The MHP Brokers Tips and Tricks Podcast Interview with Marc Henn of Harvest Advisors

The Mobile Home Park Broker's Tips & Tricks To Investing

In this episode of The MHP Broker’s Tips and Tricks podcast, Maxwell Baker, president of The Mobile Home Park Broker, interviewed Marc Henn about tax decisions that can positively influence mobile home park and RV community owners.

This and every Tips and Tricks podcast episode is brought to you by The MHP Broker’s’ proprietary Community Price Maximizer. Use this four-step system to get the highest price possible for your mobile home park or RV community when you sell it through The MHP Broker. Guaranteed. Ask Max for details.

Here Are the Show Highlights:

• Max met Marc Henn of Harvest Advisors of Cincinnati in a Strategic Coach program last June. They discussed tax strategies that would be ideal for investors who sell their parks and want to save as much of their money as possible from taxation, or use their land for additional revenue growth. Marc introduced the topic of the five super asset classes and Max thought Marc would make an excellent podcast guest. (Max, 0:22)
• Marc has been in the investment field for over 30 years. In that time, he helped his clients get into the super asset class or classes that were most appropriate for each. For those with wealth to invest in the range of about a half million to $2 million, many choose investments in the paper asset class, consisting mostly of stocks and bonds. (Marc, 1:50)
• Marc found a particularly under served client group to be those in the asset range of about $4 million to $15 million. In addition to paper assets, the five asset super classes include real estate, personally owned businesses, oil and gas, and investments in other commodities. (Marc, 3:12)
• Max invited Marc to be a podcast guest because of his experience with oil and gas investment tactics and strategies and tax benefits that might be of value to his audience. (Max, 4:36)
• One effective way of investing in oil and gas is to get involved in a direct drilling program, which can provide a significant tax write-off in year one. Keep in mind, like a lot of investments it’s not risk-free. (Marc, 712)
• Take as an example a client making a million dollars a year. His last $100,000 will be federally taxed at a 37 percent rate, so they’ll lose $37,000 in taxation on that income. But invest that money in an oil and gas drilling program and they’ll pay about $3,700 in taxes on that $100,000, for about a 90 percent tax write-off. That’s just a starting point. (Marc, 8:04)
• You’re also given a depletion allowance on income earned, because the IRS knows that the well revenue will deplete over time. So instead of being taxed on 100 percent of income earned, you might only be taxed on 85 percent. However, some wells have a much longer life. Mark has a well in his family that’s produced for 110 years, though that’s not typical. (Marc, 9:07)
• As an advisor, Marc and his company don’t promise any sort of investment return on oil and gas, but finds that it’s not unrealistic to get a complete return on investment in a well-chosen drilling program in a year and a half to two years. (Marc, 10:36)
• One big determining factor is the price of a barrel of oil, which can fluctuate greatly. If it gets down to $30 or lower, the investment could be at risk as a revenue producer, but the tax benefit is still there. (Marc, 11:46)
• You need to watch out for companies that might have just recently gone into the drilling business in reaction to rising oil prices, but lack experience, insurance and adequate capital for such essentials as drilling platforms and rigs. Instead, invest in experienced producers with good track records and connections to the large drilling companies such as Anadarko and Occidental. Marc and his people can help vet their clients’ partners in oil and gas investments. (Marc, 13:40)
• For many clients, Harvest Advisors offers diverse investments in multiple super asset classes. So your money might flow from paper asset class investments to oil and gas to real estate and other commodities. (Marc, 15:40)
• Mobile home park owners are used to owning what’s called surface rights on their land, but they also own subsurface rights which they can sell to oil and gas exploration companies. That means that your property’s mineral rights can also quality you for a 1031 exchange just like your property above ground. (Marc, 20:57)
• Your mineral rights can also be sold just like any other investment if you need quick cash. (Marc, 23:42)
• Mineral rights investments are earning higher returns now. That’s in part because oil and gas investments are being shed by endowment funds due to political and social concerns. However, Wall Street still highly values these companies, so they can be better investments now than ever. (Marc, 25:53)
• If the price of oil goes down, drilling on your land might stop until the price goes up enough to make drilling profitable again. Your mineral rights are safe in that you wouldn’t have to sell pumped oil at cheap prices at a loss. (Marc, 27:23)
• Think of your mineral rights as a long-term investment. Drilling could stop for many years if the price of oil isn’t right, but you still get 1031 exchange tax benefits. And as soon as oil prices rise again, drilling resumes. (Marc, 28:08)
• Your oil and gas investment can also flow with your opportunity zone tax benefit, which lots of mobile home communities have. This can further maximize your return. (Marc, 29:22)
• These oil and gas investments can be ideal for park owners who might otherwise be hesitant to sell their land on account of the tax burden. Now they can keep their land and count on a regular check from their investment. (Max, 33:39)
• Marc Henn can be contacted at [phone] or by email at [e-mail]. His company website is HarvestAdvisors.com. (Marc, 37:13)

Want to know more about wise investments for mobile home park and RV community owners that can create tax benefits and generous revenue returns? Contact Max Baker and The Mobile Home Park Broker team at [phone]. We’ll be happy to put you in touch with Marc Henn of Harvest Advisors.

Power Quotes in This Episode:

“I love the idea of strategies that when we look at investors and the biggest expense, they face…taxes…we can address that issue and keep more money in your pockets and less for the federal government. I think it's it's every American's duty to do that.(Marc, 1:18)

“...our job really is to kind of design for a client a strategy to really save on taxes, have a great diversified mix, and if possible, if it's something the client wants as well, to go outside of just those paper assets (stocks and bonds).” (Marc, 3:12)

“Those (oil and gas investment) tax write offs carry over into a Roth IRA strategy or a 1031 strategy or opportunity zone strategy as well…” (Marc,9:07)

“...when you factor in the tax benefits of a drilling program, we're looking for a return of your capital probably in about a year, (or) between a year and a half to two years.” (Marc, 10:36)

“...you want to have a company that has enough insurance behind them as well, just to protect everything. And typically a company that's also partnering with larger drilling companies like an Anadarko or Occidental, things like that.” (Marc, 13:40)

(Regarding the sale of mineral rights.) “So it operates and acts just like owning property above ground, and of course, that's one of the many reasons that can qualify for that 1031 exchange.” (Marc, 20:57)