The Systems Every Growing Brand Needs with Lance Morgan

The college price tag keeps climbing, but draining savings or delaying retirement doesn’t have to be your only option. We sit down with Lance Morgan, founder of College Funding Secrets, to map out a step-by-step approach for turning smart real estate moves and tax strategy into a reliable engine that pays for tuition while protecting your future. Lance pulls back the curtain on why many high earners miss out on aid, how 529 plans can quietly work against you, and where short-term rentals can create the kind of “tax scholarships” that rival the cost of a private university.

We get specific about the short-term rental advantage: active losses that can offset W‑2 income, the return of 100% bonus depreciation, and the FAFSA timing that makes junior year of high school a pivotal window. You’ll hear how to underwrite an STR with real data—occupancy, average daily rate, and seasonality—using tools like AirDNA, and why design, amenities, and ranking on page one are the difference between middling revenue and top-percentile performance. Lance shares practical operating tactics for a hands-off model with management baked into the numbers, so you’re not spending weekends washing sheets.

We also dig into asset positioning to avoid common aid mistakes. Learn which accounts count against you, why retirement vehicles often don’t, how to value property conservatively for aid forms, and when the CSS profile changes the rules for private schools. For liquidity and resilience, Lance explains using a properly structured life insurance policy as a source of low-rate loans for down payments and slow seasons, so you preserve compounding while keeping your real estate plan moving. By the end, you’ll have a clear playbook to fund college through cash-flowing assets, reduce taxes, and keep your retirement on track.

If this strategy guide helps, follow and subscribe, share it with a friend who’s staring down tuition, and leave a quick review so more families can discover smarter ways to pay for college.

How to connect with Lance?
Website: https://collegecostsecrets.com
Instagram: https://www.instagram.com/collegefundingeducation/
Linkedin: https://www.linkedin.com/in/lance-morgan-college-funding-secrets/
Youtube: https://www.youtube.com/@Lance_CollegeFundingSecrets 

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Chapters

• 0:00 Welcome And Lance’s Mission
• 5:56 Why Merit Aid And 529s Fall Short
• 8:49 Using Real Estate To Create “Tax Scholarships”
• 11:26 Short-Term Rentals As Active Losses For W‑2s
• 15:24 Timing Depreciation And The Aid Calendar
• 19:24 The 529 Problem And Moving Funds
• 24:31 Turnkey STR Operations And Market Selection
• 29:04 Creative Financing For Entrepreneurs
• 31:19 Planning Paths: Young Kids Vs. Near-College
• 36:13 Valuing Assets And Avoiding FAFSA Mistakes
• 40:24 Underwriting STRs: Data, Design, And Differentiation
• 45:24 Ideal Clients And Core Message

Transcript

SPEAKER_02: 2:14

Welcome everyone to the Firing the Man Podcast, a show for anyone who wants to be their own boss. If you sit in a cubicle every day and know you are capable of more, then join us. This show will help you build a business and grow your passive income streets in just a few short hours per day. And now your hosts, serial entrepreneurs, David Schomer and Ken Wilson.

SPEAKER_01: 2:40

Welcome back to Firing the Man Podcast, where entrepreneurs, builders, and business owners learn how to create systems, wealth, and freedom beyond the grind. I'm your host, David Schomer, and today's guest brings a completely different angle to financial strategy, one that every parent, investor, and forward-thinking business owner needs to understand. Today we're joined by Lance Morgan, a college funding strategist and founder of College Funding Secrets, an organization that helps high-income families reduce the cost of college by$100,000 or more through a smart blend of financial aid planning, asset positioning, real estate strategies, and tax optimization. Lance is a father of five whose journey started with a deeply personal mission. How do you afford college without sacrificing your family's financial future? That question pulled him from an IT career into the world of finance, where he uncovered a surprising truth. For many families, traditional college savings plans do more harm than good. Today, Lance helps families legally reposition assets, unlock financial aid they didn't know they qualified for, and build a college funding plan that doesn't derail retirement or cash flow. Through this, through his content on Instagram, LinkedIn, and YouTube, he's on a mission to change the way America pays for college. In this episode, we'll dive into strategies high-income earners aren't being told, the myths around 529s and savings plans, how real estate can play into college funding, and why the system is set up to punish the very families who are trying to do everything the right way. If you're a business owner or parent thinking about the future or how to fund it, this conversation will be an eye-opener. Let's jump into it. Lance, welcome to the show. Thank you. Thanks for having me on. Absolutely. So to start things off, can you share with our audience a little bit about your background and path to uh college funding?

SPEAKER_00: 4:48

Yeah, for sure. So my background is in the IT industry. It was my first professional career. And then I went from the IT industry to the financial industry because I had a passion for money and understanding different financial strategies. And I got into the financial industry about 20 years ago. And as my kids got older and closer to college, I realized it was going to be very expensive. I realized it was going to be very expensive to be able to send them all to college and help them pay for it. And I saw that it could take a pretty big toll on my retirement. And so being in the financial industry, I became more and more passionate about the specific topic of college funding and ways that I could reduce the cost, maximize the free money, everything related to paying for college. And so my I always tell everyone I learned a lot of this out of desperation more than inspiration.

SPEAKER_01: 5:47

That's funny. That's funny. Now, as I I was prepping for this interview, one of the things that I came across was a piece of content uh saying that that you can help high-income families reduce college costs by$100,000 or more. And I have three children myself. And boy, would I love to learn how to do that. And so can can we dive into some of those strategies?

SPEAKER_00: 6:12

Yeah, for sure. So there's a lot of ways that somebody can save money on college. The traditional way is they think about merit-based scholarships. Now, merit-based scholarships are a great way to save money on college. It's just usually not as much free money as people think. Plus, as much as we love our kids, I have five of them, and they're all different. You know, we I had one daughter who got um a partial athletic scholarship as a cheerleader at the university, and the other one didn't get any scholarships. So it's like some kids are gonna get scholarships, some aren't. And the other way that you can get free money for college traditionally is through financial aid. However, most families make too much money to qualify for financial aid. So they just assume that that's not gonna be an option for them. The reality of it is, is that there's ways to qualify for financial aid by repositioning your finances, meaning take some tax benefits of real estate, for example. Real estate tax benefits could offset your income to the point where you don't show any income. Now you could qualify for some financial aid. But what it also does is allows you to get some tax scholarships, which is really just a fun way of saying tax savings, right? So by buying real estate and reducing your taxes, you could argue that that money is like scholarship money. It's free money that you weren't gonna have if you didn't offset your taxes. In fact, most of our families can offset their taxes by the cost of college every year. So if a family is going to send their kid to a college that's 30, 40, 50 grand a year, sometimes we can help them save 30 to 40, 50 grand a year in taxes. And so then that's another way of getting free money. So some of these really high-income families, they might not qualify for financial aid no matter what we do, but a really high income earner could reduce their taxes by 100 grand a year, which is more than an Ivy League education these days.

SPEAKER_01: 8:10

Absolutely. Absolutely. Let's let's dive a little deeper into the tax savings. So it it it seems like there's kind of two camps of people. You've got your W-2 earners, and you've got people that own their own business, maybe invest in real estate. And so and I would say a large majority of people are W-2 employees. And so are the same opportunities available to those W-2 earners as the second camp of people that I spoke about.

SPEAKER_00: 8:39

Yeah, yes and no. I would probably say 90% of our clients are W-2 income earners, and they don't feel like they qualify for a lot of those tax benefits that come from owning your own business. However, by getting into the short-term rental business, the short-term rental business is considered an active form of income, which is in the same category as a hotel or a motel. So you gotta think about it different than a rent, a long-term rental or an apartment building or any sort of what they would call passive income. So in real estate, most of the tax benefits are passive benefits. They're passive losses to offset the passive income. What's unique about the short-term rental space is that a short-term rental property like an Airbnb is like a mini hotel. You know, you're checking people in and out, you know, you're cleaning on a regular basis. It's very much an active business, just like a hotel is. And so it falls under a completely different part of the tax code. It falls under the same part of the tax code as a hotel. And it's it's a way of basically generating active losses. So you can take the traditional depreciation benefits, which now with the big beautiful bill, we've got a hundred percent bonus depreciation back, you know, and you can write off a big chunk of your real estate in one year off of a W-2 income.

SPEAKER_01: 10:15

Okay. Okay. And the going back to t to planning for college is when you're looking at financial aid packages, are they looking at the past year's tax return, the past three years? What at what point, you know, if it in what year would you take that that giant depreciation charge?

SPEAKER_00: 10:37

Well, as many years as possible, really, but it's the junior year of high school that they're gonna look at, you know, so that but then they look at every year after that. So really in a perfect world, you structure it in a way that you can, you know, take some of your college savings and buy your first property, then take out college loans to pay for college so that we can reinvest the money that's coming in from our property that we bought along with the tax savings, and along with any money you were planning on paying out of your pocket for college, put all that into the second property, and then reinvest all of the cash flow from those two, you know, plus the tax savings into the third, and so on and so forth in a perfect world. You know, you're investing in four or five properties while your kids are in college, offsetting your income all four or five years, and by the time they graduate, you've got enough cash flow to pay for college and your retirement.

SPEAKER_01: 11:37

There you go. I like it. I like it. One point I I want to revisit was you had made the distinction between a a like an apartment complex versus an Airbnb. And what I just want to make sure I understand this one correctly. So the the Airbnb, that those losses can offset W-2 earnings, is that right? Okay.

SPEAKER_00: 11:59

That's correct. Yeah, it's a unique part of the tax code. They call it the short-term rental loophole. If you if you go out to you know, even Instagram, you'll get gone you know, bombarded by everybody's Instagram videos on the short-term rental loophole. But what's interesting is it's not a loophole. It just sounds like a loophole and it's great for marketing purposes, but it's really just the same tax code as a hotel or a motel. It's a, you know, it's a house that you're renting out for an average of seven days or less. If you're renting out a house for an average of seven days or less during the year, right, so you can't take like a long-term rental, you know, and and rent it out for the, you know, if it's been a long-term rental all year long, and then you just kind of rent it out at the end of the year, that's not gonna count. But during the year, if if you have a house that you rented out an average of seven days or less, then that's considered an active property like a hotel, basically. And then those are active losses, all of the depreciation and all of the tax benefits, bonus depreciation, you know, all of that counts against a W-2 income. Got it.

SPEAKER_01: 13:14

Okay. Okay. That's really helpful. Now, this next question uh I have a feeling might sting a little bit because I I have started a 529 for all of my kids and and regularly make contributions to them. Uh and and so um you know, I saw a piece of content that that you put out that said sometimes they hurt more than help. And what can you speak to me?

SPEAKER_00: 13:39

Well, first of all, um don't hate don't don't beat yourself up too much because the fact that you're saving for your kids' college education is admirable and it takes a sacrifice because that money could have been going towards your retirement, but instead it's going towards your kids' college. So, first and foremost, anybody who has a 529 account, you know, it it's not necessarily bad. However, um that money is gonna count against you when they start looking at financial aid. If they're gonna offer your kids some money, they're gonna look at that money and go, uh, let's pass on him because he's already got some college savings. Let's look at this family who doesn't have any college savings, which doesn't sound fair, but since when is anything fair, right? And so it's like they're looking at your income and they're looking at your assets, not all of your assets. They don't look at a Roth IRA, for example. So a Roth IRA would be better than a 529 account because that's considered a retirement account. And so your 401ks, your IRAs, your Roth IRAs, your annuities, your life insurance, those are all considered um retirement accounts. And so those don't count against you on the financial aid. But your savings, your brokerage account, your UTMAs and Ugmas and 529 accounts and prepaid college tuition, all those things count against you. And when it comes to getting financial aid, if you have a lot of that money, you're not gonna get as much financial aid. So our strategy is to help families reduce their income with the tax benefits of like a short-term rental, for example. We're gonna help them reduce their income. Then we're gonna take some of that 529 money, and I know this might not be popular, but we're gonna take some of that 529 money or all of like all of the 529 money, and we're gonna put it towards a down payment on real estate. Now, here's the thing: you will be penalized on the gains. So if you add$100,000 in a$529 account and half of it is in gains, you know, you're gonna have a$5,000 penalty. So it's 10% on the gains of the account plus that$50,000 is going to be added to your income. However, if you take that$100,000 and buy a short-term rental property with that money, it will offset your income by about three times as much. So you might, for example, you might add$50,000 to your income by taking out the$529 money, but you might offset your income by$250,000 by buying the real estate.

SPEAKER_01: 16:29

Interesting. Okay.

SPEAKER_00: 16:31

So you're still gonna net a huge tax savings. Like you're still gonna save a lot of money in taxes, even though you're gonna trigger a tax and a penalty from moving the money. If you move that money and put it under your mattress, then you're not gonna benefit, obviously. You're gonna have a penalty and you're gonna add money to your taxes and add income to your taxes. But if if the$529 money is going towards purchasing real estate that could qualify for that bonus depreciation, then you're offsetting your income more than you're adding to the income.

SPEAKER_01: 17:07

Got it. Okay. One point you made there, which I was not aware of, is the penalties only on the gains. And and your principal remains untouched. And that's that's a really, really interesting point. Uh now I'm sure as you talk to your clients about this, some of them say, Lance, I don't know anything about short-term rentals. I don't want to be spending my Sundays washing sheets for the next person. What does this look like? And so what you how do you respond to that?

SPEAKER_00: 17:36

We like we like to say that our tagline is that we make real estate simple. And the reality of it is, is that nobody wants to get another job, especially these high-income W-2 earners that are making a lot of money, you know, they don't have time, right? I would say to So what we've created is we've created some very turnkey processes where number one, we're gonna help you find the property, we're gonna help you underwrite the property and understand the market data. You know, and a lot of people say, oh, my neighborhood is not a good market for a short-term rental. Well, that's not the point. You can't look at it like that. You have to look at it as right location, right? Right location. So that might be across the country. Like I live in Utah and I just bought a vacation house this year in Florida and in Idaho. So you don't have to buy a house in your next, you know, next door. You want to look at it like buying a franchise in a way. If you bought into a franchise, you're not gonna be working at that franchise every day. You know, you're going to have a manager that's gonna manage the franchise and you're gonna have employees. Well, the same thing with buying a short-term rental. You're actually buying a business. I know that your audience is a lot of entrepreneurs, you know, and you've got to think of it not as real estate. You've got to think of it as a business. You know, a short-term rental business is what makes the most money when you get the pricing right, when you get the photos right, when you get to the first page of Airbnb, when you stage it right, when you design the rooms to a theme that is going to attract your audience in that area. I mean, on and on and on and on. It's like, you know, there are so many things that you have to do right, you know, to make the property a very, very successful business. And what we've done is just created lots of partnerships with people that can just hold your hand through that entire process. Just like as if you were gonna build a house. If you were gonna build a house, you've got a general contractor, you got a bunch of subcontractors, you know, and you just pop in from time to time, you know, to make a presence and to check on things and things like that. It's really that easy.

SPEAKER_01: 19:47

I like it. I like it. Now, Florida and Idaho, is that a purely economic decision, or is that a place that you like to go and visit?

SPEAKER_00: 19:57

So we like to get into creative financing. Um, we love creative financing deals that where we can take over somebody's mortgage payments or a seller financing type deal. And so I have certain areas that I'm interested in owning property. And Idaho um on a lake where we like to go boating and stuff, it's not too far from our place. I do like that particular area. But then Florida is just a fun place that we like to go and visit for vacations. Um, and so I was looking, and you know, and I'm still looking in like Arizona and some other areas that you know are that we'll own. I'd like to own hundreds of properties eventually. So it's all about finding the right property, you know, in that right location, right? Um, I know a lot of people love the Smoky Mountains, for example, because they might live close to the well, I'm surrounded by mountains. I I don't want I don't want to travel to the mountains, you know, I want to travel to the beach. And so so for me, there's just certain locations I like. And then I found, you know, the right property at the right price and the right deal. You know, I picked up a 2.9% mortgage on the Idaho cabin and a 4% VA loan in on the Florida house.

SPEAKER_01: 21:13

You you aren't by chance a fan of Pace Morby, are you? Very much, very much. Me too. Me too. And and to our listeners who haven't heard of Pace Morby, uh creative financing genius, um, seller financing, raps, things like that, is and he puts out a lot of really, really good free content. And and so um, but let's talk about like let's talk without going too deep down that rabbit hole, let's talk about creative financing and and why somebody should entertain that as an I as a method as opposed to your your standard 30-year mortgage with 20% down payment.

SPEAKER_00: 21:52

Well, we are talking to entrepreneurs, and the one thing us entrepreneurs hate is banks, because banks do not look at our income very favorably, especially if we're taking advantage of all these tax write offs. I can make over a million dollars a year and with tax write offs show that I don't make any income. That makes it very difficult when going. Going to a traditional lender, right? For a traditional mortgage. And so if we're talking to entrepreneurs, the one thing that we all hate is looking at our debt to income ratio, looking at our credit, because some of you have, I know I've had a rocky road to get to where I'm at, right? I don't think anyone would consider the entrepreneur path a smooth sailing path. And so sometimes people's credits have maybe gotten messed, you know, messed up along the way, or maybe, you know, they're in a situation where their business is very, very successful. They're making good money, but it doesn't look like it on paper to a bank. And so what I love about creative financing is no credit checks, no debt-to-income ratio checks, things like that. You know, it's like you can close within a couple of weeks and you can put way less than 20% down. I bought a$620,000 house in Florida for$40,000. And it came fully furnished. It came fully furnished, ready to go as an Airbnb. And I bought a cabin in Idaho for it was a$1.5 million house for$100,000 down. And it came fully furnished as well, ready to go. That's awesome. That's awesome.

SPEAKER_01: 23:26

Yeah, that's uh yeah, awesome, awesome just topic for for people to learn about. And and so um let's talk about so uh back to the college planning for people with young families, say 10 years and younger, uh what what strategy should they be employing? And then let let's answer that in a different way. You know, if you have kids a couple years away from college, what what things should you be doing?

SPEAKER_00: 23:54

Well, for starters, definitely redirect those 529 savings towards some real estate, whether now or whether you're saving up, you know, to buy some real estate when the kids get older, that's fine too. But just save in a vehicle or save that money in a way that you have access to it when you need it. There's only one downside to real estate, in my opinion. I love a lot of things about real estate. But one thing I don't like is that you don't have access to the money. It's not really liquid. You know, when you buy a house, your money's kind of tied up, unless you go get like a home equity line of credit against the house or something. But generally speaking, it's not liquid. And so we're a really big fan that if you're gonna get into the real estate game, you should have access to your money. Now, I know this is probably, you know, I know this is a controversial topic, but we love a very specific type of life insurance where we keep the fees really, really low and we can get about 70% of the upside of the SP with a 1% guaranteed minimum. And so that's a safe place to save your money. And then when it comes time to buy that first house, you can actually use that money you have saved as collateral, and you can actually get a loan from the insurance company at a 5% fixed rate, depending on the company, but you can get a low interest loan using your money as collateral. That's what you could use for those down payments. And you could use that for any unexpected expenses that come along. You know, with real estate, there's always unexpected expenses, or maybe there's three months of the year that, you know, is an off-season where you're not renting it as often. You know, like I feel like if you're gonna get into the real estate game, you need to have a cushion. You know, and we like that cushion over like having money in the market, for example, because of timing, right? Like if you have money in the market and then you need the money, it might be it might not be a good time to go get that money out of the market. Um, and then of course, if you do go get the money out of the market, you're interrupting all that compounding. Whereas with the insurance, it continues compounding the rest of your life and you just borrow against it. So there's no timing issues or anything like that. It's just a more advanced way to buy the real estate. So if you're just saving up for the future, you know, I like that vehicle because it also doesn't hurt you on the financial aid either.

SPEAKER_01: 26:15

Yeah, yeah. Can you can we use some really easy numbers like a$100,000 house? And can you walk me through an example of that life insurance?

unknown: 26:26

Yeah.

SPEAKER_00: 26:27

Yeah. So on the life insurance example, honestly, we can set that up for anyone's budget. We have families saving$500 to$1,000 a month, just kind of building up their savings for these bigger purchases in the future. Um, and we have clients that are moving money, you know, money that they already have. They're moving money into life insurance to the tune of hundreds of thousands of dollars every year. They're moving that money over, you know, into this type of vehicle because it grows tax-free, guaranteed to never lose, still get the upside of the market. I mean, there's all these benefits if it's structured correctly. So those plans can range from$500 to$1,000 a month to hundreds of thousands of dollars a year, you know, into those plans. And I would just look at it as a life insurance savings account. Just think of it as a life insurance savings account with the actual life insurance as kind of an added icing on the cake, you know, just an added bonus. You know, it's just more about the savings vehicle. And then and then once you get around 10% saved up, you know, that's when you could get into a house for about 10% down, um, especially these creative financing deals. So, you know, you if you're looking at getting into a million-dollar house, you know, you want to save up, you know,$100,000, ideally.

SPEAKER_01: 27:47

Okay. And then you you would take a loan out against your principle that you've been contributing to the life insurance policy.

SPEAKER_00: 27:56

Correct. Yep. You would just take a loan out, you would take that and put a down payment, you know, on the real estate, and you're not even required to make loan payments. The loans can just be paid off when you die. Yeah. Yeah. Absolutely.

SPEAKER_01: 28:10

Absolutely. And I I like it. I like it. Now, uh entrepreneurs often reinvest everything back into their businesses. How does that behavior impact financial aids and and how can you maybe structure things differently?

SPEAKER_00: 28:28

No, I think that works out great because who's to say what the value of your business is, you know. So if you're reinvesting all your money back into your business, unless you have a half million dollars sitting in a business checking account, you know, it's pretty easy to value your business as being next to nothing. Because if you if you died or if you weren't involved, then the business wouldn't succeed. Like, you know, if you weren't still here, this podcast wouldn't still be here. You know what I'm saying? So it's like, what's the value of your business without you, I guess, really? You know what I'm saying? And so depending on your business, obviously, we're all trying to get to that point where we can remove ourselves from our business and it will continue to grow and everything. But but you know, putting all your money back into your business to grow your business, that'll just generate you the cash flow to be able to buy the real estate and do these other things.

SPEAKER_01: 29:18

Aaron Powell Okay. Okay. And when we're talking uh financial aid, you've got your merit-based items and then your non-merit-based. And and I remember when I was applying for for college, there was a FAFSA that I filled out. Is that is that what you're talking about? Like the government financial aid?

SPEAKER_00: 29:38

Yep. Yeah, there's two forms that you're typically going to fill out. The FAFSA. The FAFSA is the federal application for student aid, and that is your government form. Okay, so the FAFSA is going to be for a lot of your public schools. Then there's the CSS profile form. The CSS profile form is going to ask additional questions, digging a little deeper, and that's typically used by private schools that have more money to give. Um, that's another thing to kind of point out. A private school that's 80 grand a year or 90 grand a year, or pushing 100 grand a year nowadays, they could actually cost a family less than the state school costing 20, 30 grand a year because they give so much more financial aid if you qualify. So if you qualify for financial aid, a top-tier private school is going to give you the most money. They just also happen to be the hardest to get into, so you still have to get into the school. And supposedly they're need blind, meaning they don't look at your finances and making those admissions decisions, but I'll question that all day long. So if you're going to pay full price, you've got a much better chance of getting in somehow. Yeah.

SPEAKER_01: 31:00

No, that that makes sense. That makes sense. Now, do where do they generally draw the line? Is it are they looking at is it adjusted gross income that they're looking at? And at what income threshold do they you tend to qualify versus not qualify?

SPEAKER_00: 31:15

Think of it more as around 20% of your income and about 5% of your assets. So let's say that you let's just roughly say that you make$100,000 a year. If you make$100,000 a year, you know, your financial aid number is gonna be in that$20,000 range. Okay. That means that if the school is$80,000 a year, you're gonna qualify for$60,000 of financial aid. Because if your number, and this number is just a financial aid number, it's just a number that they calculate when you fill out the financial aid forms. And it's like I said, it's roughly 20% of your income. So if your financial aid number is$20,000, the school is$80,000, you qualify for$60,000 of financial aid. But just because you qualify for that financial aid doesn't mean that school is going to give it to you. Some schools are more generous than other schools. So, like a local state school, they're not very generous because they're only$30,000 a year retail, right? On a local state school, they're$30,000 a year retail. So if you're if your financial aid number is$20,000, you've only got$10,000 worth of financial aid eligibility, but they um they might only help you with half of it.

unknown: 32:35

Got it.

SPEAKER_00: 32:35

Got it.

SPEAKER_01: 32:36

Okay. Okay. No, that that's really helpful. That's really helpful. Now, in my intro, I talked about legal repositioning of assets. What are some examples of this and and how can a family use this to their benefit?

SPEAKER_00: 32:53

So uh uh we were talking about the life insurance a minute ago. That's an example. An example of moving some of your money from an account into the life insurance, it's now going to be legally repositioned into a retirement asset that's not going to count against you. You could also put your brokerage account and your 529 account, you could put that into a Roth IRA, an IRA of 401k, an annuity, life insurance. It's just that a lot of those have an annual limit, right? So it's hard. It's hard to move a lot of money into a Roth IRA. But you could move a lot of money into life insurance. That's why it's used so commonly. It's a common way to reposition assets. Real estate is another way to do it, but it's a little bit more complicated because if I have a hundred grand of equity in my house, then technically that goes on my financial aid. My primary residence doesn't get looked at on the FAFSA, the federal form, but it does on the CSS profile for a lot of your private schools. But let's talk about an Airbnb. Let's say we bought ourselves an Airbnb and we have$100,000 of equity in the Airbnb. Technically, we should put that on the financial aid forms that we have$100,000 of equity, right? But if the house is worth a million dollars, I could pretty easily justify it as a$900,000 house making no equity. I could make an argument for not having any equity just in how I value the house. Now, within reason, I can't say that that million dollar house, you know, is worth$300,000 because, you know, with AI and a lot of the data that's out there, they have an idea. You know, they have an idea of what houses in a certain zip code might be worth, you know, but they're not going to require you to go get an appraisal on your house or anything like that. They just ask you what it's worth. So another mistake that a lot of people make on the forums is they they say their house is worth a million bucks. Well, they just shot themselves in the foot. Like you could say it was worth$800,000. They're not going to fight you on it. You know, who's to say it's by the time you sell it at a discount because you're in a hurry, you got to sell it in a hurry to pay for college. So you got to reduce the price. You got to pay your realtors, the realtor fees, you got to put a little money into fixing it up and staging it before you sell it. I could easily justify a million dollar house being worth$800,000. So I could technically get rid of$200,000 just in how I value the real estate. I got it.

SPEAKER_01: 35:29

I got it. Yeah, that makes sense. Uh when families come to you, what is the most common red flag you see that unknowingly disqualifies them from financial aid? And you mentioned the the value of your house. Any others there?

SPEAKER_00: 35:43

Yeah, it's how they value their assets, is one of the big mistakes everyone makes, or they put the wrong assets on. You know, it on the FAFSA it says, what is the net worth of your parents' assets? You know, and so they start putting 401ks, IRAs, like a lot of these kids that are filling out the forms, you know, they put down all these assets that they don't have to put down. You know, the the FAFSA isn't very good at explaining what counts and what doesn't count, you know, and so people think that the FAFSA is really easy to fill out because it's just fill in the blanks. Well, that's true, but it's like what numbers do you put in the blanks? You know, it's like it's more about the preparation before you even get to the point of filling out the FAFSA, like knowing what numbers are going to go on to the form. It's kind of like doing tax planning, you know. You can't do you can't do tax planning for 2024 in April of 2025. You know, when you when you get ready to go do your taxes, you know, it's April of the next year. It's like it's like, what can you do at that point? It's like your tax year is in the past, you know? And so tax planning happens throughout the entire year, you know. Like I I meet with my CPA every month, you know, strategizing what we're gonna do. I like it.

SPEAKER_01: 37:06

I like it. Now I want to talk a little bit more about uh short-term rentals, and I I think I shared with you maybe before the episode, I'm a buy and hold investor. Got it. And I am also I'm a retired CPA that's super risk averse. Okay. So I'm gonna explain to you why I I like this. I like buy and hold. Everything is known or knowable. Yeah. I can down to the penny know what my uh payment to the bank is gonna be. I can go get an insurance quote, I can see what last year's taxes were. Yeah. Based on the age of the home, there's pretty good estimates on repairs and maintenance and capex. And I can see what market rate rent is. And so very I can when I'm estimating, okay, if I get into this deal, here's what it's gonna cash flow. Um, I like that. Now I have looked at short-term rentals, and the one question mark that I have is occupancy. If this rents out 28 out of 30 days a month, uh that looks a heck of a lot different than if it rents out two out of thirty days a month. And so um, but most of the other things are known or knowable. And so when you're when you were looking at, say, the the place in Idaho or or the the place in in Florida, what what were you looking at for that the occupancy number? What gave you some comfort in um this is gonna be a positive cash-flowing piece of real estate?

SPEAKER_00: 38:34

Well, I agree with you 100%. You know, we do a very similar process when buying a short-term rental property. You know, there's a tool out there called Air DNA, and Air DNA is pretty dang accurate, you know, as far as like what is the average daily rate in the area, what is the average nightly rate for the price you're gonna charge, you know, what is the occupancy, you know, on average in that area, you know, so you can go in and get some pretty good data, you know, you can find out again, you know, the cost of um furnishing it and stuff, you know, you might be around 10%, you know, as far as the cost to furnish it. So there's these rule of thumbs that you can, you know, go on, like you were saying, so we kind of know ahead of time, okay, if we get into this property, this is how much it's gonna cost us, and this is what the rent, you know, or this is what the mortgage is gonna be, and this is what the estimated rent is, and everything else. It's very similar to what you said. There's a big difference, though, in being in the middle of the market and being in the top of the market. And that's why I refer to a short-term rental as not real estate, but a business. It's a very different animal than if somebody is looking at renting a house for a long-term rental, you know, it's a very different decision than when they're picking a house to go vacation in. Right. And so when you're running a short-term rental business, you're not just a real estate investor that buys and holds, you know, a house and it's somewhat very passive, right? A passive type form of income. When you're getting into the short-term rental business, you are looking at what is the top 1% of that market, you know, doing in revenue and what is their occupancy rate. And oh, is it because they have a pickleball court in the backyard and they have a pool and they've decorated their bedrooms to be Mickey Mouse themes and it's right close to Disneyland? And so, you know, that house is gonna stand out over another house that was staged like a model home.

SPEAKER_01: 40:40

Got it. Right. Got it. Yeah.

SPEAKER_00: 40:42

And and then you're gonna decide is this a house for families or is this a cabin in the woods where couples are gonna go visit? Because if it's where couples are gonna go, I want a bedroom to bathroom ratio of like one to one, right? Like I want three or four couples to go to that house and all have an equal experience because they're probably splitting the bill, right? So, so they each need to have a king bed, they each need to have an attached bathroom, you know, things like that, right? Versus if I'm close to, you know, a family, you know, like if I'm close to Disneyland, for example, or Disney World or something like that, I might have a Disney theme throughout the house, and I might turn the garage into a bunk bedroom, and I might have a twirly slide coming down off the off the and I might have a pickleball court, and I might have the bright colors, you know, and it would be a house that you would choose for your kids, but not for you and your wife as a getaway. Right? Yeah.

SPEAKER_01: 41:41

No, that that's really um that makes a lot of sense. That that makes a lot of sense. And it's good to know that there's there's places out there where you can pull that data and you know, I'm a spreadsheet guy. Yes, that's that's how I get comfortable with my decisions.

SPEAKER_00: 41:52

And so uh And we have a we have a spreadsheet on every single property, right down to the operating expenses, to the insurance, and in our case, the management. We're gonna budget in a good twenty percent for the management because we don't want to manage it, right? We wanna we wanna have somebody else manage the property, checking guests in and out every day, you know, cleaning the whole nine yards. Absolutely.

SPEAKER_01: 42:15

No, that's really good. Um all right. Well, to but before we get to the fire round, um how do you what's the typical client that you work with and what's the best way of of getting in touch with you? And if they engage with you, what can they expect?

SPEAKER_00: 42:31

So we have clients of all ages with kids of all ages. I would say we get a lot of clients with kids in high school just because it's, you know, it's uh it's go time, right? Like it's the last minute, you know, it's on the they're talking about it, the algorithms, listening to them, you know, and so we do get a lot of families that have kids in high school, and we work with kids with you know seniors in high school. We even have a lot of families with um freshmen in college. They still have college to pay for, you know, and we can still help, even if they have kids in college, we can still help. So we help um families that have young kids and they're doing a lot of planning and preparing long term, and then um we help with you know kids that are already in high school. And we work a lot with you know higher income families in the sense that like our average client probably makes over$150,000 to a million dollars a year in the W-2 income because they're the ones that are not getting a lot of the free money through the Pell Grants and things like that, you know, and so and they're looking at the uh more expensive schools, you know, they're looking at these$100,000 a year schools. And so uh I don't care how much money you make, it's all relative. You know, and if your kid is gonna go drop$100,000 a year to Ivy League school, it hurts. It hurts at all levels. Yeah. And and so we we probably target a little higher income families just because we're recommending that they buy real estate to pay for college. That's our whole message, is don't go pay cash for college. I don't even know if I've mentioned this. We've kind of talked about so many other things, but but basically our main message is don't go pay cash for college, but buy real estate that will generate the income to pay for college and your retirement. So our big message is put your college money into real estate. Not every family can afford to do that, you know. So we're targeting families, you know, that have some money saved that can get into some real estate, you know, things like that. And then our website is collegefundingsecrets.com.

SPEAKER_01: 44:35

Very nice. And we'll post a link to that in the show notes. Now, Lance, before we break, we have something called the fire round. It's uh four questions that we ask everybody at the end of the show. Are you ready?

SPEAKER_00: 44:46

Awesome. I'm ready. All right, what's your favorite book? My favorite book, without question, is Who Not How changed my life.

SPEAKER_01: 44:54

That's a good one.

SPEAKER_00: 44:55

That is a good one. What are your hobbies? Um, I live to snow ski, love snow skiing and mountain biking.

SPEAKER_01: 45:03

Nice, nice. Uh, what is one thing that you do not miss about working for the man?

SPEAKER_00: 45:09

I haven't worked for the man for so many years, I don't even remember. Freedom. You know, it's funny. I always say that I'll work 80 hours a week as long as it's my 80 hours that I get to choose.

SPEAKER_01: 45:20

I I I'm with you there. I'm with you there. All right. And and final question what do you think sets apart successful entrepreneurs from those who give up, fail, or never get started?

SPEAKER_00: 45:34

Oh, you just gotta expect to fail and keep going. You just have to accept that you're gonna have some stumbling blocks along the way, and you just have to keep getting up and you just have to keep reinventing. Outstanding.

SPEAKER_01: 45:49

Outstanding. I like it. Lance, thank you so much for your time today. Uh to our to our audience, check out CollegefundingSecrets.com or uh check out Lance's YouTube page, College Funding Secrets. And uh, Lance, thank you. Looking forward to staying in touch. Awesome. Thank you for having me on.