[Note: To follow is an excerpt of an interview with Pankaj Shukra, founder and CEO of T-Rex Global. To listen to, or download the show archive MP3, go to www.IncomePropertyInvestmentTalk.com.]
Mosca: Technology products, services and solutions are allowing more and more investors, agents, and brokers to generate wealth more effectively and efficiently. You call your products T-Saps, or Tiny Simple Applications. Why are T-Saps important to the real estate investor?
Shukra: Typically in the software industry you'll see the larger players in any vertical market tend to be served well. The smaller guys are more diffused and are the ones left holding the bag in terms of a lack of useful solutions. We saw an opportunity and went there. We listen to our customers from the beginning, understand their 'pain points,' and create solutions to address those for smaller real estate investors who already owned property. Our T-Saps are primarily designed for income residential property owners because there are about 10 million owners out there.
Mosca: How does your product Defer'Em help those 10 million investors?
Shukra: Defer'Em is focused on the investor that's going through a 1031 exchange. Depreciate'Em is focused on an investor that just bought property and needs to set up their depreciation schedule. Simplify'Em is focused on keeping your property finances organized for tax time.
Mosca: The sponsor of our radio program, RealSource, has thousands of real estate investors across the country invested either in their own properties or tenant in common investments. How can Defer'Em help multifamily and apartment investors like them?
Shukra: One of the biggest pain points investors have when it comes to 1031 exchange is the IRS form and the proper forms to fill out, like the 8824. Defer'Em takes advantage of your closing statements on your bought and sold property. It analyzes and optimizes every aspect of cash received and cash spent. We also have a support line and e-mail support.
Mosca: The 1031 process is comprehensive and we recommend working with the very best 1031 professionals (we have archives of 1031-specific radio shows at IncomePropertyInvestmentTalk.com). What are the unique aspects of Simplify'Em?
Shukra: Simplify'Em solves one of the biggest pain points that a real estate investor has which most dread January, February, and March of each year. Simplify'Em is a property management solution that organizes finances so you are always ready for tax time.
Mosca: There are about 2.5 million investment properties purchased every year by real estate entrepreneurs. Can you tell us how Depreciate'Em helps investors save thousands of dollars in taxes in the first year?
Shukra: When you first buy an investment property you have to set up a depreciation schedule. A larger investor who buys a $10/$30 million strip mall might consider a cost aggregation specialist to come in, study a property and list all the assets in the building. This is not as cost-effective for the smaller single-family or duplex investor. Depreciate'Em calculates the basis for a property by creating a list of assets that an investor can accelerate and depreciate faster. Typically we can save an investor with $100,000 close to $1,000.
Mosca: Many real estate professionals are working from a home office or a workshop. How can they take advantage of your software?
Shukra: The investor segment is such a huge, lucrative segment and I do not think enough real estate professionals are focused on it. Investors did a staggering 22 percent of all transactions completed in 2007. It is a huge market for real estate professionals (to learn more about working with investors, please go to this link ). Investing is just like real estate.
It is a relationship business and you build a team. As a real estate professional, I want to be part of that investor's team to tap into this 22 percent of the market. The only way to succeed in life in general, and real estate specifically, is to build win-win relationships and have a team of people that are all dedicated to the same goal.
Mosca: Ay last golden nugget?
Shukra: Time is money. Look for solutions that save time and make you money.