Maximizing Asset Protection and Tax Savings with Scott Royal Smith

 

Maximizing Asset Protection and Tax Savings with Scott Royal Smith

 

Guest: Scott Royal Smith is a real estate investor, attorney, and founder of Royal Legal Solutions. He shares his background in real estate and law, and how he scaled his wealth through strategic planning and asset protection. He believes in educating people and forming relationships to help them leverage their assets to build wealth.

 

Big Idea: Scott Royal Smith shares his expertise on cost-effective legal structures for real estate investing and tax strategies for asset protection. He presents a practical system involving creating a series of LLCs and a Land Trust to hold assets, which provides effective asset protection and can help minimize maintenance costs. Scott’s insights offer valuable perspectives on how to reduce risk, minimize costs, and ultimately build wealth in real estate investing.

 

 

    

 

Dan: Nice. Scott, so for listeners, would you mind giving us maybe the reader’s digest version of the evolution of your business real estate and law career and then sort of what the business model is today?

Scott: Yeah and so my company is Royal legal Solutions but I got started in real estate when I was in law school. I bought a commercial property and auto repair and transmission repair shop for the back taxes. And I end up flipping the business in the building upon graduating to graduate from law school without any debt. And I thought that was going to be a hotshot litigation attorney. So I took a job suing insurance companies in a law firm. Turns out insurance company’s business model is collecting premiums and denying coverage, especially when things get expensive. And then that’s what attorneys does, they sue them whenever they do that. So, get first-hand experience about how does the whole game of insurance really work and how it’s important for us to have insurance, but also have additional protection in place.

But the whole time while I was working as an attorney there, I continued by real estate and I scaled my own real estate portfolio until I was making more money doing real estate and I was being an attorney. It took me about like a year and a half. I wasn’t sleeping a whole lot at those times in my life, and I didn’t need a lot of money, right? I wasn’t married, didn’t have kids and I was like, hey man, I’ve hit it. I’ve hit my financial freedom. I was like I’m golden, but then I ran into the problem and I think a lot of people run into which is like wait shouldn’t I be structuring this inside of like LLCs and should I be using any of trust to hold my assets and my company’s anonymously? And what should I be doing with all of my taxes and my estate planning, and my insurance? And why do I want to be doing all that? How’s that all suppose to work?

So, I did what everybody does and I was like, well, I’ll try to read the books and I’ll try to contact professionals. And so I did all of that, and I realized that nobody really have a complete system we’d put together. So I had to put one together for my own. So I built my own team of people because I was like, well, I want, I had the financial freedom but I wanted the time freedom. And the only way I can get there is if I built a team. If I studied for myself to understand how to do it for myself and then built a team of people that do it for me on basically managing my wealth for me.

It was great, I finally had everything that I wanted and I was traveling a ton and living a great life. And as I came back in living inside the states, a lot of my friends real estate Investors and asked me like hey man, how are you doing? What is he doing? How are you living this lifestyle? What is going on right now? And it’s like, well, here’s what I built. And this is how it all works. And they’re like, well, can I get in on that? Can you take on more people and help me build this thing? So I was just kind of helping people out, getting them into the things that I’d figured out for myself. And eventually when I was like, hey, you should go in this BiggerPockets podcast and go just share with people about asset protection. It’s one part of whether it’s some of the stuff you know. And I didn’t think anything was going to come of it. So I gave up my personal email and phone number into it.

And what happened was I was getting 30 to 40 phone calls a week from investors all over the country. They were like, hey man, I really need help on asset protection and how all these other pieces are supposed to put together. So then that’s where I realized that whatever you want to call, that higher power in life was really tapping me on the shoulder and says, hey, this isn’t all about just hanging out on the beaches and have a good time. You need to be of service to other people, help them be able to walk the path that you’ve walked and get them to that place of being secure and having the true freedom and protection in place for keeping what they’ve work so hard to be able to build. And that’s Royal legal Solutions is now turning and I, we serve all 50 states, we have over 2,000 clients that we’ve helped that are Real Estate Investors and we have about 30 people of attorneys, CPAs, paralegals and support staff.

 

This Episode is Also Sponsored by the Lending Home. Lending Home Offers Reliable & Low Cost Fix & Flip Loans with Interest Rates as Low as 9.25%.  Buy & Hold Loans Offered Even Lower.  Get a FREE IPad when you Close Your First Deal by Registering Now at  http://REILineOfCredit.com

 

Resources mentioned in this episode:

https://RoyalLegalSolutions.com/

 

For Access to Real Estate Deals You Can Buy & Sell for Profit:

https://AccessOffMarketDeals.com/podcast/

 

Scott & I Discuss:

  • Leveraging LLCs for asset protection

  • Land Trusts to hold assets

  • Private Foundations for tax savings

  • Strategic planning for building net worth

    

Relevant Episodes: (There are 220 Content Packed Interviews in Total)

 

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.

The Future of Commercial Real Estate Investing in Major Cities with James Nelson

 

The Future of Commercial Real Estate Investing in Major Cities with James Nelson

 

Guest: James Nelson is an industry expert in commercial real estate with over 20 years of experience. He is a Principal and Head of Tri-State Investment Sales at Avison Young, one of the world’s fastest-growing commercial real estate services firms.

 

Big Idea: In this podcast, James Nelson shares valuable insights into investing in commercial real estate in major cities like New York and Chicago. He discusses the challenges and benefits of doing business in these cities, the importance of thorough due diligence, and the potential for value-add opportunities in “tired” assets. Nelson also emphasizes the significance of location in real estate investing and provides guidance on navigating current challenges in the industry, such as the shift towards e-commerce and the need for more flexible office spaces.

 

 

    

 

Dan: So I was going to make a little bit of a perception of the New York real estate market from around the country, right? Oh, it’s overpriced, it’s outrageous. The price of land in Manhattan and those kind of things that we all hear around the country, it’s like, who could ever buy anything in New York, anywhere in the city and be successful at the way the prices are? So that was growing up in Philadelphia, James, so that’s my perception, right? We would get the New York buyers who would come down and see Philadelphia as just like discount bargain just pay cash for it. Who needs a mortgage kind of a market. Well, when I got to Chicago, Chicago had a similar, very priced out type of feel to it coming from Philadelphia. And long behold, it does work and you can’t make money.

Sometimes those high price points offer things like high commissions and high profit spreads and 8,9,10%, or even 3 or 4% appreciation on a larger number is larger numbers at the end of the day as well. So I’ve gotten more comfortable with the higher price points myself personally. And I’m curious, as we kind of get into today’s show, I imagine cut your teeth in the New York market, and it’s a high price point market we all know that. I’m excited to kind of hear today’s show with that frame, if you will.

James: Sure, yeah. New York certainly is a place to live. It is very expensive. So a studio apartment here is $3,000 a month. The median apartment sells for, I think it’s 1,000,00.

Dan: Wow.

James: So yes, it is certainly expensive. When you’re looking to buy here on the commercial side yes, the barriers of entry are high because there is global demand looking to purchase properties here in New York, when we talk commercial, I’m talking multi-family with five or more units. I’m talking retail, office development, industrial, and there’s only about in Manhattan about five or 600 of those sales that happen a year. So there’s always this supply demand imbalance. And so the New York terms here are very challenging, especially for kind of the first time investor because most of our deals are signed with a 10% hard deposit due diligence done prior to contract signing. So that’s pretty daunting to jump in and have to put in hard money day one, really tough when you’re buyer, but when you’re looking to turn around and sell again, the market is liquid. So there are challenges to break into this, but once you’ve been able to secure an investment, if your business plan is to resell, you’re going to have a much easier time exiting when the time is right.

 

This Episode is Also Sponsored by the Lending Home. Lending Home Offers Reliable & Low Cost Fix & Flip Loans with Interest Rates as Low as 9.25%.  Buy & Hold Loans Offered Even Lower.  Get a FREE IPad when you Close Your First Deal by Registering Now at  http://REILineOfCredit.com

 

Resources mentioned in this episode:

https://JamesNelson.com/

 

For Access to Real Estate Deals You Can Buy & Sell for Profit:

https://AccessOffMarketDeals.com/podcast/

 

James & I Discuss:

  • The challenges and benefits of investing in commercial real estate in major cities

  • The importance of thorough due diligence in real estate investing

  • The potential for value-add opportunities in “tired” assets

  • The significance of location in real estate investing

  • Navigating current challenges in the industry, such as the shift towards e-commerce and the need for more flexible office spaces

    

Relevant Episodes: (There are 218 Content Packed Interviews in Total)

 

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.

Revolutionizing the Apartment Industry: Mike Kaeding on Disruption, Inclusive Investing and Company Culture

 

Revolutionizing the Apartment Industry: Mike Kaeding on Disruption, Inclusive Investing and Company Culture

 

Guest: Mike Kaeding is the CEO of Norhart, a company designing, building, and renting apartments. Mike and his team are transforming the way apartments are built and managed, incorporating technologies and efficiencies from other industries. After his father’s passing, Mike took the reins of the family business and found success by changing the way construction is done, hiring the best talent and solving chronic construction inefficiencies. Through this process, he has been able to provide cost-effective projects to solve America’s housing shortage and improve the way we all live.

 

Big Idea: Mike Kaeding, CEO of Norhart, is revolutionizing the construction industry by creating an attractive company culture, solving chronic construction inefficiencies, and integrating traditionally unaffiliated trades to achieve higher quality, more cost-effective projects. His mission is to solve America’s housing shortage by transforming the way apartments are built and managed, ultimately improving the way we all live. Inclusive RE Investing is one way that Norhart is paving the way for the future of construction disruption.

 

 

    

Dan: Mike, I did the research, the listeners did not, before today’s episode, do you want to kind of give the brief Reader’s Digest version of your business model and maybe how it evolved to that point in some of your story about how you got there?

Mike: Yeah, I would be happy to do so. At a high level, we design, build and rent apartments, but we’re really focused on solving the cost of housing. And we’re doing that by transforming the way construction is done. We’re already achieving about a 20 to 30% reduction in construction costs, and we believe we can achieve a 50% reduction. But imagine what that means. It means someday your rent could be half or your mortgage payment could be half. And that’s the kind of impact that we want to make. We want to solve America’s housing affordability crisis. Now didn’t always start out that way, we were very small. My parents started the business. They built just small eight unit apartment buildings at the time. In fact, I can remember family outings where we drove off to the local hardware store about a half an hour away.

My brother and I, my mom and dad, we each fill up two carts full of supplies, then filled it at my dad’s trailer as we’re driving down the highway to go work on our building a little bit more. So summers, we’re often working on these small buildings with my family, winter season we’d be in school. So it was very much ingrained in my life and then went after college. But I wanted nothing to do with the family business. It was very small, but I wanted nothing to do with it. And the reason is, deep down, I didn’t want people to think it was given to me. So I really wrestled with my own ego on that and eventually realized that really what I wanted to do was try to make some kind of meaningful, positive impact on the world.

And I started to see that I could take this small business and grow it in something larger, but we can have a wider impact in the world. And so I jumped in with my dad and my dad and I doubled the size of the company in the first few years. And then overnight he passed away. And so at this stage it was horrible. It was a horrible experience. And this stage ended up taking over the company entirely. And since then, we’ve just started to make changes. And now looking back, that was sort of the magic because we didn’t know what we were doing and there’s a lot of pain in that. But we also didn’t know the way things were supposed to be done and we can start changing the way things were done as a result. And we started to have some decent impact. And today we’re at about a 200 million valuation and producing about 500 units a year. And we’ve been doubling in size almost every year.

 

This Episode is Also Sponsored by the Lending Home. Lending Home Offers Reliable & Low Cost Fix & Flip Loans with Interest Rates as Low as 9.25%.  Buy & Hold Loans Offered Even Lower.  Get a FREE IPad when you Close Your First Deal by Registering Now at  http://REILineOfCredit.com

 

Resources mentioned in this episode:

https://www.Norhart.com/invest/

 

For Access to Real Estate Deals You Can Buy & Sell for Profit:

https://AccessOffMarketDeals.com/podcast/

 

Mike & I Discuss:

  • Company Culture & Construction Disruption: How Norhart’s Unique Culture Revolutionized Construction

  • Housing Shortage: Solving America’s Growing Housing Crisis

  • Overcoming Leadership Challenges

  • Integrating Traditionally Unaffiliated Trades

    

Relevant Episodes: (There are 217 Content Packed Interviews in Total)

 

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.