Today, my guest is Lauren Coville, Lauren is a CPA and the Vice President of Finance at Occupier. Occupier is a lease management software solution, empowering real estate teams, finance professionals and tenant rep brokers to collaborate on the entire lease lifecycle, and maintain compliance with lease accounting standards. And in just a minute, we're gonna speak with Lauren about how new lease accounting standards are impacting organizations and their care processes.
J Darrin Gross
I'd like to ask you, Lauren Covell, what is the BIGGEST RISK?
The biggest risk in my mind is understating the level of effort required to maintain compliance with ASC 842, a lot of people are just rushing to get implemented under a 842. But really, in my mind, it's a race to the start, that where the going gets tough is maintaining that compliance. And if you don't have those processes established, or if you're not leveraging software, you know, you're going to open yourself up to a lot of risk. And so without, if you can, maybe give the standard a little bit more credit, then you can think about, okay, where do I need to improve my processes? What people do I need, what resources do I need in order to maintain compliance with ASC 842. Because what got you to comply with the old standard is not going to get you where you need to be, as we talked about, there's massive risk in manual error, even if you are certain that everything is accurate, there could be a fat finger, that will be a formula reference error, there are so many things that can go wrong in these massive XML files. And then you have the risk of not interpreting ASC 842 correctly, that if you don't have the technical expertise in house, that's also going to be a pretty big risk. And I think, you know, of course, when you think about the insurance policies, you're never going to absolutely move that risk to someone else besides the finance team or transfer it right. But there are ways that you can mitigate that. And I think the biggest way that you can mitigate is start thinking through your processes. And whether or not you should be leveraging software to help you from a capacity standpoint, really helps you like leaps, make leaps and bounds in your transition to 842. And also, obviously, make sure that you're compliant with everything.
Today, my guest is Omni Casey. Omni has been a real estate investor, broker and coach for nearly 20 years. He invest in small to mid size multifamily, cash flowing real estate from Virginia to Hawaii. And in just a minute, we're going to speak with him now about investing in cash flowing small to mid size multifamily properties.
I'd like to ask you Omni Casey, what is the biggest risk?
That is a great question. I think there's a lot of little things you can point to you mentioned environment and and you know what's going on in the world. You know how that might affect your individual acid at the time or your strategy at the time, but my answer is probably a little bit more abroad, you know, because what I've found over the years, no matter who's in office, right, no matter what's going on in the world, you can be successful in what I do in real estate investing, and you just got to be willing to change your strategy, when you understand what's happening there. So I think the biggest risk is really not understanding the rules to whatever game you're playing. So understanding the rules is so important. And some people don't even understand the game, so maybe not understanding the game. And then, like what I'm doing, you could actually choose to play a different game, right? There's, there's a very common game out there, I'm like, Well, if I can get good at my own game, no one was actually in my space playing the game that I'm playing. So I don't have a lot of competition. So it's actually much easier for me, because I created the own rules to my game. Once this picks up, then maybe I gotta go figure out how to create a new game. And so when you're looking at some constants that we think are constants, and maybe they change, how does that affect vote, for example, um, a lot of talk about inflation, right, we're north of 7%, and who knows where it's gonna go. And, but that's a rule, that's a rule in the game. And if, you know, I use the analogy of gravity quite often, like if gravity changed today, like if the like, if, for whatever reason, gravity was at 50%, and people like borderlines started to float away, we would have to change the rules to how we live our day, right, we'd probably have to wear heavier clothing and you know, not jump around, or whatever the case may be. But we'd have to adapt and get used to it. And so 7% 8% 10% Inflation is crazy. But as long as we're adapting, and we know what to do, we have to invest differently, like my investment decision today is different than it was five years ago, based on inflation. Same thing with insurance. Well, same thing with interest rates, if the interest rates continue to rise, alright, that changes my strategy, my strategy is drastically different. But understanding that all they are just rules to the game, I gotta shift what I'm doing. So it's really a self analysis of what your goals aren't what you're doing, and understanding that everything that's going on around you are just rules to a game, if you understand them, you can use it to your advantage.
Today, my guest is Zack Flora. Zach is the vice president of market growth at the Center for Active Design, and Active Design Advisors Inc. And in just a minute, we're gonna speak with Zach about how commercial and industrial building owners can increase their property valuations through green ins initiatives.
J Darrin Gross
If you're willing, I like to ask you, Zack Flora, what is the biggest risk?
Yeah, Darrin, absolutely. And I'm going to come at it from the point of their real estate community. And there's this growing need to be able to kind of measure and implement green and healthy building initiatives. And I think the biggest risk to the real estate community today is to not understand what it means to be a healthy building, not understand what it means to what those concepts are around creating a healthy building and to neut to narrowly focus in on kind of one set of aspects. So if it's an industrial to narrow to narrowly focusing on maybe things like workplace injury or commercial office space, to narrowly focusing on things like indoor air quality, or to say we're doing energy efficiency, and that's going to be enough. Being the healthy buildings are this idea of healthy buildings are relatively new, even though the evidence base has been around for for 100 years, companies and the real estate community specifically, they need to understand exactly how their buildings are performing against a set of related metrics. So that they can begin to figure out how to manage and measure the risk related to health. And, you know, we can come back to that, that office environment, we have low occupancy rates, still, we're struggling to get people back into the office, if you don't know how your properties are actually impacting health right now, you're not going to be able to make the effective changes to build that trust and reduce and mitigate that risk moving forward, you're not gonna be able to figure out how do I prevent reduced occupancies in the face of maybe a future contagious or respiratory infectious disease outbreak like COVID-19, we are not going to understand how do I control for mental health issues and social equity issues that my employer that my tenants and their employees are asking about. So not being able to kind of look at the broader picture, understanding where you are, where you're starting from. So you can make a really strategic and informed plan moving forward is, I think the biggest risk to saying you're not gonna be able to see some of the returns we talked about, unless you know exactly where you're starting from and setting goals and being able to meet them, you're not going to be able to see those kind of the suitability of tenants, you're not going to see that return on investment. Because maybe you were too narrow in your focus, or maybe you didn't know where to start, and you didn't know where you are. So you didn't start appropriately, in kind of retrofitting or designing or implementing healthy buildings in your culture.
Today, my guest is Vinney Chopra. Vinney is a multifamily syndicator, Senior Living care facility developer, an author, a podcast host, a mentor, family man, he's a lot of good things. And in just a minute we're going to speak with any about the opportunities in multifamily and senior living.
Let me ask you this, what do you see, is the BIGGEST RISK that you face in this marketplace? And just kind of the near future, as you, you know, work with your your investors and trying to totally coach steward for their money?
Totally, you know, I'm so glad you're asking that. I've raised like, close to 200 million or so. But you're right, investors want to save money? What if when you die, you know, or something happens to you, right? What what's the risk involved in that, and then when I took the key man's insurance, and then our daughter is in it, now, she'll step up as President, my wife is also injured, our legal, you know, team and everybody, our accounting department itself, the other parties, you know, during the properties we buy, so there is insurance to be gotten at every point of the property, the loss of income insurance, those are the risks also, if some burning, you know, something fire comes, are like that. So, that is other risk. The other risk, which I got hacked, you know, I think I'd like to mention, is the cybersecurity risk. And that's a big one nowadays, you know, with everything going through, through the computers and everything. So, you know, there are so many different directors, insurance risk is another one. You know, the big thing is contractors who work with us to do capex jobs and everything, we try to save money, but it's not worth saving money, unless we want to make sure contractors are well bonded in also have, like, you know, millions of dollars of insurance, right, you know, when they come to work at our assets? I don't know if that's the question, you were really posing, the biggest risk I find is that you want to do legal way to raise money, and then take care of the investment of the investors. They know, fiduciary responsibilities the right. So as a CEO, I definitely have always felt each asset I bought, I bought 37 Now or something, you know, and I'm on the loan on all 37 Not too many GPS, you know, cold GPS or anything, I don't believe in that. Maybe just three I have done it, you know, and then with my partner integration now, you know, like that, but other 27 or eight, I was the only person but, you know, the key thing is, you got to mitigate the risk for investors and mitigate the risk for the well being of your company. So you are in the right business. You are there, you know, Because insurance, it's an investment, I always look at it as an investment. It's not an expense, because I had lawsuits of $3 million $4 million lawsuits, which I, because of insurance, I walked away with giving zero money, zero money, and they settle the mediated and all that stuff. You know, so when you are in a business entrepreneur, like me and anybody, there are risks involved in people suing you and other stuff like that. So I always feel insurance is an investment, you know, yeah.