J Darrin Gross

I'd like to ask you, John Mitchell, what is the BIGGEST RISK?

John Mitchell  

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

Steffany Boldrini  

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?

David Moore  

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.

David Moore  

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.

Today, my guest is Ashleigh Wilson. Ashleigh is the CEO and founder at AuditMate. Ashleigh is open sold multiple small businesses by the age of 20. Until ultimately landing in the elevator business. And in just a few minutes, we're going to speak with Ashley about AuditMate. It's the world's first elevator escalator auditing and management software.

J Darrin Gross

I'd like to ask you, Ashleigh Wilson, what is the biggest risk?

Ashleigh Wilson  

Safety and compliance. Every elevator is is inspected, safety tested and inspected. So you need to make sure that your certificate is consistently up to date, and that your testing has been completed. Now the way that we can avoid this risk, start with your service contract, making sure that you ask your elevator company, what state required testing or city required testing is is what intervals and what tests; all of them. Because they'll say they may say hey, you have to do this every one year in this every five years. And there's fire service testing that the owner can do, or the elevator company can do get the elevator company to tell you everything that's required and who can do it. And who if they can train the owner. Get that covered under your service contract, that's going to be the cheapest way to do it. And making sure that you're transferring that ownership or that responsibility on to the the elevator company. The second is going to be tracking that certificate expiration date, the state can be past due. So waiting for the state to come out and perform your testing is risky business, put a calendar invite on your on your schedule, so that you reach out to the state before your certificate expires, and send them an email, please come inspect my equipment. If you can't come inspect my equipment on time, can you write me an email granting me temporary coverage or temporary certificate until you can come complete the inspection. Some generally the the state inspector will write you an email and say this email serves as your temporary certificate until we can come out and inspect your equipment. That way you have that in writing from from the inspection company and from the elevator company. So making sure passengers are safe on the equipment and making sure that your compliance is up to date with the state endorsee.

Today, my guests are Nick Earls, and Eric De Nicola. Nick and Eric are full time real estate investors, developers and founders of winterspring capital, a private equity firm based in Boston, Massachusetts. Together they have developed over $56 million in multifamily assets with another $40 million in the pipeline. And their work includes value add affordable housing development, and luxury multifamily condo developments in the southeast us. And in just a minute, we're going to speak with Eric and Nick about their experience and how you can learn and identify and, and grow your multifamily portfolio. 

J. Darrin Gross

I'd like to ask you, Nick curls and Eric de Nicola. What is the biggest risk?

Eric DiNicola  

I think in the business we're in and because we're in, you know, a few sort of real estate verticals, if we focus say just on the condo development They're, I feel like there are two major risks. One is sort of the political and municipality risk in the city or building. And I'll get into that a little deeper in a second. And then the other one is sort of a macro risk right now or in potentially, you know, the Fed raising rates over the long term, it does, you know, potentially reduce buying power for individuals, and we're selling condos. So the way we kind of, we don't necessarily think at our firm, that's going to happen. So at least not in the immediate future, there's potentially too many consequences for that on a macro scale. But these two things that we see, so when you're dealing with a city like Boston, there's so much red tape, that if you get into a project, without sort of a backup plan, or a worst case scenario, still kind of breaking even, for example, a very simple way to put it would be you buy a property in a three Family Zone, you should make sure if you had if you get denied for your variances, you get denied the Zoning Board of Appeals, you could still develop a three unit property, that would always break even the worst case, because by the winter, the why you can do that you don't need special permission, you're in a three Family Zone, you're allowed. So look at that scenario, if that scenario loses a lot of money, then you probably shouldn't get into it without protecting yourself and minimizing that risk either by having a contingency that Nick spoke about, or some sort of backup plan. So that's kind of the local political municipality risks, because in Boston is just very difficult to develop. And it's getting harder and harder, you know, not even every year, it seems like every month, there's much more red tape. And like I said, the other thing would be more interest rate risk, when you're selling condos. Buying Power does go down for buyers as interest rates go up. So one way we kind of, you know, try to eliminate that is we say, okay, look, where's the market at right now, a lot of developers project out oh, you know, the markets increased at this rate, this is the value of homes, you know, a year ago, this is what they're at now continue with that project that I'm going to sell them for this this much higher than they are now. We don't do that we project as is, even if it's two years old, even sometimes with like a 10% hit to see what this still work. And if it doesn't, you know, we second guess that project. So that's kind of how we try. That's how we see to the biggest risks we see. And those are kind of the ways we would eliminate them in our business. But also just the idea of diversifying within real estate where you have the different asset classes that we had, and the different types of verticals that were involved with, is sort of another way or to risk minimization.