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[00:01]
A
And so I thought, well, I'm just gonna be an investor. I'm doing the note thing, the seller financing. But I want to connect with real estate agents that maybe can play with me in this space, right? I'm trying to figure out, I'm in a new place, everything, how am I going to start playing in this market? So I started talking to realtors, every single one of them. You know that that doesn't happen here. Seller financing doesn't happen here, not in this market. Well, over the next few years, I proceeded to buy two personal homes and in this area, at least a couple of investment properties just in this local area with owner financing and without a realtor because they're a liability unless they have. Have their lights turned on, right? You, you actually can't see what you don't believe is possible. It's weird like that. Welcome, Everybody. This is August 4th, the first property in PA of this month. And I can't believe how fast the year is going. And I want to make an announcement. And a lot of you know me already, dawn and noqueen.com I started that back in 2008, that, that brand, or maybe even earlier 2007. But this is where we talk about owner financing, real estate and note investing. And those all go together, right? They all connect together. But most professionals and most people aren't aware of it. And even if they understand the mechanics of seller financing, they almost never know that there is a secondary market for notes for private notes, the same way that the bank sell their loans right up to Fannie and Freddie. There's a private market for these. And lots of professionals, even very sophisticated real estate investors actually don't know that. They don't put together in their mind that seller financing and note investing, like, there's this market that goes together. And even if they do know that, unless people buy and sell paper notes, deeds of trust, mortgages for their own portfolio, they really don't know what that note is going to be worth on the secondary market or how to reverse engineer the numbers to optimize the financial outcomes. And tonight I'm, I'm focusing on what I'm calling the landlord liberation method. And actually, as an announcement, I'm going to be shifting. There's going to be one property and paper life per month and there's going to be one landlord liberation method because there's a lot of interest and a lot of people that need the very most basic of concepts around this tax exit playbook, right? It's, it's a tax advantage It's a way to reduce and, or defer capital gains so that you can have the best possible chances. Because people, they're, they're just sick. They might be sick and tired of managing their properties, but they're not going to write a check to the IRS for the third of what they've built. They're just, they're, they're going to look at the number, they're going to go, okay, we'll just grind on another year because there's no other way. We're not going to sell and take that tax hit. They never hear, most people never hear about the installment sale, about selling over time. That's the piece that I just want to raise awareness. And so I've been doing a little bit of a campaign and there's a lot of interest in this. There's a lot of tired landlords out there that really are looking for a solution. Taxes and insurance are up, maintenance is up, they're getting older, the wife doesn't want the, her husband climbing on the roof anymore, things like that. And so I've had a few conversations as I've gotten the word out. I invite people to schedule time with me to talk, and they're kind of like, oh, wow, I never even heard this existed. So I'm going to share one of those conversations or the results, his situation and, you know, kind of what we determined. Of course, I am not an accountant, as tax advisor, cpa, but there are certain generalities where I can use basically AI to say, let's just get close, right? Let's get an idea. If, if this person sold for cash, what would their tax liability be? And if they sold with, let's say, 20% down and use the installment sale, what would their capital gains be? It's my belief, and correct me if I'm wrong, that depreciation recapture, there's pretty much no way of getting around that in the first year of the sale, even if you do the installment sale. But the capital gains that we're talking about, and I was just starting to say before I announced the recording and this call is that, you know, when I first moved to Carson City here in Nevada 14 years ago, I let my license go because I was a broker in California for a number of years just with myself. I didn't have employees. And so I thought, well, I'm just gonna be an investor. I'm doing the note thing, the seller financings. But I want to connect with real estate agents that maybe can play with me in this space, right? I'm Trying to figure out I'm in a new place, everything, how am I going to start playing in this market? So I started talking to realtors, every single one of them. You know that that doesn't happen here. Seller financing doesn't happen here. Not in this market. Well, over the next few years, I proceeded to buy two personal homes and in this area, at least a couple of investment properties just in this local area with owner financing and without a realtor because they're a liability unless they have. Have their lights turned on. Right. You actually can't see what you don't do believe is possible. It's weird like that. And me, since I'm a freak and this is my whole world, I see everything as, oh, this is seller financing. This is terms. This is something creative, right? And so I'm really like, blown away that most people. So because I believe in it, I find it and I see it. And as an example, I'm getting ready to help a longtime client sell two properties and exchange. Not exchange, but move into another personal home, a bigger, nicer one in a nicer neighborhood. And apparently I wasn't the one that presented the offer to the seller. It was another agent that he's worked with, has given him a lot of landscaping work. And so she said, okay, let me. She was unsuccessful in getting a listing from the guy, but she, you know, made a buyer broker agreement with my landlord, my landscaper guy, and submitted an offer. Well, he rejected it flat without even a counter or anything. And so I was like, hey, you know, they have their, their legal arrangement there. I don't really want to get in the middle of it. But then he told me later, okay, I said, well, what happened? Did you get the, you get the property? And he goes, no. And anyway, so come to find out, I just said, let me, let me have the phone number, right? Let me ask. Phone number. I'm going to call him. I'm going to call the seller. And so we probably talked for an hour this last weekend. And I said, so what's going on? You know, what are you really doing? You really want to sell? Because, you know, I'm just curious. I know this guy really wants to buy your property, and he's a good buyer, he's a strong buyer. He, you only have one side of commission. You only have two and a half percent commission. He's not going to ask you for repairs. He's not going to ask you for a credit. He's not going to ask you for 2% to buy down his loan, right? I said, it's not. He goes, well, I just think I can get more. And I said, are you kidding me? He goes, well, what do you think? I said when I looked at it, I think you could get 8 or 850 somewhere in that range. Well, the other person, she told me I could get 900 to a million. And so I was offended when they just dared to offer me, you know, 800,000. I go, that's a great net offer. Anyway, so since I wasn't really looking for a commission, we were just having this really frank conversation. They were like hitting up him upside the head with the two by four going, dude, it is not the selling price, it's what you walk away with. You've got a mortgage on this place, it's vacant, you're not coming back. You tell me you want to buy Exchange into something for your kids down in San Diego so they can have cheaper rent than they're paying now. So like, what? What is it? He goes, oh, anyway. And I said, well, are you open to the owner carry? And he goes, yeah, that was the interesting thing is that when you texted me, I looked up your name and I found out I found your note queen site. And he goes, so you're all about that seller financing, right? And I go, yeah, I mean, that's kind of the world I. The lake I swim in. And he goes like, yeah, I was really wondering about that because maybe I'd want to do that, you know, because if he can only come up with such and such, maybe I'd be willing to. To carry the Last 1 or 200,000 or whatever he needs to get me my price on it. So I was like, here's somebody that you would think no. He said no to everything. He didn't counter. Nobody asked him. But just because he knows what I'm into. So like every person I call, that's fun to me anyway, just, just an example of, Please just. I'm just trying to create more awareness of that there's options out there. And actually if he doesn't do a 1031, he wants to do more of an installment sale with at least part of the funds or he said, gosh, I'm even willing to leave the loan in place and provided it's a good loan, that's another option as well. Although I doubt the other agent would probably be comfortable with that. Any questions? Comments so far? Okay. No. All right, so done. Who's the other agent? Are you saying the one that had it listed? He didn't give her a Listing. So she just. I think she might. She's a property manager, and I'm not sure if she was managing his property or not, but since he was getting ready to sell, she sent him over to give a bid on the irrigation system. And instead he goes, well, what if I just buy it from you instead? You know, if my quote's too high for you, just sell me the property instead. I'd be really interested. Has the big work barn garage thing that, you know, big, big work area. And that would be perfect for him. Park his vehicles, his work vehicles and all that. But anyway, she. She's the one that couldn't get the listing from him. And plus, she kind of shot herself in the foot because she did. What most agents do is they, like, they tell someone that they can list their property for more than it's worth just to get the listing. So by the time she brought the offer in at 800 after telling him, oh, if you list with me, I can get you nine or nine hundred to a million. And like, what's he gonna do? Of course, he's like, oh, you're lowballing me at 800. And I'm going, no, I. Dude, I think if you gave me a. If I was coming to you with the listing, I would, I would go between 805, 850 for you. That's where I think is fair. So now she has no contract with anyone except, you know, if he buys any for the next six to nine months, you know, she's going to get a commission on it, so. But he does. She doesn't have any deal with the, with the seller. Mark, did you have your hand up?
[11:23]
B
Yeah, I did. So real quickly again, I'm, you know, haven't heard on some things, but a lot of things of what you're talking about, I agree. And so some cases, when the agent says there's an issue, I say, well, what if you said about the leaving the loan in place? Right. How about if they did a lease option initially, but the agent still got some of the compensation, then the rest would be if it could be. Because when you're saying leaving the loan in place, you're talking about doing a wrap. You're talking about doing subject to. What are you talking about?
[11:52]
A
Since I'd be rooting for him and I'm not. I don't have any agency relationship.
[11:57]
B
Right.
[11:58]
A
You know, I'd really try to make it where he's just doing it sub two or, you know, what I would like to do is take a small amount of money and wrap it myself. That's what I would like to do just as a third party.
[12:09]
B
Yeah. You be in the middle and wrap it with you in the middle making the spread. Yeah, that's a little.
[12:15]
A
But, you know, I. I doubt. I don't want to come muddy the waters. I. I just want him to get the property that he wants. Yeah, but he, you know. Yeah, that is a great idea because then the agents is a little. But still, if he closes on the property, you say like close in a year. But. But the point is the guy wants most of his cash out for helping his kids buy another property in San Diego. But that's a great. That's a great.
[12:38]
B
When you say most, like how much we talk in here. Approximately 200,000.
[12:43]
A
Yeah. He only has a $200,000 loan, so he's looking to walk away with 600 grand or so because I'm helping him sell. Sell his other two houses. And he will easily have that.
[12:52]
B
Okay. Yeah, well, it makes a big difference with 600,000 versus 200,000 or 100,000. Whatever. Because, of course, my goal is always get in light. Get in light.
[13:01]
A
Oh, yeah. Lots of leverage. You know, they just don't like, you know, he's. He pays off his properties quickly. He likes 100% equity. No more.
[13:12]
B
The older you get, the better. I think that's the way to go. Yeah.
[13:15]
A
Yeah. He keeps. He keeps just buying more things. He always got a big bank, fat bank account ready for any opportunity, you know, so.
[13:23]
B
Well, there you go. Well, my argument then to the. To the realtor is, come on, the guy's putting 600,000 down. What are you concerned about? If there's a problem, he'll just pay off the loan.
[13:34]
A
Oh, yeah, it's. The realtor's not a problem yet.
[13:37]
B
Yeah.
[13:38]
A
Because she's not listing the property. She's representing him as. She has a buyer broker agreement.
[13:43]
B
Okay.
[13:44]
A
But anyway, I don't want to get. I appreciate your comments on that. I really like your thinking on that. I wouldn't have thought of that, honestly. I like putting that in my tool in the.
[13:54]
B
I just, I've had. For whatever reason, the realtor was more comfortable and even sometimes the seller that we started out with a lease option. I proved myself with the payment history. And then I had built in upon payment of 5, 6, 10, 12 on time payments. Then automatically the paperwork's there with the attorney to have it transition from a lease option to a subject to or a wrap. And that was.
[14:19]
A
And at that point, it's past The. I guess probably past the buyer broker. I don't think he'd owe a commission at that point. Or maybe that would be part of this.
[14:27]
B
We've even built it in that we still paid the commission. But.
[14:29]
A
Yeah, yeah, yeah, that makes sense. Yeah.
[14:32]
B
Anyway, it's just a thought based on some what I've done. I'm always learning. I appreciate how like minded you are to how I think because Jimmy, Jimmy Napier was my main guy and that was. Got the guy that got me thinking paper and wait, wait. I can go trade both sides that I could do the debt side and the collateral side and play both sides
[14:50]
A
and some deals, let you do both in the same one you can do. You can make money on the real estate and the note in the transaction.
[14:57]
B
And I love that. I love that.
[14:58]
A
Okay, thanks. That's my favorite. Thank you so much. So just in case everybody came or people that are listening to this that say, where's the. Where's the tax. The landlord tax exit playbook. You promise? So in getting the word out, I've had a few people schedule calls with me. And one of the first one was a guy named Christopher and he is in Pennsylvania and he's like, so how would this really work? So the first thing I ask people is, so do you have a CPA where you could run numbers and scenarios with. Okay. And so I asked him that. And then one other person yesterday, both of them said, I have kind of grumpy CPAs. They don't like me asking them questions. They don't like doing any planning. And I'm like, wow, I need to help. You know, not only do, if they're going to list their property across state lines out of Nevada, not only do I need to find them an agent, if they want to do the seller financing that can and will do, their broker will let them do it and they will work with me as a consultant. I've got to find that. And I was like, I need to build a list of tax advisors that can help these people. Because oh my gosh, if you can't even do like, can you give me a scenario of what my tax liability would be with a cash sale versus installment moment? I mean that's pretty slim services right now. So then I'm like thinking, but when I'm talking to people and they're kind of going like, so what would the difference be? So I, I started explaining how it works and they're going, wow, that would be cool. So then the one guy says, well, and, and here's a Scenario, I'm just going to read it. So I just had basically Claude work this up for me, right? And, and I'm starting to just maybe, maybe I'm re reinventing the wheel here, but I'm just like make me a little Excel spreadsheet so that I generalish idea of things to go and take to a qualified licensed person. So in his situation here, he had several rentals and the one that he was brought to me for thinking about is one that he bought for $50,000 and now it's worth 250,000. And the tenant has been asking for years to buy the property from him, but he said, you know, I sold the property last year and I'm not about to pay those taxes again. So I learned my lesson. But then, you know, you made me curious. So you know, what could it be? So this is what Clyde came up with. If a cash sale, the gain would be 250 less the basis of 50. So 200,000. Okay. And the federal long term capital gains he was this, the Claude was assuming 75,000 other income, just an average 15% tax bracket. So the federal tax would be 26,000 and change. The Pennsylvania tax would be 6,000. Total tax at closing, 33,000. Net proceeds 216,000. If he put that in a 4% CD or something, that would be about $8,600 a year. And if instead, so let's see, 33,000 instead, if he did a 20% down and we reverse engineered it so that, you know, the person could, could really afford it. And actually he would even make something like $500 a month more. Right? $500 a month more, maybe a little bit, maybe $600 a month more. Then he was collecting in rent that he was netting in rent. Okay. So the payment would still be really great for that tenant slash borrower, maybe they could even pay a little bit more because they're getting the mortgage write off and all of that. So he's like, wow, you mean I could pay less taxes and I can get five or $600 a month more and I don't pay property taxes, I don't pay insurance, and I don't get tenant calls or have to have surprise repairs, you know, for big maintenance issues. No roof, no sewer main, no toilets, no water heater, nothing like that. So anyway, if he were to take 20% down, so $50,000, his total tax at closing would be. What would you guess? It's not that, that hard to figure out, but it's $3,600. So it's like 10%, 12% of the tax out of his pocket. So his net cash at closing would be 46,000. Of course we're not dealing closing cost commissions and all those sorts of things, but if they just did this deal together, if he sold for cash, he paid $33,000 and he have 216 to put in some other investment. If he took 20% down and carried the rest at 5%, it was just very moderate. Only has to pay 3,600 in taxes, gets the net cash at closing 46,000. And of course you can do something with that. You can pay down debt, you could buy hard assets, you could diversify and then what he would get on the interest is a little bit less 7,400, but that the remaining 160,000 of gain, right, stays deferred inside the equity, inside the house. So basically that got a little bit wordy, but because I'm trying to read through Claude's all the things. So that's $30,000 not paid to the IRS and earning interest instead. And of course a 4% that's just paying you interest only that's not giving you back any of your principal. Thank you for engaging with my content. If you'd like to hear the rest of the replay, please go over to citizensoftherealm.com and join our free community. If you'd like to participate live, be sure to subscribe@notequeen.com and if you have a situation where you could use some one on one help, check out notequeandeepdive.com and schedule a private consultation. I guarantee that one hour with me will either make or save you thousands. Take this information and go out there and create financial solutions. Just one mom and pop to another. See you next time. Take care everybody.

Summary5 min read

Podcast Summary

Owner Financing & Note Investing Podcast with Dawn Rickabaugh

Episode: The Tax-Smart Way to Exit Your Rental Properties
Date: August 8, 2026
Host: Dawn Rickabaugh

Episode Overview

In this episode, Dawn Rickabaugh explores practical, lesser-known strategies for real estate investors—specifically landlords—looking for tax-advantaged ways to exit their rental properties without taking a massive tax hit. She dives into seller financing, installment sales, note investing, and creative deal structuring, aiming to empower everyday investors with tools traditionally reserved for sophisticated players. The discussion highlights the importance of awareness, education, and flexible thinking in real estate, and features a detailed case study of a landlord considering an installment sale to limit tax liability.

Key Discussion Points & Insights

1. Seller Financing & Market Awareness

Dawn opens by challenging the belief among many realtors and investors that “seller financing doesn’t happen here.” She shares her own experiences buying personal and investment properties with owner financing—even in markets where brokers insisted it was impossible.

“You actually can’t see what you don’t believe is possible. It’s weird like that.” (02:03, Dawn)
She connects seller financing with note investing and stresses that few professionals grasp the robust private secondary market for mortgage notes.

2. The “Landlord Liberation Method” & Tax-Advantaged Exits

Dawn announces a new focus: one episode per month dedicated to the “Landlord Liberation Method”—her approach to helping landlords sell with reduced tax burdens.
Many landlords are “sick and tired” of property management but resist selling to avoid steep capital gains taxes.

“They’re not going to write a check to the IRS for a third of what they've built ... They'll just grind on another year because there’s no other way.” (04:26, Dawn)
Dawn highlights installment sales (selling property and carrying the note over time) as a powerful strategy most never hear about.

3. Case Studies in Creative Transactions

Dawn shares a real-world scenario:
- A client wanted to sell to a buyer, but traditional listing agents were unable or unwilling to structure a seller-financed deal.
- Miscommunications about pricing and commissions created obstacles—an all-too-common issue when agents use inflated listing prices to secure contracts.
- Dawn’s creative mindset led her to suggest direct communication and flexible terms, including owner carrybacks and leaving an existing mortgage in place (subject-to deals).
- She models how awareness and confidence open up off-market, win-win solutions.
“Because I believe in it, I find it and I see it.” (07:44, Dawn)

4. Wraps, Lease Options & Creative Structuring (with Guest “B”)

Guest “B” joins to brainstorm structuring deals:
- They discuss the technicalities and practicalities of wraps, subject-to, lease options, and commission arrangements.
- “B” shares his experiences starting with a lease-option, establishing trust, and then converting to a wrap or subject-to.
  
  “I proved myself with the payment history... The paperwork’s there with the attorney to have it transition from a lease option to a subject to or a wrap.” (13:53, B)
Both agree on the advantages of high down payments and leverage in creative transactions.

5. The Tax Math: Comparative Example (Dawn’s Conversation with “Christopher”)

Dawn details a landlord’s scenario—a property bought for $50,000, now worth $250,000, with a tenant eager to buy:
- Cash Sale:
  - Capital gain: $200,000
  - Federal capital gains tax: ~$26,000
  - Pennsylvania state tax: ~$6,000
  - Total tax at closing: $33,000
  - Net proceeds: $216,000
  - At 4% in a CD: $8,600/year passive income
- Installment Sale (20% down):
  - Down payment: $50,000
  - Tax at closing: $3,600
  - Net cash at closing: $46,000
  - Seller finances the remaining balance at 5%
  - Interest income ~$7,400/year
  - Receives $500–$600 more per month than rental income, with no more landlord headaches:
    
    “No roof, no sewer main, no toilets, no water heater, nothing like that.” (16:55, Dawn)
  - Bulk of the capital gain ($160,000) remains deferred within the property’s equity.
- The installment approach means $30,000 not paid to IRS upfront and instead earning interest for the seller.

6. The Pain Point: Lack of Knowledgeable Advisors

Many sellers face resistance or confusion from CPAs and agents unfamiliar with installment sales and seller carries.

"I have kind of grumpy CPAs. They don’t like me asking them questions. They don’t like doing any planning. And I’m like, wow, I need to help.” (15:07, Dawn)
Dawn encourages building networks of creative consultants and tax planners for these strategies.

Notable Quotes & Memorable Moments

“You actually can’t see what you don’t believe is possible. It’s weird like that.” (02:03, Dawn)
“They’re not going to write a check to the IRS for a third of what they've built... They’ll just grind on another year because there’s no other way.” (04:26, Dawn)
“I proved myself with the payment history... The paperwork’s there with the attorney to have it transition from a lease option to a subject to or a wrap.” (13:53, B)
“No roof, no sewer main, no toilets, no water heater, nothing like that.” (16:55, Dawn)
“That’s $30,000 not paid to the IRS and earning interest instead.” (20:55, Dawn)

Important Timestamps

00:00 – 05:00: Dawn’s market entry story and why most agents don’t “see” seller financing
05:00 – 09:00: Challenges and missed opportunities in typical agent-buyer interactions; real-world seller negotiation example
11:23 – 14:57: Strategy discussion with “B”—lease options, wraps, and commission structures
14:57 – 21:45: The “landlord tax exit playbook”; case study math on cash sale vs installment sale; key conclusions on deferring taxes and boosting passive income

Final Takeaways

Seller financing and note investing are underutilized but powerful tools for landlords seeking tax-efficient exits.
Traditional professional advisors (agents, CPAs) often lack the flexibility or knowledge to guide clients through these options—meaning savvy investors benefit from self-education and networking.
Installment sales can dramatically reduce immediate tax liability, allow deferred capital gains, and often boost passive cash flow compared to both rentals and cash-out sales.
Awareness and creative thinking are the biggest advantages in today’s market.

For live participation, guidance, or to dive deeper into these strategies, connect with Dawn at notequeen.com.
Join the community at citizensoftherealm.com for continued learning.

Loading summary

Transcript27 lines

[00:01]
A
And so I thought, well, I'm just gonna be an investor. I'm doing the note thing, the seller financing. But I want to connect with real estate agents that maybe can play with me in this space, right? I'm trying to figure out, I'm in a new place, everything, how am I going to start playing in this market? So I started talking to realtors, every single one of them. You know that that doesn't happen here. Seller financing doesn't happen here, not in this market. Well, over the next few years, I proceeded to buy two personal homes and in this area, at least a couple of investment properties just in this local area with owner financing and without a realtor because they're a liability unless they have. Have their lights turned on, right? You, you actually can't see what you don't believe is possible. It's weird like that. Welcome, Everybody. This is August 4th, the first property in PA of this month. And I can't believe how fast the year is going. And I want to make an announcement. And a lot of you know me already, dawn and noqueen.com I started that back in 2008, that, that brand, or maybe even earlier 2007. But this is where we talk about owner financing, real estate and note investing. And those all go together, right? They all connect together. But most professionals and most people aren't aware of it. And even if they understand the mechanics of seller financing, they almost never know that there is a secondary market for notes for private notes, the same way that the bank sell their loans right up to Fannie and Freddie. There's a private market for these. And lots of professionals, even very sophisticated real estate investors actually don't know that. They don't put together in their mind that seller financing and note investing, like, there's this market that goes together. And even if they do know that, unless people buy and sell paper notes, deeds of trust, mortgages for their own portfolio, they really don't know what that note is going to be worth on the secondary market or how to reverse engineer the numbers to optimize the financial outcomes. And tonight I'm, I'm focusing on what I'm calling the landlord liberation method. And actually, as an announcement, I'm going to be shifting. There's going to be one property and paper life per month and there's going to be one landlord liberation method because there's a lot of interest and a lot of people that need the very most basic of concepts around this tax exit playbook, right? It's, it's a tax advantage It's a way to reduce and, or defer capital gains so that you can have the best possible chances. Because people, they're, they're just sick. They might be sick and tired of managing their properties, but they're not going to write a check to the IRS for the third of what they've built. They're just, they're, they're going to look at the number, they're going to go, okay, we'll just grind on another year because there's no other way. We're not going to sell and take that tax hit. They never hear, most people never hear about the installment sale, about selling over time. That's the piece that I just want to raise awareness. And so I've been doing a little bit of a campaign and there's a lot of interest in this. There's a lot of tired landlords out there that really are looking for a solution. Taxes and insurance are up, maintenance is up, they're getting older, the wife doesn't want the, her husband climbing on the roof anymore, things like that. And so I've had a few conversations as I've gotten the word out. I invite people to schedule time with me to talk, and they're kind of like, oh, wow, I never even heard this existed. So I'm going to share one of those conversations or the results, his situation and, you know, kind of what we determined. Of course, I am not an accountant, as tax advisor, cpa, but there are certain generalities where I can use basically AI to say, let's just get close, right? Let's get an idea. If, if this person sold for cash, what would their tax liability be? And if they sold with, let's say, 20% down and use the installment sale, what would their capital gains be? It's my belief, and correct me if I'm wrong, that depreciation recapture, there's pretty much no way of getting around that in the first year of the sale, even if you do the installment sale. But the capital gains that we're talking about, and I was just starting to say before I announced the recording and this call is that, you know, when I first moved to Carson City here in Nevada 14 years ago, I let my license go because I was a broker in California for a number of years just with myself. I didn't have employees. And so I thought, well, I'm just gonna be an investor. I'm doing the note thing, the seller financings. But I want to connect with real estate agents that maybe can play with me in this space, right? I'm Trying to figure out I'm in a new place, everything, how am I going to start playing in this market? So I started talking to realtors, every single one of them. You know that that doesn't happen here. Seller financing doesn't happen here. Not in this market. Well, over the next few years, I proceeded to buy two personal homes and in this area, at least a couple of investment properties just in this local area with owner financing and without a realtor because they're a liability unless they have. Have their lights turned on. Right. You actually can't see what you don't do believe is possible. It's weird like that. And me, since I'm a freak and this is my whole world, I see everything as, oh, this is seller financing. This is terms. This is something creative, right? And so I'm really like, blown away that most people. So because I believe in it, I find it and I see it. And as an example, I'm getting ready to help a longtime client sell two properties and exchange. Not exchange, but move into another personal home, a bigger, nicer one in a nicer neighborhood. And apparently I wasn't the one that presented the offer to the seller. It was another agent that he's worked with, has given him a lot of landscaping work. And so she said, okay, let me. She was unsuccessful in getting a listing from the guy, but she, you know, made a buyer broker agreement with my landlord, my landscaper guy, and submitted an offer. Well, he rejected it flat without even a counter or anything. And so I was like, hey, you know, they have their, their legal arrangement there. I don't really want to get in the middle of it. But then he told me later, okay, I said, well, what happened? Did you get the, you get the property? And he goes, no. And anyway, so come to find out, I just said, let me, let me have the phone number, right? Let me ask. Phone number. I'm going to call him. I'm going to call the seller. And so we probably talked for an hour this last weekend. And I said, so what's going on? You know, what are you really doing? You really want to sell? Because, you know, I'm just curious. I know this guy really wants to buy your property, and he's a good buyer, he's a strong buyer. He, you only have one side of commission. You only have two and a half percent commission. He's not going to ask you for repairs. He's not going to ask you for a credit. He's not going to ask you for 2% to buy down his loan, right? I said, it's not. He goes, well, I just think I can get more. And I said, are you kidding me? He goes, well, what do you think? I said when I looked at it, I think you could get 8 or 850 somewhere in that range. Well, the other person, she told me I could get 900 to a million. And so I was offended when they just dared to offer me, you know, 800,000. I go, that's a great net offer. Anyway, so since I wasn't really looking for a commission, we were just having this really frank conversation. They were like hitting up him upside the head with the two by four going, dude, it is not the selling price, it's what you walk away with. You've got a mortgage on this place, it's vacant, you're not coming back. You tell me you want to buy Exchange into something for your kids down in San Diego so they can have cheaper rent than they're paying now. So like, what? What is it? He goes, oh, anyway. And I said, well, are you open to the owner carry? And he goes, yeah, that was the interesting thing is that when you texted me, I looked up your name and I found out I found your note queen site. And he goes, so you're all about that seller financing, right? And I go, yeah, I mean, that's kind of the world I. The lake I swim in. And he goes like, yeah, I was really wondering about that because maybe I'd want to do that, you know, because if he can only come up with such and such, maybe I'd be willing to. To carry the Last 1 or 200,000 or whatever he needs to get me my price on it. So I was like, here's somebody that you would think no. He said no to everything. He didn't counter. Nobody asked him. But just because he knows what I'm into. So like every person I call, that's fun to me anyway, just, just an example of, Please just. I'm just trying to create more awareness of that there's options out there. And actually if he doesn't do a 1031, he wants to do more of an installment sale with at least part of the funds or he said, gosh, I'm even willing to leave the loan in place and provided it's a good loan, that's another option as well. Although I doubt the other agent would probably be comfortable with that. Any questions? Comments so far? Okay. No. All right, so done. Who's the other agent? Are you saying the one that had it listed? He didn't give her a Listing. So she just. I think she might. She's a property manager, and I'm not sure if she was managing his property or not, but since he was getting ready to sell, she sent him over to give a bid on the irrigation system. And instead he goes, well, what if I just buy it from you instead? You know, if my quote's too high for you, just sell me the property instead. I'd be really interested. Has the big work barn garage thing that, you know, big, big work area. And that would be perfect for him. Park his vehicles, his work vehicles and all that. But anyway, she. She's the one that couldn't get the listing from him. And plus, she kind of shot herself in the foot because she did. What most agents do is they, like, they tell someone that they can list their property for more than it's worth just to get the listing. So by the time she brought the offer in at 800 after telling him, oh, if you list with me, I can get you nine or nine hundred to a million. And like, what's he gonna do? Of course, he's like, oh, you're lowballing me at 800. And I'm going, no, I. Dude, I think if you gave me a. If I was coming to you with the listing, I would, I would go between 805, 850 for you. That's where I think is fair. So now she has no contract with anyone except, you know, if he buys any for the next six to nine months, you know, she's going to get a commission on it, so. But he does. She doesn't have any deal with the, with the seller. Mark, did you have your hand up?
[11:23]
B
Yeah, I did. So real quickly again, I'm, you know, haven't heard on some things, but a lot of things of what you're talking about, I agree. And so some cases, when the agent says there's an issue, I say, well, what if you said about the leaving the loan in place? Right. How about if they did a lease option initially, but the agent still got some of the compensation, then the rest would be if it could be. Because when you're saying leaving the loan in place, you're talking about doing a wrap. You're talking about doing subject to. What are you talking about?
[11:52]
A
Since I'd be rooting for him and I'm not. I don't have any agency relationship.
[11:57]
B
Right.
[11:58]
A
You know, I'd really try to make it where he's just doing it sub two or, you know, what I would like to do is take a small amount of money and wrap it myself. That's what I would like to do just as a third party.
[12:09]
B
Yeah. You be in the middle and wrap it with you in the middle making the spread. Yeah, that's a little.
[12:15]
A
But, you know, I. I doubt. I don't want to come muddy the waters. I. I just want him to get the property that he wants. Yeah, but he, you know. Yeah, that is a great idea because then the agents is a little. But still, if he closes on the property, you say like close in a year. But. But the point is the guy wants most of his cash out for helping his kids buy another property in San Diego. But that's a great. That's a great.
[12:38]
B
When you say most, like how much we talk in here. Approximately 200,000.
[12:43]
A
Yeah. He only has a $200,000 loan, so he's looking to walk away with 600 grand or so because I'm helping him sell. Sell his other two houses. And he will easily have that.
[12:52]
B
Okay. Yeah, well, it makes a big difference with 600,000 versus 200,000 or 100,000. Whatever. Because, of course, my goal is always get in light. Get in light.
[13:01]
A
Oh, yeah. Lots of leverage. You know, they just don't like, you know, he's. He pays off his properties quickly. He likes 100% equity. No more.
[13:12]
B
The older you get, the better. I think that's the way to go. Yeah.
[13:15]
A
Yeah. He keeps. He keeps just buying more things. He always got a big bank, fat bank account ready for any opportunity, you know, so.
[13:23]
B
Well, there you go. Well, my argument then to the. To the realtor is, come on, the guy's putting 600,000 down. What are you concerned about? If there's a problem, he'll just pay off the loan.
[13:34]
A
Oh, yeah, it's. The realtor's not a problem yet.
[13:37]
B
Yeah.
[13:38]
A
Because she's not listing the property. She's representing him as. She has a buyer broker agreement.
[13:43]
B
Okay.
[13:44]
A
But anyway, I don't want to get. I appreciate your comments on that. I really like your thinking on that. I wouldn't have thought of that, honestly. I like putting that in my tool in the.
[13:54]
B
I just, I've had. For whatever reason, the realtor was more comfortable and even sometimes the seller that we started out with a lease option. I proved myself with the payment history. And then I had built in upon payment of 5, 6, 10, 12 on time payments. Then automatically the paperwork's there with the attorney to have it transition from a lease option to a subject to or a wrap. And that was.
[14:19]
A
And at that point, it's past The. I guess probably past the buyer broker. I don't think he'd owe a commission at that point. Or maybe that would be part of this.
[14:27]
B
We've even built it in that we still paid the commission. But.
[14:29]
A
Yeah, yeah, yeah, that makes sense. Yeah.
[14:32]
B
Anyway, it's just a thought based on some what I've done. I'm always learning. I appreciate how like minded you are to how I think because Jimmy, Jimmy Napier was my main guy and that was. Got the guy that got me thinking paper and wait, wait. I can go trade both sides that I could do the debt side and the collateral side and play both sides
[14:50]
A
and some deals, let you do both in the same one you can do. You can make money on the real estate and the note in the transaction.
[14:57]
B
And I love that. I love that.
[14:58]
A
Okay, thanks. That's my favorite. Thank you so much. So just in case everybody came or people that are listening to this that say, where's the. Where's the tax. The landlord tax exit playbook. You promise? So in getting the word out, I've had a few people schedule calls with me. And one of the first one was a guy named Christopher and he is in Pennsylvania and he's like, so how would this really work? So the first thing I ask people is, so do you have a CPA where you could run numbers and scenarios with. Okay. And so I asked him that. And then one other person yesterday, both of them said, I have kind of grumpy CPAs. They don't like me asking them questions. They don't like doing any planning. And I'm like, wow, I need to help. You know, not only do, if they're going to list their property across state lines out of Nevada, not only do I need to find them an agent, if they want to do the seller financing that can and will do, their broker will let them do it and they will work with me as a consultant. I've got to find that. And I was like, I need to build a list of tax advisors that can help these people. Because oh my gosh, if you can't even do like, can you give me a scenario of what my tax liability would be with a cash sale versus installment moment? I mean that's pretty slim services right now. So then I'm like thinking, but when I'm talking to people and they're kind of going like, so what would the difference be? So I, I started explaining how it works and they're going, wow, that would be cool. So then the one guy says, well, and, and here's a Scenario, I'm just going to read it. So I just had basically Claude work this up for me, right? And, and I'm starting to just maybe, maybe I'm re reinventing the wheel here, but I'm just like make me a little Excel spreadsheet so that I generalish idea of things to go and take to a qualified licensed person. So in his situation here, he had several rentals and the one that he was brought to me for thinking about is one that he bought for $50,000 and now it's worth 250,000. And the tenant has been asking for years to buy the property from him, but he said, you know, I sold the property last year and I'm not about to pay those taxes again. So I learned my lesson. But then, you know, you made me curious. So you know, what could it be? So this is what Clyde came up with. If a cash sale, the gain would be 250 less the basis of 50. So 200,000. Okay. And the federal long term capital gains he was this, the Claude was assuming 75,000 other income, just an average 15% tax bracket. So the federal tax would be 26,000 and change. The Pennsylvania tax would be 6,000. Total tax at closing, 33,000. Net proceeds 216,000. If he put that in a 4% CD or something, that would be about $8,600 a year. And if instead, so let's see, 33,000 instead, if he did a 20% down and we reverse engineered it so that, you know, the person could, could really afford it. And actually he would even make something like $500 a month more. Right? $500 a month more, maybe a little bit, maybe $600 a month more. Then he was collecting in rent that he was netting in rent. Okay. So the payment would still be really great for that tenant slash borrower, maybe they could even pay a little bit more because they're getting the mortgage write off and all of that. So he's like, wow, you mean I could pay less taxes and I can get five or $600 a month more and I don't pay property taxes, I don't pay insurance, and I don't get tenant calls or have to have surprise repairs, you know, for big maintenance issues. No roof, no sewer main, no toilets, no water heater, nothing like that. So anyway, if he were to take 20% down, so $50,000, his total tax at closing would be. What would you guess? It's not that, that hard to figure out, but it's $3,600. So it's like 10%, 12% of the tax out of his pocket. So his net cash at closing would be 46,000. Of course we're not dealing closing cost commissions and all those sorts of things, but if they just did this deal together, if he sold for cash, he paid $33,000 and he have 216 to put in some other investment. If he took 20% down and carried the rest at 5%, it was just very moderate. Only has to pay 3,600 in taxes, gets the net cash at closing 46,000. And of course you can do something with that. You can pay down debt, you could buy hard assets, you could diversify and then what he would get on the interest is a little bit less 7,400, but that the remaining 160,000 of gain, right, stays deferred inside the equity, inside the house. So basically that got a little bit wordy, but because I'm trying to read through Claude's all the things. So that's $30,000 not paid to the IRS and earning interest instead. And of course a 4% that's just paying you interest only that's not giving you back any of your principal. Thank you for engaging with my content. If you'd like to hear the rest of the replay, please go over to citizensoftherealm.com and join our free community. If you'd like to participate live, be sure to subscribe@notequeen.com and if you have a situation where you could use some one on one help, check out notequeandeepdive.com and schedule a private consultation. I guarantee that one hour with me will either make or save you thousands. Take this information and go out there and create financial solutions. Just one mom and pop to another. See you next time. Take care everybody.