How proactive advisory and cost segregation helped a business owner dramatically reduce his taxes and scale a lasting real estate portfolio.
Background
The owner of a successful, Florida-based home staging company, operated in an industry closely tied to residential real estate. The business was generating strong cash flow and supporting multiple active projects at any given time. Like many entrepreneurs, the owner was deeply involved in the day-to-day operations — managing inventory, coordinating logistics, purchasing assets, and overseeing every aspect of the business himself.
While the company was turning a profit, there was very little strategic financial planning in place for the future.
Challenge
The client faced a common but critical challenge: despite earning significant income, he was paying substantial taxes and lacked a clear long-term wealth or exit strategy. His primary business, while successful, required constant hands-on involvement. As it stood, it also offered limited scalability without increased operational burden.
At the same time, the client had a strong personal interest in real estate investing. However, he didn’t fully understand how to structure his activities to unlock the tax and wealth-building advantages and opportunities available to real estate professionals.
Approach
We worked closely with the client to develop a long-term plan that aligned his business success with his real estate ambitions. This included:
- Educating the client on the requirements and benefits of qualifying as a real estate professional — including time commitments, income considerations, and audit defensibility — so he better understood how to balance his time and energy.
- Helping restructure responsibilities within the operating business by putting the right people in place. This allowed the client to step back from daily operations without sacrificing his desired growth.
- Expanding the scale and legitimacy of his real estate activities by acquiring additional properties and increasing hands-on involvement in property management, leasing, maintenance, and oversight, also supported by his spouse obtaining a real estate license.
- Implementing cost segregation studies across existing properties retroactively and on every new acquisition once the real estate professional status was achieved.
- Advising on strategic real estate acquisitions, including purchasing warehouse properties used by the staging business, allowing the operating company and real estate portfolio to reinforce one another.
This coordinated approach kept our client’s real estate activity well-documented and fully aligned with both tax planning and his long-term wealth goals.
Value to Client
The results were transformative. By qualifying as a real estate professional and leveraging cost segregation, the client realized hundreds of thousands of dollars in tax savings, which were reinvested directly into new real estate projects.
Over time, his real estate portfolio grew to three to four times the value of his operating business, ultimately becoming the cornerstone of his retirement and legacy planning. What began as a side investment evolved into a scalable, sustainable wealth strategy — one that provided diversification, tax efficiency, and a clear path to eventual retirement.
Start Building a More Tax-Efficient Growth Strategy
If you operate a business connected to real estate — or own property alongside your core business — we can help you explore strategies like real estate professional planning and cost segregation to reduce taxes and accelerate growth.
Talk with our real estate tax and advisory professionals to learn how proactive planning can help you build a smarter path to financial independence.