On Thursday, March 6th, our Industry Partner, The National Association of Hispanic Real Estate Professionals (NAHREP) Chicago hosted “Elevate,” a sold out wealth-building event and workshop. The event is part of NAHREP’s Hispanic Wealth Project, which is based on 10 principles to encourage Hispanic entrepreneurs and families to invest in themselves and their future.
At Elevate, attendees learned from real estate and financial experts, who presented valuable information over the course of two session, “Becoming Your Own CFO” and “Money Moves.”
Becoming Your Own CFO
REALTOR® Robert Padron, RE/MAX CityView, and Certified Public Accountant Luis V. Plascencia went into an in-depth review of what it means to be your own Chief Financial Officer. The pair admitted that their goal wasn’t to have all attendees become accountants, but to at least have a sound understanding of their businesses’ financials, including profitability analysis, budgets and tax liablities.
- Your Hourly Rate: Robert had attendees calculate their hourly rate by taking their 2018 gross income and dividing it by 2,000. One of the main reasons this is important is to ensure you are making the best use of your time. For example, if your hourly rate is $300, it may not be beneficial to your company for you to spend five hours hanging flyers. A new hire or third-party company may make more financial sense for your business.
- Your Profits and Loses: A Profit and Loss Statement (P&L) is one of the most important financial documents in your business. Also known as an Income Statement, your P&L takes the sum of your income and subtracts the sum of your operating, marketing, human resource and other expenses to find your net profit.
Analyzing your P&L helps you figure out what steps you need to take in your business. If you have a super high income and profit income, said Robert, then it may be time to increase your human resource costs by adding a new team member. Adding a personal assistant could help you increase producutivty and grow your business. If your income is low however, take a look at how much you’re spending on marketing. Try to increase your marketing to generate more business.
- Your Variable Costs versus Fixed Costs: Luis helped attendees understand the differences between variable costs and fixed costs.
- Variable costs are the costs that change along with your revenue. For example, your marketing costs likely increases as your revenue increases.
- Fixed costs remain the same, no matter what your revenue is. Examples of fixed costs include your cell phone bill, rent and automobile payments.
- Your Tax Liability: Robert and Luis said that a lot of problems entrepreneurs run into is a result of ignoring their tax liability. A rule of thumb, Luis said is, “It has to be ordinary and necessary.”
- Non-deductible: Parking tickets, lobbying expenses and political contributions, for example, are not deductible because they are not necessary for the success of your business. Entertainment costs, under the new Tax Code, are no longer deductible.
- Deductible: While entertainment is no longer deductible, keep your receipts for business-related lunches and dinners, as meals are deductible. Other examples of business deductibles include office rent, professional licenses, continuing education, professional dues, marketing, business travel, and home office space and equipment.
Money Moves gave attendees the opportunity to learn alternative ways to generate money in the real estate industry. The discussion with Ulises Ruelas, Northwestern Mutual, and Mark Buford, Lima One Real Estate, was moderated by Mimi Luna, NAHREP-Chicago and RE/MAX Legends.
- There Are Resources to Help You Invest: At Lima One Capital, Mark helps makes investments a reality for real estate professionals of all levels. Whether you’re looking to flip a home or buy a rental or multi-unit family property, Lima One has services to help you secure the capital you need. For investor-hopefuls concerned about their credit score, there’s some good news. If you have another person, or multiple people, doing the business with you, Lima One only takes the strongest credit score to process the transaction.
- Financial Planning Isn’t Reserved for the Wealthy: Ulises dispelled the myth that getting assistance from a financial adviser is a service reserved for wealthy individuals. At Northwestern Mutual, he meets with people of all income levels who have the common goal of growing their wealth. When he meets with a client, he analyzes their financial situation and their end-goal. He and his team then devise a plan to help that individual reach that goal. Ulises checks in with clients at least every six months to ensure they are on track or to help them pivot if necessary.
- Be Well-Positioned: Chicago has lots of investment opportunities. Mark said big corporations make it a point to stay up-to-date on upcoming projects and begin to allocate resources to invest in those projects. Instead of standing idly by, get in position to access these opportunities when they become available. Even if money is an issue for you, identify your unique value proposition and sell that to investors. Are you fluent in legal terminology? Do you have local expertise? Are you a project manager? Knowing what you bring to the table can help you become an integral part in Chicago’s next investment opportunity.
- Be Patient: When it comes to eliminating the wealth gap, Ulises reminded attendees to be patient. “Rome wasn’t built in a day, and neither is anything in this business.” It may take longer than you expect to reach your financial goals, but stay the course. The most important thing is to get started and commit. Ulises warned against “waiting until your next paycheck” to get started on your savings and investments. Do it today and every day moving forward.
NAHREP also unveiled it’s new logo, which has three dots surrounding its name. Hipolito Garcia Jr., NAHREP Chicago President, said the dots represent the organization’s core values: education, advocacy and networking.