Happy Friday! The last Friday in January (today) is always “National Fun at Work Day.” From bean bag tosses to darts to bowling, to foosball and ping pong tables, there are myriad ways to have fun today at work. Feel free to share photos of how you celebrated your fun day at work on our Facebook page today. Just be sure you tag it #funatworkday.

Situation Awareness: Users of Apple devices such as the iPhone, iPad, Mac, Apple Watch, or Apple TV should update all those devices to the latest version of the operating system to protect against a new hack out there that can let a bad guy take control of the device if it opens the hacker’s website. They use phishing and smishing to send the links, so — as always — think three times before you click that link. CISA

1 big thing: Bill curtails hedge funds in housing investments

Hoping to open up the tight residential real estate market, Congress is considering a bill that would prevent hedge funds from owning single-family homes anywhere in the U.S.

Why it matters: Even if it doesn’t pass, the bill—introduced in both the House and Senate—is a symptom of growing frustration with inequities in the housing market.

How it would work: The End Hedge Fund Control of American Homes Act would give hedge funds ten years to sell off all but 50 of the single-family homes in their portfolios.

  • It imposes stiff tax penalties on companies that acquire more during this period.

  • The bill defines “hedge fund” as a corporation, partnership, or real estate investment trust with more than $50,000,000.00 in net value or assets under management on any given day in a tax year.

  • The goal: No more hedge fund ownership of more than 50 single-family homes.

Investors are outsized in the housing market, responsible for over a quarter of all single-family home purchases.

  • Their share may grow to more than 30% by the end of 2024, according to a report by CoreLogic.

  • With their all-cash offers, hedge funds are beating out first-time buyers, lower-income buyers, and anyone armed with only a minimum down payment and a mortgage application.

  • It’s estimated that the bill could return 1.3 million homes to non-hedge fund owners.

Congressional action: “It’s time for Congress to put in place commonsense guardrails that ensure all families have a fair chance to buy or rent a decent home in their community at a price they can afford,” one of the sponsors, Sen. Jeff Merkley (D-Ore.) said in a statement.

  • The American Neighborhoods Protection Act, a bill also targeted at freeing single-family home inventory from large-scale investors, imposes a $10,000 annual fee on anyone who owns more than 75 single-family homes. The funds would go to down payment assistance for individual home buyers.

Yes, but: David Howard, the National Rental Home Council’s CEO, argues there aren’t enough houses out there to buy, and we therefore need to build millions more housing units, rather than restrict corporate ownership.

The bottom line: Congressional Republicans oppose the measures, so neither is likely to pass.

  • However, if interest rates drop — making mass purchases of single-family homes more attractive again — the backlash against hedge fund buyers in the housing market could give the bills traction.

2. RIP Realtors’ popular health insurance program

A 2018 rule expanding the definition of “employer” would have allowed Realtors to buy affordable health insurance through an Associated Health Plan (AHP). The Department of Labor is trying to stop it.

Why it matters: AHPs offered the prospect of at least some relief for Realtors facing high insurance premiums out on the open market.

  • Without the AHP option, they’ll continue to pay more for their insurance than people who work for large companies with employer-sponsored plans.

Backstory: Large employers get their group healthcare plans at considerable savings, which they can pass on to their members. Expanding AHP eligibility would allow the self-employed, small business owners and other individuals affiliated by industry or geography to band together and access the same large group plans as the big guys.

  • AHPs are championed by Republicans, who see them as a viable alternative to the Affordable Care Act (ACA) exchanges.

  • Realtors earning too much yearly to qualify for ACA subsidies have also favored AHPs.

Contested from the start: In 2019, a federal district court judge struck down the 2018 AHP expansion. The Trump administration appealed.

  • A decision on the appeal was still pending when, in December 2023, the Department of Labor (DoL) submitted its proposal to rescind the rule altogether.

What they’re saying: The National Association of Realtors supported the 2019 appeal, and opposes the DoL’s effort to limit AHP eligibility. NAR said in a December statement that it is:

  • “[S]pearheading a broad coalition to develop multi-industry comments against the proposal,” and

  • Supporting the CHOICE Arrangement Act (HR-3799), which passed the House last summer. The bill would effectively restore AHP access.

The long view: It’s an election year, and healthcare — the perennial fourth rail of American politics — as usual looms large.

3. Catch up fast

  1. 2023’s new home sales helped the U.S. avoid a recession as December’s report shows about 81,000 new homes ready for move-in. HousingWire

  2. The U.S. economy grew at 3.3% from October through December from the prior year, cooling from 4.9% in the previous quarter. Expectations had been that the economy would only grow by 2% or less in the last quarter, so — while it’s still growing — the growth has slowed which should comfort the Fed as it considers lowering its base rate. This sentiment also pushed the S&P to a new record high. CBS News

  3. Mortgage applications rose by 3.7% last week, but refinances were down 8% from last year. National Mortgage Professional

  4. CFPB is looking to crack down on more “junk fees.” The agency’s crackdown on bounced checks, overdrafts, and NSF fees has saved consumers an estimated $7.5 billion since 2021, which equates to an average annual savings of $170 for the 33 million households who typically incurred these fees. DS News

  5. Florida led the nation in 2023, with the highest increase in active listings by 27% in 2023, making it a better place for buyers in 2024. Realtor

  6. Or, depending on how you look at the numbers, Florida may be heading for a slump. Bigger Pockets

4. Closing Thought

The cold snap earlier this week coaxed the camelia bushes out of their warm slumber, but returning warm temps are threatening this year's blooms. Photo: Joe Seagle

Over the next month or so, I’m interviewing clients and friends who are also entrepreneurs, and we’re recording it.

Why it matters: The interviews will be part of the “Trust This. The Masters Series” video podcasts on our YouTube channel.

On Wednesday, I sat down with Tom Lehmann and discussed his business, where it’s heading, and how he got here.

One theme that kept coming up was the importance of the growth mindset.

  • Successful entrepreneurs and leaders have a hunger for growth that manifests often as a burning desire to learn new things.

  • We learn through experiences, which include failures as much as successes. As Billy Joel sang, “You’ll learn more from your mistakes than you’ll ever learn in school.”

  • We work with coaches, attend seminars, retreats, boot camps, and spend more time, energy, and money on learning and trying new things than non-entrepreneurs.

Another theme I’m discovering is that entrepreneurs are resilient.

  • They don’t quit after multiple failures.

  • They get knocked down, but they also get back up, learn from the setbacks, and go back at it.

I’m eager to hear the stories of the other entrepreneurs in this series, but I’m even more excited to share them with our readers and viewers.

What’s next: Be sure to subscribe to our channel (link below) to be notified when each video is posted.

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

Be on the lookout for our next issue! 

  • Our mailing address: PO Box 547945, Orlando, FL 32854-7945

  • Our physical address: 1901 West Colonial Drive, First Floor, Orlando, FL 32804

Happy Friday! The last Friday in January (today) is always “National Fun at Work Day.” From bean bag tosses to darts to bowling, to foosball and ping pong tables, there are myriad ways to have fun today at work. Feel free to share photos of how you celebrated your fun day at work on our Facebook page today. Just be sure you tag it #funatworkday.

Situation Awareness: Users of Apple devices such as the iPhone, iPad, Mac, Apple Watch, or Apple TV should update all those devices to the latest version of the operating system to protect against a new hack out there that can let a bad guy take control of the device if it opens the hacker’s website. They use phishing and smishing to send the links, so — as always — think three times before you click that link. CISA

1 big thing: Bill curtails hedge funds in housing investments

Hoping to open up the tight residential real estate market, Congress is considering a bill that would prevent hedge funds from owning single-family homes anywhere in the U.S.

Why it matters: Even if it doesn’t pass, the bill—introduced in both the House and Senate—is a symptom of growing frustration with inequities in the housing market.

How it would work: The End Hedge Fund Control of American Homes Act would give hedge funds ten years to sell off all but 50 of the single-family homes in their portfolios.

  • It imposes stiff tax penalties on companies that acquire more during this period.

  • The bill defines “hedge fund” as a corporation, partnership, or real estate investment trust with more than $50,000,000.00 in net value or assets under management on any given day in a tax year.

  • The goal: No more hedge fund ownership of more than 50 single-family homes.

Investors are outsized in the housing market, responsible for over a quarter of all single-family home purchases.

  • Their share may grow to more than 30% by the end of 2024, according to a report by CoreLogic.

  • With their all-cash offers, hedge funds are beating out first-time buyers, lower-income buyers, and anyone armed with only a minimum down payment and a mortgage application.

  • It’s estimated that the bill could return 1.3 million homes to non-hedge fund owners.

Congressional action: “It’s time for Congress to put in place commonsense guardrails that ensure all families have a fair chance to buy or rent a decent home in their community at a price they can afford,” one of the sponsors, Sen. Jeff Merkley (D-Ore.) said in a statement.

  • The American Neighborhoods Protection Act, a bill also targeted at freeing single-family home inventory from large-scale investors, imposes a $10,000 annual fee on anyone who owns more than 75 single-family homes. The funds would go to down payment assistance for individual home buyers.

Yes, but: David Howard, the National Rental Home Council’s CEO, argues there aren’t enough houses out there to buy, and we therefore need to build millions more housing units, rather than restrict corporate ownership.

The bottom line: Congressional Republicans oppose the measures, so neither is likely to pass.

  • However, if interest rates drop — making mass purchases of single-family homes more attractive again — the backlash against hedge fund buyers in the housing market could give the bills traction.

2. RIP Realtors’ popular health insurance program

A 2018 rule expanding the definition of “employer” would have allowed Realtors to buy affordable health insurance through an Associated Health Plan (AHP). The Department of Labor is trying to stop it.

Why it matters: AHPs offered the prospect of at least some relief for Realtors facing high insurance premiums out on the open market.

  • Without the AHP option, they’ll continue to pay more for their insurance than people who work for large companies with employer-sponsored plans.

Backstory: Large employers get their group healthcare plans at considerable savings, which they can pass on to their members. Expanding AHP eligibility would allow the self-employed, small business owners and other individuals affiliated by industry or geography to band together and access the same large group plans as the big guys.

  • AHPs are championed by Republicans, who see them as a viable alternative to the Affordable Care Act (ACA) exchanges.

  • Realtors earning too much yearly to qualify for ACA subsidies have also favored AHPs.

Contested from the start: In 2019, a federal district court judge struck down the 2018 AHP expansion. The Trump administration appealed.

  • A decision on the appeal was still pending when, in December 2023, the Department of Labor (DoL) submitted its proposal to rescind the rule altogether.

What they’re saying: The National Association of Realtors supported the 2019 appeal, and opposes the DoL’s effort to limit AHP eligibility. NAR said in a December statement that it is:

  • “[S]pearheading a broad coalition to develop multi-industry comments against the proposal,” and

  • Supporting the CHOICE Arrangement Act (HR-3799), which passed the House last summer. The bill would effectively restore AHP access.

The long view: It’s an election year, and healthcare — the perennial fourth rail of American politics — as usual looms large.

3. Catch up fast

  1. 2023’s new home sales helped the U.S. avoid a recession as December’s report shows about 81,000 new homes ready for move-in. HousingWire

  2. The U.S. economy grew at 3.3% from October through December from the prior year, cooling from 4.9% in the previous quarter. Expectations had been that the economy would only grow by 2% or less in the last quarter, so — while it’s still growing — the growth has slowed which should comfort the Fed as it considers lowering its base rate. This sentiment also pushed the S&P to a new record high. CBS News

  3. Mortgage applications rose by 3.7% last week, but refinances were down 8% from last year. National Mortgage Professional

  4. CFPB is looking to crack down on more “junk fees.” The agency’s crackdown on bounced checks, overdrafts, and NSF fees has saved consumers an estimated $7.5 billion since 2021, which equates to an average annual savings of $170 for the 33 million households who typically incurred these fees. DS News

  5. Florida led the nation in 2023, with the highest increase in active listings by 27% in 2023, making it a better place for buyers in 2024. Realtor

  6. Or, depending on how you look at the numbers, Florida may be heading for a slump. Bigger Pockets

4. Closing Thought

The cold snap earlier this week coaxed the camelia bushes out of their warm slumber, but returning warm temps are threatening this year's blooms. Photo: Joe Seagle

Over the next month or so, I’m interviewing clients and friends who are also entrepreneurs, and we’re recording it.

Why it matters: The interviews will be part of the “Trust This. The Masters Series” video podcasts on our YouTube channel.

On Wednesday, I sat down with Tom Lehmann and discussed his business, where it’s heading, and how he got here.

One theme that kept coming up was the importance of the growth mindset.

  • Successful entrepreneurs and leaders have a hunger for growth that manifests often as a burning desire to learn new things.

  • We learn through experiences, which include failures as much as successes. As Billy Joel sang, “You’ll learn more from your mistakes than you’ll ever learn in school.”

  • We work with coaches, attend seminars, retreats, boot camps, and spend more time, energy, and money on learning and trying new things than non-entrepreneurs.

Another theme I’m discovering is that entrepreneurs are resilient.

  • They don’t quit after multiple failures.

  • They get knocked down, but they also get back up, learn from the setbacks, and go back at it.

I’m eager to hear the stories of the other entrepreneurs in this series, but I’m even more excited to share them with our readers and viewers.

What’s next: Be sure to subscribe to our channel (link below) to be notified when each video is posted.

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

Be on the lookout for our next issue! 

  • Our mailing address: PO Box 547945, Orlando, FL 32854-7945

  • Our physical address: 1901 West Colonial Drive, First Floor, Orlando, FL 32804

Title

👋 Happy Friday! Our offices are closed today for Veteran’s Day (Observed). We’re also moving to 1901 West Colonial Drive over this three-day weekend so it’s going to be “busy” but not very “productive” for a few days.

🔌 Electric 🌼 Daisy 🎪 Carnival 🦄 (AKA: EDC) is in Orlando this weekend to add to the activities nearby. If you’re downtown and see a bunch of scantily-clad, neon-studded fairies and other 20-somethings dancing around to music thumping at 180 beats per minute, just go with it. The ticket and concessions sales from this one event pay the Camping World Stadium operating costs for the entire year, so Orlando is more than happy to host the event year after year.

1 big thing: TransUnion's Tenant Screening Missteps

home-graphics-11

The CFPB and the FTC recently penalized TransUnion’s rental screening arm to the tune of $15M for failing to make sure their tenant reports were accurate.

Why it matters: Many property managers and real estate investors rely on these reports; if they’re not accurate, good tenants could be denied—and bad tenants could slide in through the cracks.

  • The subsidiary responsible for tenant reports, TransUnion Rental Screening Solutions, neglected the accuracy of eviction records.

  • This led to wrongful denials and possible financial harm to impacted consumers.

Define “neglect.” There were a few checkboxes TransUnion Rental Screening Solutions failed to meet, including:

  • Eviction records that did not reflect dismissals

  • Erroneously-duplicated eviction records

  • Incomplete information provided surrounding inaccurate information

The result: People were unfairly denied housing. And when renters became aware of inaccuracies, the company made it difficult for them to request corrections.

So, a hefty fine. TransUnion will pay $15M for screening inaccuracies and $8M for issuing bad information.

For years, TransUnion responded with misleading responses to consumer queries regarding security freezes and locks on credit reports. This led to more bad outcomes for property owners and managers who relied on TransUnion for accurate data.

Hence the court order. The proposed court order should force TransUnion to stop these practices and take immediate action to boost record accuracy.

Yes, but: these aren’t isolated incidents.

  • Over the past seven years, TransUnion has faced similar enforcement actions indicating a pattern of misconduct, negligence, and misleading communication practices.

  • The Consumer Financial Protection Bureau (CFPB) has taken action against TransUnion in the past for deceptive practices surrounding the company’s subscription plans.

The bottom line: If we use tools like TransUnion’s Rental Screening Solutions to make decisions that impact people’s lives, and our profit margin, we must stay informed about them. Accuracy, fairness, and transparency are in everyone’s best interest.

2. Unlocking Opportunities with Assumable Mortgages

Assumable mortgages — programs that allow buyers to take over a seller’s existing mortgage — may be the golden key today’s would-be homebuyers are looking for.

How it works: A staple of the real estate industry in the ‘70s and ‘80s, assumable mortgages allow a buyer to assume the seller’s loan terms.

  • This includes the seller’s interest rate, which is often significantly lower than rates available through new mortgages.

With today’s interest rates for new homes hovering around 8%, the idea of taking over an existing mortgage with a much lower rate is an appealing option for many buyers.

Yes, but: Not all mortgages are assumable. Most are primarily available for loans backed by the government through the VA, FHA, or USDA. Such loans constitute a little over 20% of active mortgages.

  • If a buyer qualifies for this type of mortgage, that could unlock affordable homeownership.

  • Many real estate professionals realize this and advocate for assumable loans for their buyers.

  • Sellers of qualifying homes are advertising this feature because they realize it gives them a competitive edge.

One wrinkle: If the seller is a VA loan holder, allowing a non-veteran to assume the loan could affect the seller’s eligibility for future VA loans — a noticeable con amid the pros mentioned above.

Nevertheless, if both the seller and the buyer qualify and are interested in pursuing it, an assumable mortgage can provide many benefits. It’s just essential to understand the nuances of these types of mortgages.

The bottom line: Remember that “assuming” a mortgage is not the same as taking a property “subject to” a mortgage where the lender doesn’t formally approve the conveyance, allowing the buyer to step into the seller’s shoes.

  • Assumptions are great for those who plan to live in the home as their primary residence, while “investors usually use subject-to” transactions.

3. Catch up fast

  1. Debunking the 7 myths of turnkey investing. Bigger Pockets

  2. The top five markets for projected price declines (3 in FL) over the next year. CoreLogic

  3. 30-year mortgages see largest one-week drop in a year, revising mortgage demand. The average monthly payment is now only $250 higher than last year’s. HousingWire

  4. The number of consumers seeking delinquent mortgage counseling has surged 90% since last year. DS News

  5. Commercial and multi-family loan applications drop 49% since last year. The M Report

4. Pic of the day

Illustration: Joe Seagle

Commitment to one’s vision is a trait of great visionaries.

Those who succeed have heard of the “zone of disappointment” and know how to overcome it through grit and tenacity.

  • It’s that space between our expectations of what success looks like versus the reality of what it actually takes.

We are told that success will come in that straight line if we get one percent better each day, continuously rising a little more each day. But that’s not how it works in reality. There are setbacks each day.

  • Some ideas don’t work out as planned.

  • Money (profit) is slow to build; employees quit, people get sick, and so on.

So we skip along the bottom for a while … sometimes for years … with setbacks and disappointment.

Yes, but: Those who believe in their vision and execute strategies to achieve it will succeed. A vision without a strategy and execution is just a daydream.

The hardest part is powering through that zone of disappointment, which requires sacrifice.

  • Sometimes, it means sacrificing relationships with friends and family members who are naysayers or unsupportive of your vision.

  • Often it means sacrificing time spent with those who are supporters.

The bottom line: As I’ve written before: “Name it to tame it.” Recognizing when you’re in the “zone of disappointment” and naming it is the first step to powering through it.

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

Be on the lookout for our next issue! 👋

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