Many real estate entrepreneurs are losing money due to operating inefficiencies, tax and legal exposure, and other threats to wealth that can be missed when closing deals and building a portfolio. Yet many of the risks to squandering the wealth created via real estate are hiding in plain sight, quite simply, because no one is looking.

Complacency Kills

Success can breed complacency on the part of your pro­fessional advisors. You are already their client. This fact alone can change things. The aggressive focus on inno­vative approaches, the responsiveness, the proactivity on staying in step and ahead of trends and technology that can benefit you, often, over time, falls by the way­side.

If you are using the same LLC structure across ten deals with each having different core elements and particulars, then complacency has taken root. This is a simple example of one frequently used tool that is often used incorrectly.

We often find that when the same model is used year over year, your risk exposure is much greater. For instance, your personal assets, family and accumulated wealth could be at risk if you face a personal liability such as a car accident in which you are personally negligent. The typical LLC structure may not adequately shield you and your assets in a settlement – there are better ways.

Other areas we find that expose you to unnecessary risk and loss are within your entities. Have you reviewed the management fees in your GP/LP structure? Do you have an Operating and Management Agreement in place to define those fees and regularly review compliance? What about construction management fees and other expense allocations to your properties? This is an area that can quickly dry up your funds if mismanaged. Another risk you should be proactively thinking about: insurance and your personal exposure to litigation arising on one of your properties. If you’ve been in the real estate business for long you know there are people out there looking to benefit from a lawsuit against you. It is imperative to be thinking ahead of them and proactively defend your assets. Are you ready for an ADA walkthrough on your multifamily or retail complex? If not, you should consider building compliance into your capital expense plans, lest face a lawsuit from someone actively searching for these issues. You need a partner who is going to help you be proactive. One who knows your success depends on the quality and management of your properties and your risk.

By maintaining the status quo, your advisors and there­fore, you, retain the illusion of success while building up risks. Wouldn’t you rather walk confidently into every business opportunity knowing you’ve got your bases covered?

Auditor, or a Savior?

Many negative connotations are associated with the word, “audit.” For the most part, it makes sense. Why do you want someone poking around your financials and business with the possibility of a negative outcome?

Even an internal audits can have a negative stigma attached to it. But consider this: When the auditor is your partner they can show you your risky areas. They can show you where other investors lost money or financing due to theft, mismanagement or lawsuits.

The stigma exists because most people don’t see the benefits of traditional audits. They hear the word audit come into play, hear about how someone lost their job for not doing something right, or how a company got bad PR as a result of audit. Those are not the stakeholders. In your company, you are the stakeholder and it would be you losing the money or reputation. The audit is there to protect you. Wouldn’t you like to know if any of your internal processes are not in line with nationally recognized standards? And whether your employees are properly trained or could use more training to more effectively and safely run your business?

This is why we’ve rewritten the script. We’ve developed an audit that you welcome, an audit that can help you:

  • Make and keep more money
  • Identify risky areas where you could be losing money needlessly
  • Ensure your books are adequate for effective tax planning and risk management
  • Anticipate cost saving strategies and proactively apply them
  • Insulate wealth and assets from excessive exposure to litigation from joint venture partners, tenants, lenders and creditors
  • Pay only those income (and estate) taxes that are absolutely necessary
  • Save on the costs of insurance lending and professional service fees, as duplicate and sometimes excessive fees are drastically reduced
  • Increase speed and ability to capitalize on new opportunities through precise cash flow management and optimization. Free up liquid resources to do more and larger deals
  • Benefit from an unvarnished real-time view of your financial health, ensuring properly informed decision-making
  • Efficiently transfer wealth to heirs and causes
  • Benefit from on-demand document management and delivery
  • Reduce and/or eliminate exposure to death taxes. There are smart, effective ways to mitigate this exposure and still allow you to control your hard-earned money

Who

The issue is most people don’t know where to get an audit like this done.

Who do you know who has the multi-disciplinary ex­pertise to oversee all your financial, legal and tax af­fairs, making certain your team gets the job done right? Do you have the time, desire and knowhow? Isn’t your time better spent growing capital and enjoying the life you’ve built?

The first and most important step in engaging Atlan­tic Wealth Partners’ Personal CFO is a financial, legal and tax health audit. Here, we diagnose your financial health, illustrating any deficiencies that detract from your well-being. There is no cost to you and there is no better way to understand how the Personal CFO can and does benefit you.

LLCs

Both the Tax Cuts and Jobs (TCJA) Act of 2017 and the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 have enacted various changes that impact real estate entrepreneurs.

Many of the restrictions from TCJA that may have negatively impacted your taxes were reversed by the CARES Act and a comprehensive review of your returns from 2018 on could greatly benefit your strategy and position going forward. But it’s not on you to navigate this alone. As your Personal CFO, we will already know your business and come to you with strategies to maximize the benefit of these changes.

This is just one example of how recently enacted laws could grossly detract from your profitability and cause unnecessary increased liabilities if not addressed proactively.

Changes and new opportunities occur throughout every year and impact your financial well-being. These events take on a domino effect. A single change to something in your business or personal financial life impacts the tax and legal requirements and outcomes.

A comprehensive strategy that encompasses and helps establish the tactics of all your financial professionals is the prudent way to properly maximize opportunities and minimize your exposure.

Comprehensive Wealth Management

Focused on non-traditional, creative income and estate tax minimization, and dynamic investment risk manage­ment strategies, the Atlantic Wealth Partners Personal CFO program adapts the function of your wealth to meet the requisites of your lifestyle and responsibilities. Families with intergenerational wealth benefit even more, having a reliable resource to manage the family’s financial affairs after the family pa­triarch or matriarch passes away. Most wealth is lost by the third generation due to a lack of planning, oversight and beneficiary education. We provide the appropriate mix of all three.

Spend It

Administering wealth is not your specialty, nor should it be your burden. By identifying existing gaps in your plan and driving expense reduction through elimination of excess fees (usually due to inefficiency), paid to ad­visors, money managers and other professionals, the Personal CFO frees up capital for additional investment and allows you to focus your energy elsewhere and confidently maintain and enjoy your lifestyle, both now and in retirement – and to effectuate wealth transfer to future generations confidently.