AI and Real Estate. How do they go together?
In today's rapidly evolving real estate market, Artificial Intelligence (AI) is reshaping how we approach everything from property searches to transaction management. With the integration of real estate AI, we're witnessing unprecedented efficiency, accuracy, and decision-making capabilities in real estate operations. The significance of Artificial Intelligence in real estate and how it is enhancing real estate processes cannot be overstated, as it is having a transformative impact on the industry.
This transformation is touching every aspect of the industry, from simplifying property searches with intelligent algorithms to automating complex transactions and enhancing customer service with chatbots. AI's impact is profound, offering unmatched efficiency, accuracy, and a new level of decision-making prowess that was previously unimaginable. As we delve deeper into real estate and AI's capabilities, it's clear that this technology is not just an add-on but a fundamental shift in how real estate operates, promising to redefine the industry's future.
Understanding AI in Real Estate
When people talk about AI and real estate, they’re not just using buzzwords. They’re talking about a seismic shift in how our industry operates that’s happening right now.
AI brings a level of automation and insight that’s revolutionizing the real estate industry by analyzing massive datasets, predicting market trends with greater accuracy, and automating tasks, property valuation, investment analysis, and customer interaction.
By harnessing AI, real estate professionals can predict market trends with greater accuracy, personalize customer experiences, and streamline processes.
This shift towards an AI-driven approach isn’t just about adopting new technology; it's about embracing a new way of thinking that places data and predictive analytics at the heart of real estate decision-making. This is about how real estate professionals can leverage AI to gain a competitive edge and deliver superior service.
Recent Developments in AI for Real Estate
Recent advancements in AI technologies such as predictive analytics, generative AI, and computer vision are reshaping the real estate sector in unprecedented ways; they are setting new rules for how real estate transactions are conducted and properties are managed. Although this is true, many are still wondering how to use AI in real estate.
Predictive analytics, for instance, enable real estate professionals of every level to forecast market trends and customer behavior more accurately, offering a strategic edge in decision-making.
Generative AI is revolutionizing property visualization and documentation, making interactions more efficient.
Computer vision is transforming property searches and presentations, offering a more immersive experience.
These advancements aren’t just technological feats; they're practical tools that enhance every facet of real estate operations, from listing to closing. Soon enough, real estate and AI will go hand in hand for the majority of real estate professionals.
The Rise of Predictive Analytics in Real Estate
The rise of predictive analytics in real estate marks a pivotal shift in how industry professionals approach decision-making and customer satisfaction. By harnessing the power of vast data sets and advanced algorithms, predictive analytics enables real estate professionals to forecast market trends, property values, and consumer behavior with remarkable accuracy.
This foresight not only empowers agents and investors to make informed decisions about buying, selling, and investing but also allows for a more personalized approach to customer service. By anticipating clients' needs and preferences, real estate professionals can tailor their offerings, ensuring a more satisfying and efficient experience for buyers, sellers, and renters alike. This level of predictive insight is transforming the landscape of real estate, making operations more strategic, proactive, and client-focused.
Predictive analytics applications in real estate are vast and varied, ranging from optimizing property pricing strategies to identifying potential investment opportunities before they hit the open market.
For instance, predictive analytics can evaluate historical price data, demographic shifts, and market dynamics to determine a property's optimal listing price. As a result, they attract serious buyers more quickly and maximize seller returns.
Additionally, by predicting which properties are most likely to sell, investors can gain a competitive edge in sourcing deals.
The benefits of incorporating predictive analytics into real estate operations are clear: enhanced accuracy in property valuations leads to better investment decisions, while a deeper understanding of customer preferences enhances satisfaction and loyalty. As the real estate industry continues to evolve, I’m more confident than ever that the role of predictive analytics promises a more data-driven, efficient, and client-centric approach to real estate transactions.
Generative AI in Real Estate
Generative AI innovations are streamlining operations and significantly enhancing efficiency. This technology, which includes the ability to generate text, images, and even predictive models from existing data sets, is transforming how real estate professionals interact with both properties and clients.
For example, generative AI can create a highly realistic virtual property staging, allowing potential buyers to visualize empty spaces as fully furnished homes without the need for physical staging. This not only saves time and resources but also enhances the property's appeal to a wider audience.
Generative AI can even automate the creation of property descriptions, marketing materials, and personalized communication with clients, ensuring consistency and saving precious time that can be redirected toward more strategic tasks.
The practical applications of generative AI in real estate are both diverse and impactful.
One example is using AI-driven tools to generate accurate and detailed floor plans from simple property images, a task that traditionally requires significant time and manual effort. Another innovative application is developing predictive models that analyze market trends and consumer behavior, helping real estate professionals anticipate shifts in demand and adjust their strategies accordingly.
These generative AI applications not only streamline the day-to-day operations of real estate businesses but also offer a competitive edge by enabling faster, more informed decision-making and providing a superior customer experience.
As the technology continues to evolve, its potential to transform the real estate landscape is becoming increasingly more noticeable. This promises a future where generative AI is an integral part of every real estate transaction.
Advancements in Computer Vision for Real Estate
Advancements in computer vision technology are revolutionizing the real estate industry by significantly improving property searches and presentations, which is enhancing the transaction process.
This technology allows for the automated recognition and classification of property features from images alone, allowing potential buyers to search for homes based on visual elements like layout, architectural style, or even specific amenities.
Computer vision helps with the creation of more engaging and informative property listings with virtual tours that offer a realistic and interactive viewing experience from anywhere in the world. This broadens the market reach for listings and streamlines the decision-making process for buyers, making it quicker and more intuitive.
Looking ahead, the potential of computer vision technology in real estate is limitless. It promises to deliver even more innovative solutions like predictive property valuation based on visual attributes and enhanced market analysis tools. It’s easy to see that computer vision will likely play a pivotal role in shaping the future of real estate, making transactions more efficient, accurate, and user-friendly.
AI in Real Estate Use Cases
AI in real estate is not just theoretical; it's practical, with numerous real-world applications.
AI-driven property valuation and pricing strategies offer a competitive advantage by providing accurate market insights.
Virtual property tours and staging powered by AI have revolutionized property marketing, allowing potential buyers to explore properties remotely.
Predictive maintenance in property management and AI-driven investment analysis are other areas where AI's benefits are clearly visible, showcasing its role in enhancing efficiency and profitability in real estate investments.
Check it out HERE
Property Valuation and Pricing
AI algorithms are revolutionizing how properties are valued and priced.
These sophisticated algorithms analyze historical transaction data, property features, and market dynamics to generate precise valuations, which allows real estate professionals to develop effective pricing strategies.
AI-driven pricing models also offer a competitive advantage by dynamically adjusting prices based on real-time market conditions. This ensures that properties are priced optimally to attract potential buyers without undervaluing the property.
This use of AI streamlines the valuation process and gives it a level of precision and efficiency that was previously unattainable. This is allowing sellers, buyers, and real estate professionals to make smarter, data-driven decisions that benefit each group.
Virtual Property Tours and Staging
AI-powered immersive virtual property tours and realistic staging simulations are becoming more prevalent and, as a result, are reshaping property presentations.
These advances in technology are allowing potential buyers to explore properties in detail from anywhere in the world.
AI-powered virtual tour platforms now enable prospective buyers to navigate through properties in a seamless, interactive manner, offering a comprehensive view without the need for physical visits.
These platforms can integrate detailed property information, note features of interest, and even simulate different lighting conditions, providing an enriched viewing experience.
AI is also proving to be instrumental in virtual staging, where empty rooms are furnished with lifelike digital furniture and decor, enhancing the property's appeal and helping buyers visualize themselves in the space.
This technology not only captivates the interest of potential buyers but also significantly broadens the reach of property listings and shortens the sales cycle by making properties more attractive and accessible from the start.
The use of AI in creating these virtual experiences is reshaping real estate marketing, setting a new standard for how properties are presented in the digital age.
Predictive Maintenance in Property Management
AI's role in predictive maintenance is ensuring that property management becomes more efficient and cost-effective. By predicting maintenance needs, AI helps in proactively addressing issues, leading to cost savings and improved tenant satisfaction.
Using AI, property managers can now monitor the condition of buildings and systems in real time, predicting maintenance needs before they become critical issues. This proactive approach is enabled by sensors and IoT devices that collect data on the performance of various building components, such as HVAC systems, plumbing, and electrical systems.
AI algorithms analyze this data to forecast potential breakdowns, allowing maintenance to be scheduled at optimal times to prevent disruptions and extend the life of equipment. This reduces the frequency and cost of repairs by addressing issues before they escalate and minimizes downtime and inconvenience to tenants, improving their overall satisfaction. This strategic use of AI in predictive maintenance is transforming traditional reactive management into a more efficient, cost-effective, and tenant-friendly approach.
AI-Driven Investment Analysis
AI-driven investment analysis is profoundly impacting the real estate industry by providing deep insights into investment opportunities and associated profits and risks.
Using AI algorithms, investors can process and analyze vast amounts of data that include historical market trends, property valuations, demographic shifts, and economic indicators much faster and more accurately than traditional methods.
This capability allows real estate investors to make informed data-driven decisions based on growth potential, property values, future market conditions, and more in order to forecast investment returns more accurately.
AI also enhances risk assessment by analyzing patterns and anomalies that could signal potential issues, enabling investors to make informed decisions that balance potential returns against associated risks. This strategic use of AI optimizes the investment process and customizes investment approaches based on data-driven insights, ensuring higher accuracy in predictions and better alignment with market dynamics.
Leadflow's AI technology plays a crucial role by equipping real estate investors and agents with powerful analysis tools. Leadflow’s advanced AI algorithms help investors sift through complex market data to identify the properties that are most likely to sell, giving them a huge advantage over the competition. Leadflow’s analysis tools also help with forecasting investment returns, considering various scenarios and market conditions.
This not only helps investors in making informed decisions quickly but also provides a competitive edge by reducing the time and effort required to evaluate multiple investment opportunities. Through Leadflow, investors gain access to a suite of AI-enhanced tools that streamline the investment process, from property discovery to final acquisition, ensuring a smarter, data-driven approach to real estate investing.
Chatbots and Customer Service Automation
AI chatbots are transforming customer service in the real estate industry by providing instant, round-the-clock support that significantly enhances the client experience.
These AI-driven chatbots can handle a wide range of customer needs, from basic questions about property listings to more complex requests like scheduling viewings or providing detailed property specifications. Their ability to be available 24/7 ensures that potential buyers and tenants receive immediate responses at their convenience, eliminating wait times and improving overall satisfaction.
Chatbots can also automate routine customer service tasks such as appointment scheduling and follow-ups, which not only frees up human agents to tackle more complex issues but also enhances operational efficiency.
This level of automation ensures that the real estate business remains responsive and agile, improving client engagement and speeding up the transaction process.
Implementing AI in Real Estate
The integration of AI into real estate operations requires a strategic approach, from selecting the right AI solutions to training staff, and overcoming implementation challenges.
Best practices for integrating AI include a thorough evaluation of AI tools, a focus on staff training to ensure effective use of AI technologies, and strategies to address common implementation challenges. This structured approach ensures that real estate businesses can fully leverage AI's potential, transforming their operations and setting a new standard in the industry.
Best Practices for Integrating AI Solutions
Successfully integrating AI into real estate operations demands a strategic approach. It involves selecting the right tools, training staff to use them effectively, and continuously evaluating the impact of AI implementations.
Here are the steps you should take when implementing new AI tools into your real estate business.
- Identify specific areas where AI can have the most impact, such as customer service, property valuation, or investment analysis.
- Select AI tools that are best suited to these needs, which may include chatbots for customer interaction, predictive analytics for market analysis, or AI-driven CRM systems for managing client relationships.
- Implement a pilot program to test the AI solutions in a controlled environment, allowing for adjustments and learning without disrupting the entire operation.
- Set up training sessions for staff to ensure that everyone understands how to use the new technology effectively and can transition smoothly.
- Continuously monitor and evaluate the performance of AI implementations. This involves regular checks on AI accuracy, efficiency, and its impact on business outcomes, as well as gathering feedback from staff and clients about their interactions with the AI systems. Such ongoing evaluation helps in fine-tuning AI applications to better meet the needs of the business and its clients, ensuring that the real estate operations harness the full potential of artificial intelligence.
Training and Up-skilling for AI Adoption
For real estate professionals to make the most of AI tools, training and up-skilling are essential.
Effective training programs ensure that real estate professionals are proficient in using AI tools to enhance decision-making, streamline operations, and improve customer interactions.
This training should focus on developing skills such as data analysis, understanding AI-driven market reports, and managing AI-powered customer service tools. Additionally, professionals should learn how to interpret AI insights accurately and make informed decisions based on this data.
Investing in thorough training can ensure that your team is prepared to use AI technologies effectively and is capable of driving innovation and maintaining a competitive edge in real estate’s rapidly evolving industry.
Overcoming Challenges in AI Implementation
Implementing AI in real estate comes with its set of challenges. From selecting the right technologies to ensuring data privacy, real estate businesses need to address these hurdles to fully reap the benefits of AI.
The most important thing in this area is to do your research and partner with experienced AI vendors and consultants who can provide expertise and guidance throughout the implementation process. This can help to significantly mitigate any risks associated with AI adoption and maximize the technology's potential to revolutionize operations.
Future Trends and Opportunities in AI for Real Estate
As we look to the future, the role of AI in real estate is set to grow even more significantly.
Predictive property valuations, automated customer service, and enhanced decision-making capabilities are just the beginning. The future of real estate lies in leveraging AI to unlock new levels of efficiency, predictive accuracy, and customer engagement. As AI technologies continue to evolve, they promise to open up new avenues for innovation in real estate, further solidifying its status as a key driver of industry transformation.
Unlock the Power of AI with Leadflow Software
Realeflow stands at the forefront of integrating AI into real estate solutions. real estate professionals can gain a competitive edgeBy exploring Realeflow's AI-powered tools and services. To learn more about how Realeflow can transform your real estate business with AI, visit Realeflow and Realeflow Pricing.
Frequently Asked Questions
- What are the key benefits of AI adoption in the real estate sector?
AI adoption in real estate brings numerous benefits, including improved efficiency, enhanced accuracy in property valuations, predictive maintenance, and personalized customer experiences.
- How can real estate companies leverage AI for lead generation and marketing?
https://bostonrealestateinvestorsassociation.com/exploring-artificial-intelligence-in-real-estate-investing/
Tuesday, April 30, 2024
Monday, April 29, 2024
Reviving Communities: The Transformative Power of Opportunity Zones in Real Estate Investment
The Opportunity Zones program is seeing significant updates and proposed changes, primarily aimed at enhancing the benefits and refining the operational aspects of the program to foster more economic development in underserved communities.
A new bipartisan bill introduced in the U.S. House of Representatives is proposing to extend the tax deferral period for Opportunity Zones investments from 2026 to 2028. This extension aims to provide investors with additional time to reap tax benefits, such as the basis step-up incentives. Previously, investments made by December 31, 2021, could qualify for a 10% basis step-up, with the possibility of an additional 5% for investments held for seven years. The new bill also suggests expanding reporting requirements to enhance transparency, allowing investments in multiple funds (fund of funds), and disqualifying high-income Opportunity Zones while providing states the option to designate a new zone
Further, the legislation intends to address concerns about certain zones, like Buick City in Flint, Michigan, that were initially overlooked. These improvements are part of an ongoing effort to ensure that the program can better serve targeted communities while also addressing industrial site revitalization
For more detailed insights into the legislative updates and their implications on real estate and other business investments within Opportunity Zones, you can refer to comprehensive resources and analyses provided by OpportunityDb and Novogradac. These updates reflect the evolving nature of the program and its role in enhancing community development through strategic investments.
Further reading can be found on our blog https://bostonrealestateinvestorsassociation.com/opportunity-zones/
https://bostonrealestateinvestorsassociation.com/reviving-communities-the-transformative-power-of-opportunity-zones-in-real-estate-investment/
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https://bostonrealestateinvestorsassociation.com/business-and-real-estate-millionaire-investing-52-wealth-principles-powerful-essential-and-proven/
Sunday, April 28, 2024
Unlocking the Potential of Real Estate Lead Sources: A Guide for Investors and Agents
Navigating the myriad of lead sources available in real estate can be daunting. Each source comes with its unique set of advantages and challenges. Understanding these can significantly impact the effectiveness of your marketing strategy and ultimately, your success in the real estate market. Here, we'll explore various lead sources that have shaped the career of Jeff Chubb, a seasoned real estate professional with experience at RE/MAX, eXp, and now partnered with REAL.
The Double-Edged Sword of Free Lead Sources
Free lead sources like open houses, door-knocking, expired listings, and For Sale By Owners (FSBOs) are a great starting point for new agents. These methods require no upfront financial investment but demand a significant amount of time, making them less scalable as your business grows. These activities, while cost-effective, can quickly consume your most valuable asset—time.
Leveraging Digital Platforms: YouTube and Social Media
In the digital age, platforms like YouTube offer a fantastic avenue for generating leads at no cost other than your time. Creating engaging content that addresses potential buyers' pain points and offers real value can attract leads who are engaged and potentially closer to making a purchase decision.
Social media platforms, particularly Facebook, provide a cost-effective method for purchasing leads. These platforms allow for targeted advertisements that can fill your pipeline with potential leads. However, these leads are generally higher in the sales funnel and require nurturing over time to convert into sales.
The High Stakes Game of Paid and Organic Leads
Google or Bing Pay Per Click campaigns are more expensive than social media ads but tend to deliver higher quality leads. These are people actively searching for specific real estate services, thereby increasing the likelihood of conversion.
On the other hand, organic leads generated through effective Search Engine Optimization (SEO) on your website can be a goldmine. Although SEO requires a significant upfront effort and patience, the long-term payoff is high-quality traffic that can convert at a higher rate without the ongoing costs associated with paid advertising.
Premium Lead Sources: Real Estate Portals
Platforms like Zillow, Realtor.com, Homes.com, and Realty.com are on the pricier end of the spectrum. These leads are usually further along in the buying process, making them more valuable. However, the high cost associated with these leads necessitates a robust follow-up process and efficient sales funnel to ensure a good return on investment.
Traditional Yet Effective: Farming and Media Advertising
Farming a neighborhood through regular mailers and community engagement can be expensive and slow to yield results but promises significant returns with persistent effort. Similarly, investing in radio, TV, and podcast advertisements requires a substantial initial budget and commitment but can greatly enhance brand recognition and lead generation in competitive markets.
Strategic Advice for Real Estate Investors and Agents
- Master One Source at a Time: Dive deep into one lead source, optimize your strategy and ensure it yields consistent results before moving on to the next.
- Avoid Trend Chasing: Stick to lead sources that have proven effective and resist the temptation to jump onto every new trend.
- Invest in Systems: As your lead generation efforts scale up, having robust systems in place to manage and nurture leads becomes crucial.
Conclusion
Lead generation is the lifeblood of the real estate business. By carefully choosing and mastering different lead sources, you can ensure a steady stream of clients and grow your business sustainably. Whether through free methods, digital marketing, or traditional advertising, the key to success lies in consistent effort and strategic optimization.
For those eager to learn more about real estate lead generation or discuss their experiences, feel free to reach out to industry experts like Jeff Chubb or explore additional resources to enhance your understanding and skills in this critical area.
Check out our recommended source of ALL leads here by clicking here
https://bostonrealestateinvestorsassociation.com/real-estate-lead-generation-top-lead-sources/
Thursday, April 25, 2024
Did you know that there are beautiful English-speaking countries you can retire in for less than $1000 per month? When it comes to retiring abroad there are a number of countries worth considering, however, while many offer low costs of living, beautiful architecture or scenery, and unique cuisine there are a select few countries that take the ideal retirement to the next level with the addition of English being the main language spoken there.
https://investingtravels.com/travel-trends/best-english-speaking-countries-to-retire-live-or-visit/
Tuesday, April 23, 2024
So team or not to team.
I think a team is a GREAT idea for a new agent. There is a reason why 87% of all newly licensed agents are out of the business within 2 years. We will touch more on that in a couple of moments.
However a team offers a newly licensed agent a steroid shot and drastically increases their chances of making it in the industry. And for the record. This industry is cutthroat. It is one of the most difficult out there. I know the HGTVs of the world make it look easy… But again. There is a reason that 87% of all agents end up leaving within two years!
Yes. A team is a good idea. But only if it is the right team.
I mentioned a team leader who has a team to serve them a couple of moments ago. If this is the team you are looking at, then walk away and find a better team.
Like the Berenstain Bears beds, there are many different styles of teams. Some are really big. We call these Mega teams. Then you have what I would call normal-size teams. And then you have the smaller husband and wife size teams.
And all of them offer a different value proposition and can have some additional negatives. For example, a Mega team will most likely offer an agent more resources. Accountability will be a major thing as these mega teams are keeping track of all the KPIs, Key Performance Indicators. They will track how many calls you make, how many conversations you have. What the conversation-to-appointment ratio is. Then the appointment to contract signed ratio. You name it. They track it all. And they have to. Because they invest so much money every single month to ensure that the wheel keeps moving. They will also charge the buyer agent more. But if you want more leads, more training, more accountability, and possibly a bigger chance of success, then this is a great bet for you.
Then there is the husband and wife, mom and pop style team. There can be some big advantages to these team structures, but also some disadvantages. For the person wanting some resources, but maybe not wanting all of the accountability, then this could be a great option! But let’s dig into this a little deeper.
These teams aren’t holding their one or two agents accountable because they are not investing that much or even any into you and your business. Oftentimes the leads that these agents are receiving are the breadcrumbs of the team owners. The leads that they don’t want to work or the open houses that they don’t want to host.
I know this because this is where my team first originated out of. It’s how most teams first originate. My business was getting too big for me personally to handle. So I stopped working on all leads below $300,000. Then it became $350,000 and then it became a certain geographical area. Rather than throw away these leads and get nothing for them, I gave them to a buyer agent and did some wishing and praying. Anything converted was considered a little bonus.
In this situation the training isn’t great. There are leads, but they are the bottom feeder leads. But the splits are ultimately better!
Then there is the in between. The 10 or so person team that has a lot of the same resources. Has a bunch of accountability and is run with the agent and their success in mind. Ultimately at this level, the team leader has stepped out of production. They need their agents to be successful in order to pay their bills! These team structures ultimately feel a lot less like a machine and a close community. I find that it’s these size teams that generally have the best culture.
Without a doubt, a team will provide a new agent the best chances of success and drastically reduce the chances that the new agent becomes part of that 87% statistic.
So what is it that an agent is giving up in order to be on a team? A percentage of the commission.
On some teams that could be 30, 40, 50. I have even seen teams at 60 to 70 percent for in house leads that an inside sales associate nurtured.
It seems like a lot. I get it. But keep in mind that an agent on one of these teams has little to no monthly expenses.
People think that these teams slaughter it. But consider this. The best and most finely run mega teams will have a profit margin that tops out at 20 percent. If that team has a margin of 15%, then they are doing pretty well… And that’s before Uncle Sam comes knocking.
So what does that mean? Let’s say it’s a $10,000 commission after paying the brokerage as well as any ancillary fees. And let’s say it's a 50/50 split. Agent gets $5,000 of pretty much profit while the team gets $5,000 of revenue. Of that $5,000, the team will reinvest $4,000 into their business in the tune of new leads, office support, maybe an inside sales associate department while $1,000 is their top of the line profit.
These bigger teams are built solely to get agents to be more productive and get a return on their invested capital.
Can you succeed as a new and solo agent? Absolutely! Will it be more difficult? 100%. Leads are harder to come by. Training is more important than ever in this rapidly changing industry. And for most, the freedom is enough where we hang ourselves so the accountability is what keeps us focused and in the game.
If you are newly licensed and think a team would be a right fit for you, then let me know. Happy to pass along some team recommendations for you.
And if you are looking for a company where you will be able to learn and grow, then I would love to chat with you about the opportunities over here at Real Broker.
Again, it’s Jeff Chubb. You can reach me at 617-775-7687 and all my other contact information is below.
Until next time!
#Real #Estate #Join #Team
Jeffrey Chubb
2024-04-22 14:52:16
https://bostonrealestateinvestorsassociation.com/new-to-real-estate-should-you-join-a-team/
I think a team is a GREAT idea for a new agent. There is a reason why 87% of all newly licensed agents are out of the business within 2 years. We will touch more on that in a couple of moments.
However a team offers a newly licensed agent a steroid shot and drastically increases their chances of making it in the industry. And for the record. This industry is cutthroat. It is one of the most difficult out there. I know the HGTVs of the world make it look easy… But again. There is a reason that 87% of all agents end up leaving within two years!
Yes. A team is a good idea. But only if it is the right team.
I mentioned a team leader who has a team to serve them a couple of moments ago. If this is the team you are looking at, then walk away and find a better team.
Like the Berenstain Bears beds, there are many different styles of teams. Some are really big. We call these Mega teams. Then you have what I would call normal-size teams. And then you have the smaller husband and wife size teams.
And all of them offer a different value proposition and can have some additional negatives. For example, a Mega team will most likely offer an agent more resources. Accountability will be a major thing as these mega teams are keeping track of all the KPIs, Key Performance Indicators. They will track how many calls you make, how many conversations you have. What the conversation-to-appointment ratio is. Then the appointment to contract signed ratio. You name it. They track it all. And they have to. Because they invest so much money every single month to ensure that the wheel keeps moving. They will also charge the buyer agent more. But if you want more leads, more training, more accountability, and possibly a bigger chance of success, then this is a great bet for you.
Then there is the husband and wife, mom and pop style team. There can be some big advantages to these team structures, but also some disadvantages. For the person wanting some resources, but maybe not wanting all of the accountability, then this could be a great option! But let’s dig into this a little deeper.
These teams aren’t holding their one or two agents accountable because they are not investing that much or even any into you and your business. Oftentimes the leads that these agents are receiving are the breadcrumbs of the team owners. The leads that they don’t want to work or the open houses that they don’t want to host.
I know this because this is where my team first originated out of. It’s how most teams first originate. My business was getting too big for me personally to handle. So I stopped working on all leads below $300,000. Then it became $350,000 and then it became a certain geographical area. Rather than throw away these leads and get nothing for them, I gave them to a buyer agent and did some wishing and praying. Anything converted was considered a little bonus.
In this situation the training isn’t great. There are leads, but they are the bottom feeder leads. But the splits are ultimately better!
Then there is the in between. The 10 or so person team that has a lot of the same resources. Has a bunch of accountability and is run with the agent and their success in mind. Ultimately at this level, the team leader has stepped out of production. They need their agents to be successful in order to pay their bills! These team structures ultimately feel a lot less like a machine and a close community. I find that it’s these size teams that generally have the best culture.
Without a doubt, a team will provide a new agent the best chances of success and drastically reduce the chances that the new agent becomes part of that 87% statistic.
So what is it that an agent is giving up in order to be on a team? A percentage of the commission.
On some teams that could be 30, 40, 50. I have even seen teams at 60 to 70 percent for in house leads that an inside sales associate nurtured.
It seems like a lot. I get it. But keep in mind that an agent on one of these teams has little to no monthly expenses.
People think that these teams slaughter it. But consider this. The best and most finely run mega teams will have a profit margin that tops out at 20 percent. If that team has a margin of 15%, then they are doing pretty well… And that’s before Uncle Sam comes knocking.
So what does that mean? Let’s say it’s a $10,000 commission after paying the brokerage as well as any ancillary fees. And let’s say it's a 50/50 split. Agent gets $5,000 of pretty much profit while the team gets $5,000 of revenue. Of that $5,000, the team will reinvest $4,000 into their business in the tune of new leads, office support, maybe an inside sales associate department while $1,000 is their top of the line profit.
These bigger teams are built solely to get agents to be more productive and get a return on their invested capital.
Can you succeed as a new and solo agent? Absolutely! Will it be more difficult? 100%. Leads are harder to come by. Training is more important than ever in this rapidly changing industry. And for most, the freedom is enough where we hang ourselves so the accountability is what keeps us focused and in the game.
If you are newly licensed and think a team would be a right fit for you, then let me know. Happy to pass along some team recommendations for you.
And if you are looking for a company where you will be able to learn and grow, then I would love to chat with you about the opportunities over here at Real Broker.
Again, it’s Jeff Chubb. You can reach me at 617-775-7687 and all my other contact information is below.
Until next time!
#Real #Estate #Join #Team
Jeffrey Chubb
2024-04-22 14:52:16
https://bostonrealestateinvestorsassociation.com/new-to-real-estate-should-you-join-a-team/
Saturday, April 20, 2024
Avalanche home loan tokenization protocol raises $10M in Series A
“Homeowners effectively sell a portion of their home’s equity at today’s price and repay at tomorrow’s,” wrote Homium staff.
Homium, a home equity line of credit (HELOC) tokenization protocol built on Avalanche, has raised $10 million in a Series A funding round led by Sorenson Impact Group and Blizzard.
“Through shared appreciation home equity loans, Homium introduces a way for homeowners to borrow against their home equity without increasing their monthly debt burden,” wrote Avalanche in an April 15 announcement.
By using Homium, homeowners pledge a portion of their home’s future appreciation as collateral for loan equity in maintenance and repairs, debt consolidation or inheritance. At the same time, investors receive a tokenized asset tracking the price appreciation of a pool of shared homes on the protocol.
Homium is building a valuable new asset class for institutional investors, providing a new source of uncorrelated, inflation-protected return in their core portfolios,” said CEO Tommy Mercein in a statement. The first such home tokenization loans are currently available in the United States state of Colorado.
The tokenized assets are backed by second mortgage loans made to owner-occupied single-family homes. Investors of the HELOC tokens are secured to the title like any other mortgage. Homium pledges that every home is “appraised by a third party, hybrid valuation service” with nationwide loan originators.
While the HELOC tokens are built on distributed ledger technology, they are not cryptocurrencies. Instead, the tokens are debt securities compliant with the United States Securities and Exchange Commission’s (SEC) Rule 144A regarding private placement to institutional investors. Regarding its technology, Homium explained:
“Patented technology gives Homium investors a real time window into every loan in each pool including its origination value and current marked-to-market estimated value. Because Homium loans are underwritten to a uniform standard that secures a % of the underlying home equity, this allows instant securitization of the note from inception. Investors receive pooled exposure to home price appreciation by state."
Since July 2023, Avalanche has pledged $50 million in investments for on-chain tokenization protocols, with a major focus on those specializing in real estate and digital collectibles. Meanwhile, financial services giant Citi recently described the tokenization market as the next “killer use case” in crypto.
Source - Avalanche home loan tokenization protocol raises $10M in Series A (cointelegraph.com)
https://bostonrealestateinvestorsassociation.com/?p=11483
“Homeowners effectively sell a portion of their home’s equity at today’s price and repay at tomorrow’s,” wrote Homium staff.
Homium, a home equity line of credit (HELOC) tokenization protocol built on Avalanche, has raised $10 million in a Series A funding round led by Sorenson Impact Group and Blizzard.
“Through shared appreciation home equity loans, Homium introduces a way for homeowners to borrow against their home equity without increasing their monthly debt burden,” wrote Avalanche in an April 15 announcement.
By using Homium, homeowners pledge a portion of their home’s future appreciation as collateral for loan equity in maintenance and repairs, debt consolidation or inheritance. At the same time, investors receive a tokenized asset tracking the price appreciation of a pool of shared homes on the protocol.
Homium is building a valuable new asset class for institutional investors, providing a new source of uncorrelated, inflation-protected return in their core portfolios,” said CEO Tommy Mercein in a statement. The first such home tokenization loans are currently available in the United States state of Colorado.
The tokenized assets are backed by second mortgage loans made to owner-occupied single-family homes. Investors of the HELOC tokens are secured to the title like any other mortgage. Homium pledges that every home is “appraised by a third party, hybrid valuation service” with nationwide loan originators.
While the HELOC tokens are built on distributed ledger technology, they are not cryptocurrencies. Instead, the tokens are debt securities compliant with the United States Securities and Exchange Commission’s (SEC) Rule 144A regarding private placement to institutional investors. Regarding its technology, Homium explained:
“Patented technology gives Homium investors a real time window into every loan in each pool including its origination value and current marked-to-market estimated value. Because Homium loans are underwritten to a uniform standard that secures a % of the underlying home equity, this allows instant securitization of the note from inception. Investors receive pooled exposure to home price appreciation by state."
Since July 2023, Avalanche has pledged $50 million in investments for on-chain tokenization protocols, with a major focus on those specializing in real estate and digital collectibles. Meanwhile, financial services giant Citi recently described the tokenization market as the next “killer use case” in crypto.
Source - Avalanche home loan tokenization protocol raises $10M in Series A (cointelegraph.com)
https://bostonrealestateinvestorsassociation.com/?p=11483
Wednesday, April 17, 2024
Courtney Fricke is a Solutions Based and Creative Real Estate Investor located in the Greater New Orleans area. She has buy and hold portfolios in Southeast Louisiana as well as South Mississippi that have all been acquired through creative financing or private money loans from everyday folks. Since her start, she has flipped, held rentals, wholesaled, developed, bought, and sold with owner financing, and handled complex title issues with many different asset classes such as low-end and high-end single family, mobile homes on land and in parks, mobile home, and RV parks, small and large multi-family, small and large tracts of land. As founder of Northshore Real Estate Investors Association and cohost of WWL's Home Improvement Radio Show, she cares about solving the real estate problems of our community through education for the public and within the industry.
Time : May 2, 2024 07:00 PM Eastern Time (US and Canada)
Register in advance for this meeting:https://us02web.zoom.us/meeting/register/tZYvd-CgrDwoGdfZNzd8QCF_Cv130R4_wjnX
https://bostonrealestateinvestorsassociation.com/solution-based-real-estate-investor-courtney-fricke-to-speak-at-boston-reia-via-zoom/
Tuesday, April 16, 2024
AI and Real Estate. How do they go together?
In today's rapidly evolving real estate market, Artificial Intelligence (AI) is reshaping how we approach everything from property searches to transaction management. With the integration of real estate AI, we're witnessing unprecedented efficiency, accuracy, and decision-making capabilities in real estate operations. The significance of Artificial Intelligence in real estate and how it is enhancing real estate processes cannot be overstated, as it is having a transformative impact on the industry.
This transformation is touching every aspect of the industry, from simplifying property searches with intelligent algorithms to automating complex transactions and enhancing customer service with chatbots. AI's impact is profound, offering unmatched efficiency, accuracy, and a new level of decision-making prowess that was previously unimaginable. As we delve deeper into real estate and AI's capabilities, it's clear that this technology is not just an add-on but a fundamental shift in how real estate operates, promising to redefine the industry's future.
Understanding AI in Real Estate
When people talk about AI and real estate, they’re not just using buzzwords. They’re talking about a seismic shift in how our industry operates that’s happening right now.
AI brings a level of automation and insight that’s revolutionizing the real estate industry by analyzing massive datasets, predicting market trends with greater accuracy, and automating tasks, property valuation, investment analysis, and customer interaction.
By harnessing AI, real estate professionals can predict market trends with greater accuracy, personalize customer experiences, and streamline processes.
This shift towards an AI-driven approach isn’t just about adopting new technology; it's about embracing a new way of thinking that places data and predictive analytics at the heart of real estate decision-making. This is about how real estate professionals can leverage AI to gain a competitive edge and deliver superior service.
Recent Developments in AI for Real Estate
Recent advancements in AI technologies such as predictive analytics, generative AI, and computer vision are reshaping the real estate sector in unprecedented ways; they are setting new rules for how real estate transactions are conducted and properties are managed. Although this is true, many are still wondering how to use AI in real estate.
Predictive analytics, for instance, enable real estate professionals of every level to forecast market trends and customer behavior more accurately, offering a strategic edge in decision-making.
Generative AI is revolutionizing property visualization and documentation, making interactions more efficient.
Computer vision is transforming property searches and presentations, offering a more immersive experience.
These advancements aren’t just technological feats; they're practical tools that enhance every facet of real estate operations, from listing to closing. Soon enough, real estate and AI will go hand in hand for the majority of real estate professionals.
The Rise of Predictive Analytics in Real Estate
The rise of predictive analytics in real estate marks a pivotal shift in how industry professionals approach decision-making and customer satisfaction. By harnessing the power of vast data sets and advanced algorithms, predictive analytics enables real estate professionals to forecast market trends, property values, and consumer behavior with remarkable accuracy.
This foresight not only empowers agents and investors to make informed decisions about buying, selling, and investing but also allows for a more personalized approach to customer service. By anticipating clients' needs and preferences, real estate professionals can tailor their offerings, ensuring a more satisfying and efficient experience for buyers, sellers, and renters alike. This level of predictive insight is transforming the landscape of real estate, making operations more strategic, proactive, and client-focused.
Predictive analytics applications in real estate are vast and varied, ranging from optimizing property pricing strategies to identifying potential investment opportunities before they hit the open market.
For instance, predictive analytics can evaluate historical price data, demographic shifts, and market dynamics to determine a property's optimal listing price. As a result, they attract serious buyers more quickly and maximize seller returns.
Additionally, by predicting which properties are most likely to sell, investors can gain a competitive edge in sourcing deals.
The benefits of incorporating predictive analytics into real estate operations are clear: enhanced accuracy in property valuations leads to better investment decisions, while a deeper understanding of customer preferences enhances satisfaction and loyalty. As the real estate industry continues to evolve, I’m more confident than ever that the role of predictive analytics promises a more data-driven, efficient, and client-centric approach to real estate transactions.
Generative AI in Real Estate
Generative AI innovations are streamlining operations and significantly enhancing efficiency. This technology, which includes the ability to generate text, images, and even predictive models from existing data sets, is transforming how real estate professionals interact with both properties and clients.
For example, generative AI can create a highly realistic virtual property staging, allowing potential buyers to visualize empty spaces as fully furnished homes without the need for physical staging. This not only saves time and resources but also enhances the property's appeal to a wider audience.
Generative AI can even automate the creation of property descriptions, marketing materials, and personalized communication with clients, ensuring consistency and saving precious time that can be redirected toward more strategic tasks.
The practical applications of generative AI in real estate are both diverse and impactful.
One example is using AI-driven tools to generate accurate and detailed floor plans from simple property images, a task that traditionally requires significant time and manual effort. Another innovative application is developing predictive models that analyze market trends and consumer behavior, helping real estate professionals anticipate shifts in demand and adjust their strategies accordingly.
These generative AI applications not only streamline the day-to-day operations of real estate businesses but also offer a competitive edge by enabling faster, more informed decision-making and providing a superior customer experience.
As the technology continues to evolve, its potential to transform the real estate landscape is becoming increasingly more noticeable. This promises a future where generative AI is an integral part of every real estate transaction.
Advancements in Computer Vision for Real Estate
Advancements in computer vision technology are revolutionizing the real estate industry by significantly improving property searches and presentations, which is enhancing the transaction process.
This technology allows for the automated recognition and classification of property features from images alone, allowing potential buyers to search for homes based on visual elements like layout, architectural style, or even specific amenities.
Computer vision helps with the creation of more engaging and informative property listings with virtual tours that offer a realistic and interactive viewing experience from anywhere in the world. This broadens the market reach for listings and streamlines the decision-making process for buyers, making it quicker and more intuitive.
Looking ahead, the potential of computer vision technology in real estate is limitless. It promises to deliver even more innovative solutions like predictive property valuation based on visual attributes and enhanced market analysis tools. It’s easy to see that computer vision will likely play a pivotal role in shaping the future of real estate, making transactions more efficient, accurate, and user-friendly.
AI in Real Estate Use Cases
AI in real estate is not just theoretical; it's practical, with numerous real-world applications.
AI-driven property valuation and pricing strategies offer a competitive advantage by providing accurate market insights.
Virtual property tours and staging powered by AI have revolutionized property marketing, allowing potential buyers to explore properties remotely.
Predictive maintenance in property management and AI-driven investment analysis are other areas where AI's benefits are clearly visible, showcasing its role in enhancing efficiency and profitability in real estate investments.
Check it out HERE
Property Valuation and Pricing
AI algorithms are revolutionizing how properties are valued and priced.
These sophisticated algorithms analyze historical transaction data, property features, and market dynamics to generate precise valuations, which allows real estate professionals to develop effective pricing strategies.
AI-driven pricing models also offer a competitive advantage by dynamically adjusting prices based on real-time market conditions. This ensures that properties are priced optimally to attract potential buyers without undervaluing the property.
This use of AI streamlines the valuation process and gives it a level of precision and efficiency that was previously unattainable. This is allowing sellers, buyers, and real estate professionals to make smarter, data-driven decisions that benefit each group.
Virtual Property Tours and Staging
AI-powered immersive virtual property tours and realistic staging simulations are becoming more prevalent and, as a result, are reshaping property presentations.
These advances in technology are allowing potential buyers to explore properties in detail from anywhere in the world.
AI-powered virtual tour platforms now enable prospective buyers to navigate through properties in a seamless, interactive manner, offering a comprehensive view without the need for physical visits.
These platforms can integrate detailed property information, note features of interest, and even simulate different lighting conditions, providing an enriched viewing experience.
AI is also proving to be instrumental in virtual staging, where empty rooms are furnished with lifelike digital furniture and decor, enhancing the property's appeal and helping buyers visualize themselves in the space.
This technology not only captivates the interest of potential buyers but also significantly broadens the reach of property listings and shortens the sales cycle by making properties more attractive and accessible from the start.
The use of AI in creating these virtual experiences is reshaping real estate marketing, setting a new standard for how properties are presented in the digital age.
Predictive Maintenance in Property Management
AI's role in predictive maintenance is ensuring that property management becomes more efficient and cost-effective. By predicting maintenance needs, AI helps in proactively addressing issues, leading to cost savings and improved tenant satisfaction.
Using AI, property managers can now monitor the condition of buildings and systems in real time, predicting maintenance needs before they become critical issues. This proactive approach is enabled by sensors and IoT devices that collect data on the performance of various building components, such as HVAC systems, plumbing, and electrical systems.
AI algorithms analyze this data to forecast potential breakdowns, allowing maintenance to be scheduled at optimal times to prevent disruptions and extend the life of equipment. This reduces the frequency and cost of repairs by addressing issues before they escalate and minimizes downtime and inconvenience to tenants, improving their overall satisfaction. This strategic use of AI in predictive maintenance is transforming traditional reactive management into a more efficient, cost-effective, and tenant-friendly approach.
AI-Driven Investment Analysis
AI-driven investment analysis is profoundly impacting the real estate industry by providing deep insights into investment opportunities and associated profits and risks.
Using AI algorithms, investors can process and analyze vast amounts of data that include historical market trends, property valuations, demographic shifts, and economic indicators much faster and more accurately than traditional methods.
This capability allows real estate investors to make informed data-driven decisions based on growth potential, property values, future market conditions, and more in order to forecast investment returns more accurately.
AI also enhances risk assessment by analyzing patterns and anomalies that could signal potential issues, enabling investors to make informed decisions that balance potential returns against associated risks. This strategic use of AI optimizes the investment process and customizes investment approaches based on data-driven insights, ensuring higher accuracy in predictions and better alignment with market dynamics.
Leadflow's AI technology plays a crucial role by equipping real estate investors and agents with powerful analysis tools. Leadflow’s advanced AI algorithms help investors sift through complex market data to identify the properties that are most likely to sell, giving them a huge advantage over the competition. Leadflow’s analysis tools also help with forecasting investment returns, considering various scenarios and market conditions.
This not only helps investors in making informed decisions quickly but also provides a competitive edge by reducing the time and effort required to evaluate multiple investment opportunities. Through Leadflow, investors gain access to a suite of AI-enhanced tools that streamline the investment process, from property discovery to final acquisition, ensuring a smarter, data-driven approach to real estate investing.
Chatbots and Customer Service Automation
AI chatbots are transforming customer service in the real estate industry by providing instant, round-the-clock support that significantly enhances the client experience.
These AI-driven chatbots can handle a wide range of customer needs, from basic questions about property listings to more complex requests like scheduling viewings or providing detailed property specifications. Their ability to be available 24/7 ensures that potential buyers and tenants receive immediate responses at their convenience, eliminating wait times and improving overall satisfaction.
Chatbots can also automate routine customer service tasks such as appointment scheduling and follow-ups, which not only frees up human agents to tackle more complex issues but also enhances operational efficiency.
This level of automation ensures that the real estate business remains responsive and agile, improving client engagement and speeding up the transaction process.
Implementing AI in Real Estate
The integration of AI into real estate operations requires a strategic approach, from selecting the right AI solutions to training staff, and overcoming implementation challenges.
Best practices for integrating AI include a thorough evaluation of AI tools, a focus on staff training to ensure effective use of AI technologies, and strategies to address common implementation challenges. This structured approach ensures that real estate businesses can fully leverage AI's potential, transforming their operations and setting a new standard in the industry.
Best Practices for Integrating AI Solutions
Successfully integrating AI into real estate operations demands a strategic approach. It involves selecting the right tools, training staff to use them effectively, and continuously evaluating the impact of AI implementations.
Here are the steps you should take when implementing new AI tools into your real estate business.
- Identify specific areas where AI can have the most impact, such as customer service, property valuation, or investment analysis.
- Select AI tools that are best suited to these needs, which may include chatbots for customer interaction, predictive analytics for market analysis, or AI-driven CRM systems for managing client relationships.
- Implement a pilot program to test the AI solutions in a controlled environment, allowing for adjustments and learning without disrupting the entire operation.
- Set up training sessions for staff to ensure that everyone understands how to use the new technology effectively and can transition smoothly.
- Continuously monitor and evaluate the performance of AI implementations. This involves regular checks on AI accuracy, efficiency, and its impact on business outcomes, as well as gathering feedback from staff and clients about their interactions with the AI systems. Such ongoing evaluation helps in fine-tuning AI applications to better meet the needs of the business and its clients, ensuring that the real estate operations harness the full potential of artificial intelligence.
Training and Up-skilling for AI Adoption
For real estate professionals to make the most of AI tools, training and up-skilling are essential.
Effective training programs ensure that real estate professionals are proficient in using AI tools to enhance decision-making, streamline operations, and improve customer interactions.
This training should focus on developing skills such as data analysis, understanding AI-driven market reports, and managing AI-powered customer service tools. Additionally, professionals should learn how to interpret AI insights accurately and make informed decisions based on this data.
Investing in thorough training can ensure that your team is prepared to use AI technologies effectively and is capable of driving innovation and maintaining a competitive edge in real estate’s rapidly evolving industry.
Overcoming Challenges in AI Implementation
Implementing AI in real estate comes with its set of challenges. From selecting the right technologies to ensuring data privacy, real estate businesses need to address these hurdles to fully reap the benefits of AI.
The most important thing in this area is to do your research and partner with experienced AI vendors and consultants who can provide expertise and guidance throughout the implementation process. This can help to significantly mitigate any risks associated with AI adoption and maximize the technology's potential to revolutionize operations.
Future Trends and Opportunities in AI for Real Estate
As we look to the future, the role of AI in real estate is set to grow even more significantly.
Predictive property valuations, automated customer service, and enhanced decision-making capabilities are just the beginning. The future of real estate lies in leveraging AI to unlock new levels of efficiency, predictive accuracy, and customer engagement. As AI technologies continue to evolve, they promise to open up new avenues for innovation in real estate, further solidifying its status as a key driver of industry transformation.
Unlock the Power of AI with Leadflow Software
Realeflow stands at the forefront of integrating AI into real estate solutions. real estate professionals can gain a competitive edgeBy exploring Realeflow's AI-powered tools and services. To learn more about how Realeflow can transform your real estate business with AI, visit Realeflow and Realeflow Pricing.
Frequently Asked Questions
- What are the key benefits of AI adoption in the real estate sector?
AI adoption in real estate brings numerous benefits, including improved efficiency, enhanced accuracy in property valuations, predictive maintenance, and personalized customer experiences.
- How can real estate companies leverage AI for lead generation and marketing?
https://bostonrealestateinvestorsassociation.com/exploring-artificial-intelligence-in-real-estate-investing/
Friday, April 12, 2024
A law that took effect January 1, 2024, has killed any hope of anonymity by using a Wyoming LLC, or an LLC in any state for that matter. Even if you are not worried about anonymity, you are going to be profoundly affected by this law.
In 2021, Congress passed the Corporate Transparency Act. This law created a new beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.
The new program is called the Beneficial Ownership Information Reporting system, and it will be implemented by the FinCEN (Federal Financial Crimes Enforcement Network), a department within the Treasury Department – the same folks who brought you the IRS.
Never heard of FinCEN? If you have any type of a business (corporation or LLC), it will become as common in your language as the term “IRS.”
Under the new laws, “beneficial ownership information refers to identifying information about the individuals who directly or indirectly own or control a company.”
Reporting
As of January 1, 2024, you have to register the “beneficial ownership” of each LLC, corporation, limited partnership, or any other type of business entity. These are called “reporting companies.” There are exceptions for the companies with over 20 time employees, banks, insurance companies, and lots of other companies that are already regulated. But this reporting hits the little guys – us!
A “beneficial owner” is any individual who, directly or indirectly exercises substantial control over a reporting company – OR – owns or controls at least 25 percent of the ownership interests of a reporting company.
Companies that existed prior to January 1st 2024 have to be registered sometime between January 1, 2024, and the end of 2024. If you create a new entity in 2024, you have 90 days from the filing with the state to register the company. If you create an entity after 2024 you only have 30 days to register it. This reporting requirement isn’t just a suggestion. You will register, because the penalty is $500 per day after the deadline plus a $10,000 penalty, plus a two-year extended stay in a federal facility.
You will notice the program is run by the Federal Financial Crimes Enforcement Network. These guys have guns, and they have all the collection power of their big brother – the IRS.
The registration forms are found at FinCEN.gov/BOI. Basically, the information they want is:
- Full legal name
- Date of birth
- Complete current address
- Unique identifying number and issuing jurisdiction (with image) from one of the following non-expired documents: U.S. passport, state driver’s license, identification document issued by a state, local government, or tribe.
If you have a number of companies, like a lot of real estate investors do, you could get a personal “FinCEN identifier” and then just put that number on each company registration to identify yourself. You can get an identifying number from FinCEN by “providing certain information to FinCEN.” The information you have to supply to get your FinCEN identifier is basically the same information you supply for an individual company registration.
I understand that we need to try and shut down the mob and politicians from laundering corrupt money, but this is just another government intrusion into our life. The bad guys will figure a way around it, and we are stuck with the harassment of another government agency.
This is going to be almost impossible to comply with going forward. Anytime a registered person associated with a company has any change in their registration information, you have 30 days to inform FinCEN. When you get a new driver’s license, I am sure your first thought is “I have to reregister with FinCEN.” This is going to be a nightmare for companies with a dozen owners.
Privacy?
The big sales pitch you get at seminars and online for privacy is to put your corporation or LLC in Wyoming or some other state where the registered agent can put their name on the state records and keep your name off the state records. Of course, you pay the registered agent and the state for this “privacy,” and they are getting rich. You are getting poorer.
The name of the registered agent in Wyoming, whose name is on the LLC filing to hide your name, isn’t going to cut it as the beneficial owner under the new FinCEN laws. Your name is going to be the one reported.
In addition to the registration requirements, the government has put a massive data sharing agreement in place. Each agency is supposed to have access to every other agency’s information on you. This will speed up your qualification for government benefits, catch the bad guys, allow the IRS to catch cheats, and will provide tons of other benefits – according to the government. The agencies are getting much better at sharing data.
States are now even required to feed a lot of their data into the federal system and the data will be shared with the states. Even your bank will have at least some access to the data.
I Never Used The LLC
If you have an entity that you have never used, you may not have to report it to FinCEN. You will have to meet all six of the following criteria to have FinCEN consider it an “inactive entity.”
- The entity was in existence on or before January 1, 2020. □
- The entity is not engaged in active business. □
- The entity is not owned by a foreign person, whether directly or indirectly, wholly or partially. □
- The entity has not experienced any change in ownership in the preceding twelve-month period. □
- The entity has not sent or received any funds in an amount greater than $1,000, either directly or through any financial account in which the entity or any affiliate of the entity had an interest, in the preceding twelve-month period. □
- The entity does not otherwise hold any kind or type of assets, whether in the United States or abroad, including any ownership interest in any corporation, limited liability company, or other similar entity. □
FinCEN may not require you to register, but remember, FinCEN is the little brother of the IRS. Dormant entities are dangerous when it comes to the IRS. Do you have an unused EIN out there? They act as IRS audit magnets. You need to kill those entities and EINs.
The state where the entity is filed will have a dissolution form on its state website. There is often a fee to formally kill an entity.
Trusts
The question I keep getting is about a trust that owns an LLC or corporation. You should have your living revocable trust own the stock in your little corporation or your membership interest in your little LLC. The only reason for doing that is so your family won’t have to probate the entity when you die.
Having a trust own a corporation or LLC doesn’t offer any more asset protection or anything like that. There really isn’t much anonymity gained by having your trust own your LLC, because your name has to “be on title” as the trustee. Remember, on any ownership document (stock or membership) the trust’s “name” has to have:
- Name of trust
- Date of trust
- Name of trustee
The registration requirement for FinCEN will undoubtedly require naming the trustees and the beneficiaries of the trust. Your trust isn’t secret, so you are not disclosing anything important, but this whole thing is going to be a pain.
Trusts don’t have to report. They are not “reporting companies.” There are two types of reporting companies: Foreign companies, which you are probably not worried about, and then domestic companies, which are “corporations, limited liability companies, limited partnerships, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.” There isn’t any state filing with a trust.
However, if your living revocable trust owns an interest in a reporting company, the following individuals may hold ownership interests that will have to be reported:
- A trustee or other individual with the authority to dispose of trust assets
- A beneficiary who is the sole permissible recipient of trust income and principal or who has the right to demand a distribution of or withdraw substantially all the trust assets
- A grantor or settlor (the guy who sets up the trust) who has the right to revoke or otherwise withdraw trust assets
However, you own a reporting company, FinCEN is going to be a pain for you, and it could be expensive.
Scams to Watch For
The new Beneficial Ownership Information Reporting program is turning out to be a bonus for scamsters. They are offering to file for you, or they are calling and demanding information on your company because of the new law that you might have heard something about.
I’ll just let you read the government alert on this scam:
Alert: FinCEN has been notified of recent fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act. The fraudulent correspondence may be titled "Important Compliance Notice" and asks the recipient to click on a URL or to scan a QR code. Those e-mails or letters are fraudulent. FinCEN does not send unsolicited requests. Please do not respond to these fraudulent messages or click on any links or scan any QR codes within them.
A take-home message in this newsletter is watch for the reporting requirements on your LLCs and corporation, and don’t miss the deadlines. Be careful of the scammers that are going to capitalize on the entire FinCEN Program. FinCEN will never contact you by phone or the internet and will probably not even contact you by mail.
The IRS has almost entirely stopped contacting people by phone or the internet because of the fraudsters calling and saying they are from the IRS. Be CAREFUL! The old adage is true; if anyone says, “Hi I’m from the government, and I am here to help you,” you know they not from the government or they are lying.
FinCEN Law Struck Down By Federal Court
Late Friday night March 1st, an Alabama Federal Court slapped down the FinCEN program. In a surprising summary judgement ruling, Judge Liles Burke said that the Corporate Transparency Act (CTA) – which sets up the whole FinCEN registration program – is unconstitutional.
The judge actually outlined how the government could make the CTA constitutional by rewriting the law.
He found that the law didn’t even come close to being constitutional. Thus, the summary judgement.
He also said that the penalties imposed by FinCEN for not complying with all the registration requirements ($500 for every day late, PLUS $10,000 penalty, PLUS 2 years in jail) were “offensive, unfair, and outrageous.”
He also pointed out that this was basically just a trap for the small business owners.
I agree! It will be nearly impossible to comply with the FinCEN registration law as it stands. Not only is there a complicated registration, with the most personal information for everyone involved in ownership or benefit from the company, but there are the ongoing requirements.
Anytime a beneficial owner changes address, gets a new driver’s license, changes ownership interest, or does a half-dozen other things, the company has to report to FinCEN within 30 days. For the company to monitor every owner and even its own activities to that extent will be nearly impossible. There will be slip-ups.
The Beneficial Ownership registration program is just a way for the government to take out the little companies it doesn’t like for some reason. If you pollute too much – like the farmer who raises cattle (we are already down a billion pounds in beef production this year) – if you are doing something politically incorrect, if you cross someone with political power, or any one of dozens of other reasons to be targeted by a federal agency, they can play the FinCEN gotcha game. That’s how dangerous I think this law is.
FinCEN Back in Business?
In a press release put out by FinCEN (Financial Crimes Enforcement Network), the government is flexing its muscles – and showing its teeth. The Treasury Department has basically said, “We don’t care what the court said. We are going ahead with the full weight of the law. FinCEN is the little bother of the IRS, but it is trying to grow up and be bigger and better than its sibling.
The case where the judge in Alabama Federal Court said that the entire Corporate Transparency Act (CTA) was totally and unquestionably unconstitutional was brought against the Treasury Department (Mother of the IRS and FinCEN) by the National Small Business Association.
In FinCEN’s press release after the court ruling, they have taken the position that only the plaintiffs in the case (the National Small Business Association and its members as of March 1st) are exempted from filing by the court ruling. They contend that the rest of us poor suckers are not protected by the constitution and are required to file (colorful language added for emphasis).
The target is back on your back. In light of the fact that they will use this law to target who and when they wish – and the fact that the law gives FinCEN the teeth to chew up a victim and literally destroy any small business – you had better consider filing.
Today’s Advice
If I were filing a new company this year, I would comply with this year’s 90-day filing requirement. The clock starts the day you file. Personally, I am not planning on starting a new company – I already have too many – so that doesn’t apply to me.
I do have companies existing prior to January 1, 2024. I will wait until the start of the 4th quarter to make my FinCEN filing on those companies and see if anything further shakes out on this court case, or if someone who is business friendly will be elected in the fall.
If it is totally unconstitutional for some people, it should be unconstitutional in mine and your case too. Don’t you think?
With FinCEN’s attitude, to me they are telegraphing their hatred for small businesses and thirst for power. This law gives them big enough teeth that we had better comply. The penalties are big enough that they can pretty much destroy any small business they want to.
Stay tuned for the next chapter in the saga.
Lee Phillips, ESQ
United States Supreme Court Counselor
https://bostonrealestateinvestorsassociation.com/fincen-will-you-comply/
Friday, April 5, 2024
In the video, we cover the best places to visit in Berlin, including iconic spots like the Berlin Wall, Brandenburg Gate, Reichstag Building, Museum Island, Holocaust Memorial, Sachsenhausen, Topography of Terror, Berlin TV Tower, Berlin Cathedral, Currywurst spots, Charlottenburg Palace, and the Botanical Garden.
Here are the top 12 things to do in Berlin, ideal for anyone planning a trip to the city. This guide includes the best Berlin attractions, top places to visit, and must-see spots in Berlin. Additionally, we provide recommendations for the best places to visit in Berlin, Germany, to help you plan your trip effectively.
If you're interested in visiting Berlin, the Berlin WelcomeCard is a great resource to consider. For more information or to purchase the card, you can visit http://bit.ly/3geqor2.
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https://investingtravels.com/western-europe/germany/top-12-activities-to-experience-in-berlin/
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