What It Takes to Achieve Financial Freedom
The Investor's Guide To Joy Episode 40
In this episode of The Investor's Guide to Joy, Tino Madyara, a seasoned tax professional and real estate investor, shares expert advice on tax strategies for business owners and investors. He highlights the importance of aligning personal and business tax plans to maximize savings, avoid surprises, and navigate complex tax structures. Tino also offers a success story where proactive tax planning saved a business $500,000 during an acquisition, demonstrating the power of strategic decisions in tax management.
Tino Madyara discusses common pitfalls in real estate partnerships, particularly around tax structures and depreciation, and stresses the need for business owners to work closely with a tax professional. Reflecting on his own real estate journey, he encourages investors to find a strategy that aligns with their personal values and long-term goals. This episode provides actionable insights into tax planning, real estate investing, and making informed decisions for financial success.
Highlights of the Podcast
00:08 - Introduction
02:40 - Business Owners' vs. Individuals' Tax Strategies
04:14 - Challenges for Smaller Businesses
07:50 - Success Story: Tax Savings in Acquisitions
09:50 - Advice for Business Owners
12:59 - Real Estate Partnerships and Common Mistakes
15:10 - Working with a Tax Professional
22:26 - Timeline for tax planning
23:50 - Choosing the right tax professional
25:17 - Tino’s real estate investment journey
30:05 - Due diligence and market risks
32:40 - Mindset for investors
Paul Graham [00:00:08] Hello, everyone. This is The Investor's Guide to Joy podcast. And my name is Paul Graham. We are going to go through a number of different opportunities for you as an individual to understand more about the tax code, your investments, and ultimately what that means for your taxes and the income that you generate. Oftentimes with CPA and accounting type professionals, we don't get into the mindset of a chief financial officer type perspective. So Tina and I are going to go through a lot of questions related to that and investing. One of the biggest takeaways from today is we're going to go through when and how limited partners may not able to actually deduct against your active income for the investment. This is imperative because every just about investment that I see opportunity is going to say that you can offset your taxes. This is not always the case. And so we also go through the two things that you need to do. If you do have the conversations with these funds or these syndications that are going to give you the passive way to ultimately offset your taxes. If you're a limited partner who's looking to invest to offset your taxes, oil and gas is the best, in my opinion, way to do that. Reason being, that is the highest depreciation, typically 80 to 100% and has passive cash flow. It also is, in our case, of a way to viably offset your taxes. Keep in mind, not all oil and gas or all real estate opportunities are. And one of the most important reasons of why we go through that on today's podcast or information will be in the show notes. If you're looking to invest in gas for 2024 to offset your taxes. But for now, let's get into the show. So today, Tino Madyara is going to go through a number of items related to businesses and tax savings investing and even being a real estate investor himself. Tino, thanks for being here.
Tino Madyara [00:01:50] Hey, thanks so much for having me on Paul. I'm excited to have a conversation.
Paul Graham [00:01:53] Yeah, you bet. And I mean, we're in Q4 of 2024. You know, most business owners are hopefully not ignoring, you know, your emails because now is definitely the time to understand like what has happened in the year. What are we looking forward to next year? What sort of tax saving strategies we should consider and look at for I mean, really the business owner clients like you have. One thing I want to really go into is like, why does there tend to be, you know, individuals who are these business owners? They tend to only focus on investments in tax saving strategies for the business and not necessarily themselves. And they tend to not like overlap. So I wanted to give you an opportunity to talk more about what strategies you're seeing that like business owners do and individuals do and see like what, if any, overlap you tend to find with those things.
Tino Madyara [00:02:40] Well, I would say that there is a lot of overlap from my perspective. When I'm serving a business, I still view myself as serving the business owner themselves, even though the name that goes on the engagement letter on the tax return might be Paul Graham, LLC. At the end of the day, there's a person behind that business. And and so ultimately those two things do work together hand in hand, especially just working with a lot of pass through entities right to where whatever there may not necessarily be a tax impact on on their business. It ends up flowing directly to them. So in that sense, the two do work very well together in terms of thinking from your business side and what you're doing for your on the individual side. You know, it ends all melding together.
Paul Graham [00:03:29] Yeah. I mean, it's fascinating to uncover what, you know, options, you know, they have. And I've also found like the difference three, six, seven and eight figure business owners, they also either know or, you know, do some of these either planning services or, you know, financial, financial. I just like understanding almost or even, by golly, just like recognizing that, you know, it is the end of the year. You should be understanding, like what your tax implications are so that we could still manage of things like, you know, within this year. Talk to me more about because you do, you know, some CFO services, which is, you know, unique in some ways, you know, considering your background, like what have you found that businesses are experiencing and maybe even like avoiding?
Tino Madyara [00:04:14] I would say for the most part, your smaller business owners, let's talk probably 500 or some $500,000 businesses. The the focus is very much on the on the taxes and that that there's really two sides to think of it like firstly like what I said is like most of those businesses are pass through entities and we always hear about when you're starting a business, try to don't just build yourself another job. So really within that range where businesses are still kind of within that, those early stages or even if it's a mature business that's within that income range, a lot of the time it is very much focused on the owner. So it's an owner operated entity, not necessarily a large staff. So really well for people of that size, normally they just thinking about their finances within the scope of their taxes. So a lot of people may not necessarily keep good financial records. It's really an afterthought that, you know, we're coming up once we're coming up to the end of the year. That's when people start to let me start, you know, putting together my financials. And a lot of the times, to some people, it's an after the end of the year activity that they start to to engage in when they start thinking about their taxes. And so at that point, you know, you're putting together your a record of how you did for the previous year. And, you know, for the more mature businesses, you understand that there's there's a lot of good financial information that you have at your disposal. And let's put that information together throughout the year to be able to make some some business decisions around it. So and that was really what led me to now starting to focus more on the fractional CFO services, is that, you know, just as a tax professional, you know, you'll find a lot of people there coming to me strictly looking for tax savings and and that's great that we can definitely do that. But there needs to be a little bit more of a forward looking element to it. And in order to be looking forward, you need to know what's happening right now. And, you know, you take your track record, what's happening in the past, what's happening right now, what are the future conditions that you're expecting? And then then we can start to make projections for the future. And so so very much for for taxes. Absolutely. As you're doing you or you as you're working through like your day to day out transactions going on, maybe some acquisitions, just things of that nature. You need to be talking to your professional throughout the year. And the larger, larger companies I work with are a lot better at doing that and having like a dedicated team throughout the year to make sure that everything is going where we need it to go. And if it's not, what are we doing about it to correct it.
Paul Graham [00:06:55] And what are you defining as like larger company? Are we talking like seven, eight figure?
Tino Madyara [00:06:59] Yeah, for sure. A seven figure is like once like $2 million and up. So I work with some construction companies that'll have like just just because of the nature of the type of work that they do. Like those revenues will be higher, right? You start getting into eight figure businesses and and at that point, you definitely want someone watching over this. And more than just an external CPA, I start to advise people at that point you have someone internal that's at least taking care of the day to day, day to day, like administration, right? So your accounts payable, you know, bills need to be paid, but revenue needs to be collected. So so, yeah, yeah.
Paul Graham [00:07:35] One thing I'd love to learn is like, what is what what's like your biggest success story? Like, what would you say is like the most that you've been able to save or create in terms of value, like for, for a company? And then what size company was it?
Tino Madyara [00:07:50] Well, when you say value, that's always a tough one to nail down, right? Because there is different people value different things. And like I said, so sometimes like from a tax perspective, right. The biggest thing that I'm looking for there is like, let's, let's, let's decrease my tax liability as much as I can. Other people. It might just be because I've also done some services or helping with business acquisitions. And so I would say I'd one example was looking at helping someone with a with a transaction to try to acquire a business and whatever. And so let me back up a little bit through the process of that. Right? We'll do a quality of earnings review just to make sure that whatever the seller is presenting, as you know, these are their numbers. Let's make sure that actually has some legs to it and they're not pulling numbers out of thin air. So you go through that information and then then based off of that, obviously is what you determine your value based off about the net operating income of the business. So I had an instance where a guy was going to buy a company and it was going to be at around I think the multiple was sitting somewhere like 4 or 4 and a half, four and a half multiple of seller discretionary earnings based off of the information that they had. And then after we do a positive earnings review, you started looking at those numbers and there's a lot you have to take off, a lot more expensive than they're reflecting to get down to the actual number. And so really at that multiple with this new information, this new seller, discretionary earnings number, the selling price drops significantly, probably about by about $500,000 of what they were what they're anticipating purchasing. So I would say like that was a success story in that there's no actual dollars that they no tangible dollars that they can see the where this amount was decrease on their tax liability, but potentially avoiding overpaying for a business.
Paul Graham [00:09:40] Yeah that yeah that's certainly fair. What would you say something that you wish like more business owners knew as it relates to taxes.
Tino Madyara [00:09:50] Specifically on taxes? Well.
Paul Graham [00:09:52] I'd say let's start with this first.
Tino Madyara [00:09:53] Yeah. So I would say people within the real estate industry, people love forming partnerships. And there's a good reason for that because they're the most flexible entity that you can have in terms of the restrictions. The tax guidance. And I find people maybe doing some things that are too sophisticated for for for what they're actually trying to accomplish. I'll give you an example, is people form a partnership and they they'll have like a different capital allocation ratios, different profit allocations, different loss allocations. And you start to get pretty deep into the into the tax code when you start doing things like that. And I'll talk about like GP's for example, where we all know about the, you know, if you're a real estate professional being able to take some losses against your, you know, to be able to decrease your income. That's the biggest way that real estate professionals will biggest advantage of their on the tax side. Now granted, we all know that you're supposed to be actively participating within this real estate. And, you know, there's there's some other parts of the tax code that we can dive into to where we can straighten out what the all the actual rules are. But you'll find some people maybe improperly assuming what type of depreciation they can take. So they may think that they're they can take all these extra losses, but they may not necessarily be able to based off of their either their participation, material participation or specifically the amount of capital that they've invested in there. Right. So there's some rules to where you depending on your basis, you can start to take losses in excess of that basis. So you might project that you're going to be able to write off, have like a $500,000 loss at the end of it where you don't have that much basis within within that property. So, so, so tax partnership. Taxation for sure is the biggest area. And what I was alluding to earlier is like you then start seeing people doing things like this on a maybe it's a single family residence. There are 200, $200,000 house and now you're putting in some of these complicated partnership formation in this space. And from my perspective, right, I'm I'm going to have to follow the tax code regardless of whether it's a $200,000 property, up to $2 million property, and just the complexity that adds to your tax return to where maybe there's only about a $4,000 benefit, you know, all things considered. Yet you've put all these extra complicated things and this carries in there and you're, you know, so, so people will make it more complicated than it needs to be, where you might just be better off just going with a more simple structure and, you know, just play, you know, if you're playing with smaller amounts, doing some of those extra things may not benefit the dollar amount that you benefit on. There might not be as great as as what you would assume. And just because you've seen a larger this you're seeing because you've seen that work well on a larger entity may not necessarily translate for for a smaller for smaller properties.
Paul Graham [00:12:59] Yeah that's certainly fair and sometimes tough to judge, like when to use what strategies. But ultimately, you know, it's talking to the professionals to see what they recommend and what options are what have you. You're talking a little bit about, you know, syndicators and, you know, the general partnerships. What would you say is like a big like just like unexpected thing or maybe like a myth or something like that that you kind of hear within the within kind of that space.
Tino Madyara [00:13:24] So I would say more on the LP side. So syndicators will go out and they'll advertise depreciation as one of the benefits for their investors. And like as a passive investor, you can't take those losses against your your active income. So this may be marketed to people as, hey, there are all these great tax savings. But it's it's it all depends on the individual as to whether they can actually benefit from those tax savings. So if you have a lot of other passive income that you need to offset, then like by all means by doing a syndication, that'd be a great way if there, you know, if there's enough depreciation there for you to take to offset that. But a big misconception is that someone would go out raising capital and they're pitching tax savings, not knowing what what the person's tax situation is. And I I'm then working with the LPs where they're expecting to be able to take these huge deductions on their tax returns, but they can't because, you know, they haven't met all the criteria. That's to be able to take that deduction.
Paul Graham [00:14:28] Okay. Yeah, I mean, that's definitely unfortunate thing. And it's one of those like, well, you can. Right. I mean, by, you know, fundraising in oil and gas, you know, you can take up to 100%, but there are some, you know, stipulations within that people need to those stipulations just for those who are curious are in terms of like amount invested in that and also depends on the project. And we had one project that had 83% depreciation rate, which is more than real estate typically, but that doesn't mean it's, you know, guaranteed 100%, but it is, you know, up to 100. And there's a number of different small factors, at least within the, you know, type. I mean, do do cost segregation studies get passed to everyone or is that the same? Thing of like, it just depends on the individuals.
Tino Madyara [00:15:10] Yes, all of that will get passed through to the individuals, but it might just get suspended on there. So it'll just be sitting as a suspended loss that you have to take in a future year. So either when that property gets sold, you get to take that. So you're not paying any capital gains taxes, right? You can use that to offset it. And then we can go into a whole nother discussion about recapture as well that people aren't always aware of, of that coming back to bite them. But but no, you you absolutely it absolutely does get allocated to everyone But but again it's like do you have the ability to actually to actually take that loss if you're 100% of the time, if you if you're just passively investing in an LP syndication, you would not you cannot turn around and just deduct that against your W-2 income. And and as educated as I think the investing public is, it's I'm still astounded the amount of times that people are not aware of how that actually works.
Paul Graham [00:16:03] Yeah. It's as I as I've raised capital, I've been in more of these circles. And yeah, it's it's definitely fascinating and it's in some ways tough to be like, hey, like you aren't actually doing what you think you're doing or it's something that, you know, in some ways we are competition, but also not like, you know, oil and gas is incredible way for, you know, tax saving type of year. It can also be used as like a primary investment vehicle. My personal viewpoint is more of like do the equity plays, right? Real estate, PE, you know, things like that, and then use oil and gas as a tax saving grant that there's certain types of oil and gas that is advantageous for tax savings with working interest, not just well, I mean, you still get the tax savings, I guess, for, you know, poking a hole in the ground, if you will. Right. Whenever you either get cash flow or you get nothing. So that is coaching. But yeah, knowing which type of oil and gas is is beneficial just to kind of what you're saying too, of like, you know, within real estate, like what type of investment and then also based on your situation. So it really seems like, you know, having a tax professional who is not only knowledgeable but is also then doing like reviews and such, you know, with you is going to be imperative. Otherwise it just seems like it's going to be a, Hey, I did this and it's like, well you, you know, could in or should or, you know, you're not going to get this sort of thing. And it's like, well, how do I get my money? You just all these kind of like issues.
Tino Madyara [00:17:20] Yeah. So, so sorry to cut you off. I was going to say, like, that's where the importance is of meeting with your, your tax professional or whoever you using on, on a more frequent basis. Right. And have those conversations before you make the investment versus now coming in. You know, if I if I'm getting all this information, you know, in February of 25 and you're thinking that you have these huge tax savings coming, if we'd had that conversation in August or whatever it is that that the investment was made, we can we make those projections out and see, okay, you if you do X, Y, Z, you can then benefit from this Y, you know, and here's the list of criteria of things that you need to do to, to be to actually be able to benefit from it. So and I get it just because, you know, we're in the chat chat stage and information is readily available and sometimes just knowing what is the right question to ask because you can. Right You can. There's confirmation bias. So you can find you can find the answer that you're looking for just by going out and doing some research. But there's a lot of other considerations to take into account, too.
Paul Graham [00:18:27] Yeah, let's go down the path of talking about, you know, recapture. I mean, specifically for those LP's from like a residential side though, you know, first as we iron that out, I mean, really, that's just going to be the rule of two and a five, right? Or it's going to be, you know, some sort of 1031 exchange if it was, you know, turned into an investment property or it's just going to be, you know, you sell it and you kind of have, you know, the capital gains. Is there anything to add, at least on kind of the residential typical like homeowner side before we get, you know, kind of more complicated and bigger?
Tino Madyara [00:18:57] I mean, it would work the exact same way, whether it's a residential or it's a commercial property on your recapture. Like if you if you've done a cost segregation on it, you're taking depreciation which which you're required to take depreciation. Then when when that project goes to sell or when you're doing a 1031 right? It's basically like if you had taken this, you taken these deductions against it at at an ordinary rate and now you're going to sell you can then get that same benefit and a capital gains rate. So they want to capture that at the ordinary income rate to be able to make sure that whatever taxes that you're paying are, you know, that you're not underpaying when that property is sold.
Paul Graham [00:19:42] Yeah. When when they're specifically in syndications. Let's go multifamily because multifamily is like the biggest and obviously then most invest in it, that big biggest being in terms like market share, you know, what should people be considering? What should investors be considering like before they make the investment while they're doing the investment or just have it right? And then also once the investment is disposed of and ultimate. They sold as well beforehand.
Tino Madyara [00:20:08] I think this is due diligence that you need to to make sure that you're doing on the actual investment itself. Look at what returns, the look at what returns are being proposed. And and it'll say, you know, depending on how it's presented right there would tell you if you should expect a lot of that return on the back end if they're thinking okay this is this is more an equity play to where, you know, we're going in to fix this thing up and it's going to be a big there's there'll be a big capital event at the end of it where that's where you get the majority of your return. Or is it something where you'll be expecting to get more incremental returns, like higher returns like threw out? Because, you know, it'll just be presented as like you're, you know, as what your final returns are for the project. Right. But understanding like where you you know, what exactly your return is going to look like that that's those are some good questions to be asking ahead of time to make sure, you know, you you know what you're getting yourself into then like during I mean, once you're in there, you're in there is so a lot of a lot of the pain is taken care of, you know, ahead of time. Right. And because we all know more recently have been because of what interest rates are doing, there may be some additional capital calls that are required in there. And that's, you know, I don't know what else there is to do, like from the investor standpoint at that point. Right. You just kind of got to decide, you know, and it's really dependent on the on the JP's on what avenue they're taking and how to, you know, whether they're refi or selling or, you know, what position you're going to be in. And then when it comes time to sell, when that money is coming in, we always try and like time that to be able to. But if you're expecting that there's a sale that's happening this year and, you know, try and project out as best we can what we think those returns are going to be, how much how much your percentage ownership is going to results, what type of gain you're expecting from that, and then try to do some sort of start looking at some some planning that we can do ahead of time to make sure that you can counter that. Either you're going to go reinvest in something else. So that's probably the most common. But, you know, just looking it really depends on on the individual as to what else they have within their portfolio to do other business that investments to make sure we can do what we can to minimize that that return.
Paul Graham [00:22:26] Yeah, you bet. What what would you say is like a reasonable timeline to have that kind of proactive conversation? Like we're talking like two days, two months?
Tino Madyara [00:22:36] I would say months for sure, because the beginning.
Paul Graham [00:22:39] That's right. Hey, if we think, you know they're going to sell this year, so be it. But definitely every year operates differently in some at least that I've talked to in the back channels, like every other week, they're like, man, I should like maybe sell it. And it's like, anyways, just kind of crazy. But yeah, yeah.
Tino Madyara [00:22:54] Well, yeah. And yeah, I would expect that the GP's have enough communication with their investor base to where, you know, you're keeping up to date with what's happening within your investment. So there should be at least some at a minimum quarterly reporting that's happening so they can see the performance, but periodic updates as well as to what's going on in the market. If people are spooked, you know, for the most part, I see that there's at least some sort of communication where they know or if it was supposed to have a three year hold and I would know that we're in year three. Something's supposed to happen this year. We're expecting a refi, but it doesn't look like this could happen. So there will be some sort of communication and you'll be aware of what's coming down the pike and having that conversation with with your tax professional to prepare for that is important.
Paul Graham [00:23:39] Yeah. What would maybe be like the 1 or 2 piece of advice you would tell people on like finding a best, the best tax professional like for them and just in general?
Tino Madyara [00:23:50] Well, I mean, always ask for the person's experience. I think there's a tendency within our industry of, you know, CPA just thinking they know it all. I'm very clear when there's stuff that's outside of my scope, I will tell you, in international taxation, for example, if you're if you have dealings outside of the U.S., you know, I will happily send you to someone else that can better serve you because you just need experience in doing those things. So making sure that your professional has some kind of track record and has been working with with clients similar to you and you can sort of asking them like very specific questions too, right? Like if you like example, what we're talking about right now, if you tell them, hey, there's a there's a liquidity event that's happening. So we're expecting X, Y, Z, you know what, what would you recommend or what have you done with others in these situations So as as specific as you can get? Because if you just ask them, do they work with real estate investors, you know, 99% CPA is a going to say yes. But the more specific you can get about your situation and ask those questions to them, that will help you determine if if that's the right professional for you.
Paul Graham [00:24:58] Sure. Yeah. One thing I'd also like to expand on is like your real estate investor yourself, which I tend not find as like. Civic. So can you talk more about what your journey as has been? What do you have now and then what you also like and don't like in terms of investing, at least for, you know, your yourself?
Tino Madyara [00:25:17] Yeah. So Will Estate Investor is a generous title to give myself. You know, I have two single family properties that are rentals and just long term rentals that we have. And you know, so like my my passionate love for real estate, you know, when I was working, you know, before I started my firm and I worked for forever, a large public accounting firm. And one of our big clients was a big, like real estate investing company that had, I think, 18 billion in assets under management at that time. So and I you know, when I kind of when I started work working, you know, working professionally, it just seems like it was just a different world, right? I think as accountants, sometimes we just become numb to what numbers mean. So you'll see these these big investors going out. They bought a $50 million property, $100 million property. And it just seems like an outside world where this is the stuff that the super wealthy are doing. But then when you start to break it down and realize, no, they're you know, people are doing this even on a on a smaller scale, Like that's what I decided. And I'm looking at these looking at these big funds, like doing amazing things in real estate. And I decided, you know, let me try and participate within this instead of just being a bystander. And so that's when we, you know, we purchased our properties and and then, you know, like after the second purchase that you run out of capital and you're like, okay, where am I going to get the downpayment to make this next purchase? And so that was really where it kind of fizzled out. But, you know, I do have plans to keep investing in the future. I've entertained some some syndications in the past and never actually come to it. We've pulled the trigger on it. But yeah, so I mean, so so that's my investment journey. And so a lot of stuff that I would do like for myself, like personally, I try to think from my perspective as an investor, what would I want? What would I want happening for me, my taxes, what would I want from my tax professional? And I sit in that seat first and then that's how I try and serve my clients.
Paul Graham [00:27:13] Sure. Yeah. What type of syndication opportunities have you looked in in the past?
Tino Madyara [00:27:20] There was a multi families that were I'm in the San Antonio, Texas area, so there are some multifamily syndications where they're kind of going through like a capital raise. And you know, you look through it and you just weren't ready to pull the trigger on it. You know, the returns seemed so, so and so. This was after we made our first purchase of our first rental property. And we were trying to say, should we go and just buy another single family property or should we just go with syndication? And so we ended up just buying another single family property. And in hindsight, that was probably the best thing to do just because the timeline of it was kind of a 2122 when like the interest rates were starting to do this number. So I just imagine that with with some of those some of that debt coming due, I'm not sure how that those, you know, those properties are actually performing right now. Whereas like in my single family, I'm just sit in hold you know let's hold tight there's there's rents coming in so I'm okay I don't have to worry about a refi or what the markets are actually doing. Yeah.
Paul Graham [00:28:24] I mean, fixed debt is definitely different, right? Yeah, it's definitely one of the. Yeah, I have a whole kind of course in education and even soapbox on this of just like as investors like scale different stages of income right? Like how they should go about thinking about finance, the types of things they should or could invest in, but also the nuances. Right? I kind of mentioned some oil and gas stuff, but you know, to your point, you know, I'm just a bigger advocate on, you know, fixed it for these types of properties because there's just one less factor, right? Like we can't predict the future. And ultimately, I've just seen within syndicators, it's like, yeah, we're going to be here, and then the appreciation is going to go like this and the rent is going to go like this and all the people are going to move are going to go like this, and everything just keeps going up, you know? Right. And, you know, there's too many factors, too, to be at play. And I've heard of even operators, you know, lose properties not because of their, you know, operation, you know, experience or what have you, just like the market this the debt that, you know, there's all these things and they're you know going for pennies on the dollar and you know investors are then kind of hitting that. So certainly a good thing to keep in mind as people are growing are there's those some nuances that, you know, could really keep them from from investing. And then to your point, from investing or to investing and then, you know, with that again, what was that then outcome. So yeah, it seems like you made a good decision, especially 2122 Yeah, that's a that was a good, you know, Texas appreciation ride. At least it was for me. And so I'm I'm looking at taking that equity and then investing that so it's going to give you punch. But no, that's great. What other things would you say from like the LPI or GP side? Have we maybe not covered that you think people should like Absolutely know as it relates to investing?
Tino Madyara [00:30:05] I mean, we could go down a couple of rabbit holes, but I mean, I think just for the most part, it's just like things are unexpected. We you know, we always say like past performance is not indicative of a future returns. And I think for a lot of us, I was in college when like the 0209, you know, the great financial recession happened. And so it didn't really I didn't really fully experience what that meant. I mean, that the extent of it was, you know, I was I had a finance class, but we had a kind of managing a portfolio. And, you know, we meet weekly to make investment decisions. And so the was doing this number of the entire time. So it was just, you know, it's fake money. But so really, this downturn is the first time in at least like my adult life seeing an actual downturn. And those real estate returns do not just be not just be up into the right. So really, the important thing is to do just more due diligence about what exactly you're getting into. And I think this has been a good reminder to people that it's not always up into the right and there is some risk associated with it. And but I understand the challenge that that there is a challenge for LPs to be able to properly do that valuation because you're you're really only subject to whatever information that that a GP is providing you. Right. And so I think at that stage it's, it's comparing, seeing like what, what other, what other if it's a fund or a syndication are you getting into, what are they doing other similar properties that compare. Are there two properties that are maybe closely located and they're both very their projections look very different. And, you know, it's it is a challenge because it's not like the public stock market where you can just clearly see what's been happening. And, you know, there are a lot of analysts that can help you come to that type of conclusion. So it's just a difficult time for people right now. And there's it's just hard to know what you're getting into.
Paul Graham [00:32:11] Yeah, No, certainly that's a good perspective. So this is definitely like the investor's guide to Joy and appreciate the insights you gave us that people are kind of left out in the dust and doing deals that don't really align with them or not, you know, being within their taxes or even just, you know, learning what that could be. What would you say you would put in this guide in terms like, you know, a mindset, a quote and some sort of mantra that you think that really resonates with you and and your journey?
Tino Madyara [00:32:40] I think everyone needs to understand what what lane they are going to be in and just try find what is true to you. If you're going to go down the business route as your way to generate wealth or it's going to be through real estate, you know, just find what aligns with you and then pursue that instead of trying to copy what you see others doing. I think that's that's where we we end up getting in trouble sometimes is because because something is working for someone else, then it's automatically going to work for me. I think that the biggest thing to get an understanding of who you are, what matters to you most, what type of life you want to live, and then from there, make the determination of what you want your wealth journey to look like.
Paul Graham [00:33:28] Yeah, I would definitely agree. It's the idea of like understanding about yourself, where you're going, what you want. You know, I mean, I have a three year vision template that people can download and fill to understand where they want to go and those kind of questions. Because otherwise, yeah, we're just doing things that may not align with us and we may not know that until we get there. And some of that certainly like, you know, growing and trying, certainly. That's a very good perspective, especially from what you said from your experience. So thanks so much for being on sharing your insight. And I'll go ahead and, you know, link in the show notes where people can find you. But, you know, I had a chance to learn a couple of things today, so thanks for sharing.
Tino Madyara [00:34:04] Thank you so much. I appreciate the time.
Paul Graham [00:34:05] Yeah, you bet. Hey, one last thing before you go. I wanted to share my mission while on this earth, and it's to help educate investors about different opportunities, share mindset tips on how to change our perspective and different things to really experience more joy in our lives. If this resonates with you at all and you enjoyed this episode, please share it with friends and others to help grow the community around. The Investor's Guide to Joy. Leading a five star review also helps grow the show and get connected to more people and share our experiences along the way. Thanks so much for joining and can't wait for you to listen to the next episode.