.

What does that look like?

What is the common thread? What is the common issues that you see that most of those guys are dealing with on a day-to-day as it relates to their financial world?

Oh, man.

Uh, there's so many different issues that you can see in these industries, right? But it really comes back down to predicting the future.

If you want to hire somebody, you wanna kinda get an understanding of how much are they gonna cost me, and then when am I gonna recoup some of that money back, right? If we're, we're gonna add another marketing channel, how much am I gonna spend on this marketing channel? How much time do I've gotta invest for us to see a ROI on that? So a lot of it comes down to not looking at what decisions you're making into the future, right? So, you know, a lot of the times we're discussing having conversations, we're talking about what is it that you're doing in your business that is going to impact next month, the next month, the next month, and there, instead, a lot of people are looking at, like, historically.

Like, okay, what did we do? Really, really what you wanna do is start thinking about what you are going to do, 30, 60, 90-day forecast, right? Thinking about where the cash flow is gonna be at 90 days from now.

Because if you can get an accurate projection of that, now you can start making really good decisions for today.

'Cause if it's a lot more money than you care to have, you might change your decisions on how you're doing it.

Looking at their finances, like, when is the right time for them to do the hire?