Unlocking Capital Gains Secrets with Brett Swarts – Episode 658

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[00:01] Welcome to the Prosperity Podcast. Hello, it’s Kim Butler and I will be interviewing today Brett Swartz of CapitalGainTechSolutions.com. This is the Prosperity Podcast and we don’t have guests very often. So Brett, you should feel honored and I hope that you do. I do, Kim. Thank you so much for having me. Grateful to be here. Absolutely. So you and I have dealt with money our entire lives in some form or fashion. So go ahead and give our audience a little bit of your background and then I’ll have some fun questions for you. Awesome. Yeah. So my background is I grew up in a place in California, mostly the Bay Area, Michigan San Jose, Fremont and Sacramento, helping my parents build houses and invest into

[00:48] real estate and fell in love with that at a young age to be able to work on a project from start to finish and then had a chance to go to college and play some college basketball and then a chance to go and study and practice multifamily brokerage at a place called Marcus and Millichap. And this is around 2006 when I started there. And quickly we came into the 08 crisis and, you know, about a year and a half from there and things changed drastically with how we approached thinking through how to build wealth in a way that truly gives freedom and unlocks impact for families and for really capital gains that can put people in tough positions to not sell or get hit if they do sell with large taxes.

[01:28] And so all of those things kind of led to where we’re at today. We build capital gains tax exit plans for purpose driven entrepreneurs and investors who are selling lots, large businesses, large pieces of real estate and also Bitcoin and stock. And so with that, here and now in Florida, we moved from California a few years ago to Florida and we married five kids and did some jiu-jitsu and still play some basketball. That’s kind of helped to lead the team here at Capital Gains Tax Sessions. How fun. Well, I have a very strong connection to the Marcus and Millichap company in that my first husband worked and works still 35 years later for them. So I was around when Bill Millichap and George Marcus were a part of the

[02:13] community and doing the good work that they do. And how wonderful that you’ve taken that platform and expanded it. Thank you. Yeah, I love Marcus and Millichap and I love the company and the leaders learned a lot when I started there. Well, and that’s such a great jumping off point because I have a question for you that I want to share my answer to first, and that is let’s go back to the beginning. And so for some of our younger entrepreneurs and people that are pursuing this at an early level, you know, their age may not be young, but they are new in this space. One of the things that I recommend that people do if they’re interested in commercial or investment real estate at a high level is go interview

[02:56] a Marcus and Millichap broker because they’re typically around the country and just really have a unique perspective on income producing real estate. What’s one of the things that you like to suggest to that younger entrepreneur or real estate investor as they begin on their journey again, no matter the age? Yeah, you know, you find a mentor, right? And you add value to that mentor so that you can be a part of their time and energy to add value to use. And so that’s what I learned quickly. Marcus and Millichap, the moment that you know more about, you know, the person you’re calling’s property and or solution to their biggest two or three problems is the moment you start adding value and every other

[03:36] moment on the time on the phone with them is just wasting their time. Right. It was kind of a brutal, you know, six months into it. I remember talking to one of my mentors in the office and he’s like, yeah, just really make sure that you’re thoughtful and you’re not wasting people’s time. And you’re calling with something of value, of insight, of movement, of momentum for them and their business. And it could be a property that’s sold next door. It could be some rents that’s increasing. It could be some kind of trend, something about interest rates, something about value, some kind of insider thoughts on real estate, which is a beautiful thing. There’s no insider trading because it’s all you can go find it out.

[04:11] Provide that value. And so the same concept is true for the mentor. If you’re looking to get into the business or anything, figure out what your mentor, a way that you could save them time or energy, add value to them. Then they’re more likely to pour into you. I learned the term value creator from Dan Sullivan, probably 30 years ago. And I love that give first, create value first, put value fourth. I can’t stand the question. Can I pick your brain? It’s just the wrong way to start a mentorship, right? I agree. So I’m curious. What are some of your own money mistakes that you’ve made? So I’ll share a couple of mine first. And it’s losing principle, whether you didn’t do the real estate deal, right.

[04:58] And the debt ended up higher than the asset and it still had to be sold, you know, short tell or whatever bank, you know, REO property, you name it. Losing principle, I think is just one of the biggest areas of mistakes that I’ve made in my money life. Tell me one or two of yours. Yeah. You know, it started at Marcus and Millichap. I remember there was this really, this opportunity for a $4.5 billion listing. And it was a beautiful property, town homes and the hills of Cameron park outside of Sacramento. And I had met with the seller and had done all the things. I’m all excited to win the listing. And it’s down to, and basically he’d given me a semi-verbal that I had the listing. Great. And then the next week he called, hey Brad, I have one question to ask.

[05:40] He just, you know, would you be open to working with a residential agent that I’ve known a long time and have a relationship with that you guys would work well together. And instead of getting creative and saying, oh yeah, okay. Let’s all work together and be a team and make it happen. And said, I thought it was more of a question rather than like, let’s do this. And what ended up happening was a week later, the properties listed with, without me, I was the one that was out and that residential agent went with another commercial agent and the worst part again was the next, like within a month properties under contract with the buyer that I was already going to call that I was working with. So they ended up double ending that property.

[06:17] And so, you know, the average commission on 4.5 million is about 5%. And not only that, they, you know, they closed it pretty quickly. And on top of that, they got the listing again for, for a couple of years later and did another double end on that. And so potentially, you know, that’s a $225,000 commission times two, you know, that’s a $450,000 mistake. Looking back, I would have been, I think a little more humble and I would have listened clearer, right. And I would have read between the lines a little more and I would have said, Hey, no, let’s do it. Like let’s go your way. I missed your seller. And I was still young in the business. Right. And so now it’s different, I think, when you’re, you know, more established

[06:53] or five or 10 years into the business and you’ve got, you know, all kinds of massive listings, but this is like dire streets at those, at that point. Like it was like every penny counted. And I think I would have been wise to just say, yes, sir, I’ll do it your way and let’s go. Instead, I guess, semi-negotiated thinking that I had some kind of leverage and I didn’t, and I was then one that was left out. Wow. Yeah, that is a story. And in today’s world, really what occurred there is lack of collaboration. And it’s so natural for us entrepreneurs. I mean, we’re competitive people by nature. Most of us played sports. We want the deal. We want to control the deal. And yet competing is not the way to get results.

[07:35] Collaborating is. I find because I do work nationwide, which is a little unusual in our industry until 2020, then it became normal, right? But I’ve actually worked nationwide since the internet began. And because of that, there’s collaborative opportunities because that’s how we must look at them all over this country. I guarantee you I’ve blown some as well, but it is so interesting to hear that from you. Thank you for sharing that. And really thank you for acknowledging the humility that you missed, because I believe humble confidence is one of the best skills that we can bring to the table as entrepreneurs and people that are getting results and the humble part is first in that sentence because it needs to be.

[08:22] So not always easily done. So tell me then what one of your successes might be, one of your true. And if you can, because I want to get into the business a little bit more in a minute, but if you can keep it to a personal financial success. Okay. Yeah, sure. You know, I think the personal financial success was definitely keeping to our core value of my wife and I to be able to help her live out her dream, which was to be a full-time mom and homeschool our kids and not have to go back to work. She enjoyed her work a lot. She used to run before and after school programs for kids and she studied child development and I say, you know, if you want to do that, go for it. Right. But we start, we started in case, you know what, I think I want to do that

[09:08] child development for my own kids in our own house. And so that is a huge success. Cause that’s been on 16 years. We’ve been married and she’s been able to live her dream there. And we’ve been, you know, financially been able to make it happen. Now that wasn’t without the blood, sweat and tears of working multiple side hustles during the 2008 crash at Cheesecake Factory and AAU basketball tournament. It’s been still at Marcus and Milchap. I was doing all three of those for a couple of years and then medical sales in between and then commercial real estate all the way through. And then we could go through that whole story, but that is the biggest success because our kids are doing amazing and we’ve homeschooled since

[09:39] the beginning and we love it. We get to travel the world. We did Uganda, New York and Washington DC and Montana and South Dakota. We did all that in the last 12 months, right? California, Maui. And so we’re able to do that. So personally, that is the biggest success financially that we’ve been able to achieve, which is that kind of that adventure and that open opportunity to educate our kids in a hands-on way versus the traditional way. I love it. So Spencer and I enjoy a commentary around world school as opposed to homeschool. And that’s what you guys did, right? You world schooled those kids. And that’s so special. I trust, you know, the huge fan of homeschooling. I have a public education background in my parents.

[10:24] I never was involved with it personally, but my mom was a kindergarten teacher for over 30 years, two classrooms a day. I know I can’t even imagine. My dad was an elementary school principal. Thank goodness I was in his school and I didn’t get in trouble. So such appreciation for the public school realm. And I believe with 100% accuracy that if I had young children today, I would world school them. So I trust you know about things like Tuttle Twins and the Rich Dad Poor Dad community of homeschool material and Complete Free World. Are you familiar with all those three? Not really. We’re more of an unschooled, not that we wouldn’t look at that. We do play the cashflow quadrant game and getting out of the rat race.

[11:04] So I have my kids doing that and which is cool. And so maybe that’s a part of that. And, but yeah, it’s been called unschooling. So it’s really focused on their strengths and their gifts and what we believe their unique calling is that God’s given them. And then we kind of just pour into that and see where their passions take them. And it’s so it’s definitely, we’re definitely, we’re public school kids and her parents and grandparents were Duke and Stanford and PhDs and attorneys and rocket scientists. And so definitely have an appreciation for that side of it. But we definitely love that we have this focus the way that we, our kids have been able to have their passions and their freedom with education.

[11:36] So, but those all sound really cool. I’d love to check those things out. Well, I recommend them highly to all people that are utilizing the space of raising children. Like how they’re being schooled is secondary, but just being able to contribute to their capabilities, those programs, if you will, are very valuable. Something else that I’m just so grateful for is Peter Diamandis. I don’t know if you’re aware of him. He’s a tech guy from the California area, very well known in the space of what’s happening in the next, I would say three to five years. He just quoted, I don’t know if I can get the statistics right, but the point will be well made. He just quoted that the percentage of people that feel like

[12:20] college is the ticket to success. So percentage of people that feel like college is the ticket to success dropped from, it was something in the eighties to like something in the thirties, just this last year, which is I think really necessary for our world to move forward in an effective way. And you know, that will bring about a whole thing, but really interesting arena there. So I have a question about your children. How are you helping them learn monetary skills? Do you, I mean, the cashflow game, obviously fabulous addition to that. Do you have anything else just as a tip, because a lot of our podcast listeners, our parents of just young families, you have a special tip in the money teaching space?

[13:09] Yeah. First thing is just financial intelligence. So like I have this type there and then you get back to Marcus and we’ll chat most ages use this HP 12C. And so if you know what it is, you know what it is. Right. And so I do feel this would be the way that people learn how to calculate on calculators and to be able to do it manually. I wish I would have learned this at a young age. So I teach them on how to do calculations on a calculator of an HP 12C, I mean, reading books. I mean, we read a ton of books, right. And so we’re giving them financial books to read. We’re giving them the rich dad, poor dad book to read. We’re providing I think real world understanding of just real estate and what truly passive income is, you know, versus what, you know, you know,

[13:47] passive income is so that, that whole, the whole, there’s actually another concept that we go above and beyond rich dad, poor dad with our, with what we teach them and I mean, everything is commissions. They have no allowance. They do work and they make money. So it’s not, it’s a different mindset and approach to that. We pay them for reading books. So we pay them for, for they, they started, you know, they started the little bake, bake shop outside. We just did like a, like a bake thing with the neighborhood is plus my daughter does like, like slime and like, you know, like these, I don’t even know, like these lotions and stuff. She creates them at home and she sells them. So, yeah, so I mean, that’s it.

[14:24] I mean, we don’t over, you know, over complicate it, but we definitely are intentional about it. So cool. Well, we’ll put in the show notes and I will email your team. My husband, because we all know how difficult the HP 12C is to learn has five free financial calculators that enable the present value, future value, rate, time, and missing one payment, thank you, to be on the screen where all the calculations are on the screen so you don’t lose your numbers, you know, as you put them in. And I think you would be interested in them. Of course our community is as well. So his company is all about teaching financial math, which as we know is way different than grade school math. And it’s very rare that you can find someone if you’re not in the

[15:13] investment real estate community that knows how to use an HP 12C. I have forgotten. I used to know, but I don’t know how to use it anymore. Cause I use Todd’s and there’s so much. Let them carry everywhere, everywhere I go and then using my pocket. And then it’s also this app on the phone that you can use downloading HP 12C apps. That’s good. Yes, absolutely. He’s actually done some research. So the HP 12C came out in 81 and it is HP, still HP’s highest selling product, isn’t that amazing? Yeah. All right. As we wrap up here, tell us now switching to business today, the type of client or prospect, I should say the type of prospect that you’re looking for, who does your company serve best? Yeah, we serve purpose driven entrepreneurs and investors who have

[15:58] a passion for building wealth and a, and with a mindset of stewardship. And they hate the massive taxes on their incredible gains that they’ve made with their business, Bitcoin, real estate investments. They don’t like to see the wealth wasted away and squandered, which is what we’ve seen in the last 12 months and the whole knew their way with what the American government has squandered and they want to have, they have a purpose for it. They want to make a difference for MVPs, the most vulnerable people. They also want to make a difference for their families, right? They want their time back. They’re tired of the toilets, the trash, the termites, the regulation, especially in places like tax, California or New Jersey, New York,

[16:33] Illinois is Uber tax states that are Uber regulated, that provide really a disincentive to be a business owner and a disincentive to be a real estate owner. But they’re also looking for a place to harvest their gains, defer the tax, diversify their wealth, liquidity, get out of debt, not be forced into 1031 exchanges that puts you in a compromised business sometimes, or, you know, some assets don’t even qualify for 1031. In fact, the only thing that qualifies now is investment real estate. So Bitcoin businesses, primary homes, stock, our strategy works for, they’re also wanting to double, sometimes even triple their cash on cash return. I find it’s a exponential need and want for baby boomers as this

[17:13] 124 trillion is transferring in the next five to 10 years that they need to want massive cash flow and they don’t necessarily need more millions. They want cash flow now to make an impact now because their time is short, you know, we average American and our average life is around seven to 75 years old. So they’re saying, you know, how do I, how do I, you know, set up and become a steward with this legacy of this wealth without having to get stuff with the consequences of the massive tax. The tax is somewhere between 20 and 50% of the gain. And so just to give you a real life example, Warren and Catherine are selling a property in Sacramento, California, and I walked them through the 1031 option versus our option.

[17:50] We’ve really quickly, clearly said they want to be out of debt, want to be diversified, want more time. They had 15 units. In other words, they had 15 problems and they didn’t need 30 problems. Right. That’s not the point. They had multiple millions. They didn’t need more multiple millions per se, but they want to diversify and preserve that wealth. And so we sold at a good price. We got them out of debt. We diversify their wealth. We deferred all their tax. And then we invested in things that were, you know, two and three X their cash on cash return. And that’s the piece here that most people miss. Like you don’t have to trade like kind for like kind in these short period of times. And so that’s what we serve.

[18:31] And then next is the next generation after that to help the legacy serve the next generation, because this will be the largest wealth transfer in the history of the planet that we know of in the next five, 10, 15 years. And the question becomes, where would this money be? Will it be the hands of the government who will squander it? Cause that’s all they’ve really have ever done. You know, whether what side you vote for, or it will be the hands of the people, right? To create jobs, to create industry, to end the housing crisis. Right. How many trillions of dollars will it take to end the housing crisis? I don’t know. Is it one, two, three, four, five trillion? Well, if 124 trillion is transferring in the next five to 15 years.

[19:09] Well, if that’s subject to 20 to 50% of tax, we just did it right there. With proper tax legal planning, if we can unlock that capital and let that fuel the building of attainable workforce housing, we can end one of the biggest crisis is in America, right? So these are the things and the people that we work with that really have a passion for what I’m talking about here. So exciting. Well, we will put your link in show notes, but is there anything specific that you would like to share with our audience about how they may learn more about the work that you’re doing? Yeah, I would just encourage you to get really clear on your truly passive income number, right? I think, you know, we have been all kind of loathe into the rich dead

[19:51] poor dad and I love Robert. I love all this stuff he’s doing. But that fourth quadrant is typically so unattainable for most folks. They get stuck in the second and third quadrants. And so truly passive income we believe is to your freedom and impact is compounding interest is to your money. And so is it 10, 20, 30, 40, 50,000, whatever per month. What is that number for you and your family and what if you were to sell, harvest, defer the tax and get a truly passive income plan coming in? What do you mean? Meaning no shoes, no shirt, no problem. You’re Kenny Chessing on the beach playing the guitar and you’re able just to get durable, consistent income coming in that you don’t have to trade your time, talents, treasure or stress for so that you have

[20:31] more time with your family so that you can even do more legacy planning for family mission, vision and values so that you can give to causes you believe in more. Like to us, that’s the big domino for so many folks that have made that’s what they want, but they’re stuck, right? They’re stuck in where they’re at. And so just getting clear on that number and what it would take to make that one big move to knock over that big domino. Now that’s really it. And then you can, if you want to connect with me and my team, go to CapitalGainsTaxSolutions.com. I wrote a book with Kevin Harrington from Shark Tank. It’s called Building a Capital Gains Tax Exit Plan. You can pick that up on Amazon or just go to CapitalGainsTaxSolutions.com

[21:08] to check it out. Awesome. Well, it’s been such a joy to talk with you. I love the legacy aspect of your thinking. Also the way that money flows through us to go on and do other good. I’ve never heard the MVP most vulnerable people analogy. That’s great. And this is something that we’re all working on as listeners to our Prosperity Podcast. And I’ll just end with one of the most successful things that I did all along the way and still continue to do because Todd and I both believe, so my husband’s Todd Langford, we believe that 87 is the new 65 and that the old idea of retirement and age associated with it needs to be absolutely retired and just for people to continue to serve for as long as they can.

[22:02] And the way that we have done that is to combine investment real estate with whole life insurance because you get all the tax advantages of the real estate and the cash flow with the certainty and the liquidity of the whole life insurance product, which is centuries old. So really you’re bringing together two of the oldest forms of wealth in real estate ownership and the whole life insurance product. And I’m very grateful. I’ve stumbled into it, didn’t know what it was 30 plus years ago and have learned lots about it since. So thank you. Anything else you want to add? No, I guess I would just say if you’re in a 1031 exchange and looking at it, we have a best 1031 exit plan and we can save a failing 1031.

[22:45] And sometimes it’s a little bit of both, a regular 1031 and our strategy or, you know, it could be, you know, two, two strategies or even three strategies in one. So just keep us in mind for any of that. I think it’s malpractice to go with a group or broker or an exchange company that doesn’t give you a backup plan because you just, you just really put yourself in what’s called 1031 jail. So we don’t like people to be in 1031 jail. So I’ll just add that. And that’s, I know that that’s really it. And I just appreciate the opportunity to spend some time with you, Kim, and your audience and hope everyone has an amazing 2026. Awesome, Brett. Thank you. Thank you for listening to the Prosperity Podcast.

[23:22] To take control of your money and have it work for you, visit ProsperityThinkers.com.