Commercial Real Estate Pro Network Commercial Real Estate Pro Network

J Darrin Gross
I'd like to ask you Zach Lemaster, what is the BIGGEST RISK?
 
Zach LeMaster
Oh, man, we're gonna get deep here for a sec. Darrin, I'm gonna get on my soapbox. But the biggest i and this is investing in general, buy, I truly feel this isn't this cliche, I truly feel that the biggest risk is doing nothing with your money, and not not paying attention to it. Because if you want to live the same life you're living now later in life than that, that's what you can do, right and one, one event could wipe you out one event and a health event, a loss in your job change in the market could completely wipe you out, you start over. So I just want to say that first and foremost, the biggest risk you can do is nothing. But when you're investing, I think there's there's so many different ways to evaluate risk. I actually think leverage D risks your investing. I like the idea of having adequate property insurance in place, we have portfolio policies and umbrella policies on all of our properties, we also do risk by having the right entity structure in place on our portfolio and separating it that out from each other and personal assets. We have all life insurance policies set up we invest for retirement vehicles, which are protected accounts, we also invested trusts, as well as having LCS those are all like portfolio structure that I think can de risk situations. Having the right insurance policy in place, I think is certainly important. But the the and there's so many different ways to answer this right at doing nothing is the biggest risk. And then I think secondary to that investing arbitrarily without knowing what you're investing in investing out without fully understanding something or having a plan and strategy. That is probably the next biggest risk that I see in investing real estate, it's a beautiful thing because you can man, you can really de risk it quite a bit. First and foremost, you're investing in a physical asset you're investing in and that's why we like residential real estate because it's human necessity housing, that's never going to go away. People always need a place to live and especially if you're in that kind of workforce housing, location like those are areas where you will always have demand and then you properly insure the property. You protect your assets with right entity structures. You have the right insurance brokers and professionals providing guidance bay that actually understand your goals. I think that is the biggest way to de risk so I probably went on too many And is there Darrin? So let me let me stop there.

Today, my guest is Ashley Tison. Ashley is an attorney, professional speaker and a founder of OZ Pros, a full service opportunity zone advisory firm. And in just a minute we're going to speak with Ashley Tison about Opportunity Zones for real estate tax mitigation.

J Darrin Gross
I'd like to ask you, Ashley Tison, what is the BIGGEST RISK?
 
Ashley Tison
Well, in the context of what we do, the BIGGEST RISK is audit. Right? So inside of Opportunity Zones, right, that's the, that's the thing that would unwind your deal. So all of these plans that you've made, if you can't survive an audit, then you're going to do it all for naught. And so in stepping into that, there's a number of ways that you do you try to avoid the risk, you try to mitigate it. And then you know, ultimately, we're, we're actually and we need to talk with you about this, we're working on an insurance product or exactly that, that will cover audit, actually covering the price of the audit, and then that will ultimately cover any kind of indemnity for will have an indemnity threshold, but it will cover up to an amount that the IRS said that you were incorrect on. And, you know, the easiest way is, like I said before, is to just have a really solid and organized audit trail that reads like a book. And that is presented in a storybook format. And, you know, that's the best way to mitigate it. And then secondarily is to have good professionals who can assist you with processing the audit with the IRS. And then, you know, ideally, we're going to be able to put together this, you know, are trying to figure out an insurance product that will then insure it. So, great question. I love it. And I love the fact that you're posing that question to everybody, because everybody should be looking at that, as it relates to every element of their life, how can they mitigate risk? And how can they deal with it effectively. And that's both inside of opportunity zones that's within their taxes as a whole that's within their real estate deals. I would say even that it's within kind of life itself relative to family and business continuity, that they ought to have a plan in place in order to be able to address potential situations down the road where they may not have access to the infrastructure that's available today. And I think that that's awesome that you're encouraging your clients to think about that kind of stuff. That's what we do with Cinterion is we help people with kind of continuity plans.
 

Today, my guest is Rob Finlay. Rob Finlay is a certified property manager and is a commercial real estate expert with a broad portfolio of success stories developed through hands on work and multigenerational industry experience with decades of experience in every facet of care from analytics to acquisitions, operations, to finance and more. Rob's insights are derived from real world wins and cutting edge industry innovation. And in just a minute, we're gonna speak with Rob Finlay about strategy changes needed for commercial real estate owners and asset managers in the shifting markets.

J Darrin Gross:
I'd like to ask you, Rob Finlay, what is the BIGGEST RISK?
 
Rob Finlay:
So not sure if there's one specific one and just so you know, hopefully, I I can give you one right now, that is top of mind for me, right? Because insurances. Property Insurance is property insurance that has been spoken about and and fortunately, we have people like you that help us, real estate owners get through that through that mess. The one thing that that property insurance people aren't going to help us with is what I see as this great risk is compliance and corporate risk. There is this thing out there for anybody who's in real estate, I want everybody who's in real estate, who are all your listeners to understand, if you have not heard of what this corporate Transparency Act, or CTA, whatever it's called, is right at CTA, look it up. But actually make sure it's corporate Transparency Act. The corporate Transparency Act is where anybody who's in commercial real estate, anybody who's in real estate, anybody who has an LLC, and it must file with the US Treasury, any type of beneficial ownership, any type of direct control any type of indirect, like, all these different requirements. And I think where most real estate people are, they're like, Okay, you know, my attorney will deal with this, or my accountant will deal with this, the accounts don't want to touch it, the attorneys will have to do an incredible amount of research to see. And then you have to track it and do all this stuff. If you don't, so right now, if you file an LLC, if you create an LLC, I think you have like 60 or 90 days to file. But in 2024, so this year, you must file this, this, this, this form with the Department of Treasury for all of your entities. And if you don't, it's a big one. These are like you're talking about, like, hundreds and 1000s of dollars of per day, fine. So what I would say is, for me, from a risk standpoint, is one, this is administrative and corporate risks. That typically will fall under the radar until probably December, probably last week in December, when I will now need to go get information and do all this work for all of my entities and try to load it up into some US Treasury database, right? So for me, like I'm gonna have to go sit there and put out by the systems are going to crash. It's like, it's like all of a sudden telling everybody, Hey, you have to file your taxes. But we're not doing it until the last possible second, and you don't know what you're not All right, you don't have none of the paperwork. So, to me, there are a lot of risks out there, right? You could go into data risk, you can go on, you know, all this other stuff. But quite frankly, this is risk that can be avoided, well, actually, I don't know, can you avoid you can't avoid it, because you have to do it. Right. You can minimize it by being proactive. And third, you could probably transfer it There are companies out there that that will handle it for you. So yeah, you can't avoid it. But you can minimize it by being proactive and looking at it now, not December 31.
 

Today my guest is Neal Bawa.  Neal is the founder of Grow Capitis an online multifamily investor education platform, experienced syndicator, developer and his attention to the data has earned him the moniker "The Mad Scientist of Multifamily". And in just a minute, we're going to speak with Neal Bawa about the Upcoming Multifamily Distress in the Marketplace.