Unlocking Real Estate Success: 5 Tax Strategies Every Investor Needs

Stephen Schmidt (00:03.381)
Welcome to the show where we interview the nation’s leading real estate entrepreneurs and let me tell you what guys I got a treat for you here It’s only the second time this has happened But I’m glad it’s happening again where I’ve got an absolute tax pro here in the studio today and I’m gonna be having a great conversation with him Maybe he’s learning some tips tricks and seeing what people are really missing that’s wide out in the open especially in the real estate space now

What’s also incredible about this guest is they’ve been in the commercial and industrial real estate space since 1989 and has been a part of a family business only managing over a million square feet of real estate. So now he is currently running his strategic tax plan in a state firm with a heavy emphasis in the real estate world. And I’ve got William Spar in the house today. Also, we’re to get into it. just before we do remember here to investor fuel, we help real estate investors, service providers and real estate entrepreneurs.

2 to 5X their businesses so they can build the businesses they’ve always wanted in order to live the lives they’ve always dreamed of. Now, that being said, William, welcome to the show.

William Spar (01:05.016)
Good morning. Thank you. Appreciate the opportunity.

Stephen Schmidt (01:06.941)
You hear? You bet, I’m glad you’re here, my friend. Do you go by William officially or do you go by Bill? How do you typically? Either.

William Spar (01:10.477)
Yeah.

William Spar (01:14.646)
Either, it’s Bill most of the time, but yeah, or any other four-letter words my friends call me.

Stephen Schmidt (01:20.405)
Yeah, of course. Well, those are good friends if that’s the case. I’ve got some of those myself. So now, let me ask you this. Can you give us just a little background on how you got started in the business? What got you even interested in it? And how’d you get to where you’re at today?

William Spar (01:23.468)
Yeah. Of course. Yeah.

William Spar (01:38.964)
That’s a, of course it’s a long story, but the short version is my family’s been involved in real estate for 60 years. And, when I got out of college and, and, got my real estate license, I spent a lot of years in, in brokerage, retail leasing, industrial commercial, all that kind of good stuff. And then. Joined my family’s business, from the real estate division as well. And I spent 10 years there just.

Stephen Schmidt (01:41.769)
Totally.

William Spar (02:03.426)
getting groomed and building and tenant improvements and learning the business from that perspective. And then in January of 2000, I left the family business and went into life insurance and estate planning from that point and I’ve been doing that for 25 years.

Stephen Schmidt (02:20.564)
Now, so with that, because you also, you’ve got two full-time preparers, but you’ve also got tax attorneys, real estate agents, you’ve got notaries, you’ve got basically the whole package to be able to handle everything. Now, what are some things investors should really be considering and thinking about when it comes to your niche in the industry that they’re oftentimes missing?

William Spar (02:44.366)
The biggest thing that we see is what’s going to happen tomorrow. How are we going to be able to parlay this property into making it more efficient, not only from a cash flow perspective, but what are they going to do to capture tax advantage benefits for them? How are they going to capture expenses and make sure that the property is running more efficiently, whether they’re doing a cost segregation study or

there rehabbing the property, anything along those lines. there to help them hold their hand and walk them through how those things look.

Stephen Schmidt (03:20.018)
Now, so what made you decide to do the tax strategy and the estate planning in combination? Like obviously each deal separate, they’re kind of both important at the same time, but at what point did you decide to like walk away from the family business? Like why was that?

William Spar (03:30.979)
Yeah.

William Spar (03:38.03)
The family business, as you know, it’s a unique dynamic when you’re working with your brother, your father, your uncle, your cousins. you know, although we were probably being overpaid for the position, there was always going to be that glass ceiling that I was going to hit my head on and someone else was going to determine my outcome and just didn’t jive with me. so when I told my mom and my dad actually when I

Stephen Schmidt (03:45.972)
yeah.

William Spar (04:04.92)
went to go see them. I wrote letter and got my feelings out. My dad was all for it. He goes, listen, that’s how I got into business. I did the same thing. I know what you’re thinking. I’ve been there. I’ve done that. so my mom really wasn’t very happy. She thought I was going to offend people. And no, they’ve all been very supportive. And again, it’s been 25 years since I did that. And I’m sure they’re a little shocked that I continue to survive.

Stephen Schmidt (04:25.96)
Really?

William Spar (04:34.284)
Listen, entrepreneurial blood runs through our system, so just got to make that happen.

Stephen Schmidt (04:41.012)
Yeah, 100%. What’s a…

What’s a big risk that you took early on? What would you say a big risk was in that process?

William Spar (04:51.03)
So when you get into the life insurance world, I joined New York Life and they want you to do this whole build a list of 100 of your closest friends and family, so on and so forth. And I absolutely refused to do that. I didn’t want to sell my family, didn’t want to sell my buddies. And so I just grinded it out and went out and knocked on doors and said hello and got business other ways. And I waited for them to call me in order to do things. so.

Stephen Schmidt (05:00.788)
Totally.

William Spar (05:19.278)
Hence why I’m bald by the way. And so just grinding it out and making stuff happen without having to reach within my super inner circle. And other than asking for business, I asked for referrals. Who do you know that I can go help that I’m a specialist in?

Stephen Schmidt (05:39.22)
Now, so what did you find in terms of the people that you did some business with? How important was it to get those referrals to you? I think that’s something in sales, like this is kind of going off on a little bit of attention, but in sales, so many people are always afraid to ask people for referrals, but really it sounds like that’s how you even built your business was off of that.

William Spar (05:56.727)
Yeah.

William Spar (06:05.262)
It’s a sensitive situation because some people don’t like to give referrals. And so it’s just a matter of how you are phrasing the conversations, how you’re maneuvering through the conversations. And I find that not directly asking for them works best. It’s more of a subtle hint on who you know that I can work with. Sometimes people don’t like that. And so we just continue to do good work, right?

And if your work stands out above others, people are going to refer you no matter what.

Stephen Schmidt (06:40.659)
And so with your current list of clients, are you focusing on people that are in the real estate space or what’s like kind of the next thing on your radar with your business right now?

William Spar (06:52.566)
We have probably 20 % of our clients are real estate owners in some way, or form. I think our biggest real estate guy, he owns 60 single family residences and he’s 90 years old and now his daughter is taking over. So that’s a big portfolio. It’s a lot of work, so on and so forth, but a lot of real estate brokers, commercial and industrial real estate brokers are my clients.

Stephen Schmidt (07:08.723)
for a while.

William Spar (07:18.536)
And then the next biggest chunk is just small business owners, whether they’re manufacturing, architect, chiropractors, printing houses, plumbers, HVAC, all those guys are our clients. And then of course there’s a bigger chunk of just mom and pops and singles and individuals.

Stephen Schmidt (07:36.915)
Are there any common misconceptions about your part of the industry?

William Spar (07:43.224)
From a tax perspective, no, because the code decides on how we make things happen, right? You can’t negate, can’t debate the code. Yeah, we can manipulate the code. We can manipulate it in your favor. And so it all depends on how it applies. A lot of people, I mean a lot of people, think that there’s two different tax codes. One for the super rich and one for the rest of us.

And so I spend a lot of time educating people on the fact that there is only one. So when Donald Trump or Bezos or Bill Gates say, paid very little tax or no tax, I explained to them, it’s the same exact tax code. It’s who you’re working with that makes the difference.

Stephen Schmidt (08:30.546)
And ultimately, I mean, there is a factor of that too, I think, where people don’t, you know, they look at people that own businesses, right? And there is some key differences between being a W2 employee and a business owner, I’m assuming, correct? What are some things that people with…

William Spar (08:44.504)
Yeah.

Without question. HiW2 earners are great clients for us because there actually are some tax maneuvers, tax code that we can use to make the situation look better. And of course, small businesses are great as well. We find that businesses that have about 250, 300, up to about 2 million in revenue, that chunk is being absolutely ignored from

regular tax people. They’re too big creation R block and they’re too small for Deloitte and Touche and similar type guys. So that’s really the niche that we concentrate on. other misconception is that people want to tell me, I have a CPA. That’s great. I don’t want to disrupt a perfectly good relationship, but tell me where you see the word tax in the three little letters CPA.

Like what do you mean? A CPA is a certified public accountant. Their debit’s in credits. Nowhere in there is the word tax. Yes, some of them do tax planning. CPAs are excellent at their job. They put the right numbers in the right box and they hit go.

right? But they’re not strategic tax planners. They’re not manipulating the code in a good way to show people, hold their hand on what code can apply to their situation. So it’s really a deeper conversation.

Stephen Schmidt (10:23.837)
Yeah, and you know, it’s funny that you mentioned that because even getting on before the show we were talking and I mentioned that I have a CPA but like really what he is is a tax strategist. And so now I’m gonna have to stop referring to my CPA as a CPA because of the difference, right? Right. Yeah.

William Spar (10:30.413)
Yeah.

Mm-hmm.

William Spar (10:37.9)
Yeah, including accountants. Same thing, accountants are also debits and credits and they’re great and some of them do great tax planning or tax work. you know, the point is is that we’re tax planners, we’re strategic in what we do.

We don’t do any accounting. We don’t do any debits and credits. Yes, we can build you a P &L or a balance sheet. Yeah, we can do that stuff. But that’s not our real forte. We do it in order to tax plan, not necessarily make your books look good.

Stephen Schmidt (11:09.873)
Yeah, totally. Now, so who are your favorite people to work with?

William Spar (11:15.34)
Favorite people to work with, of course, are small businessmen because I really do, as I mentioned before. I think that chunk of people that we want to work with are really getting ignored in the marketplace, right? And so I do my very best to try and get in front of those people and tell my story. Educate them on who I am, what we’re doing, so on and so forth. But again, I bleed real estate, man. It’s commercial and industrial. Those are the guys that I want to get in front of because I understand.

what they’re doing. understand their business. I’ve been there. I’ve done that. I’ve walked in their shoes. So it’s a good fit.

Stephen Schmidt (11:53.011)
Yeah. What’s a mistake that cost you time or money and what did you learn from it?

William Spar (12:00.384)
A mistake or an event? Yeah, you know, listen, I got I got very, sick in 2020 and almost died. And so I spent 14 days in the hospital and it took me about 45 days to completely recover. And so spending that amount of time away from from running the business was very, difficult. And I thank God that

Stephen Schmidt (12:03.462)
Let’s go event. Sounds like you got something teed up.

William Spar (12:27.734)
the two people that I had on my staff at the time, really carried me through that particular time and communicated well with the clients. And of course, then they communicated to me. So it was a rough period of time, but it’s something that you deal with, in my opinion, God decides and we’re here to carry out his mission.

Stephen Schmidt (12:56.564)
So out of curiosity on that note are there some systems or processes that you’ve put in place since then that have also saved you from major headaches or?

William Spar (13:05.514)
Absolutely, absolutely. Hire the right people. Hire the right people. Communicate with them. Make sure they understand the mission. Understand what happens if I were to disappear tomorrow. Who do you call? What do you say? Who steps in to help either? Run the business, sell the business, shut it down, whatever it is. What we’re trying to do is…

you’ve ultimately transitioned the business to two of the people within the business who’ve expressed keeping it on. whether I get called home or I just decide to transition out, we’ve got plans in place.

Stephen Schmidt (13:46.708)
So would you say that that event was like the biggest turning point in your business or what would you say was like the biggest turning point that you’ve had?

William Spar (13:55.038)
I would say it was a giant wake up call to get your act together, no question about it. When that happened, it came on so suddenly and it was just something that we dealt with quickly and of course my family was there to help me and they were communicating with my staff while I was of course wrapped up in a bed and just trying to make things happen from that point.

Stephen Schmidt (14:24.177)
Now, so as far as like your marketing and whatnot, what does like day to day look like for you? How do most people end up finding you?

William Spar (14:34.572)
So we’re on most of the socials and really my job is the owners. I’m out in the marketplace every day. I will talk to anybody about anything. I don’t care. I’ll say hello to anybody. And that’s a good tool that I use that I’m trying to teach my children. Listen, just say hello. Just say hi. You’ll know if they don’t want to talk to you. They’ll let you know very, very quickly, right?

Stephen Schmidt (15:01.363)
Yeah, totally.

William Spar (15:02.592)
And if they do, you never know. That person can become a friend, they can give you a business, they can give you their business, they can introduce you to people. Just say hello. And so I’ve really made that my motto in terms of how we meet people and teaching my staff to do the same thing. We kind of roll in groups and people over here is talking and so we’re not afraid to turn around and give them a business card if we need to.

Stephen Schmidt (15:29.415)
Totally. How do you stay educated with things changing so fast in our world? I think we’ve got a lot going on with AI and everything else. How is that affecting your industry and how do you stay educated with everything going on?

William Spar (15:45.036)
Yeah. Well, again, as we were talking before the show.

being licensed by lots of different divisions, we’re constantly doing continuing ed, taking tests, making sure we’re up to date, making sure we’re compliant, all that kind of good stuff. So Department of Insurance, the IRS, all those things we’ve got to do to keep ourselves going, including my staff. We have to take continuing ed just to renew our software, if we’re crying out loud. So there’s a lot of backend stuff that we’re doing in order to stay compliant. But for me,

AI is definitely challenging at this point. AI is taking over the tax and the accounting world big time, but it’s never going to take over what you and I are doing. It’s never going to take over face to face, eyeball to eyeball. And as much as people think that it’s going to rule the world, might, but I doubt it will do in my lifetime. But I know I wouldn’t want a robot planning my future, that’s for sure.

Stephen Schmidt (16:39.283)
Totally.

Stephen Schmidt (16:51.077)
Yeah, no kidding. Well, you know, I think the human connection piece is, I think in a way it’s dwindling. You know, for example, I made a post this last week and it’s a conversation that I had with my mom probably.

six months ago. And I just told her, said, you know, mom, we’re really getting into a world where every day we’re progressing towards a more synthetic version of reality. People don’t get outside the way that they used to anymore. They don’t call people on the phone the way they used to. They don’t like all of these things have completely changed. And I mean, you just even look at like the dating world. I mean, how often how often is it that you come come up now?

William Spar (17:18.825)
Mm-hmm.

William Spar (17:31.598)
Mm-hmm.

Stephen Schmidt (17:36.731)
and you meet a couple and it’s, well how’d you guys meet? And it wasn’t like, well believe it or not, I was down at the farmer’s market and I saw her over there in that sundress. It’s like, ha, we met on Tinder, you know what I mean? It’s almost like 50-50 now, you know what I mean? Where the convenience is great, but at the same time I think there’s something to be said about the value of human connection, because that’s really how we’re made, right?

William Spar (17:43.405)
Yeah.

William Spar (17:47.212)
Yeah, that’s exactly right. Yeah.

William Spar (18:02.508)
Yeah, agreed. And I’m trying to run the business the same way. You know, we do a lot of advertising, we post and we send postcards and I do workshops every single every single month across the valley here. You know, there’s nothing better than eyeball to eyeball in my opinion. That’s how I grew up. I think our kids will be different. They’re going to they’re going to run their lives differently than what we are. But yeah, you know, I met my wife at New Year’s Eve party, completely random, you know.

Stephen Schmidt (18:07.88)
Mm.

Stephen Schmidt (18:25.363)
Sure.

Stephen Schmidt (18:28.883)
Yeah.

William Spar (18:31.242)
So, you know, that was a chance encounter and we made it work. It’s been 25 years. And so that’s the way I’m trying to teach everyone around me is don’t let the robots get you.

Stephen Schmidt (18:36.243)
Sure.

Congrats.

Stephen Schmidt (18:44.753)
Yeah, no kidding. So you brought up something interesting and I’m putting two and two together here, but your business is 25 years old-ish and you’ve been married for 25 years. there was a, those two things are pretty pivotal life decisions that happened around the same time. How supportive was your wife of you during that season?

William Spar (19:02.702)
She was extremely pivotal in helping me make that decision. She was there when I went and talked to my parents about bailing on the family business. And so I had to make sure that it wasn’t because of her. This was me doing what I was doing. And at the time, I was just getting ready to graduate with my masters. And so there was a lot of things culminating at the same time.

Stephen Schmidt (19:10.065)
Mm.

William Spar (19:28.846)
this new person in my life, leaving the family business, getting my master’s, starting a new career, being, you commission only. So there was a lot of moving parts and then literally we got married in October of 99 and in December my wife was recruited by Mandalay Bay so she bailed and went to Vegas and so I followed shortly thereafter after I got licensed and all that kind of stuff that needs to happen there.

just a ton of moving parts in a very short year as we happen to go through that.

Stephen Schmidt (20:03.927)
Wow, that’s insane. Now, you know, I think choosing your spouse is, I think it’s common sense that it’s obviously a huge decision, but especially for entrepreneurs, people in business, it can make or break your success a lot, a lot of times.

William Spar (20:18.028)
Yeah. There’s no question about it. They have to be patient. They have to be good listeners.

have to be tolerant, you know, because our days are so wacky and you know, I’ve learned over time that you know, what comes out of my mouth is directly related to how other people are going to feel. And so it’s just all that communication whether you’re talking to your family or a client or a prospect or you’re just meeting a new friend over a beer, right? It makes a difference.

Stephen Schmidt (20:53.928)
Yeah.

Stephen Schmidt (20:57.491)
Well, William, we appreciate you coming on the show. Tell these fine folks how they can connect with you for more, learn more about what you’re working on.

William Spar (21:05.902)
Sure, I appreciate that. it’s ARP Tax and Estate Planning, Phoenix, Arizona, phone number 623-889-3403 or email is wmspar at arptaxpro.com.

Stephen Schmidt (21:21.864)
There you go folks, go connect with them, show them some love from the real estate pros in the investor fuel community and we’ll see y’all in the next episode. Thanks Bill.

William Spar (21:25.518)
Appreciate it.

William Spar (21:29.442)
Thank you very much.