Building Long-Term Wealth with Short Term Rentals. Real Estate's #1 Asset Class with Bill Faeth

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. are brought to you by the HubSpot Podcast Network, the audio destination for business professionals with great shows like I Digress. Today, we'll be breaking down how to build long-term wealth with short-term rentals, real estate's number one asset class. To drop these value bombs, I am brought to Bill Faith in the EO Fire Studios. Bill is a renowned real estate investing expert, entrepreneur, and founder of Build Short-Term Rental Wealth, a highly successful educational platform for real estate investors with over 25 ,000 members.

0:37In today's financial, we'll talk about why real estate investing is awesome. We'll talk about short-term rentals as the best asset class. We'll talk about STR, the war room, and so much more. And a big thank you for sponsoring today's episode goes to Bill and our sponsors. The Hustle Daily Show, hosted by Juliet Bennett-Ryla, Rob Litters, Ben Berkley, and Mark Dent, is brought to you by the HubSpot podcast network, the ideal destination for business professionals. The Hustle Daily Show brings you a healthy dose of irreverent, offbeat, informative takes on business and tech news, like a recent episode on hackers versus casinos, where the hosts talk about MGM Resorts and Caesars Entertainment and the devastating potential of cyber attacks.

1:17Listen to The Hustle Daily wherever you get your podcasts. Don't be the bottleneck to your organization's growth. Accomplish more with Belay. To get started, schedule a free delegation consultation with Belay in just 30 minutes. See how their flexible staffing solutions can grow your business and free you up to lead. Text FIRE to 55123 to schedule your delegation consultation today. Bill, say what's up to FIRE Nation and share something that you believe about becoming successful that most people disagree with. What's up, everybody? I think something about becoming successful, a lot of people think that certain levels of success are not achievable.

1:58And I believe that they are. In fact, I believe that every single person on this planet, regardless of your upbringing, the society you grew up in, the city you grew up in, I think we all have at least a limited number of opportunities that are presented to us. But a lot of us miss those opportunities, right? So I can tell you that I grew up in Bakersfield, California with a single mother who was a teacher, probably never made more than$30 ,000 a year. And I've turned out okay without a father, you know, single mother, no brother. or sisters. I think we all can do it. But I think there's this mindset that holds us back when we're not gifted the golden spoon or we don't have the best mentors when we're growing up into adolescence.

2:43And I think that a lot of people believe that. I fortunately was taught by my mother that I could be bigger and better than what my surroundings were. Powerful words to start off a powerful episode about building long-term wealth with short-term rentals. And I do want to start off by talking about real estate investing. What is it and why is it awesome? For many reasons. I mean, if you do it correctly, you're investing into appreciating assets. And most people kind of migrate into long-term rentals such as I did. So as we were just chatting in the pre-roll, I was a golf professional coming out of Southern California.

3:21And the first real estate investment I did with my earnings. I played on back then the Nike tour and then went to South America, came back with a couple of hundred grand and bought a duplex in Bakersfield, California, and owner occupied one half and bought the other. But it was 2015, John, where everything changed for me. I'd been in multifamily apartments, condos, all LTR. I've done commercial. I built a gold lead certified, a very large commercial space. And when I switched LTR to short-term rentals, I saw the asset class was delivering five to seven X return and getting the exact same appreciation as long-term.

3:59So that's when I started liquidating LTRs and moving everything into STRs simply because of the ROI. I still believe today that short-term rentals, even though there has been a slight correction back to probably 2019, early 2020 pre-COVID revenue numbers for most investors, I'm still escalating. I'm still 3.5 % above 2022 numbers before the slowdown started. So the asset class is still improving if you learn to execute the right way. In Fire Nation, you will learn to execute the right way. And LTR, long-term rental, STR, short-term rental. And you believe right now that short-term rentals are simply the best asset class.

4:44So let's dive deeper. Let's talk about why. So I mean, I am not a crypto guy. I am very risk averse like many, even though I'm an entrepreneur and I've invested into myself with 27 startups. But the reason that I like it is because it is a tangible asset that appreciates over time and it generates significant cash flow. And probably most importantly, it's passive. But there's also significant tax benefits because of the short-term rental loopholes that we don't get in long-term and mid-term rents. Fire Nation, these reasons and more are really why you need to understand this process because there are some pretty sweet tax benefits of short-term rentals for these high-income earners that don't want to move to Puerto Rico and live the 4 % capital gains free tax life.

5:40So tell us more about this bill. As an example, I was just on a coaching call a few minutes ago before we started, and I'm talking about the Augusta rule. Just something simple that anybody can take advantage of, not even just investing into short-term rentals, is that you can rent your primary residence for up to 15 days at full market value tax-free. So essentially, you can short-term rent your own property. And this was developed for people that live around Augusta National every year that the masters would come around. So I actually use like three days for Taylor Swift weekend here in Nashville, Tennessee, where I live.

6:13And it was$2 ,300 a night that I rented my house to another entity that I own. And that becomes a tax-free income for the second entity and a tax break for the first entity, all because it's short-term rented. The biggest one is really accelerated depreciation. When you invest into a short-term rental, there is a thing called a cost segregation study. And this is really for high income earners to where you essentially reallocate all the individual components of the dwelling, the carpet, the appliances, the tile, the fans, into its normalized depreciation schedule. And you get a tax credit for that, that you can do, well, this year, 80%.

6:58So essentially, if you buy a million dollar property and you put$200 ,000 down, let's say another 3%, so another six grand down, so$206 ,000 down to purchase the property, if you buy it in North Carolina, the land value is low. So you're gonna get a much higher percentage, usually in the 30, 35 % tax benefit. So off a million dollar property, that's gonna be a 300 to$350 ,000 tax benefit. Now, if you fall into the 44%, let's just say 40th percentile in the tax bracket, 40 % of$300 ,000 is$120 ,000 straight tax credit that will eliminate your rental income first. Then it will go to a W-2, a Schedule C, or a K-1.

7:45So it works for high-income W-2s as well as entrepreneurs. yours. Now, part of the investing strategy, John, is if you go to the beach, the land value, the sand is way more valuable. So the dwelling cost is going to be less. So your cost segregation benefits going to be less at the beach than it would be if you go to North Carolina. It's going to be higher in South Dakota than it would be in Malibu. Fire Nation, you can tell Bill knows what he's talking about. He's done his homework. He's run the numbers. And that's why he's got to where he is today. And these are the type of people that we learn from.

8:22These are the type of people that we look at as a subject matter experts and we take their knowledge and we apply it to our lives and we say, will this work? Can this work? Is this interesting to me? And we have a lot more to talk about around this when we get back from thanking our sponsors. The fourth quarter is here. It's time to hit your revenue targets, finish strong and win the quarter. But before you can win Q4, you have to close deals. And before you can close deals, you have to fill your pipeline and nurture prospects, which is oftentimes the hardest part. So how can you get a jumpstart on your Q4 sales goals?

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10:12Don't be the bottleneck to your organization's growth. Accomplish more with Belay. To get started, schedule a free delegation consultation with Belay in just 30 minutes. See how their flexible staffing solutions can grow your business and free you up to lead. Text FIRE to 55123. That's F-I-R-E to 55123 to schedule your delegation consultation today. There are several things required to create and run a successful business, and one of those is having the right tools. You tune into Entrepreneurs on Fire to learn from other successful entrepreneurs. This is a great tool to have in your pockets, and I've got another show I highly recommend checking out.

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11:26This is the easiest way to help your business grow and succeed. Listen to the Millionaire University podcast. Find The Millionaire University on Apple, Spotify, YouTube, or wherever you get your podcasts. Bill, we're back and I want to talk about STR, your super team. We're talking CPA, we're talking banker, attorney, data analyst, broker, marketer. Tell us more. As I said earlier, John, I've done 27 startups. You've been a very successful entrepreneur. We need to formulate a team around us. So even though I was probably one of the bigger influencers in this space and I had had success, I was able to birth the best skill sets in our industry really out of my mastermind.

12:11And I built what I refer to as the STR super team. We're really the Avengers, if you will, of the space because asset and liability protection, huge deal. Contracts, huge deal in this space. That's where I've got Jeff Hampton from STR Law Guys as our attorney on the super team. And what we just got done talking about, the tax benefits. Most CPAs do not know how to take it full advantage, full advantage of the STR loophole. That's where Ryan Bakey from at learn like a CPA comes into place on my STR super team. I've got John, the bank whisperer Hodge right now getting funding, even for a$300 ,000 condo, let alone a$3 million boutique hotel is extremely challenging.

12:56It's excruciating. It's so difficult. John, the bank whisperer, does just what he says. He's the one that takes our members and gets them funded. He knows where to find the deals and the ones that don't come with liability like a DSCR product. The marketing side, I've got Chris Wharton, who is the expert in Facebook ads, listing optimization, along with myself. And I've got Avery Carl, who is the GOAT. She wrote the book, Build Long-Term Realth with Short-Term Rentals. And she is the GOAT agent in Gulf Shores and Destin, the Panhandle, the Smokies, everywhere. So we have everything covered. So I don't know about you, Fire Nation, but I surround myself with the best people that are better than me at individual skill sets.

13:42And I'll take a kind of, I know we have a mutual friend, John, his name is Jeff Walker. And Jeff talks about standing on the shoulders of giants. this super team are the individual giants in the real estate space. And that's why, Bill, people are listening to this episode right now because they are surrounding themselves with giants. They are surrounding themselves with experts in their area of expertise. And Fire Nation, you get to do this for free via this podcast. And then you can listen to how somebody like Bill has built his STR super team and plant some seeds about what you need to do going forward to build your super team, to build the kind of lifestyle that you're looking to build as you're driving your car right now, as you're hiking a mountain, as you're walking your dog, as you're folding laundry, as you're doing what you're doing.

14:32And I want to shift into War Room. What do you have to say about this, Bill? War Room, and you've probably heard this name before, right? From Perry and Michael. So I was a member of War Room with Digital marketer when I was coming up through the ranks as a digital marketer. And it's different. We titled it War Room for the same reason that Perry and Mike did. It's because it's different than a mastermind. It is so deep. We're bringing the best deals. I forgot about one member on my super team, John, and that's Kenny Bedwell, who's the founder of STR Insights, the number one data analysis tool in our industry.

15:12So like Kenny and I bring the best deals available in the country to our war room members. We have the war room. Everybody on that super team is like your board of directors. When you're inside the war room, you can't make a bad deal. We're analyzing deals. We're helping you with your legal docs. We're helping you with asset protection. We're setting you up the correct entities. And very rarely do you see the attorney and the CPA working hand in hand. That is a huge component of this, right? We're getting you the best financing, the best banking. That's what I want when I make an investment, even though I am like the leader, I'm Nick Fury of this team.

15:49I still need their help once in a while, right? So these are the giants that I stood on and we started helping each other. And we're like, we just can't keep this to ourselves. We need to make this available to the high income W-2s, to the successful entrepreneurs that are out there that are looking for these tax advantages, but also looking to generate positive cashflow and cash on cash return out of their investment. So they can kind of double dip on the tax advantages, the appreciating asset, and also the cashflow for the trifecta. Fire Nation, you know I end every episode by saying you're the average of the five people you spend the most time with.

16:26Those people need to be your super team. These people need to be people in your war room when you are interacting with them, when you're learning from them, when you're adding value to them, when they're adding value to you. So Bill, take a step back here. What do you really want Fire Nation to walk away with from this entire conversation that we had today? I want everybody to know that they can get access to the number one investment asset class available to them. It is short-term rentals. There is no Airbnb bust. It is strengthening, to be honest with you, but you need to understand how to build a super property, turning that into a super portfolio and building into a super life with intention.

17:12That's why we built the war room. That's why we've made it accessible to everybody in the country so you can have the same access that I do so you can build long-term wealth. Well, I just became an Airbnb super host, so I definitely do agree that Airbnb is still thriving and I'm enjoying it down here in the lovely community of Palmas del Mar, Puerto Rico. And it looks like Bill is going to get on the golf course down here with me at some point. We're going to tee it up together. You're giving me two aside. Oh yeah, man. Gary Player designed these golf courses down here and he had a little help from Chi Chi Rodriguez, Puerto Rico's most famous golfer.

17:53So they're pretty sweet courses. Absolutely. I can't wait. So Bill, give Fire Nation a call to action. If our listeners want to connect with you, want to learn more from you. Where do they go? What do they do? I would tell everybody to go to the STR War Room. That's T-H-E-S-T-R War Room.com. You can learn more about the War Room and get access to those giants that I stand on their shoulders. There's a short application process if you want to explore it even deeper. And one of our members, not like a sales team, one of our members of the super team will actually have a call with you to see if you are the right fit.

18:30You can find me at Bill Faith. That's F-A-E-T-H 73 on Insta, TikTok everywhere. My business is build short-term rental wealth, but I really think the war room and the super team for somebody that's looking to get started or somebody that is a high income earner that really wants to get to that next level and have these types of people surrounding them every step of the way, that's where I would recommend going to. That's the E-S-T-R war room.com. Fire Nation, you are the average of the five people you spend the most time with. You've been hanging out with BF and JLD today. So keep up the heat.

19:05For links to everything we talked about, visit eofire.com. Type Bill in the search bar. The show notes page will pop up. And again, those links to everything we chatted about will be right there. And Bill, thank you for sharing your truth, knowledge, and value with Fire Nation today. For that, We salute you and we'll catch you on the flip side. Thanks, John. Hey, Fire Nation. Huge thank you to our sponsors and Bill for sponsoring today's episode. And Fire Nation, over the last decade, I've interviewed more than 3 ,000 of the world's most successful entrepreneurs, and I've created a revolutionary 17-step roadmap to your financial freedom and your fulfillment.

19:42I put it all into my first traditionally published book, The Common Path to Uncommon Success, personally endorsed by Seth Godin and Gary Vaynerchuk. The Common Path to Uncommon Success. It's the step-by-step guidance that you need to achieve the lifestyle of your dreams. Visit UncommonSuccessBook.com. I'll catch you there or on the flip side. The Hustle Daily Show, hosted by Juliet Bennett-Ryla, Rob Litturse, Ben Berkley, and Mark Dent is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. The Hustle Daily Show brings you a healthy dose of irreverent, offbeat, informative takes on business and tech news, like a recent episode on hackers versus casinos, where the hosts talk about MGM Resorts and Caesars Entertainment and the devastating potential of cyber attacks.

20:31Listen to The Hustle Daily wherever you get your podcasts. Don't be the bottleneck to your organization's growth. Accomplish more with Belay. To get started, schedule a free delegation consultation with Belay in just 30 minutes. See how their flexible staffing solutions can grow your business and free you up to lead. Text FIRE to 55123 to schedule your delegation consultation today.