Smarter Planner Podcast Ep 28. Real Estate: The Forgotten Asset Class - Rich Arzaga [CFP & Real Estate Whisperer]
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Jan 3, 2024 
Rich Arzaga, a CFP and founder of The Real Estate Whisperer Financial Planning, discusses the overlooked complexities of real estate in financial planning. He explains how most planners treat properties as placeholders, neglecting critical cash flow and tax analyses. Rich highlights real examples, like how a single rental can yield poor returns once true costs are assessed. He emphasizes the need for specialized knowledge and recommends the rigorous CCIM education for advisors. Additionally, he shares insights on clients' psychological ties to real estate and the impacts of COVID-19 on risk perceptions.
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Real Estate Is A Major, Overlooked Asset
- Real estate often comprises about 30% of national wealth, so ignoring it misses a major portion of clients' net worth.
- Rich Arzaga built a niche because most advisors weren't addressing directly held property in comprehensive plans.
Model Property Cash Flow, Not Assumptions
- Don’t treat a property as a mere placeholder in the plan; drill into cash flow, expenses, and long-term performance.
- Validate or challenge client assumptions by modeling actual Schedule E numbers and tax effects.
One Rental Can Hide Zero Return
- A client thought a rental produced $20–30k but, using Schedule E, Rich found it broke even with zero real return.
- That $1.5M equity with near-zero cash return drastically changed her plan's outcomes.