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.

J Darrin Gross

I'd like to ask you, Neal Bawa, what is the BIGGST RISK?

Neal Bawa

So I'll give you two risks that affect insurance prices, and all other forms of prices in the United States. So one is a bigger, sort of more, you know, overarching risk. The second one is, is well known to us this. So the first one is climate change, we are continuing to see devastating impacts of climate change in many markets. It is a political, you know, issue where, you know, half of America doesn't want to acknowledge what is happening in markets like Florida and Texas and many other markets, like California, for example. But insurance costs are absolutely skyrocketing. And what's interesting is that it's even happening in markets that are not as impacted. So for example, Chicago is not considered to be a market that's highly impacted by climate change. But I just renewed my insurance for a triplex that I own on Brandon Avenue in Chicago. My insurance went up 58% 58%. And I went through a very detailed process of shopping it. So the climate change, is it an evolving thing? So it's not one of those? Yeah, you know, we've had insurance almost doubled in the last three or four years. I think we're done with that process. That's a nonsensical answer. I am not seeing any evidence that we are, quote, unquote, done with climate change that we're done with the insurance hikes, there's no doubt in my mind that we will continue to see double digit insurance hikes at least into the foreseeable future. So that's really the first biggest risk. The second largest risk is to inflation. So it's not necessarily directly tied to insurance, I'm sure insurance will go up because of it. The second largest risk is that there is a now an increasing chance that the United States will get into a shooting war with China in 2027. By 2026, the Chinese navy will achieve parity with the United States by 2027, they will be stronger than us, the chances of a shooting war are high. If that happens, we could have a year with 100% inflation in a single year.

Today, my guest is DJ McClure. DJ McClure is the VP of sales and business development at National Flood Experts driving strategic growth through partnerships and tailored cost saving solutions. And in just a minute, we're going to speak with DJ McClure about innovative flood insurance solutions.

J Darrin Gross:

I'd like to ask you, DJ McClure. What is the BIGGEST RISK?

DJ McClure:

I think right now, one of the BIGGEST RISK that I see among many is the number of properties that are, you know, approaching a debt restructure, you know, there's a lot of short term bridge that for a lot of properties that's coming due. And so one or two things are going to happen, obviously, they're going to be able to, if they're able to put together the funds to structure a refinance, you know, it's likely going to be into a different loan structure or excuse me a loan program, predominantly, your Fannie and Freddie type programs being, you know, the more fixed set options in a lot of cases. And this has a dramatic increase on the flood insurance coverage requirements. And so you could take a property that's only paying maybe a few 1000, a building, and the new requirements, you know, could add and more than double or triple the cost of what they're having to pay per building.

And this isn't always something that somebody knows is coming. So if you're looking at a debt restructure and you're in a flood zone, you know, sooner than later, you want to have our team or someone look at that. Because not only could you increase the value of the property going into the refinance, which could reduce, you know, the cash in potential that may be required by being able to show that lender a higher valuation with a better noi.

But you're also avoiding that flood insurance coverage increase that would come with that. And then the other option of that being the same as if a seller or excuse me, an owner is forced to sell because the refinance is not possible. Nonetheless, that flood insurance cost is counting against that sale valuation. If you're having to sell in that scenario, you're probably already selling at a lower valuation than your business plan has at that point. So again, if the flood insurance costs can be reduced, again, that helps on that sale valuation to try and recoup as much of those investor dollars as possible.

Today, my guest is Joey Klein. Joey is the host of Tech Talk podcast or the Tech Talk podcast. Joey is a seasoned commercial real estate broker focusing on representation of corporate tenants across a range of industries. based in Atlanta, he is deeply involved in urban focused developments, and transit expansion advocacy, particularly in Georgia and the Southeast.

J Darrin Gross: 

I'd like to ask you, Joey Klein, what is the biggest risk? 

Joe Kline:

Sure.

I don't have an insurance related answer. So that's, that's good. I have to say, I do think that your industry is a very fascinating one. And I think if we had more time, I'd love to throw some of these back at you. Because insurance is a very rapidly changing industry over the past couple of years as well. I look, I think that any Anyone, anyone who makes their money solely via Commission has to constantly be thinking about risk. And if you're not, you probably won't be doing it for very long. So it is something that I think about a lot, sometimes too much. And Atlanta is as well as the commercial real estate in general, right? Unless you're in a really small tertiary market. Valdosta, Georgia, right, you kind of have to be a jack of all trades, okay, there's not enough of one food group to really, you know, feed you. In a market like Atlanta, you really have to specialize. Okay. What I've tried to do is within my special specialization, diversify, that's how I think about risk. So my specialization is that I only represent tenants, I do absolutely no work whatsoever on behalf of landlords marketing buildings. That's not to say, I don't think there's anything wrong with that there are absolutely guys I know who do both sides of it. And they do well with it. I have very simply chosen to, for that to be my line in the sand, I only do work with tennis. However, within that work with tenants, certainly since 2020, I have tried to diversify the areas in which I do work and in which I target prospects, you know, potential clients. So I was very, very heavy into, you know, sort of growth stage early stage technology companies at the start of my career, and part of that was because I enjoy spending time with those people. And part of it was because as a younger guy starting out, it's a little bit easier to get a meeting with the, you know, CEO, who's your age at a 10 person company than the managing partner at a law firm. Okay. And when 2020 came, you know, those those were some of the really hardest hit companies, not only because venture funding dried up, not immediately Of course with them. But also they were some of the ones that took the most to work. So ever since then, I have diversified who I work with right more of a focus on professional services and finance, right those are some of the biggest uses of office space recently. A A good portion of business focused on not pure industrial manufacturing, but more of flex Flex is basically the office in the back the warehouse in the front, all right. So you know I helped a large water meter company establish kind of an HQ To where they had a big office there a warehouse and manufacturing, not only was that diversified type of group that I work with, it was also extremely interesting. You know, I do some sort of pseudo hospitality work, I have a social club that I'm working with right now he wants to set up a location in Atlanta, likely it will be in an office building, but it's a different use. So my, my risk assessment has been that, while I am not trying to be a jack of all trades, in terms of just any industry out there, that it's really important, especially right now to change, not change to increase the types of people and industries that you have in your orbit.

Today, my guest is Jeremy Friedman. Jeremy is with Stoic Equity Partners. And they have a portfolio of 10 Self Storage Flex Industrial assets in the southeast, totaling $48.8 million assets under management and 500,000 square feet located in Georgia, Mississippi, Florida, Alabama, and Arkansas. And in just a minute, we're going to speak with Jeremy Friedman about Why Invest in Flex Industrial Real Estate.