Industrial Real Estate Is a Weird Game (and expensive)

[@xLisranda]

The thing about a "Confidential Assistant" or "Executive Assistant" or "Office Manager" is that you don't really manage them. They are not "Office Assistants" or "Receptionists" who are entry level and take care of what they are told to, how they are told to. "Office Manager"s et al know how to run the bureaucratic-y part of a business better than any executive who is involved primarily with the business' core function. And they just step in and do it. And you do what they tell you, and all of a sudden you are always exactly where you're supposed to be with everyone and everything you need to get the job done. A big pitfall is accidentally hiring an "Office Assistant" to do the job and not understanding that a proper "Office Manager" etc is basically a junior executive in authority and responsibility.

[@MiWill1988]

Found the secretary. . . . . . . I'm so sorry this just sounded funny as a reply, I don't actually mean to simplify that way

[@Taaneria]

Co-sign a former Executive assistant. Don’t hire us if you’re not going to listen. My job is to organize your life and make the trains run on time. If you’re not going to listen you’re wasting your money and my time.

[@spinwardbound]

@@Taaneria I agree but, having had an executive assistant, their value becomes apparent very quickly. Once you’ve experienced The benefits of an executive assistant, you start listening to them

[@shawnkirsch]

💯

[@georgehoyle8797]

This sounds a lot like the debate between registered nurses bs nurse practitioners.

[@phantomenergies]

Just wait until Doug finds out that the LLC can adjust the rent rates each year to manipulate the profit on the balance sheet of the renter and thus pay less taxes.

[@Juice1984]

+

[@fakjbf3129]

My favorite tax dodging scheme has a great name, it's called the "Double Irish with a Dutch Sandwich". Basically you set up a shell company in Bermuda which has a 0% tax rate, then merge it with an Irish shell company. Ireland has a law that if an Irish company is owned by a foreign company, the Irish company's profits can just be counted as the foreign company's profits and taxed at their tax rate (in this example, 0%). Then you merge with a Dutch shell company that owns the IP to something you need your actual company to use, because the Netherlands has a law that revenue from IP is taxed at a super low rate. So let's say your company makes a million dollars in profit, you then have the Dutch shell company charge a million dollars in licensing fees for the IP. The Dutch Company pays the taxes (let's say 1% so $100,000), then transfers the remaining $900,000 to the Irish shell company and then onto the Bermudan shell company. Since Ireland doesn't charge any taxes in the middle and Bermuda doesn't charge any taxes, you now have $900,000 left over instead of the ~$650,000 you would have had paying the full taxes in the US. EDIT: Replace $100,000 with $10,000 and $900,000 with $990,000.

[@kaleria608]

So what you're saying is we need to pass laws that tax foreign country held entity companies that do business in the US at 50% of their global income so they stop pulling this BS and actually pay their fair share in taxes here in the US.

[@Muiuiuky]

@@kaleria608 tbh that scheme is used mainly by US companies so that they don't have to pay taxes here in Europe

[@Juice1984]

@@fakjbf3129 math doesn't check out. It is worse (or better if the owners) as 1% of a million is $10,000. Transfer the $990,000.

[@kelm102]

"Don't worry guys, we're gonna take this problem off of your hands. *We* will put the oil into the river." Line killed me.

[@nexuslax3284]

And also the fish. Lol

[@xyzcreate]

The Seinfeld entrance music @6:00 is so perfect for Phil. That man exudes big Kramer energy!

[@terry3906]

Doug needs more than administrative support, he needs a personal assistant to crack the whip on him when necessary.

[@PKSullivan]

Doug needs a professional domme.

[@JonTripp115]

Shell Games, LLC would be a good name. Keeps one foot in the gaming world, while also commenting on how the tax code is just 3 Card Monte for billionaires.

[@Comicsluvr]

I like it!

[@userwhosaysni4180]

I agree that would be a great name

[@EmrysCorbin]

I know there is already a Schell Games, so I imagine there would be room for confusion.

[@FantasKanal]

10:00 Douggy doesnt want the bathroom, he wants his bucket back.

[@QuantumMechanic343]

Depreciation. Let’s say Wyrmwood buys a shiny new lathe that Johnny is going to use to turn all kinds of things on. Now that lathe isn’t going to last forever, eventually Johnny is going to wear that thing out and buy a new one. Wyrmwood, being the smart institution that it is, is going to calculate how long it expects the lathe to last, let’s say it will last for 10 years. Next, Wyrmwood is going to put money aside every single year so that when Johnny finally wears this one out, in 10 years time, Wyrmwood can buy a new lathe. That money you’re putting aside to buy that new lathe in the future isn’t profit, it’s the cost to maintain the depreciating asset, therefore it isn’t taxed. You can apply the same logic to any asset that the company uses: computers, furniture, and even the building itself. Anything that you use will eventually wear out and need to be replaced, and that future cost is captured in depreciation.

[@AlainPilon]

Except that industrial lathes can last over 50-80 easily, so once depreciation is at 0 and it is still going strong, you have to decide what to do with it: You can either sell it and be taxed on the full sale price since its value is 0, or keep it and all repairs will be 100% deductible so running the machine is now "free". Right?

[@QuantumMechanic343]

@@AlainPilon when I wrote “let’s say it will last for 10 years”, it is important to keep in mind that this is just an example, and not an actual figure or claim as to how long a lathe should last. My intent here is to explain the logic behind why depreciation can be used to make a deduction from a company’s profit, and not to provide a fully qualified and practical example of exactly how a corporate entity goes about calculating depreciation. In reality, your relevant tax agency will have documentation on the method to calculate the depreciation (straight line vs declining balance) effective life of the asset and the diminishing value rate of any asset. The effective life is length of time that you can use to deduct for depreciation on the asset, and the diminishing value rate is the percentage of the current value that you can deduct each year. With the way the numbers work out, you cannot depreciate an asset’s value to zero, there is always a residual (or salvage) value. The reality is that you can’t actually depreciate an asset to 0%, as there is always a residual (or salvage) value. For example, if we use straight line depreciation on an asset that has an effective life of 10 years and a diminishing value rate of 10%, then it will have a residual value of 5% of the original value. So as far as your question goes, I would have to reject it on account of the premise that you can depreciate something to 0%. The reality is that you would probably sell the asset for its salvage value and buy a new one so that you can use its depreciation to increase cash flow and decrease profit. But this can depend on a lot of factors.

[@AlainPilon]

@@QuantumMechanic343 Thanks for the clarification, I was aware of the general account working, but not the finer details.

[@Trizenoid]

This kills me. Depreciation is not that hard.

[@WayTooManyNames]

Don't buy that last building unless you are prepared for hidden costs, it has gone through a couple of owners I believe and there are lots of hidden cleanup costs to that lot specifically so I'd step extra careful on that one. I drive by it every day on the way to work lol.

[@MustNotContainSpaces]

I assume that last one would be just for the property. Those ruins would probably need to be demolished and rebuilt from scratch.

[@Kulric]

@@MustNotContainSpaces but even the property can have cleanup liabilities.

[@DeadMech1]

​@@Kulric Mhm. Doug is probably a good guy and doesn't want his workers getting ill and diseased from whatever pollutants the previous owners may have contaminated the property with. At the very least since he also works there he isn't going to want to expose himself to that stuff either. So a good environmental assessment to know what needs cleaning and how much that'll cost definitely needs to be part of the process.

[@GoodJobCasey]

I just need Bobby to know (or the wyrmlife team) that one of the hot things to do on youtube is moving/upgrading/building houses/shops. There is just so much content you can make for it, and for whatever reason its generally pretty engaging conten. So...like, that is a benefit also. haha

[@damienthetexasian6827]

The real estate thing is how McDonald's works. They're not a fast food franchise so much as a real estate company that rents to their own franchisees.

[@greyborg3846]

Loving the energy Phil brings to this endeavor. Doug, I agree that all of the hoops are bs. I suggest Wyrmwood's Bytch LLC.

[@LabTech41]

Yeah, it's unfortunate that you NEED those hoops so that you don't end up losing your shirt because of some regulatory nonsense.

[@garayworkshop]

Between James, Moses, Fahey, Frank, Dale and Andrew (Healthcare Master) you guys really have a nice lineup of grown ups to take care of you.... I mean this with the utmost love and respect 😋

[@WyrmLyfe]

We understand

[@jameseduffy13]

LLC definitely needs to be called Nonsense-Land.

[@danielsheraton5433]

I love these glimpses into corporate America, it makes me question everything I know about how the world works.

[@deathfrombeloved]

and also explains so so so much about how the world works

[@ethankriegel4614]

Something they didn't mention is that by having the property owned by a separate LLC. If Wyrmwood went thru a bankruptcy or was sued and lost, the property wouldn't be an asset that would be counted towards the company's worth. So, whatever equity they have in their property is separate and protected.

[@thomasstevenhebert]

@@ethankriegel4614 yeah the protection is a great asset and also the liquidity on a piece of property is much higher and by extension an LLC that owns property. Right now if one of the Wyrm owners wanted to take a personal loan on the value of their shares it would be much more difficult. 1/12 of a business that owns 18 million fmv of real estate and $360 in cf is much easier to get a loan against

[@zarathudoo]

Amortization is simply a tax accountant's way to pay now for future rebuilding or replacement costs. It is not a game or nonsense, but rather thinking about all of your business costs so you don't hide future costs. Like planning for bathrooms rather than shitting into a bucket. Pay yourself for taking on the risk of being your own landlord, so the LLC can have money to repair the building when it needs work.

[@HeyJyll]

Oh man, Doug. As someone who works in commercial real estate, let me tell you that the reason all they all look like they just got back from golfing is because they probably did!

[@user-kw1xf4kg3i]

For those thinking, just get a bigger switchboard..... Right now a 3000A switchboard is over a year lead time at the moment

[@JelenedraKTulsa]

Artemisia LLC (Artemisia absinthium being the Binomial name for Wormwood) Also, good office managers basically handle the ordering and billing and everything like that for each department. Giving your heads more leeway and because ONE person is doing it there is more feedback to the people that write the checks when there is a price increase or vendor issue.

[@Onyx08]

loved this episode, just Doug having ADHD + breaking and entering XD

[@ArchEnemy2006]

I can't believe no-one's suggested it yet, but Wyrmhood immediately came to mind for me!

[@drackar]

The humidity from that lake would do...interesting...thing to wood working.

[@Novanewf]

we need more Moses. He's a riot.

[@nathanberry7384]

Here to acknowledge the editor inserting fantastic clips. Thanks for reminding me about Will Ferrel and his landlord vine.

[@calvinktorz]

22 million dollars building, 3 toilets. Who built this? Amazon

[@WMFrenzel]

That cut after “We’re gonna go buy a 22 million dollar building.” Was an all time cut. What a beautiful edit.

[@jessicaevans3592]

I love seeing these conversations so much, not only do they help me understand like how manufacturers work but also like how taxes are and how to game the system

[@tylerrohde5728]

Can't wait for part 6, condemned haunted unwired warehouse built during WWII 150k square feet for 3.8 mil *new plumbing*

[@Fattman1243]

Loved the chaos crew energy in this episode, and as always, excellent editing!

[@clarkmoore4]

If you guys wanted to go the tech startup route you could buy that last property and turn it into a proper Campus. Get a subway on site, bike path, gym, etc. Really deck it out.

[@maevenik]

If as a business owner you need to ask yourself “do I need an assistant to help me organize shit?”, chances are the answer is Yes and probably needed it 6 months ago. Just a matter of affordability. Honestly these guys could use an office manager AND an executive assistant at the very least. Especially if they expand the line to include a weed accessory company…. Board could use someone on the admin side as well just to manage that stuff.

[@Flarecobra]

I do like the Wyrmland idea. Plus they can keep it for the next time they move to a bigger building and turn that place into an all-wood amusement park.

[@Nom-Noms]

Never laughed so hard watching Wyrmlife. This ep really brightened my day!

[@JonTripp115]

Lemmy let me know this would be a good episode right off the bat.

[@SteveGerencser]

I pay rent to my wife's company for my business space. It's all about the different tax rates on things.

[@echtogammut]

Since not everyone went to business school, it's great that more people see this and get a better grasp of how things work. For instance McDonalds (last time I checked) is the largest commercial real estate owner in the world, well their subsidiary corporation Franchise Realty Corporation is. They either purchase or lease land lots all over the world, then sub-lease those out to franchises for McDonalds and other places. For a place like a grocery chain, Krogers, they will often buy a plot of land, build a shopping complex, write down the loss from the construction, then sell that complex to a subsidiary or real estate investor with a perpetual lease contract. People might claim they are gaming the system, but when you see operating costs and profits, you will quickly understand that business margins are very tight and the only way to give yourself breathing room is to take advantage of everything you can.

[@SinisterGeekz]

What an awesome episode. Super funny and very interesting.

[@wobermier9701]

I think I could watch a show just about Philip Moses. "I've seen things you won't believe" I bet.

[@Galahax]

It’s so obvious what to call it… GootLoose!!

[@AresFordwin]

That way it has (at first sight) no obvious connection to Wyrmwood. I second this!

[@patrickcunningham1329]

Man, that Deja Entendu reference brought up some SUPER STRONG but pretty complicated feelings...

[@GreenEyedMansChannel]

The content I need in my life is seeing Doug react to the double irish with a dutch sandwich tax avoidance technique. That on film mwaaa *chefs kiss

[@grimoradebrock]

Generational Gaming. A comment on quality products lasting forever

[@cindywomack1113]

the Kramer sound cue when real estate guy comes in...chefs kiss

[@countertothedark]

This has been one of my favorites episodes for this season.

[@coreygamble5382]

Just buy land, build your own factory. Go big or go home. I think the last place would be great if you could own it, just knock it down and start anew

[@devincheeseman3867]

Doug reviling the seedy underbelly of cooperate America. give him a Netflix documentary.

[@stevejackson3815]

I love how much matt’s opinions end up resonating with Dougie’s. They are men of the people!

[@blacksmithknight5030]

WyrmDomain should be the name honestly!

[@thegothaunt]

Stop, lmao -- the Lemmy pop ups killed me

[@stan129]

I like it when you all go on field trips.

[@reznor_59]

I’m not going to lie…I despise the thought of designing a commercial manufacturing building, but the idea of designing the home for Wyrmwood is crazy exciting. Help me, help you! Haha!

[@PatrickUnrated1]

I love these videos. Just so interesting.

[@pillarsofadventure]

Call your new location WyrmWorld. Then make it a woodwork theme park. Have a haunted forest called the Poisonwood etc etc.

[@russdarracott395]

Yes, yes you need an assistant.

[@strtkn]

How perfect is that drawing of Doug on the white board tho.

[@adamtomlinson918]

Wyrmcave or Dragon's Hoard should be the LLC.

[@millyk5685]

Personally I'd really love to own real estate properties as well as REITs, I've been informed of people making as much as $30,000 from these investments and If anyone could be lenient enough to share, I'd really love clue and tips on how to maximize profit

[@millyk5685]

@White House Down wow! do you think you can give me some advice on how to invest in a healthy way as you are doing? please

[@millyk5685]

@White House Down I just looked her up on google and researched her accreditation with SEC. She seem very proficient and have great records to her name. will write her an email soon

[@Jeremy-uk3kq]

More clapping tracks when people enter rooms please

[@AresFordwin]

So... the big companies found a way to legally evade tax through basically giant, gaping, loopholes

[@sbcguitarist]

No, they aren't loopholes. These are codified rules. They built the game themselves, and are playing perfectly within the rules they designed.

[@DeadMech1]

Yes and no. Other posters have some insightful stuff to say about it but the summary is that buying a building isn't just an upfront cost. It needs maintenance, repair, and eventually replacement that you have to plan for. And that much seems sound logically to me. Setting aside some of the profit a business makes in a year so that they can maintain the things they need to function. The whole spin off an LLC to buy it and rent the building from it though is probably needlessly complicated and may well be hiding tax loopholes. Especially when you start claiming these spin offs are based in other districts with lower tax rates.

[@JeremyHamaker]

Any company of any size, and frankly any individual in business for themselves, has access to every business based tax rule that is available that applies to them, their cash flow, their expenses, their assets, etc. Any business has a right to exercise any rule that applies to them.

[@AresFordwin]

If my understanding is correct, the LLC will basically get their money back on the building over the course of X years through depreciation and some jibber-jabber over being in debt. The LLC also gets the rent money, which the actual company using the building gets to write off, cause it's not part of the profit. The way I see it, cause a company in my country is classified as a "person" (judicial entity, if the translation works), I'm loaning my mother some money to buy herself a house, and then I move into that house and pay her rent, and we're both avoiding a hefty amount of tax. I don't think this is right, but... People here find other ways to steal/avoid tax anyway so I don't really know what's worse.

[@Brahlam]

Love those episodes where you go exploring! And Pro for an Assistant for Doug! :-P

[@janderson5773]

Lol loving these videos!!!

[@wolfbladesalpha6271]

John! Don't forget to mention section 179 for depreciating assets and MACRS!

[@Loasdrums2]

Empty Bucket Commercial Rentals LLC as a nod to the early days of Wyrmwood as well as the buckets of glue y'all used to order by the pallet.

[@jameskort4303]

9:00 NEED MORE POWER!!!!

[@matthewjennings7645]

I've actually always wondered where you got the name wyrmwood. The name of the star in Revelation 8? The demon uncle in CS Lewis' Screwtape Letters?

[@LocIsBac]

Create a parent company called Elder Wyrm

[@cacklebarnacle15]

That lake is asking for a yearly company wide boat build off. Requirements: Can it carry two people to the other side? Is it made to x% out of wood? Did no more than 5 people work on it?

[@johjoh1203]

Call the subsidiary Wyrmacre. It is a play on the old term Blackacre which refers to a hypothetical property in property law.

[@Erinlikeshiking]

I did not expect to see brand new album art when I clicked on this, lol

[@Alien.404]

I would love to work as Doug's PA, it would be fun trying to point him in a direction while simultaneously helping him to manage his email and technological items that he just does not care about.

[@jesterofatlas5749]

And now you understand the rich peoples games.

[@NV-xw5ok]

It makes m nervous for you guys. You kickstarted your table campaign which probably brought you to this point but how are you sustaining that net down the line to keep up with these buildings and machines?

[@HonestAuntyElle]

Wyrmwoods been chugging along for a while before MGT. They need to expense this money coming in or else it will get taxed out the ass.

[@austheer4468]

Welcome to the wyrmwoods

[@social3ngin33rin]

I'm surprised Doug doesn't understand depreciation :) He seems like he understand everything lol WyrmLand?!?!?! Carpentry wonderland!!!!

[@Ezonial]

Think of the office manager as pepper pots in the MCU. Lots of authority to make things happen, not just schedule your appointments.

[@wikem123]

I'll be your office manager Doug, it's my current job anyways. And yea it's mostly organizing.

[@MiscToddley]

You know what you do with the land across the lake? You make another mini-business, like a campground or a mini-golf course.

[@cameronoberg8793]

I am now keeping an eye out for a job posting for Office Manager at Wyrmwood.

[@Very_Okay]

5:20 y’all are actually so close to being there lmao please have Doug & Matt read Michael Parenti

[@usaevo8]

Separate the Liability... complexity is protection. WOOD LLC

[@Boodoosh69]

So funny and tragic, but mostly funny :)

[@Draenal]

Big fan of "Nonsense Land LLC"

[@cwaldrip]

Wyrmland… the most twisted amusement park ever!

[@swordlessfish2203]

Phil is great!

[@edac_plays6259]

Hi welcome to wyrmlife today you’ll be learning how to trespass

[@mcfluffier]

Doug’s assistant better be a hard ass that pushes back. Shady Dealings LLC from Delaware.

[@ChapterGrim]

That last one was spicy, but there's definitely room, assuming they've got the power...

[@tazmon122]

in the context of the WW purposes: i'm bummed af at that last property's disrepair....seeing as MA not only being the birth of the American industrial revolution, also that it was built on hydro-electric. a renewable resource. WW being next to a dam would be able to run almost completely green manufacturing...and do it in style too. in the context of me being interested in urban decay artistically: this place is perfect!

[@buzzolol]

It's only nonsense land because you don't wanna pay the taxes like the governament intended. So the loopholes are nonsense land indeed

[@buzzolol]

@@staceygram5555 I agree, but theese loopholes tecnicaly shouldn't even exist, therefore shouldn't be so weird. And ofcourse double the tax is ridiculous

[@stekra3159]

If you can thry to have a rail conetction to your factory it will simplify logistics so much

[@Pistonrager]

I like this property guy

[@zookb123]

If you get the busted one you need to do a hand coming out of the lake holding a Wyrmwood sword.

[@shellegriffin]

New LLC OGD42 LLC Stan’s for Original Dug and 42 is the answer to everything 🤣

[@Averymon00]

The memes…. Immaculate

[@ghetorange9604]

Wyrmland... man such a missed opportunity, I would call it WoodLand XD

[@TheT8or]

Its called an Executive Assistant if you are C level... Like Doug

[@solcud93]

Wyrmlair would be a fitting name for the LLC

[@Indiana_Pwns]

New LLC name: Wyrm Lyve (pronounced worm liv, because it's where Wyrmwood lives)

[@olivierlar]

I put my vote for Wyrmland

[@taylormademadness]

I think Nonsense Land is the perfect LLC