April Fools — Overcome Unexpected
April Fools — Overcome Unexpected Coming Around Again! If ten years ago, on April 1, 2016, you had read any of these predictions, you would have considered them April Fools attempts. The Dow Jones Average will soar by over 15,000 points with Presidents at/near 80 years old! The USA will kidnap a South American leader and attempt to destroy by missiles a mid-east country! Aaron Rogers will be considering serving as starting quarterback AGAIN for the Pittsburgh Steelers! Do NOT get frozen by what happens unexpectedly. We need to stay light on our feet and gain “dry powder” to respond to opportunities others miss from fear. WHERE ARE YOU? Start with a realistic diagnosis of where you will want to stand in our ever-evolving brave new world, versus the one for which you may still long to be. None of the above is the end of the world. We in the USA, though, may be going from “happy days are here again” excessive to more of a “working on a railroad” counting-your-pennies style of living. WHAT IS LEFT? As in MASH, we need a quick application of triage, as not everything will survive. Some churches close, grocery stores become virtual, and driverless cars may become the norm. What survives (e.g., the paid-off car) and what is let go (e.g., the vacation trip of a lifetime to Ireland) are best determined, though, in advance of crisis. RECOVERY! Your energy and resources are best used if applied to ONE area where you have a “survive to thrive” chance over the next 18–36 months. Ideally you build on what you already know and “blossom beyond” as the bills are being paid on time. PREDICTIONS RETAIL. It is difficult to quickly turn around a large retail center (e.g., think an aircraft carrier vs. a PT boat). The volume of retail sales online, as a percentage of all sales, will continue to grow. Most markets, though, will have (at least) one mall survivor (as some buyers need/like to touch what they are buying). Retail sales will drop when the economy drops unexpectedly (e.g., as gasoline and food spike this month). OFFICE. Smart leaders will NOT bring those who remain working from home back into the office. It is easier to fire folks you don’t see every day. SELF STORAGE. A roller coaster economy does not crater mini storage. MEDICAL. Concierge physician practices will grow, as person who can afford better care will still have the money to pay for better care. INDUSTRIAL WAREHOUSE. Won’t feel a short-term downturn. VETERINARIAN PRACTICES. While they may lose most animal food sales to online services, they will remain attractive to Wall Street. Why? Vets get paid when services are supplied (versus with insurance reimbursement for human) and sick pets still were brought in for care. BOTTOM LINE Hold tight to your regular income if it is coming from a source which will not be negatively impacted by the roller coaster economy. Start a second gig part-time, which you can ramp up if you get let go OR your employer goes under. Having walked this walk now several times in my career, allow me to reassure you that there is always an economic path to get back home. Latest Articles All Posts Government As Friend July 7, 2026 April Fools — Overcome Unexpected July 5, 2026 Leave a Reply Cancel reply Logged in as Kristine Haboc. Edit your profile. Log out? Required fields are marked * Message*
Marry Money & Opportunity
April Fools — Overcome Unexpected A Way To Explain What A Transaction Catalyst Does For A Living! Have you had the challenge of explaining to friends and family the role(s) you play in your career? How best do I explain the game of “Marry Money and Opportunity” in the world of alternative (non-traded) real estate securities? No analogy is perfect—much like most of life—but the world of opaque security transactions does mirror much of what goes on in a marriage—traditional or otherwise! LAWYER ROLES PRE-NUPTIAL AGREEMENT – Similar to the letter of intent, it only has value IF the parties move forward with the relationship. WEDDING VOWS—Think of the Agreement of Purchase and Sale; both address the intentions of the parties. WEDDING—Similar to the closing of a real estate transaction; rights and privileges have transferred and are recorded with the municipality. RECEPTION—Rarely do the parties get through a reception without significant debt! Ditto on the purchase of real estate; it comes with debt obligations (which the lawyer negotiates and documents). HONEYMOON—The security document brings in equity investors; they get to go along on everything going forward! WHERE IS EVERYONE ELSE FATHER OF THE GROOM—Like a sponsor of an offering, the father of the groom wants MANY grandchildren (AKA—ongoing sales to investors). GROOM—The wholesaler wants access to the registered representative (prospective bride). FATHER OF THE BRIDE—The regulator, FINRA, plays a loud and strong role, yet seems often to function without a clue what is really going on. MOTHER OF THE BRIDE—The broker dealer only wants the best for their children (registered representatives) and will “appoint” someone in the family—the due diligence officer – to ask around about the proposed groom. INVESTIGATOR – The father of the bride (FINRA) mandates even further investigation of the family of the prospective groom (particularly the father/sponsor). Unfortunately, the third-party due diligence analyst research reports come back reading like a STD blood test. It does help to know your intended is not bringing into the marriage unwanted disease (e.g., bankruptcy, securities fraud, or criminal conviction). But does any of this indicate if this is a good and competent long-term relationship? MARRIAGE LICENSE – The marriage license is a requirement of the state, but there are no limits on the vehicle you drive, at what speed, or how well it needs will be maintained! An appraisal is required by banks, but at best it is a moment-in-time snapshot of value, and it does not reflect how THIS borrower will approach the investment in the future. MARRIAGE PLANNER—Things go smoother in life when you have someone—who has been there before—organizing your process or event. The right managing broker-dealer knows everyone in the industry and helps in structuring the sponsor and offering, introducing the opportunity to the market, and assures compliance with the rules of the regulators. It is not required to have a marriage planner or a managing broker dealer. The chance for success does improve with their expertise. MARITAL COUNSELING (PRE-AND-POST) Great advice is readily available. Good advice, which the receiver—in marriage or in real estate securities—absorbs and acts on accordingly, is in rare supply. Actionable good advice, coupled with hands-on support, is the role I play in my world of “Strategy is the Game of Chess.” BOTTOM LINE It can be helpful to take a problem and reconsider it in a different context. You may want to consider developing an analogy like “the marriage of money and opportunity” above to help explain what you do to others not in your field. Latest Articles All Posts April Fools — Overcome Unexpected July 5, 2026 Marry Money & Opportunity March 23, 2026 OZ Wizard Predicts! February 2, 2026 Leave a Reply Cancel reply Logged in as Kristine Haboc. Edit your profile. Log out? Required fields are marked * Message*
OZ Wizard Predicts!
OZ Wizard Predicts! WHAT TO EXPECT WHILE YOU ARE EXPECTING Others wait, expecting clarity to come soon from final Treasury regulations – a.k.a. Part One – regarding Qualified Opportunity Zone Funds (“QOZF”). While they wait, allow for the following bold predictions about how QOZF will develop! WHO WINS? 1. HUGE SPONSORS. They already are successfully raising billions in equity annually (e.g. Kevin Shields). Why is this important? QOZF is a new concept for NON real estate investors (who already have 1031 DSTs as an option). Go big, with a national network of wholesalers, or go home. 2. ONE HIT WONDERS. Single property developments (e.g. Greg Genovese) will attract those investors who want / need to see how a proposed property fits in a neighborhood (and also with a little more confidence, at least in the short run, regarding applicability of QOZF regulations). 3. FRIENDS & FAMILY. Some few folks are both excellent hands on developers and have a following of devoted “Friends and Family” investors (e.g., Vanessa Sturgeon). Investors need assurance that what they see (in marketing material) is what they will get. Sponsors need to be sure that they can raise the minimum equity to complete the proposed project (otherwise the investor may lose their equity capital AND their tax deferral). A well done “Friends and Family” QOZF can be “right sized” to match the reality of what can be realistically raised in equity to size of project to be developed. WHAT ELSE IS BEHIND THE CURTAIN? 1. LOCAL EXCLUSION. Governors selected a year ago the 20% of potentially qualified census tracts in their state. Want to bet that those living / owning in the 80% of tracts NOT selected will make their exclusion a state and local election issue? 2. 1031 DST IMPACT. Promotion of QOZFs will help in the sales of 1031 DST. Why? More real estate selling investors, in reading of the comparison, will gain comfort in 1031 DSTs as they have 15 years of history (versus not yet dried ink…does the government still use ink?) and DSTs (can) have cash flow (import to retirees) where a development deal has initial cash flow only if the books are cooked (with a few potential exceptions with already leased properties). 3. NATIONAL TAX DEFICIT. The national tax deficit runs around $22 trillion. The potential capital gain tax break of QOZF exceeds $6 trillion. If you are running for Congress, might this be an interesting point to hammer into an incumbent who voted for the 2017 Tax Cuts and Jobs Act? 4. SWEET SWEET CHARLOTTE. For a Charlotte County (Florida) – and other under-developed rural / challenged urban core areas – to compete for QOZF investors / developers with, for instance, the City of Charlotte (NC), the game has to be “rigged” with additional incentives (e.g. block grants), local investors (e.g. in a JV Reg D offering), workforce training (to help attract out of area tenants to the new development), anticipatory land use planning already approved (to cut development time), and “tenant ready” users of the proposed development (e.g. community college, government as tenant, businesses ready to expand). 5. CONSULTANT FEA. Those consultants who understand the challenges of local government (e.g. former Cleveland Mayor Jane Campbell), balancing the needs of effective developers (e.g. Molly McCabe), and how “other peoples’ money” impacts the successful equation (e.g. …well, me!), will thrive with the QOZF FEA (“Full Employment Act”)! BOTTOM LINE The potential for QOZF is huge, but only a few of the 300+ firms announcing funds will succeed in attracting sufficient equity capital to accomplish their goals. There are over a million parcels of land in the 8700 qualified opportunity zones. Only those local governments prepared to compete with additional incentives will overcome the investors / developer bias to locate where other successful business / real estate are already thriving. Latest Articles All Posts April Fools — Overcome Unexpected July 5, 2026 Marry Money & Opportunity March 23, 2026 OZ Wizard Predicts! February 2, 2026 Leave a Reply Cancel reply Logged in as Kristine Haboc. Edit your profile. Log out? Required fields are marked * Message*
Scams in Real Estate
Scams in Real Estate LIES, DAMN LIES, AND LIARS Someone last week hijacked my mail (had it forwarded to their address in Atlanta). Then someone attempted to open two new credit cards in my name. Our friend, Dr. Fred Chasalow, had a caller “from Medicare” attempt to gain his new Medicare number. My in-laws received a call claiming they had money waiting for them from Publishers Clearing House…and only their bank account and social security number was required to complete the transaction. How does larceny – and it exists everywhere – play out in the world of real estate investing? IF IT SOUNDS TOO GOOD TO BE TRUE High current cash flow AND a huge gain on sale with NO investment risk? Most real estate investors are sufficiently aware that when it sounds too good to be true – run away! Unfortunately, the artists of scam are sufficiently sophisticated; fraud is not always obvious even to the best of analysts. BAIT AND SWITCH. Edward H. Okum was the master of playing to your greed. One of his industrial 1031 TIC offerings from Investment Properties of America projected a above market annual cash distribution. The tenant showed great activity at the facility. But about a year after the equity was raised, the tenant shut down. The tenant was owned by Mr. Okum! The property empty was worth but a pittance versus the price the investors paid. PONZI SCHEME. Mr. Okum owned 1031 Tax Group. Investors placed the proceeds from their property sales with this group, serving as their qualified intermediary. Okum proceeded to “borrow” the assets to live the high life. As long as new money came in, it was paid out to replace the old money (when the investor was ready to close on their replacement property). Once money slowed coming in to the QI, there was no money to honor the demand from the investors. The firm collapsed and Okum is now in jail for over 100 years. LAWYER IMPERSONATION. Kay Creasman, Chair of the Real Estate Section of the Virginia State Bar, has found that “fake profiles” in real estate transactions are rampant. Proceeds from a sale are redirected, usually by a phony email which appears to come from the appropriate party, to an account controlled by the criminal impersonator. Phone confirmation, while a good step, is not infallible (as phone can also be hacked). SOMEONE LIED. United Dominion Realty was bidding, where a hard deposit was required, on a large package of apartments assembled by the RTC after the 1986 financial crash. There was a 240 unit complex in Nashville which was critical to the value of the portfolio. When we went to inspect the property, we discovered – even though the original loan proceeds had been advanced to the developer – only 120 apartments had been constructed! BOTTOM LINE History is no guaranty of the future. Good properties can be overcome with spill over neighborhood crime. Great sponsors can become addicted to money, power, prestige, alcohol, drugs, young women and gambling. Attractive sales people will tell you what they believe you need to hear so you will write a check to invest. Sometimes, but rarely, do they lie when they know the truth. More often it will be the case that they just don’t know what they need to know… but they don’t know they don’t know it! There are great investment opportunities in real estate – even in hot markets like today – but don’t buy into the lie that every real estate investment is wonderful because some have generated wonderful returns. Dig deep and wide in your research. Latest Articles All Posts April Fools — Overcome Unexpected July 5, 2026 Marry Money & Opportunity March 23, 2026 OZ Wizard Predicts! February 2, 2026 Leave a Reply Cancel reply Logged in as Kristine Haboc. Edit your profile. Log out? Required fields are marked * Message*
Government As Friend
Government As Friend Sometimes We Need To Listen As a real estate investor, government can be your best friend! WHAT!!! Sometimes as real estate investors we get so caught up in wanting what we want, and wanting it immediately with minimal cost, that we fail to consider that maybe there is a rational other side of the argument. And when we take the time to slow down just a little and listen to other voices, the benefits of cooperating with government may well enhance the success of your investment. Today, an ode to government from the eyes of a multi-decade real estate investor. NOT ALL GOVERNMENT IS CREATED EQUAL 1. Municipal Government – Real estate is impacted most directly by local government. Taxes, fees, land use approvals, construction inspections, easements, access…it goes on and on. I learned when we bought an apartment complex for United Dominion Realty in Maryland, that local government can also use a hammer from the toolbox of other government entities to nail down their position. There the housing authority approval of substitution of borrower on a federal low-income loan—typically automatic for a multi-billion-dollar NYSE REIT—led to an “offer we could not refuse” to upgrade the property beyond the rental market. 2. State Government – The General Assembly controls the powers granted to municipal government (if not granted, local government doesn’t have it). Most states impact real estate with environmental and housing regulations, generally with limited ability to enforce (leaving much of the dirty work to local government). There are some tax benefits granted on the state level, but generally not sufficient to move the needle on real estate investor decisions. We will talk more about state tax policy conforming with the new tax code in a subsequent article. 3. Federal Government – Tax policy coming out of Washington, DC, is traditionally social policy for the rich! Qualified Opportunity Zone Funds will benefit those with capital gains to shelter. Real Estate Investment Trust do not get taxed as the corporate level, so that the masses (of those with money) can participate in a diversified portfolio of real estate, similar in concept to a mutual fund investment in a diversified portfolio of stocks. HOW TO GET MAXIMUM ADVANTAGE 1. WIIIFY? Start every approach to government, at any level, with a consideration of “what is in it for you”. By you, I mean that level of government, the appropriate elected and appointed officials, the department you are approaching, and the individual with whom you will meet. Often there is multiple versions of the answer. It may not be that any of them dislike you (even if you ARE dislikeable!). 2. LEMMINGS. Do your research to find something which was done in that municipality in the near past that is most similar to what you are proposing. It difficult for a government to legally deny that which is proposed when some similar was already approved before. As important, issues are often substantially better understood by both sides when they are communicated in context of something which already exists. 3. PROMISES. Search for something in your proposal which supports something the officials (elected or appointed) have previously publicly endorsed. Be creative; sometimes a pig can be made to look like a cow with the liberal use of lipstick! 4. COMMUNITY. From my years as an attorney in county government, and then as an elected member of the General Assembly, we sometimes in government get caught up in the heat of the current crisis and lose our way as to the overall direction. Garner community support (or at least neutralizing organized opposition) and government officials will more clearly see a pathway to your proposal. 5. MEDIA. Involve the press (and TV / radio / online) as a “nuclear option” working with government. Properly educated, media attention can generate an electric energy to move the community and government officials in your direction. Lose control – which often happens – as media requires a “hot story” to report – and an explosion follows which will destroy all sides of the proposal. BOTTOM LINE We all are touching the same real estate elephant at distinctly different points of the body. We all have a blindfold on (or at least blinders to the position of all others). Recognize this one reality, and you will eliminate at least half of your frustration with the multiple levels of government you will need to complete your goal. Latest Articles All Posts April Fools — Overcome Unexpected July 5, 2026 Marry Money & Opportunity March 23, 2026 OZ Wizard Predicts! February 2, 2026 Leave a Reply Cancel reply Logged in as Kristine Haboc. Edit your profile. Log out? Required fields are marked * Message*