Meet Dr. Kirsten Limmer, a board-certified pediatrician, PhD in molecular biology, and also an incredibly savvy real estate investor. She learned that she could save lots of time and money, by designating herself as a Real Estate Professional. Most doctors are attracted to real estate investing because they hear about the potential tax deductions they can receive. However if you do not have Real Estate Professional Status, any losses that are involved in real estate activities are considered passive, and are limited by how much can you deduct on your tax return.
So why don’t more doctors opt for Real Estate Professional Status? Mainly because you have to keep onerous and detailed logs each year as evidence you are involved in material real estate activities as a Real Estate Professional. Not able to find an appropriate solution, Kirsten create one on her own. Now available on iOS and Android, REPStracker is a portable solution to help you streamline the way you document hours for Real Estate Professional Status. This could be a huge breakthrough in your real estate investing.
Kirsten also happens to be one of my students, and we discuss the obstacles she faced on her journey from turning her app into reality. Prepare to be inspired!
REPStracker – a better way to document your REPS hours. The next generation app that will streamline the way you document hours for Real Estate Professional Status.
Mike Woo-Ming: Hey guys this is Dr. Mike Woo-Ming welcome to another edition of Bootstrap MD. Well, I’m really excited on my next guest. And she really is an example of how as entrepreneurs we find problems, we are in front of problems that we know is hurting us either through time or money. And we come up with solutions to address these problems.
And this doctor did exactly that. Her name is Dr. Kirsten Limmer. She is a Pediatrician completing her residency at Harvard Medical School earned her medical degree at my Alma mater UCSD. She was at the UCSD School of Medicine, actually has a PhD in molecular biology at UCSD as well. And as mentioned, she’s board certified in general pediatrics, but…
Probably even more important to you, especially if you’re a real estate investor. And I know many of you are, who are listening to this program. She has created a very cool app that can save you a lot of time and money. It’s called REPStracker. She can talk all about it. Welcome to the show Dr. Kirsten Limmer, Kirsten, how you doing today?
Kirsten Limmer: Thanks Mike. I’m happy to be here.
Mike Woo-Ming: Well, I gave it this intro, you know, we got the Harvard, we got the UC San Diego here. Molecular biology. What kind of led you to creating this app known as
Kirsten Limmer: REPStracker?
Yeah. Yeah. Well, okay. Like you said, I’m an, I’m a real estate investor. I’ve also always had an entrepreneurial spirit.
In second grade, I started a business selling, earrings that I made out of tiny little origami cranes and started a little side business inside of my second grade class. So always kind of looking for problems and solutions and , in trying to make innovations out of that.
And you know, being a real estate investor , over the last several years have kind of been more of a hobby investor, kind of dabbled in real estate. But over the last year or so, I’ve become a lot more systematic, a lot more serious about investing and concurrently with the pandemic. I have three little kids who who started homeschooling at home, like a lot of people.
So I had to, to cut down my clinical time, pretty significantly in order to be at home for them. . So kind of, it was, it was kind of a clash of, of two worlds. I was both more serious about real estate investing and I had cut down my clinical time. And what led me to start to go down the road of was something called real estate professional status, because I knew since I was not working…
As much in the hospital anymore. And I was doing more real estate that I could potentially apply or become a real estate professional in the eyes of the IRS for the, for tax purposes. Now I’m gonna give you a little high level overview of real estate professional status because it’s not like becoming a real estate agent or anything.
It’s, it’s really just a tax designation. And so basically, normally as a real estate investor, when you have profits and losses from your real estate those can only be used against each other. So that’s considered passive income. And so to give you kind of a real world example I have a house in Palm Springs that I use as a vacation rental.
And I put on solar panels a few years ago for, I mean upwards of $80,000 or something like that. So a really decent expense, but because those passive losses can only be claimed against other passive losses. I wasn’t able to deduct the whole thing off of my taxes that year. So that’s kind of a step-wise deduction off of my taxes.
Now what real estate professional status does is it takes that basically that bucket of… passive profits and losses and combines it with active profits and losses. And that could be something like a W2 or a 1099 income. So for, for myself and my husband, who is also a physician it’s that’s considered active income.
And unless I can say that I’m a real estate professional then that would be considered passive income. So now I’m putting both of those in the same bucket and now anything, any deductions or anything like that from our real estate investments, we can use against our W2 income. And that is you know, becomes a really.
Powerful tax reduction strategy when you have a lot of real estate and especially as you know, a dual physician couple so what I found when I was going down this road and, and I should kind of back up and say the most important thing about claiming real estate professional status on your taxes is documentation.
So I’ll, back up even more on that. And say, you know, with any great power comes great responsibility. So the IRS is not just going to like, swallow that you’re just a real estate professional. And just here I am. And, and that’s it. And, and give me a tax refund of a hundred thousand dollars, please. No. So there, there’s a lot of hoops that you have to jump through and it’s a little outside of the scope of this podcast, but essentially what you have to do is show that you have… spent several hundreds of thousands, not sorry, excuse me. Not hundreds of thousands, several hundreds of hours on your real estate throughout the year.
And that, and that has to happen every year. And not only do you have to have the time logs to prove it but you also have to have the evidence. And so, for example, if you, if you say that you spent half an hour with your tenant on the phone on March 21st, not only do you have to have that, but you sh if, if you get audited, you better be able to bring up that call log and be able to show that you spent half an hour on the phone with your tenant.
So you know, as you can imagine, these, these time logs really add up and you have to be really on the ball to, to, to stay updated and, and keep you protected. And in the case of an IRS audit and what I looked around and what I saw was that most investors were actually using like Excel spreadsheets, Google Calendar, some would like, you know, just like a pen and paper note, pad type thing.
And like, you know, keeping a little shoe box full of their receipts or their, their pictures of all of their evidence. And, and to me being you know, a little bit more on the OCD spectrum, I was like, wow, I can’t do that. Like, first of all, I know that I need a system.
If I’m going to be super meticulous and up to date amount, my hours, I need a system that is easy. I can do on the go. I don’t have to wait to come home and like, sit in front of the desktop. And because I just know I won’t do it if, if day after day with having such a busy life, I know that that I won’t be able to keep track of my hours that way.
So I looked around for an app because, you know, there’s gotta be an app for that. Right. And couldn’t find anything. So there’s, there’s kind of generic time tracking apps, but none of them really fit the needs that I was looking for. So hence, was born REPS tracker.
Mike Woo-Ming: So, a lot to cover there. And then I’m curious to know, and probably you don’t have the the numbers on this, but…
It sounds like, you know, real estate investors that could save thousands of dollars, perhaps hundreds of thousands of dollars , you know, becoming a real estate professional or having a real estate professional status. But most of them don’t do it. What’s the reason for that?
Kirsten Limmer: Yeah. And I think that that’s a good question.
And I think that it’s something that even I kind of took pause about, and that is the fact that it, it is an auditable thing to declare on your taxes. And you know, in the eyes of the IRS, you are guilty until proven innocent. And so nobody wants to leave themselves open for an audit. So… that was really what gave me pause.
And finally, I kind of, you know, that was kind of a limiting belief that I, that I had going into it. And when, how I got over that limiting belief was that I was like, there’s gotta be a system. Like if that’s my only reason why I’m not doing this, then let’s create a system that will kind of keep me, you know, water tight from, from that, that type of problem.
Mike Woo-Ming: It’s almost like when you thought about like these hours and like just having them on Excel sheets, it kind of reminded me of like doctors who are like tracking CME. Yeah. You can’t just like, okay, well I did a hundred hours of CME and I wrote it down on this piece of paper.
Kirsten Limmer: So you,
Mike Woo-Ming: you, you, you found out that there wasn’t any. Solution to this. And you said, you know what, I’m just going to create it myself. What is the thought process that goes with it?
Kirsten Limmer: Yeah. Yeah. And yeah, that’s a great question. And so as you can imagine, it wasn’t quite as just easy as, “Hey, I’m just going to like create it myself.”
There was, there was some. Forks in the road, some bumps in the road. And I do have to back up and say that this is not my first app idea. This is not my first kind of venture down the app world. I actually had an app idea, you know, right before COVID and it was just to give you like a really quick it’s it was matching carpools of parents who I would see them . At school, then I would see them at soccer. Then I would see them at a gymnastics. And I was like, okay, I can, I, I should be able to just create an algorithm where everybody, all of these parents have essentially like a GPS tracker and it matches your carpool and then spits it out. Hey, you need to like talk to Susan over there because she’s going to soccer at 3:45 so anyways, I, you know, being very naive, I was like, this is going to be easy. I mean, we have Uber, we have, we have all these apps out there that have GPS it’s super easy. So, you know, that very naive thought actually. So I went and I I talked to an app developer about that app idea and I was just like, wow, blown away by the quotes that I was getting for.
For definitely not the idea that I was coming up with for real scaled down version. It was along the order of like $40,000. Upstarting bare minimum app. So, so I knew kind of going into REPStracker that like anything that you have, that’s like, you know, kind of a grandiose idea, both needs to be scaled down in the beginning.
And also it’s gonna cost a lot of money. So I should say with, with that, that last app, I ended up going to a venture capital fund. It kind of went a couple of steps further and then COVID hit. So it was actually a pretty good thing that it didn’t, didn’t go all the way, but so I knew going into REPStracker that…
there was some issues with, with hiring software developers. It was hard to kind of translate your idea to somebody who is a software developer and, and often it’s because it’s hard to find software developers that kind of have the same vision as you and there’s a cost versus quality versus money type situation that you get into.
And so if you’re, if you’re hiring a developer, let’s say in like, India, it’s going to be really hard to kind of translate this idea that is, very americanized idea to, a software developer who really thinks in code and Java script. And so it, it becomes a big hurdle to find somebody like that.
I knew that it was also going to be quite costly off the bat. So you know, I kind of had this epiphany and said, you know, if all these guys can be software developers, I mean, I went to medical school. Like, it can’t be that hard. I’ve got to just, I can, I can create this app on myself.
So then I started watching YouTube videos and and like really trying to like school myself on app development and went down a couple rabbit holes and found actually like this app development, essentially school. So it was like going to med school, but for app development. And they worked on a platform that did not use coding language, just coding logic.
And I just learned this skillset kind of day by day, step-by-step.
Mike Woo-Ming: And so what was the timeline from initial, you know, idea to actually deciding to, start developing it, start paying money to, to develop it, to actually then launch it. And how much time did you devote each week or month to this?
Kirsten Limmer: Yeah, that’s a good question. So I started it… So it’s. March now. So I started it in November and I had my minimum viable product, my MVP, out by January 15th, I think. So it took less, it was actually less than less than two months that it, that it took for me to have a minimum viable product that had beta users.
And after that I had beta users use it and, and tried and iterated different versions of it until I was able to get it to a version I felt pretty confident in, launching into the app stores.
Mike Woo-Ming: what do you think was the biggest challenge in developing REPS tracker?
Kirsten Limmer: Yeah. So for me personally, the biggest challenge was thinking in coding logic, which I actually, I love thinking in coding logic.
But having three kids at home for most of that was you know, having to go down these. Like long pathways, or if anybody interrupts you, you have to go back to the beginning. So, so having my kids home during this, so actually adjusted my schedule. I started waking up at like two or three in the morning so that I could just have these few hours of uninterrupted time, so I can really, really nail down my app.
But yeah, I think that that . And also I spend a lot of mental energy in the beginning. Almost keeping it like secret. And I think a lot of entrepreneurs kind of struggle with this. “I’ve got this great idea and but I can’t tell anybody cause the people are gonna steal my idea.”
And if I were to go back and do it over again, I don’t think I would keep it secret. I think that, you know, what I’ve realized is that number one, it takes a lot of time and effort to, to create an app. So, you know, you’re not going to like, tell Joe Schmo about it and then have them just like create the app right away.
It’s pretty unlikely that somebody’s going to steal your idea. And also when you, when you are a really open and honest and, excited about something, people will give you ideas that you might not have thought about. And I think it kind of adds to your own excitement and your own momentum.
So, really I think with any kind of future endeavors that I do, I’m going to kind of take that and go with it and really just try to be open and gauge other people’s ideas on these things.
Mike Woo-Ming: So a few weeks ago we had on the program Dr. Daniel Erichsen, who also developed an app and is someone that I know you had a chance to talk to and, and he had his own ideas about apps and whether a physician should get into apps. What do you recommend say as someone who’s now, been there done that.
Kirsten Limmer: Yeah. And interestingly, since I launched this I’ve had a lot of physicians reach out to me asking me how to, to launch their own apps and, and bouncing ideas off of me.
So definitely those physicians are out there wanting to create their own apps and wanting to go down the entrepreneurial route. I kind of hear the same thing over and over again, like, wow, it’s so hard. How could you have done that by yourself? And my response is, Oh my goodness, you guys, we went, we all went to medical school.
We all, well, you know, so in college I was a total dumb ass and maybe I’m just speaking for myself. And sorry you have to edit that out of your podcast. But like, you know, like five years later I was doing central lines. I was intubating for premature babies. So, you know, we can do hard things and, medical school is a hard thing and residency is a hard thing.
This is not that hard. This is a skill that you can learn and, and you can do it. And if you have an idea that you’re just going to keep on going back to and being regretful, if you didn’t do it, just do it, just do it. It’s not that bad.
Mike Woo-Ming: Awesome. Awesome. So REPS tracker is launched at the time of this recording. Available on iOS.
Kirsten Limmer: Yep. And Google Play now. Yes.
Mike Woo-Ming: And so just to find it, if you’re a real estate investor, why should they… to get REPStracker, what can they expect after they download it? Tell us the process. What can they expect to receive?
Kirsten Limmer: Yeah. Good question. So do you mean talking you through the app, going through the app?
Mike Woo-Ming: Yeah for people who are interested and they want real estate professional status? What is the app? What do they expect to receive?
Kirsten Limmer: Yeah. Yeah. So the thing about REPStracker is it’s very.. You can essentially individualize it for your own investing. So a real estate agent would log all of their properties and then.. After that every time entry, the investors will add time entries and tag it onto that particular property that they’re talking about upload as much evidence as they want.
So for example I’m constantly messaging and text messaging, my real estate agent and also my property managers and stuff. And so, you know, I’ll just log like five minutes of texts and I’ll take a screenshot of my texts and upload it onto my little description and it takes me 10 seconds to, to log that time entry.
And so the, and those little things add up. Right? So so I’m going on my, my own app. Like several, several times a day to log my own entries. And so people can both log their time entries and also attach all of the evidence that they need in case they’re ever audited against against this, by the IRS, they can attach all of that.
And then REPStracker also keeps it. Keeps track of how much time you have left until you can reasonably claim real estate professional status. So you don’t have to go adding it up or anything by yourself. You just have a little cute little screen that will tell you exactly how much time you have left and how much time you’ve submitted.
And then at the end, if you want to just print out a spreadsheet and keep it in a shoe box, we want to go back to the shoe box method print out a spreadsheet… . Just export everything into Excel or CSV and, and keep it for the rest of eternity, if you want.
Mike Woo-Ming: Well, I’m so ecstatic that REPS tracker is now live and in the world and all the public can use it. And just to give some transparency, I was honored to join you on this journey. To getting this app launched and I had a pleasure working with you, so I’m curious, what’s next for you, Kirsten?
Kirsten Limmer: Hahaha! Okay. Yeah, a couple of, well, a couple of things. So number one, I’m going to start using my own app and really scaling up my real estate! Which I’ve kind of done concurrently. And there’s a lot of other ideas that I can kind of offshoot off of this. So, for one, going along my lines of just being totally transparent and open with my ideas a lot of people are getting really excited about short-term rentals. And short-term rentals has, has a pretty similar kind of tax structure for material participation.
And so starting to kind of build upon these different offshoots of these. These tax structures and being able to use my app for that. And yeah. And I’ve had such a great time working with you too, Mike, it’s been awesome!
Mike Woo-Ming: So, where can they go if they want to reach out to you? I don’t know if you offer any.. You said a lot of physicians asking you about apps or maybe about real estate investing are you available for to hear from some of these listeners or doctors or… ?
Kirsten Limmer: No, absolutely. I’m I actually am really happy to talk to people. I think it’s so exciting that there’s so many people out there that want to share their ideas and want to bounce things off of me. And I’m more than happy to talk to anybody who has anything.
That they want to ask about creating an app, about a REPStracker, about real estate professionals status, really anything. So they can go to my website actually that is probably the best way to do it.
So REPS tracker.com. So R E P S T R A C K E R. Reps, tracker.com. And there’s a little thing that says contact me there.
And it goes straight to my email. Or else you can email support @ reps tracker.com, and that just goes straight to me.
Mike Woo-Ming: It’s been a pleasure working with you and I am so excited again about REPS tracker, any like last minute advice or best advice you could give to listeners out there?
Maybe a doctor who wants to start up an app, or maybe someone who is just getting started in real estate investing and is not sure about that? You know doesn’t really know too much about real estate professional status and is considering it, any words of advice you have for those folks?
Kirsten Limmer: Yeah. Yeah, you can do hard things. Remember that? Remember you probably did a really hard thing yesterday in your job. Believe me, you can start real estate investing. You can start making an app, you can do whatever you want. And you know, if you don’t have an answer for something it’s out there, so just go find it and just start.
Mike Woo-Ming: Awesome. Thanks for this again, reps track you’re good REPS tracker.com to download an app. So you get a lot of time and money as a real estate investor. And again, thank you, Kirsten Limmer for joining us today. And you’re a perfect example of just, just finding that there’s a problem out there.
Figuring out that their solution, if you can’t find that a solution to it, why not create yourself, but it’s not just about reading about it. It’s not about just like, you know, going into direction. If you have something that you believe it can be a value to a world, nothing better to do, and to just keep moving forward.