Welcome to the Commercial Real Estate Show with Pam Goodwin and Shelby Beckman. Today, we’re diving deep into the world of commercial real estate, and we’ve got some fantastic insights and tips lined up. Plus, we’re joined by an accounting expert who’s going to reveal some money-saving strategies you won’t want to miss. Stick around!
Exploring Chicago’s Retail Wonders
Pam recently took a trip to Chicago for her niece’s graduation, and she was thrilled by the vibrant retail scene in downtown Chicago. Here are some highlights:
Eataly: A Culinary Experience
Pam visited Eataly, a massive Italian marketplace that spans two levels and covers 60,000 square feet. This location features nine restaurants and over 10,000 bottles of wine. The founders from Italy have brought this concept to the U.S., and guess what? Dallas is getting one at NorthPark soon!
Apple Store with a View
Pam also checked out the stunning Apple Store overlooking the river. The two-level store features floor-to-ceiling windows with a breathtaking view, making it not just a shopping destination but an experience.
K9 Cinema in Plano
Back in Texas, Shelby and Pam discussed the K9 Cinema in Plano, where you can bring your dogs and enjoy unlimited wine while watching a movie. It’s the perfect spot for dog lovers.
Diving into Commercial Real Estate with Shelby Beckman
Understanding Your Target Demographic
Shelby’s got her target demographic figured out: moms aged 35 to 55 with kids in school, living in areas with higher disposable incomes. This demographic is essential for Shelby’s business as these moms usually have more free time and resources for activities like workouts.
Location, Location, Location?
While the old adage says it’s all about location, in modern retail, knowing your customer is king. Shelby’s gym in the Foundry District of Fort Worth is a prime example. It’s a small space but perfectly sized for her needs. Pam believes that retail success now hinges on understanding your customers and their behaviors.
Shelby’s Workout Studio Experience
Pam visited Shelby’s Power Fit studio in Fort Worth and was highly impressed. The 30-minute workouts are equivalent to 90 minutes, thanks to innovative equipment. This visit helped Pam understand Shelby’s business better and provided valuable insights for finding a second location.
The Importance of Hands-On Experience
Shelby joined Pam for a commercial listing meeting to get a real-world feel of the industry. Initially overwhelmed, Shelby found the experience invaluable. Observing Pam’s knowledge and calm demeanor gave her confidence and helped her pick up industry-specific lingo.
CPA Insights with Valerie Fretnani
Why You Need the Right CPA
Our special guest, Valerie Fretnani from Borrowers and Brunt Associates, stresses the importance of having a reliable CPA. Here’s why:
- Responsive Communication: Your CPA should return your calls and emails promptly. If they don’t, it’s a red flag.
- Understanding Your Business: A good CPA asks about your business to provide tailored advice.
- Building a Relationship: The right CPA will invest time in understanding your needs and long-term goals.
Services Beyond Tax Filing
Valerie offers services beyond just filing taxes:
- Setting Up LLCs: She assists in choosing the right structure, whether it’s an LLC, S-Corp, or partnership.
- Operating Agreement Review: Ensures your agreements are tax-efficient.
- Quarterly Tax Estimates: Helps in planning ahead to avoid surprises.
Business Structures: LLC vs S-Corp
Choosing the Right Structure
Valerie explains that an LLC can be several things: a sole proprietorship, S-Corp, or even a partnership. The choice depends on various factors like liability protection and income level.
Benefits of an S-Corp
For service-oriented businesses, an S-Corp can offer significant tax advantages. By splitting your income into salary and distributions, you can save on self-employment taxes. However, remember that S-Corps come with additional responsibilities like payroll and balance sheets.
Real Estate Ownership Structures
Partnerships for Property Investment
Valerie recommends using partnerships for real estate investments. Each property should have its own LLC for liability protection and tax benefits.
Maximizing Deductions with Cost Segregation
Accelerated Depreciation
A cost segregation study can identify components in a property that qualify for accelerated depreciation. This can result in significant tax savings.
Qualified Business Income Deduction
For pass-through entities like S-Corps, the Qualified Business Income Deduction can provide a 20% tax break on qualified income.
Advanced Tax Strategies
1031 Exchanges
To defer capital gains, consider rolling proceeds from a property sale into a new investment using a 1031 exchange.
Qualified Opportunity Zones
These zones offer tax incentives for investing in economically distressed areas. If held for 10 years, investments can potentially eliminate deferred gains tax.
Accounting Best Practices
Importance of Cloud Accounting
Valerie recommends using QuickBooks Online for real-time access to your financial data. This allows her to provide timely advice and track business performance.
When to Seek Professional Advice
Complex tax situations like cost segregation studies and qualified opportunity zones require professional guidance. Don’t hesitate to consult your CPA for these matters.
CPA Services Beyond Tax Preparation
Financial Advising
Valerie can help with financial planning, loan applications, and investment strategies.
Payroll and Payment Processing
She also offers payroll processing through services like ADP or Paychex and can assist with credit card processing solutions.
Parting Advice from Valerie
Spend Wisely
Don’t spend money just to get a tax deduction. Make sure it’s an expense you need.
Hire a Curious CPA
Choose a CPA who asks questions and shows genuine interest in your business.
Prioritize Quality
It’s better to invest in top-notch accounting services than to cut corners and face issues later.
Getting in Touch with Valerie
Valerie Fretnani serves clients nationwide. You can find her on LinkedIn under her name or through Borrowers and Brunt Associates. Visit their website for more information and to schedule a consultation.
Whether you’re just starting out in commercial real estate or looking to expand, having the right CPA and business strategies can make all the difference. Reach out to Valerie for expert advice tailored to your needs.
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