What makes real estate a resilient wealth-building strategy, even during inflation? As 2025 approaches, discover how to leverage tax benefits and investment opportunities to secure your financial future.
With 2025 just around the corner, it’s time to future-proof your financial strategy. In this episode Anne Gannon, CPA and founder of The Largo Group, explores how real estate thrives even in times of inflation and why it’s a cornerstone for long-term wealth building.
Anne shares The Largo Group’s Real Estate Accelerator method, empowering business owners and individuals to harness real estate’s financial potential. She unpacks innovative tax strategies, highlighting how short-term rentals can provide substantial tax benefits, reduce liabilities, and create immediate investment advantages.
The conversation also dives into the impact of inflation, explaining why real estate remains a stable and appreciating asset. By tying value to tangible property, real estate can act as a hedge against rising costs, safeguarding and growing your wealth in uncertain economic times.
💡 Key Takeaways:
- 04:35: How understanding your financial foundation in 2024 can help uncover new opportunities in real estate investments.
- 11:02: The importance of streamlining financial processes to avoid mistakes and increase efficiency when scaling.
- 14:56: Why detailed tracking of cash flow and returns is essential to growth and sustainability in real estate.
- 21:15: Anne’s innovative tax strategies, including the “Real Estate Accelerator” method, and how short-term rentals can reduce tax liabilities.
- 23:42: Recognizing missed opportunities in real estate and how to seize them for financial growth.
- 26:39: The significance of understanding your unique tax situation in building long-term wealth.
- 31:27: The mindset shifts needed for entrepreneurial success in real estate, especially as the market shifts in 2024.
- 35:18: How Anne’s career shift from professional golf to real estate shaped her perspective on financial planning and investment.
Corwyn and Anne encourage listeners to explore real estate opportunities, think creatively about financial growth, and take actionable steps toward securing their financial futures in the coming year.
Connect with Anne @:
- Contact Number: 943-0480
- Website: https://www.accelerator-method.com/]
- Linkedin: https://www.linkedin.com/in/anne-gannon-529107148/
Connect with Corwyn @:
- Contact Number: 843-619-3005
- Linkedin: https://www.linkedin.com/in/cmelette/
Shoutout to our Sponsor: EXIT Realty Lowcountry Group
Do you want something more? More Meaningful Moments opportunities, deeper relationships and memorable experiences? Do you want to make a difference? If you say YES, a career and real estate could be the opportunity you’re looking for guiding people to one of the most important decisions they ever made, the purchase or sale of their home can be both rewarding and lucrative.
EXIT Realty has a revolutionary compensation model training and technology that provides you with the tools you need to start and build your successful real estate career. Call EXIT Realty Lowcountry group today at 843-619-3005 that is 843-619-3005 or visit https://exitlowcountry.com/joinexit and make your Exit today.—
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CORWYN:
Do you want something more? More meaningful moments, opportunities, deeper relationships, and memorable experiences? Do you want to make a difference? If you said yes to any of that, a career in real estate could be the opportunity you’re looking for. Guiding people through one of the most important decisions they ever made. The purchase or sale of their home can be both rewarding and lucrative. Exit Realty’s revolutionary compensation model, training, and technology provides you with the tools you need to start and build your successful real estate career. Call Exit Realty Lowcountry Group today at 843-619-3005, that’s 843-619-3005 or visit join.exitlowcountry.com and make your exit today.
Good morning, good morning, and great morning, guys. Welcome to another fabulous episode of Exit Strategy’s Radio Show. I am your host, Corwyn J. Melette, broker and owner of Exit Realty Low Country Group in beautiful North Charleston, South Carolina. Guys, if this is your first time listening to this show, you sir or ma’am are in for a treat. That is because our mission here is very simple. That is to empower our community through financial literacy and real estate education, guys. We’re legacy building. That is what we do. So guys, look, we’ve been having an amazing run. We’ve been having a tremendous amount of fun. That is because we have searched high and low, and we always focus on finding the one to bring you the best content and the best information, and today is no different. Now, I will be remiss if I didn’t say happy shout-outs and all that good stuff to all my people that listen locally in the Charleston area, whether you’re in the Hollywood, what you know no good, whether you’re out there in Monkeys Corner, and y’all know my mama out there around the bend, look here, wherever you may be listening to us, I want to thank you from the bottom of my heart for tuning in. You guys make my day every time I bump into you and you say that you listened to an episode or you’re a faithful fan and tune into the show. So guys, today, we talk real estate, we talk money, and when we talk real estate, we know what we’re talking about. We talk about that dirt, right? But when we talk money, we like to talk about how to get it. We talk about when you got it, what to do with it. We talk about how you can retain it, how you can make that money, make money. We talk about all that kind of stuff, and today, we got a guru. Again, we got the one who can tell you how to better and best manage your finances. We have none other than Anne Gannon, who is a founder of the Largo Group, and look, we’re going to be talking about the accelerator method today, so I want y’all to strap in because that means that we’re about to take off. Anne, how are you doing?
ANNE:
I’m doing great. Thank you so much for that awesome introduction. I’m so excited to be here. Thank you very much.
CORWYN:
Well, look, I can’t wait because we are, I mean, as we, so for our listeners, guys, look, we are technically just past, quote unquote, the, if you’re a business owner, April 14th, 15th, or thereabouts, that mid-April date, most business owners don’t quite make it. They didn’t go. So, they give us another date about six months away. As we’re having this conversation, guys, we are past that date, and for what it’s worth, some of us are still, whoo. Yeah, oh, that’s so true. That is so true. And if you don’t mind, give us like the 50,000-foot view of who you are, what you do, and let’s get into a good conversation.
ANNE:
Yes. I’m a founder of the Largo Group. I am CPA by trade. I worked for a big accounting firm. At the beginning of my career, I quickly realized that that’s great, and they care about that accounting firm, but they really don’t care about business owners or the individual, right? They’re just doing the return. It is what it is, and that whole world really is designed to not really have time to look forward. You’re just looking backwards. You’re following it during your time. And what I realized is that doesn’t work for the individual or the business owner who’s looking to optimize, do the best they can from a tax perspective. So the Largo Group is designed to reinvent the way that accounting works for business owners and individuals in that we’re flat-fee, we’re monthly, and the goal is that we’re looking at 24 now, right? Not next year, but we’re actually looking at the current year now so we can change it and we can make it better, and at least we can make sure that you understand what’s going on so there’s no surprises. And when that works and both sides come together, it really is a magical result because you’re not frustrated and you don’t hate tax season, but you really just see what you can do. You’re empowered to make next year better than this year. And that’s really my whole goal is just to make it something where it’s a great relationship for the long term rather than just transactional and filing return and you’re done.
CORWYN:
So what I heard in there, the undercurrent is you are a partner for the business owner. So instead of it just being, OK, look, you see me once a year or twice a year when it’s time for me to collect this information, put together a return and have you come in and review and sign it, and then I file it. So basically you are the person or a person who is a partner. So you’re there all the time, not just that once or twice, if you will, to facilitate that. So you’re there to help them and advise them on strategies from day one on how to manage and grow their business. Is that fair?
ANNE:
Yes. And really taking it one step further, that’s how we came into the real estate world. So we started off our specialty was hospitality business owners or small business owners. And really over the last five years, our goal has been really trying to help business owners to educate themselves in real estate, to really see that, especially as we’ve gotten into this inflation period, inflation for a restaurant is horrible. Food costs more, labor costs more, people don’t want to pay more for the food, so it’s bad. But real estate likes inflation, just educating them that there’s a time, everything has a season. And right now it’s really hard to be an operator, but it could be something to think about, building comes up for sale or you do want to diversify into short term rentals or more passive, whatever it is, just to be aware of inflation isn’t always bad. We just might be sitting in the wrong seat. And that’s OK, but we might want to look at other seats because there’s things we could do for your whole picture with where we are right now. And so that’s how we’ve come into the real estate accelerator method, really with the idea of real estate is a great tool. It doesn’t have to be all you do. There definitely has to be something that you educate yourself in because it’s a great way to grow your wealth for the long term.
CORWYN:
So one of the things that we talk about here on the show, and so I always explain this to people that, and even what attracted me to this industry a long, long time ago was a realization that people that had wealth had real estate. And that doesn’t mean that that’s how they got it. That doesn’t mean they started there. People that hit the lottery, they hit the lottery. And one of the first things that many of them do is start buying real estate, whether they buy a home for themselves or family or what have you. So that was the base and premise, if you will, that not alone, let alone the history that I had, my family and real estate that prompted me to this. So learning to manage the financial aspect of it to grow, I think is incredible. So I love how you taught at the end that sometimes to be blunt about it, they don’t think about that. They don’t think about the tax liability and possible implications of flipping a property, right? Right. Yeah. Like, hold on, hold on. I made this money and then, wait a minute, I got to pay what? I know. It’s so true. I know.
ANNE:
But on the flip side, there’s savings there too. So, yes. No, I agree. And see, that’s why we need you, right?
CORWYN:
That’s exactly why we need you. So there’s some savings in there that we may not know because we didn’t seek to take advantage of them or the person that we might’ve been speaking with had no idea. Because oftentimes people do this, but then they’re using, you know, they’re using and I won’t call companies, but they’re using, you know, companies, but you’re using companies that all they used to doing is a standard return.Yeah. They don’t incorporate any of the strategies that we may talk about here as we go forward. So, and you wrote a book, right? What’s the book?
ANNE:
So it’s called The Real Estate Accelerator, but it’s basically the idea, and I love what you said, because that’s my starting point in real estate is as I started to do tax returns, a good portion of your clientele is people who are retired or they’re not as active as they were. And what you find is the one common denominator in all of my happiest retired clients is that they all have real estate and it may not have been all they did. It might’ve just been something they inherited or whatever, but it has been this thing that really makes it to where they can retire comfortably. They’re not as stressed as the retired people who are invested in the market. Not that it’s a bad thing to invest in the market, but when you retire and all of a sudden there’s a market downturn, you’re watching your savings go away. Where the real estate people at least have more control because rents will always go up and appreciation will always happen, even if there’s ebbs and flows of that. And so you look at it and you’re like, wow, those guys are pretty happy. They’re living a pretty good life over there where the market people are like sweating. They never know what it’s going to be. So it’s eye-opening as I feel like I have a great seat at the table for so many people’s lives just because I have the opportunity to do their returns and I can see what this does and learn so much. And so from that was really where the real estate technology came from to say, it doesn’t have to be all you do, but here’s what it would look like to grow your net worth through real estate because that’s really what they’ve done. I mean, I have one guy who he bought properties last 20 years on like Outer Banks, like not really anything that was just something he did and he rented them out and all of a sudden he sat down one day and he’s like, do you know my net worth? And I’m like, yeah, I can only imagine. But he hasn’t done anything but his properties have just depreciated and he’s paid off and just little bits, eating the elephant one bite at a time, his net worth is pretty good. And that’s where the real estate came from, just the idea of, I think it’s educating people because they get so caught up in, you know, even annual cash flow or, you know, return and lose sight of that longer term benefit that real estate can really have.
CORWYN:
So people miss, we talk about this on occasion, it kind of becomes, we cycle it back. Let me put it that way. The real estate is a long ball game, right? Yeah, you may have, you may pick up the short ball. Something gets bundled, if you will, into midfield, so to speak, but really and truly it is long ball. It is way out, outfield before you see results. It’s not, you buy a property today and tomorrow it’s worth five or $10,000 more, so forth and so on. Now, have we seen times and markets, quote unquote, such as that? Yes. However, that is not the norm. That is not consistent. You have to look historically at real estate, which means you have to take larger swaths, if you will, of time in order to determine what the return is going to look like. And obviously the long ball, 50, 60 year long ball is a very continuous and a better return most times than what the stock market will bring you over the same historic period. However, because we see short-term gains, people oftentimes just automatically go to that. It’s disheartening because they’re not committed to the long ball. I’m not saying that we want some short-term gains. Don’t get me wrong. Boy.
ANNE:
Yeah, I know. And that’s why I feel like as the internet, whenever I was on Instagram and all these talking heads, I mean, so many times I’ve heard horrible pieces of advice like, oh, sell your property if it’s not generating, like whatever. I mean, first of all, again, I’m an advocate of the long game. I’m like, why would you sell? Even if it’s breakeven today, I just feel like the one thing people miss and they miss it in business and they miss it in real estate, especially is what is inflation? And really, if you’re breakeven today, five years from now, people are going to pay you more for rent. They just are, right? That’s just inflation. You’re going to pay more for gas and you’re going to pay more for rent and that property is going to be worth more. It just will. Like you said, there’s going to be times it goes down, but it will come back. That’s just inflation. That’s not anything other than that. So if you understand that, then you’re like, why would I get rid of this appreciating asset that’s breakeven today because I don’t have to do anything. It’s going to be worth more. I’m going to owe less on it and people are going to pay more in rent. So those things coming together create this amazing outcome if we can just understand it. But if we get impatient and we start chasing the squirrel, like that’s where we can make bad decisions for long term just to get that immediate gain that we may not need.
CORWYN:
So you advise people as it relates to real property. One of your niches is what short-term rentals? Is that one of the spaces that your clients operate in? So if you could, I mean, granted, that’s interesting because some areas is like overly saturated and then you see other places where there’s like a shortage of them. There’s so much opportunity. But why do you think that particular space is so popular now for real estate investors?
ANNE:
So I came upon this space a couple of years ago when a few of my clients during COVID started to say, I want to invest in this and it sort of came like this one-off thing and then several others were talking about it. So I’m always someone who loves to learn and so I’m like, you know what? I’m just going to learn as much as I can about the short-term rental space because in the tax world, nobody’s talking about it. Most CPAs really don’t understand the difference between the short-term rental rules and just the regular rental. And from a tax standpoint, they’re completely different. The short-term rental is most of the time, again, everyone’s tax situation is different. This is not tax advice. But in most cases, the short-term rental is considered ordinary income or ordinary loss. So if you’re someone in a higher income space, especially if you’re like a higher W-2 income, you can take advantage of a short-term rental in some cases, not for everybody, but in some cases and can write that off against your ordinary income. So it can have a huge tax impact if done correctly. So I had no idea about this, but as a normal person walking around, like you said, you see short-term rentals everywhere and you’re like, why are people doing this? Well, it’s the tax world where if I had the same property and I considered it as passive income, I don’t get any of that loss if I’m in a certain bracket. But the short-term guys get all that loss. So they now can write that off. They get a huge deduction in the first year because they go out and get a cost segregation and they do all those things. And now they basically can start to strategize to buy one or two properties a year and just get themselves in a much lower effective rate than they would have been if they had stayed in the passive world. So that’s really where it’s an amazing new development. Now, most CPAs have no idea and that’s where even these guys who are going out and doing this work, if your CPA doesn’t understand the rules regarding short-term when it becomes ordinary versus passive, I met guys who then turn around and they go, wait, I got nothing. Like literally, I got it deferred to next year. Like what? Well, no, like you have to make sure that both sides understand and you’ve met the criteria. There’s like a four-point test. It’s all very nuanced, but if done correctly, it can have a significant impact for your higher income earners.
CORWYN:
Wow. So look here. I don’t know if you saw it over here, Anne, but literally the top of my head just went up a little bit. I mean, literally, you just blew my mind with that. Wow. Wow. Okay. I’m loving that concept because I mean, obviously, I’m assuming there’s some people that are listening to this that maybe need to have that conversation with your person. And if you ain’t got a person, you got one now because you didn’t call anyone. Like, oh, what you just said? Talk to me about that. Explain that to me. Do I qualify? Not everybody, but obviously. So, is that a method? So, let’s get to the book. I want to make sure we talk about the book. So, is this like stuff that you’re talking about in the book? Let’s talk about that.
ANNE:
So, basically saying, first of all, my belief is that everybody has a unique tax picture, right? Your tax picture is different than my tax picture. No one is the same. So, ignore everybody on Instagram who’s giving you tax credits because they don’t know your picture. They have to know your picture first. So, it starts with you understanding your tax picture. Where real estate comes in and, you know, especially the shorter term is the fact that you could potentially have more flexibility to really reduce your effective tax rate through real estate. So, all of the benefits start at the beginning, the long term, really playing in for the next 20 years. Well, if you could at the same time lower your tax today by investing in real estate, it could be a much different return from what you’re going to get through additional 401k or additional market stuff because of this ordinary income distinction. So, the idea of the Real Estate Accelerator is to say, where do you want to be 5-10 years from now? What’s the net worth you want? And if there’s a way to strategize through rules that allow it where you could take advantage of a lower tax rate, you’re investing more of that income after tax into your property, you really can exponentially grow your net worth in a 5-10 year period in a way that you just can’t in market vehicles and other things because of the tax rate. Like, some of these guys are sitting in low 30s, mid 30s, effective tax rates, and that’s hard. But if the real estate you can get like the mid 20s, I mean, that’s a 10% savings that you can just then steamroll into more real estate investment.
CORWYN:
So, for our listeners, all right? So, guys, look, let’s envision this. Granted, I know some people is not your arena and maybe you don’t have that much interest, but you may know someone. So, if you have a higher income earner, like real tall and in our area, we have ports, right? Our crane operators make a quarter million dollars a year plus. That’s substantial income.
ANNE:
W-2, paying like 35% tax plus the state, yeah. And there’s very little that person can do from a tax strategy perspective. Almost nothing, right? You can invest more in your 401k, but that gets capped. The IRS has sort of eliminated the itemized deductions, standard deductions, if you’re married, it’s one, if you’re single, it’s another. There’s not much left that you really could do. And all of a sudden, you’re watching 35% of your income go away, right? It’s gone. Kiss it, it’s gone. Yeah. And if you did the math on the dollars that person’s probably spending in tax, right? You really got 250 and rolled up 30, maybe even 30%. That’s significant, right? So, if you took that same person and you told them to go out and buy short-term rental in downtown Charleston, right? And they invest, say it’s a $400,000 property and they got a mortgage, they don’t pay that up front, so they’re financing it over 30 years. That same person could probably get their tax down 10% at least through a very real method of taking a cost aggregation on the new property, bonus depreciation year one. And now, over the life of that asset, they’re going to have some of that return every year will be sheltered through depreciation. But the strategy that I’ve seen, I have some guys who work in like the trade area, they’ve invested, they have 13, 14 properties, and it’s just every year, they go buy a new property and they do the same thing with the money. They’re really not taking money out of your pocket, it’s money you were already going to spend in tax. Now, you’re just redirecting it into real estate.
CORWYN:
And so, for anyone else like in that particular arena that may be self-employed, maybe you got the truck driver who’s the owner operator, you got people, all these people that make this money, now you have a method that can assist you in offsetting your taxation, your level of taxation. So, this is like good stuff, like my man, like this is, hold on, this is the stuff that dreams are made of, you know what I’m saying? Yeah. It really is. And let’s make sure we get your information out for our listeners. How can people reach you, get in contact with you?
ANNE:
Yes, so check out our website, thelargogroup.com. We have a lot of information on search and rentals, real estate investing. But I think our big message is that for, just a great example, it’s good to just understand how you’re taxed. Like, it’s easy to wait till April 10th and throw in your W-2 and the TurboTax, and that’s fine, right? And say, well, my return’s simple, that’s all I need to do, there’s nothing I can do. But we have to start by understanding how we’re taxed and what are the things that you could do within the rules to reduce your tax liability. Because it’s more than just the refund. You are paying a significant amount of money in tax every year. And look at that total number, because I think then it becomes more interesting to really put that as a priority before 1231, to really make sure you’ve done everything you can, you’ve looked at it from a longer-term strategy, because these are real dollars on the table every year.
CORWYN:
That is huge. And we don’t want to leave the money on the table. We want to get the money off the table, right? Like playing Monopoly, right? Like, it’s real-life Monopoly. And when that money hit on the table, I’m trying to figure out how to get it off. Hold on, here we go.
ANNE:
Well, and I think the other thing to keep in mind is this isn’t always about, yes, you want the refund, and we want to obviously do this the real way through the IRS rules. But the other thing to think about is the old tax strategy of, I’m going to put money in a pre-tax account. That really doesn’t work now that we’re into the period of inflation. Because you’re going to pay more in taxes when you retire. You just are, right? And a lot of it’s inflation. A lot of it’s just where taxes are going. So, the old strategy of just, I’m going to put it in an IRA, and I’m going to take it out when I retire, it just doesn’t work anymore. And that’s where we just have to be open to, where are we today? What will it look like when I retire 20 years from now? Like, it’s never too early to just start to think about that, because that’s where real estate comes in. That, you know, this could be a vehicle that in 20 years, that property’s paid off. You’re just collecting rent. You’re sitting on the beach. Life’s pretty good, right? But if we don’t see that picture today, we’ll never get there.
CORWYN:
Exactly. And that is something. So, and thank you so much for touching on that, Anne, because we talk constantly on this show about mindset. We talk consistently about doing things differently so you can have a different outcome. You want that outcome. Nobody has done anything wrong if they made sacrifices today that allowed them to live that life later. And oftentimes, there is a mentality and a mindset that they had a different opportunity. No, they took a different opportunity. Because while they took, hey, I’m going to eat peanut butter and jelly. I’m going to eat oodles of noodles. I’m going to eat whatever else for this time period so I can save some money so I can have towards this down payment. While they were doing that, there were other things that others were doing that were completely contrary and contrast to that, and their outcomes are different. We have that ability. Our listeners, as you listen to the show today, you have the ability to get started somewhere. And if you can’t buy one by yourself, get you a partner. Let’s talk about that. Let’s figure out how we’re going to make that happen. So, Anne, look, I have this question I like to ask our guests, right? It’s that mic drop question, that look at 2020 hindsight. If you had this thing to do over, I mean, you could go back to when you first. And matter of fact, look, listeners, Anne ain’t say this, but Anne was pro golfer. Yeah. So if you had this thing to do over, knowing that you were the pro golfer, that means that you made money back then, what would you have done differently that you think would have catapulted you far beyond where you are today?
ANNE:
So interestingly, it’s real estate, right? My husband and I bought our first house in 2008. We way overpaid and we ended up selling it a lot. It was just stupid. And it really, it was not to throw him under the bus, but he didn’t understand inflation. And I was like, I really think we could have held on to this. It was like break even if we had rented it. It was just one of those things. It was a good time, but it was just like a missed opportunity. And I think the people that hold on to those first priorities that they own, that’s really where you, and I think where we missed was just looking at belonging, right? Looking at retirement. It’s so easy when you’re younger to say, I’ll worry about that later. And we’ve got to figure it out, but I think it’s definitely was eye-opening when you go look at what’s that poverty right now. You’re like, see? Inflation is real. But I think that’s where you just educate. It’s never too early to start educating yourself in real estate because opportunities are there. They’re real. It doesn’t have to be a ton of investment. And it’s just hold for 20 years and see how happy you are. And I guarantee you’re going to be pretty happy.
CORWYN:
I love that. I love that. And I have a similar story, like, man, look, if I could do this all over again, I probably would have did this as well. So I get it. I definitely get it. And I want to thank you for being on the show with us today. You’ve been a barrel of laughs, a tremendous amount of fun, and I appreciate the information, the context in which you gave it to our listeners today. Oh, thank you so much. This was so much fun. I really appreciate the opportunity. Awesome. Awesome. So for our listeners, guys, look, y’all need to reach out to Ann. Ask the question. There’s no such thing as a dumb question. Whatever. Let’s take that off the table, guys. Let’s come to, quote-unquote, the well so we can do well. I like that.
ANNE:
I like that.
CORWYN:
Let’s come to the well so we can do well. So guys, y’all please reach out to Ann. Ann, again, from the bottom of my heart, thank you for being a part of the Exit Strategies Radio Show family, for dropping them jewels and nuggets on our listeners. And for our listeners, guys, y’all know how I feel. Y’all know what I say. Y’all know it’s putting two of those things together. And I give it to you this way, which is to tell you that I love you. I love you. I love you. And we gonna see you guys out there in those streets.
