Spouse Tax Strategies w/Michael Guthrie
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Episode Description
Welcome to the Freedom Point Real Estate podcast! Michael Guthrie joins Jeremy Dyer in today's episode encouraging you to put in the work today one step at a time, follow through on your word, and take advantage of tax strategies.
Michael Guthrie has real-world experience in business, investing, and leadership. A former military man, he moved into the med-tech industry, where he led teams and drove growth before stepping into the ATM business as VP of Sales. Alongside his wife, Samantha, Michael built Automated ATM Solutions into one of the top five ATM companies in the country before making their 7-figure exit. He focuses on people, relationships, and strategy. Over the years, he has built a strong network and gained deep investing knowledge from both hands-on experience and high-level masterminds. Michael believes in taking action and making smart moves, not chasing perfection. He’s the kind of person who stands by investors, making sure their interests come first. His approach is simple: find real opportunities, build meaningful connections, and invest with confidence.
CONNECT WITH MICHAEL GUTHRIE!
LinkedIn: https://www.linkedin.com/in/michaelguthrieinvestor/
Website: https://pacificcapitalllc.com/
CONNECT WITH JEREMY DYER!
Website: https://startingpointcapital.com/
Instagram: https://www.instagram.com/startingpointcapital/
LinkedIn: https://www.linkedin.com/in/jeremydyer
Facebook: https://www.facebook.com/startingpointcapital
Book a Call! https://calendly.com/startingpointcapital/discuss-investing-with-jeremy-dyer?month=2023-12
Summary
Tip #1: Start with Trustworthy Relationships
"Most investors, me included, I work with people I know, like, and trust. If I don't know, like, or trust you, I’m probably not going to give you my money."
Trust is paramount when choosing an investment partner, especially in the high-stakes world of real estate. Michael emphasizes that forming solid, personal relationships with investors and teams is critical before diving into financial commitments. Trust allows for open communication and ensures that the investor is comfortable with the decisions made, leading to a more secure and predictable investment outcome.
Tip #2: Control Costs to Avoid Overextended Budgets
"If we're not getting a benefit and we can't control the cost... we're not doing our investors or our tenants or our own business any benefit from that."
Cost control is crucial in real estate investing. Michael shares an example where property upgrades went over budget and failed to yield expected rent increases. The key takeaway here is that not all upgrades are worthwhile—investors should prioritize projects that directly impact the bottom line and steer clear of those that don't, thus safeguarding both profits and relationships with investors.
Tip #3: Know When to Pivot
"I literally set, I raised most of the capital on it, and I sat in on a property management meeting. I said, 'Maybe it’s time to stop.'"
Flexibility in strategy is essential, especially when unforeseen issues arise. Michael highlights the importance of recognizing when to stop or pivot in the middle of a project, particularly when costs escalate without expected returns. This willingness to make tough decisions at the right time can save an investment from potentially spiraling into financial loss.
Tip #4: Utilize Triple Net Properties for Stability
"We just went in and bought triple nets for cash... It's like a bank account literally."
Triple-net properties offer steady, predictable returns with minimal involvement from the investor. Michael explains how purchasing triple net properties during a volatile time provided a stable income stream while parking capital outside traditional banking systems. This investment strategy is appealing for those seeking lower-risk options with consistent returns over time.
Tip #5: Diversify to Mitigate Risk
"For me, it was just about parking money into an asset that is already paying better returns than what I could get in the banking system."
Diversification is one of the cornerstones of smart investing, as it spreads out risk across different asset types. Michael emphasizes how real estate, especially triple-net properties, can offer higher returns compared to traditional savings accounts or investments. By diversifying into different real estate sectors, investors can hedge against market volatility and improve their portfolio’s stability.
Tip #6: Be Prepared for Market Cycles
"If we look at a clock, I think we're between 7 and 8 o'clock... I think we've hit the bottom."
Understanding market cycles is crucial for making timely investment decisions. Michael uses a clock analogy to explain how real estate markets fluctuate, and he suggests that we’re nearing the end of a market downturn. Investors should anticipate these cycles and position themselves to take advantage of low points in the market to maximize future profits.
Tip #7: Leverage Low Interest Rates for Long-Term Gains
"I think interest rates over the next year are going to come down even more... and we're going to see a lot more transactions in movement."
Lower interest rates can provide favorable conditions for acquiring new assets. Michael predicts that interest rates will drop further in the coming year, potentially spurring a surge in transactions. Investors should be prepared to act when interest rates are low, as this can create opportunities for buying assets at favorable prices.
Tip #8: Understand the Impact of Depreciation
"I think we're going to see some push towards the 100% bonus depreciation... maybe by the end of the year we'll have that back in place."
Bonus depreciation can provide significant tax advantages for real estate investors, particularly in the early years of an investment. Michael anticipates a return to 100% bonus depreciation, which could further stimulate investment in real estate. By capitalizing on tax advantages, investors can maximize cash flow and reduce taxable income, increasing overall profitability.
Tip #9: Focus on Long-Term Gains, Not Just Short-Term Results
"When you start to see the assets that are being acquired today go to market and sell in two, maybe three years... you’re going to be looking back going, 'Why didn’t I put more money in?'"
Real estate investing is a long-term strategy, and patience can often lead to significant rewards. Michael stresses that those who invest now will likely see substantial appreciation in a few years as market conditions stabilize. Investors should avoid getting caught up in short-term thinking and focus on the long-term potential of their assets.
Tip #10: Stay Informed and Keep Learning
"I do some coaching in the space... it's for me it's a give-back and I want to make sure that I’m here to help others understand what they’re getting into."
Continuous learning and educating others are key to success in real estate. Michael's commitment to coaching and sharing his knowledge reflects his belief in the importance of staying informed about market trends and investment strategies. For new investors, seeking mentorship and resources is a great way to accelerate learning and avoid costly mistakes.
