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Trust This. By Joseph E. Seagle, Esq. ● Nov 08, 2024 Smart Brevity® count: 6 mins…1530 words 👋 Happy Friday! The 🎼 College Park JazzFest 🎷 in our local Orlando neighborhood is tomorrow. If you see us there, be sure to say hello. Situation Awareness: While lost in all the other news this week, yesterday the Fed cut its base lending rate another quarter of a point because inflation is at 2.4% — the lowest it’s been since February, 2021 — and unemployment is still at 4.1% — a rate it’s hovered around for the past couple of years after hitting its lowest point in 55 years in April, 2023. The economy also grew last quarter by another 2.8%. The Fed had been rapidly raising the rate to cool an overheating economy with fast-rising inflation post-pandemic. This is the second meeting in a row that the Fed has voted to reduce the rate as the country maintains maximum employment, and the inflation rate approaches the Fed’s mandated target of 2%. | | | 1 big thing: Florida’s Live Local Act: What Real Estate Investors Need to Know About New Tax Exemptions
Key takeaways: Expanded affordable housing property tax exemptions could boost ROI. Investors building or converting to affordable housing may benefit from significant tax breaks. This opens new avenues for mixed-use properties in Florida’s growing urban centers.
Florida’s Live Local Act, passed earlier this year, is reshaping the state’s affordable housing landscape. Recently amended, the law now allows for even broader property tax exemptions for developers and owners of affordable housing. The act is designed to address Florida’s housing crisis, and the tax relief is aimed at encouraging real estate investors to step in and provide affordable rental units.
The amendment to this legislation allows for exemptions on both new and existing properties that are dedicated to affordable housing, including mixed-use developments with commercial spaces. This could be a game-changer for developers looking to add affordable housing units to their portfolios while reaping long-term tax savings. State of play: The expanded exemptions under the Live Local Act present a prime opportunity for real estate investors. Investors could significantly lower their property tax burdens by incorporating affordable housing units into new developments or converting existing buildings into affordable housing. Florida’s rapidly growing population, driven by in-migration from other states, has created a booming demand for housing, but affordability remains a challenge for many residents.
What’s next: Investors can look to strategically develop or reposition properties in areas with the highest demand for affordable housing near Florida’s urban centers, which have experienced the most significant population growth. The amendments also favor mixed-use projects, allowing for tax benefits on commercial spaces within affordable housing developments. This dual-use strategy may appeal to investors seeking to diversify their portfolios while aligning with Florida’s broader economic and housing development goals.
The bottom line: Expanding affordable housing tax exemptions in Florida under the Live Local Act offers substantial savings potential for real estate investors. Those who act quickly to align their strategies with this new legislation could unlock value and strengthen their investment returns in a rapidly evolving market. | | | 2. Florida Municipalities Opting Out of the Live Local Act: What Real Estate Investors Need to Know
Some Florida municipalities are opting out of key provisions of the Live Local Act. What’s happening? Yes, but: While Florida’s Live Local Act was designed to stimulate affordable housing development through tax exemptions, not all municipalities are on board. Several cities and counties across the state have opted out of a crucial provision of the Act, which limits their ability to offer the full range of tax incentives to developers and property owners of affordable housing. The specific provision in question involves the tax exemptions for affordable housing units within mixed-use developments, which has been a significant selling point for real estate investors looking to benefit from the Act. The opt-out decisions are often driven by local concerns over potential strains on infrastructure, schools, and municipal services that could come with denser affordable housing developments. Which municipalities are opting out? While the list of municipalities opting out is growing, notable areas include more urbanized and high-demand regions where affordable housing shortages are most critical. Key counties and cities such as Miami-Dade, Broward, and parts of Palm Beach have expressed reluctance to embrace the incentives. Investors looking to develop affordable housing in these areas may find fewer tax savings opportunities, impacting the overall profitability of projects.
What it means for investors For investors focusing on affordable housing development, the opt-outs present a challenge. Without the full tax exemptions, the financial feasibility of certain projects—particularly in more expensive and competitive real estate markets—could be significantly reduced. However, opportunities still exist in municipalities that have embraced the Act. Investors will need to carefully evaluate each market’s stance on the legislation before committing to new developments or acquisitions.
How to capitalize Investors should prioritize markets that have not opted out of the Act’s provisions, where full tax exemptions are available. These areas may offer more attractive returns on affordable housing developments in regions with a growing population and rising demand for affordable living options. Understanding each municipality’s position on the Live Local Act is crucial for crafting a successful investment strategy.
The bottom line: Florida’s Live Local Act offers strong incentives for affordable housing development, but investors must navigate a patchwork of local opt-outs. Careful market research will be essential to ensuring that projects are located in areas where the full benefits of the Act apply, maximizing potential returns and reducing tax liabilities. | | | This week’s Trust This podcast features Emanuel “E” Premate, a PadSplit adviser who shares tips and tactics on what PadSplit is, how it works for investors and members, and how it creates a profitable workforce housing solution for real estate entrepreneurs. Listen in or watch on your favorite streaming platform. | | | 3. Catch up fast
Second verse, same as the first. (Meta.ai)
The Trump Agenda: What to Expect in his Second Term. Politico Expectations of higher government spending under Trump have driven up the 10-year Treasury yield. Mortgage rates up to 8% are possible. HousingWire Trump’s plans for the housing market and their potential effects. Realtor What Trump’s win means for the housing market. Newsweek Investors are betting that Trump will privatize Fannie Mae and Freddie Mac. Inman Final update on how the final economic numbers compare under Biden’s current administration and Trump’s former administration. Forbes
| | | 4. Closing Thought: 📝 How Journaling Helps Entrepreneurs Become More Observant, Creative, and Resilient
Yesterday, we volunteered at Second Harvest Food Bank, sorting over 7,100 pounds of donated dry goods into boxes. Each box can feed a family of four for a week. (L-R) Rick Rentas, Mariana Bellino, Haley Helbig, Sean Napolitano, Jimmy Co, Vanessa Adams, Joe Seagle, and Jahn-na Watts.
Journaling is more than just a personal habit; for entrepreneurs, it’s a strategic tool. It cultivates a mindset that fosters observation, creativity, and resilience — traits essential for navigating the roller coaster of business ownership and life. The big picture: Many successful entrepreneurs, from Richard Branson to Oprah Winfrey, tout the benefits of journaling. By capturing thoughts, challenges, and reflections on paper, entrepreneurs develop a mental framework that enhances their ability to recognize new opportunities, solve complex problems, and handle stress more effectively. Key benefits of journaling for entrepreneurs: 1. Heightened Observational Skills Details in focus: Journaling requires attention to experiences, emotions, and surroundings. This regular practice makes entrepreneurs more attuned to details in business, from customer feedback to market trends. Actionable insights: By documenting these insights, entrepreneurs can notice patterns and nuances that might otherwise go unnoticed—an invaluable asset for decision-making.
2. Enhanced Creativity Mind expansion: Regularly writing about ideas and solutions encourages a natural flow of creative thinking. Entrepreneurs can explore new concepts, assess potential risks, and envision innovative paths for their ventures. Breaking mental blocks: Journaling helps clear mental clutter, making it easier to connect disparate ideas and view challenges from fresh angles. This creative edge can set a business apart from its competitors.
3. Better Stress Management Processing dilemmas: Business owners often face high-stakes decisions that can feel overwhelming. Journaling offers a space to examine dilemmas from multiple perspectives, which can reduce anxiety and promote more balanced decision-making. Emotional resilience: By expressing frustrations, concerns, and setbacks on paper, entrepreneurs can process emotions constructively, helping to prevent burnout and maintain mental clarity.
What’s next: Start by setting aside 10–15 minutes a day to write. Topics could include recent business experiences, reflections on current challenges, or aspirations for the future. Or simply sitting in a cafe and writing down everything you smell, hear, taste, feel, and see in great detail. Over time, journaling can transform from a simple habit to a powerful strategy for growth and resilience, equipping entrepreneurs to face each day with greater insight and creativity. Pro tip: Start small with an app like 5-minute journal (Apple or Android), Stoic.journal, or the Journal app built into iPhones.
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