J Darrin Gross:
I'd like to ask you Houman Mahboubi, what is the biggest risk?
I think that BIGGEST, BIGGEST RISK is to take on more than you think you can handle? You know, because you don't want to put self inflicted pressure on yourself. There already is daily pressure on the work that you do. I call it good cholesterol versus bad cholesterol, right? So stick to the good cholesterol take on as much as you can handle. Understand, what is the worst case scenario? If your business does fail, you know, are you going to be homeless? Are you going to be fractured and level that you can't function anymore. So as much as it's important to be all in and take every effort or measure to be successful in your endeavor, just make sure that if for whatever reason, like the pandemic Thomas, we think we can troll so much. But on a, you know, molecular level, we're all the same, and we're all equal. And when it comes to things like that we're all you know, one, believe it or not, just know that any endeavor you pursue makes, make sure that if it doesn't go well, you'll still be okay, you know that it's not going to any way change your life for the worse. So don't take on more than you can handle and try to be a hero or let your ego get in the way to say I'm here to do what I meant to do whatever my capacity is, and I will let the universe guide me in that unfolding and for me to do what I need to do. But that's a very good question. Because the risk factor, you don't want it to completely turn your life around where you can function anymore. And I think that goes for investments as well, you know, don't be over leveraged, how much debt are you taking on? You know, what if the picture looks incredibly clear, and there's no way there's maybe one in a million chance that, you know, this thing's gonna fail, but that one in a million, it's one of the decks in the card, one of the cards in the deck that can account make it happen like someone winning a lottery. So don't ever be overleveraged don't ever be a pessimist be an optimist, but just know that if all else fails, are you going to be okay, tomorrow? Are things going to be fine? And if the answer is an implicit Yes, then you know you're on the right track. If it isn't, and you are going to cause damage to yourself and the loved ones, then most definitely, it's not a smart risk to take on.
J Darrin Gross
I'd like to ask you, John Mitchell, what is the BIGGEST RISK?
You know, I think the biggest risk is, is not taking control of your life and letting life go wherever is gonna go rather than you directing your life. And, and I see that when I turned 50. And of course, is that pressure and what was going on with my mom, I realized, man, I got to step up and make this thing when I'm want it to be, I can't say yeah, I was too often in my 30s and 40s, I would push off well, you know, I'm, I'm gonna be really successful, just down the road a little bit. And, and when down the road, a little bit never came. I'm like, Whoa, I gotta I gotta step up here. And so I think that, that the risk is, is that you end up taking this precious life and not making the most out of it.
Today, my guest is Steffany Boldrini. Steffany is originally from Brazil, and moved to Silicon Valley 20 years ago. After a successful career in tech sales, she decided to focus on commercial real estate investing, where she has achieved over a 36% cash on cash returns. She is also the host of the Commercial Real Estate Investing from A to Z Podcast. And in just a minute, we're going to speak with Stephanie about how to manage your assets remotely.
J Darrin Gross
I'd like to ask you, Stephanie Boldrini what is the biggest risk
For myself personally that I am in right now would probably be cryptocurrency. I avoided it for a decade that I know it, unfortunately. And finally decided to put some money there. I think that is my biggest risk today. I put a little bit of money there. But you know, I had a very shortly epiphany right now talking to you that, you know, when the government printing so much money, there's also $200 billion, that crypto crypto mining that was created out of thin air right. So is the government really interested in in making them illegal? I don't know. Maybe not. Because that is keeping the economy going. Right? There's $200 billion more out there, that people are spending or trading and it's that the government did not even have to print themselves. So will they really make it illegal? Which is what I thought for the last decades? Maybe not?
Today, my guest is David Moore. David is the CEO and co founder of Equity Advantage. In 1991. He and his brother Tom started Equity Advantage after a successful real estate investment career. David is a nationally recognized expert on 1031 Exchanges, and a former board member of the Federation of Exchange Accommodators. And in just a minute, we're going to speak with David about how to execute a 1031 Exchange.
J Darrin Gross
David Moore, what is the BIGGEST RISK?
The BIGGEST RISK for an investor on assets, so the biggest risk in an exchange or what what in what?
J Darrin Gross
I let you I'll let you frame framing how you how you see what is the biggest risk could be there are.
So I My biggest concern right now is just government changing the rules on my clients, you know, in the middle of a transaction or after somebody purchased something, and I just see so many situations today where you have to look at somebody's intent and what they're trying to accomplish versus what the laws are actually there allowing them to do versus what those laws were actually intend to do. Now, if I look at just complexity, and I'll just say as far as insurance products, I'm not a huge fan of limited liability companies for holding property. And and if you look at what was proposed, and Biden's build back better, it You rarely ever see an asset held by a corporation these days, because if you and I own an asset and a C Corp or S corp, we just want to go different directions, just taking the asset out of the corporation is going to trigger taxes that that nullify any benefit of an exchange, you're stuck in that entity, they want to go mark and mark it on distributions from limited liability companies to so where we talked about community versus non community property states, even with spouses with LLCs, I've got clients that will have a single LLC for all their properties, I've got clients that will have an LLC for each property, I've got clients that don't use any old C's, I would say, good stout insurance policy, I'm a bigger fan of than the old C's because of the complexity of moving assets with the LLC. Now, as I said, if we're in a community property state LLC is a lot easier to work with, and it is where we live. So, you know, that's one of my concerns. But my biggest concern right now is just the government changing the rules on stuff. And an example of that would be here, we've got the City of Portland and once more housing, and you can argue whether you think VRBO is housing are not, you know, obviously people have sort of shifted instead of long term rentals and renting to people directly. They're going to use that mechanism so they don't have to deal with some of the rent control laws. So you know, the Multnomah County changes rule says Okay, so we've got a number of clients with the retirement with retirement accounts, self directed IRAs 401k plans that buy rental houses and they were using VRBO for that thing and it worked very well. So they've got these assets. That's property that's available and all sudden the city can Any state somebody makes a law change. So no, boom, now you can't own these things you can't VRBO unless it's owner occupied property. So now every client I've got that had properties used that way with a retirement account, by law, they can't occupy your, you know, use that property anyway, so that no longer fits. So everybody that had those things now has to sell them and go do something else. So it's, it's tough when when we've got bureaucrats out there changing laws on things they don't understand at all. And they change the rules. And then so rent thing, you know, that vacation from Brent, sorry to sound callous on it, but nobody's giving the landlord that property owner, a vacation from paying the debt service. And everybody assumes that landlord is wealthy person. And I will be the first to tell you, I've got so many clients, they are land rich cash for everything they've got in that stuff, they've worked their tails off throughout their lives to accumulate some pool of real estate. And, and they're not wealthy people, you know, they need that that's what they live off of. And they're good people. And the other thing I'm seeing a fundamental shift in is, with the rent control laws and the changes and what property owners are able to do, you're seeing a lot of those people put up the the white flag and they're exchanging out of these assets they can no longer afford to deal with and into these passive investments, the DSTS, the ticks, that type of stuff. Now, what the government people don't understand, I would say is that the mom and pop that owned the property, they cared about the tenants, they knew the tenants, they really it was a different situation for them, they cared and by the way, you know that $4,300 Move out charge if you don't do it correctly, that hurts the mom and pop, well, what do you think of REIT a real estate investment trust, I'm seeing a fundamental shift in the ownership of our local property going from local people to institutional ownership from somewhere else. They don't care, it's a different deal. So it's just there's lots of things happening out there. And and I think it's all calculated. And so my concerns are just rules changing on people with with really no thought from the government of the true repercussions of those changes. And I see firsthand how it impacts my clients, and it's not good. So that's what really bothers me. Most, you know, as far as the insurance, the liability stuff, the LLCs, like I said, a good insurance policy is going to take care of that. You know, the other thing that is always out there to is with, for my businesses, we're moving money all the time. So, you know, we're concerned with all the wire fraud stuff, I mean, that's a huge thing. So having the policies, the insurance policies in place that are going to protect us, because, you know, the business owners got a lot of responsibility, let's say out there in liability if it's not taken care of correctly. So that's something unfortunately, it's just out there and seems to be growing and growing. And I really don't understand how they can't put a stop to that with a flip of a switch. Anything that's wired has to be received by somebody. I mean, you just locked down that money for 48 hours or something, don't allow it out. I would think that would change that whole thing a lot. But you know, nobody seems to be looking at solutions like that.