The million dollar college decision

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The real cost of college

1. Opportunity cost
2. What the money would have done
3. A property instead
4. What that is worth over time

The tax side

1. Depreciation, and what it allows
2. Material participation
3. Free money, and appreciation

Choosing, and getting help

1. Merit money and the aid number
2. A million dollar decision
3. Finding the deal
4. The team

Opportunity cost

Did you know the average family spends over $200,000 on the cost of college? That's right. You might pay half that or you might pay five times that. But either way, it is very expensive.

In fact, how you pay for college could be one of the biggest financial mistakes you make in your life that will have a massive impact on your retirement. Because most families are just planning on taking money out of their college 529 plans, their brokerage account or their cash flow and just paying cash for college. If you do, that money is going to be gone. It will not be working for your retirement.

And we all know that the cost of college has skyrocketed over eight times faster than wages. So most families have to take out loans. And if you take out loans at just 7% interest, because these are unsecured loans, that could be over $300,000 in loan payments. But it gets even worse because there's a third cost of college that nobody even thinks about.

It's the secret cost of college. It's called opportunity cost. If we pay $200,000 for college or $300,000 in college loans, that money is not going to be working for our retirement. It's like killing the goose that's laying the golden eggs.

All of that compounding interest is not going to happen for our retirement. It's called the cost of missing out on all of that money in retirement. In fact, over 20 years, you could be looking at over a million dollar that you're not going to have in your retirement by helping your kids pay $200,000 for college. So, there's really three costs of college.

What the money would have done

There's the cost of attendance, which would be the tuition, room of board, books, and supplies. There's the financing costs. And then there's the opportunity cost as well, which is again over a million dollar to send your kid to a $200,000 education. And your numbers might be five times this much.

It's very expensive, and it has a huge impact on people's retirement. But what if I told you that I could help you save a million dollar off the cost of college? Now, I know that sounds way too good to be true, but our mission is to help every family. Send any student to the school of their choice and still increase your retirement income.

And we do that using real estate. That's right. What if you took that same amount of money out of your 529 accounts, your savings, your brokerage accounts, your cash flow, whatever the case may be? What if you put that money towards a million investment property like a vacation rental?

It's a typical 20% down payment. And whether it's the money that you were going to pay for college loans or whether it's the money that you were going to pay cash, what if instead of paying for college, you bought an income prodducing asset, an investment property that grows in value and produces cash flow like this for example. Plus, you get to own an amazing vacation rental that you and your family can go and enjoy as well and have lots of memories. Now, the most important thing is that this vacation rental that you buy is going to produce cash flow.

A property instead

So, as an example, for some very conservative numbers, if I had a million-doll house, even after the mortgage payment, the expenses, and paying a management company to manage it for me, if you don't want to worry about it, you could potentially get a net of, let's say, $2,000 a month from this million-doll vacation rental. Assuming you chose the right property in the right location, that cash flow could actually pay for college. So, you're still paying for college, but you're paying for it using the real estate cash flow. So, you could take out college loans, for example, to actually pay for college, and then the cash flow from the investment property could pay back those college loan payments.

So, as an example, let's say that we were generating $24,000 a year with a modest 3% inflation rate. In just five years, we would have generated over $127,000 of cash flow that could go towards college or college loan payments. In just 10 years, we're over 275,000. In 15 years, that's 446,000.

And in 20 years, we're talking over $644,000 of cash flow. That is what we call letting that goose continue to lay those golden eggs. Now, here's the significance of year 11. In year 11, we would have generated over $300,000 in cash flow.

So, if we put $200,000 down on a million investment property that generated cash flow that could cover those loan payments, within 11 years, college would be paid. Now, here's the best part. What happens to that cash flow after college is paid for? Well, of course, it keeps coming.

And in 15 years, that could be an additional $146,000 of cash flow even after paying back college. That is true savings. I know we always focus on getting scholarship money and maybe even financial aid, but what if you could get $146,000 of savings just by how you pay for college in just 15 years? In 20 years, that could be over $300,000 in savings.

What that is worth over time

And like I promised, in 35 years, that's over a million dollar in savings just by how you pay for college. Now, what if you could get into the same million-doll property for only 10% down? It will still generate cash flow to pay back college, but now you only have to come out of pocket $100,000 instead of $200,000. That's even less money out of your pocket to pay for college.

That's similar or the equivalent of only having to pay $100,000 for college instead of $200,000. That's a 50% discount off the cost of college because my property will still generate cash flow to make those college loan payments. Plus, it gets even better because if you buy a vacation rental, you also qualify for what we call tax scholarships. That's right.

Depreciation, and what it allows

Real estate tax savings equals college savings. And this is how it works. Real estate actually depreciates over time in the eyes of the government. Now, I know that we believe that most real estate should go up in value over time, but the government says, you know what, the roof is going to wear out, the flooring is going to wear out, the appliances are going to need replaced.

And so, they allow us to depreciate this asset over time. It's like 27 and a half years for residential or 39 years for commercial. and an Airbnb or a vacation rental, a short-term rental would also be considered a commercial property. So, it would be traditionally depreciated over 39 years.

But thanks to the big beautiful bill and a cost segregation study, we could get all these tax savings in one year or at least a lot of the tax savings in one year. What I mean is that when you do a cost segregation study, they look at the flooring, the appliances, the furniture, and all of these things that can be depreciated over 5 to seven years or 15 years. And if they can be depreciated over five to seven years or 15 years based on this cost segregation study, then you're able to take all of those items and depreciate them in one year with bonus depreciation that we just got back in the big beautiful bill at 100%. What that means is is that you can buy a short-term rental and you can take advantage of these tax savings.

Now, if you want to screenshot that tax code for your CPAs, you can because guess what? Most CPAs think that you have to be a real estate professional where you spend over 750 hours in real estate and nothing else. But the reality of it is that's not true. The short-term rental loophole allows you to only spend 100 hours, what they call material participation.

Material participation

And so by materially participating in your short-term rental, like maybe you go out and visit, maybe you go and build the guest book, you go out to eat to make recommendations, and you get to count some travel time. And if it's you and a spouse, you get to couple double the count double the hours. that can allow you to qualify even with a W2 income. So, if you have a W2 income or a 1099 income and you don't think you qualify for these real estate tax benefits, you do if you operate your property as an Airbnb with an average nightly stay of 7 days or less.

And there's other qualifications. I am not a CPA and I'm not giving you tax advice. I'm just saying if you follow the rules and you meet the qualification, you can offset your active income through what we call this short-term rental loophole. As an example, this milliondoll property, you could use a cost segregation study and get 25 to 35% of that in bonus depreciation.

You can't depreciate the land and they don't allow you to depreciate the structure in that that short period of time. the structure and everything else is going to still be depreciated over the traditional 39 years, but that could help you to reduce your income by $250 to $350,000. So, for this particular example just by doing $100,000 down on this million-doll house, we could offset our income by $300,000, saving almost $77,000 in taxes, depending on your tax bracket. That's amazing.

Free money, and appreciation

That's $77,000 in free money, just like getting a scholarship or just like getting financial aid. That's money back in your pocket. And if you want to look at it this way, you could say that you're really now only coming up with $23,000 to pay for college. But if it were me, I would take that $77,000 plus the $23,000 and I would go buy another vacation rental to be able to get more tax benefits and more retirement income.

That would be even better. Now, here's another way that you can save a million dollars off the cost of college. In 20 years from now, that million-doll property, if it appreciated at 5%, could be worth over $2.6 million. That's right.

Just because of that asset appreciating over time, that is also money in your pocket. And like we've said before, you're going to generate cash flow in retirement. That is over a million dollar of cash flow in your retirement. Again, another million dollars of savings that you're not going to have if you pay for college the traditional way.

Because once college is paid off, all of that cash flow is yours. you get to keep that to supplement your retirement income. Now, if you think about it, in 20 years from now, that's over $40,000 a year. And if you've ever heard of the 4% rule, the 4% rule says that if you have a million dollar in an IRA or a 401k or any money in the market that you're probably going to want to put it into some bonds during retirement and just live on the interest.

So, think about that. A million dollar generating four to five% a year is only going to pay you minus fees about $40,000 a year. But this one property with appreciation and that increasing income could generate more income in your retirement than a million 401k and you only had to pay a hundred,000 or $200,000 down as a down payment on this property. So, this could significantly increase your retirement income as well.

In fact, if you lived over 40 years from now, that would be over $1.5 million of retirement income. Plus, you could even get free money for college by buying real estate. That's right. If you're a highincome family, you're not going to qualify for financial aid.

But if you buy real estate and take advantage of this bonus depreciation and all these tax savings, it could reduce your income and you could qualify for need-based financial aid. Let me explain. There's two ways to get free money for college. We've all heard of merit-based scholarships.

Merit money and the aid number

Merit-based scholarships are all based on the student and student positioning. You might want to work with a college admission specialist that can help your kids go from gifted in other ways to an exceptionally gifted student. That helps them to get some free money through merit-based scholarships. But we also know that a lot of these top tier private schools, they don't offer merit-based scholarships.

And the lowerpriced state schools don't have a lot to offer either because they're so inexpensive. Now, what if you could qualify for need-based financial aid as well? Even if your student wasn't exceptionally gifted, you as a family through what we call financial positioning could qualify for need-based financial aid. Because when you fill out the financial aid forms in this fall of the senior year, like the FAFSA and the CSS profile, they're going to look at your income and your assets and they're going to calculate this expected family contribution number and this student aid index number.

These are your financial aid numbers and they look at income and assets. But the majority or the biggest factor is your income. So if we reduce our income and reposition some of our assets, we could actually reduce our financial aid numbers and allowing you to qualify for needbased financial aid. And that is how you can use real estate tax strategies to maximize the free money for college.

Let's take an example of University of Michigan. If we're looking at an $80,000 sticker price with room aboard, the tuition, books, and supplies, and everything else, if my EFC number was $5,000, I could qualify for $75,000 in financial aid eligibility. Now, every school is different, but University of Michigan is going to help you with 91% of that. However, a lot of that is sometimes in loans and work study, and we want to know how much we're going to get in free money.

So, our formula shows us that 82% of that is going to be in free money. So, our out ofpocket could potentially be less than the local state school. That's right. You could potentially send your kids to these top tier private schools for less than a local state school depending on the schools and depending on your financial situation.

Now, we have a proprietary software program that can simulate the financial aid process and help you to calculate these costs on all the schools on your list. We can generate reports just like this to show you how much college might cost your family and how much you could get in free money. So, in summary, if you pay for college the traditional way, you're going to take money out of your college savings plan, out of your brokerage account, or your cash flow, and you're going to either pay cash for college, or you're going to take out loans and pay back these college loans. Either way, you're not going to have any money left over for retirement because it's going to go towards college, of course, which means you could be paying full price for college, paying back all those financing costs, and most importantly, it could be costing you over a million dollar in your retirement.

A million dollar decision

This is truly a million dollar decision. Or you could actually use our creative college funding method where we could take that same amount of money. Even if we did 20% down on a million dollar property instead of paying for college with that money, we could still have a million dollar vacation rental generating enough cash flow to cover the college loan payments. We could get about $77,000 in tax savings over a million dollar of cash flow in retirement plus the appreciation of course on that million-doll vacation rental.

We could have generational wealth for several generations because that cash flow just keeps coming for several generations. And for some of you highincome families that don't qualify for financial aid, these tax strategies could help you qualify for some financial aid as well. Now, I know what you might be thinking. You might be thinking, "This all sounds great, but I've never invested in real estate before.

I wouldn't even know where to start. And I don't have time. I'm working this full-time job, and I don't have time to manage these vacation rentals." Look, I get it. I'm a father of five kids myself, and I understand how busy life can be.

But if you use the right people to help you, you can still accomplish this. And think about it, how much is it gonna how long is it going to take you and how hard are you going to have to work to save a million dollars for retirement? It's well worth making a little bit of effort and letting us help you in this process because it truly is over a million dollars in your retirement that you're going to get if you pay for college using this creative college funding strategy. So the first way that we can help you is through analyzing these properties.

Finding the deal

You want to look at the data compared to other properties in that area. We have special software that analyzes all the data. So we can look at the houses in that area and get a good idea of appreciation and cash flow and what it's going to take on an average nightly rent and occupancy rate. Like what is your cash flow going to be?

Plus, are you looking at just a lifestyle asset that you want to go enjoy as a family or are you looking at a good investment and you don't care where it's at? Either way, we're going to help you analyze the numbers so that you know if it's going to be a good investment and you can actually estimate how much cash flow you're going to need because we will also help you calculate the cost of college and what those future loan payments might be. so we know how much real estate cash flow we need to be able to cover those loan payments. The other thing that we can help you with is creative college funding deals.

This is where you get like seller financing deals where you can get low down payments and low interest rates. Now, as an example, I bought a $ 1.5 million cabin this year on the lake for our family to go and enjoy. that will also offset my income. And I only paid $100,000 down.

That's right. I got a $ 1.5 million cabin for $100,000 down. And I got the $2.875 mortgage. I took over the mortgage payments.

The house is still in my name. It's still I'm still on the title and the deed. I own the house, but the mortgage is paid by myself and it stays in their name. That's how I take that's what we call creative financing or sub two mortgages.

You can research this on YouTube if you want. I also bought a house in Florida this year on the beach. This house in Florida was over $600,000 and I got in for about $50,000. It was fully furnished, ready to go as an Airbnb.

And of course, I'm hiring a third-party property manager to manage the property for me because I don't live in Florida. So, I have a cabin in Idaho. I have a house in Florida and I live in Utah, but you can have property managers manage the properties for you and you can get low down payments and low interest rates. We can help you because we provide all of these creative financing deals for you to look at.

The team

We get lots of people sending us these deals every day because we have so much volume. We have so many people looking for these creative financing deals. You can use our members area and our portal to shop for some of these deals. Now, the third way that we can help you is we can help you with advanced tax strategies.

I shared some tax strategies with you using bonus depreciation and cost segregation studies. But you can also put your kids on payroll. You can lease your house called the Augusta rule. You can lease your house to your business.

You can go on family vacations and write those off as business expenses. You can write off a portion of the expenses of your house and your vehicles. You can even bonus depreciate a new vehicle for your business. Now, I am not a CPA and I'm not giving tax advice.

The point is is through our strategic partnerships, you can work with tax specialists that know how to take advantage of some of these real estate tax benefits in addition to so many other tax benefits as well. And we're also going to look at long-term tax benefits. We might want to start shifting focus over the years to long-term tax benefits and long-term retirement strategies using some of these same principles but just slightly different. Maybe we want to get more into long-term rentals someday or even multifamily investing into multifamily housing or something like that.

These are all options that we can look at over time to really build that long-term retirement plan that will really allow you to leave a legacy. And the fifth way that we can help you is narrow down these colleges based on which colleges are going to be a good financial fit. Now, you might know which colleges are going to be a good academic fit and a good social fit, but we'll help you to see which colleges might give your family the most free money. Plus, our financial aid specialists will help you fill out those financial aid forms so that you don't make any mistakes.

Our financial aid specialists have filled out hundreds of these over the years and we know how to strategically fill out the information in these forms to maximize your free money. And then in the springtime of that senior year, we'll be able to help you in the appeals process to get even more free money. And the sixth way that we can help you is through volume discounts. It takes a team to be able to really be successful in a vacation rental business.

And we have the best team of real estate professionals, tax professionals, people that can help you furnish the properties or even do some remodeling. Maybe you want to take the garage and turn it into a fifth bedroom. Maybe you want to add a pool in the backyard or put in a pickle ball court. We can help you with the marketing, the staging, how to get that property into that top 1% of the market and really maximize your cash flow through some of our strategic partnerships.

And of course, most importantly, a discount on management because you're busy, you have teenagers, and you don't have time to manage your vacation rentals. So, allow the experts who specialize in property management manage these properties for you. And last, but surely not least, the best part of all is that you would be joining an amazing community of like-minded people just like you. We are in our community every day, helping each other out, sharing ideas, and teaching more strategies all the time.

And this is also where we post all of those creative financing deals as well. So, if you want to join our team, book a call, reach out to us, click the link, work with our team to help you save a million dollars off your cost of