All About 1031 DST Exchange And Planning For Retirement With Tim Croak

Artwork for podcast Real Estate Marketing Implementation Podcast (The REmarketing Podcast)

Episode 28 • 3rd May 2022 • Real Estate Marketing Implementation Podcast (The REmarketing Podcast) • Jerome Lewis

Okay. And we are alive. Thank you. And welcome everyone for coming on to listening to the remarketing podcast. I'm your host for this episode? My name is Scott slacker and in this podcast, we focus on, uh, tech real estate, uh, business and business leadership and systems. Uh, today, I am very happy to welcome, uh, Timothy CRO, who is the president and founder of croak asset management, which is an independent RIA fiduciary firm is a 40 years experience in the financial services industry.

years. They've helped over: 1000

Welcome, and thank you so much for coming on our podcast. Thanks, Scott. It's really very, uh, nice to be here and to be, to be part of your program. I think it's a really interesting. Okay. So we usually like to start off with you giving our audience a little bit of background about you, uh, how you got into financial services.

Yeah, no, absolutely. I, I was born, raised and still live inwe Ohio. And, uh, if you don't know where that is, we, we are, uh, right in the middle of Detroit, Cleveland, Columbus, Cincinnati, Indianapolis, and Chicago. And so it's a, it's a great city, great part of the country. Uh, very proud to be part of Ohio. And, uh, and interestingly that the busiest east west road in the country and the busiest busiest north south road in the country intersect in Toledo.

And so it's, uh, yeah, it's really a great community. All right. Great. And, and so what it says here is that you specialize specifically in 10 31 DST exchanges. Uh, I came across that early on in learning about real estate. Uh, but do you mind explaining for people what that is, who might not have that experience?

Sure. Yeah. Let me kinda go from a treetop view down too. The, uh, cause my firm is involved in the total financial planning area. So we get involved in absolutely everything. Uh, we run our own portfolios. Uh, we we're an RIA, which means that we're a fiduciary firm, so everything is fee based and it's transparent.

And so, you know, we don't work with commissions. Uh, there's nothing hidden. and, uh, and it just, it comes to be that, uh, everyone sooner or later needs something that we do. And, uh, one of those areas is real estate that, you know, that really should be part of everyone's portfolio, but it's a very select area.

And, and every investment, uh, vehicle that you've got has got its own set of pros and cons and real estate, for example, you know, tends to make a lot of money. But it, because it's based on both growth and income, uh, and some tax benefits, uh, the problem with real estate is it tends to not be very liquid and, but anybody that's paying attention knows that real estate and the stock market are kind of the big production areas in, in the investment world.

And, uh, with, with many investors, uh, a lot of 'em wanna get into individual real estate where they're gonna manage. So they're going to buy a commercial office building or apartment buildings or something manage it, which means they're gonna find the renters. They're gonna collect the rent. They're gonna do the maintenance, you know, in the whole bit.

And so, uh, there, there's an aspect to the law that says, I, if you want to sell appreciated property, uh, you can do so, uh, without a tax obligation. Cause normally you'd pay tax on the gain when you. You'd have the ability to, uh, to basically sell it and roll that money over on a tax free exchange, as long as it goes into other kinds of real estate.

And so, uh, where we come in is for that investor, that, that first of all wants tour or needs to sell their real estate holdings. Um, and, uh, but they don't wanna pay tax on the gain. And, uh, you know, to do that, um, they're either gonna have to find another piece of real estate themselves, or they're gonna come to someone like me, uh, who uses large national syndicated deals, uh, you know, that they can put money into.

And there, there really is two reasons to, to seek me out. Number one is that, uh, there's no product available. For them on a, uh, on a local basis. Um, and that's the case right now. And it's the reason why my firm is so incredibly busy, uh, with the real estate markets booming. There's just not a lot of real estate available to buy, unless you're willing to pay a real premium for it.

And, and so those people who, uh, wanna stay in real estate are turning to me because we're using these large national firms that, that are quite frankly. Better shoppers and buyers in the real estate market than just doing it individually. Uh, the second investor is the one that says, man, I am tired of real estate.

I'm tired of finding renters, uh, worrying about collecting rent, doing the maintenance, you know, and all of the upkeep. And I wanna change my, uh, my real estate. From management myself to, uh, just having a, a mailbox relationship where, you know, my job as an investor is to you go out into my mailbox and pick up a check.

And so it's really both of those people that, that are seeking us out. And when you move money from that, the old real estate program to the new real estate program, if you do it right then that is done without paying taxes on that transac. Okay. So, um, I just outta curiosity is, are you guys, uh, involved in doing things very similar to like invest like real estate investment trust?

Or is it a different sure. Yeah, no, I, I, a, uh, in the, the syndicated real estate investment world, uh, the real estate investment trust is a pretty broad category. And, you know, there's a lot of things that fit in. But, um, to, uh, put money into it's called a DST, a Delaware statutory trust, uh, program. And that just means that it is eligible for a 10 31 exchange.

That's the IRS section that allows these tax free exchanges. So the programs that you buy into the DSTs are very similar to re the way that REITs our, our S. Okay. Great. And so, um, just outta curiosity, like, what do you think is the big push or, or why real estate is so hot for, I guess you would say a retailer or a passive investor, like, what is the, the main throw that they typically see?

Like when you have a client come to you? Yeah, well, um, first of all, real estate is always hot. Um, You know, I, I think that there's an awful lot of investors that they like the bricks and mortar aspect. They, they like something that is tangible, that they can invest in. And when, when you've got a very strong economy, which we do.

Having that kind of tangible property is gonna be a very nice commodity to own in your portfolio. So it's gonna be pretty popular. And it just so happens that the, uh, the demand, you know, with a combination of things, strong economy, mm-hmm, , uh, relatively low interest rates, you know, over the past couple of years, you know, have, uh, created that interest where a lot of people wanna have real.

And in many sections of the country, uh, especially the Midwest, the real estate values have been very low comparatively. And so what we're finding is, is a lot of investors, um, specifically from the coasts, from the east and west coast, uh, where real estate has been booming for a long time, their prices are very high and, and they're looking for opportunities.

So they're buying a lot of properties in the Midwest. Where those prices have been low and they, they feel that they can find values. And so that, that, that demand externally has created price increases that have been, you know, very rapid and significant. Okay. And you were talking about earlier about there being like certain hot topics surrounding real estate.

What are the, the top, I guess three or four that you thinker the hottest topics going on right now? Yeah, you certainly, um, the, uh, the whole 10 31 exchange, uh, program is the hottest topic out there right now. Um, just because, uh, we have an aging investor population, uh, that those aging investors wanna get out of being, uh, having real estate that is actively managed mm-hmm

And so most people do not know that they've got the ability to sell out of their real estate holdings and not pay tax on that. And, um, so typically again, what happens is that, that real estate investor, instead of, you know, paying a lot of tax, they're gonna roll it over to a program like ours, that that is actively managed.

And, uh, right now there is a, uh, a law on the estate tax rules that, that say upon death, uh, you are going to get a stepped up basis on the date you die of, of, uh, appreciated real estate holding. So, what does that mean? Uh, that means that, that if my father, for example, has got real estate, uh, that he has got no basis in mm-hmm

And so he's got a building for a million dollars and if he sells it the day before he dies, then he would pay tax on that entire million dollars. Okay. Wow. Yet, yet, if he's holding it, when he dies and I inherit it and I sell that building the next day. I sell it for a million dollars and don't pay tax on any of it.

Okay. Okay. And so the, the combination of using real estate for those 10 31 exchanges, and then keeping, uh, those programs until the date of death, which means that they're continuing the income, you know, so it's a very nice retirement income for them, but then, uh, letting their errors inherited, uh, means that, uh, there's no tax paid at all on that appreciated real estate.

So those are pretty hot topic. That's that's. So how long has the 10 31 exchange been around? I said, I know when I jumped in, that was one of the first things I heard of for deferring your taxes off later on. Uh, but I don't know how long it's been around for. Yeah, it's been around since the early nineties, it's a long term program and, and this is not a surprising thing.

Uh, those of us in the wealth management business, uh, know that the, um, the opportunities for wealthy investors. Are much greater than the opportunities for investors who are not wealthy. And so to do a 10 31 exchange, um, you need to be an accredited investor, which means you need to have a financial net worth of a million dollars or more.

And so it's, it's, you know, part of that, uh, the thing that the rich get richer, you know, but, uh, these type of opportunities are available for the people that, uh, that do have that kind of. All right. And so one thing I've been reading about recently was that there were some changes that sh might be coming down the line or have already started regarding this type of exchange.

Have you seen any of that? And if so, what kinda changes are happening right now? Yeah, well, there's been talk forever that, uh, that the government is going to eliminate, uh, 10 31 exchanges, um, so that you're not gonna be able to roll, roll real estate tax free from one program to another. Uh, there's also been, uh, discussion that they're going to eliminate the stepped up basis of death.

Um, I'm also very involved in the, the energy business. Uh, when you invest in oil and natural gas, you get a tax deduction right off the top of your taxes, uh, for up to 90% of the amount that you invest. And, and it's never recaptured, you know? So for example, if you invest a hundred thousand dollars into a 401k.

You deduct it today, but then you pay tax on it, plus the growth when you take it out sometime tomorrow, but with oil and natural gas, you deduct it today and then it's an income stream and, and you never pay, uh, tax on, you know, that amount that you, uh, you deduct it. Um, they're also talking about what do we do with that, that, uh, tax benefit for oil and natural gas, uh, and those discussions always take place.

Um, Especially in economic times where we've got a lot of debt and we've got a lot of national expenses. Uh, and so we're looking at those tax laws and the legislation all the time. Uh, there has been nothing about it, uh, recently except the initial discussions. So, okay. Uh, the, the people in the business, most of my peers don't think that, that any of that legislation is gonna get pushed through at all.

And the other thing you wanna realize is. Most of our legislators are wealthy, uh, and they are taken advantage of these type of programs, you know? And so, oh, of course they're gonna, you know, whether they they're gonna pass those laws to, to penalize themselves financially, I, I don't think is gonna be very likely.

No, I, I don't think so either, unless they already have a backup plan that they're going right into the legislation that they can take advantage of themselves. Yeah. I don't, I don't see that's changing any of that. And it might be a law that they're gonna change it, but, but existing programs are grandfathered in, you know, mm-hmm, uh, that could always be too.

So you don't really know, but alls we know is, is we've gotta make our planning decisions based on what the laws are today. Yeah, definitely. And then when you're, when you're working with your clients, do you focus mainly, or, or solely on real estate or do you diversify with them or like, what is your strategy when you work with someone who comes to you?

Yeah. Yeah. We take a look at everything. Uh, you know, everything is from, uh, total top down approach. So, uh, we, we talk about estate planning, their, uh, their life disability and long term care insurances. Everything in their investment portfolio. Again, 80% of the money that we, we manage, we manage through our own portfolios.

Uh, and so we are analyzing those and we're making moves on 'em all the time, uh, with the intent that through our analytics and, and through watching where the markets are. We are continuously down shifting from, uh, sectors that are overvalued towards sectors that are undervalued. And, uh, the power to that is that we should have the boat rise when the tide is high, but rise a little bit more because of people dealing with us.

And when the tide is down, then they're gonna be down a little bit less for dealing with us, you know, because we're, we're on top of those moves, uh, it's that other 20% that, you know, involves, uh, real estate, uh, individual programs like DSTs or, or oil, or what have you. Um, but everything that we do is a, is a total planning thing.

And so if we're gonna do DSTs, it is gonna be part of a much larger picture with a client's total planning in. Yeah, definitely. That's, that's so important to, to take everything at a, a, I guess like a client by client basis or step by step because everyone's financial circumstances are a little different.

Their income level is different. Uh, their expendable income is different as well. Um, I know with real estate, one of the biggest barriers to entry for the average working class person is that you need large amounts of capital to buy an investment property versus. Maybe doing something like a re where you don't have to put nearly as much in, because it's, you're only supplying a portion of what the trust needs to, to go out and syndicate their deals.

Yep. That that's the power to res all the way around. Yeah, absolutely. Um, so let's think here, is there, uh, an opinion you have in financial planning that you find to be unpopular with your peers, something that you think that maybe some other people might disagree with you about. Yeah. Uh, you know, uh, not really, I, I think you, you would find, first of all, Mo most of my peers in agreement that, uh, you can't time the market, uh, that the guys that are doing day trading, uh, and that are trying to time the market, uh, are not very successful over a long period of time.

You know, if you go to a casino in Vegas, uh, you might win for a day or two, but if you play long enough, the casino's gonna get their money back. Absolutely. And so, you know, rule number one is you wanna stay in the game, you wanna get confident advice. Um, you know, there's an awful lot of commission guys out there that, you know, they like things that we're not very wild about to be honest, but they're the ones that drive more commissions.

And, uh, in our world where you're a fiduciary, you're an RIA. Um, you know, we don't care necessarily what you invest in, as long as it's part of the overall plan. Uh, we're gonna make the same regardless. And, uh, we use an asset management fee. So that, uh, we're all on the same side of the table. You know, we, we all want your money to grow.

If it does, you're happy we make more money, you know? So, uh, if you win, we win. Uh, but the real things about financial planning are, are there psychological, they're not financial and, uh, you wanna conquer the, the psychological aspect of, um, Building money, you know, having a savings plan to accumulate, uh, sticking with the plan through the highs and lows and for goodness's sake, don't let the emotional factors weigh into those decisions.

We all have a certain amount of greed in our heart and fear in our heart. And you don't, you know, we, we make decisions, empirically everything is based on the analytics and the numbers, not the emotion. And so we need to, to divorce our emotions and our ego from our financial decision. And I think an awful lot of, of people that are in my business, in my position, um, they, they try to use fear and greed to sell people.

Uh, and, uh, I think that's really where the, where the biggest problem in our business lies. Yeah. I think that's investing across the board as well. I noticed I started early on in the stock market to put some of my extra cash in there and I was actively. Buying and selling. And I made a lot of emotional decisions when I saw it go down.

Uh, yeah, you absolutely have to have either get the education or have someone in your corner. Who's making their decisions based off, off of the numbers and analytics. There's a, a really good buffet quote that I, like he said, the stock market is just a tool that transfers wealth out of the hands of the inpatient and delivers it into the hands of the patient.

Yeah. Yeah, yeah. And that's really it. And, you know, uh, buffet is really good and, and his deal is, you know, when, when other people are celebrating is when you wanna sell. And when other people are in despair is when you wanna buy mm-hmm and, uh, and you, you do, you just wanna kind keep that, that emotional end out of it.

Um, the decisions that we make in our portfolios. Uh, is based on that, that company analytics, what, what are the earnings of these companies? You know, cuz what you know is that, that every company in this country is geared towards making more money. That's why they're in business mm-hmm and when you know what their earnings are and you, you know, what the ratio typically is between their earnings and their.

It gives you a very good judgment of, uh, where that price is compared to where it should be. And so we, we in our process are just in the business to be able to, first of all, identify that and the businesses that have got a higher price than what it should be. We're gonna deemphasize and the businesses that have got a lower price, we're going to emphasize.

Yeah, that's that's really good advice. Uh, that's something that I've read as well. When I started looking up investing was to find where there are gaps in the market where things are undervalued. That's the best entry point. And then when things are overvalued, the best thing, if you have it, sell it, you know, if you don't stay away from it, go for the things that are, are undervalued.

What I can't emphasize to our listeners enough, how important it's to not try to do any of this on your. And get the right advisors and the team on your side that have the education, the experience like yourself. Um, is there any advice that you would give to someone just starting out, like say they're like, Hey, I wanna start investing in building my, my savings up to have passive income later on.

Uh, what would be one of your biggest pieces advice for them to get started? Yeah, well, uh, the, the best advice is to get started and, and, you know, in this day and age, the, the, the technology is out there so much. That you either need to be an expert or you need to find an expert. Yeah. And you know, very few people are gonna be able to do this on their own.

You know, we work at this eight hours every day. You're not gonna be able to compete with us, you know, in terms of the, the information and the judgment and perspective that we're generating. Mm-hmm uh, and so if you wanna do it for fun and as a hobby, great. But if you wanna make progress, you need to come to somebody like us to do.

Um, but, uh, the, the successful, um, you know, process of investing is based on putting money in. On a continuous basis without taking it back out. Okay. Mm-hmm and that's what I mean about the psychological end, the return that you're getting, doesn't matter as much as the systematic methodology of putting money in and putting money in and putting money in and making that a consistent part of your life.

And if you do that, you will find that the progress, uh, and the results that you. Are gonna be well worth the effort. And, and so in that planning, we wanna make sure that we have got a, an approach that is disciplined without being sacrificial. Okay. Okay. And so we, we don't wanna cause anybody angst, you know, from their investment program, but we do wanna go about it in the discipline nature.

Yeah, that's really powerful. The discipline part. I really like, because it's, it goes in alignment with every wealth building principle that's out there is it takes consistent and disciplined effort to do the same thing. Every month after month, you have a certain percentage you set aside month after month, it goes into those accounts that you've set up for stable and, and consistent growth.

It is. Is there a tool, uh, that you use in your, your field that you feel is underrated? Uh, you know, uh, yeah, the, the tool is called homework. Okay. Uh, you know, people don't like that knowledge is out there. They don't like that, but you know, there's just no substitute for digging in the information and really looking at it analytically.

Uh, because again, it, it is all out there, but you've gotta be able to do the work to, uh, to do it. And, um, but I, I also think getting control, uh, of your money, knowing where it's going, making sure that that your debt is low, uh, goodness gracious, stay away from credit cards completely, or at least pay them off on a, you know, on a month by month basis.

Uh, consumer debt is the biggest evil in society today. Um, but, uh, you know, having those kind of tools on your phone now that you can invest money, you know, just as the, the change after every transaction and kind of following what you're doing, being involved with that, uh, emotionally as well as financially, I think is the best tool you got going.

Oh yeah. Def, uh, that's, that's definitely, I haven't played with any of those apps yet. Like I think there's an acorn that does it. Mm-hmm where it'll round up and then it'll take the difference. Yeah, uh, between that, and then you're a dollar and then put that into an investment of your choosing. I should really get started on that.

I do, however, make a consistent effort to take a percentage of my income, set it aside, and it stays, uh, I actively invest as well in, uh, real estate notes. Are you familiar with that? Sure. Absolutely. So that's, that's why I also am a, a broker for a capital fund. I'm a registered agent broker with them, but I do some work on that side as well.

Uh, doing your homework is huge. The book that I was just reading recently was talking about basing your, your, your risk, I guess, assessment on a full market cycle, like going all the way back to a full up and down of the market. So you can see, and I, I don't understand all of it completely. I'm gonna go back and read it multiple times.

Because this is not an area of mind that I have expertise in with yourself. Well, you, you can't, you can't base things based on, on a short term look, you know? Yeah. They, they, they've gotta be based on a, on a longer term cycle and, you know, through all the ups and downs, but if you are rebalancing, you know, and if you're dollar cost averaging, which means you're, you're continuously selling high and buying low.

you know, mm-hmm , then you're gonna have much less volatility, you know, than typical. You're gonna have much better results than typical, but, but long term, you know, you, you wanna have a portfolio that has given you that 10% and, uh, you know, or even a little bit more. So I tell people, you know, guys, if we lose 10% this year, don't jump off a bridge.

And if we make 20%, don't throw a party. You know, those things are aberrations. We wanna get a long term consistent average return. Right. You know, and that that's really what we're after, but the, the power to that, especially for people who are relatively young, that you wanna remember that the rule of 72 says that your money is gonna double upon itself.

You know, it, it, if we get 10% returned, then your money doubles upon itself every seven years. Yeah. And so, so if you invest 10,000, it's not just 10, you know, in, uh, that seven years, it goes from 10 to 20 and then 20 to 40, 40 to 80, 80 to one 60, you know, in consecutive 70 year periods. And, uh, when, when you've got a lot of young people out there who are just starting their investment world, that compounding for them is magic, but they need to stay the course.

And you know, it's not gonna be a matter of guessing. Well, the market's high, so I'm gonna pull out. I'll wait for the market to drop. You've gotta stay in the game. Yeah, definitely. You have to, how, how early would you say someone? How young would you say someone should start setting their money inside and start investing?

Think I know the answer to one, but I'd love to hear your insight. Yeah. You know? Yeah. As young as possible, you know, I think when, anytime that you're in a job situation and, uh, having debt, especially consumer debt is. Absolutely destructive. And so I, I really don't want people to invest money until their debt is paid off.

So no credit cards, no school debt. Okay. Get all of that done. And then you can start, um, you know, making progress, but the sooner you do the better, and again, it's not about, uh, saving or investing big numbers. It's about saving, consist. Def, yeah. Saving consistently over time is very, very much one of the most important things.

It's a question I ask newbie investors when we come into, uh, real estate networking events and stuff like that. The first thing I usually ask them is the, I you've probably heard of this one, like, which would you rather have $200,000 for a year? Or do you want one penny doubled every single day for a month?

You bet. And, and the power of compounding. Yep. Yeah, that power, it starts off slow. But once it starts to get those bigger numbers, I mean, those, those double jumps yeah. Are they're massive. Yeah. And you know, I, the, uh, part of the thing I'm very thankful for is I got very good financial guidance when I was young.

And I, I came from an economic background where we were, we were lower middle class. We had six kids all in private schools. Uh, my dad worked in a factory. My mom worked in a library to, to get all the kids through school, you know? And so we had a lot of. Casserole and soup meals and hand me down clothes.

But, um, it teaches you that you don't really need money to, you know, or fancy cars or whatever to feel good about yourself. Mm-hmm and that's a real gift. Um, but I decided when I was 22 that I I'm gonna live till I'm 90. That's my goal. Okay. All right. And I, I want, I wanted to hit 45, um, with the economic situation where I could live the second half of my life without any purse.

Okay. You know, and any problems. And, uh, and so I, I saved money at 22 when I was done with college, saved it very consistently. Uh, I'd like to think it was prudently. Uh, so that by my age 45, I was able to quit my job at a, uh, uh, an employee financial services type of company. Started my own firm. Uh, my kids' college was totally paid for the day they started school.

Uh, we've been able to, to literally travel all over the world with our kids, you know? And so all of the things that I am passionate about I've been able to do, but it's because I started at a young and was very consistent about it. Yeah. I really wish for myself that I had started younger. Uh, I got into.

A different field. I was working full time as a one-on-one therapist for children with autism. And I started, uh, maybe about like a couple years back getting a high rate of burnout, uh, which is, comes with that industry. And I said, I gotta get out. I gotta do something different. Yeah. And so I started looking into investing and I'm like, once I started learning some of these principles and reading up on him, I was, I was like, I wish I had, I had learned about this when I was in my early twenties.

Cause I. I've always been a good saver. As soon as I got out into the workforce, I was saving $200 outta every paycheck every week. So about 800 a week, I was putting into savings, but not investing it. And I think back on those times, like if I had invested 800 a month every month when I was 23, 24, like that would've been a huge benefit.

Now, now I'd be reaping some rewards. Yeah. Um, you know, so much of our economic decisions are based on ego though. Mm-hmm and really money is just a tool. And the reality to it is, is that there's two ways of making income mm-hmm and one is your labor. And the second is having your money work for you. And you know, the more money you have, the less we need you working.

Which means you're free to go out and follow your passions, whatever those passions happen to be, you know? And that's a wonderful gift to give yourself. Oh, for sure. Is there, so you guys traveled a lot with your family. Is there a favorite place you have that you guys went to? Uh, yeah. Um, we, uh, in fact, um, uh, my son just got married, uh, last weekend in Charleston, South Carolina, as a destination wedding.

And so char char, Charleston's kind of a domestic favorite and my daughter's getting married in two weeks in, uh, in Italy, on the Al coast. Oh wow. And so, uh, so we've been to Italy repeatedly, and so that's definitely a favorite on the international scale. I definitely that's one of the other things that inspired me to move out of my full time into investing and in getting my finances in order was I've always wanted to travel.

I have a whole list of countries. I wanna visit Italy being on that list for sure. Um, And then I, I still love, I like Georgia. I, I lived in Georgia for a little while, so I'd love to go there. I love hiking. So I wanna travel and hike, but all that, the finances need to be taken care of first so that I have the time or same thing with everyone else.

We need to set that up for ourselves. They, they do. And I'll tell you, the hint that I would give is that you wanna make your, your savings and investment program, like a bill mm-hmm . Um, so that, you know, Hey, I'm gonna save this amount of money. I'm gonna pay myself. Uh, and then spend whatever's left. And then when you do that, you can spend freely and really enjoy yourself.

But you, you do that, knowing that the financial end is already taking care of itself. And so you don't have to worry and judge, every penny that is coming in and going out on, on where it's going. And I think it just, just leads a much happier life and, and it lets you live well today. Just very, very well tomorrow.

That's that's exactly what I want. I think that's what all of our listeners would love out of their businesses and their real estate investments. For sure. We talked about, uh, how bad credit is, and I know there's a couple of methods for trying to work down your credit. Do you have a favorite or particular strategy for someone who might have consumer debt that they're working on eliminating first?

Yeah. Um, first of all, don't get consumer debt, you know, yeah, definitely. It's the easiest thing, you know, and if you do, you know, make sure that you attack the high interest ones first. Okay. I know there's a lot to be said for, for eliminating the lower, uh, credit amounts first, you know, cause then, then you can build up, but I'll tell you, some of these credit cards are, are 18 21, 20 4%.

Oh yeah. And yeah. And you. Gotta eliminate those things, you know, you're just never gonna be able to make progress until you do so you would put it in order from highest interest to lowest. Then just work on putting extra payments towards the highest first. And then I would, I, and I tell you what, uh, I would go into my couch cushions at home, whatever change I could find.

I, I would put it towards eliminating that debt. That's how strongly I feel. Every little bit you can do to pay it down and to stay free of credit cards, uh, is gonna benefit you in the long run. Yeah. I've always been avoidant of using credit cards a little bit differently since I've gotten into business and had to put some business expenses, but I make sure I pay it off at the end of the month.

Yeah. So I'll use the credit card in the time, in the meantime to wrap up points or whatever benefits, but it's always paid off the month up. So I'm not paying any interest. Yeah. You. If you can use debt constructive. You know, where it's your advantage? Um, you know, and, uh, and I tell people, gosh, you know, I get a lot of questions.

Should I pay off my mortgage? And you know, if, if we invest money and we can get 10% and you're, you've got a mortgage at 3%, it doesn't make any financial sense to pay off your mortgage. You know, right. Uh, with 10% money that you're only paying 3% on. And so, uh, and, uh, like using some of the, the big cards that you can get a lot of points and a lot of benefits out of man.

I'm, I'm all for it. Cause it's a great convenience and a great tool, but you just don't wanna let that debt build up. Is that interest rate that'll kill you. Yeah. One of the problems I saw. We've seen in recent years is that the whole student debt crisis thing, we have a lot of people, graduating college are finding it difficult to, to tackle that debt because it's so large, the interest rates are high.

Um, I was grateful enough that I paid for my college in cash. I saved up my work for it and I paid in cash. So I graduated college without any debt, but most of, most of the people graduating today are not that lucky. They're not at all. Yeah. And it's a, it's really a crisis. you know, and, uh, and it's just not something that I'm in favor of at all.

I, I think that man, you, you pin these kids down with massive amounts of debts before their careers even started and it's gonna take them decades to be able to catch up and get ahead. Yeah, absolutely. And I, I was very grateful too. My first. Uh, outside of high school education was a certification trading for computer programming, web design, software engineering, stuff like that.

And I got out of that with 13,000 in debt and worked on paying it off before I went back to college. Yeah. Yeah. And one of the things I learned there was I took out 13,000 in debt and had no guarantee of any type of career after there, there were job services. Uh, the school I attended, wasn't very good at that.

I kept hunting and most of them would tell me you need a bachelor's or a master's in my program to even get started. And so I'm like, okay, well now I have 13,000 in debt and not a start in the career. So am I gonna add more debt onto it by continuing school? I, I wasn't comfortable with that. Not at all.

Yeah. Yeah. I think that was a good call. Yeah, definitely. All right. So, so why don't we move on to maybe some more, uh, personal questions? Sure. We can learn a little about you. Our listeners can learn about, um, you know, how kind of, where you're at. So, um, what is, or what has been your least favorite job to date?

Uh, the job that, that still spooks me, I'll give you a pro and con example. Um, the, the, the con is I worked at ups. Okay. Uh, when I was in college and I, I loaded and unloaded trucks from four to eight in the morning, whew. In the, in the heat and the cold and the whole bit. And so the reason I still work hard today is so I don't have to go back to ups, you know?

And, um, because that was brutal. And, uh, and I'll tell you what I U the ups commercials used to be that they run the, the tightest ship in the shipping business. Mm-hmm . My God man. They did, they were, uh, it was a great company and still is, but it was just, and it was brutal for me to work at, uh, but my first job ever, um, it was the positive example.

I, I worked for a little, um, Hungarian restaurant in east Toledo called ludas. Okay. And there was a, a, a chef from Hungary that ran that kitchen. And this guy was a great guy to work for. Uh, he, uh, he taught me more. Uh, he showed up early for every shift, stayed late. Uh, he sung his way through the day. You know, he had a great positive attitude.

Uh, serving customers for him was a, it was sacred and it was a religion. Uh, and he did it with so much joy in his heart that, uh, for our first job, for me to be able to go in and work underneath this guy, uh, was really a great life. That's that's a great example too. Like it's, it sets the, the stage for new working in other jobs.

When you brought up by ups, I can very much relate to that. My first job outside of high school was for, we call 'em a lumping company. I don't think they're really around anymore. They had a contract with CVS warehouse. So essentially all we did was unload trucks all day. Uh, sometimes from 3:00 AM to 3:00 PM.

and it was, it was brutal. And just like you and it, we had the steel containers that we had to go into and unload. So in the middle of winter, it's freezing middle of summer you're drenched and sweat. Uh, it was, it was a brutal job and I was falling asleep when I got home every day. Cause I was just physically exhausted.

I get home at 3 34. Muscle sore. Uh, sometimes six days a week, that would probably rank as my least favorite job as well. I hated I don't blame you, but that's how I paid down my debt. yep. I get it. I, I, you know, so much of that restaurant for me was that the culture that this guy established, you know, once everybody knew that he was gonna show up early and stay late, then that became the culture.

All of us showed up early and stayed late, you know? Yeah, for sure. And, uh, and yeah, that was just a man. It was a great work lesson for. That's a great example in leadership too. That's what leaders do that show up early. They stay late. They take pride in their work. Like it's, I've had people like that in my life that I've tried to model things off of as well.

It's so powerful. So let me ask you, uh, if you can go back to your 18 year old self and give your 18 year old self a piece of advice, what would it be? Uh, you know, I, uh, that's a great question. Um, a again, coming, uh, coming really from nothing. You you come into the world being hungry. Mm-hmm and, uh, and I, I was in such a rush to, um, get through college and to get into business and to get successful.

Uh, I, I wish really, I would've loosened up a little bit and had more fun and enjoyed the journey a little bit more, you know? And, um, I, I think at, at 18 man, so many of us take things so seriously. And, uh, your definition of success is different than what it is when you're 60, you know? Okay. And, um, and it really was about more of those achievements than it was about anything else.

And in retrospect, what I have learned is that the true meaning of life is about your relationships and the experiences that you have. And it's not about the things you've got or the money that you make. Um, you know, it really is about your relationships and experiences. And I wish I would've realized that younger.

Okay. Yeah, I can definitely see that. Uh, I was a very serious teenager as well. Not my peers, my peers were much more of a party crowd, but, uh, I was very serious about where I wanted to go and what I wanted to do, and definitely I'm guilty of not allowing myself to have more fun. Then I should have, I was busy working.

Yeah, you bet. Okay. So what does your morning routine look like when you get up in the day? What do you do first? Yeah, it's always been the same, you know, for all these years, I'm, I'm an early riser, so I'm up every morning at. And I've got a, a, uh, workout gym in my basement. And so I will, uh, get down into the gym and work out every morning.

And, um, I I've got a, uh, TV and movies and stuff set up. So I, I end up watching two movies a week, a hundred movies a year. I've seen every movie that there is in history of humanity. I think. But then I, I, uh, when I'm done working out, I'll have breakfast, I'll read the paper and medias and financial news and things.

And then I will spend a couple minutes, 15, 20 minutes every morning, uh, in meditation. Just kind of getting, getting grounded, getting aware, um, being calm, focusing on what I need to do, uh, for that day to make it meaningful. Uh, and then it's up, take a shower, get dressed, get into the office. So most days I I'm in the office at, at eight o'clock or eight, 15.

Wow. Yeah. That's meditation is a huge one. I see. Come up quite frequently. Yeah. Especially people who own and run a business. Uh, just because of the mental health benefits. I've not been as consistent as I would like to be with mine. Yeah. I used to be a more consistent and meditation, but it's, it does help you, it improves your, your overall wellbeing.

Uh, my background when I went back to college in psychology, so I, I love the brain and the neuro stuff. That comes along with meditation, your brain just functions a whole lot better, which leads to everything else in your life. Yeah. Well, I think you need to be holistic in your approach, you know, and, and there's no, there's no success in the field.

That compensates for failure at home or with yourself as a person mm-hmm . And so I, I, I personally think everybody should be in meditation. Everybody should be in therapy. Uh, everybody should, should have a pretty, even balanced life between. Um, you know, their, their financial life, their educational life, their social life, their, you know, the, the things they do for fun and encouragement.

And, uh, we should all be watching movies and reading or listening to books on tape or something because it it's what keep your mind active, you know? And, uh, and I just had a couple in, in the office last night and we had this talk, um, because they were grind. you know, and, you know, they were worried about retirement.

You could tell they were worried about it. And, and so many people that I have worked with and met through the years that they grind their way into retirement with that level of worry. And then when they retire and they they're financially in great shape. If they end up getting sick or falling over with heart attacks and stuff, you know, and I, I think, I think what having that balance lets you do is keeping everything into perspective where you you're emphasizing the relationships and experiences and uh, you know, it gives you that well rounded life and, and your money becomes a means to the end of enjoying yourself.

The money is not the ends itself. It is powerful. I, I see that a lot in my own life. Like the areas, you know, your, your work life, your social life, your mental health and wellbeing, they all overlap in some way, shape or form. So it's important to treat it as one whole system because otherwise, well, I'll give you an example from my own personal life, where I was working in that other job, I was working four 12 hour shifts a day, uh, a week, sorry, without nine to nine zero.

And it was starting to affect my personal life with my family. It was affecting my finances or my financial decisions. Cause I'm stressed. Like if you don't keep on top of every little area in your life, you the social, the mental, the, the professional, and you keep in some sort of harmony it's gonna spill over into another area.

It is, it is all about the balance. Yeah, definitely. So let's, um, ask you some quick closing questions. This will be the closing table. We call it because in real estate we deals, um, great. You know, we'll kind mix the questions together though. Are there any books, podcasts, or documentaries that you recommend our listeners check out to get better background on things?

Um, sure. Yeah. I, everybody should watch all nine hours of Lord of the rings, every chance they get. Okay. So yeah, that, that makes me nerd out a little. But it's really about finding your passion and, uh, you know, whatever that happens to be and what brings that out. And, and I was actually a history major in college, so I like things that, that are biographical in nature.

Okay. And, uh, and I, I do enough financial reading where, where that is just not gonna be a hobby for me, but I do like the, the biographies or. Histories, those type of things. Uh, I think throwing in a novel every now and then, you know, with, with people who are a really good writer, um, part of the benefit of COVID has been that all of us have been stuck at home.

Well, uh, don't think that, uh, that Netflix and Hulu and, and Amazon prime and those other creators of content. Uh, have missed that fact. They know everybody's sitting around and, uh, and so there's a big scramble of, uh, collecting talent to be able to get things on the broadcast systems that are, that are binge worthy, you know?

And, uh, I, and I don't see that as evil. I see that as a real blessing, man, cuz you get, uh, you get a lot of views of the world and different kinds of writers and actors that, uh, you know, that bring, you know, special things into your. And, uh, so for me, it is more, a matter of being active and engaged and aware and using the different media outlets to be able to do that, including podcasts.

Do you have any favorite podcasts you'd like to recommend? Yeah, um, uh, I, I, I tend to be, uh, um, a little bit more, uh, socially active. So I, I like the podcast that. um, you know, uh, favor, Hey, what's going on, uh, around the world and in different segments of society. Uh, and, and I actually get into business podcasts a lot because I, I just, I love the engagement of the different ideas, you know, and every time I listen to one, I, I get a new idea that I wanna bring back and, and work with.

And. And it's kind of fun because I I'm actually in business with, uh, my son, Eric, as well as several other partners, but we both listen to podcasts very actively. And so, and obviously the, the genre of what we listen to is different. Um, but we're both listening all the time. And so it's fun for us to get together a couple times a week can share the ideas of what we're listening.

So I'm not too much of a, a big podcast member. That's it's so important. That's what I do with my YouTube. I'm more of a YouTube rabbit hole kind of person. Oh yeah, yeah, yeah. And, and most of mind center around business mindset psychology. When I read people think it's funny, cuz I don't read fiction at all.

It just, oh really? Okay. It doesn't, it doesn't interest me. And for some people like how do you not don't you do anything for fun? I'm like, this is. I like learning. I'm obsessed with it. Yeah. So I will find a book on, you know, biographies are great. I love biographies. Cause there's no better way to shortcut your learning experience than to read through someone else's life.

Yeah. And, and they give you so much information, a life experience that way. It's almost as if they're telling you and giving you advice about things when you read through it. Yeah. And then I'll read like informational stuff, psychology. I'm I'm very, very passionate about that as well. So that's really good advice.

Thank you for that. Um, so last but not least, can you tell our listeners where they can find you online? How can they connect with. Yeah, sure. Um, I, we've got a website's CRO asset management and, and our website is, is cam C a M Toledo, no dot. So C M T O L E D o.com. Um, and, uh, that just stands for CRO asset management, Toledo, or, uh, if people are interested and they want connect, just send me an email@trocroakrocamtoledo.com.

And that will get to me. And, and we have got clients literally all over the country. And, uh, that was, I was gonna ask, do you do nationwide or just local? No, we, we do nationwide. Excellent. And, uh, you know, especially man with technology now, you, you can zoom, you can visit with people and, uh, with, with. Some people, the situation calls for a face to face meeting.

And so oftentimes we will fly people into Toledo, you know, so they can visit our office and see what we're about. Uh, oh, wow. And we'll put 'em up in a hotel. We'll pay for their plane ticket. And, um, but you know, it's very important for them to be able to meet our entire team. So they know kind of what we're doing and, and be able to look underneath the hood.

And, um, and so yeah, what we, we seek out relationships. We're, we're not, again here to do a sales job. Uh, we like to work with people that are good people that have got the interest in building their, their situation. And, and we want that to be an ongoing process. And because of that, we wanna take our time, do it right, right.

To begin with. And you know, that that really has worked out very well so far. That's I don't know any financial service that has offered to fly out clients and put them up in a hotel so that they can be, uh, interpersonally involved with the team and what they're they're nesting in that's that's an incredible.

Yeah, there there's just no substitute for it. You know, there really isn't and once you get to know the people, um, you know, that, that we've got, I, our team is, they're a great people. They're professional. Uh, they're very caring. Uh, they're very thorough in what they do and what our process does. And, uh, and so, and the only way to, to get people to, to know that and feel comfortable with it is to bring them in so they can, you know, look 'em in the eye and shake their hand.

You're right. That's that connection is so important, especially when it comes to their finances. Like people are very, it, it does. Yeah. That's, that's so, so important. Uh, so we're gonna, I think, close it out with that. I do want to disclaimer, I'm not an accountant or professional certified financial planner, Tim.

However, is, so if you'd like to reach out to 'em to get advice, but anything we've talked about in regards to 10 31 exchanges don't do anything without consulting one individually yourself. So if you have one already or. Absolutely go to Tim, give him a call or contact him via email so that he could advise you independently.

Um, just wanna make sure we have those basis covered. So nobody goes off on their own. No, and, and we also, if anybody does have an interest, we have a brochure that I can email him that, that.

Do you think you're audio and, and there is some, some bells and whistles you have to do, you know, to make sure that everything stays, uh, legal and, um, yes. And so it's a little bit of a process, not too difficult, but we, we can send 'em off the explanation of that. Okay, perfect. Yeah, they, they would absolutely love that.

Is, is there any way we could, uh, post a link to the brochure maybe on the show notes? Uh, yes, we can. I will send you a link. Okay. Perfect. All right. Well, Tim, thank you for joining us again. We had a great time. I would love having you on. I have so much information for our listeners and for myself to take, I actually probably will contact you when I get to that, the point when I'm ready for that as well.

Cause I need a financial planner. For sure. That's something I've been neglecting, but again, thank you again. We'd love to have you back on again if you'd like as well sometime. Sure. Yeah. Yep. Anytime I enjoyed our conversation, so. All right. Thanks Scott. Thank you, Tim. Have a good one. I'll talk to you later.

Yep. You got it? Yep. Byebye we're out guys.

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