About Us
Who is Sera Capital?
Sera Capital specializes in exit planning for individuals selling highly appreciated real estate, businesses, and concentrated stock positions.
We have two mottos, the first is “when you want out, call us in” and the second is “We help landlords retire tax efficiently.”
We work with individuals and as independent fiduciaries, are not beholden to any institution or product sponsor for our client solutions. Our solutions come in many forms and include the following and often include some combination of the following.
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100% of our revenue is derived directly from our clients and in the almost 40 years we have served our community, we have never received any compensation from anyone other than our clients. This unconflicted advisor/client relationship provides our clients with the comfort that our solutions are based on their best interest and fostering a long-term relationship.
Because exit planning is typically situational or event driven, it is considered a specialized service and often for a limited engagement. Our clients find us in many ways. Mostly they come referred and because of past performance, it seems repeat business represents the bulk of our revenue. Additionally, new exit planning relationships appear from other sources which include trusted investment advisors, financial planners, business brokers, private equity partners, attorneys, accountants, title companies, qualified intermediaries, and real estate professionals.
The key is that before we can do our job, there must be the need for an exit from a career or profession or the sale of a business or real estate holding. Periodically, new clients find us independently, but regardless of how we are introduced, what we have seen is that the majority come to us looking to exit their real estate holdings. This means we have developed solutions that focus on the facilitation of 1031 and 721 exchanges with the occasional Opportunity Zone Fund recommendation and installment sale. Our investment management background is valuable because so much of what we do requires synchronization with our client’s legacy or estate planning as well as interacting with their attorneys and tax professionals.
Because the bulk of our exit planning invariably involves some type of real estate transaction, let us reiterate, “We help landlords retire tax efficiently.” We help them convert from active to passive management in a tax efficient manner that complements their estate planning. Our exit planning saying is once again, “When you want out, call us in.” It is important to recognize that based on our internal tracking we have found that the average first time landlord looking to exit has a total of 7 properties they own and may wish to liquidate. We work with them, in many cases over multiple years, to structure an exit plan that is all-encompassing.
In some cases, the exit planning client wants to utilize our investment management services since we are registered investment advisors or RIAs holding a series 65 license. It is a distinct, stand-alone part of Sera Capital and, while not our primary source of income, represents how we manage money for ourselves and select others. Since so many of our clients come from trusted investment advisors and professionals, we respect the relationships they have with their primary advisor and work to complement that relationship for the limited duration of our engagement. Often, we are brought on board for the transition and then just as quickly disappear once the transition is complete.
That said, sometimes there is a need for investment management, and we are asked to fill that role. Often, the client insists since so many real estate centric investors have no investment management relationship. Since our exit planning expertise is limited to accredited investors and utilizes a variety of alternative investments, our portfolio management reflects this same expertise and has a heavy emphasis on illiquid alternative investments such as interval and non-listed funds.
So, what are our strengths? We are a family-owned investment management firm with a well understood succession plan which means we can be with you and your family for multiple generations. Our commitment gives our clients comfort in the knowledge they have continuity throughout their investment lives and that Sera Capital has a continuity plan in place so that their tax efficient exit plan is executed and remains tax efficient throughout their lives.
So, what are our limitations? The list is extensive. Suffice it to say, knowing our limitations often keeps our clients out of trouble since we stay away from offering advice where we don’t feel we can provide expertise. This includes tax and legal opinions. While we are intimately familiar with the tax and legal ramifications of various tax saving techniques, we always defer to the expertise of more highly trained professionals and often work hand in hand with them during the exit planning process. One of our sayings is that “99% expertise is no expertise.” We know what we don’t know and partner with those that do.
Our Team
Carlos M. Sera
Founder and Managing Principal
Registered Investment Advisor Representative
Author of Financial Tales
Johns Hopkins University – BA – Natural Science
University of Rochester – MBA – Finance and Applied Economics
Carl E. Sera, CMT
President and Managing Principal
Registered Investment Advisor Representative
Chartered Market Technician
Arizona State University – BA – Quantitative Methods
How did we get into the exit planning space? From 1990 through 2015, our boutique firm managed money on a small scale for family and friends utilizing publicly listed securities exclusively. But in 2015, a 77-year-old widow was contemplating the sale of a $2.5 million dollar property that without our intervention would have resulted in an $800,000 tax. After months of due diligence and on-site visits to properties and corporate headquarters around the country, we immersed ourselves in the intricacies of the 1031 exchange and trusted that the Delaware Statutory Trust (DST) was a viable vehicle for a safe tax efficient harbor as one transitions from active to passive management.
Our standard solution prior to embracing the 1031/DST solution would have been to recommend paying the tax and investing the remaining $1.7MM in a diversified portfolio. We call this transaction “The Awakening” because it transformed us from a run of the mill small investment advisory firm to one that offers a highly sophisticated solution that when executed correctly is in many ways life changing for our clients, their families and their legacy. Upon completion of the widow’s 100% tax-efficient exit, we knew we had to execute the same type of transaction as often as possible. Since then, we have done it thousands of times and we’ve expanded our solutions beyond just real estate based on exit planning needs from people that have asked us to dig deeper.
As a quick review of why we transformed. A cookie cutter portfolio valued at $1.7MM for a 77-year-old would typically throw off 4% per year of income which is $68,000. The tax on this would be approximately $8,000 which leaves $60,000 to spend and a portfolio that can increase or decrease in value as much as 30% in a year. In other words, a very volatile and scary portfolio for a 77-year-old widow accustomed to receiving monthly rent checks. The alternative was to invest in something much less volatile and unfortunately due to the low interest rate environment at the time would have generated less than $30,000 per year. With the DST, the portfolio generated stability, zero volatility and a 5% cash on cash annual distribution on the entire $2.5 million or $125,000 annually since $800,000 did not go out in taxes. Furthermore, DSTs have certain tax advantages unavailable in a portfolio composed of publicly traded long only securities so that the taxes were less than $8,000 and more in the $5,000 range. This means our client could spend $120,000 per year instead of $30,000 to $60,000 under the old way of doing things. It gets better. Upon her death, her beneficiaries would be entitled to a “step-up” in basis which means the $800,000 is deferred while our client is alive and eliminated once she passes away. Transforming was a no-brainer.
As the 1031 and Delaware Statutory Trust industry has evolved, we have stayed on top of each development. In early 2020, we introduced or added the 1031 exchange that converts to a REIT via section 721 of the IRS code to our repertoire. Later in 2020, we added the Qualified Opportunity Zone as well and in 2021 we introduced the installment sale under section 453. We are focused on staying abreast of any new exit planning developments and strive to provide our clients with the latest and greatest.
We have an active legacy family and friends investment management practice that utilizes a portfolio of public and private/alternative investment solutions. That said, we do not actively seek new investment management relationships unless we get a referral from an existing relationship, or an exit planning client approaches us that has no working relationship with an advisor.
We divide our investment practice into two parts. Part one is for non-accredited legacy clients, which is a very small part of our practice and part two is for accredited investors.
It’s important to recognize that we held no public unlisted securities until 2015. We were certainly aware of how alternatives functioned in a client’s portfolio, but we did not utilize them since in our opinion they hadn’t been truly “democratized.” Since then, we have seen the explosion of the “alternative” space and the availability to the individual investor allowing them to participate. We now use a combination of public listed and unlisted investments that are more in sync with the way institutional investors and ultra-high net worth investors manage their money.
We can’t emphasize this enough. The ability to diversify from a 100% allocation in public listed securities and invest in alternatives is growing and the access to alternatives for the individual investor just keeps getting broader and more efficient.
Our investment management intellectual basis has remained constant and unwavering though the tools or products we use to provide our solutions have changed dramatically over the years as sophisticated products once only available to institutional and ultra-high net worth investors have become more readily available.
Intellectually, Sera Capital focuses on providing higher rates of return per unit of risk portfolios when compared to traditional “long-only” portfolios. We do this because decades of working with individual investors taught us that behavioral biases are the long-term enemy of success when it comes to either growing capital or preserving it. We are unwavering on this.
In the words of Yogi Berra, “It’s tough to make predictions, especially about the future.” So, please read the following with a grain of salt.
We expect Sera Capital to continue focusing on exit planning and we will evolve as exit planning specialists as the industry evolves. Furthermore, we will continue to hone our investment management expertise with an emphasis on alternative assets as we strive to provide the best of breed high return per unit of risk solutions.
Founded in 1990, Sera Capital is a private, independent, employee-owned investment manager. “We are investors” helps explain the essence of our firm. This simple, singularly focused identity defines what attracts clients and inspires us to come to work every day and share in our mission–to partner with our clients to achieve their unique objectives. Our attention is entirely focused on understanding the best possible investments and then marrying them to the unique needs of our clients. Our fiduciary responsibilities are instilled in our employees and are reflected in our approach to client assets.
“TO BE THE BEST EXIT PLANNING FIRM IN THE INDUSTRY”
- Independent – As entrepreneurs at heart, we began in 1990 as one of the earliest fee-only independent advisors. This independence allows us to deliver a superior level of service, catering to clients and advisors we choose to work with. We prioritize our clients' goals above all else.
- Transparent – At Sera Capital, we are committed to full disclosure. We openly share every fee and investment detail, ensuring our clients have all the information they need, even if it means advising them to pay taxes rather than use our services. Our guiding principle is: “First, do no harm.”
- Unconflicted – We are solely compensated by our clients, receiving no commissions from third parties. If an investment has an internal commission, it is credited to our client's account as additional equity. This approach ensures our advice is tailored to our clients' best interests without any conflicts of interest.
- Fee-only – Our role is to listen, provide advice, and be compensated solely for that advice. We are transparent with our fees, offering clients a clear understanding of costs and passing on economies of scale to them.
- Fiduciary Standard – As a registered investment advisor, we are bound by the fiduciary standard, legally required to act in our clients' best interests. This ensures our clients can trust that we always prioritize their needs, strengthening relationships and delivering better results.
- Access – We are not obligated to sell proprietary products, giving us the freedom to choose the best investments for our clients. With access to 100% of available investments across RIA and brokerage channels, we can make informed recommendations that align with our clients’ goals.
- Family-owned – Sera Capital is a family business owned and operated by us, offering a high-trust, high-performance environment. Our boutique experience and succession plan ensure that our values and philosophy will be passed down from our family to yours.
- Disclosures – Since our launch in 1990, Sera Capital has maintained a perfect record with no customer complaints.
We publish the Financial Tales Blog, the Financial Tales Book and the Financial Tales Guides as educational tools. Our hope is that through storytelling, you can identify with those that have similar situations and develop a plan that you can implement. We continue to update our blog regularly and we hope you find the information helpful.
What is Financial Tales?
People learn complicated lessons in different ways. We teach these lessons by appealing to multiple senses. Our philosophy is that the lessons you learn from a fable, myth, story, parable or tale are longer lasting if you can relate to them. When you relate to someone, you integrate these lessons. If you can’t recall these lessons for whatever reason, you can always refer back to a tale – or a story. Our goal is to make it as easy as possible for you to adopt an approach to your finances that helps you answer both the obvious and the complicated questions surrounding money.
