Jason Hartman hosts Fernando and Zack to showcase organizational tools and portfolio management options available on Property Tracker, a software that helps keep track of your real estate portfolio. He explains how it makes tax time much easier, especially with creating Schedule E’s, depreciation schedules, and other forms.
Announcer 0:00
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
Announcer 0:13
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the company leet solution for real estate investors.
Jason Hartman 1:04
Welcome to the creating wealth show. This is your host Jason Hartman episode number 882 882. Thank you so much for joining me today. We had a insurance agent on the last episode, one of the brokers that we’ve dealt with for several years now, we again recorded that before hurricane Irma hit. And it has been just staggering and tragic to watch what’s going on. And I have to say that in some places, it’s not as bad as I thought it would be. Thankfully, it’s still pretty darn terrible. No question about it. It does, at least my sense of it is that the government has done a pretty good job. This time around. We’ll see. You know, again, the jury’s still out on this. It’s still early. And again, we are recording this episode, three days in advance as well. There’s a lot of news yet yet to unfold, but I gotta say it’s a Amazing how the media operates. And by the way, I’ve got Fernando and Zach on the line with me. So welcome you guys. Thank you. Yeah.
Fernando & Zack 2:11
Thank you.
Jason Hartman 2:12
Yeah, my pleasure. And I just we’re gonna talk about tracking investments today and how to make managing them easier and all that good stuff. But I’ll rope Ian on this conversation at the beginning of the show here. You know, I just couldn’t help but thinking as I was watching CNN, with a hurricane coverage, as as the power of Irma was downgraded from category five, down to category three, and then to category two, thankfully, it wasn’t as bad. And again, I guess those category rankings only take into account the amount of wind or maybe their amount of rain and wind, but they don’t take into account storm surge. I don’t believe or flooding as a result of Either storm surge or rain, but I gotta say, you guys, did you have this impression too? That like, CNN seemed legitimately bummed out that it wasn’t worse. I don’t know. I just I’m gonna pick on him a little bit because that you know, that’s sick it’s pathetic but I just I couldn’t help but feel that way as I was watching the coverage Am I am I am I crazy?
Fernando & Zack 3:26
That’s interesting. I didn’t pick that up i i’ve been glued to the to the news, you know, with my with my iPhone trying to figure out the path of the storm and in the category there was going to hit landfall and of course, I have both property in people, friends and relatives that live there, which is, you know, the most concerning piece of it all, but it sounds like there’s no issues with the people living there that I know. And I don’t know about one of my properties and I’m really curious to know If, if there was any major damage there, and if, if cnn had anything to do with it, I don’t know. But they’ve been called fake news by our leader, President. And in of course they sell news. I think that they’re not alone in this and they want us to be glued to that TV and monitors are the worst a tragic tragedy the better for their ratings. So unfortunately, that’s the world that we live in.
Jason Hartman 4:31
As the old saying goes in the news media, you know if it bleeds it leads. And so, you know, of course and then Don Henley has that great song, you know, the bubble headed bleached blonde comes on at five she can tell you about the plane crash with a gleam in her eyes. It’s interesting when people die. They want dirty laundry, you know, that’s a great song, by the way, but it’s something else
Fernando & Zack 4:54
in a world of live cams streaming to YouTube constantly. I think it’s kind of straight. that anybody would prefer to see what’s actually happening in Florida through a biased lens when they can just view it themselves online.
Jason Hartman 5:09
Yeah, yeah, no question. No question. You know, the the the media still is hanging on but I agree there they are quickly becoming outmoded, and and not as relevant as certainly they were for the last several decades, or really for the last forever, at least, I guess with the start being the newspaper. Right. So we’ll go back to Gutenberg time for that, but yeah, really, really just, it’s tragic. What’s going on. And, you know, we’ll continue to cover it. But I do think that there’s going to be some good that comes out of all this. I have some properties in the panhandle area, Florida. Fernando, I know that you use stone and you talked on the show before about how you did a 1031 exchange for some properties that you owned, I think one or two in Naples, Florida. And that was a really hard hit area. But the interesting thing is and you know, I’ll just say This again, every cloud has a silver lining in some way at some level. And I have seen people I saw this in the in the days of Hurricane Katrina, about, what, 12 years ago now, I guess, you know, where people actually profited. They thought at the beginning, you know, when when their property was damaged, or even completely destroyed, that it was terrible. It was, you know, the end of the world, it was really depressing. Turned out, some developer came along and said, Hey, I’ll pay you a huge premium for your lot. I’m trying to do an assemblage and build a high rise condo complex, you know, so it’s kind of amazing how this stuff works out. It’s not always bad news, ultimately. Okay. And you know, as long as human life is safe, and of course, there there has has been some losses there as one might expect as terrible as it is it is. As far as the property goes though, you know, Sometimes people profit from their insurance claim, sometimes they profit from just you know, developers and all kinds of ways that might surprise you. So as the old saying goes, it’s never over till it’s over. So if you are affected by this, you know, sit tight, evaluate the big picture, look at the macros step back and look at the big picture. And you might be, you might be surprised and pleasantly surprised at how it all unfolds.
Fernando & Zack 7:28
Any thoughts, you guys? Yeah, one piece of good news, by the way, Jason, is that I just read today on the wall street journal that there is quite a bit of money for the insurance companies, essentially, the reinsurance companies, which are going to be the ones that are going to be backing out of the claims in Florida, that they’ve been building up quite a bit of reserves, since there hasn’t been a hurricane of this magnitude since at least 2005. I think they’d been building up cash. So hopefully there’ll be you know, Okay to pay the claims and, you know, we’ll know how bad the devastation is, I guess in a few days, but, but there’s some good news there.
Jason Hartman 8:08
Yeah, definitely. Definitely. There is. So yeah, we will, we’ll continue to cover it. And we’ll be talking, you know, over the next weeks and months, we’ll be talking about specific examples of insurance claims and you know, how to deal with your insurance company and get the coverage you deserve. You know, we’ll be profiling stories like this, and there’s probably going to be some tax relief, as well. They’re, there are already been signs of little clues to this coming but nothing substantive yet. But I’ll bet you it’s coming. So look for that and we will report on it as soon as we hear about it. Of course and and we’ll we’ll keep you in the loop and and not just report on it but tell you how to best take advantage of it and use it you know with with our with our unique and enlightened spin on economics and investing and personal finance. So we’ll go from there. A couple other things, one of the articles in the content section and you guys might want to comment on this. I didn’t say we were going to talk about this one, but it is kind of interesting. In the south, the famous restaurant in the south. I remember when I took one of our venture Alliance members for the first time I took him to none other than the Waffle House. It’s famous place and and and this article is entitled, in hurricane Irma is wake government may turn to what they call the Waffle House index, the Waffle House index. Yes, that’s a real thing. And so FEMA literally looks at whether or not the Waffle House restaurants stay open, or they close because apparently, they’re like the US mail. Neither rain nor sleet, nor snow nor gloom gloom of night, you know, we’ll close them down. So the Waffle House index. And Fernando I’m sure you’d love this super healthy organic food at the Waffle House. Joking, of course.
Fernando & Zack 10:07
No, I would
Jason Hartman 10:08
not. It’s a grease pit. But I do. I do kind of like the Waffle House in Ostalgie sort of way. Whenever I go to the south, I try and stopped in there once and I took Chris Allen or venture Alliance members there for the firt. One of our venture Alliance members there for the very first time he he’d ever been, he’s probably never been since because he’s a health conscious guy too.
Fernando & Zack 10:26
But I just thought that was gonna say yeah, Chris probably probably didn’t approve of that either. So that’s
Fernando & Zack 10:33
interesting. He the big
Jason Hartman 10:34
giant 400 pound waitress gave them a big hug. When he walked in. I said, hey, it’s his first time here. I put some money in the jukebox played some music and we had a good old time. It was pretty funny. Interesting. There you go. There you go. The Waffle House index folks. There’s a new one for you. See, we try to bring to you things that you wouldn’t normally expect on this show. One other thing is about a prediction. I have made and you can see inklings of how it is coming true. And that is about cryptocurrencies. And I’ve talked a lot about Bitcoin aetherium Litecoin Dogecoin Kanye coin. JOHN McAfee is coming out with his own cryptocurrency. He’s been on the show before. Of course, he’s the very famous founder and kind of eccentric Now, many people consider that lately, but he was really good on the show. He was a great interview, I got to bring john McAfee back. Anyway, um, he’s coming out with his own cryptocurrency and China has now halted
Fernando & Zack 11:39
all
Jason Hartman 11:40
crypto currency exchanges to curb quote, risk, unquote. And folks, this is I have predicted this for a long time. I told you I said that cryptocurrencies are competition for the most powerful forces that the human race has ever known governments and central banks, the product of governments and central banks, one of the main products that they have the widgets they produce, if you will, that is currency. In the US case, it’s the dollar produced by the US government and the Federal Reserve and their unholy alliance. In Europe. It’s the euro and the European Central Bank. In Japan. It’s the Japanese central bank that Forgive me that may not be the exact name for it, but whatever it is, and their government, okay, and it’s the end. And so anywhere around the world, the most powerful forces the human race has ever known our governments and central banks, they have standing armies, and the old saying that you better follow, don’t bet against the Fed never bet against the Fed. And a cryptocurrency investment or really a speculation is a bet against the Fed. And you know, it’s hard to say this in the face of these thing’s going way up in value. I have friends that have made fortunes in this stuff. But I am sticking with my prediction I think that the government is going to do you know, whatever they can to ultimately limit it, squash it and manipulate it, ally it you know, they’ll let it go for a little while and then they’ll find a reason of course to protect us for our own good to, to to limit it halted manipulate it whatever they got to do regulate it and they’ve already done it with Bitcoin. Because you know, the one bitcoin that I bought through Coinbase, the famous exchange, it’s a Silicon Valley startup in San Francisco area. That you know, I remember they sent out an email to all their clients several months ago when it said, you know, now the IRS we had to turn over data to the IRS so they know who owns the bitcoins and the snout and you know, here it comes, you know, all those Bitcoin people thought Oh, it’s Private, it’s decentralized. The government can’t do anything about us. Haha. Yeah. Right. Don’t bet against the government or the Fed. You’re crazy. You guys have any thoughts on that?
Fernando & Zack 14:10
Well, there’s still the ones with the guns at the end of the day. So
Fernando & Zack 14:14
it’s all power gaming, when it comes to currency. I mean, if you if you look at the colonial currencies prior to the start of the country, and and, and after the Revolutionary War, we had a lot of different currencies. And oh, yeah, I remember.
Jason Hartman 14:27
I have some of those. I have some of those. Zack, they’re called protest coins. I bought some of those as collectibles. which are these coins that people minted themselves, you know, because they were protesting they were mad about we’d have three central banks in the US I don’t know which one it was then or whatever, but they were mad about what was going on. So they made their own money.
Fernando & Zack 14:49
So what so I guess my question is is cryptocurrency a protest coin? Another version of it? Yeah, and what’s preventing one cryptocurrency from competing With another cryptocurrency nothing, preventing some innovator from creating a better in relative terms, more stable cryptocurrency in the future really nothing. So is it gonna be a market for different currencies based on what’s hot at the time in the future? It’s hard to say,
Jason Hartman 15:17
Zach, that is a great point. And you know, most of my friends that are like really experts in this stuff, they say that it theory, which is a newer cryptocurrency is better by a longshot in terms of its technology than Bitcoin is. So, you know, the whole thing that currency the value of currency is built around is scarcity, right, the limited supply of it, and, you know, they all say, well, Bitcoin has a limited supply, you can only get 32 billion bitcoins or whatever the number is, and mining them gets harder and harder, as more are mind and then there will be the end then they will all have been mined. And so there’s limited supply Then theorem comes along. And then soon john McAfee’s currency is going to come along. And ultimately I think the blockchain and all this technology of cryptocurrency is going to be used by governments and central banks, they’re going to create their own. And that’s going to be the one that wins the day because at the end of the day is act like you said, they have the guns.
Fernando & Zack 16:19
So yeah, well, yeah. and implementing the blockchain with US currency could be a very, I’ve heard about it being done and being thought about before, having a public ledger of every transaction made with $1 could change the way our currency works, and could provide increased value to the currency that already exists. Oh, no, no,
Jason Hartman 16:40
no question. We shall see. We shall see. It’s very interesting. But hey, guys, let’s switch gears and let’s talk a little bit about keeping organized when it comes to your investment properties. And tracking investments and stuff like this. You know, this is where the rubber meets the road. It’s critically important Good investors implement certain practices. And I have to say, Fernando, you know, my hat’s off to you, you’ve done a really good job at this, it’s probably, at least in part due to your engineering background and your engineering mindset, you know, you’ve really treated this like a business, your investment portfolio folio and, and you know, you’ve been on the show many times over the years, you were a client of ours, you you bought about 70 units, 70 doors, and I think 50 total properties but 70 doors, right. And you really, you really manage your portfolio very well. And, you know, you use all the best software tools to do it. And, and you guys of course, have done a nice update from a very practical standpoint, your own experience, Fernando in terms of updating property tracker and, and its, you know, its its look and feel and kind of the flow of organization there. So, I just wanted to get an update about you know, the latest and greatest there. So thanks for the comments on on being organized. And I think that that’s both a curse and I guess a strength. I do enjoy keeping track and have a system in track in place to keep track of my investments. And you were it’s interesting that we’re talking about organization in property tracker right now because this is tax season.
Fernando & Zack 18:26
Most people should know that
Jason Hartman 18:29
corporate taxes for LLCs and corporations are due in just a few days. So yeah, on the final extension, actually,
Fernando & Zack 18:36
what I’m referring to is my are more important than that a personal income tax due in October 15. You of course need to file an extension from the normal April 15 deadline, but we’ve heard from CPAs and attorneys that have been to our events, that you have a lesser chance of being audited if you file your taxes by October 15. I have
Jason Hartman 19:01
In other words, if you file late
Fernando & Zack 19:02
you file a correct and I certainly have taken that advice to heart and I file by October 15 every year. So we’re in September now 2017. And I’m going through my documents to provide to the accountant for property taxes that are due in over over a month or so. So one of the things that I wanted to talk about is how important it is to keep track of the different income and expenses for your property. I Jason as you probably would would guess, I literally create a Schedule II from property tracker for every one of my properties, and create a PDF for that Schedule D and I put it into a folder and then transfer that to my CPA for my taxes to be produced. makes their job a lot easier because they can see all of the numbers that I have for the year for each property. And this includes, of course, depreciation as well includes all of the generic expenses that I have for my entire portfolio, I have so much confidence that the numbers are correct. And when I give that to the to the CPA, there’s relatively few differences between what the CPA has using their software compared to what I’m able to give them for my schedule. And without a tool like property tracker. I don’t know how anybody would do it properly. You know, you can, you can use a spreadsheet, so you can put some formulas in there, but you have to do a lot of research. And at the end of the day, you wonder if the spreadsheets are correct or not, if you’re giving the CPA the correct numbers for your, for your properties.
Jason Hartman 20:53
Yeah, absolutely. It really helps keep you organized. So there are some sort of fundamental things That a good organized investor needs to let’s call them the organized investor, okay, like a name. Let’s give them a name the organized investor. they evaluate cash flow, return on investment, and even internal rate of return IRR, which is sort of the holy grail of metrics, if you will. They track income and expenses. they analyze their portfolio on an ongoing basis. They use software to help produce tax forms, which saves them money on accounting, and, you know, CPA bills and so forth. They research and kind of keep tabs on appreciation, although they don’t stay up at night about it. Because again, as we’ve always said, that’s the icing on the cake. It’s not the cake, okay? They, the fundamental investment is not about speculation and appreciation. They use calendars, okay? They use calendars to keep track of their lease renewal dates, their property management, contract renewal dates with their managers, if they’re not self managing their insurance policy renewal dates, if they don’t pay association fees on a monthly basis, then they use a calendar to remind them when to pay the HOA dues. they file their contracts in the cloud, and they they have that filing cabinet. But if they’re smart, they always keep a backup for themselves. Okay, of course, they keep a correspondence log, in terms of you know, who they’ve talked to what they talked about, you know, just a little couple of words just like to jog their memory type of thing. And these are some of the things that I think the organized investor, you know, they they engage in these practices, these are like the best practices, wouldn’t you guys agree? Certainly.
Fernando & Zack 22:53
Yeah. I think automation, you know, to keep track of all of these things is is obviously the key but how Easily it is to enter that information in into to grab that information to somehow compile if you have several properties to get that information easily in a format that can be distributed to you mentioned calendars, for example, you know, for a lot of what I do in organizing my properties, I remind property managers about in check on leases that are expiring through looking at the calendar feature. If you were showing your property manager that you’re on top of things, you will be treated differently because when they talk to you, they know that you are paying attention. And that makes a difference.
Jason Hartman 23:43
They give you a whole new they give you a whole new level of respect.
Fernando & Zack 23:47
Yeah, and our software makes it so easy to be that person who’s constantly on time, constantly up to date with an aggregated calendar. That it’s it takes less effort. For now than it ever did before, to track your assets.
Fernando & Zack 24:04
Yeah, one thing Jason that I wanted to mention since I started to talk about schedule ease, of course, you know as as this is tax season, I do produce the schedule ease which are at the end of the day, the schedule that really represents the performance of your property for that year. But along with that schedule, we for every one of my properties, I produce straight out a property tracker, a schedule of depreciation for the tax year in this case for 2016. In for the benefit of the audience that scheduled depreciation will show the most common items that you should keep track of that depreciate over many years such as the dwelling on the property, the breakdown of when you purchase a property, there’s a percentage that is dwelling in the structure itself in the land. And then of course, the the dwelling is depreciable over 27 and a half years for a residential property. Then when I produce that schedule depreciation, it breaks down the land and dwelling according to the information you added to the tool. And then it gives you the prior depreciation from last year and the current depreciation for this year all in the same table, along with any closing costs that were depreciable closing costs that were entered into the tool when you first purchased the property. In most importantly, this is where it becomes painful for the investor. When you have improvements to your property, you know, capital improvements, new roofs, a new paved driveway, you know, large expenses that are normally not to be taken during that year as as repairs. You need to make sure that you have the proper lifetime associated with that depreciation. It could be 15 years or five years depending on what sort of item it is and the tool helps keep track of it It helps break that depreciation per year and also keeps keeps track of where you are in your lifetime. And without having this information easily available incorrectly identified. You could get in trouble if you get audited and you did not break it down properly. So once you purchase this property, it becomes very important to understand as repairs come along and track these repairs so that when it comes time for tax income preparation, the correct information is given to the the accountant and reduces the amount of issues that you might have later on.
Jason Hartman 26:49
Okay, so most people when you start talking about taxes, they start to fall asleep. And I just want to remind our listeners, that taxes are the single largest sixpence any of us have in our lives so, you know, you better stop thinking taxation is boring because it’s not it’s where you can save a lot of money it is the biggest expense you’ll ever have in your life taxation, okay? So learn how to deal with it and respect it. It’s very, very important. But that said, you know, hopefully that drove the point home. What else do you really love and use with property tracker in terms of, you know, being a better investor being that organized investor?
Fernando & Zack 27:37
Well, I we’ve we’ve talked about calendars that to me is a key feature. I like to keep traps tabs on on lease expirations as my main focus to make sure that I that I know where I am. As as it comes to vacancy rates and so on and why these expiring and when and the tool makes it very easy to To keep track of it. And by the way, I know Jason, you did mention the the upgrade that we gave to a property tracker and what we call v 2.0. But when I give Zach a chance to, to talk about, you know, the user interface and how much it really has been more modernized, and I think we’re pretty proud of what it what it looks like. But
Fernando & Zack 28:24
yeah, go for it well, so for our returning customers that have used the old property tracker, they probably noticed that we were we, we needed an upgrade. And what we did is we took the same framework of our old website and software and did a full ground up visualization overhaul, even changing some things in the back end to make it a little bit more fluid for our users. So we created a pathway for inputting your asset information into the tracker, and we made it a little bit more intuitive for our users, we opened up the communication channel So we have a lot more access to our support team. And we could faster implement features and changes in the future and kind of keep it like a constantly changing and evolving piece of software for our customers. So it should be a lot easier than it was before but also we continue to improve it as we move forward.
Fernando & Zack 29:22
So as the interesting tidbit here, Jason, I know that when we talk on our events and also in your podcasts, our IV ratio, the rent to value ratio is such an important metric and we we discussed the RV ratio in to two hopefully everyone’s the light we’ve made it so that property tracker when when you do the evaluation or a particular property, we will display an upgraded pro forma projection and when your projection for a particular property that will show the rent evaluation show right near the top right you know, as As you look at the projection, which will make it very much, much easier for people to know if the property is worth looking at those small change, but I think very meaningful.
Jason Hartman 30:12
Yeah, you know, that’s just a really simple rule of thumb metric. But it’s the one that everybody’s just got to be super conscious of. And you know, I had an interesting, I’d love to get your guy’s comment on this because I had an interesting Vox with one of our listeners today, and one of our listeners from Canada. And the funniest thing is all these people from Canada, they always say, I’m from Canada, instead of saying what city they’re from, you know, you from Vancouver, Toronto, Quebec, you know, we have I mean, where are you from? Like, specifically? And, and he says to me, when we were talking about this before, you know, most Americans don’t know where those cities are. It’s not a shame. He’s actually right about that.
Fernando & Zack 30:51
That’s a shame.
Jason Hartman 30:54
You know, folks, I just enlighten you all America, as great as America is. It’s not the same of the world, you know, or the center of the universe at least. But, but yeah, so he says, I’ve never understood exactly, I haven’t gotten my head around the thing that you say, and meaning me what I say about when you own an asset, when you own a property every day that you don’t sell that property. It’s as if you’re buying it back for you’re buying it from yourself. Okay. And I just want to kind of elaborate on that. And I think, Zach and Fernando, you’ll, you’ll have some comments on this, because it really speaks to that RV ratio metric that is now part of property tracker that you were just talking about. And here here’s the example. I first said that explain that concept in a seminar in Newport Beach, California, probably in 2004. Okay, when I was giving my first version of my creating wealth seminar way back in 2004, and I was saying that Every day that you have a property you own and you don’t sell it, you are buying it back from yourself. And here’s why I said that. The typical deal back then, was the Southern California investor, okay, who owned a $500,000 property. And they were renting it for 2000, maybe 20 $200 a month, which gives them an RV ratio of less than point five, less than half. And our ideal target, Fernando Zach, what is our ideal target? 1%? Yeah. So so we that $500,000 in real estate investment, ideally would generate approximately give or take $5,000 per month, and they’re getting 2000 or 2200 per month, right. This is the typical Southern California investor. So I posed that question to the audience to say to them, Look, you know, if you’re not selling that property, you’re buying it back. If knowing that You know, now would you buy that property today? Would you? Would you go and look at a property that’s $500,000 and accept 2200 or $2,000 per month in rent? No, you wouldn’t. So why are you hanging on to that crappy property? Because you have an opportunity cost and use usually the lazy kind of diluted investor mindset gets to this kind of thinking, this rationalizing. They say, Well, you know, I’ve owned it so many years, I’ve got a low mortgage on it, my tenant doesn’t household me too much. So I just let it go, well, you’re losing 20 $700 a month, or 2800 or $3,000 per month. That’s a serious expense. If you had to write a check for that you’d be paying attention. So that’s how important the simple dumb little metric known as the RV ratio is. And it’s right there now for you. So
Fernando & Zack 34:02
yeah, that’s a really interesting thought, Jason that if you had to write a check for it,
Jason Hartman 34:06
you would pay attention. Yeah, it’s we, you know, we are funny As humans, we, we have a funny nature. And we’ve got to make sure that we keep our own funny oddities of our psychology in check. And I know because I’m this way, too. Like I’ve said before in the show, I will spend, you know, a couple hours trying to save $105 on airfare. Like, why do I do that? I don’t I look at myself. I’m like, why do I do that? It’s stupid. I can make $5,000 in that time, if I apply myself productively, you know, and I just admit it, I do these weird things and I try to overcome them. You know, a big part of life is overcoming ourselves. You know, there’s a great quote by I think jack Paar said it. He said, life My life is one giant object. course, with me as the chief obstacle. And I think that’s true for all of us. I know it’s true for me. But
Fernando & Zack 35:07
yes, yeah. So when it sees you mentioned this, again, being being the organized type, as you as you put it, one of the, one of the the reports that I get out of property tracker, and I keep track of this pretty much every quarter or so, is when you do a detailed report of your property, you can see the amount of equity that is sitting in your property. And this ties together with the market value of the property. So what I normally do is, I update the market value of the property via property tracker, there’s a way to update the market value and if there’s a history of market values associated with the property, which then gets fed into this detailed report that I produce and look at in various different ways, different properties in different years. And I, I output that information and put into a spreadsheet, spreadsheet type graph, ranking the properties that I have the most equity in, in, you know, going back to your point of, if you’re not, if you’re not actively looking at the property that perhaps there’s money being left on the table because the property value is much higher than that 1% rent to value ratio, you’re leaving money that is untapped in you, you probably be, you know, should be looking at maybe doing a 1031 exchange or even selling a property and buying cheaper properties. I’ve I’ve done this. We’ve talked about this in the previous shows, and I’m going through one of the sales right now with a property in Naples. That has appreciated quite a bit. And in by looking at that chart of of equity, I was able to determine that the best thing for me to do is to do 1031 exchange. So, again, you know, make sure that as an as an investor, you are looking at all these different aspects of the investment, not just a cash flow but, but how you can save money with taxes, make sure you’re organized with producing the correct data for your account and then have the correct forms with with the proper values. And then look at the analysis portion of the of the portfolio to see if you should be selling it. So, just a few ideas.
Jason Hartman 37:33
Yeah, absolutely. Yeah, yeah, you’ve always got to be evaluating your portfolio, you know, and you got to, you know, keep your eyes on those calendars as to what’s going on with your property. You know, it’ll The software will send you notifications as to you know, you’ve got a lease renewal coming up, you know, and if you’re the one who forwards that to your property manager, they’re gonna be like, wow, this guy’s on the ball. Okay, and maybe you’re Not really even on the ball that much, but at least you can fake it. Fake it till you make it Hey, you know
Fernando & Zack 38:06
being being organized with property tracker and kind of getting that that 40,000 foot view over your little mini empire of all your different assets and what equity you have. It kind of gives you the headspace and the time to really make smarter moves and and trim the fat and save some money like you guys were saying so it creates a different perspective, a different perception of how to view your assets which with with being disorganized, you’re constantly going through all the the work of having to get all your paperwork together and file it and organize it. So j Fernandez right on.
Jason Hartman 38:42
Yeah, yeah. Fernando any other like best practices you can share with our listeners? We’ve talked you know, about sort of the physical world of organizing files have have two files. I mean, this was a long time ago. I did a shoot just a couple shows on this. We talked about it. At the meet the Masters events over the years, and you know having an acquisition file, that’s all the documents from the acquisition of the property, and then a separate file. That’s the operations file. And one of the things I love about property tracker is the file storage, you know that you can you can really access your stuff from anywhere in the world. You know, thank god al gore invented the internet for us all. I mean, yeah, I’m so happy.
Fernando & Zack 39:26
I’m joking.
Fernando & Zack 39:30
Well, I think there is Yeah, I do.
Fernando & Zack 39:34
think this is an important pieces as we become more and more digitally inclined. I like to make sure that every single document that is sent to me is scanned. And you know, you can do this yourself. We can buy a simple scanner that that will do the job. If you receiving letters or if you’re receiving bank statements, whatever you are, make sure that it’s scanned and OCR Do you have to have optical optical character recognition so that you can search that file after you get scanned for any information that you might want to look at in the future.
Jason Hartman 40:20
Let me just interrupt you there. I mean, a lot of our listeners know what you’re talking about, but I just want to explain that a little bit. So OCR stands for optical character recognition, you can scan a document, and the document is essentially a picture it’s a photo essentially right? Or you can scan it to text recognition or optical character recognition of what’s on the page. So if the word you know, 123 Elm Street is on the page, the the address of the property right, you can actually search your computer for 123 Elm Street and find that button. document, you know, in the OCR is not perfect. It doesn’t always work, right? But it’s better than nothing. So this is a pretty cool feature, I only started doing it or recently I set my scanner to scan OCR. And it’s it’s really cool, you know, all kinds of documents come up now when I look for stuff that I would wouldn’t have found before except manually by labeling the file. So that’s a that’s a cool, handy feature. Yeah,
Fernando & Zack 41:25
yeah, that doesn’t work anymore. I mean, there’s the amount of information that we are bombarded with. And the problem is, the easier the devices make our lives are the easier the devices make it so that we can share information, the more noise you will see, and there’s a fallacy that you’re becoming more efficient. But the problem is everybody else is becoming more efficient. So therefore there’s the volume just goes way up and I am. I am partially responsible for this working for Apple for so many years and helping create these devices, but nevertheless, I think it’s very important to participate in the game correctly by and what I mean by that is by having everything that you you that comes in being scanned in OCR, so that you can search it when there is a question when there is an expense that comes up when you’re about ready to do your taxes that you don’t recognize and you want to go back and try to find out well, what is this for? And then how do I you know, how do I know if it’s an improvement or a repair and so on. If you have it properly organized and scanned, you can easily find it. Otherwise you will spend a lot of time doing this.
Jason Hartman 42:40
And so what Fernando is talking about there is just kind of like two concepts to give them a label I like to give things labels because then it helps me remember them and you know refer to them later. One is the and you’re gonna love this one Fernando Is this the engineer you know that you are the signal to noise ratio, right? You’re pretty good at cutting down the noise I’m not good at that. You always tell me you got to cut out the noise. Yeah, that’s Yeah, I’ve got so much noise in my life. So the signal to noise ratio, number one, and number two, you know, the arms race. Basically, it’s an arms race, because I remember when I got my first cell phone, I had a cell phone, like really early when most people didn’t have a cell phone. So I was like, way ahead. But then the arms race began, and everybody had a cell phone, so I no longer had an advantage, right. So there’s this and you know, and then the other concept, which I talked about with self driving cars and autonomous vehicles, is that the more technology people have, the more stuff they share, because it’s so easy to share. And one of my predictions is, the easier it is to travel and the more mobility we have, the more people will travel. Okay, because it’s just easier, there’s less resistance. So you know, if you can just summon a car and it will come pick you up and you don’t need to worry about anything and it’ll just drop you off and you don’t need to drive Right, you’re gonna travel more, because it’s easier, right? There’s less resistance to it. So it’s interesting you mentioned that I remember going on a small tangent, I remember looking at studies that show that when they actually removed the carpool lanes from certain highways, the traffic or became
Fernando & Zack 44:19
better.
Fernando & Zack 44:21
It has to do with this usage concept. If people know that something is easier or not know that it’s easier, you know, either way it will affect their behavior. So, you know, use of devices is a very interesting, you know, psychological type of study. But yeah, just be careful. You know, you have to, you have to be organized, make yourself make your life easier by being able to search. So if you’re going to opt to upload the documents via property tracker or just keep them in their local folder, and make sure that you have it searchable in a backup. If you want to use something like Dropbox or if you want to use some other automated way, property tracker helps you with the automation. But you want to also have your your personal data, your property data backed up as well.
Jason Hartman 45:14
I heard someone say just the other day that if you don’t have three backups, you don’t you have them backed up. Now, again, here I am preaching do what I say not as I do, I do not have three backups, folks. But but but I heard that the other day and it sounded good. So I thought I’d share it.
Fernando & Zack 45:30
Can I also mention real quick just for existing users and for all the people listening. When you do use OCR for PDFs, you don’t have to reread all pages. And the nice thing is, I don’t know if everybody knows about this, I’m finding out more and more than more people don’t but if you hit Command F or Ctrl F, whether you’re on Apple or PC, you can search any amount of characters for key words. So you don’t have to reread all these pages. And when You get your, your OCR PDFs onto your cloud on your property tracker account. You can just search for keywords and find things immediately. It saves so much time. It’s unreal. So I hope all of your listeners Jason know about Command F. I use it a lot. It’s great. They got me through grad school. So if anybody doesn’t know about that you’re missing out.
Jason Hartman 46:22
Well, that and probably massive fees and student loans. But yeah, that
Fernando & Zack 46:26
too. I don’t like to mention that one. But yeah, yeah.
Jason Hartman 46:29
Well, we, we’ve debunked that concept. A lot on the show over the years, but Okay, so, um, let me take care of a couple housekeeping items. And then let’s kind of wrap it up with some final thoughts about the organized investor. So housekeeping, go to Jason Hartman comm slash contest, Jason hartman.com slash contest, we got a new contest running, and two new questions. We love the engagement from all of you listeners and clients and we always try to Get your opinion about a few things. So we got a couple new questions out there. I think I like answering those. They only take a second there quick. Jason hartman.com slash contest win the Amazon echo the second one we’re giving away. Remember, listeners, we only have like seven listeners on planet Earth. So your odds are really good when you enter these contests because, you know, three of our listeners are here. There’s four of you out there listening So, so yeah, 25% chance of winning. I’m of course, thankfully, just kidding. We have lots of listeners. But you know, a lot of them just listen and they don’t enter you know, and I know they’re listening because they, they engage with me and they tell me they’re listening, but they don’t enter the contest. So I’m telling you, if you’re listening, enter the contest. Your odds are good. Okay. Jake player won the last echo and he loves it. I think I think he loves it. What else we’ve got meet the masters of income property coming up. This one is going to be the best one ever. They’re always the best one ever. They really are because every year we Really Work hard. This is our annual event. I believe it’s the 20th meet the Masters we’ve held we used to do it twice a year. This one will be in La Jolla, California. It’s a gorgeous, stunning hotel property. I’ve the nicest venue we’ve ever had. The biggest event we’ve ever had, we’ve got a room that is far bigger than any of our past events. We’ve sold more tickets earlier ever than ever in our history. I think we’re up to about 8090 ticket sales so far, and it’s you know, the events Not till January, okay, so that early bird pricing is really bringing in the ticket sales. So take advantage of that. Go to Jason hartman.com slash events for meet the masters of income property 2018. Of course, our venture Alliance members, our mastermind group, they’re all free. They get all our events for free. And but we do have a venture lions event coming up in beautiful Palm Springs, California in October that’s going to be an awesome event. I think we’re going to get in the air on that event. So you’ll see how we do this. But we aren’t going to be flying in one form or another. at that event, I’m pretty sure and doing all our cool usual venture lines mastermind stuff. You can go to venture Alliance mastermind or some detail venture lions mastermind.com sorry, venture lions mastermind calm for some details about that. And I’m not sure this page is up yet. I got one more thing I want to tell you about. It’s new. And it is not up yet. But I’m hoping by the time you hear the show will be up. And that is Jason hartman.com. Slash charity for hurricane relief, and we’re trying to assemble a list of good charities to donate to for hurricane relief. And I am personally donating so you know, help your your your neighbors and less fortunate out there who’ve been affected by these terrible hurricane gains. And Jason hartman.com slash charity, we should have that page set up for you for some good reference some guidance there on ranking of charities and so forth. So check that all out. You guys. Anything we didn’t mention, as we talked about, you know, the organized investor here, Fernando.
Fernando & Zack 50:18
Well, let me pass it on to to Zach. And we can talk about our promotion that is going on right now.
Jason Hartman 50:25
Yeah, absolutely. Go for it.
Fernando & Zack 50:26
Yeah. So for the first we had a previous offer on a previous podcast and that filled up pretty quick. But for the first 20 I guess after this podcast airs, customers that contact me at administrator I real estate.
Jason Hartman 50:44
do this again, Zack, are you too busy?
Fernando & Zack 50:47
Yeah, I’m crazy. I know. But I enjoy it and But anyways, for the first 20 people to contact me, they’re going to get an hour to work with me to upload their property information onto Property tracker calm in a trial form and yeah, would you like to talk about the offer? Fernanda?
Fernando & Zack 51:06
Well, sure, yeah. So we have for, for clients, for clients of Jason Hartman calm, we have the $27 monthly price for a property tracker subscription or $247 for the yearly subscription. And this comes with one free month, trial month that you can cancel at any time during that month and you won’t be charged the different in the addition to to our normal offer, which I just described to what we’re offering. Now. He’s the one our onboarding with Zack that Zach was was describing, that he’s becoming quite busy with. But this is very, very valuable because as a client or former client and it’s due to a client I have my own tool I know that the first property or properties that you you add on to your tracking software are the most challenging because everything is new. And you might be a new investor and don’t quite know exactly where to put things and having somebody help is very helpful in a will allow you to then feel very confident that you can add properties after that point. So take advantage of it.
Jason Hartman 52:23
Yeah, yeah, you know, once you get the momentum going, it becomes easy. That’s how it works with any new habit, software, whatever it is eating right, exercising, you know, all of this stuff in life, right? Just get the habit going. And Zack will help you with the onboarding. So that’s really great that you’re still doing that, Zack, I thought you I thought you were gonna say no more of that by now. But you know, this is this is not scalable, obviously, folks. So get it while the getting is good. Yeah.
Fernando & Zack 52:50
I look forward to working with everybody and kind of getting you through that little barrier to entry to getting on there and utilizing it to its full potential to the software. A
Jason Hartman 53:00
low income property is the most historically proven investment in the world. We just love real estate investing. So we’re trying to bring you lots of different views and experts and tools and, and property tracker is certainly one of them. Zack, just give out that email address one more time for the free one hour onboarding.
Fernando & Zack 53:20
Yeah, so it’s administrator at Real Estate tools.com. And I look forward to meeting every one of you that contacts me.
Jason Hartman 53:28
Sounds good. Thank you to everyone for listening, happy investing. And we will be back Friday and then again on Monday with many more episodes for you and lots of great guests coming up. So happy investing to all and we’ll talk to you in a couple of days.
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