Change is constant. There isn’t much any of us can do to manipulate that truth. We try. We all try. It’s a fact of life in life; it’s a fact of life in business. In fact, change is something we can count on. It is the one constant that never changes. Change is ironic. There is an anonymous quote out there which has been used in many ways, sums up the message clearly. It goes something like this, “…how you handle _________ , is probably how you handle everything…”. How we face what we do in our lives daily, is how we efficiently, or inefficiently, deal with change.
Upon reflection, I recall a period of my own life where I chose not to deal with change. You know what that feels like. We all know what that feels like. We get into a place where we are complacent and any change to our routine or rituals or work environment is comfortable, and any outside influence irritates us. There were external influences that were happening then, that were affecting my life; yet, I refused to look at what those influences were that were changes because I refused to let them into my life. I refused change. Comparatively I didn’t have a choice. I didn’t have the choice to disallow change because I wasn’t mature enough to understand the power of change. And then, before I knew it, change happened anyway. Whether I liked it or not, I had two choices, two options, either embrace, accept and allow change, or not. I chose the path of least resistance. The very instance that I made that decision, everything fell into place for me. Everything worked out for me. Everything was okay. I discovered that change was a good thing. I really didn’t have to figure things out because everything came to me as they should in the time that they were supposed to. I was at one and at peace. I discovered through acceptance of change that change was a good thing and that my non-acceptance of change was my problem. Not change itself. A decade ago, our country was faced with a global change that rocked everyone’s world. Not one single person, animal and living creature got out of the influence of the worst global financial disaster that made the tsunami in 2004 in India, look like a small tropical rainstorm, comparatively. Dwayne Meadows who was a survivor of this deadliest, recent tsunami said, “…It still affects me most days…”. On December 26, 2004, the Indian Ocean was hit with what is known as the deadliest tsunami in recorded history. Over 280,000 people died and the estimated damages were in excess of $14 billion dollars. Over a decade and a half later, recovery is still in motion. Over a decade and a half later, children now grown, who lost family members, still suffer from PTSR (Post Traumatic Stress Reactivity) according to the Study of the Tsunami Aftermath and Recovery (STAR). In 2005, STAR began following over 30,000 people in 487 communities as part of a population-representative household survey conducted by Statistics Indonesia. The results are astonishing because the strength of the recovery came from the people, not the government. Natural disasters work that way. I witnessed humanitarianism at its best when I worked with FEMA during the Northridge California Earthquake in 1994. The quake was caused by the sudden rupture of a previously undocumented blind thrust fault. To put things in perspective, the epicenter in Northridge was the costliest earthquake in U.S. history, with estimated damages that exceeded $20 billion, yet the death toll resulted in 57 documented cases. According to Maryann Mott, a writer for National Geographic News, her compelling article stated: “Before giant waves slammed into Sri Lanka and India coastlines ten days ago, wild and domestic animals seemed to know what was about to happen and fled to safety. According to eyewitness accounts, the following events happened: • Elephants screamed and ran for higher ground. • Dogs refused to go outdoors. • Flamingos abandoned their low-lying breeding areas. • Zoo animals rushed into their shelters and could not be enticed to come back out. The belief that wild and domestic animals possess a sixth sense—and know in advance when the earth is going to shake—has been around for centuries.” According to the article, “…Wildlife experts believe animals' more acute hearing and other senses might enable them to hear or feel the Earth's vibration, tipping them off to approaching disaster long before humans realize what's going on...” and, “…Relatively few animals have been reported dead, however, reviving speculation that animals somehow sense impending disaster...”. Ravi Corea, President of the Sri Lanka Wildlife Conservation Society, based in Nutley, New Jersey, was in Sri Lanka when the massive waves struck. He describes his shock, when he traveled to Patanangala beach, which is located inside Yala National Park, of the sixty visitors that were washed away into the ocean. Ravi Corea stated in an interview that, “…about an hour before the tsunami hit, people at Yala National Park observed three elephants running away from the Patanangala beach [headed for higher ground].” The fact is that the animals instinctively knew that something was about to happen, and they trusted their instincts to survive. Within 15 minutes after the earthquake off the coast of Sumatra and the Nicobar Islands hit on that hot day of December 26, 2004, 98-foot walls of salt water waves crashed in Aceh, on the beaches in Sri Lanka and in Thailand. Thousands upon thousands of people drowned or were carried out to sea and were never seen again. The human instinct of approaching peril was suppressed and with that suppression came their demise. Alan Rabinowitz an American zoologist, and the CEO of Panthera, which is a nonprofit conservation organization who was the past Director for Science and Exploration at the Bronx Zoo-based Wildlife Conservation Society in New York, when interviewed, said, “…animals can sense impending danger by detecting subtle or abrupt shifts in the environment. At one time humans also had this sixth sense but lost the ability when it was no longer needed or used…”. In 2007, our country was in the middle of refinancing loans in the sub-prime era because the rumor around the industry then was the housing market slowdown. It started in 2006 when the United States Commerce Department warned that the October 2006 new home permits were nearly 30 percent lower than 2005. I remember working with SBA (Small Business Administration) back then and the Director of this local rural SBA was a State Legislator. We had a close business relationship. When I started noticing fluctuations in the market in our area I asked him how he felt about the changes. I recall his response that he didn’t think that the housing slowdown was going to affect the rest of the national economy, moreover the rural economy as a whole. He felt that the market was normal. Yet, in my neck of the woods, in rural USA, home prices started falling. I was a property manager and a realtor at the time and just like anyone in the industry, I helped my clients refinance their rental properties that were purchased with hard money loans. We had to hurry up and get appraisals showing there was equity in the rentals. The mortgage brokers were aggressive in their sales with investors and homeowners who fell into the trap of the sub-prime lending debacle. Everyone who owned homes or real estate or invested into real estate for buy and holds were buying in on the sub-prime rates where no proof of income was necessary, little paper, quick closes, lock in your rates and hurry up and get it done. On one of my many meetings with the Director/Legislator of the SBA, prior to the stock market crash on September 29, 2008, he said to me on occasion that I should consider getting into the Servicing Agency business. Hind-sight being 20/20, I never fully grasped that hint until well into the crash. To refresh your memory, the stock market crash was a direct result from the US Congress rejecting the bank bailout bill that had been set before them. When the crash happened, everyone in the world was in utter shock. Within one year after the market crashed, my real estate business was on the verge of bankruptcy until one morning at 7 a.m. I got the call from a Bank of America representative. The call went something like this, I got your name from the yellow pages, and I see that you are a property manager. We are seeking someone like you who can manage our bank owned properties, it’s kind of like managing properties, which is what you do, but, you don’t have to deal with the tenants. Within four hours, I was faxed an application with a contract, and within two weeks I was now in the asset management business on the front-lines of the foreclosure tsunami. When I first started working for the “banks”, I did the majority of the work alone. There was a list of priorities that had to be done and I felt, if I was going to do this full time, I had better get to know the business from the ground up before I hired anyone to train. The rules were stringent and rigid. If I didn’t comply, I didn’t get paid. Before I knew it, within two weeks of signing the application, I was receiving more than ten orders a week that covered a 300-mile radius in rural America. What I was about to embark upon in this new real estate journey, was a journey that burned into my memory like the exposure of pornography is to a child. The first few jobs entailed crawling under houses and making sure copper water piping was intact and taking photographs of the piping, to prove that the piping was there. This included any copper piping inside and documenting damages, such as roof damage, roof repair, broken windows, holes in walls, personal property left behind, the checklist was pages long. With each house came the same work. With each house there was a new problem. With each house was a memory. With each house came speed and efficiency, with each house it felt like it would never end. I wasn’t new to real estate, but I was new to loss. I was new to witnessing loss. I was new to witnessing devastation in nice well-groomed communities which by now looked like war zones. Some of the communities appeared as though an atom bomb hit. For example, there might be four single family houses on a city block, all vacant where two of the four houses had fires and one of them had an explosion through a roof and I had to document three of the four houses. As I remember standing in the cul-de-sac shooting photos and I circled the area, it felt ominous, like the force of the after effects of the fallout of the ash after an atom bomb hit. Cars were sitting in the driveways with the hoods up, broken windshields, doors open, blankets in the backseats, some cars propped up on cement blocks; some of the houses had boarded up windows and doors with graffiti infested loitering, trash on the outside perimeter and occasionally in the photos a person peeking through a shade. As the months passed, prior to my business expansion, as I was learning this work, I went on many of these jobs alone. I had a puppy when I started who turned into an asset. Welsen was a very large border collie. I trained him in this business because sometimes when I went into these houses, there were people inside, even animals. And Welsen was really good about going through a house faster than I could to clear it for me moving forward, he was calm, quiet and instinctively new what to do. He was a truly amazing dog. Hundreds upon hundreds of photographs that I have to show Welsen is in them doing his job. Upon entering into some of these houses there were ageless memories of loss. Expletive words written in human feces, on walls, next to framed family photographs of forgotten childhoods, happy marriages, now filled with, in some cases, left over syringes on the floors next to mattresses with one last final attempt, by a once perfectly happy human being, who tried to stay, who tried to keep their home. It was obvious they had nothing left; wanting some peace that whatever was in that syringe could give them before the cash for keys program negotiated a price to get them out to give them a new start to their new freedom; to leave to a place they had never been before. Change happened that was a direct result of outside influences with the force of a tornado that crushed them from the inside out, to only end up in a homeless shelter, and eventually on the streets because by then, there were no jobs, no one was hiring and those of us who did survive was because we knew where our bread was buttered. We rescued the houses for the banks, but it wasn’t the houses that needed rescued, and nobody saw that change until it was too late. Each house had its own energy, like phantoms pulling me in directions to show me what happened. I could almost hear the voices screaming, children crying, flashlights and blankets with stuffed animals in closets. Favorite backpacks left in bedrooms with unopened valentine’s day cards to classmates asking them to be their valentine because that’s all they had left; and now even the faintest memory of that was gone. Eventually I became numb to witnessing. Job orders were coming in by the dozens per day. I hired crews to work sectors of a three-state area to do the work that I once did alone. New hires were always the hardest. I’d get calls while they were on the job by the supervisors telling me they were vomiting and became physically ill with what they witnessed. I’d spend time on the phone with the new-hires talking to them, consoling them and working through their emotions as they worked through the homes that were filled with despair. I was qualified. I went through it myself in the early days. Not only did I manage the business, I managed the crews, I became their therapist. Finding animals in abandoned homes were always the hardest. There were times where I would walk into a home on acreage and find horses in fields, dying of thirst and hunger. Pets were left in homes with empty bowls of food and water and cat carcasses would be found in rooms withered on pillows waiting for their owners to come home and rescue them when the owners couldn’t because they were too busy rescuing themselves, to change. After about three and a half years of working in this field, eventually there were animal rescues that evolved from animal control who stepped in to save these forsaken animals left behind because before, if we could get anyone to listen to us as field reps, we knew that animal control would euthanize unless a worker would adopt. That happened sometimes. Years went by. House after house after house realized a collection of door knobs. The banks required us to change those with each job we did. My doorknob collection over five years became so vast that my 20 x 40-foot garage was filled with over thirty cubic yards of 50-gallon, heavy duty bags filled with doorknobs from each home we walked into. Each one of these doorknobs represented to me a family that was separated and destroyed. Each one of these doorknobs represented the touch of each person in that family that opened the door to safety, to home, to the smell of dinner, to mom and dad, to warmth, to comfort. I never got used to it. And I survived the business of the clean-up of the aftermath of the tsunami. I’m one of the lucky ones. But, there are millions of people who did not survive. There are millions of children who were harmed by the tsunami of foreclosures. There are millions of people today who are still trying to pick up the pieces of their lost lives attempting to get out of the quagmire of PTSR (Post Traumatic Stress Reactivity) because of what our very own government allowed; then left its citizens hanging by a thread, that forced many to live in shelters while bills were being passed in Congress to eliminate the funding. The media spun rumors of how our economy was growing when no jobs were available. Many people couldn’t even afford their car payments any longer. In some cases, families gathered in the homes of their retired parents who only had two bedrooms while the parents worked at mediocre jobs to maintain some semblance of income. In many cases, many families just dispersed where ever they could. Change that was a result of a tsunami of greed and financial harm that wreaked corruption within our very government who knew about the outside external forces, raped nearly 900,000 families in 2008 according to Realtytrac. The household median size was averaging 5.3 family members which amounted to two adults and three kids, according to the US Census. By the end of 2012 there were 8.3 million children affected by the housing crisis according to Alex Gold of the Brookings Institution for research assistance. This is not counting the adult population. In hindsight, moving into the future, we have to remember where we’ve been. In 2005, there were 855,000 foreclosures. In 2006, there were 1.2 million foreclosures according to Housingwire. In 2007, Realtytrac documented 2.2 million foreclosures. In 2008, Realtytrac documented 3.1 million foreclosures. In 2009, there were 3 million foreclosures. In 2010, Realtytrac documented 3.8 million foreclosures. In 2011, there were in excess of 3 million homes foreclosed and lost which exceeded 2010. In 2012 there was an abundance of shadow inventory and the foreclosures became skewed because of the first major auction of owner occupied assets that Credit Suisse/Bank of America auctioned nearly 2500 pieces of real estate in the hardest hit areas of the United States which were California, Nevada, Arizona, Florida and Michigan. In the end, there were a documented 1.850 million foreclosures. In 2013, there were 1.37 million foreclosures. In 2014 there were 1.12 million foreclosures. In 2015, there were 1.2 million foreclosures. According to ATTOM Data Solutions, curator of the nation’s largest fused property database, in 2016, there were 933,045 foreclosures. In 2017, according to INMAN, there were 649,000 foreclosures. Currently, in the United States, according to the 2017 AHAR (Annual Homeless Assessment Report to Congress) there were 553,742 homeless people. 67% of these people were adults, no children and 260,979 were white of which 55% of the total number were women. Today, I’m discovering that at least 1% or 5537 of the homeless women and men over 50 in the nation are or were Executives, still trying to recover their lives directly related to the market crash. That is astonishing.For those of you who are wondering what caused the market crash in 2008, it started in 1979 when President Jimmy Carter deregulated banks. That change allowed banks to participate in Hedge Fund trading with financial contracts that derived its value from an underlying asset. The underlying assets were mortgage based real estate. The trading got bigger and bigger until it blew up because there were no more underlying assets to trade. That was the beginning of the market crash. Cause and effect. It took, 35 years for the market to implode like an earthquake. The rock, which was our economics and financial system broke. The energy from that break radiated out in every direction and expanded into every single country on the planet. At that moment of the crash, the size of the amplitude of the devastation at that very moment was the biggest financial devastation this country and world has ever seen. In other words, the tectonic plates on the fault-line was so long, that the radiation of the amplitude of the devastation was immeasurable. Most people, in fact the majority of the world, did not see that financial holocaust approaching. Moreover, we did not even see the signs of what was about to happen three years earlier. Our intuition was turned off and we were blind sighted with what felt was a sudden jolt, when in reality the tectonic plates were breaking before the crash. We were taught through outside influence to believe what our government was doing was in our highest and best good. We all became complacent and we didn’t have the intuition to see the wall of salt water approaching us. None of us, like the elephants who felt the change, ran for higher ground to safety. It was too late, and our lives were changed forever. We didn’t have an option to embrace change. It was thrown at us and we were expected to adapt and modify without help. When you really look at the whole picture, our Government doesn’t know what to do. They develop programs like HAMP that didn’t work, loan modifications that didn’t work, they still bailed out the banks even when Congress didn’t pass that bill that caused the crash that September 29, 2008. The bailout numbers range from $700 million to $17 trillion. In all reality, will we ever know? Does it even matter? We’re all so busy recovering. I believe in our people. We’re a strong people and incredibly resilient. We’ve lived through a major change, a devastating historical event which struck our lives personally in every way possible. Looking back, after what I witnessed in each home that I stepped into, because of the work I did for the banks, I think that the majority of the people in our country initially suffered from PTSD (Post Traumatic Stress Disorder). Then, we went into a state of PTSR (Post Traumatic Stress Reactivity). All who lost their homes, jobs and families reacted to the stress. In the first two years after the market crash (2008 -2010), it was documented by the British Journal of Psychiatry who found that more than 10,000 people committed what they labeled as “economic suicide”. These deaths spanned across the US, Canada and Europe during this recession. We can safely presume there were more since then. I’ve witnessed people who recovered well. I’ve witnessed people who lost everything and suffered from depression which caused severe health issues that they may never recover from. I’ve witnessed families severed with no chance of recovery. Most everyone is just trying to do their best because deep down, we all have anxiety about anything that most anyone, especially in power tells us. Deep down inside we know, because of that intuition that’s forming once again, to feel the presence of something that may go wrong so we can run up the hill to a safer place. This change isn’t over. If there is one thing we can count on, is the fact that this change will be constant for many more years. Our USA has not recovered, we’re working on it, but we have not recovered. No one can fix a broken system that took 35 years to break, in just seven years. We know it. We live it and we keep working towards a better life because we are now in Post Traumatic Growth (PTG) as my good friend Heather Smith Callahan, author of “A Drop of Rain” coined as a result of “conscious decisions” to survive. And to get through this, the people we elect in the future by our conscious decisions are going to be who we put in charge of creating new laws that are going to have to be implemented including the consideration of regulating banks again. As people, we must embrace change to recover from these events to move our country forward; we cannot depend upon our government to do it for us. We can however utilize the government to get there. Our world will never be what it was, nor should it be moving forward. Change. Change is everywhere. Change is constant. Change is inevitable. Who is Jinean Florom? Jinean Florom is a National Real Estate Investment Consultant and Acquisition Specialist who solves intricately woven problems for Real Estate Investors on their investments. Here is a Hard Fact: Signs of the upcoming market crash were documented by the FBI (Federal Bureau of Investigation) when they warned in 2004, of an "epidemic" in mortgage fraud, an important credit risk of nonprime mortgage lending, which, they said, could lead to "a problem that could have as much impact as the S&L crisis". If you know anyone who would like to know this information, please share this blog. And to book a consultation with Ms. Florom, please visit www.myreitoolbox.com #myreitoolbox I think we can all agree that Nevada is seen as America’s corporate haven. There is no question, hands down, that the State of Nevada, over many decades, has created entity programs to make its State, business and corporate friendly.
Yet, Nevada may not be, in all truthfulness, the perfect State to form your entity in. Over the years, there have been a lot of changes in Nevada. Since around 2008, their entity setups have been evolving and changing nearly annually. I’d like to give to you some history about Nevada’s perseverance of getting its reputation as being America’s corporate haven in the first place. Let’s rewind the hands of time to the early 1990’s through the early 2000’s, when George Bush and subsequently Bill Clinton were Presidents. Back then, the general historical consensus of the US Economy was great. The gross domestic product (GDP) increased steadily for nearly ten years. Businesses were being formed around the country and many Companies were taking advantage of the State of Delaware’s business formation because of the fact that the State of Delaware’s entity formation laws protected their business owners’ information private who registered their Companies with them. What this means, is that if you were to go research a Company in the State of Delaware, to date, you cannot obtain the information publicly. The State of Nevada wanted to offer this to their new business formations. The State of Nevada, for all intents and purposes, was jealous of the way businesses and Companies went to the State of Delaware to form their entities. Because of this, Nevada ended up getting super aggressive in changing its rules and laws and literally copied the State of Delaware’s success when it came to liability protection for their businesses. During the early 1990’s because of the extended growth of the US GDP as businesses were growing, the State of Nevada’s end goals, in that era, were to attract those new Companies and Businesses to form in their State and they succeeded. Time passed, and somewhere between 2001 and 2004 the State of Nevada ended its privacy State privileges and stopped offering business owners anonymity. It was a subtle transition. So subtle that the changes bypassed even the most educated in business formation. Then again around 2008, the State of Nevada began slowly increasing its corporation fees and continues to do so, nearly annually. Now that you understand the history of how Nevada got its reputation as being America’s corporate haven, it’s important to get to the root of why Nevada is pushed to form businesses in today. Why do many of the Real Estate Gurus sell Nevada and even say that it still has the privacy anonymity when it doesn’t? The biggest reason that Gurus are continuing to sell the State of Nevada for business formation, is because the State of Nevada doesn’t have an Information Sharing Agreement with the IRS. Why is that? Because there is no income tax department in Nevada. One of the perks, that the State of Nevada offers new business owners, is that the Officers and Directors of a Nevada Corp “can be” protected from unlawful acts of the business. BUT if that business is foreign filed and unlawful acts are committed, it is very easy to breach the Corporate Veil. Additionally, what Gurus sell to all of you that participate, is a Tax Advantage that the State of Nevada does not impose a tax on Corporate or LLC profits. Since this discussion is diving deep into this topic, let’s evaluate that for a minute and approach this for the majority of you who have paid for the entity, and still have not made a profit and then eventually or are on your way into revocation status with your formation. Do you live in a different State and do business in that State outside of where your LLC is formed? If so, and your business is formed in the State of Nevada and you are not making a profit and losing money, then the chances are, you are not reaping the benefits of the business formation that you were sold. It used to be that the State of Nevada served to protect its business owners from nasty creditors and litigators and frivolous lawsuits. But today, the State of Nevada doesn’t do that anymore. The privacy benefit has been gone for nearly 17 years or longer. And the nasty secret behind these Gurus sales pitch, do not tell you that the State of Nevada doesn’t stop anyone who practices unscrupulous businesses from filing frivolous lawsuits against someone. Here is a real-world example. One of my Clients was a private money lender who bought out a hard money lender position. My Client was sued by an LLC. The LLC was in Nevada, but the actual location of the LLC was in a different State. The LLC was registered in the State of Nevada and was foreign filed in the State where the actual LLC did business. My Client hired my services, to help organize the case and assist, locate and hire Attorney’s to represent my Client. Because of the intricately woven problems this case involved, my Client ended up having to retain an Attorney in four different States to unravel a sale the LLC, registered in the State of Nevada, had made. The case was the fraudulent sale of a piece of real estate which bypassed paying back the private money lender who was a first lien-holder. Why did the Client have to hire four Attorney’s? One State was where the private money lender lived; the second State was where the LLC was registered; the third State was where the LLC actually did business, and the fourth State was where the property was located. And it’s important to understand that each State has their own laws when it comes to Real Estate law. So, it was my job to organize the paperwork for each Attorney to review and work with, within their State they were hired to work in, with my Client because of the way the LLC was formed in the State of Nevada. It’s important to also note, that the LLC who held the property in State number four, was not foreign filed. What happened next was nothing short of Business suicide. During discovery, the Lawyers found out that the LLC literally Quit Claim Deeded the property to themselves, personally, without the private lenders knowledge. When that conveyance happened, by and through a Title Company in the State where the property was located, the private money lender was not notified of this conveyance. The Quit Claim Deed which was previously filed by the LLC, without the use of a Title Company, had the new owner of the Deed to the property’s name on it who happened to be the one and only Managing Member of the LLC which was formed in the State of Nevada. That name was on the Chain of Title. This gave the LLC, who moved to own the property personally, to sell the property in their name personally which bypassed the payoff to the private money lender. The private money lender did not know the sale had happened right away. It was months after the sale that it was discovered. During that time, the LLC that was sued by my Client, did not have a Lawyer and filed motions to extend for a few months when the case was originally filed. After the property was sold, and the LLC’s Owner responded to the lawsuit, in the very response to the filing of the case with the Courts, stated that the money that was received from the sale of the property was being used to retain the Attorney to respond to the lawsuit. That is the definition of Ponzi. After approximately three years of litigation, my Client was able to receive a judgment which boiled down to one State. My Client won the case for many reasons. One of the reasons was because the LLC who transferred the property into their name personally with a loan agreement and promissory note under their LLC that was registered in the State of Nevada, allowed my Client to move with the legal team to prove that the LLC/Owner breached the “Corporate Veil” that the State of Nevada allegedly protected the anonymity of the Owner which was the irony. The truth, my Client never recovered monetarily the financial losses of this debacle. Ultimately, the LLC and the Owner that LLC went out of business and was never heard from again. My Client accepted the loss, and now has their contracts and purchase agreements of their ongoing investments reviewed by Lawyers, per our recommendation, in the States that are invested in; and forms LLC’s in those States where the property is located. The lesson my Client learned is that the law will prevail in the State in which the property is located. This example is but one of many real-world experiences, to show that what the Gurus say about privacy in the State of Nevada is not necessarily what you are told nor what you pay for. And in this case of my Client, because the LLC was registered in the State of Nevada a crime was committed against my Client by this LLC. The LLC/Owner thought that they were protected by the anonymity rule. The Owner of the LLC was brazen enough to fraudulently convey a property from the LLC to themselves which literally breached their own Corporate Veil. The bottom line, is that if you are registered in the State of Nevada and you commit crimes with money against others, your Corporate Veil will not protect you. The LLC was not protected by the business structure in Nevada. Most heavy playing Real Estate Gurus say that Nevada is the best State to incorporate in. What they don’t say is that the State of Nevada is a great State to incorporate in to achieve certain illicit goals. What they don’t say really matters. Those goals for the Gurus are to sell you entities that are set up to accomplish doing bad business and hide assets through a sales pitch that is designed to make you think that you have anonymity. It is not full proof for those who think that way because even the most unscrupulous business people eventually lose. And for those of you who have entitles set up and are not using them because they don’t benefit you or your business, also lose because your best interests of your business model were not looked at and considered when the entities were formed. It was about the sale, and only the sale. Nothing else mattered. Another sales pitch that is being sold regarding the State of Nevada’s other tax benefits, some Real Estate Gurus are saying that Nevada has a relationship with Florida, Colorado and recently Utah. That is a myth. The State of Nevada does not have any type of a reciprocal relationship with Florida, Colorado or Utah. I think it’s important to note that the State of Nevada has huge tax revenues from its biggest industry which is gaming. That result of tax revenue offers Nevada’s residents and businesses low State taxes. Let’s take a look at that more closely and ask ourselves, is it possible that it is in a business or Companies best interests to perhaps consider filing their entity in the State that it practices its business in? Is it possible that each State has its own tax revenues for small business enterprises that are local to that State? It’s up to you to find that out on your own. Call your State Corporations Division/Secretary of State located in your State and ask those questions or seek out their website and read their FAQ’s. You can also seek out a Real Estate Investment Consultant or go to your local REI Groups and ask others, who are working the industry in your State what they do. Gather your facts, then sit down and create a plan to implement that is in you and your Companies highest and best good. If you are one of these people, I’ve described, and you are not benefiting from the tax benefit the State of Nevada has that you were sold by the Gurus; then you are not benefiting from having your LLC or your S-Corp in Nevada. Remember, it’s just a hustle the Gurus use to sell you a dream; but that dream is not necessarily your dream. Consider the option of moving your LLC to your State you live and work in, from the State of Nevada. You paid for the formation, you can dissolve it in the State of Nevada and literally pick it up and move it to your State that you live and work in. This might be the ticket to serve your business better in the long-run, and save you tons of annual fees that you pay to another State. Plus, the benefit is that you now have an operating business in your state and you put your money where it matters most, your community, your State. Disclaimer: It’s important for all of you to understand that I am not undermining the State of Nevada’s Corporate rules and regulations. There is a State and a place for any business to create a start-up. This blog is specifically geared towards real estate investing and problems that run rampant in this industry due to misinformation that is passed on by others, that create seminars and prey upon people’s ignorance and create long-term financial business problems for the uninformed new business enterprise who wants to make a living in this industry. Because of my experience and knowledge, I think it is important to share my knowledge with the masses who pay thousands of dollars for three days of “education” and walk away with LLC’s and S-Corps with no previous Entrepreneurial or Real Estate experience. Worse yet, most people who walk away with these entities, do not even know what the abbreviations are that were created for them in the first place, and how to use the entities in the industry. That is the recipe for failure. I make it my company’s business to help keep small businesses, that want to do real estate, in business. Who is Jinean Florom? Jinean Florom is a National Real Estate Investment Consultant and Acquisition Specialist who solves intricately woven problems for Real Estate Investors on their investments. Here is a Hard Fact: If you are Registered in the State of Nevada and you Foreign Filed your LLC or S-Corp in the State in which you reside and work and you actively use the LLC or S-Corp in the State in which you reside and work, and your LLC or S-Corp goes into revocation status in the State of Nevada; did you know that because of non-payment of annual fees, the State of Nevada can sue you and get a judgment for you to pay the past and current annual fees? Why? Because you continued to do business in your State where you live and reside when your LLC or S-Corp was not a valid business in the State of Nevada where your business is formally registered. If you know anyone who would like to know this information, please share this blog. And to book a consultation with Ms. Florom, please visit www.myreitoolbox.com #myreitoolbox Today I am going to discuss some reasons why the facts entered by the listing agent may not match those from public records when you are getting ready to review listings to buy. The MLS listing is typically the most up-to-date and reliable source of information about a home for sale, but sometimes, MLS doesn't have the information either. Remember that Listing Agents, put information into the database, based on the information they are provided by the Owner of the property by virtue of a disclosure statement. Some Realtor pull a Realtor packet on the property; some do not. So, when you find conflicted information here are four simple reasons why the sources may not agree:
REASON NO. 1: LET'S TALK ABOUT RECENT UPGRADES - When a house has been updated, MLS listings typically reflect the current beds, baths and square footage. In some counties, the assessor's records are usually up to speed yet, some are not. If you believe that a house you are looking at to buy doesn't have accurate information on the MLS or by what you see, go to the building department and pull permits or find someone who can. This is the best strategy to take if you question add-ons or upgrades. If they are permitted, they are legal. If they are not permitted, they are not legal. That could be the difference in a profit spread on a rehab and your buy-in and your exit strategy. Additionally, the MLS "year built" may sometimes be the year of a major remodel whereas public records typically show the year the original structure was built. If the property is bank owned, you can be rest assured the bank knows the property. And banks don't have to disclose. And banks don't have to accept price reductions on "AS IS", "WHERE IS", and "WITH ALL FAULTS" listings. So, when you find yourself questioning your deal you are buying, ask yourself this simple question, "... Is the upgrade permitted or not?..." It's that simple. MLS may say so; but the County ultimately has the final decision if you are rehabbing a property that was not permitted. Some will tell you that the County is slow to update, you can count on the fact that the County is counting on the developer to make the mistakes when inspections are drawing near. Make friends with the inspectors. They can be the biggest asset you have - especially in a market you do not know well. REASON NO. 2: LET'S TALK ABOUT THE SQUARE FOOTAGE DEBACLE - It may not always be clear whether the square footage of an MLS listing includes any partially finished or unfinished areas of the house such as a basement or a garage. Public records at the building department will sometimes split out square feet into finished/unfinished sections. This information helps when looking at the cost of a rehab in areas where there are basements. Remember this fact when buying, when the MLS and public square footage does not agree, the county footprint is what will ultimately win as long as the permits have been pulled and changed at the county level. If MLS is listing more square footage than what the county shows, you can best bet that it's an non-permitted addition or add-on. Count on your County records. REASON NO. 3: LET'S TALK ABOUT, WHAT IF THE ADDRESSES DON'T MATCH - There is a rare occasion when there is a listing on the MLS that has a different public record. We have seen instances where the property was not even a matter of public record. We have seen instances where part of parcels were not part of a Deed; we have seen Deeds showing more parcels than what was actually available for purchase. These can be costly mistakes that the buyer has to handle with survey's, title searches, and more. When you find a listing that looks like the public property record is not the same, contact your County and ask them what the record is. There may be a simple explanation. There may not be a simple explanation; but doesn't it feel better to know that you have an option to talk with the county before you purchase so that you can have things straightened out when you buy before it’s too late? An example of this could be if a parcel of land was partitioned or sub-divided and has the same address yet two different homes on each parcel. This is one example of many. REASON NO. 4: LET'S TALK ABOUT REALTOR NOTES - CDOM - DOM - AND SOLDS – Where do we go when we want to see and review solds from a Realtor? We go to Redfin. Redfin above Realtor.com shows sold listings from the MLS for the past several years! It shows DOM (Days on Market) and CDOM (Cumulative Days on Market) when a listing changes Realtor's. Redfin shows the home facts for the MLS listing describes the house at the time it was sold and also provides photos. This is valuable information when using sold data to determine the fair market value of a property you may be interested in purchasing. Really get to know how to use the tools within Redfin. Don't just be satisfied that the solds you are looking at are real comps. Look at the neighborhood and google the properties to see if they are "like for like" with yours. You can be duped if you are not careful, by an aggressive realtor and ultimately buy high, sell low and lose your tail in the game. Do your due diligence. Save the listings as your favorites. Follow the trends in the market. Redfin, really does offer good reliable facts for older listings that show work done on a home when it is sold. (Disclaimer - This is not a paid advertisement for Redfin. We do not have any affiliation with Redfin other than using it as an investigative tool and to shop for property.) After you have done your due diligence on a property and you are confident you want to make an offer; you go into it with the knowledge of what it's as is value is based on the data in that market. Then it's time to contact your agent if you have questions or need some clarification about MLS-provided facts. And remember, if you are rehabbing remotely from a distance, make sure you have some solid boots on the ground teams in your area. That can make the difference between profit and loss at every level. Know someone who is working the market to help you. There is value in that kind of a team. And remember, as an investor, never get emotionally attached. Your job is to turn the most profit you can from a deal. Take the time to put your efforts into the rehab that will give you the best value in the future. This strategy going in will help you make the best and most profit. Who is Jinean Florom? Jinean Florom is a National Real Estate Investment Consultant and Acquisition Specialist who solves intricately woven problems for Real Estate Investors on their investments. Here is a Fun Fact: MLS listing has been doing the best for every home owner who has shown faith and confidence. Selling or buying a home is not an easy task and this we have experienced for all these years. This perception has changed completely with Flat Fee MLS, MLS listing and For Sale By Owner. Home owners who have used this decade old technology understand the advantage in much better way. We as home owners used to get in touch with traditional styled real estate agents and have paid them millions in commission. Now this has completely changed with flat fee MLS where owners can sell their home as for sale by owner and save in sales commission what they used to pay to traditional real estate brokers. If you know anyone who would like to know this information, please share this blog. And to book a consultation, please go to our contact us at the top of this page. #myreitoolbox |
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Just a small town girl with real estate bred in her bones. Archives
March 2019
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