Mastering Property Tax Savings with Wes Nichols

Summary

Wake Up to Wealth: Mastering Property Tax Savings with Wes Nichols

Episode Release Date: January 31, 2025

In this enlightening episode of the Wake Up to Wealth podcast, host Brandon Brittingham sits down with Wes Nichols, a distinguished expert in property tax savings. The conversation delves deep into the intricacies of property tax assessments, strategic appeals, and the substantial financial benefits that property owners can reap by challenging their tax valuations. This episode is a treasure trove for real estate investors, entrepreneurs, and anyone interested in optimizing their financial standing through savvy property tax management.

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Introduction to Wes Nichols and His Expertise

Brandon kicks off the episode by introducing Wes Nichols, highlighting his pivotal role in the Boardroom Mastermind and his unique expertise in property tax reduction. Wes provides a succinct overview of his company’s operations:

Wes Nichols [01:03]: “We’re half brain attorneys and half brain appraisers. But the great thing is, I’m not an attorney and I’m not an appraiser. We’re just really good at arguing value for property tax reduction and in consulting taxpayers, property owners on how to navigate the property tax system, how to reduce potential future impacts as well as reduce current impacts of property taxes.”

With a dedicated team of over 30 professionals, Wes’s company represents over $40 billion in assessed values across multiple states, including California, Seattle, Colorado, Texas, and New Mexico. Their expansive reach underscores their capability and success in the industry.

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Understanding Property Tax Appeals

Wes elaborates on the core services his company provides, focusing on assisting property owners in challenging their tax assessments to achieve significant savings. Brandon seeks clarity on the practical application of Wes’s services:

Brandon Brittingham [00:44]: “I essentially try to get my assessment argued. Is that kind of what you do?”

Wes Nichols [02:04]: “Correct. So right now we’re doing a lot in say San Francisco, downtown or LA, San Diego. Our two asset types that we’re seeing the most reductions on are definitely office apartments because cap rates have changed...”

Wes explains that their approach is heavily data-driven, leveraging market changes such as evolving cap rates and post-COVID economic shifts to argue for lowered property valuations. This method has proven particularly effective in sectors like office buildings and hotels, where substantial reductions are achievable.

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Success Stories and Financial Impact

One of the most compelling segments is Wes’s recounting of significant client successes. He shares tangible examples of how property owners have saved millions through their services:

Wes Nichols [04:18]: “Our biggest client that we’ve ever got a large refund was over $3 million and that was a hospital. They were being assessed for $113 million and we got them down to $44 million.”

Another notable case involves an office park in the Bay Area where a $280 million assessment was reduced to $180 million, yielding a refund of over $1.2 million. These examples illustrate the profound financial impact that effective property tax appeals can have on large-scale properties.

For smaller property owners, Wes emphasizes that even modest reductions can significantly enhance their financial health:

Wes Nichols [04:18]: “We might be able to get them 15, 20%, we might get them back 15, 20 grand. That 15, 20 thousand dollars to any investor. That’s still significant.”

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The Appeal Process Explained

Brandon seeks to demystify the property tax appeal process for listeners unfamiliar with it. Wes provides a clear, step-by-step explanation:

Wes Nichols [06:07]: “You file an appeal, certain states, certain jurisdictions, you have to turn in your valuation. So like here’s a copy of the evaluation that we do here...”

He outlines how the company prepares a condensed appraisal, focusing directly on the property’s financials and market data to support the appeal. The process involves presenting this evidence to the assessor’s office, engaging in detailed discussions, and, if necessary, taking the case to court to challenge the valuation rigorously.

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State-Specific Strategies and Challenges

Wes highlights how property tax strategies vary significantly across states, tailoring their approach to each jurisdiction’s unique tax laws and regulations. Texas, for instance, presents both challenges and opportunities due to its high tax rates and annual reappraisals:

Wes Nichols [07:48]: “The state of Texas...they use a computer model. And so the state of Texas, you just have to beat it. The other thing that’s great about Texas is they are an equalization state.”

In Texas, Wes’s team leverages the state’s equalization laws to ensure that property valuations are consistent with neighboring properties, often resulting in substantial reductions. He also touches on other states like Illinois, New Jersey, and Florida, noting the high demand for their services in areas with aggressive tax assessment practices.

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Motivation and Personal Insights

Wes shares his personal motivation and passion for his work, revealing a deeper commitment beyond mere financial gains:

Wes Nichols [10:43]: “I am one of the luckiest men in the world. I have an amazing wife, amazing kids. One thing that makes me lucky is I’m very passionate and love what I do...”

He emphasizes the satisfaction derived from helping small business owners and homeowners secure financial refunds that can prevent foreclosures or bolster mortgage payments. This heartfelt narrative underscores the human impact of his services.

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Journey and Growth of the Business

Delving into his entrepreneurial journey, Wes recounts how he transitioned from a loan originator to a leading figure in property tax reduction:

Wes Nichols [12:54]: “It was 2008. I was a loan originator... I knew it was going to be bad... I can sell and pick up clients and whatnot...”

Starting during the financial upheaval of 2008, Wes capitalized on the increased need for tax reduction services, gradually scaling his business from a few employees to a robust organization handling $40 billion in assessments. His story is a testament to resilience, vision, and strategic growth.

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Key Lessons and Entrepreneurial Advice

When asked about the most significant lessons from scaling his business, Wes underscores the importance of a solid team, effective processes, and unwavering vision:

Wes Nichols [15:39]: “Having a team and a process... having a vision and just sticking to that vision.”

He advocates for goal setting and maintaining grit, emphasizing that perseverance and strategic planning are crucial for entrepreneurial success.

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Practical Advice for Listeners

Wes offers actionable advice to listeners looking to optimize their property tax situations:

Wes Nichols [16:31]: “Anyone should if you hire us or hire someone else. The key fact is, majority of people don’t file an appeal...”

He encourages property owners to engage experts to review their tax assessments, highlighting that many miss out on potential savings due to fear of government retribution, time constraints, or misconceptions about the complexity of the appeal process.

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Defining "Wake Up to Wealth"

Towards the episode’s conclusion, Brandon invites Wes to share his personal definition of wealth. Wes offers an inspiring perspective centered on personal freedom and choice:

Wes Nichols [19:19]: “Wealth to me is having personal freedom and choice... you get to choose whether you want to do what you want to do.”

This philosophical take encapsulates the broader mission of the Wake Up to Wealth podcast: empowering individuals to achieve financial independence and live fulfilling lives through informed financial strategies.

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Conclusion and Final Thoughts

Brandon wraps up the episode by reiterating Wes’s credibility and the value of his services, encouraging listeners to reach out for assistance with their property taxes. The episode serves as a comprehensive guide to understanding and leveraging property tax appeals, showcasing how strategic financial management can lead to substantial wealth accumulation.

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Key Takeaways:

• Property Tax Appeals: A data-driven approach can lead to significant tax reductions for property owners, especially in states with aggressive tax assessment practices like Texas and California.

• Financial Impact: Successful appeals can save clients millions, while smaller reductions also provide meaningful financial relief for individual investors and small business owners.

• Process Understanding: Filing an appeal involves presenting a condensed appraisal focused on financials and market data, engaging with assessors, and sometimes pursuing legal action to achieve favorable outcomes.

• State-Specific Strategies: Tailoring strategies to each state’s tax laws is crucial for maximizing tax savings.

• Entrepreneurial Growth: Building a successful business in this niche requires vision, a strong team, effective processes, and relentless pursuit of goals.

• Personal Freedom: Wealth is defined not just by financial gains but by the ability to make personal choices and attain financial independence.

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For listeners interested in mastering property tax savings and enhancing their financial portfolio, this episode with Wes Nichols offers invaluable insights and actionable strategies. Don’t miss the opportunity to transform your financial future by leveraging the expertise shared in this compelling discussion.

Transcript

[Wes Nichols]

Foreign.

[Brandon Briningham]

This is Wake up to Wealth, a podcast dedicated to helping you change the way you think about wealth. And now here's your host, Brandon Briningham.

[Brian]

Hey, what's up everybody? We are back with another episode of Wake up to Wealth. And today, something really exciting. We're going to talk about another way to save you money, specifically on property taxes. I got my good buddy here, Wes Nichols, who happens to be in the boardroom mastermind with me and have had the pleasure to be in the room with this guy a few times. Definitely knows his cold and excited to have him with us today. Thanks for, thanks for being on today, brother.

[Wes Nichols]

Thanks, Brian.

[Brian]

So tell us a little bit about who you are, what your company does because you know, until I met you, I really didn't know anybody that did what you do and they didn't even know that this kind of industry existed. So fill us in.

[Wes Nichols]

Yeah, best way to describe what we do is we're half brain attorneys and half brain appraisers. But the great thing is, is I'm not an attorney and I'm not an appraiser. We're just really good at arguing value for property tax reduction and in consulting taxpayers, property owners on how to navigate the property tax system, how to reduce potential future impacts as well as reduce current impacts of property taxes. I've got a staff of over 30. We represent over $40 billion in assessed values. We have offices in California, Seattle, Colorado, Texas, New Mexico, and we're constantly expanding and growing.

[Brian]

So essentially I own a big apartment complex, office center. I'm going to something, whatever the case is, I come to you and try to essentially get my assessment argued. Is that kind of what you do?

[Wes Nichols]

Correct. So right now we're doing a lot in say San Francisco, downtown or la, San Diego. Our two asset types that we're seeing the most reductions on are definitely office apartments because cap rates have changed from, you know, three and a half, four to now they're four and a half, five and a half caps. We're also seeing some reductions in hotels. Most of the reductions right now are based on the debt market and the higher cap rates and the post Covid environment right now.

[Brian]

So, you know, why would a municipality or government agency or whatever essentially agree with you to say, hey, we'll make this reduction and what do you think makes you guys good at doing this? Why does it work?

[Wes Nichols]

It's all based on the data. That's one and then two is motivating the assessor to do the right thing. So there are some states or municipalities out there where they won't agree to large reductions. And they basically say, hey, this is going to impact the local government. And I say, hey, if these taxes aren't lowered, this is going to impact the local government because this is going to drive businesses, this is going to drive investors out of your county and out of your city. So we try to have a win win solution that's in certain markets. Certain markets, it's all based on data like state of California, certain counties, they're flush with money due to Prop 13, but there's only really 5, 10% of the property taxes, maybe 15 that we can actually get reductions on in California. And some of those, like for office buildings would be very sizable. We're seeing values for office properties go back to 1999 or early 2000 values. So you're seeing, you know, upwards of 60 million, 60% reductions or more on some of these office properties. It's pretty substantial.

[Brian]

So give me an example like, you know, one you can think of. Well, like what, what's a recent client that you've worked with where, you know, you gave almost substantial, like what did that translate into actual dollars? Like how much money did you actually save them?

[Wes Nichols]

I mean, our biggest client that we've ever got, a large refund was over $3 million and that was a hospital. They were being assessed for 113 million and we got them down 44 million. That was a couple years back. But we've got cases where, you know, I've got an office park up in the Bay Area where it says for 280 million and our penny values is 180 million. So that's $100 million right there that would, you know, basically generate over $1.2 million in refunds. We've got some quotes out there right now. I mean there, there are large reductions right now where the refunds could be millions of dollars back to clients. Now that's on the big stuff. But we typically, we don't just say no to everyone. We have a lot of properties that are in that 3 to 5 million dollar range where we might be able to get them 15, 20%, we might get them back 15, 20 grand. That 15, 20 thousand dollars to any investor. That's still. So we try to have a wide range approach where yes, we do the big stuff, but at the same time, you know, my roots are, is I want to help the small, small person and help them out or maybe a mom and pop where they did a transfer or change in ownership and it messed up their reassessment. They got bad legal advice where I could go in and fix that or them. So I, I look at it and go, I'm here to help everyone. And if I have that context and have that attitude, you know, everything will fall in line.

[Brian]

Yeah, so, so for someone who's listening to this and, and doesn't understand like, so do you go actually into the municipality, present them the data, argue with them, does this go to court? Like, how does, how does this, how does this process work?

[Wes Nichols]

So what you do is you file an appeal, certain states, certain jurisdictions, you have to turn in your valuation. So like here's a copy of the evaluation that we do here. And really what this is is a mini condensed appraisal. So most appraisals, 70% of its fluff, where it talks about the flood, zone, the demographics, et cetera, this goes straight to the heart of here's the property, here's what's good about it, here's what's bad about it, here's the financials, here are the market rents or the data that would support the value or what it would, we think it would sell for as of a certain period of time. And this is the data that we have to support that opinion of value. And so how you work is, is you go in, you present this, the assessor county has an opportunity to cross examine you. They try to poke holes in your cases. Then they go, and then that's where I get to go and poke holes in their cases and show that they really don't know what they're talking about. And you do closing arguments and rebuttals and depending on the board, you'll get a very favorable decision and sometimes you don't get as good a decision as you want. So that's how the process works. You know, certain just jurisdictions we're able to do via like WebEx or Zoom, you know, some area in person. So, but you know, with the post Covid, it's been nice. We can do a lot of stuff remote. It's been very helpful.

[Brian]

So in your experience for real estate investors who are listening to this out there, I mean, do you find that, you know, in, in a good amount of cases of stuff that you're looking at, that the valuations from a tax perspective are overvalued and there's typically some savings, if not significant savings to most investors you're talking to?

[Wes Nichols]

Yeah, the states and areas where we see where they're the most egregious. You definitely have state of Texas. The state of Texas, as you know doesn't have income tax. So how they taxes a property tax. So not only is their tax rate one of the highest, so it's like 3%, but it's a reappraisable every year. And how they come up with a value is they use a computer model. And so the state of Texas, you just have to beat it. The other thing that's great about Texas is they are an equalization state. So what that means is, is let's say your neighbor across the street has a similar model as you and they're being assessed less than what you are on the state of Texas. You can say even though your value might be correct, you can say I want what he has and they will lower it to his value. So when we do Texas, we look at it from two perspectives. What your competitors are doing are being assessed at and what we can win on the market level. So we do that. The other states that are really egregious are Illinois has extremely high tax rates and extremely version A lot of the New England states such as New Jersey, we're also seeing a lot of work in Florida because of the pricing increases. The states where we don't see much work is Arizona because they have like a limited value in Oregon, but mostly where we're doing most of our work would be I would say state of Washington. California, we're doing a few in Utah and Colorado and Texas are the big ones right now.

[Brian]

Yeah, that's interesting. And the other thing about Texas is, you know, I learned this from buying property in there. When you buy a property, you don't know what your tax rate is going to be. A lot of, a lot of cases, a lot of times when you buy a property, they tell you what your taxes are going to be after you've settled, which I think is pretty wild.

[Wes Nichols]

Or in some states like Massachusetts and New England, they have a set budget so you might get the value lowered, but they just raise your rate to get the num. The taxes that they wanted in in the first place. So it, they will get their money. But yeah, Texas is, you need to be forecasting what increases even though you bought it. Unfortunately. I mean there are parts of Texas that like office and whatnot that have been hurt have been, that should be on decline. But Texas is, you know, ground zero for property tax as well as state of Illinois.

[Brian]

So one thing of being in rooms with you, you know, I just think this is good for listeners to know is that you actually really enjoy arguing over getting lower taxes for people.

[Wes Nichols]

I, I am one of the luckiest mans in the world. I have an amazing wife, amazing kids. One thing that makes me lucky is I very passionate and love what I do. And if the assessor's office offers me a good option, I will take and sell a case with them. But if they make me go to court with them, I will do whatever it takes to win. And what that means is I will ask the tough questions. I will be over prepared, whatever it takes. Because yes, I love the win, but more importantly, I hate to lose. And I, when I lose a case, and it sometimes happen, but rarely, my wife's like, why are you so upset? Did you lose a case? And I'll be upset for like a couple days. And, and it's not because of what I did. It's. It's because of the board or the decision that was done because I know I'm right, or at least I think I'm right. Maybe I'm too right. But at the end of the day, I think where it comes down to is one of my clients was talking to me on the phone this week and she goes, you know, what you do is very righteous. You're helping a lot of people out. And I always thought like, hey, I'm helping the wealthy get wealthy or whatnot. But we do help a lot of, I would say, small business owners or small homeowners. And it really hit me, I was like, yeah, I guess I am making a difference in people's lives is when I can get them back that refund, I can get them back that money and lower their property taxes, and that helps them dramatically. I know in the past that I have saved properties where that refund helped them make them mortgage or got them out of foreclosure. So that's what keeps me passionate about that, is I know what we do matters. I know what I do matters. And so I need to make sure that what I'm doing, I have my A game. And, and part of that is just having the right attitude and passion for what I do.

[Brian]

So I always think it's interesting, right? How did you get, how did you get started in this? Because it's, you know, it's not necessarily an industry where you just. Everybody wakes up and says, I want to go argue taxes. So, like, what, what brought you into this?

[Wes Nichols]

I had a crazy story. So it was 2008. I was, my background was in commercial. So basically I was a loan originator. And that's where I learned how to evaluate commercial real estate, learn how to appraise properties. And I was Right around the Lehman collapsed. And I knew it was going to be bad. And I said to a coworker of mine, I said, hey, I feel sorry for the teachers and sheriffs. They're going to get laid out because the property tax revenue is going to be way down. He goes, I was a banker in St. Louis, and I knew this firm. They lowered property taxes and they had a lot of money in their bank account. I'm like, that's a thing. So I get on I Internet, I Google, and at the time, there were a few large nationwide firms out there, and their websites came up and you saw some of the success stories. I'm like, okay, well, most contingency attorneys charge 33%. I was like, but holy crap, there's money in this. And I'm looking at this going, I can do this. I can sell and pick up clients and whatnot. And, you know, part of it was a good thing. I was dumb enough not to know what I know and not to know that it can take, you know, two plus years before you start making any money. And you have to have the infrastructure in the place and you have to have knowledge. But, you know, I just kind of bootstrapped it and did it. Next thing I know, I've got a lot of clients. I've just keep grow. I got employees. And then we just. Every year we keep getting better, you know, from an operational standpoint, a sales and marketing standpoint, valuation standpoint. And every year you get better, you get. You enjoy what you do, and you just get better. And so, you know, we went from having just a couple employees to now having 30 to now, you know, in 2017, I think we filed $3 billion, 20, 21. We filed 21 billion. Last year, 30 billion. This year, 40 billion. So it's like now it's like, wow, see what's possible here? If you have the right vision, you have the right team, you can. There's a. It's unlimited what you can accomplish.

[Brian]

So when you hear, you know, it's. What's remarkable is one of the things I love about this show is I get to. I get. I get to talk to people like you that, that have these great rises, you know, in their companies. You know, there's probably a lot of things that you could share. But what do you think one of the biggest lessons you've learned of going from following 3 billion, you know, to 40 billion? I mean, that's a stark difference, right? And that, that's what we all hope for as an entrepreneur to see that Rise. What do you, what do you, what's, what do you think is one of the best lessons you could share with our audience?

[Wes Nichols]

I, I think having a team and a process is, is, is that the other is having a vision and just sticking to that vision. Like this is our, every year that we've set out, we set a goal and every year I've hit that goal. And it's amazing what goal setting can do of I'm going to do X and this is what we're going to do and just say come hell or high water. And so it's just having that grit and that context of no matter what this is happening.

[Brian]

So Wes, by the way, is a sponsor of the show and he's frankly the only guy in, in the industry that he's in that I know and trust. So people that are out there listening to this, you know who, who should reach out to you for help when it comes to their property taxes.

[Wes Nichols]

I think anyone should if you hire us or hire someone else. The key fact is, is majority of people don't file an appeal. And the main reasons why people don't file an appeal is they're afraid of retribution from the government, which that's not the case. The other is, is they get too busy and get distracted. The other reason is they think they're too busy. It's going to take a lot of their time. If that's the case, go hire an expert at least. Worst case scenario, have someone review it. And most people in the industry charge a contingency fee. So you don't pay them unless they win. Okay, so there's, in our case here, you don't owe us anything until we win. And then from there they would owe a fee after the fact. So with that being said, it doesn't hurt. You just have to like anything in life or anything in business, you have to be aware, you have to know your numbers, you have to know what's going on. And so the key is when you get a notice or you get a tax bill, make sure someone's reviewing it. Make sure an expert's reviewing it. That's the biggest key of advice is just don't be, fall asleep at the wheel. Make sure you're paying attention to it.

[Brian]

Yeah. And I mean, I will tell you that just in my personal experience, not necessarily even using a firm, you know, we filed appeal on our taxes before, just on single family residences. On different things that we've done, we've done. Not all of them were successful, but we were successful many, many Times. And I mean, that's that. That over scale that shit added up, and it made a difference to our bottom line, for sure.

[Wes Nichols]

Yeah. And most states, you file the appeal, you win, and then that reduces the future tax bill. State of California is different. You file the appeal, you pay the taxes, and then you get a refund. But each state's a little different. But the key is being aware, having a tax professional look at it.

[Brian]

Got it. So, you guys, we will drop all of Wes's information on this episode to get in touch with his company here and on other episodes. So if you need help in the things that he's talking about on tax assessments, we'll give you all the ways to get in touch with him. Kind of wrapping up here. We always ask everybody the same question. We call the show Waking up the Wealth. I bring people on the show like you to talk about money and different avenues and niches of money that people aren't aware of. Right. To case in point, I didn't know there was people out there like you that existed until I met you in boardroom. But waking up to wealth is different for everybody. I'd love to know your definition of what waking up to wealth means to you.

[Wes Nichols]

Waking up the wealth is from that movie. Quote, you're in a position of fuck you. You know, you've got your house, you got a home warranty, it's fully paid off, and you got cash in the bank. I mean, I think getting to a place to where you can choose to say yes or no to the work, rather than the work saying you having to be forced to say yes or no to the work. When you wake up on a Monday, you get to choose whether if you. What you want to do. That's wealth to me is having personal freedom and choice of. You can travel whenever you want, you can go whenever you want. That, to me, is wealth.

[Brian]

Hey, that's a good enough answer to me. I like that one, especially the first sentence. So I just want to say again, thank you. Thank you for being a sponsor to the show. You guys know, you know, we vet everybody. We don't let somebody come on and be a sponsor of a show if we don't absolutely trust them and believe in their product. This guy can save you some money. I can tell you. I've been in rooms with him. He's. If you want anyone that's going to argue for your behalf to put money in your pocket, he's the guy. Hey, thank you so much for taking the time to be on the show with us today, brother. I appreciate you.

[Wes Nichols]

Thanks. Brandon Foreign.

[Brandon Briningham]

Thanks so much for tuning in to this episode of Wake up to Wealth. We sure do appreciate it. If you haven't done so already, make sure you're subscribed to the show wherever you consume podcasts. This way you'll get updates as new episodes become available. And if you feel so inclined, please leave us a review on Apple Podcast and tell your friends about the show. It is how new people find us. Until next.