👋 Happy Friday! Today is World Smile 😄 Day, so be sure to pass one along to a stranger. I’d like to pass a smile along to Asad Ahmad, CPA, for contributing to today’s newsletter.

I’m back after a few weeks of working on myself and the practice at back-to-back-to-back weeks of seminars and educational opportunities. I’ve been fortunate to also appear on several podcasts during this time, so be sure to check out our media and events page to see those.

1 big thing: Fair housing complaints rising

There were 31,216 housing complaints in 2021, an 8.7 percent increase over the number of complaints filed in 2020, the latest numbers available.

Why it matters: Most landlords do not carry tenant discrimination liability insurance to protect them if a fair housing violation claim is filed against them, and the typical Employment Practices Liability Insurance (EPLI) doesn’t cover this type of matter either.

• These cases are often based on a mix of state and federal law, so they’re filed in federal court.

• Defending cases in federal court is a very expensive undertaking.

• Advocacy groups, HUD, private attorneys, and legal aid organizations regularly bring suits on tenants’ behalf against landlords, sellers, lenders, property managers, architects, developers, and REALTORs alleging such discrimination.

What we’re seeing:

• We represented a physician whose tenant complained that the landlord discriminated based on sex when a plumber sent to repair a shower allegedly made a pass at the tenant.

• A real estate brokerage was threatened with a complaint to HUD when they advertised a property for sale and referenced a local church as located across the street.

• Numerous cases involving service animals and pet deposits or prohibitions cross our screens monthly, leading to claims of discrimination based on disability.

Fortunately, the penalties for such violations are often low ($10,000 to $100,000), but the legal fees, time, and energy to fight the complaint, plus attorney’s fees to the other side, are higher than the fines imposed.

The bottom line: Education is key to avoiding discriminating against tenants, buyers, and borrowers in the sale, rental, or mortgaging of real estate.

• Read news about fair housing cases to stay abreast of what others are doing to give rise to complaints and attend annual continuing education courses on fair housing.

• Obtaining insurance for defense and penalties for such actions can protect landlords.

• Hold investment properties in a land trust or at least an LLC so that only that property is a target if a claim is successful.

2. Investing with Self-Directed IRAs

Many of our clients have self-directed IRAs and solo 401K plans that they use for investing.

Why it matters: When handled properly, self-directed retirement plans can provide a better return with non-traditional investments like mortgages, investment properties, franchises, startups, and other ventures unavailable to IRAs held by a non-self-directed custodian.

• When the self-directed retirement plan is holding a mortgage or real estate, we recommend that — rather than holding the asset in the plan’s name — a land trust or single-purpose LLC be used instead.

• The retirement plan is the sole member of the LLC or beneficiary of the trust that holds title to the property or mortgage, keeping the asset separate from the plan’s other assets, including cash reserves.

Yes, but: In addition to asset protection considerations, many complex tax issues surround the use of self-directed IRAs for investing in non-traditional assets.

Go deeper: Our colleague, Asad Ahmad, CPA, has written an insightful article on those issues that is a must-read for anyone in this situation.

3. Catch up fast

1. Where housing prices are booming and bursting. Housingwire

2. Maron Moss of Miami, formerly of D.C., has been found guilty of bank fraud for receiving $31,920 in total monthly mortgage assistance, saying he was unemployed when he was actually receiving income from five jobs. The Legal Description

3. Meanwhile, Carol Ferrer of Tampa is facing 30 years in prison for conspiracy to commit bank fraud. He worked with others to create fake W-2’s and other mortgage application documents to qualify borrowers for mortgages they were not otherwise qualified to have. The Legal Description

4. Progressive will non-renew about 115,000 Florida homeowner policies, but Loggerhead will offer to pick them up. WESH 2

5. October U.S. Home Price insights. CoreLogic

4. Pic of the day

Since our last issue, I heard James Lawrence (AKA the Iron Cowboy) give one of his rousing keynote pep talks.

The man is the epitome of perseverance, running 50 Iron Man triathlons in 50 states in 50 days and 100 more triathlons in 100 straight days (plus one extra).

The voices in our minds are often our biggest bullies, telling us to give up when the going gets tough or even just a little uncomfortable. As we work our muscles by forcing them against resistance, we must work our minds to overcome the resistance of discomfort and inconvenience.

• Not all of us can run a triathlon one day, let alone multiple days in a row, but we can get out of our comfort zones pretty easily.

• Cold showers, cold plunges, and intermittent fasting are some of the latest trends in “discomfort training.”

• Anyone who has completed military basic training can attest to its discomfort for body and mind.

Why it matters: Overcoming and surviving uncomfortable or even impossible situations helps us experience life’s comforts more deeply.

What they’re saying: The thrill of the fight is what it’s all about.

We hope you found this helpful — any feedback is appreciated and can be shared by hitting reply or using the feedback feature below.

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Be on the lookout for our next issue! 👋