Credit Can Do More Than You Think

A video series highlighting the strategic use of credit in your wealth management plan.

Transcript: Using credit to finance commercial real estate may help you meet your wealth planning goals.

Credit Can Do More Than You Think: Incorporating Commercial Real Estate Into Your Wealth Plan

Sam is an executive vice president at a Fortune 500 company. He loves his job but lately he's been itching for more time on the golf course and has decided he'd like to be fully retired within the next five years.

He shared his vision during his next regular meeting with his Wells Fargo Private Bank relationship team, and together they decided to review his options.

Sam's portfolio was in good shape due to years of careful planning, but in order to meet his retirement goal, he may need to adjust his plan.

During the meeting, Sam mentioned an interest in commercial real estate and his Private Bank team thought it might make a good addition to his investment mix.

They explained that owning a commercial property that includes leased tenants could provide monthly income that would allow him to move closer to his goal of early retirement. This would help diversify his portfolio as well as bring him potential tax benefits.

The team laid out the purchasing options if Sam were to pursue acquiring property. He could pay for the building outright, which would create equity but would also hurt his cash flow. He could sell some of the stocks or bonds in his current portfolio to purchase the building, which could trigger capital gains, and may disrupt the performance of his investment portfolio. Or, he could take out a loan. By using credit for the purchase he could keep his portfolio in tact and still have the necessary cash on hand to maintain his current lifestyle.

Sam set out to explore different properties and after careful evaluation selected a retail complex that included several shops and office space.

Sam decided to use credit to make the purchase and scheduled a second meeting with his Private Bank team. The team's private banker explained the financing terms and loan structure, walking Sam through all of the steps necessary to complete the loan. By using credit strategically, Sam is well on his way to achieving his goal of early retirement.

Using credit to finance commercial real estate is one example of how credit can be put to work for you.

Let's start a conversation about credit. Contact Wells Fargo Private Bank to learn more.


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