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If its Real Estate – It Must be Real

Guest: Richard Arzaga, Cornerstone Wealth Management inc.

Featured Topics: Holding Business & Commercial Real Estate

If you own real estate as part of your closely held business it is imperative that you manage and hold this asset properly. Creating proper legal entities to protect and organize the real estate is critical for wealth creation and protection. Making sure that proper accounting techniques are used, including the establishment of cash reserves, can be the difference between a successful business asset or one that can be an anchor and drag on the rest of your business.
These issues are crucially important in the context of building toward and preparing for the eventual exit or transition of ownership of a business.

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Terms/Concepts
Cost Recovery – What used to be referred to a Depreciation
Cap Rate (Capitilization Rate)
Commercial Real Estate Cash Reserve

The Big Picture (Episode Feature) Question

Ask yourself why do you want or continue to hold real estate as part of your business? Is it a critical feature of your business? Does your business need to own it in order to thrive? Is it purely as an investment? Is it to reduce costs such as rent?

Featured Guest Information

Rich Arzaga
CEO, Cornerstone Wealth Management, Inc.
www.cornerstonewmi.com
(925) 824-2880    rich@cornerstonewmi.com

Tip/Offer of the Week

Create an annual Real Estate Maintenance Account Cash Reserve. Keep this money in a separate account. Create a disciplined monthly schedule of adding to this account,.

Additional Reading/Links

Commercial Real Estate – Should you Buy or Lease your next Space
Salvatore DiFranco

Should I buy a Building or Continue Renting?

Paul Downs

Worksheet of the Week

Use the Cap Rate Formula to Determine what your property is worth.

 

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About the Host

Joel Goobich is a big-picture guy with sharp insight into how individual parts make a strong whole. He has 30+ years of entrepreneurial endeavors; starting, building and exiting businesses. He is tireless in the pursuit of solutions to boost your business and put you on a track to a profitable transition and exit to your next act.