Transcript
Speaker: Hey, everyone, it's Mike Potenza from Becker Accounting Podcasts and blink your eyes and here we are back again. Today, i have a very special guest. His name is Nick Mathias. He's a partner at Kohn Resnick, and he's really in a very niche area in accounting. And I really want to dive into what that area is. So, Nick, welcome to the show.
Speaker: Thanks, Mike. It's good to be here. It's kind of interesting, Nick. You're with Cone Res Nick for 23 years. That's correct. That's kind of like a unicorn in today's day. It is. It's rare. People don't really last that long. So I really want to dive into all the details of your career. But before we do, maybe just give the audience a 30-second overview of who you are and what you do.
Speaker: Sure. My name is Nick Mathias. As Mike said, I'm an auto partner with Kohn Resnick. I focus in the affordable housing group within the tax incentivized real estate practice. um That's a complicated and niche market, but I know we'll talk about that at a little bit later too.
Speaker: I'm interested in sports. I've got three daughters and a lot of large dogs in the home. So... lot going on. Well, we are both girl dads as another guy with three daughters, one to another. We could, you know share a lot of ah war stories. I'm sure about that, but all good stuff. All good stuff.
Speaker: Now, you mentioned this term that I'm sure a lot of people out there are not as familiar with. Tax incentivized real estate. Really high level brief answer. Can you give me a summary of what does that mean?
Speaker: Yeah, absolutely. So tax incentivized real estate, there are any kind of investments that the government might want to spurn on private development for. So if you're thinking of what kind of activities that might be, affordable housing, renewable energy, historic rehabilitation, developing new markets ah are some big examples of tax incentivized real estate.
Speaker: Those transactions are spurned on by tax credits that are generated through that development and then bought as part of the financing stack. All right. I appreciate that. I'm still not quite sure I understand it all just yet, but I appreciate that high level explanation. So we'll definitely dive into that and unpack it a little bit more.
Speaker: But before we even figure out how you wound up there in this little niche area, let's just go back in time to when it was a young Nick Mathias right growing up.
Speaker: What area of the country did you grow up in? Rural central Pennsylvania, a very small town called Lewisburg in the center of the state of Pennsylvania. ah About 10,000 folks, a great small town to grow up in for sure.
Speaker: All right. So you grow up in this little town and then did you wind up going to college in a little town near Lewisburg or did you go somewhere way out of the way? I went somewhere out of the way. So I had it in my mind that I'd love to go somewhere south. So I was looking for schools south south of Lewisburg, Pennsylvania, maybe a place that had a great academic tradition, but also some sports for me to watch and enjoy while I was in the school there, too. It took me to a Wake Forest University where I where I did college.
Speaker: Wake Forest, great university, ah some great golfers coming out of Wake Forest. Absolutely. yeah it's It's pretty wild. lily But I'm just trying to think like, you know, you're a young guy growing up in this central area of Pennsylvania.
Speaker: What about a place like Penn State with all the big sports? Was that on the radar? You know, i came a hair's breadth from going to Penn State. I think I even had my housing deposit mailed in and was a late admittance to Wake Forest. And that was sort of my target school. So late in the game, I changed gears and headed south, south from central Pennsylvania for sure.
Speaker: Okay, so something had to tip the scales. You're balancing the Penn State and South Wake Forest. What was like the ultimate decision maker for you? so They're very different schools, as you can you can imagine, a large state school versus a small private school. So ah my context growing up was Bucknell University. It's in my hometown of Louisville, Pennsylvania. So When I did my Southern tour to look at a number of different schools, Wake had very similar ah vibes to Bucknell, really. A very similar aesthetic, similar size, great academic tradition. So something about it felt familiar, except I was far enough away that my parents had to call ahead before they showed up at my dorm. It was kind of ah a critical mix for me there. There you go. Yeah. And, you know, I think a lot of us want to go to school and have that big athletic experience. Were you also an athlete were you just the spectator?
Speaker: I was a spectator. I did some club sports during my time there. um I was fortunate that my younger brother actually was on the baseball team there. He's ah a tax partner with me at Conresnik now in the same industry practice group, which is funny.
Speaker: ah But it was a great school because was The athletes and the and the students mix very well together. So there's a lot of ah integration of those types of folks at at the school, um which was great. So you got to have be a friends with a lot of the folks you saw playing on TV later in the week.
Speaker: Yeah, so it's funny, very recently from Wake Forest, a gentleman by the name of Michael Brennan in his mid-20s, been very successful, just won another PGA tournament.
Speaker: He is my good friend's son's lab partner. They were lab partners. You would be shocked. I was on a cruise in Germany and I had a Wake Forest shirt on and someone said my daughter went there and she was like a year behind me or something like that. So there's always those connections. I think with a smaller school, sometimes there's that social dynamic that brings people together too, which is cool. That is great. That is great. The Demon Deacons. The Demon Deacs. Yeah, that's right.
Speaker: All right. So you go to Wake Forest now. When do you decide accounting or did you do finance or what was the major? yeah So when I when I entered school, I knew I wanted to do something in the business school. um I didn't have a really specific direction early in my academic career at Wake.
Speaker: um But I knew I wanted to do something business oriented. So I remember in an intro to business class, um the leaders of the Masters of Accounting program at Wake came through and sort of did a roadshow where they explained to us, say hey, we've got this great program.
Speaker: They talked a little bit about the one ah additional year to get your master's degree through like a hybrid curriculum. they did some statistics for us where they talked about the employment rates, average salaries, compensation stuff, and and postgraduate success.
Speaker: And so it kind of like crystallized a couple of goals I had, which was maybe to get a postgraduate degree, you know, a good entree, a good opportunity to the professional world. And so I had to sell my parents on, you know, one more year at an expensive school, but um and they were very generous and helped me get ah my goals met there. And then I had to do the work and get admitted.
Speaker: Well, I think that fifth year, that added expense paid for itself back many times over. Is that safe to say? It is, yes. It was a good investment. So it was then finance major and then a master's in accounting? That's right. So when I was going through school, I thought that, um,
Speaker: One way to get a little bit more dynamic in my in my credentials was maybe to do something different. There was a couple of different options for an undergraduate degree to pair with a master's of accounting degree. So I pursued finance as a way to maybe ah have a little bit more ability to adapt once I was out in the profession. I wasn't 100% sure how long I was going to be in in public accounting. So I wanted to have something that would be a little bit a little bit different too.
Speaker: Excellent. Okay. So you do that fifth year, you graduate, you know, bachelor's finance, master's in accounting, and where and when does the CPA exam fit into the process? Right. So the best part about the fifth year master's at Wake was we had a really rigorous focus on passing the CPA exam. So a lot of that, not only was it really advanced coursework, but it also sort of prepared us for the CPA exam.
Speaker: We actually used Becker as part of our curriculum at that fifth year graduate course too. So the way it lined up at that point um was that you would take all four parts, two days, paper and pencil still in the big old um auditoriums.
Speaker: So right around the time of ah graduate ah graduation from my master's program. um I sat for the exam. So it was all within probably a week or 10 days of graduation that I sat in and passed those four parts all at once and was done with the CPA exam. So wow, congratulations. It's a lot different than than was now, yeah, sure. It sure is, it sure is. And it it was a different world back then. it was sure At least you got the paper and pen. I had the stone tablets and chisels and you know, I had Moses sitting next to me. it was It was a long time ago. But all right well fantastic. So then you graduate, you have your masters, you pass the CPA exam. So now are people knocking down your door trying to give you a job? What area do you want to go back to Pennsylvania? Do you want to stay in Wake Forest? What was the thought process? Interesting question. So one of the nice parts about Wake Forest was that there was an integrated recruiting function, of course, where firms would come recruit Masters of Accounting students.
Speaker: um During that recruiting process, I think it was about nine or 10 firms would come through, um the big five at the time, and then five other more regional firms. So I was talking to all 10 of those firms at the time.
Speaker: It was unclear to me whether I wanted to return to a familiar city, an urban area like Philadelphia, or stay and closer to to school and go to Charlotte. Charlotte had a pretty heavy recruiting focus at Wake Forest, so there was a lot of opportunities there.
Speaker: And during my time, it was a little bit harder to get traction to Philadelphia. And I also was kind of intrigued with Charlotte at the time. It seemed like a growing city. It was a smaller, more manageable city for me, so it felt a little more comfortable in that context.
Speaker: I kind of took a flyer and chose Charlotte and, ah you know, have been really happy being here and starting my profession in Charlotte over the last 20 some years. Wow, that is excellent. You know, you just you even you can never have a crystal ball and figure out how things are going to play out. Right. It's it's so interesting. So you take the job here in Charlotte.
Speaker: And was it with Cone Resnick or a different firm that owned it at the time? Right. So it was a ah previous iteration of Cone Resnick. I actually interned during my fifth year at Wake Forest, interned at Cone Resnick, then known as Resnick Federer and Silverman, and then accepted a job at the end of my internship, which I would start with when I finished my graduate degree. So by the time I was graduating, I already had a job in hand and a plan laid out in front of me.
Speaker: And did you start with the internship in audit, in tax, or any other specific area? Yeah. During during my ah my ah recruitment, i thought I really wanted to be a tax professional.
Speaker: And a lot of that had to do with my perceptions of work-life balance and some goals I had on a personal level for having a family and being a little bit more tethered to my home geography.
Speaker: My perception was that in the audit group, you were in the wind traveling you know most of the time. um The internship I took with Resnick Federer and Silverman, now Con Resnick, was a hybrid internship. So I got to do a little bit of audit and a little bit of tax work, which was great.
Speaker: ah One of the things I found during the internship was that it wasn't as onerous as I expected the travel dynamics of the assurance group. And I really appreciated some of the ah collaboration involved when some of the team teamwork and early exposure to clients maybe be traveling to their site. So overall, it was a little bit better fit for me.
Speaker: And I only found that out because I had an opportunity to try both during my internship. Yeah, that's that's such a great feature that a lot of firms have when they give you almost like a little rotation, right? Almost like when people want to become doctors, they have to go through all the different departments in the hospital and everything. Because how do you know, right? You just don't know. And I know today not all firms do that. So the ones that do, I give them a lot of credit.
Speaker: And, you know, you are an example of a success story for someone who did that. So you now then decide, all right, I'm going to go into this audit world. Well, You work in tax. So I don't understand, though, if you're in audit, how are you dealing with this little niche area in tax? It seems like it's a little bit of a blurry line between the two. Sure. And we're still, of course, kind of focused on applying our our our gas and gap concepts in in that dynamic, right, as being an assurance professional.
Speaker: It just happens to be that our clients are focused on the tax benefits associated with these programs. So one of the things that's kept me really interested is the interplay there between tax and audit concepts, because knowing a little bit about both gives you the ability to really provide great client service and insights to your to your clients and targets out in the in the market as well. So it's kept me more engaged, I think, because I've had to learn ah both sort of sides of the house in a lot of those contexts.
Speaker: So I'm not looking for like specific client names, but who is your target client? Like what type of business are you looking to work? Sure. ah There could be for-profit or nonprofit or real estate developers, typically building multifamily housing ah that are focused on specific state allocations of affordable housing tax credits.
Speaker: That's kind of one bucket that I operate in pretty heavily. Others could be syndicated funds where you have a bank or another group that manages an investment in similar assets.
Speaker: ah Basically, what that does is it gives other parties the ability to invest in that program as well and not be a direct user of the tax credits. So when we're talking about this now, you are referring to state, you know, certain rules, let's say. So are you limited to just North Carolina or can you operate in multiple states?
Speaker: It's a really interesting program, the low income housing tax credit, where it's a federal tax credit. Many states now, I think more than half of the states now have had a state affordable housing tax credit as well.
Speaker: But the federal government, the IRS, has given agency to the states to administer those programs. It gives the states a lot of opportunity to identify specific specific demographics that are important for their constituents.
Speaker: So I operate nationally. My clients aren't necessarily tethered to North Carolina at all. um But the North Carolina Housing Finance Agency might have some specific goals as trying to achieve using that federal resource that might be different than South Carolina or Virginia or Georgia.
Speaker: And it gives that state agency some flexibility there on how to administer those programs. Okay, it's very interesting. So now, will the clients come looking for you? Do you have to go find them? Or how does the whole, let's call it, for lack of a better word, sales end of the business where? It's a little bit of both. So ah it's a relatively small population that operates in this sort of niche market. And there are some big players. So Kohn Resnick is lucky to be at the forefront of the accounting arm of that industry. So there is a certain amount of inertia you come with being part of an organization like Kohn Resnick, which is great.
Speaker: um But there's a lot going on behind the scenes in terms of relationships, ah client service, and delivery. um So it's a pretty healthy mix of... folks, potential clients coming to us and asking us for for help versus us identifying a target, someone we want to work with, someone we're interested in, and courting that relationship by visiting with them, seeing them at conferences, maybe publishing some important articles they're interested in.
Speaker: Excellent. Excellent. so I know we're going a little bit into the weeds on this, but I just have one more question related, then I'm going to take a little bit of a step back. Sure. My last question related to this is when you're working with the clients, do they have an understanding on how much savings to expect or when they hear what you're telling them, are they like, oh my goodness, really?
Speaker: They have a really typically a very crystallized idea of how much savings to expect because it will be baked into their financing stack. So a lot of times these credits create sort of a capital influx for them so that that is measured and negotiated up front. So but early in the deal, they're sort of figuring out and quantifying what that impact looks like. Now we can do tricks on the back end to kind of help them ah goose that return maybe or add ah help avoid some issues.
Speaker: But up front, they've got a pretty clear idea about what to expect in terms of tax credits and tax benefits. And obviously, to survive this long in this little niche area, we're going to say it's it's substantial, right? It's a substantial amount. Absolutely. It's ah it's ah a healthy piece of the capital stack, anywhere from 20% 70%.
Speaker: That is pretty substantial. Absolutely. yeah Excellent. Excellent. All right. So I'm just trying to, you know, package Nick Matthias all together. And I'm fascinated by, you know, growing up in this little area in Pennsylvania, but then go into South Carolina and then wind up not even going back home, but staying here and working. So what's the culture shock like from where you grow up to now, what you're doing and where you live? Was it pretty dramatic?
Speaker: I don't think so. So for me, it wasn't super dramatic, probably because because I'm from a smaller town in the north. So if I was closer maybe to Philly or New York, it might have been more pronounced. um For me, I think that the small town i grew up in was more ah similar to a lot of the the way that um people act in the south socially, I think. So there's still a lot of more, I would say, outgoing, friendly demeanors and stuff like that maybe that you would picture in the south so it wasn't too bad it was fun you did tell me a funny story when we were talking before about when you passed the cpa exam and you took uh took the job you were supposed to at least you thought get some kind of bonus but then somehow you didn't get the bonus can you tell that story it's a good story uh that's a that's close yeah i passed it in the spring um as i graduated i started in the fall
Speaker: Later in that fall, there was a new CPA bonus program that came out where once you passed your fourth part of the CPA exam, you got a bonus. And this was new for, for Cohn Resnick at the time. It was $500. And I remember walking into my office managing partner's office and saying, I should get that bonus too. I should get that $500. I passed it on before I started.
Speaker: And he said, you know, we can't start making this retroactive because if I give you the bonus, I got to give someone that passed it five years ago. And I remember telling him, you know, I would have failed one of those parts on purpose and come back to get that $500. And he said, that's crazy. And it doesn't make any sense. And I think that you'll be happy you got it all done at once. And he's, iss of course, right. But, you know, i'm trying to make an argument for a couple extra dollars back in the day. Right, exactly, exactly. And, know, especially when you're a kid coming out of college and, you know, you usually don't have ah two coins to rub together, right? It's true. Those bonuses have grown exponentially now, I know. my goodness. Yeah, they're now between, like, could be $5,000 to $10,000 in some of these big firms. And all of a sudden you think you're getting that. And someone says, oh, no, we're not going to give it to you. Wait a minute. Come on here. Yeah. Help me out.
Speaker: Right. All right. So, OK, so you you you plant your roots here in North Carolina, not that dramatic of a change and things are going well. And we talked about this industry that you're in, this tax incentivized real estate.
Speaker: Now, did you start in it from day one? Did you want to go into it or did someone come to you and say, hey, we need you here? Tell me how one gets involved in it. Good question. When when I was going through the recruiting process, I really looked for a firm that was ah a fit on a social dynamic for me, right? Because I knew coming to Charlotte would be a new area. I didn't have a lot of friends, family in the area. So I wanted to find a spot that would be a social ah fit for me to kind of establish those those relationships.
Speaker: um It happened to be that I thought that Kohn Resnick was the best fit for me personally. i still believe that obviously. um And at the time, that firm was Resnick, Federer, and Silverman, a much smaller firm then, but a leader in the affordable housing industry. So it was much more of a niche firm.
Speaker: Over time, it's grown ah many times over and diversified significantly, but Kohn Resnick still has the largest share of the market in the affordable housing practice. So It was nice being part of a specialized group within a increasingly diverse firm, I would say.
Speaker: Excellent. Excellent. And, you know, you said that you felt Kohn Resnick was the right fit for you. And obviously you're pretty smart guy because 23 years later, Or you wouldn't be there if it wasn't the right pickler. Absolutely. So that's always good to hear because a lot of times we lay out the plans. We think this is going to be it for me long term and it never works out that way, right? Right. So yeah, as I said before, you're like a unicorn in the industry. We don't find too many of you. So that is definitely good. All right. Well, tell me now about the partner track.
Speaker: Obviously, in order to become partner, you're putting in a lot of time. You have to really do a good job in what you're doing. Not only do you have to be um performing at a very high level, but you have to be a leader within the organization. So tell me how your path to ascension to the partner role work within your firm.
Speaker: Sure. i One of the things that's nice about public accounting as an industry is that there's sort of a linear career progression laid in front of you when you start. And if things go well, and if you're able to take those incremental steps, um you can proceed on a specific path. so I always liked that. I felt like it was clear to me what lay ahead in terms of advancement. um From early in my time, I was aggressive about promotions and career growth.
Speaker: um And so my partner, path to partner sort of, um i would say, was putting my head down and and working as hard as I could for the first eight or so years. And then that start that goal starts coming into to view maybe.
Speaker: eight or 10 years out. And then you start having those more serious conversations with your office leaders, ah firm leaders about what that looks like and start understanding the differences in that role versus being just a ah great manager and then senior manager and director.
Speaker: Okay, excellent. Well, I'm glad that it worked out well for you. I do get a lot of young students and candidates who are looking to become CPAs and go work in public accounting ask about the path to partner today.
Speaker: is it different from what it was when you did it? And is it still worthwhile? Does everyone become an equity partner? Now do we have different types of partners where they might not have equity shares?
Speaker: So what are you seeing in the industry and within your firm as well? There's a lot of different models on what it means to be partner at a lot of different firms. So there's some variability there, I think, depending on what firm you're at.
Speaker: I do think there's a difference now than 10 or 11 years ago when I made partner in what it means to make partner. And a lot of it has to do with proving business development and sales.
Speaker: um It's always been an important component, but I think now more than ever, having those measurable wins to demonstrate your ability to make those sales more so maybe than like characteristics and attributes and qualities that might make that a possibility for you in the future. Money talks, right? Money talks. and And increasingly there's the economic drive behind these big firms that want you to be able to demonstrate the opportunity and the ability to bring in money um that's going to be profitable, service it and and and be accretive to the organization.
Speaker: So, you know, diving into that a little bit, that's a skill you have to acquire once you start working, right? And you have to be likable person because people aren't going to want to give you their business if they don't like you, right? You have to show that you're doing, you know, high level and high quality work or they're not going to give you the work.
Speaker: So how does one today, someone who's starting out as a staff accountant and working their way up, how do they now acquire that skill and how do they get the the interactions with the clients so that they could really develop that skill set? That's a good question because I always think a lot of times people that are attracted to accounting as an industry, a lot of the skills that they have that they're really sharp at don't necessarily always create a great salesperson, right? theyre Those are not necessarily skills that are closely aligned. So I think that folks that are looking to pursue business development, you know, pursue the path to partner,
Speaker: finding a great mentor within your organization, looking for executive coaching opportunities, looking for ah to identify sales teams to be part of. Hey, I heard you guys are going to go after this client.
Speaker: I think they seem like a great one. I'd love to be part of that pursuit. Looking for those ways to build that experience. out Because I think you're right, it's a learned skill. It's not one that you're necessarily born with. You might be born with good communication skills or something like that. But Understanding what it takes to get an opportunity to crystallize and and and be a win is definitely a learned a learned skill.
Speaker: Yeah, I'm going to bet. I know Wake Forest is a great school, but I'm going to bet you did not have a class there on acquiring and going after new business. No, you don't. know You have a lot of great a lot of great technical accounting classes. You have a lot of great soft skills classes, too. So you learn a lot about business communication, which I think are are building blocks for those skills. But you're right. it's It's not until well down the line in your career when you start really thinking about that.
Speaker: And what's interesting, what I think a lot of young people, especially those just who are about to graduate or just graduated, don't realize, you know, we learn the theory and the accounting theory and the audit and the tax and everything else in school.
Speaker: But then when you come and do the work, the work's kind of different. Right. and And I know you and I were talking, you were saying, you know, I enjoyed the school, but I didn't enjoy it as much. But I love doing what I do with the work. Is that pretty accurate? That's definitely accurate. I'm definitely more successful as a professional than I was as a student, I will say. I think a lot of that um has to do with having too much free time on my hands as a student.
Speaker: So sometimes with a lot of free time, ah my time management skills would kind of not be there. So by my early successes at work made me a much more organized and disciplined person, a much more effective time manager. So those kind of skills, I don't think I would have developed the same way in school. And it it took me a couple of years to really figure out how to study. Coming from a small ah public high school and going to Wake Forest, I had to kind of relearn a little bit about how to study and prepare myself for some of those academic tasks. And then it was sort of the next order of skills I developed from ah organization and time management ah techniques as I came out into the profession.
Speaker: And I guess one of the buzzwords people like to use are soft skills, right? Those communication skills. And again, I think they probably teach those a little bit more in today's programs than they did when, you know, you and I were going back to school then.
Speaker: But it is so vital for these young students to understand. I have to be able to write. I have to be able to speak, carry on conversations. I'm not just text messaging, right? Sure. sure That goes without saying. So that is good to hear. So let me ask you, when someone does come out of school and you hire them for your area, your little niche area on, you know, these tax incentivized real estate deals, how do they learn? How do you go out or do you do special in-house training or how do you teach them what they need to understand to be part of the process? That's a good question. So typically an ideal candidate comes with a solid debits and credits accounting background, right? Maybe a little bit in in the assurance and ah accounting world too.
Speaker: um We do a really robust learning and development program for them to to help teach them those technical concepts. And it starts at the macro level when they're getting maybe like industry group wide trainings. And then it kind of refines itself down to like engagement team specifics and engagement specific type of training where you might learn those really specific technical things through direct instruction typically. And I think that that that's really what builds those skill sets. It's not something that you would learn kind of in a broad curriculum.
Speaker: Okay. That's good to know that you are teaching them and helping them develop that internally. That knowledge transfer is critical to get them up to speed quickly. Absolutely. all right. So when we were talking about these tax incentivized real estate transactions, another phrase you threw in there was renewable energy tax credits. And I'm going to guess, are we talking about things related to solar farms, wind projects, you know hydro? Talk to me about what is this renewable energy tax credit and who you know does it apply to? you're You're exactly right that it's those types of renewable energy activities. Typically, where I would practice are investment tax credits. So it's constructing those types of assets that would perform those types of renewable energy functions.
Speaker: In our firm, it folds into tax incentivized real estate in a lot of respects because ah the structure of those ownership deals is very similar. They're throwing off tax credits, which are going to be monetized either through direct investment or syndication.
Speaker: So the way that those ah entities are structured are very similar to the way that an affordable housing or a historic redevelopment entity might be structured as well. And many similar investors are operating in those spaces, too.
Speaker: you know, just I'll be driving my car, maybe going on vacation or road trip with the family. And, you know, you're driving on the highway and you'll see these fields and fields of solar panels. right Are you involved with anything with the design of this or you, you know, just work on the accounting side of it? So there are there many entities involved in this project? Yeah. Similar to many of the other, uh, industries, sub industries, I would say, um there's a lot of players in those spaces. So I wouldn't necessarily contribute to the engineering and design aspects at all. But ah people within my group are contributing to the modeling, the structuring, the pro formas on the front end, maybe even introductions between investors and developers.
Speaker: um And then I kind of come and then my tax counterparts come once the and the the asset is constructed to do and a financial statement audit, a tax return, and all those types of things.
Speaker: And then at the end, once that credit life cycle is burnt off, we help them kind of dispose of those assets re-syndicate or reyndicate however they want to want proceed. Do you ever go out into the field and you know physically observe any of these? Yeah, it's always cool um to see the assets themselves. Some are more exciting than others, right? um A solar field isn't necessarily super exciting, but a lot of times you get to see a grand opening for a historic rehab that might be a theater or an affordable housing project that's that's housing veterans or something like that.
Speaker: So going out and seeing those actual physical assets is a great part of the job. And it's something we try to we try to get our more junior people into early so that they can kind of see the impact of of the industry that they're serving.
Speaker: I'm going to tell you one that scares me when I see it, like in person, those massive windmills, those things are so big. I feel like i' like i'm I'm on another planet. I'm watching in Star Trek or something. They're insanely large. Each of those each of those windmills is and in and of itself a separate legal entity, typically owning them because they're so big and expensive to build. now Wow. Wow.
Speaker: And one last question on the actual asset itself. One of the other things that I see a lot of these buildings now that have green roofs, right? They have all, I don't know what is covering it in green, but it's a plant that's growing. yeah Is that also something that you deal with? No, that those don't necessarily because...
Speaker: They're not integral to the structures. They're not necessarily involved in any tax credit programs. Okay. But they are great. A lot of times they can provide some additional insulation. They can provide a green space. They can do a lot of great things for the for the structure itself and the tenants of the place. Yeah.
Speaker: I always was afraid like a root is going to go through the roof and water is going to come in. So that's why I asked. Now, with these projects, whether it's affordable housing, solar, wind, these things, we're, you know, trying to help people socially. We're trying to help the environment. Very altruistic intentions that we have.
Speaker: So... Do we have to think beyond the numbers? Is it just looking at the ah ah ROI on this? Do we need to look at social impact? How do you assess this investment? It is a tricky thing to quantify when you're looking at the social benefits for some of these programs because they' are clearly they're clearly there.
Speaker: um I think you have a couple of different interested parties that look at different ah criteria. So a lot of times the owners and developers are much more invested in the the social impact dynamic. and And many times those are nonprofit entities at the at the sponsor level.
Speaker: um The investors can fill both of those buckets because they certainly need to have an economic return. That's kind of the baseline for them. ah But if it's a banking institution, many times these types of investments can satisfy their Community Reinvestment Act requirements.
Speaker: So that can be attractive to them too. And most of them, you know, in some way have that social ah impact dynamic where they're focused on figuring out what ways to help support the communities that they operate. And so it's definitely...
Speaker: a little bit of both for everyone. And then it's great being a professional in the industry as well, because um I know from firsthand experience talking with my folks, a lot of them do are able to stretch to make that leap to say, look, I'm not just here pressing buttons and doing audits or doing tax returns or whatever it might be.
Speaker: I'm serving clients that are operating for the bet broader good. So that's been something that I think has been rewarding for me. But i can I can tell you from speaking with a lot of my ah staff and seniors and managers, it's something that they value too as as part of their job.
Speaker: I'm sure. i think just human nature, if yeah we all have to work, right? We have to put food on the table for our families. That goes without saying. But if we're doing something that's very noble and helping other people out, it just gives you a good feeling. You're very proud of what you do. Agree. and We had ah a CEO who once you used to like to say, do well while doing good.
Speaker: And I think that's exactly what he meant. I love that phrase. Do well while do. Can use that? Sure. It's probably patented somewhere. I don't know. Someone else said it before. we're going to have to cut that out. I'm going to get sued here for a copyright infringement.
Speaker: All right. Now, as I was reading, you know, just an article on the affordable housing properties, I just want to put some stats at you and just get, you know, your take on this. I know they're very popular. They're at like 97% occupancy rate right now. And the foreclosure rate is like under a half a percent. So that's all great.
Speaker: But a lot of these, you know, rent stabilized properties, I believe, are financially running at a deficit because of interest rates, because of inflation. So how do you think this is going to play out long term?
Speaker: Yeah, it's ah like like you said, it's sometimes counterintuitively. It is a really ah safe performing asset class. And a lot of people think affordable housing, that's got to be like sort of scary or or or have a high default rate when it's very much the opposite.
Speaker: um I think that what you'll find is that a lot of times those operating deficits you're talking about, they're anticipated it at the at the closing of the deal. So most of these projects come complete with fully funded operating reserve, operating deficit reserves, replacement reserves. So there is that capital available to bridge the gap when those deficits are are ah realized. And it's ah also a 10-year credit so that typically there's opportunities to re-syndicate every 10 or so years and recapitalize an asset.
Speaker: Yeah, it's very interesting because, you know, you could read an article, but an author might not add that to it, right? So you're not getting the full picture. One of the nice things about the program is that it tends to be pretty bipartisan supported because it does a lot of great things from a public-private partnership perspective and a social well-being perspective as well, which appeals to a lot of different political parties.
Speaker: Excellent. All right. Well, that's good to know. I just learned something, so I appreciate that. Absolutely. All right, Nick. So let me just step back to this whole 23 years at Kohn Resnick or some form of Kohn Resnick. Again, that's pretty unheard of in today's day and age. you know, people are usually out there looking for other opportunities, shopping themselves around.
Speaker: But you stayed at one place for your entire career, 23 years. What was the rationale behind that? Good question. and And to be honest with you, I did shop myself around a couple different times in my career, um which I think is totally normal as someone kind of moves through public accounting. um The answer is is pretty complex, I would say.
Speaker: It was different at different times in my career. So... um Basically, I always felt like I had to be professionally valued. So having compensation that made sense to me, ah meeting goals and advancing on a timeline that was acceptable, those are sort of baseline.
Speaker: um And then as I entered different states of life, whether that was having children, aging parents, moving, um different types of dynamics that are big picture life events.
Speaker: I always felt like the firm was able to meet me in the middle. So ah because I think we had a good, clear communication and expectations and and we're willing to give on both sides, I always had my needs met personally as well. So having those personal and professional needs ah met kept me in place and happy.
Speaker: Even when a few of those other opportunities came, um i took I reflected and and decided that it was probably, i had a clearer idea of what it looked like to succeed at Conresnick and that I believed it was achievable.
Speaker: Excellent. Okay. So let's say there's some young staff accountant listening to this and they say, you know, Nick's story is a good story. I'd like to emulate that. And I want to go down this partner track. Now, we talked about, you know, being able to go get business and the soft skills, but Are there any other traits that you would advise a young person besides the soft skills, besides getting business?
Speaker: Is there anything else that they should be working on to help them down that path? Yeah, I think being adaptable and flexible early in your career is really important. um volunteering for assignments is really important. Try to broaden your exposure and experiences. And I think that that'll give you a lot of insight into what areas are most attractive to you to you and maybe what areas you're good at that you didn't know you were going to be good at as well.
Speaker: um So to me, that that's really good advice. And then on top of that, I think ah taking control of your own career trajectory is something I don't always see, especially in younger associates.
Speaker: So having that ownership and agency over your own career path is something I would really push on people um because I'm always more impressed when people show up to their evaluations with an agenda and some goals is already established than sort of, well, how do you think I did?
Speaker: yeah arere you going to give me a raise or not? If they say, hey, here's what I accomplished this year. Here's what I want to accomplish next year. Those are people I would typically say fit that high performing, high potential role. and and And firms are going to invest more heavily in those folks as well. Sure. I mean, and that is just great advice and you're making yourself more well-rounded. And I think that that's really, really, you know, words to live by for some of these young people to listen to.
Speaker: So one of the other things that struck me when you were talking about why you're there for 23 years You know, you said the firm would meet you in the middle and they would give you the flexibility to do what you need to. And we said at the beginning of the show, we said, hey, we're both girl heads, right? We both have three daughters. And that's pretty time consuming. So let me ask you, when you're sitting around the dinner table and the three girls are there and your wife's there,
Speaker: Does the profession ever come up? do you talk to them about your workday and what you do? Sometimes, but they're not really anxious to hear it in most and in those cases. I might, ah you know, my brother is also in the profession, like I said earlier. So sometimes it comes up in family conversations or in talking with my wife or what I have to do this week or where I have to go or who i have to talk to.
Speaker: I can tell they're, they glaze over a little bit, you know, and, uh, and they say, let's talk about something different, dad, or your job sounds boring. Or, ah you know, my wife will tease me and say that my hands are so soft from pushing pencils and paper all day. But, uh, you know, so it's not a really hot topic of conversation. I think, uh, arts and entertainment or something like that, or movies is going to be a little bit more dynamic for them, but, uh, they're all, they're all great kids. So.
Speaker: So you can't do these, you tax incentivized credits on TikTok or anything like that to your daughter's interest Maybe that is the next frontier for for that, for our industry, is to get more embedded into TikTok. I like it. I like it. All right. We'll have a rush of applicants, I think, Mike.
Speaker: that you said it. Okay. So I have to go down this rabbit hole for a moment. I want to get your take on it. You know, the hot topic, the buzz is AI, right? Every firm, and it's not just in the accounting industry, it's in finance. It's in just about every industry out there, right? Everyone's trying to figure out how can we leverage AI, save money, be more profitable, get some kind of ah ROI.
Speaker: What's happening at Cone Resnick right now with respect to trying to leverage AI? Well, we do have a ah robust approach to AI and incorporation into our work. And we have a lot of focus groups right now evaluating that investment.
Speaker: um As you know, ah investing in AI right now is super expensive. um So we're trying to target specific functions and functionality that we think might pay off to the best of our ROI currently.
Speaker: um But it's still ah much much an exploratory process. So we're trying to, right now we're using it for incremental efficiencies, maybe some ways to expedite research.
Speaker: ah But I think a much more broad rollout is coming across the industry in the near future. Yeah. And, you know, people out there, they're bit scared and impatient. They're like, hey, i want to know what's going to happen in this whole world of AI. And unfortunately, nobody knows the answers to that. Right. Well, let me just ask you, though, how is this impacting hiring a Kohn Resnick, if that's something you're able to talk about? You know, I think it'll have some impact, but there's always going to be a need for great professionals who are driving ah the market in terms of not only um understanding business needs and business cases ah and interacting with with whatever artificial intelligent mechanisms we come up with, ah but people want to work with people and people learn best from people. So there's always going to be that need for those those polished professionals to to actually execute the work in front of them.
Speaker: So in your opinion, then there's still opportunities out there, whether it's at your firm or in accounting. It's not like we're going to say ah we're going to hire zero people this year. Right. That will never happen, especially in public accounting. Exactly. Exactly. All right. So about 23 years in this specialized niche area.
Speaker: Do you see this continuing to live on long term? Like, what do you think happens in the next five years, 10 years if you could pull out a crystal ball and, you know, give your best guess? Yeah, I will say I think that it's going to continue. We talked a little bit earlier about how it was really popular in a bipartisan context, um the ah the affordable housing program and and numerous other tax incentivized programs.
Speaker: um They are have been historically very successful and like the best ah boon to that specific functionality of building affordable housing for families in the United States. So I think it's got a long road ahead of it.
Speaker: um Even recently, there's been a lot of really pro-affordable housing legislature come through, um breaking down some barriers in terms of zoning and and development that are going to help foster an environment rich for for future development as well.
Speaker: So if you think about now, um Nick Mathias and Cohn Resnick, 23 years, you have an exit strategy, you a next chapter plan, like whatever that retirement date's going to be, whether it's two years from now, 10 years from now, like what do you want to do after you're done?
Speaker: You know, i don't know exactly the timeline, of course, what that looks like. But I think my wife and I are probably going to get an RV and drive around the country and visit those three daughters and do a lot of, ah hopefully a lot of fun outdoor activities and and travel and enjoy ah enjoy life, that kind of thing. Are the daughters spread out now?
Speaker: No, they're all pretty close to home. Two are still in high school and one is moving back close to home soon. Just anticipating where they might be. Who knows really? They all have different ideas. They all very disparate ideas of where they want to go geographically here in the near future. Oh, that's funny.
Speaker: All right. So my last question for you, you know, you've you've given a really a lot of great advice about if you want to become partner, what you should do, be able to get business, have your soft skills and some other the things. But What is the last piece of advice you should say to somebody young who wants to get into this industry? If going to do anything, make sure you do this. Anything at all you can give on guidance related to that?
Speaker: If you think it's going to be a job you're going to want to have for a long time, put effort in on building your professional network. So the people you work with now are potential COIs later in life, potential clients, potential referral sources.
Speaker: Be intentional about building your professional network and stay in touch with people that you work with. That is great advice. And I'm sure you've had it. I've had it where all of a sudden a couple of years later, you you stumble across that person. And, you know if you have that good relationship with them, it it's worth a million dollars. Absolutely. I love it. I love it. All right. Well, if anybody out there listening wants to learn more about Kohn Resnick or any of the little niche areas that Nick Mathias has been talking about, is there anywhere they can go, any specific website or social media?
Speaker: point I'd point them towards my LinkedIn or I would point them towards KohnResnick.com, which has a great website with a lot of different and industry insights too. So it's a great resource. Excellent. Well, Nick, I cannot thank you enough. This was really interesting and I appreciate all of the valuable information you have gave to the audience. And hopefully ah one day we can do this again and maybe pick up where we left off. Sounds good. Thanks, Mike. Thank you so much. i appreciate it.
Speaker: All right everybody, that was some great information from Nick. Just want to make sure you're aware you can get CPE credits just for watching this. All you have to do is click on the link in the show notes.
Speaker: And if you're a Prime CPE subscriber, all you have to do is log in to get your credit. Thanks again for watching, and we'll see you in the next Becker Accounting Podcast.
