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Welcome to the Gold Collar Investor podcast with your host, Pancham Gupta. This podcast is dedicated to helping the high paid professionals to break out of the Wall Street investments and create multiple income streams. Here’s your host, Pancham Gupta.

Most of our adult life is spent working. You work hard to provide for the family, build wealth, and enjoy life. However, you spend very little time thinking about succession planning. That is what will happen to this world if something were to happen to you. Who will get this money? Who will take care of your kids? What about the house and the other things? Listen, no one likes to think about dying, much less planning out what happens when you die. Hopefully, you live up 200 years, but what if you don’t?

Safety and security are as important as the world. Safety and security should be planned with not only the present in mind but also with careful consideration of the worst-case scenario.

Another thing that we spend very little time on is protecting the wealth that we have worked so hard for. Do you know that the US is the most litigious country in the world? We spend about 2.2% of GDP, roughly $310 billion a year, or about a thousand dollars for each person in the country on tort litigation – much higher than any other country. There was a survey done in the state of Louisiana, and people were asked, “What is the number one way to get rich?” The top answer was winning a lottery ticket. Do you know what the number two was? Yes, you guessed it right. By suing someone else who has money. You may think that this cannot happen to you and it’s very possible that it won’t, but in my opinion, it does not hurt to be prepared. As president JFK once said, the best time to repair the roof is when the sun is shining. This week’s guest on the Gold Collar Investor podcast is one of our country’s foremost experts in both estate planning and asset protection, Kevin Day. So unless you’re 100% sure you and your family are covered, do not miss the show. This may get you thinking about doing things that you always kept on delaying or never planned on doing. Kevin, welcome to the show.

Kevin: Hello, how are you, Pancham?

Pancham: I am doing great. How are you doing?

Kevin:: Fantastic. It was a great seminar. Good seeing you last week. And I’m very excited to be able to share some information and using the best of my teaching skills for your listeners.

Great, great. So are you ready to fire up my listeners to do better estate planning and asset protection planning?

I am, as you already mentioned, it’s not the most fun subject. Because the estate planning side, we have to contemplate our demise. And we all know we’re on that conveyor belt but we all think we’re not going to be hit by that proverbial bus this month or this year. It’s going to be, you know, I’m going to live until I’m 80 or 90 and have a natural death. But no matter whether it’s natural or something not so natural. We are on that conveyor belt. So we do need to think about it. It’s a duty to our family, our spouses, and it’s doing the right thing, making sure more money, stays in your family and doesn’t go to lawyers and doesn’t go to the government. The lawsuit protection aspect isn’t any more fun because we are saying, hey, as a business person…and a lot of…I’m like your listener, your primary listener base. I am a high net-worth W-2. I get that from the firm that I own the law firm that I own. But I diversified also, and a lot of people I found that our clients that are engineers, doctors, and lawyers that have started to invest in real property are working in other people’s firms. I say, “Well, you’re an entrepreneur”. And they say, “No, I’m not”. I say, “Well, you own 17 single-family residences”. They just think of that as an investment. They don’t realize that they have a business-owning real property. And so everybody thinks that because they are good and fair and they treat their tenants or other employees with the respect that they’re not going to get sued, but there’s an underbelly of humanity that will turn anything in the United States that can turn anything into a lawsuit. So we want to give everyone knowledge of what they can do to counterbalance that.

Pancham: Sounds great. Sounds great. So, on this topic, we’re going to have…like the two separate past to the show. If you don’t finish all of it this time you go and continue it next time and probably to a second part for the asset protection. Let’s focus on succession planning first. So what is succession planning, Kevin?

Kevin: Succession planning is an order to a turnover of estates to your heirs, and whether they’ve been typically in normal nuclear families, to your children. If you don’t have children, where will it go? Will it go to sisters and brothers or your voting next generation and nephews and nieces? Maybe some to charity if you have a large enough estate and you have those desires, but let’s talk about a nuclear family. Some of the listeners we know are young and successful and haven’t gotten to that part of the planning but you want to think that had two children if that’s part of your road mapping. Without planning, there is a government-approved family tree that will be enforced through probate. Let me stop you for a second.

Pancham: So you mentioned a couple of legal words there. So like, probate…what does that mean?

Kevin: Yes, let’s go. Let’s break it down to the foundation. Yeah, so if I die, without a will or trust, I just get hit by that bus. Nothing can handle my affairs without government approval, and the way the government has situated that is through the probate court through a judge. So if I get hit by the bus, then life family would have to seek out a lawyer. And they’re going to take 4 to 6% of my estate, to represent my family before the probate court. And in the meantime, it takes about six months to have an executor or personal representative appointed. So in the meantime, if my family members don’t have liquidity, you’re also not only paying that 4 to 6% to an attorney, but you’re also paying a court-appointed trustee to write checks to pay the mortgage and you know, the mortgage company, the banks and the electric company. They don’t care that I have died. They want to get paid. We’ll start foreclosure procedures if they don’t get payment. So the court doesn’t want that trauma. So they were appointed a $250 an hour trustee, to pay those bills until the personal representative, my brother, sister, an elder, an adult child is appointed to carry on those tasks.

Pancham: So how do you about choosing this person? What if I do not have any family members in this country, which is actually true for many, many of the listeners as well, as you know, it’s possible. And if they do have a family member, like how would they go about it? What if my brother and I are, you know, not on good terms and whatever, you know. In that…in that scenario.

Kevin: Yes. So that’s why it takes that 6 maybe 9 months to determine who would be the appropriate personal representative for executor and executoress. An executor is male and executoress is female. It’s to give the opportunity for friends to come forward and say, “No, the brother is coming over and saying they should be the trustee or they should be the executor. They should be the one writing checks. They should control everything”. And it gives the opportunity for some other brother or sister or personal friends to come forward and say, “No, they were on bad terms”. That’s even though they are the closest relative. They aren’t the person that he would want to represent his state. The other thing is, they might say, “Oh, he loved him dearly, but thought he was a financial idiot. He would not want him to have that authority”. And that’s why you want to create a will or trust so you direct exactly who you want and not allow the court to decide on…Maybe various information, maybe the friends that actually know this information, feel like they’re putting their nose in somebody else’s business and don’t come forward. So the court never gets the information that you were on bad terms with a relative that is trying to get control.

Pancham: So in other words, let’s say there’s this couple is a nuclear family where the husband and wife are working and have kids. And if something were to happen to them, they get hit with this proverbial bus and they have not done any, like any succession planning. That is they do not have a will, they do not have trust any of that. So in that case, everything is in the hands of the probate court, and it takes six to eight months. So what happens to the kids in the meantime?

Kevin: And that’s another issue is that’s almost more important than running the estate, is who will be the guardians. I’ll use myself as an example. My dad was a sixth grade-school teacher. My sister became a teacher, and she loves children. She’s the last person that my wife and I would want to rear our children. My wife’s family comes from Michigan, and Ohio, and they are hardworking and have a good work ethic. Anyone of her siblings would be perfect to raise our children. What would happen typically happens is either or all the families come forward to the court and say, “We would love to take care of them”. But someone, one of the particular brothers of my wife, had a big family. They’re all adults. They actually live in a real mansion outside of Washington, DC with all the pillars and everything else. They have a lot of rooms, the judge who’s seeing 50 other cases that morning will say, “You’ve got extra rooms. Great. You can have the kid”. The second scenario is all the family get together and they’re trying to be logical. All of us love your children, the children. We want to care for them, but who has the extra rooms. So only one family member comes up and says, “We’ve got the extra room and we’ve talked and everybody agrees”. There’s no dissent, but any of them would be good. But the family that we chose was the sister who is a manager at Home Depot. Her husband is a handyman, but they have the look at the world and life that they would be good surrogate parents, good teachers for our children. Children, one, live on love and the other we want extra wisdom, as much wisdom as can be given and this other family would have that attention. They’re going to sell our house, they’ll have extra rooms. And to tell you the truth, if kids are in a loving environment, they can live in a pup tent in the backyard, and they’re going to grow up. Well, of course, that will not happen because they won’t need the extra rooms. We’re selling our house. We’re not living there anymore. They’re not living there anymore. And that’s part of what an estate can do. So we can control that either through a will which is kind of a message to the court, “Please distribute our estate this way and appoint this person for financial matters in this person for the guardianship”.

Pancham: I see. So if we do not have that will, then it’s really, really in the hands of the court and you’re at the mercy of the church. And if no one comes forward to take control of the kids as guardians, then what happens? They go into orphanages or something.

Kevin: They’ll go through a procedure looking for relatives, immediate relatives that are willing and able, and if not, then they would go into foster care.

Pancham: I see. I see. Okay. All right. So that’s great information. Now, what kind of different legal instruments are out there for succession planning? You mentioned will and trust. Is there anything else?

Kevin: No, those are the only two avenues. Okay? And a will is a request to the judge. Please follow these instructions. So if you die without a will and your children are 18, they will receive your estate. They’re adults. Most parents say, “I didn’t have enough wisdom, even though as a good person I can be taken advantage of”. There are all these reasons why most parents and the way we draft a will or a trust is to give a roof over their head. Take care of their medical issues. I want to encourage education so that they learn how to fish, they’re not given a fish. And maybe a couple of years out in the real workforce will wake them up. And this is if we’re dying too early, and we don’t want them to have that kind of money, they can do idiotic things with much money. Right? Or they could have close friends that say, “Oh, let’s do this, and they wrote them in and then their money all goes away”. So usually we want to give instructions where they’ll learn how to use the money during that period, and then give them tranche maybe at 25 and the rest of 32 or 25, 30 and 35 depending on your philosophy.

Pancham: Right. Okay. So, you can do all of that in a will. So, definitely having a will is better than having nothing. So what are some of the downside of having a will? Does it like, if I have a will, am I done? Like, is it is there any downside?

Kevin: Yeah, yes. So, a will still require you to hire a lawyer and go to probate court. And that’s six to nine months is just appoint the personal representative or in the executor. It usually takes a year and a half. And in some states like New York and California, it definitely is going to take at least two years, even the most simplest state. The biggest thing isn’t the time and the time is irritating, and it takes that long, but that’s just as the process. So allow others to agree that this relative or this friend is the best person or they’re not. But the cost of probate is the real problem at 4%. Just take your estate, or let’s use an example of a simple $500,000 estate.

Some lawyers getting over $20,000 to run that probate and it takes the same five forms, whether you’re a $5 million estate or a $500,000 estate, and that’s just way too much money. That’s money that should be going to your heirs to your children.

Pancham: Let me clarify. Sorry to interrupt there. So you’re saying that if I have a will versus if I do not have anything, I still go through a probate.

Kevin: Right. Exactly. And many people think exactly like that.

Pancham: So what is the difference there as will may can worse is having nothing

Kevin: Ah, well, one thing it names the guardianship provision, what people you want to rear your children, and if they are not able or willing at the particular time of your demise, who would be their backup and who would be the backup to them? So one, it’s the guardianship division. The other thing, there’s no conditions of inheritance. Your children get it once they’re 18. There’s no inheriting in stages. There are no conditions to learn about finance or learn about real estate that might be held by the family. So they’re not taking advantage of and they know how to manage, and also divorce proofing your children’s inheritance. They’ll get it at 18 periods, in a will or a trust. We can put all of these conditions. A trust, typically a revokable living trust. All trusts avoid probate, but the instrument for succession planning and probate avoidance is a revocable living trust, can put all those conditions and avoids probate a will still go to probate. But the advantage over no will is that you can put those conditions that you can put in a trust. So your children’s inheritance is divorce-proof. They get it in stages, other conditions so they can learn the skills to deal with the wealth that they’re getting from their parents.

Pancham: Got it. Got it. So that’s six to nine months or a year period where they are going and checking on like who the relatives are and who would take care of the family. That period is shortened in the case of a will because everything is written down.

Kevin: Correct, exactly.

Pancham: Right. Right. Okay. So that’s great. So having a will is better than having nothing in that way. But you are still at the mercy of the probate code, and the probate lawyer who’s going to be charging for executing all of this stuff. So let’s talk about living trust or revocable living trust that you touched upon just now. What is that and how is it different from a will and who can have that? Is it anyone who can get that going in? A lot of people that I talked to they feel like you know, they need to have a sizable amount of the assets to even have a living trust. Why go through that hassle? Let me just have a will, and that would be good enough. So can you talk about like what is living trust or a revocable living trust? And how is that different from a will?

Kevin: Yes. So a will is an instruction to the court. Not an instruction, it’s a request. The court can actually do whatever they want. Most likely they’re going to follow the desires and the will. Somebody could protest or they have special maybe they’re an adult child. They’re running a business and they say, I shouldn’t have to wait until I’m 35. I obviously know how to use money. And I’m expanding and I could use that inheritance now and the judge could agree with them. So it’s just a request to the judge. The judge will still do what they want, but most likely because they have so many other cases that day, most likely they’re going to follow the will instruction. But it does take a couple of years and costs too much. A trust…and I think this is instructive and there is a little bit of history. Living Trust is not written in the court, but that’s how we refer to it as a living trust. It’s a revocable trust. But the reason why this moniker of living trust got attached, people would put in there will…say, please create a trust. So if my kids are minors, it’s held in a trust and then distributed over time. So in that, the trust was made upon death. That was the instruction in the will. Living Trust or these revocable trust didn’t come into living until like the 30s. The attorney actually was disbarred for a little bit and then finally determined because the only type of trust existed before that was an irrevocable trust, there was not such a thing as a revocable trust. And so everybody got up in arms. All the trust lawyers say this isn’t really a trust and only can be a trust if it’s irrevocable, and the original owners gave somebody else, the fiduciary ownership, the trustee, and someone else other than themselves the beneficial interest, so they gave up all ownership and control. That was the only kind of trust existed since the 10th century. And then the courts determine, “Okay, we will allow it to be a trust. If you set up a trust and name yourself as the first trustee and name yourself as the first beneficiary, but they will not be lawsuit proof”. And thus it becomes an issued instrument that stays alive past your death. So the trust written in a will, that means not only you’re paying a lawyer, but you’re also buying the trust at the end of the day through the trust estate. So you’re having even more cost added on. Why not do these new, fangled thing in the 30s? You have it as a revocable trust now, and you avoid probate because you use magic language. You appoint the person that will run your estate now that is not called a personal representative or an executor or executoress, but now we’re going to call them a successor trustee upon my death. And they don’t need to get appointed by the court. I’m appointing them now. And they don’t have any power until I die and my wife dies. And they can step right in. They can go down to the bank and say here’s the magic language here. The proof that I am who I am and here’s the death certificate of my brother, brother-in-law, and you’ll go on the bank accounts right then rather than waiting the six to nine months to get appointed, but not be able to make distributions until a whole two years. You can literally make distributions technically after 120 days of notice to the world that day has died. So it speeds up the process. It saves money, a lot of money because you avoid probate but you’re not creating this conditional trust that it’s going to cost the same as a living trust today. A lot of information there.

Pancham: Thank you for sharing that. So if you want to break that down, let’s do that. Yeah, no, I want to little bit so before we go into that, so this living trust instrument is as if it’s you right, there is no separate entity, so to speak, or like LLC very you have an EIN number and stuff like that this is just you, you as a person, right?

Kevin: Correct. We used to get separate DIN and the IRS said please stop because it’s confusing us because it really doesn’t exist. It doesn’t come online as the active trust in the IRS his point of view until we die. And so they said don’t give it any IN until somebody dies because we bark up that tree and it’s not a trust from our purposes. But because it’s in place and alive, it avoids probate so it doesn’t get any IN. We changed the title but for all intents and purposes, from the lay perspective, it’s still you create it and then we put it on the shelf and you forget about it until somebody is incapacitated or guys.

Pancham: Okay, great. So once I create this trust, you mentioned that we still move the title so does that mean that all the assets that I own, whether it’s my own house, whether it’s some rental properties, whether it’s my bank account, whether it’s my car, whether it’s any of those assets, right? I need to move them…not physically, like legally into these into the name of this living trust, is that right?

Kevin: That is correct. And that’s what my firm does here. We’re Blue Sky. We can do a living trust in every state of the union. We do the transfers, I think it’s not practice. If the transfers are completed, you get somebody a trust and that kind of what’s happening if somebody goes through Legal Zoom or whatever. You need to do the transfers of real property of your LLC’s that hold rentals. Hopefully, you have LLC’s. Whether you do or not, whatever the mechanism is, we do all those assignments for the bank accounts. Automobiles happen to be an exception. It was determined that once people go through this horrible process of contemplating their death and doing a living trust, they do put it up on a shelf and forget about it. And it’s determined that Americans or this society buy cars more frequently than many others perhaps, and they don’t think about it anymore. Because I already dealt with that. I don’t want to think about my death again. So just mentioning that all cars that I may own at the DMV are included in my living trust is sufficient just like jewelry. You don’t have to, you just say all the furnishings in my home, but that’s legal, we take care of that.

Pancham: Yeah.

Kevin: And real estate because it is such a valuable asset that is required by law. So after purchase property, you know, they really want to ring us up and say I’m about to buy or I just bought and we’ll get those transfers done.

Pancham: Okay, great. Great. So, going back to the Living Trust, I just want to kind of ask one question like so you said the beneficiary is the person who’s creating the living trust, right? And is there something called distribution trustee also in this or no?

Kevin: That is a term that is typically going to be used in a lawsuit proof trust

Pancham: I see

Kevin: Where the settler also wants to have some more control, but not harm the lawsuit protection aspect. So we’ll have a distribution trustee, which means a trustee that can write checks or give assets and back to the person that set up the trust and set lower.

Pancham: Right

Kevin: But investment trustee can be the original owner and it’s determined usually through a statute that we can have the original owner be an investment trustee. So they can buy and sell the stock, buy and sell real property, etc. As long as they don’t have the legal authority to write themselves a check or bring a property back to their name. They need a third party trustee for that transaction.

Pancham: Okay. Okay, great. So we will discuss…We probably should keep this topic for a different show, because I do want to go deep into that one, and it’s showing itself and it’s a lot of nuances there as well. So I guess, we, we pretty much covered everything that relates to succession planning to instruments, which is wills and living trusts, and what you recommend is that people should definitely have either one of those two, but preferably living trust on top over will. Right?

Kevin: Yes, to put it into perspective. A living trust is typically going to be between 3000 to 5000. Depending on the experience of the firm, the specialty of the firm, whether it’s a giant, you know, three floors of a glass building and the firm will be more like 5000. My firm, just to put it in perspective is 3000. That includes about 11 different documents. So it is a will that covers guardianship. It’s called a pour-over will. POUR like a pitcher, pour, pour over into the trust. So if you got hit by the bus right after you bought a property and forgot to put it in a living trust, you just emailed us saying, “Hey, I bought this property”, but then you get hit by the bus, the pour-over we’ll put that property into the trust. So that’s important. But the will doesn’t govern, it’s going to be the living trust that will govern. And that avoids probate. And when you know if you have a $500,000 estate, and some lawyers getting $20,000, wouldn’t you want to spend 3000. So even a small estate will want a living trust even though it seems like a big check to write $3,000. Certainly, if you have a larger state, you get more and more perspective because the zeros get added that means the lawyer gets more and more money. Do that trust now and it will take care of your children and it will avoid probate costs and time. It’s the right thing to do.

Pancham: Great. Thank you for sharing so much knowledge today, Kevin, and…

Kevin: Absolutely. And any of your listeners can call our firm and because they’re coming from the Gold Collar investor, we will give them a free consultation to talk about their particulars and no questions too small if they say, you know, think I’ve heard that there’s if my estate is really small, there’s a quicker way through probate and there is and we can look up their estate and tell them most estates of the union or between $25,000-$40,000. In some states, if you just own a home, you might be okay. But if you own one rental, you’re above, certainly in places like California, its $150,000 of all property, or $50,000 of real property. You can’t own your own property and avoid probate if you own property, you got to have a probate. So we can inform your listeners of the threshold. Just we want to provide knowledge, right and the more knowledge we can give your listeners, they can make the right decision any lawyer that says, “Oh, I’ve got the answer. Just trust me. I don’t think they’re doing the job. We need to tell people about the instruments we are using, and the things we’re not using and why we would choose a particular route for that client”. So they know and have faith in what their decisions are worth. Most lawyers like to think that we’re grand and glorious, we are actually just outside employees. And we need to do what you want to do. And therefore we need to make sure the client knows that they have options and that they choose and they might not choose what we think is best for them. We’re going to say, “Okay, that’s what you want for now. That’s what we’ll do for now”.

Pancham: Thank you so much, Kevin, for offering the free consultations for all the listeners of the show. We will be back after this message.

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Pancham: I ask these four questions to every guest on my show. So my first question is, when was the first time you invested outside of the Wall Street?

Kevin: Well, I started because I travel a lot because we set up in the lawsuit protection arena…we do domestic lawsuit protection of trust. But my firm is in the top two in the country in offshore asset protection trust. In 1985, the US signed the Hague Convention on trust. I was one of the first lawyers to write books about it. And so I’d love to say it was particular brilliance, but we just got pushed up to the top of the heap. And we became the seminar lawyers teaching other lawyers and CPA’s how to use these things. So I was going to the Isle of Man into the poop islands and so forth. And so every time I went, I would pick up a gold coin, and for one each for my daughter and son, and this is back when they were… it was $295. And so that was by accident. My small brain…and I didn’t do research. I recommend everybody do research. So I stopped buying when it got to $500, $600. And I wish I hadn’t. Yeah. But my real conscious leap was I have some really wealthy $80, $200 million-dollar clients that started some widget idea and built their businesses or inherited and were wise enough to keep it and everything but most of our wealthy clients and overwhelming like, I don’t know, 75% were high net worth individuals that got there from being W-2 employees, but they were savers. And they saved and saved and saved. And then they said, oh, I’ve got this liquidity. What do I do and they started buying real property. And many of them stayed in that scenario but others said, I’m either I’m making more money with my real estate investments. And so I’m going to sell my business. But most of them said, I’m going to get good managers here. So I’m going to stop whatever I was doing, if they own their own business, if they were W-2’s and other people, they got to the point where they’re making more money than their salary. And they got out it was real property. That was the key to such a diverse group of expertise. So I and my wife decided we needed to invest in real property. We were savers, we had a good deal of liquidity. We finally got the guts to do it. And to our sheer luck, it happened to be in 2009, 2010, and we didn’t have the guts to invest where everybody else said we should invest. We wanted to see it and touch it. We were very conservative, which I wouldn’t necessarily recommend now. But so we bought in San Diego County during a recession. And then we, we got about seven properties and then all sudden November know my wife works and obviously I had to run my law firm and do all the things that I did. So that’s why we were kind of so slow. We really wanted to personally go out and see the properties. We had crews that would help rehabilitate or rehab, whatever we thought needed to be done as rentals. Then November 15, came on 2015 came on and it was like a light switch. There were 300 properties on the market, it went down to 30. And everything jumped up 10%. Should have still bought a bunch because it went up 20% and just kept on going. But we have a very strong revenue income stream from these properties. Wish we bought more, but that was my first foray into the outside of Wall Street investing.

Pancham: Wow, great, great story there. What fears did you have to overcome when you first invested outside of the Wall Street? You mentioned that you’re very risk-averse and you had to gather some guts to do it. What were some of the fears?

Kevin: Well, we thought we’d fall on our face and not only lose money, but maybe we lose the whole property. You know, and this is how fearful we were. When we started, I recognized that wealthy people that were our clients doing lawsuit protection of the majority came from this W-2 employee to real estate, single-family residences, and then the real wealthy got so many of those and said, We don’t want all these doors all over town. We will buy an apartment now and have all the doors in one place. And some of those even went to syndication.

And it was this natural flow. And it probably took us eight years to finally get the guts to pull the trigger because of this fear of not knowing real property. Although we had bought a lot of homes, they were our personal residence. We had never been landlords or people owning property. So, but in every market, people need places to live. And we really like real estate and I wish we had done it 15 or 20 years earlier. You got to pull the trigger. Do a test run, you know. Just realize this is part of the learning process, but pull the trigger, and you’ll realize you probably have a few lessons that you learn, but you got to do it because that is a real way of earning money without pushing the ball. And being a lawyer, I need to create a new privacy company in Nevada or Wyoming or your home state or create trusts. If I don’t get another client, I don’t get my dollar. So rentals are wonderful, right?

Pancham: No, absolutely. All right. My question number three is can you share with us one investment that did not go as expected?

Kevin: Oh, well, yeah.

Pancham: Do you have any?

Kevin: Oh, yes. None of them went terribly. The first two, we learned a lot of good lessons. You do your research on where the community is, what the other rents are. You do need to spend a little money, do the termite inspections and do the full inspection. So you, it’s okay to spend money to rehab a house, but you need to know that up front. In San Diego county. We have this moisture from the ocean. So everybody has termites. So on one of our first ones we said there’s going to be termites. We like this neighborhood. We’d like to know before that, let’s not do that expense. And there were a lot of termites. But we should have done that upfront. We might have made, we may or may not have negotiated a little bit better price because of it. Probably not. But that was a wake-up call, do good research, right on everything that you can about the school’s neighborhood, is it up and coming? It might be quite a few blocks away. But is there a change in a neighborhood that maybe doesn’t have the best reputation but will in the next three years? Those sorts of things.

Pancham: Got it? Got it. Alright, so my last question is what is one piece of advice would you give to people who are thinking of investing in the Main Street that is outside of Wall Street?

Kevin: Yes. That first one was the research. The other is get a mentor that saved us, probably a lot of trauma. Mentor I mean, you have to either listen to podcasts, use other people’s experiences and start to learn those lessons. But in this case, it was an acquaintance of probably one of my two best friends. We had known him for a while, didn’t know what he did. And I was talking to my friend about we need to pull the trigger on real estate. He had pulled the trigger about three years earlier. He’s a biologist engineer, kind of guy. And he was investing in Michigan and Alabama and all those places and I said, I can’t do that. And then this guy that I had kind of socially known for a while. He said he had gone through this route 30 years earlier where he was single-family residences, and then too many doors all around towns. Now he has like five or six apartments and living the good life and has managers. And so I picked his brain and he was gracious enough to after we narrowed down some houses, he was gracious to come with us and he said this guy you know, has great bones this that the other you want in the San Diego market. Before he had formulas that he remembered he said, I don’t know if they apply to today because single-family residences that we did, but we wanted the formula was a minimum of two bedrooms, but usually three, and you absolutely have to have two bathrooms. This will be for the exit strategy. At the end of the day you want rentals, but at the end of the day, you want something that somebody wants to sell as and nuclear family home. And so those are the minimums. And so the ones that I had grouped, some of them didn’t meet that so that was nice. Throw those out of my formula, and I took him to a couple and the one that we ended up buying and he said this has great bones. What is it? There’s a big area right behind where my offices are here in Solana Beach called Rancho Santa Fe, their giant houses back there. So when they do granite counters, they have to buy so much that there are always remnants. So he gave me this tip, never go out and buy granite that’s at the regular price. Do the slag pile because there’s always going to be some here in San Diego, which were a fraction of the cost. And we could put granite is not only in the kitchen but in the bathrooms and everywhere else. It really just enhanced the look of things. So he gave me all these little tips that were a big, big hurdle up. It helped us a lot. So nice.

Pancham: So you would say research number one and having a mentor who has done this before can hold your hand through it in the beginning. Great.

Kevin: Yes. And something like the podcast and using something like you, Pancham. Someone who has already gone through these things that makes all the difference in your success up front.

Pancham: Great, great. Thank you, Kevin, for your time today. I know it took a lot of your time and you know sharing your knowledge with our listeners, I’m sure you’ve added a lot of value. Thanks for coming onto the show.

Kevin: Fantastic and look forward to getting into the protection of your wealth, not just the succession. Do that anytime you wish.

Pancham: I hope you got value out of the show. We will do another show to go over the asset protection side of things and talk about irrevocable trusts and how they are different. Listeners, if you’ve learned something from this I want to know about it. Do let me know by emailing it to me and write to me at p@thegoldcollarinvestor.com I repeat p@thegoldcollarinvestor.com. I love seeing people getting benefits out of the shows and I would love to hear from you. Thanks again. Thanks for listening. This has been Shah signing off until next time, take care. Thank you for listening to the Gold Collar investor podcast. If you love what you’ve heard and you want more of Panchen Gupta visit us at www.goldcollarinvestor.com and follow us on Facebook at the Gold Colllar Investor. The information on this podcast our opinions as always, please consult your own financial team before investing

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