How One Financial Planner Leveraged Tax Strategy to Transform His Wealth

This week on the Tax Smart REI Podcast, hosts Thomas Castelli and Ryan Carriere sat down with Zack Mattos, a financial planner, short-term rental investor, and long-time Hall CPA client. Zack shared his journey from a traditional financial advising career to building wealth through real estate and how proactive tax strategy changed the trajectory of both his personal finances and his client work.

Discovering the Power of Real Estate Tax Benefits

For over 20 years, Zack built his career advising clients on retirement planning through stock market vehicles—IRAs, 401(k)s, and brokerage accounts. But a book recommendation opened his eyes to the wealth-building potential of real estate.

He realized that depreciation and real estate professional status (REPS) could offset active income in ways traditional retirement accounts couldn’t. This led him to pause maxing out retirement contributions and pivot toward real estate. In 2022, Zack and his wife turned their Austin, TX home into a rental, setting the stage for a massive tax and wealth shift.

Turning a Home Into a Tax-Smart Investment

Zack purchased the Austin property in 2019 for $1.7M and invested nearly $500K in improvements, including a pool and extensive landscaping. When the family moved to the Texas Hill Country, they kept the Austin home as a rental.

• 2022 Rental Income: $110,000
• Depreciation (via cost segregation): $943,000
• Result: A nearly $900,000 loss on paper, which wiped out his taxable income.

This strategy allowed Zack to avoid paying federal income tax for almost two years while still generating real rental income and holding onto a luxury property.

The Bigger Picture: Beyond Taxes

While tax savings were the catalyst, Zach emphasized how real estate creates stability in retirement. Unlike portfolios that rise and fall with the stock market, rental income offers predictable monthly cash flow. As a financial advisor who works with retirees, Zach saw firsthand that clients with income streams from real estate are more financially secure and less stressed than those relying solely on investment withdrawals.

Building a Family Business

Real estate also gave Zach’s family new opportunities. His wife qualified for REPS, his teenagers earned income by helping manage the rental, and his financial planning practice transitioned into an S-corporation, saving tens of thousands more in payroll taxes.

Zack compared DIY tax planning to DIY investing: yes, it’s possible, but risky. Partnering with Hall CPA gave him the confidence that strategies like cost segregation and the Augusta Rule were executed properly and defensibly.

What’s Next for Zack

Looking ahead, Zack plans to expand his portfolio with high-end rentals in the same Austin neighborhood, creating efficiency in management and maximizing depreciation opportunities. His long-term vision is a small but powerful portfolio of luxury rentals that provide strong cash flow, tax benefits, and peace of mind in retirement.

Key Takeaways for Investors

• • Real estate is a tax strategy as much as an investment strategy. Cost segregation and REPS can dramatically reduce taxable income.
  • Retirement planning is more secure with multiple income streams. Rental income provides stability that market-dependent withdrawals can’t.
  • Implementation matters. Knowing tax strategies is one thing; working with a professional ensures compliance and maximized benefits.
  • Even one property can move the needle. You don’t need a huge portfolio to see significant tax savings.

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Disclaimer: This podcast summary was generated from the transcript and may contain some errors or miss key points from the audio recording.