Tax Savings Through Cost Segregation with Yonah Weiss

In case you didn’t know, property owners can gain tax savings through cost segregation. That’s what Yonah Weiss is all about. Yonah is a cost segregation specialist at Madison SPECS who has assisted clients in saving tens of millions of dollars. In this episode, Yonah explains what cost segregation actually is and why it’s one of the best ways to defer or eliminate capital gains tax on the sale of a highly appreciated CRE property. He also shares best practices for building real estate and why team effort works, both in their company and with partners. He also talks about strategies around depreciation recapture tax and gives scenarios on what a cost segregation study will cost, when it will benefit you and when it won’t. To know more about Yonah and cost segregation, you can listen their podcast, Higher Profits with Bobby and Yonah or Yonah’s own Weiss Advice. 

It makes me think of the traditional educational system where we grow up thinking that there’s one way or only a couple ways to do things and anything outside of that box can shatter the thought process of what it means to do something new. The reality is, the government gives these legal tax loopholes to incentivize business and job growth. In the study of macroeconomics shows that when you do these things, they end up getting more tax revenue, jobs created, properties built, businesses started and all of those things. They want you to do this because it helps to bring in more. It’s a win-win. Yonah, before your success as an educator and what you’re doing, who are you growing up? In particular, what gifts were you given and how did that shape how you help others? I want you to connect the gifts that you’re given as a youngster, growing up, adolescence and connecting exactly what you’re doing as an educator. If somehow you can connect the cost seg, that’d be even more magical, but give us that idea of who you were growing up. 

That’s a great perspective and I’m grateful. I grew up with a lot of gifts. A lot of us did and we take them for granted. Looking back decades in the past to try to figure out where I came from and how I became who I became. One of the gifts that I only realized a little bit later in life until I was 18, 19 or 20 years old. I realize I have this powerful gift of learning things. It came with education. As I started to get into teaching, I realized I wasn’t great at school because I didn’t necessarily like the subjects. I wasn’t into certain things and maybe the teachers weren’t the best. There were certain subjects I’m sure all of us have excelled in more than others. When I started teaching, I realized that I can integrate this knowledge and give it over in a way to help other people understand and that was something that I tapped into. That’s one of my greatest gifts. I can learn something new, even complicated and integrate it fast and be able to give it over in a simplified way. If I had to plot one thing that would be it. 

If you found something that was interesting to you, you could dive in and learn about it, especially if it happens to be complex. Once you were able to break it down, understand it, inspire and educate others, that gave you more inspiration. After helping countless investors, business owners, interviewing many financial advisors, and also being on lots of different shows, you get interviewed quite a bit on commercial real estate podcasts and speak at lots of events. What is the single best practice and/or theme to implement for building your real estate portfolio and/or building wealth through real estate? 

Establishing a strong team. It’s funny because I spoke with someone and this was almost a unique perspective. This guy said that he’s worked with partners and he only does deals on his own. I found that most of the real estate is a good team effort. There are a lot of people who can bring their talents and partner up with other people through the humility of being able to recognize that you can do everything on your own and we can do so much better together. That’s the definition of synergy. On my own, I can only do so much, but together, we can do so much more. That’s the number one component. 

How did Madison SPECS do that within the organization? I don’t know if you’ve applied it to your own personal portfolio of real estate investing. Are there any connections there? 

From our company perspective, we have a team of 60 individuals. We have a team of engineers, accountants, the whole operations team, a sales team and everyone works together. Each person has their own job and it flows. There’s a lot of fluidity. Think about the operation we’ve done in 2019. We’ve done over 2,500 conservation studies in 2020 alone, which is pretty incredible if you think about the volume of doing that, especially if you understand what is involved in producing a cost segregation report. We review it at least four times. We have numerous accountants who are reviewing everything and making sure that everything is compliant. There is definitely a team effort there. I would say because of that team, the accountants and the executives who are knowledgeable in the industry are open all the time. If I have any questions about anything or if anything came up in the actual process, they’re right there available anytime. Knowing your role and knowing what you can give at doing that to the ultimate like doing your part and putting all your effort in. 

Check out our full episode Link below. 

https://savetax.capitalgainstaxsolutions.com/capitalgainstaxsolutionspodcast