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Trust This.
By Joseph E. Seagle, Esq. ● Sep 06, 2024
Smart Brevity® count: 5 mins...1299 words
👋 Happy Friday! Today is National 🍱 Food Bank 🏦 Day. Volunteering at Second Harvest in Orlando was one of our most fulfilling crew activities. Consider donating time or money to your local food bank too.
Situation Awareness: If you have a 1031 exchange pending in most of Florida, Georgia, South Carolina, or North Carolina, Hurricane Debby may have extended your deadline to complete the exchange until February 3, 2025. More information is at the IRS website.
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🚨 1: Another new FinCEN rule: What Real Estate Investors Using Florida Land Trusts Need to Know
What’s happening: The Financial Crimes Enforcement Network (FinCEN) recently issued a final anti-money laundering rule impacting the real estate sector.
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This rule, set to take effect on December 1, 2025, mandates that individuals involved in real estate closings report information on all-cash residential transactions nationwide involving legal entities and trusts.
Why it matters: This new regulation will significantly affect real estate investors who use Florida land trusts, a common vehicle for maintaining anonymity in property transactions.
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Previously, only transactions in specific high-risk areas required such detailed reporting under Geographic Targeting Orders (GTOs).
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The new reporting requirements are nationwide with no minimum transaction threshold, meaning every all-cash deal involving a trust or legal entity must be reported.
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They apply to any real property purchase where a bank does not finance the transaction (private and hard money lenders don’t count), and the buyer is a trust or entity.
Situation Awareness:
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Trust Reporting: The rule requires reporting entities to provide detailed information about beneficial owners, including their names, addresses, dates of birth, and taxpayer identification numbers (TINs). This level of transparency undermines the privacy that Florida land trusts traditionally offer.
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No Dollar Threshold: Unlike the GTOs, which applied only to transactions above certain monetary thresholds, the new rule has no such floor, making even smaller transactions subject to scrutiny.
The impact: This rule could be a game-changer for real estate investors who rely on Florida land trusts for privacy.
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The anonymity these trusts provide is now at risk, as the required disclosure of beneficial ownership details eliminates the privacy benefit.
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This could deter some investors from using such trusts or prompt a reevaluation of investment strategies in Florida.
Yes, but: The reported information will be retained in the same federal databases holding the FinCEN BOI data that must be reported.
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The general public cannot access these databases.
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They are only available to law enforcement officials with a legal purpose to review them and are maintained at a security level just below “top secret.”
What’s next: As the implementation date approaches, real estate professionals, particularly those dealing with Florida land trusts, should prepare for these changes. FinCEN plans to develop specific forms for this reporting, and the industry will need to adapt to these enhanced transparency requirements.
Go deeper: The Federal Register copy of the Final Rule
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2. Annual salary needed to afford a starter home is skyrocketing
According to Redfin's latest report, homebuyers in the U.S. now need to earn nearly $80,000 annually to afford a typical starter home.
Why it matters: This threshold is just below the all-time high, reflecting rising mortgage rates and soaring home prices. With these escalating costs, the pool of potential homebuyers is shrinking for lower-income families, significantly affecting market dynamics.
By the numbers:
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The average monthly payment for a U.S. starter home rose to $1,981 in July, a 4.4% increase from the previous year.
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The typical starter home now costs a record $250,000, requiring an annual income of $79,252 to qualify for a mortgage.
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The average mortgage rate in July was 6.85%, more than double the rates seen during the pandemic.
The big picture: The increasing income requirement to afford starter homes is reshaping the real estate market, pushing more middle-income buyers into the entry-level market and sidelining many lower-income households. This heightened demand for affordable homes is driving up prices even further, making starter homes a hot commodity.
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In many regions in Southern California, even median earners are struggling to enter the market.
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For instance, a family in Los Angeles needs to earn twice the median local income to afford a starter home.
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Conversely, Rust Belt cities like Detroit and St. Louis remain more accessible, with median earners far exceeding the income required to buy a home.
What’s next: For real estate professionals, understanding these shifts is crucial.
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As affordability continues to tighten, competition in the lower tiers will likely intensify, and markets with lower costs may see increased interest from buyers priced out of more expensive areas.
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Keeping a pulse on these trends will be vital for guiding clients in this evolving landscape.
Go deeper: For a detailed breakdown of metro-level data and to explore potential investment opportunities, read Redfin’s full report here.
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This week we sit down with Miami-based attorney Blake Harris to learn about offshore trust and how they work as part of an overall plan to protect your assets.
Listen in or watch on your favorite streaming platform.
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New multi-family tenant protections are coming in 2025 under Fannie Mae and Freddie Mac loan document changes. MPA Mag
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Florida lawmakers stay quiet as large corporations buy thousands of homes. Tampa Bay Times
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RealPage pushes back on Fed’s lawsuit. WRE
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Where new investors should be buying this fall. Bigger Pockets
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HUD awards $32 million to fight housing discrimination. HUD
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4. Closing Thought: Tolerations - The Silent Saboteurs of Leadership Effectiveness
That time we stopped tolerating hunger and volunteered an afternoon of work at the local food bank distribution center.
You’re only as efficient as what you tolerate.
Why it matters: Tolerations are the small, often overlooked annoyances or inefficiencies that leaders allow to persist in their personal or professional lives. These minor issues accumulate, quietly draining energy, focus, and resources that could be better utilized elsewhere.
Driving the news: Business leaders, often consumed by high-stakes decisions, may underestimate the impact of tolerations on their overall effectiveness. Whether it’s a consistently late meeting, an underperforming team member, or a cluttered workspace, these issues create distractions that divert attention from strategic priorities.
The big picture: Tolerations are like background noise.
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While individually, they may seem insignificant, together, they form a cacophony that disrupts a leader’s ability to think clearly and act decisively.
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Over time, the cumulative effect of tolerations can lead to burnout, reduced productivity, and a decline in overall business performance.
What’s happening: Leaders who tolerate inefficiencies or nuisances often do so because addressing them seems too time-consuming or trivial compared to more pressing issues. However, this mindset can trap leaders in a cycle of inaction, where small problems persist and grow hindering progress on larger goals.
Between the lines: The presence of tolerations often signals deeper issues, such as a lack of boundaries, difficulty delegating, or an aversion to conflict. Leaders must address these underlying challenges to reclaim their focus and drive meaningful progress.
What’s next: Leaders should conduct a toleration audit, identifying the small frustrations that disrupt their daily lives. By systematically addressing these issues, leaders can free up mental and emotional bandwidth to focus on strategic, high-impact activities that move the business forward.
The bottom line: Eliminating tolerations is not about perfection; it’s about creating an environment where leaders can operate at their best. By tackling these silent saboteurs head-on, business leaders can regain control, enhance their effectiveness, and accelerate their journey toward success.
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Be on the lookout for our next issue! 👋
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