Episode No. 15

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Episode No. 15

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Do you know why you’re paying more taxes?


Larry Pendleton joins us in this episode to provide useful tips on how entrepreneurs can be smarter with taxes. He goes in-depth on business structures and breaks down their tax implications. Larry also shares his thoughts on how minorities and non-minorities approach their tax and wealth-building strategies, and why he is building passive cash flow through real estate.


Larry Pendleton is a real estate investor and CPA with a passion for adding value to fellow investors through tax consulting and accounting services. His mission is to help people achieve financial freedom through real estate investing and tax strategies. He’s been a CPA for over 8 years with over a decade of experience in tax consulting & preparation, cost segregation studies, accredited investor validation, accounting, auditing, and bookkeeping. His team consists of 5 tax and accounting professionals servicing 200+ professionals in real estate in the US. He also brings over 6 years of real estate experience in buy and hold multi & single-family housing, corporate housing, short-term rentals, and flips. He has stakes in various syndications and joint ventures across the US overseeing 11 cash-flowing properties, consisting of 53 doors and 2 lots of land for new construction in 2022. He adds value to these groups in capital raising, tax strategy, investor relations, and underwriting. Most importantly, Larry is married to his beautiful wife, Whitney, and he’s the proud father of two handsome sons, Larry III and Wesley.


[00:01 – 11:15] Who is Larry Pendleton? 

  • Larry discusses how he got into real estate
  • His background in public accounting, audit, and eventually building PC Financials
  • Seeing how his father dealt with taxes inspired him to serve other business owners


[11:16 – 21:24] How to Be Strategic With Taxes

  • The mistakes people do that cost more taxes
  • Understanding the entity types
  • single-member LLC vs S Corp
  • Knowing when to be an S Corp election
  • Consult with a tax strategist or accountant


[21:25 – 24:55] The Mindset of Minorities Around Taxes

  • Thinking of immediate needs vs long term
  • Who are you surrounding yourself with?
  • Communities need to come together more


[24:56 – 30:54] Serving the Mission

  • Why Larry almost quit real estate
  • Learning about multifamily
  • Opening up his time to help more people by earning passive cash flow


[30:55 – 36:24] Closing Segment

  • The final 2 questions
  • Larry on diversification: Do you truly understand what you’re investing into?
  • Connect with Larry!



Key Quotes 


“When you go self-employed, you’re now responsible for all the FICA taxes, that’s an additional 15.3% on top of the federal income tax rate as well. That’s why it goes from an employee being taxed on 30 to 40% of their income to self-employed individuals being taxed on 50 to 60% of their income.” – Larry Pendleton


“We’re trying to pinch every penny and squeeze everything out in the world but at some point, you have to bring in professionals in certain aspects that like, you’re not skilled at.” – Larry Pendleton


“I don’t see them [minorities] compiling their resources to buy a business or property or whatever so that no one is straining themselves or leveraging the strength of their group. Whereas non-minority groups are doing that more often.” – Larry Pendleton



Resources Mentioned


Connect with Larry Pendleton! Follow him on LinkedIn, Facebook, and Instagram. Check out his Linq page, too! Contact him directly at 7575358592 and book a meeting now!


Let’s get connected! 

You can find Nicole on LinkedIn, Instagram, or Facebook. Visit her website https://noirvestholdings.com 



[00:00:00] Larry Pendleton: That’s what I kind of learned more about, Hey, if you can find the right deal, like people will invest into it. And if you can’t find the people to invest into it, then it’s either a bad deal or you don’t have the right people around you.

[00:00:12] Larry Pendleton: And that’s where it kind of took off from there and just kind of networking with different groups, offering my tax services, but also the opportunity to put my foot in the door, being a GP in some of these deals.

[00:00:22] Nicole Pendergrass: Hi, everyone. Welcome back again to another episode of the Share the Wealth Show. I’m your host, Nicole Pendergrass and I’m so excited because today we spoke to Larry Pendleton and Larry has so much information. He’s a CPA. He’s been a CPA for his own accounting firm for about eight years, but he has over a decade of experience as a tax preparer, consultation strategists, and doing just a ton of stuff in the tax arena.

[00:02:08] Nicole Pendergrass: And he also has about six years of experience or more in the real estate and doing buy and holds and doing some flips, being a joint venture partner, doing ac credited like syndications, he’s done a lot of things. And why did he get into all of that? If he was working as a W-2, CPA, and then he decided to open his own business.

[00:02:32] Nicole Pendergrass: And then he decided to invest in real estate. Why was that? It’s because his strategies, his mission is actually to help people achieve financial freedom through real estate investing and tax strategies. And in order to do that, he needed to free up his time. So he could have more free time in order to help people with their education in those in tax strategies and real estate.

[00:02:55] Nicole Pendergrass: And so why that’s important is because that’s why he’s investing in real estate, to give himself enough passive income to meet his expenses. And it goes all in line with his mission statement. He needs that free time to help people. And that’s what I love about bigger vision type of dreams and goals.

[00:03:17] Nicole Pendergrass: And we actually, you need to stick in longer for the rest of the conversation because we also talk about the mindset of minorities versus non-minorities when it comes to tax preparation strategies and thinking about the big picture and not always just wanting the most refund right now and thinking about what your plan is for next year or the year after. What you want to do and what your tax strategies should be now and how that will affect your ability to do what you want to do in the future. So in any case, let’s get to the show because you don’t want to miss the gems that Larry dropped. See you all soon.

[00:03:53] Nicole Pendergrass: Hi, everyone. Welcome back to another episode of the Share the Wealth Show. This is where we focus on strategies to grow, build, and protect minority wealth. And today, oh, actually first I am your host, Nicole Pendergrass and I thank you so much for being here with us today. And I actually need to ask you to leave a rating and review if this podcast so far has been helpful for you, if you’ve picked up any great information that you want to use. This helps, putting a rating or review helps us share the wealth even further and helps it spread to other people so they can have the same kind of information. But any case today we have with us, Mr. Larry Pendleton and the great. Hi, thank you so much for being here today with us. I really appreciate it.

[00:04:42] Larry Pendleton: Hey, Nicole, appreciate you having me.

[00:04:45] Nicole Pendergrass: Thank you. Okay. So I just want to jump right in and let’s get started. I read a quick overview of your bio, but what, during your journey, I know you started as a CPA first and then got into real estate. What was that transition like? What made you want to start investing in real estate on top of being an accountant?

[00:05:09] Larry Pendleton: I appreciate that. So in my field, you meet a lot of people, you know, everyone needs their taxes done. So you start to kind of see, like a, how we ended up picking up a lot of wealthy clients when I was in the public accounting world and as well as when I started PC Financial Services. So, and I always knew the benefits of real estate when it comes to tax savings, but I just never thought that I can be a real estate investor myself.

[00:05:34] Larry Pendleton: So this is the whole limiting mindset aspect of things. But then my partner, Terreon Conyers, who is also a Class A contractor, he was already in the game. Since 2012, or probably 2011, 2010, really. So, and there was one point in 2016, he was like, Larry got this property that got to me on my plate the moment, like, go and get FHA loan.

[00:05:58] Larry Pendleton: I got this guy, this agent, got a property manager. Just try it out. You can do it. So really he’s the driving motivator of what got me going ’cause I seen it. I knew the strategies for it. Just like, I can’t. Like, Larry actually do it. I mean, took that kick in the behind from one of my good friends to really get me going.

[00:06:17] Nicole Pendergrass: Okay, so, but that doesn’t still happen just overnight, automatically. You don’t go from being scared thinking, oh, can I do it? ‘Cause I definitely have had that mindset and limiting belief, you know, what’s possible for me, just from your friend one time saying, oh, you can do it. There was, was there anything else there? I feel like that’s a big jump to say, like, ’cause there’s a lot of times I don’t listened to my friends.

[00:06:40] Larry Pendleton: I guess you have to understand the relationship between me and him were like we’re aligned, we’re brothers. Were all in it and we ended up serving as motivating factors for each other. So like I say, he’s very, very intelligent. Like I said, can do all the taxes, but like, he wasn’t big into the starting the tax, like doing a whole lot of taxes, starting tax business. He just saw the skill set in me. And then we kind of came together and started PC Financials. And so basically me motivating him to do that. And then him motivating me to get involved and kind of seeing deals.

[00:07:14] Larry Pendleton: And I mean, we walked through a lot of properties first because I guess I should have thrown that caveat in there. There was like, it wasn’t the first property that he had was just like, I looked at it and we went, we looked at what were some agents involved and then just kind of came across one where I said it was a little three, two townhomes here locally in Norfolk, Virginia.

[00:07:33] Larry Pendleton: I still have it today, but I say there were quite a few properties that we looked at beforehand that just didn’t pan out numbers-wise.

[00:07:42] Nicole Pendergrass: Oh, okay. So know what I asked you that makes me curious. I want to backtrack a little bit in your story. What were you doing before you were an accountant and what made you open up your own firm?

[00:07:51] Larry Pendleton: I was in the public accounting world. So a regional firm, like I really wasn’t in the big four, big accounting, like big company type of guy. So I started off in public accounting for eight years. And then, because I was eager to start my own thing, I knew there would be a conflict of interest, with working for an accounting firm that does tax and then I’ll be doing taxes on the side.

[00:08:13] Larry Pendleton: Well, so, so by the time I left there jumped around a few internal audit roles. So, that’s where I kind of got my audit background between doing public accounting as well as a couple of companies outside of that, but at the same time, we were building PC Financials in the midst of, in the, while having a nine to five job as well.

[00:08:34] Larry Pendleton: So it was just kind of seeing what I went to from to be a size-wise type of taxes and all of that, who I wanted to help, what I wanted to serve, I guess, who we wanted to serve, I guess, is a better way to put it. So that’s how I kind of had the background of how we kind of built this thing up from the ground.

[00:08:50] Nicole Pendergrass: Okay and what gave you that bug though? ‘Cause if you’re, most people who are a W-2 employee, I’m a W-2 employee as well. Sometimes it takes something happening to make you want to go out on your own because that’s seen as like risky, right? Or at least in a lot of people’s mindsets. And I think that’s also a shift in whether your W-2 was risky or if going out on your own is risky. But what was that bug that made you want to try to do it yourself?

[00:09:19] Larry Pendleton: First, because I know a lot of people are kind of jumping into like Rich Dad Poor Dad, and all of that being self-employed and all of that being an investor, that became a motivating factor, but that was after once kind of getting into the corporate world and I really wasn’t finding my internal fulfillment, especially cause the reason why I got into accounting in the first place, because my dad, like I said, he’s self-employed and his own HVAC business and just kind of growing up, seeing him like work his ass off, like every day, and then coming around April 15th, every year he’s getting killed with taxes.

[00:09:56] Larry Pendleton: So part of that was why I even got into accounting because I knew there was a need to help people like him. And I knew I’ll probably be in that same position as well, but knew a lot of people in our community would be in that position as well, because a lot of people go from still paying a lot of taxes as an employee, but then starting their own businesses and paying even more taxes. It could because of them just not knowing the strategies or really how I like to call it, a game. Once you figure out how the game is played when it comes to taxes, then you start to adjust your lifestyle a bit differently, or you start to make different moves, start to hanging around with different people so that you can get more educated from that standpoint there.

[00:10:32] Larry Pendleton: So that’s where it kind of feel for me. And then that’s when Rich Dad, Poor Dad and Find Your Why and all these other books that I started to come across, educating myself on, I was, okay, I need to really hone into this niche of serving others. And that’s why my mission now is to help as many of our people achieve financial freedom through real estate and taxes, because I feel like that’s a huge, step for everybody at this point.

[00:10:56] Nicole Pendergrass: Yeah, no, I agree. So you’ve seen it more because you’re saying that you saw a lot of people, either they’re starting businesses and they’re actually paying more taxes, when the reason you’re starting a business is you know it’s tax-efficient and you know, whatever the motivating reason is behind starting your business.

[00:11:15] Nicole Pendergrass: But what were the mistakes that you saw people doing with their businesses that ended up making them pay more in taxes?

[00:11:22] Larry Pendleton: It’s the realization, part of it is that when you’re an employee, everyone knows you get your FICA taxes taken out and typically your employer pays half and your pay the other half.

[00:11:33] Larry Pendleton: The other aspect that people don’t realize is that when you go self-employed, you’re now responsible for that full, all the FICA taxes, that’s additional 15.3% on top of what the government, of the federal income tax rate as well. That’s why it goes from employee being taxed on 30 to 40% of their income to self-employed individuals being taxed on 50 to 60% of their income.

[00:11:56] Larry Pendleton: And yes, people think like, Hey, I can do all these, right, and all that. But unless you’re actually growing a business, like basically taking your jobs and making it into a business and you’re still an employer or employee of your own business. But unless you are expanding and doing certain like elections to be taxed favorly, you’re always going to be hit with that additional tax on your full net income.

[00:12:18] Larry Pendleton: So that’s one, and especially when people just like, kind of making a lot of money and like not really, like, strategizing their, any of their corporations in ways so they can be more tax-efficient from there. The other spectrum of it is that people write off too much. And they’re writing off everything ’cause they don’t want to pay any taxes.

[00:12:35] Larry Pendleton: They don’t want to let go any income and then try and get a loan. It’s like, okay, you’re not showing income from your business. So there’s a delicate balance, like, between the two and that’s what people have to learn. If you’re doing an active business, like, when’s the right time to be an S Corp, when it’s the right time to be a C- Corp, how to pay yourself a reasonable salary ’cause just being an LLC isn’t enough from that and, like, and then how to, like, run expenses through the business properly so that you have the proper documentation. Because, like I say, I tell people that I’m very aggressive when it comes to finding all the write-offs, but I have to have supporting documentation so that everybody can sleep well at night. I just can’t pull a $10,000 expense if there’s no $10,000 invoice to support it.

[00:13:23] Nicole Pendergrass: Yeah. Okay. So yeah, I need a lot of help in this area. I am not great with, maybe I shouldn’t say this on a podcast, but I am not great with keeping track, like, at the end of the year, like now I’m always scrambling to do, to go back over the past year and look at all my income and expenses and create a P and L and blah, blah, blah.

[00:13:45] Nicole Pendergrass: I can’t always find receipts. Like I just need to be able to have an easy system to upload receipts and keep track of that. Like, so I was looking at, you know, the smaller version of QuickBooks and at least to learn that ’cause I know that’s easier for most accountants to just like transition into and see what you need there.

[00:14:04] Nicole Pendergrass: I want to dig into a little bit of what you were saying between the entity types, especially for people who are starting businesses with the thought of building wealth and tax can be a really big wealth stealer if you are not strategic with what you’re doing, so what would it be, why should someone be an S Corp and why shouldn’t they be, or when is that point of transition from LLC to S Corp?

[00:14:31] Nicole Pendergrass: When should you do C-Corp? Is there anything you can share, like digging in on that a little bit?

[00:14:36] Larry Pendleton: Oh, yeah. So when you’re talking about just being an LLC, or even just a sole proprietor, so you don’t even have an LLC, the purpose of the LLC. It was really to create some asset protection. Like it doesn’t, it’s not a tax-saving mechanism because I can just be Larry Pendleton, CPA and run my business that way with no LLC.

[00:14:54] Larry Pendleton: If I write off this. Like it’s still a business spend. It’s like, it doesn’t matter if it’s under an LLC or not. It’s just, I’m running a business that I can prove that from that standpoint, then you still want to separate bank statements of business and personal bank statement, track all of that. So once you kinda understand that the LLC is not going to create all these tax savings, you didn’t understand if you are just a single-member LLC, which is a disregarded entity, all of that’s going to be reported on your Schedule C pretty similar to if you’re just a sole proprietor. So that’s where that 15.3% hits the bottom line. Like no questions asked from there. And even if you are a partnership, you may file a separate business tax return and you get a K1, that’s still considered a disregarded entity because all of the income and all the tax is going to be hit on your portion of the partnership as well.

[00:15:43] Larry Pendleton: Now, once you actually, then there’s a, timing aspect as well, where like once you’re growing and you’re needing a certain amount of income, then it’s time to kind of consult with your tax advisor of when to be an S Corp election. Because S Corp election, once again, it doesn’t provide any legal protection outside of this LLC.

[00:16:01] Larry Pendleton: The purpose of it is so that you can now separate yourself from your business so that you are the employee of your business because as an LLC, you and it is you is the same thing. Even if you have a separate EIN number, like it’s all going to be considered one thing. But if you’re now separating yourself from your business and that’s what the S Corp election does now, you’re paying yourself a reasonable salary because with LLC you can’t pay yourself a salary.

[00:16:26] Larry Pendleton: You can pay somebody else’s salary, but you can’t pay yourself. Now you pay yourself a separate salary, your FICA taxes, all are going to hit your salary. So if you’re netting a hundred thousand dollars, your minimum tax bill, if you’re just an LLC is going to be $15,000 or $15,300 off the break. But now that you pay yourself $30,000 in income, because you are now S Corp, now that 15.3%, it’s only going to apply to that smaller amount. The other 70,000 still rolls over to your personal tax return. But like I said, it’s not hit in addition to that. So you’re already going to see tax same probably as a certain election and running a payroll for yourself.

[00:17:07] Nicole Pendergrass: Do you have a, like a recommendation or a range of how much money you should be making before you try to be S Corp?

[00:17:13] Larry Pendleton: It ranges from, my personal preference is to keep things clean and simple that if you are a netting, that means after income and expenses, that’s because your tax, when your net income, not when your gross, if you’re netting at least $50,000 consistently on an annual basis, you should be starting to make heavy considerations for an S Corp election.

[00:17:32] Larry Pendleton: And the reason why is that it costs to be an S Corp. One is a separate tax return. So you have to pay for that. And you got to pay for the K1s and the state files related to that. Two, you have to run the salary for yourself. Are you going to do your own payroll or are you going to go through a QuickBooks or Gusto-type of system, or are you going to pay ADP or Paychex to do it?

[00:17:53] Larry Pendleton: Like each of them are going to cost either money or time from that standpoint there. So, I mean, I know some other tax advisors there, they’re higher in the range. Some may go up to 70 thousands. I know some, there are low 30,000. It’s all just depends on the individual. And once you do that cost analysis of the tax savings exceed the cost of doing the S Corp election.

[00:18:16] Nicole Pendergrass: So I know I’ve paid more for, I’ve paid for a separate LLC tax return to be done. So isn’t the LLC just as expensive then. Like what’s the difference between paying for LLC tax return for us to pay for S Corp tax return?

[00:18:31] Larry Pendleton: Now is that partnership tax return or just a single-member? Cause if you’re just a single-member LLC with no S Corp election, you should not be filing a separate business tax return for your LLC.

[00:18:43] Nicole Pendergrass: Okay. So I have multiple LLCs. One is a single-member. One is a partnership, but my single-member is the partner of the other LLC.

[00:18:54] Larry Pendleton: Yeah. So you end up following a 1065 form 25 tax turn from your partnership tax return. And then you’re a single-member LLC where they got the K1, which would then report on your personal tax return. Now also keep in mind that as just an LLC and your single-member LLC, like yes, there’s the cost of filing that tax return, but then you’re not required to pay yourself a salary from there. So you still have that aspect to it. And then if you’re going to make that entity an S Corp, then you have to make sure your partner is going to is okay with being a S Corp as well ’cause they may not be, they may not be on board with that from there. That means that your single-member LLC, then it has to be a S Corp election, depending on all the different businesses and all the money you’ve got coming in and make the assessment from there.

[00:19:42] Nicole Pendergrass: Okay. Yeah. My brain already hurts thinking about this. This is why you need a tax strategist and a great accountant, like Larry, to help you navigate these waters because it can get complicated. And there is so much benefit on the backside of this if done correctly. And, but you don’t need to. And I know that the, for new entrepreneurs or people who maybe have a W-2 and is trying to start something on the side but they want to set up everything correctly, that’s also an inhibiting factor sometimes because it seems so overwhelming and you have to do everything yourself. This is kind of like the E-Myth though. You need to work on your business, not in it, but a lot of people get stuck working in it and can’t grow and expand it to that level where you can even, you know, consider being an S Corp, right?

[00:20:30] Larry Pendleton: There’s also the concept of who not how, Dan Sullivan, where it’s like, we’re so focused on how we can do it, where you’re draining yourself and draining your time instead of finding the right whos that can handle certain things that you don’t want to do. You don’t find any value in internally doing it, but typically we’re trying to pinch every penny and squeeze everything out in the world.

[00:20:51] Larry Pendleton: But like at some point you have to bring in professionals in certain aspects that like, you’re not skilled at. I say, like, if you need heart surgery, you can cheaply try to do it yourself. Not sure how successful that going to be, but you’re better off going professional. And let’s say we pick and choose me, want to do that, but it’s nothing wrong about getting quotes from different tax advisors, same way you do with contractors, the same way we do with bookkeepers is all the same. You just try to find who’s the right fit that can understand what you got going on and you can grow with as well.

[00:21:23] Nicole Pendergrass: Yeah. Okay. I just had a question and, so I want to help, with this podcast, kind of shine a light or let people really look in the mirror and see their own limiting beliefs and how that could be hindering them from employing strategies that could really catapult their wealth-building either through business, building a business or real estate or whatever that pillar is that they’re using to create that capital then to later grow and invest it.

[00:21:52] Nicole Pendergrass: So I’m curious, because I’ve really want to help minorities, I’m sure you have clients who, you know, have a lot of minority clients and a lot of non-minority clients. I’m just curious, is there any difference in the way minorities think about taxes or maybe not think about taxes, but in the way that we operate or how we’re looking to either build wealth or strategies we do or don’t want that might be actually inhibiting us from moving forward, like faster. I’m not sure if that, does that make sense?

[00:22:28] Larry Pendleton: It makes sense. I think from what I’m seeing, more often than not, it’s a, because there’s the racial component to it, but then it’s also, okay. Are we talking about lower middle class of non-minorities versus lower class of minorities.

[00:22:45] Larry Pendleton: A lot of times those worlds kind of think the same from that standpoint where it’s like this immediate need for things and need to write all the write-offs and not really understand the long-term implications for certain things. Whereas the upper-class and more often than not, it’s, like I said, the non-minority clients are kind of in that upper class, upper-middle class, wherever you want to call it from that standpoint there.

[00:23:07] Larry Pendleton: So okay, how do we now get into that spectrum of it there? And the main difference I’m seeing is really the people that they’re putting around them. And like I said, people always going to have negative influences and all that, but it’s like, okay, who are you surrounding yourself with?

[00:23:24] Larry Pendleton: I say, is it just going to be me and you talking with no attorney because if the legal stuff isn’t in order, the tax stuff doesn’t mean anything at all. Because the legal stuff guy be the guy that tracks these together. So it’s more often what I’m seeing between the different wealth classes and sometimes even between the different racial classes, it’s just the aspect of being able to delegate, also understanding like the bigger picture.

[00:23:49] Larry Pendleton: Like, not what’s immediate, what’s good now. Like yes, everybody wants to save on taxes now, but if we just want to write off everything and you can’t get a loan next year Then great. Like, the taxes were great. Like, you got a refund, but you’re not really seeing the big picture from that standpoint there so, and also just a lot more compiling of resources.

[00:24:09] Larry Pendleton: I know people get into last indications and stuff now with real estate, but. I just don’t really see minorities kind of, I don’t see them as much. I’m not saying I don’t see it at all because I’m part of minority syndications myself, but I don’t see them compiling their resources to buy a business or property or whatever, so that no one is strained themselves.

[00:24:30] Larry Pendleton: Like they’re leveraging the strength of their group. Whereas non-minority groups are doing that more often.

[00:24:36] Nicole Pendergrass: Yeah, no, that’s definitely true. And I think we see that in almost all the different industries, not just real estate so that there’s a good point that I felt like we need to come together more and inform groups and communities where we can just work together to elevate and we all elevate as a group. So I love that. I guess more, I kind of want to switch a little bit to, back to you and your journey and once you started buying real estate, how that progressed from that first, I’m assuming that single-family you bought was a flip?

[00:25:08] Larry Pendleton: No, that was a buy and hold. So that one, I still have that one today. The next property was a flip and that was the crash and burn. That was a good learning experience on that one. And, and that’s when I kind of like, man, taking on too much. Like I had a full-time job, I’m growing the tax business. The property was an hour away. I’m over there, like dropping stuff off during lunch.

[00:25:32] Larry Pendleton: So like, so obviously I’m taking two-hour lunches.

[00:25:36] Nicole Pendergrass: I was just about to say that, like how long was your lunch break?

[00:25:40] Larry Pendleton: It was like a two-hour lunch break, and if I go in early and I stay late at work and then go to the property. I mean, do some stuff and then just not vetting the right team members and right contractors and just getting glorified handyman from there.

[00:25:55] Larry Pendleton: So, which is not a problem, it’s just time and place for everyone. And that wasn’t a time and place for a glorified handyman. So, like I said, I almost quit real estate just after the second deal. Because like I said, I just want to kinda jump in on one of the big checks and all that. And overall, the tax benefits are better in the long run, plus I was still in a position to still get loans and all that. Because like I said, just being able to still have the W-2. So then, about 2018, I came across Michael Blank and ’cause I knew I ended up buying like a duplex and buying some other single-family rentals and it’s like, okay, this scalability isn’t there.

[00:26:34] Larry Pendleton: But I don’t want to go back to flips. So, and then that’s where I’ve learned about multifamily like large multifamily is not like the little duplexes triplexes, which is like fine. They’re still stacking those up along the way and still got some in the portfolio today as well, but really wanting to like, get into like, Hey, how, do these syndications work?

[00:26:54] Larry Pendleton: How are people buying? Well, people assume as a hive, there’s one person who bought these apartment buildings. Like they no one out here just choking out a check by themselves. And that’s what I kind of learned more about, Hey, if you can find the right deal, like people will invest into it. And if you can’t find the people to invest into it, then it’s either a bad deal or you don’t have the right people around you.

[00:27:15] Larry Pendleton: So, and that’s where it kind of took off from there and just kind of networking with different groups, offering my tax services, but also the opportunity to put my foot in the door, being a GP in some of these deals

[00:27:27] Nicole Pendergrass: Wow. That’s great. Okay. So we were talking a little bit about having that larger vision and having that long-term plan and making decisions not based off of like immediate gratification and you pushed past the horrors of your first flip, but what was your long-term plan and where are you in that? Like, are you closer, you know, what’s your progress towards the long-term plan and what was that plan?

[00:27:56] Larry Pendleton: I mean, my long-term plan is always tied into my mission, which as I said to help people achieve financial freedom through real estate and taxes. So in order to do that, I need to open up my own time. I need to free up more of my time. So that means I need to create more passive cash flow coming in and I can do that through real estate. I mean, I can do that with the tax bins as well as this kind of scale-up. But at some point I’m not going to be filing taxes forever, tell all my new clients, they’re like, I’m not your 10-year plan.

[00:28:27] Larry Pendleton: Like if I’m still doing this in 10 years, I screwed up somewhere. So it’s still kind of building that cash flow, like, okay, getting the bigger deals. And I’m also in the mindset where I’m happy to take 1% of every deal. If that’s the only bit of effort I’m doing, like, if I’m just doing like, Hey, I’ll discount my fee for GP portion a year, then fine.

[00:28:49] Larry Pendleton: Like I could do that all day, every day without having to worry about getting too much involved in capital reason and investor relations and property management. I definitely don’t want to do that all is well, but like it does, but also learning that like I could raise capital, I could talk to investors and present deals and all that as well.

[00:29:08] Larry Pendleton: So that’s where my long-term vision was. Okay. Is it helping me serve my mission? If not, then I need to reassess what my plan is, because if it’s not walking me in that direction, then I’m not creating passive cash flow to open up my time so I can do more educational support groups and all that.

[00:29:27] Nicole Pendergrass: Wow. Nice. I love that mindset of always being okay with taking a small slice of watermelon than trying to get the whole apple, right? So that’s great. And everything. So many things that you’ve said throughout this conversation is just so true. When people, and that’s why I want these conversations so that people think about long-term, ’cause I definitely had the issue where I was trying to purchase something and my DTI was too high because I was trying to take off too many write-offs the year before, you know, like if you looked at my W-2, it was fine. Like I made enough, my debt to income was fine. When you look at my taxes, I don’t even know what I was writing off because. I have no clue. I didn’t own anything but it really does affect your next steps and what your plan is. And if you’re not conscientious about that because I know a lot of wealthy people, they don’t want to get a tax return. That’s not in the thing. They don’t want to pay taxes. They want to just zero out because a tax return is basically like an interest-free loan to the government.

[00:30:30] Nicole Pendergrass: And some people think, okay, well, that’s like a forced savings plan for me because then I’d rather just get that money back. But then that also means maybe you’re not great with your money management during the year. If you have to force somebody to make you save, but then you give that money and you buy something consumeristic with it anyway. So there’s just so many different things behind that one statement by itself, right? But I love it. I’m actually going to ask you now we’re wrapping up to the end and I’m going to ask you a question that I ask all of my guests. Number one, Warren Buffet said that diversification is protection against ignorance.

[00:32:15] Nicole Pendergrass: What do you take that to mean?

[00:32:17] Larry Pendleton: There, there’s definitely some truth to that because you can only understand, so many things like our minds are great, but it does take shortcuts. So if you’re trying to invest in real estate and then invest in oil and, and it’s like, okay, now you’re investing in precious metals and all of that.

[00:32:35] Larry Pendleton: Okay. Do you truly understand what you’re investing into? Now, it’s okay to invest in those things. But I mean, a lot of people just kind of jumped into crypto. Like I still have no clue what’s going on with cryptos. I’m trying to learn from people that are smarter than me, involved with it, but I’m not going to dump as much money into that than I’m also able to diversify within real estate though. Like, I may not just do all apartments. I do note investing. I do hard money lending for flippers and all of that, but that’s still, for me, it’s the same concept of diversifying, but with all within the same niche. So it’s like, there’s some truth to it, but it’s like, okay, but can you diversify within a niche itself?

[00:33:14] Nicole Pendergrass: So, yeah, that’s very true, so, okay, perfect. I love it. And second question. You you’ve played monopoly before, right?

[00:33:24] Larry Pendleton: Yes.

[00:33:25] Nicole Pendergrass: Okay. I’m really waiting. I said this before. I’m waiting for somebody to say no, ’cause I’m going to probably side them real hard, but I’ll have to come up with an alternate question.

[00:33:33] Larry Pendleton: Most likely when somebody said no, that means they did something really bad that game and started a family fight.

[00:33:39] Nicole Pendergrass: And they won’t want to admit to it.

[00:33:42] Larry Pendleton: That’s basically what that means ’cause I imagine everyone has played that game.

[00:33:46] Nicole Pendergrass: Okay. So in your strategy for monopoly, are you going for Baltic Avenue or Boardwalk and why?

[00:33:54] Larry Pendleton: And gone for Baltic because they at least give me enough and still keep me enough capital to so I’m not really big on just kind of maximizing everything, so at least Baltic, even though it may be considered a C or D class in real estate terms, at least allowed me to have some, like to keep some capital, get some cash though. So I can now get to other areas.

[00:34:15] Nicole Pendergrass: Yeah, no, that’s true. And you know what C and D they kinda actually, they cash flow pretty well, not in monopoly, but in real life they cash flow. Remember they have a lot of other problems. So you gotta do what you want with that.

[00:34:30] Larry Pendleton: You got to know what you’re getting in to.

[00:34:31] Nicole Pendergrass: Oh, man. Okay. Wow. Great. This was an excellent talk. Thank you so much for joining me. I want to give you an opportunity to let the listeners know where they can reach out to you, either if they want to talk about maybe being a client or even just connect with you.

[00:34:48] Larry Pendleton: Yeah, I’m on all the social media networks on Facebook, LinkedIn, Instagram dabbled into Twitter, but really not too much there. They want to take a QR scan of this code right here. They’ll take you to my personal page where you can book a consultation meeting or book a financial meeting. I’m also open to sharing my number: 7 5 7 5 3 5 8 5 9 2. Shoot me a text, shoot me a call. And if I don’t respond, give me about 48, 72 hours, because I’d like to just kind of meet new people and see where I can be of value.

[00:35:20] Nicole Pendergrass: Nice. Okay. I wonder who wrote down that phone number, but you have to list it again to get it, but all his other links to his social media profiles will be in the show notes.

[00:35:31] Nicole Pendergrass: And if you are not watching the video, you don’t see the QR code, but go to the show notes. The links will be there. And thank you so much, Larry, for joining us today. It was great. And we got to keep in touch.

[00:35:44] Larry Pendleton: Thank you, Nicole. Looking forward to it.

[00:35:46] Nicole Pendergrass: All right. Good luck with everything. Bye everyone. Thanks for joining us today.

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