This knowledge will set you apart in the marketplace, helping you get more high-net-worth clients, better serve your existing clients, and demonstrate real value to your Upstream Partners.

Brett’s expertise and our conversation will include:

–Transformational Exit Planning Vs. Transactional Exit Planning

–How to sell Cryptocurrency all tax deferred and invest in commercial real estate

–How to eliminate the need for a 1031 exchange

–What are the benefits of a Deferred Sales Trust (DST) and buying real estate through the DST vs 1031 exchange?

–How to attract high net worth partners by unlocking their highly appreciated assets to invest into a CRE syndication with you.

Background in Real Estate

Brett Swarts is a licensed commercial broker from northern California, and you could argue that he’s the foremost expert on the subject of tax deferral in the country! He has co-authored a book with Kevin Harrington, the original Shark and has expert opinions and a few key strategies to share on the subject of attracting new upstream partners and better high net-worth clients with a refined unique knowledge.

He started his career in Real Estate selling Commercial at Marcus Millichap in 2006, and before getting too comfortable experienced the economic crash brought on by the market shift in 2008. He retells going to zero basically overnight. Left without a way to provide for his family (of five kids!) he got a “side hustle” at the Cheesecake Factory just to pay the bills. He kept his license with Marcus Millechap and used the time to continue to learn and work with the best in the business through the crash.

He faced a challenge not unknown to the clients he now serves. The challenge, he says, was this: “1031 Exchange was in fact the enemy”. 

The pitfalls in Real Estate his investors were experiencing were too much liability, too much debt, not enough liquidity and a lot of capital gains built up. He compares the shift to what he teaches now with the shift from Blockbuster to Netflix. 

In short: flexibility. Applying what he learned, he has since retired from the “side hustle” and offered his wife the opportunity to stay home with their five kids while his businesses close deals weekly.

“1031 Exchange was the enemy”

What makes Brett say “1031 Exchange was the enemy”? His clients were experiencing what perhaps some of yours are; they are Real Estate rich, but cash flow poor. This could be the great opportunity for you to serve a select group of people in this high networth clients,  and better still share a unique offering with Upstream Partners who serve this niche of clientele. 

You must first determine the answer to this question: What’s the problem you’re trying to solve?

Your prospective clients, and those of your Upstream Partners, have a goal to move from A to B and it is up to you to determine what those points are for them so that you can offer them the solution they have not yet been able to see. 

We uncovered many of these clients are after one thing in the long run and that is freedom. This comes in the form of cash flow freedom, location freedom, debt freedom, optimal timing freedom (to reinvest). You are now able to offer them a new ability to diversify and move from a mindset of cash flow to tax flow.

If the government has a spending problem, we have a tax problem and we see now more than ever the need to use legal, available strategies to unlock your freedom. 

Market Yourself to Solve Problems 

As we’ve determined, your number one agenda is to uncover needs and challenges of your desired clients and Upstream Partners. What’s the one thing they desire, and what is taking away from that? It could be they have the money but not the time, or vice versa. You then use a method Brett calls “Mirror and Labeling” where you share it back and give the emotion a name to relate to them and help them find a solution. 

Here is a simple format to this meeting: 

  1. In person 
  2. Determine Motivation
  3. Compare their other options with your proposal 

They have a problem and the alternatives are either unclear or unattractive. They either won’t sell at all or they won’t sell with you unless they see a clear solution. You now have resources to help them avoid tax consequences or trading into another property – leave it open and make a connection to Brett. 

Take the examples Brett shares in this Podcast to a Financial Advisor, and see if they have clientele who can relate! He shares several stories throughout, from people selling high end commercial Real Estate, to those who had kids later in life, already had millions in nest egg, and needed time. If you can paint a picture for your Upstream Partners and for your clients, you can help them see how you have the unique solution they have otherwise given up on.

Stand out in a Crowded Marketplace 

Know what these unique deferral options are and who it works for. Here are a few ideas Brett shared with us:

  • An individual selling a million dollar asset, worth $1M Net proceeds and $1M gain
  • Business owners
  • Cryptocurrency trades 
  • Transfer of wealth from one generation to the next (with 77 million boomers and $32 Trillion of wealth being passed down, we are facing what is now known as the largest transfer of wealth in history!)

In a crowded marketplace, it’s easy to overlook how little the people you serve truly know and how helpful you can be to them with a unique offering. You don’t have to have all the answers – you are growing a great network and now have another resource to add with Brett Swarts and his connections and resources! It will help you know what else is being sold, so start with an email to Brett for a list of what is closing right now to learn how these deferral strategies could benefit your connections. 

As a leader, you see before others see and now you may have an opportunity to unlock capital from this transfer of high-end primary homes, business equity and crypto-currency equity that could be used to flow back into reinvesting in the Real Estate and bring you buy-sell transactions with the right relationships. 

Consider the following scenarios:

How to Serve an Upstream Partner with This Knowledge

A Financial Advisor inherited a client too late. Before passing, he planned to pass three commercial properties to his family. Without proper planning and education, his family ended up selling two of these just to cover the Death Taxes and were only able to inherit one.

How to Serve a Client with This Knowledge

Help your clients move away from the “Blockbuster-age model” where you use 1031 Exchange to “swap until you drop”. 

Imagine a client who, at the end of their life is worth $124 Million. 

Their kids would get a $24 Million exemption at their passing, and the other $100 Million is subject to forty percent tax on the death tax, equal to paying $40 Million. 

You come in with this solution: Sell to a 3rd party at fair market value and move proceeds into deferred sales trust plus and eliminate the estate tax (40%). Now the kids partner with the trust and buy more real estate with an extra $40 million. You earn more Real Estate transactions, and above all their trust because you offered them a real solution and saved their assets generationally – how is that for thinking bigger! 

Partner with other experts

We learned from Brett’s example what it looks like to partner with an expert in this field, and with his unique knowledge you do not have to be the expert in anything beyond growing yourself. get in the room with people smarter than you, and offering your connections! 

What you learn could bring you, your clients and your Upstream Partners true success and significance, that’s what we’re all about! Connect with Brett at the resources below and shared within this podcast, and let us know how we can help! 


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