#Tax Advisor West Palm Beach County

[gardenshomemanagement]

Marker Construction Group Proclaims Launch Of Marker Estate Management

The scholar shall be required to fulfill with the Superintending Dean, the Dean of Students, and, if applicable, the Dean of the student’s main to have the ability to course of the coed suspension for one tutorial year. The Superintending Dean will send a letter requesting the suspension to the Registrar who will then formally notify the coed that he or she is suspended. Copies of the letter are sent to the Dean of the school the place the coed palm beach estate management is a major, to the student’s educational advisor, and to the Dean of Students. A Business Tax Receipt is a tax for the privilege of partaking in or managing any throughout the Village limits of the Village of North Palm Beach. Whether your small business is in a industrial location, out of your house or you personal rental property a Business Tax Receipt is required pursuant to each local and state legal guidelines.Business Tax Receipt FAQs6.

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My Area Realty, Inc is a full service commercial property management company that's focused on the South Florida market and extra specifically Palm Beach County. Our expertise within the West Palm Beach property management market and our palms on strategy permits us to create a constructive experience with our business property house owners and tenants. Kanga is the best choice for Palm Beach Gardens property management and this is applicable to both new traders and more experienced traders with a number of rental properties of their portfolios. We boast over 10 years of experience absentee estate management palm beach and have built a exceptional monitor document of exceptional property management providers. During this period in the real estate arena of Palm Beach and Broward county we have worked with tons of of buyers long run and now have the resources and know-how for lots of more. Our founders, Sivan Gerges and Liran Koren have an accumulative experience of greater than 20 years in industrial property management and actual estate investing, first as private traders and afterward for other individuals.

We conduct intensive screening on all tenants and deal with every facet of getting your investment rented in the shortest time possible. The staff is incredibly responsive, detailed they usually get things done. We have multiple properties under their management and always affordable estate management palm beach rented promptly. We began working with Jacob and his group about a year in the past and I feel lucky to have found him. Its more like having a partner then a property supervisor, in that he's as concerned as I am when it comes to the things that basically matter.

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The Home Watch aims to stop undesirable harm and maintain the house's important functions. In addition, easy duties like removing flyers or mail create the impression that the property is occupied. BBB Business Profiles typically cover a three-year reporting period estate management in palm beach. If you choose to do enterprise with this business, please let the enterprise know that you just contacted BBB for a BBB Business Profile. The scholar has turn out to be a pupil of authorized age as provided in Policy 5.072.

[kbcpagroup-blog]

How Much Will it Cost to Hire an Accountant to Do My Taxes?

The cost of recruiting a professional chartered accountant to do your taxes differs depending on your circumstance and what tax forms you are in need to file. The normal expense of recruiting a certified public accountant (CPA) to plan and present a Form 1040 and state get back with no ordered allowances is $176, while the normal charge for a separated Form 1040 and a state tax return is $273. If you are independently employed and need to recruit a CPA to set up an ordered Form 1040 with a Schedule C and a state tax return Form, the average charge increases to $457.1 It is important to remember that these are the normal expenses; the cost will contrast if parts of your tax filings are under extraordinary cases and take more time for the accountant to finish. In these conditions, accountants may charge you more in consultation fees and extra time work. Read More: IRS problem resolution West Palm Beach County

Preferences of Hiring a Tax Professional

When you pay a professional to do your taxes, you are getting the additional advantage of various different services, including accounting, tax consultation, record-keeping, and auditing. You can likewise employ an accountant who has a specific specialization, for instance, If you own a small company or live abroad. A few professionals are generalists, however, regardless, it is essential to recruit somebody with a level of experience.

Accountants can give help with working up a powerful accounting system to precisely and advantageously evaluate productivity, screen costs, and costs, control financial plans and conjecture future hypothesis patterns. Accountants can likewise talk with their customers on tax-related issues, for example, tax consistency and guidelines and strategies for a tax decrease.In addition, accountants can think of precise review reports, budget summaries, and other bookkeeping documentation required by government guideline and loaning organizations. At the day’s end, employing an accountant can be the beginning of a productive relationship with a financial consultant. They will find out about your business or family financial records and goals, and they can offer significant guidance and individual tax decrease proposals and answers to critical questions whenever the year. Read More: Federal Stimulus FAQ

Your decision about whether to enlist a professional or document your own taxes with the assistance of accounting software should be founded on how agreeable you are with numbers, your knowledge of basic tax rules, and how much time you are eager to spend. When the Tax Cuts and Jobs Act (TCJA) became effective on January 1, 2018, it rolled out some general improvements to the tax code. Specifically, there were many changes made to organized allowances. This has made recording taxes more convoluted, in any event, for those acquainted with the tax code.

Tax Filing Assistance Options

If you fall inside a specific level of pay or are a senior resident, you may fit the bill for tax recording help. Starting in 2020, the Volunteer Income Tax Assistance (VITA) gives free tax preparation services to individuals who acquire $56,000 or less every year. Likewise, If you are age 60 or more seasoned, you may fit the bill with the expectation of free tax preparation services through Tax Counseling for the Elderly (TCE) and the AARP Foundation’s Tax-Aide programs.

If you want to know more about the income taxes Preparing service you can contact KB CPA Group. KB CPA Group is the best Tax Advisors in West Palm Beach County, Broward County & Miami-Dade County. For more information call us at 9545109188 or visit our website.

[anachef]

Jon Smith Subs Announces Widespread Plans for Expansion in 2019

New Franchises Expected to Open; International Presence Increased

West Palm Beach, FL  (RestaurantNews.com)  Jon Smith Subs® closed the year strong, bringing its total number of stores to more than 20 across four countries. Heading into 2019, the brand has lofty plans, with more than 35 stores in development at various stages.

Just last month, the brand celebrated the grand opening of the Port St. Lucie, FL location. In the coming weeks, they anticipate the opening of another location in Palmdale, CA. On the international front, a location in Hammersmith, England just opened its doors last week, and this expansion will continue in Panama, Portugal and Australia.

“The expansion of the franchise is a clear sign of its growing appeal among guests that love great-tasting and fresh food, a variety of menu options, and customer-friendly service,” said Brand President, Jim Butler, who also serves as the Leader of the Food Division of United Franchise Group.

During the month of January, Jon Smith Subs wants you to make a sub-stantial donation by hosting a fundraising event at your local Jon Smith Subs location. Organizations that have a fundraising event at Jon Smith Subs will receive 20 percent of pre-tax sales on eligible orders during the event. Learn more about fundraising events here at JonSmithSubs.com/Fundraising.

Jon Smith Subs offers an array of appealing dishes, ranging from its well-known and popular individually wrapped, marinated four- and six-inch sirloin steak subs, to multiple options from the grill, giant deli subs, salads, and numerous side options. Its menu for the younger crowd includes a combo meal with choices that include turkey, ham, meatballs, cheeseburgers, or grilled cheese. The Plenti-Full sub platter, which can satisfy up to 18 people, is a very popular choice during the holidays and is perfect for catering social gatherings.

About Jon Smith Subs

The first Jon Smith sub shop opened in 1988 in Palm Beach County, FL with a commitment to serving the absolute highest-quality overstuffed, marinated grilled sirloin steak and real chicken breast subs. Jon Smith Subs has locations in South and Central Florida as well as Ohio, Nevada, Texas, and California—soon in Australia. Jon Smith Subs specializes in freshness, preparing all the ingredients for every sub on-site daily. Its sirloin steak and chicken breast subs are trimmed, sliced, seasoned, marinated, and grilled to order, various catering options are available, and its Plenti-Full Sub platters come as individually wrapped four-inch and six-inch subs.

About United Franchise Group

Led by CEO Ray Titus, United Franchise Group is home to a variety of internationally recognized brands including Signarama, Fully Promoted, Experimax, Jon Smith Subs, Venture X, SuperGreen Solutions, Transworld Business Advisors, Accurate Franchising, and The Great Greek Mediterranean Grill. With more than three decades in the franchising industry, and 1,600 franchisees in 80 countries throughout the world, United Franchise Group offers unprecedented leadership and solid business opportunities for entrepreneurs.

Media Contact: Jessica Chacoff 305-631-2283 Jessica@inklinkmarketing.com

source http://www.restaurantnews.com/jon-smith-subs-announces-widespread-plans-for-expansion-in-2019-011619/

[juditmiltz]

Tax h(e)aven: SoFla brokerages are targeting out-of-state buyers looking to escape new, larger tax burdens

(Illustration by Neil Webb)

Ultra-wealthy out-of-state buyers are flocking en masse to South Florida, scooping up multimillion-dollar homes and condos with plans to establish residency in order to avoid shelling out money to the government as a result of last year’s tax reform, brokers and developers told The Real Deal. The influx has local brokerages doing everything they can to capitalize on the  trend, using their partnerships with far-flung firms to grow their client rosters ahead of the competition.

The out-of-staters are largely top-earning hedge funders, real estate bigwigs, big-time entrepreneurs and CEOs from states such as New York, New Jersey, Connecticut, California and Illinois — places with state income taxes as high as 13.3 percent, and even city taxes in the case of New York City. Florida, on the other hand, has no state income tax.

“It’s one thing when the tax reform gets passed, and it’s another thing when you’re sitting with your accountant and you say, ‘Shit, I could just to move to Miami,”’ said Oren Alexander of Douglas Elliman.

Nelson Gonzalez of EWM Realty International calls the new buyers “tax refugees,” and said they account for 90 percent of those looking at his high-end listings. He has shown properties priced over $10 million or $15 million to at least 40 such ultra-wealthy buyers in the past few months, he said.

When Gonzalez showed a unit at luxury condo building Apogee South Beach to three different buyers who were all in the elevator together, Gonzalez asked, ‘“Why Miami, why are you moving from New York?’ One said ‘Taxes,’ and the others said, ‘That’s why I’m here,’ ‘That’s why I’m here.’”

“Hedge fund guys make $50 to $150 million a year, and these guys can come down here and buy a $10 to $20 million house, and with the tax savings, they get a free house in two to five years, and they get to live in paradise,”Gonzalez said.

Real estate insiders point to Barry Sternlicht, chairman and CEO of Starwood Capital Group as a leader of the trend. In 2015, the mogul bought a waterfront vacant lot on Miami Beach’s North Bay Road and built a mansion for his permanent residence, then later moved his company’s headquarters from Greenwich, Connecticut to Miami Beach. During a keynote session at a University of Miami real estate event in 2014, Sternlicht said, “My generation, which is the tail end of baby boomers, we’re coming. We’re changing our addresses and we’re coming to low-tax states.”

In the U.S., the vast majority of states levy income taxes. For those earning at the top level, the state taxes can be as high as 8.82 percent in New York; 8.97 percent in New Jersey; 6.99 percent in Connecticut; and 4.95 percent in Illinois. California has the highest state income tax in the nation, topping out at 13.3 percent for those earning more than $1 million.

The Tax Cuts and Jobs Act, passed in December 2017, limited the ability of taxpayers to deduct state and local taxes (SALT) from their federal taxable income in 2018. That has dealt a significant blow, experts said.

Changing state residencies to avoid these taxes is not an easy task. You must provide proof that you are not in your former home state for more than 180 days a year. And to establish residency in Florida, you must secure a driver’s license and follow other legal requirements. Florida also has property taxes of about 2 percent of the assessed value, which is a lower rate than that of about half of the states in the country.

It’s “really a no-brainer,” said Camille Douglas, senior managing director at LeFrak, the co-developer of 1 Hotel & Homes South Beach and the future North Miami mixed-use project SoLe Mia. “If you already think it’s nice to have a place in Miami, you’re now hugely motivated to pull the trigger. And it is almost free to become a Florida resident because your tax savings will support it.”

For Eloy Carmenate of Douglas Elliman, the volume of out-of-state residents earning tens and hundreds of millions of dollars who are looking at Miami properties is unprecedented. “I’ve never seen this super wealth come into town like this year,” he said. They’re looking at both condos and houses, Carmenate said, often from Miami Beach’s North Bay Road to the Sunset and Venetian islands.

“They’re pretty down to earth and unassuming,” he said. “They want to be able to walk down the street without bodyguards, go to restaurants.”

According to April figures from the Miami Association of Realtors, people from New York City ranked first among all cities searching for properties on MiamiRealtors.com. California ranked as the top state.

Developer Jules Trump of the Trump Group (no relation to the president) has watched wealthy families come down from the Northeast to vacation at his Acqualina Resort & Spa in Sunny Isles and become buyers at his Mansions at Acqualina and Estates at Acqualina intending to stay.

“After a few days at the hotel, the kids start pressuring, and the wife starts pressuring, and from a little thought in the back of their heads, it becomes a thought that ‘I’ve got to be crazy not to do it,’” said Trump. “They see that the living here is a much nicer lifestyle than what they could ever have in the Northeast.”

Real estate insiders say that while a handful of other states — including Alaska, Nevada, South Dakota, Texas, Washington and Wyoming — do not currently have an income tax, Florida is often viewed as the most desirable residence.

Reaching the out-of-staters

Some brokerages are shifting their strategies to reach buyers from high-tax states. Cervera Real Estate, which has a partnership with Stribling & Associates, held a seminar in New York to educate agents on how to purchase real estate and establish residency in Florida, said Alexandra Goeseke, Cervera’s director of general real estate. Cervera, which in the past typically received several referrals a month from Stribling, is now seeing many more referrals out of New York, she said.   

Douglas Elliman is taking advantage of the presence it has in New York, New Jersey, Connecticut and California, said Jay Parker, CEO of Douglas Elliman’s Florida brokerage. “We’re at a point where the Trump tax plan has paid into our strategy perfectly, because we have agents in those markets that are already comfortable on referral business, and have a client pool that is now motivated and forming inquiries about that transfer [of residency].”

Agents like Elliman’s Carmenate say they are traveling to the Hamptons and New York City repeatedly to market properties and make presentations to prospective buyers.

One Sotheby’s International Realty is also working with its affiliates in markets such as New York, New Jersey, Connecticut and California, according to the firm’s president, Daniel de la Vega. Over the summer, its agents will host events in the Hamptons. “Our strategies include traveling to these markets and hosting events where both brokers and clients alike can learn more about South Florida real estate,” de la Vega said.

Brown Harris Stevens is using its internal referral network and sending agents from Florida to New York to give presentations to agents, said BHS Miami President Phil Gutman. Social media is also being targeted to the Northeast, highlighting property listings and the South Florida lifestyle. It’s helping drive viewers to the brokerage’s website, where traffic has spiked about 25 percent from Northeast buyers, he said.

And Beth Butler, general manager of Compass Florida, said agents in South Florida “are relying on agents in other parts of the country to work their databases and send people our way, and that has been working effectively.” In the $3 to $5 million range, families are gravitating to secondary markets like Naples and Jupiter, she added.

For the Keyes Company, CEO Michael Pappas said sales have skyrocketed in the million-dollar-and-up sector of the market — up 35 percent in the first quarter, year-over-year. “These are sophisticated buyers. Many times, [a purchase] is the beginning of their move,” he said.

Keyes’ commercial brokerage is also hearing from a number of financial firms that want to relocate to Palm Beach County or open branches in the state to escape onerous taxes.

Financial firms are mostly looking at Boca Raton and West Palm Beach, said David Joseph, director of Keyes’ commercial division. Biltmore Capital Advisors, an investment adviser based in Princeton, New Jersey, opened an office in Boca Raton. The firm purchased three office condos in February. Atlantic Street Capital Management, a Stamford, Connecticut-based private equity firm, leased nearly 4,000 square feet at 515 North Flagler Drive in West Palm Beach in April. Parker of Douglas Elliman attributed the increase in high-end residential sales to tax reform, but he said they are also being driven by the “strong maturation of our market.”

“A lot of people are able to make the move, but now we have a product and a market that can substantiate their tastes,” Parker said.

Taxes aren’t the only thing drawing out-of-staters to South Florida, according to de la Vega of One Sotheby’s. Sellers are slashing their prices, especially on the high end of the market, where inventory is excessive. “As you go up in price point, days on the market are increasing and months of inventory are increasing pretty significantly,” de la Vega said. “Everything is price-sensitive and everything becomes a comparable.”

In May, AQR Capital Management co-founder Cliff Asness paid $26 million for a penthouse at 321 Ocean, marking the most expensive condo sale of the year. But the five-bedroom unit actually sold at a 51 percent discount off the $53 million asking price in 2015.

And about a month earlier, Asness’ business partner John Liew picked up a unit at the nearby Apogee in Miami Beach for $13.5 million, $1 million off the ask. Both Liew and Asness are billionaires who live in Greenwich, Connecticut.

Common concessions

Incentives are also a factor for sales. On the new construction side, developers are offering buyers sweeteners to close deals.

For projects that are nearly or just completed, developers are including the finishing touches for buyers — offering to throw in flooring and wall treatments that wouldn’t normally come with a new unit, said Edgardo Defortuna, president and CEO of Fortune International Realty.

Of the six units remaining at Fortune’s Jade Signature, a luxury condo tower in Sunny Isles Beach, Defortuna said he is “finishing” three units. At other projects, he’s seen developers offer the same for units on the less popular configurations for a limited period of time.

That means the developer is eating the cost, which typically ranges from $100 to $150 a foot to “finish a unit well.” The Estates at Acqualina and Turnberry Ocean Club are among those delivering units finished.

For buildings that aren’t as close to opening, developers are still reducing deposit requirements and offering discounts on a per-square-foot basis “if the price is right,” Defortuna said.

While Elliman’s Parker said the firm isn’t “engaged in any sort of incentive-based draws,” some projects Elliman is marketing are now offering furniture packages to buyers for an extra fee.

As the flow of out-of-staters continues, certainly one thing is changing for brokers, according Danny Hertzberg of Coldwell Banker’s the Jills: “We’re all becoming a bit of tax experts.”

from The Real Deal Miami https://therealdeal.com/miami/issues_articles/tax-heaven/#new_tab via IFTTT

[walterfrodriguez]

Tax h(e)aven: SoFla brokerages are targeting out-of-state buyers looking to escape new, larger tax burdens

(Illustration by Neil Webb)

Ultra-wealthy out-of-state buyers are flocking en masse to South Florida, scooping up multimillion-dollar homes and condos with plans to establish residency in order to avoid shelling out money to the government as a result of last year’s tax reform, brokers and developers told The Real Deal. The influx has local brokerages doing everything they can to capitalize on the  trend, using their partnerships with far-flung firms to grow their client rosters ahead of the competition.

The out-of-staters are largely top-earning hedge funders, real estate bigwigs, big-time entrepreneurs and CEOs from states such as New York, New Jersey, Connecticut, California and Illinois — places with state income taxes as high as 13.3 percent, and even city taxes in the case of New York City. Florida, on the other hand, has no state income tax.

“It’s one thing when the tax reform gets passed, and it’s another thing when you’re sitting with your accountant and you say, ‘Shit, I could just to move to Miami,”’ said Oren Alexander of Douglas Elliman.

Nelson Gonzalez of EWM Realty International calls the new buyers “tax refugees,” and said they account for 90 percent of those looking at his high-end listings. He has shown properties priced over $10 million or $15 million to at least 40 such ultra-wealthy buyers in the past few months, he said.

When Gonzalez showed a unit at luxury condo building Apogee South Beach to three different buyers who were all in the elevator together, Gonzalez asked, ‘“Why Miami, why are you moving from New York?’ One said ‘Taxes,’ and the others said, ‘That’s why I’m here,’ ‘That’s why I’m here.’”

“Hedge fund guys make $50 to $150 million a year, and these guys can come down here and buy a $10 to $20 million house, and with the tax savings, they get a free house in two to five years, and they get to live in paradise,”Gonzalez said.

Real estate insiders point to Barry Sternlicht, chairman and CEO of Starwood Capital Group as a leader of the trend. In 2015, the mogul bought a waterfront vacant lot on Miami Beach’s North Bay Road and built a mansion for his permanent residence, then later moved his company’s headquarters from Greenwich, Connecticut to Miami Beach. During a keynote session at a University of Miami real estate event in 2014, Sternlicht said, “My generation, which is the tail end of baby boomers, we’re coming. We’re changing our addresses and we’re coming to low-tax states.”

In the U.S., the vast majority of states levy income taxes. For those earning at the top level, the state taxes can be as high as 8.82 percent in New York; 8.97 percent in New Jersey; 6.99 percent in Connecticut; and 4.95 percent in Illinois. California has the highest state income tax in the nation, topping out at 13.3 percent for those earning more than $1 million.

The Tax Cuts and Jobs Act, passed in December 2017, limited the ability of taxpayers to deduct state and local taxes (SALT) from their federal taxable income in 2018. That has dealt a significant blow, experts said.

Changing state residencies to avoid these taxes is not an easy task. You must provide proof that you are not in your former home state for more than 180 days a year. And to establish residency in Florida, you must secure a driver’s license and follow other legal requirements. Florida also has property taxes of about 2 percent of the assessed value, which is a lower rate than that of about half of the states in the country.

It’s “really a no-brainer,” said Camille Douglas, senior managing director at LeFrak, the co-developer of 1 Hotel & Homes South Beach and the future North Miami mixed-use project SoLe Mia. “If you already think it’s nice to have a place in Miami, you’re now hugely motivated to pull the trigger. And it is almost free to become a Florida resident because your tax savings will support it.”

For Eloy Carmenate of Douglas Elliman, the volume of out-of-state residents earning tens and hundreds of millions of dollars who are looking at Miami properties is unprecedented. “I’ve never seen this super wealth come into town like this year,” he said. They’re looking at both condos and houses, Carmenate said, often from Miami Beach’s North Bay Road to the Sunset and Venetian islands.

“They’re pretty down to earth and unassuming,” he said. “They want to be able to walk down the street without bodyguards, go to restaurants.”

According to April figures from the Miami Association of Realtors, people from New York City ranked first among all cities searching for properties on MiamiRealtors.com. California ranked as the top state.

Developer Jules Trump of the Trump Group (no relation to the president) has watched wealthy families come down from the Northeast to vacation at his Acqualina Resort & Spa in Sunny Isles and become buyers at his Mansions at Acqualina and Estates at Acqualina intending to stay.

“After a few days at the hotel, the kids start pressuring, and the wife starts pressuring, and from a little thought in the back of their heads, it becomes a thought that ‘I’ve got to be crazy not to do it,’” said Trump. “They see that the living here is a much nicer lifestyle than what they could ever have in the Northeast.”

Real estate insiders say that while a handful of other states — including Alaska, Nevada, South Dakota, Texas, Washington and Wyoming — do not currently have an income tax, Florida is often viewed as the most desirable residence.

Reaching the out-of-staters

Some brokerages are shifting their strategies to reach buyers from high-tax states. Cervera Real Estate, which has a partnership with Stribling & Associates, held a seminar in New York to educate agents on how to purchase real estate and establish residency in Florida, said Alexandra Goeseke, Cervera’s director of general real estate. Cervera, which in the past typically received several referrals a month from Stribling, is now seeing many more referrals out of New York, she said.   

Douglas Elliman is taking advantage of the presence it has in New York, New Jersey, Connecticut and California, said Jay Parker, CEO of Douglas Elliman’s Florida brokerage. “We’re at a point where the Trump tax plan has paid into our strategy perfectly, because we have agents in those markets that are already comfortable on referral business, and have a client pool that is now motivated and forming inquiries about that transfer [of residency].”

Agents like Elliman’s Carmenate say they are traveling to the Hamptons and New York City repeatedly to market properties and make presentations to prospective buyers.

One Sotheby’s International Realty is also working with its affiliates in markets such as New York, New Jersey, Connecticut and California, according to the firm’s president, Daniel de la Vega. Over the summer, its agents will host events in the Hamptons. “Our strategies include traveling to these markets and hosting events where both brokers and clients alike can learn more about South Florida real estate,” de la Vega said.

Brown Harris Stevens is using its internal referral network and sending agents from Florida to New York to give presentations to agents, said BHS Miami President Phil Gutman. Social media is also being targeted to the Northeast, highlighting property listings and the South Florida lifestyle. It’s helping drive viewers to the brokerage’s website, where traffic has spiked about 25 percent from Northeast buyers, he said.

And Beth Butler, general manager of Compass Florida, said agents in South Florida “are relying on agents in other parts of the country to work their databases and send people our way, and that has been working effectively.” In the $3 to $5 million range, families are gravitating to secondary markets like Naples and Jupiter, she added.

For the Keyes Company, CEO Michael Pappas said sales have skyrocketed in the million-dollar-and-up sector of the market — up 35 percent in the first quarter, year-over-year. “These are sophisticated buyers. Many times, [a purchase] is the beginning of their move,” he said.

Keyes’ commercial brokerage is also hearing from a number of financial firms that want to relocate to Palm Beach County or open branches in the state to escape onerous taxes.

Financial firms are mostly looking at Boca Raton and West Palm Beach, said David Joseph, director of Keyes’ commercial division. Biltmore Capital Advisors, an investment adviser based in Princeton, New Jersey, opened an office in Boca Raton. The firm purchased three office condos in February. Atlantic Street Capital Management, a Stamford, Connecticut-based private equity firm, leased nearly 4,000 square feet at 515 North Flagler Drive in West Palm Beach in April. Parker of Douglas Elliman attributed the increase in high-end residential sales to tax reform, but he said they are also being driven by the “strong maturation of our market.”

“A lot of people are able to make the move, but now we have a product and a market that can substantiate their tastes,” Parker said.

Taxes aren’t the only thing drawing out-of-staters to South Florida, according to de la Vega of One Sotheby’s. Sellers are slashing their prices, especially on the high end of the market, where inventory is excessive. “As you go up in price point, days on the market are increasing and months of inventory are increasing pretty significantly,” de la Vega said. “Everything is price-sensitive and everything becomes a comparable.”

In May, AQR Capital Management co-founder Cliff Asness paid $26 million for a penthouse at 321 Ocean, marking the most expensive condo sale of the year. But the five-bedroom unit actually sold at a 51 percent discount off the $53 million asking price in 2015.

And about a month earlier, Asness’ business partner John Liew picked up a unit at the nearby Apogee in Miami Beach for $13.5 million, $1 million off the ask. Both Liew and Asness are billionaires who live in Greenwich, Connecticut.

Common concessions

Incentives are also a factor for sales. On the new construction side, developers are offering buyers sweeteners to close deals.

For projects that are nearly or just completed, developers are including the finishing touches for buyers — offering to throw in flooring and wall treatments that wouldn’t normally come with a new unit, said Edgardo Defortuna, president and CEO of Fortune International Realty.

Of the six units remaining at Fortune’s Jade Signature, a luxury condo tower in Sunny Isles Beach, Defortuna said he is “finishing” three units. At other projects, he’s seen developers offer the same for units on the less popular configurations for a limited period of time.

That means the developer is eating the cost, which typically ranges from $100 to $150 a foot to “finish a unit well.” The Estates at Acqualina and Turnberry Ocean Club are among those delivering units finished.

For buildings that aren’t as close to opening, developers are still reducing deposit requirements and offering discounts on a per-square-foot basis “if the price is right,” Defortuna said.

While Elliman’s Parker said the firm isn’t “engaged in any sort of incentive-based draws,” some projects Elliman is marketing are now offering furniture packages to buyers for an extra fee.

As the flow of out-of-staters continues, certainly one thing is changing for brokers, according Danny Hertzberg of Coldwell Banker’s the Jills: “We’re all becoming a bit of tax experts.”

from The Real Deal Miami & Real Estate News News | & Curbed Miami - All https://therealdeal.com/miami/issues_articles/tax-heaven/#new_tab via IFTTT

[nicolesrollins]

Tax h(e)aven: SoFla brokerages are targeting out-of-state buyers looking to escape new, larger tax burdens

(Illustration by Neil Webb)

Ultra-wealthy out-of-state buyers are flocking en masse to South Florida, scooping up multimillion-dollar homes and condos with plans to establish residency in order to avoid shelling out money to the government as a result of last year’s tax reform, brokers and developers told The Real Deal. The influx has local brokerages doing everything they can to capitalize on the  trend, using their partnerships with far-flung firms to grow their client rosters ahead of the competition.

The out-of-staters are largely top-earning hedge funders, real estate bigwigs, big-time entrepreneurs and CEOs from states such as New York, New Jersey, Connecticut, California and Illinois — places with state income taxes as high as 13.3 percent, and even city taxes in the case of New York City. Florida, on the other hand, has no state income tax.

“It’s one thing when the tax reform gets passed, and it’s another thing when you’re sitting with your accountant and you say, ‘Shit, I could just to move to Miami,”’ said Oren Alexander of Douglas Elliman.

Nelson Gonzalez of EWM Realty International calls the new buyers “tax refugees,” and said they account for 90 percent of those looking at his high-end listings. He has shown properties priced over $10 million or $15 million to at least 40 such ultra-wealthy buyers in the past few months, he said.

When Gonzalez showed a unit at luxury condo building Apogee South Beach to three different buyers who were all in the elevator together, Gonzalez asked, ‘“Why Miami, why are you moving from New York?’ One said ‘Taxes,’ and the others said, ‘That’s why I’m here,’ ‘That’s why I’m here.’”

“Hedge fund guys make $50 to $150 million a year, and these guys can come down here and buy a $10 to $20 million house, and with the tax savings, they get a free house in two to five years, and they get to live in paradise,”Gonzalez said.

Real estate insiders point to Barry Sternlicht, chairman and CEO of Starwood Capital Group as a leader of the trend. In 2015, the mogul bought a waterfront vacant lot on Miami Beach’s North Bay Road and built a mansion for his permanent residence, then later moved his company’s headquarters from Greenwich, Connecticut to Miami Beach. During a keynote session at a University of Miami real estate event in 2014, Sternlicht said, “My generation, which is the tail end of baby boomers, we’re coming. We’re changing our addresses and we’re coming to low-tax states.”

In the U.S., the vast majority of states levy income taxes. For those earning at the top level, the state taxes can be as high as 8.82 percent in New York; 8.97 percent in New Jersey; 6.99 percent in Connecticut; and 4.95 percent in Illinois. California has the highest state income tax in the nation, topping out at 13.3 percent for those earning more than $1 million.

The Tax Cuts and Jobs Act, passed in December 2017, limited the ability of taxpayers to deduct state and local taxes (SALT) from their federal taxable income in 2018. That has dealt a significant blow, experts said.

Changing state residencies to avoid these taxes is not an easy task. You must provide proof that you are not in your former home state for more than 180 days a year. And to establish residency in Florida, you must secure a driver’s license and follow other legal requirements. Florida also has property taxes of about 2 percent of the assessed value, which is a lower rate than that of about half of the states in the country.

It’s “really a no-brainer,” said Camille Douglas, senior managing director at LeFrak, the co-developer of 1 Hotel & Homes South Beach and the future North Miami mixed-use project SoLe Mia. “If you already think it’s nice to have a place in Miami, you’re now hugely motivated to pull the trigger. And it is almost free to become a Florida resident because your tax savings will support it.”

For Eloy Carmenate of Douglas Elliman, the volume of out-of-state residents earning tens and hundreds of millions of dollars who are looking at Miami properties is unprecedented. “I’ve never seen this super wealth come into town like this year,” he said. They’re looking at both condos and houses, Carmenate said, often from Miami Beach’s North Bay Road to the Sunset and Venetian islands.

“They’re pretty down to earth and unassuming,” he said. “They want to be able to walk down the street without bodyguards, go to restaurants.”

According to April figures from the Miami Association of Realtors, people from New York City ranked first among all cities searching for properties on MiamiRealtors.com. California ranked as the top state.

Developer Jules Trump of the Trump Group (no relation to the president) has watched wealthy families come down from the Northeast to vacation at his Acqualina Resort & Spa in Sunny Isles and become buyers at his Mansions at Acqualina and Estates at Acqualina intending to stay.

“After a few days at the hotel, the kids start pressuring, and the wife starts pressuring, and from a little thought in the back of their heads, it becomes a thought that ‘I’ve got to be crazy not to do it,’” said Trump. “They see that the living here is a much nicer lifestyle than what they could ever have in the Northeast.”

Real estate insiders say that while a handful of other states — including Alaska, Nevada, South Dakota, Texas, Washington and Wyoming — do not currently have an income tax, Florida is often viewed as the most desirable residence.

Reaching the out-of-staters

Some brokerages are shifting their strategies to reach buyers from high-tax states. Cervera Real Estate, which has a partnership with Stribling & Associates, held a seminar in New York to educate agents on how to purchase real estate and establish residency in Florida, said Alexandra Goeseke, Cervera’s director of general real estate. Cervera, which in the past typically received several referrals a month from Stribling, is now seeing many more referrals out of New York, she said.   

Douglas Elliman is taking advantage of the presence it has in New York, New Jersey, Connecticut and California, said Jay Parker, CEO of Douglas Elliman’s Florida brokerage. “We’re at a point where the Trump tax plan has paid into our strategy perfectly, because we have agents in those markets that are already comfortable on referral business, and have a client pool that is now motivated and forming inquiries about that transfer [of residency].”

Agents like Elliman’s Carmenate say they are traveling to the Hamptons and New York City repeatedly to market properties and make presentations to prospective buyers.

One Sotheby’s International Realty is also working with its affiliates in markets such as New York, New Jersey, Connecticut and California, according to the firm’s president, Daniel de la Vega. Over the summer, its agents will host events in the Hamptons. “Our strategies include traveling to these markets and hosting events where both brokers and clients alike can learn more about South Florida real estate,” de la Vega said.

Brown Harris Stevens is using its internal referral network and sending agents from Florida to New York to give presentations to agents, said BHS Miami President Phil Gutman. Social media is also being targeted to the Northeast, highlighting property listings and the South Florida lifestyle. It’s helping drive viewers to the brokerage’s website, where traffic has spiked about 25 percent from Northeast buyers, he said.

And Beth Butler, general manager of Compass Florida, said agents in South Florida “are relying on agents in other parts of the country to work their databases and send people our way, and that has been working effectively.” In the $3 to $5 million range, families are gravitating to secondary markets like Naples and Jupiter, she added.

For the Keyes Company, CEO Michael Pappas said sales have skyrocketed in the million-dollar-and-up sector of the market — up 35 percent in the first quarter, year-over-year. “These are sophisticated buyers. Many times, [a purchase] is the beginning of their move,” he said.

Keyes’ commercial brokerage is also hearing from a number of financial firms that want to relocate to Palm Beach County or open branches in the state to escape onerous taxes.

Financial firms are mostly looking at Boca Raton and West Palm Beach, said David Joseph, director of Keyes’ commercial division. Biltmore Capital Advisors, an investment adviser based in Princeton, New Jersey, opened an office in Boca Raton. The firm purchased three office condos in February. Atlantic Street Capital Management, a Stamford, Connecticut-based private equity firm, leased nearly 4,000 square feet at 515 North Flagler Drive in West Palm Beach in April. Parker of Douglas Elliman attributed the increase in high-end residential sales to tax reform, but he said they are also being driven by the “strong maturation of our market.”

“A lot of people are able to make the move, but now we have a product and a market that can substantiate their tastes,” Parker said.

Taxes aren’t the only thing drawing out-of-staters to South Florida, according to de la Vega of One Sotheby’s. Sellers are slashing their prices, especially on the high end of the market, where inventory is excessive. “As you go up in price point, days on the market are increasing and months of inventory are increasing pretty significantly,” de la Vega said. “Everything is price-sensitive and everything becomes a comparable.”

In May, AQR Capital Management co-founder Cliff Asness paid $26 million for a penthouse at 321 Ocean, marking the most expensive condo sale of the year. But the five-bedroom unit actually sold at a 51 percent discount off the $53 million asking price in 2015.

And about a month earlier, Asness’ business partner John Liew picked up a unit at the nearby Apogee in Miami Beach for $13.5 million, $1 million off the ask. Both Liew and Asness are billionaires who live in Greenwich, Connecticut.

Common concessions

Incentives are also a factor for sales. On the new construction side, developers are offering buyers sweeteners to close deals.

For projects that are nearly or just completed, developers are including the finishing touches for buyers — offering to throw in flooring and wall treatments that wouldn’t normally come with a new unit, said Edgardo Defortuna, president and CEO of Fortune International Realty.

Of the six units remaining at Fortune’s Jade Signature, a luxury condo tower in Sunny Isles Beach, Defortuna said he is “finishing” three units. At other projects, he’s seen developers offer the same for units on the less popular configurations for a limited period of time.

That means the developer is eating the cost, which typically ranges from $100 to $150 a foot to “finish a unit well.” The Estates at Acqualina and Turnberry Ocean Club are among those delivering units finished.

For buildings that aren’t as close to opening, developers are still reducing deposit requirements and offering discounts on a per-square-foot basis “if the price is right,” Defortuna said.

While Elliman’s Parker said the firm isn’t “engaged in any sort of incentive-based draws,” some projects Elliman is marketing are now offering furniture packages to buyers for an extra fee.

As the flow of out-of-staters continues, certainly one thing is changing for brokers, according Danny Hertzberg of Coldwell Banker’s the Jills: “We’re all becoming a bit of tax experts.”

from The Real Deal Miami & Real Estate News News | & Curbed Miami - All https://therealdeal.com/miami/issues_articles/tax-heaven/#new_tab via IFTTT

[michaeljames1221]

How Investors Can Protect Themselves

Financial advisers help manage more than $30 trillion of investible assets and provide services to fifty-six percent of U.S. households. That’s why at Ascent Law, we want to help you protect what is yours, not just while you are alive, but after you are gone, to help you leave a legacy.

Yet the Securities and Exchange Commission reports that most Americans don’t conduct a broker background check, while those who do rely on search engine results.

Failure to perform a comprehensive background check can be costly. The median settlement paid to consumers is $40,000—nearly 60% of the average household’s net worth. One-quarter of settlements exceed $120,000. Over a recent two-year period, financial industry misconduct settlements totaled $974 million.

The FINRA Broker Check database (the same database used by the study authors) is a free, easy way for customers to run an advisor background check. Checks can be performed using an adviser’s name, or their unique CRD number.

Should You Trust Your Financial Adviser?

Widespread financial adviser misconduct costs investors hundreds of millions of dollars per year, new research shows.

The first ever large-scale study of misconduct by financials advisers and financial advisory firms finds that bad behavior tends to cluster around repeat offenders at an individual and an organizational level, with many advisers who get fired for misconduct landing at large firms with high misconduct rates. This concentration, the authors suggest, is not the result of random mistakes, but of firms targeting vulnerable customers.

KEY FINDINGS FROM FINRA DATABASE ANALYSIS

Researchers from the University of Minnesota, the University of Chicago, and Stanford collaborated on an economy-wide analysis of financial adviser misconduct in the United States in order to document the extent of unscrupulous behavior in an industry that many Americans rely upon, but few trust.

Trusting one’s financial advisor is crucial, they argue, because stockbrokers are experts relative to investors, making it difficult for customers to gauge the level of services and creating the potential for abuse. Financial advisers consistently rank among the least trustworthy professionals, surveys reveal.

Mistrust of brokers seems to be justified, according to “The Market for Financial Adviser Misconduct,” which found that misconduct is an industry-wide problem.

“It’s everywhere, not just small firms. It is pervasive,” said study co-author Amit Seru.

But while misconduct is widespread, it is not spread equally across the industry. Several of the largest financial advisory firms displayed a pattern of misconduct against financially unknowledgeable customers. “Such firms are more tolerant of misconduct, hiring advisers with unscrupulous records,” the researchers write.

Conversely, firms with a low tolerance for misconduct use their clean records to attract knowledgeable customers.

Other key findings from the study include:

About 7% of financial advisers have records of misconduct.

At some large brokerages, more than 15% of advisers have misconduct records.

Misconduct is concentrated in financial firms with retail customers and in counties with low education, elderly populations, and high incomes (including areas like Palm Beach, Florida, where 18% of advisers had misconduct records).

Prior offenders are five times more likely than the average adviser to engage in misconduct.

Roughly 50% of advisers are fired as a result of misconduct; of these, 44% are reemployed in finance within a year.

Nearly 3 in 4 financial advisers disciplined for misconduct are still active after a year.

Firms that hire past offenders tend to have higher rates of misconduct.

Oppenheimer & Co., First Allied Securities, Wells Fargo, UBS Financial Services, and Cetera Advisors are among the financial firms consistently engaging in misconduct.

Brokerages with the lowest misconduct rates include Morgan Stanley, Goldman Sachs, BNP Paribas, SunTrust Robinson Humphrey, and BlackRock Investments.

To count as misconduct, disputes must have settled (not be dismissed or pending). Misconduct includes activities such as recommending unsuitable investment products, misrepresentation, omission of key facts, recommending risky investments, unauthorized activity, negligence, fraud, and breach of fiduciary duty.

True financial misconduct levels are likely higher than the study estimates, according to the researchers.

Free Initial Consultation with a Securities Lawyer

When you need legal help, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Ascent Law LLC8833 S. Redwood Road, Suite CWest Jordan, Utah 84088 United StatesTelephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews

Recent Posts

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How to get a Lawyer when a Detective is Trying to Contact You

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Is filing bankruptcy better than just not paying your creditors back?

Reclaim your financial freedom

from Michael Anderson http://www.ascentlawfirm.com/how-investors-can-protect-themselves/

from Criminal Defense Lawyer West Jordan Utah https://criminaldefenselawyerwestjordanutah.wordpress.com/2018/03/04/how-investors-can-protect-themselves/

[shirleydazzle]

How Investors Can Protect Themselves

Financial advisers help manage more than $30 trillion of investible assets and provide services to fifty-six percent of U.S. households. That’s why at Ascent Law, we want to help you protect what is yours, not just while you are alive, but after you are gone, to help you leave a legacy.

Yet the Securities and Exchange Commission reports that most Americans don’t conduct a broker background check, while those who do rely on search engine results.

Failure to perform a comprehensive background check can be costly. The median settlement paid to consumers is $40,000—nearly 60% of the average household’s net worth. One-quarter of settlements exceed $120,000. Over a recent two-year period, financial industry misconduct settlements totaled $974 million.

The FINRA Broker Check database (the same database used by the study authors) is a free, easy way for customers to run an advisor background check. Checks can be performed using an adviser’s name, or their unique CRD number.

Should You Trust Your Financial Adviser?

Widespread financial adviser misconduct costs investors hundreds of millions of dollars per year, new research shows.

The first ever large-scale study of misconduct by financials advisers and financial advisory firms finds that bad behavior tends to cluster around repeat offenders at an individual and an organizational level, with many advisers who get fired for misconduct landing at large firms with high misconduct rates. This concentration, the authors suggest, is not the result of random mistakes, but of firms targeting vulnerable customers.

KEY FINDINGS FROM FINRA DATABASE ANALYSIS

Researchers from the University of Minnesota, the University of Chicago, and Stanford collaborated on an economy-wide analysis of financial adviser misconduct in the United States in order to document the extent of unscrupulous behavior in an industry that many Americans rely upon, but few trust.

Trusting one’s financial advisor is crucial, they argue, because stockbrokers are experts relative to investors, making it difficult for customers to gauge the level of services and creating the potential for abuse. Financial advisers consistently rank among the least trustworthy professionals, surveys reveal.

Mistrust of brokers seems to be justified, according to “The Market for Financial Adviser Misconduct,” which found that misconduct is an industry-wide problem.

“It’s everywhere, not just small firms. It is pervasive,” said study co-author Amit Seru.

But while misconduct is widespread, it is not spread equally across the industry. Several of the largest financial advisory firms displayed a pattern of misconduct against financially unknowledgeable customers. “Such firms are more tolerant of misconduct, hiring advisers with unscrupulous records,” the researchers write.

Conversely, firms with a low tolerance for misconduct use their clean records to attract knowledgeable customers.

Other key findings from the study include:

About 7% of financial advisers have records of misconduct.

At some large brokerages, more than 15% of advisers have misconduct records.

Misconduct is concentrated in financial firms with retail customers and in counties with low education, elderly populations, and high incomes (including areas like Palm Beach, Florida, where 18% of advisers had misconduct records).

Prior offenders are five times more likely than the average adviser to engage in misconduct.

Roughly 50% of advisers are fired as a result of misconduct; of these, 44% are reemployed in finance within a year.

Nearly 3 in 4 financial advisers disciplined for misconduct are still active after a year.

Firms that hire past offenders tend to have higher rates of misconduct.

Oppenheimer & Co., First Allied Securities, Wells Fargo, UBS Financial Services, and Cetera Advisors are among the financial firms consistently engaging in misconduct.

Brokerages with the lowest misconduct rates include Morgan Stanley, Goldman Sachs, BNP Paribas, SunTrust Robinson Humphrey, and BlackRock Investments.

To count as misconduct, disputes must have settled (not be dismissed or pending). Misconduct includes activities such as recommending unsuitable investment products, misrepresentation, omission of key facts, recommending risky investments, unauthorized activity, negligence, fraud, and breach of fiduciary duty.

True financial misconduct levels are likely higher than the study estimates, according to the researchers.

Free Initial Consultation with a Securities Lawyer

When you need legal help, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Ascent Law LLC8833 S. Redwood Road, Suite CWest Jordan, Utah 84088 United StatesTelephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews

Recent Posts

Technology Lawyer

Business Divorce

How to get a Lawyer when a Detective is Trying to Contact You

Defamation Lawyer

Is filing bankruptcy better than just not paying your creditors back?

Reclaim your financial freedom

Source: http://www.ascentlawfirm.com/how-investors-can-protect-themselves/

[asafeatherwould]

How Investors Can Protect Themselves

Financial advisers help manage more than $30 trillion of investible assets and provide services to fifty-six percent of U.S. households. That’s why at Ascent Law, we want to help you protect what is yours, not just while you are alive, but after you are gone, to help you leave a legacy.

Yet the Securities and Exchange Commission reports that most Americans don’t conduct a broker background check, while those who do rely on search engine results.

Failure to perform a comprehensive background check can be costly. The median settlement paid to consumers is $40,000—nearly 60% of the average household’s net worth. One-quarter of settlements exceed $120,000. Over a recent two-year period, financial industry misconduct settlements totaled $974 million.

The FINRA Broker Check database (the same database used by the study authors) is a free, easy way for customers to run an advisor background check. Checks can be performed using an adviser’s name, or their unique CRD number.

Should You Trust Your Financial Adviser?

Widespread financial adviser misconduct costs investors hundreds of millions of dollars per year, new research shows.

The first ever large-scale study of misconduct by financials advisers and financial advisory firms finds that bad behavior tends to cluster around repeat offenders at an individual and an organizational level, with many advisers who get fired for misconduct landing at large firms with high misconduct rates. This concentration, the authors suggest, is not the result of random mistakes, but of firms targeting vulnerable customers.

KEY FINDINGS FROM FINRA DATABASE ANALYSIS

Researchers from the University of Minnesota, the University of Chicago, and Stanford collaborated on an economy-wide analysis of financial adviser misconduct in the United States in order to document the extent of unscrupulous behavior in an industry that many Americans rely upon, but few trust.

Trusting one’s financial advisor is crucial, they argue, because stockbrokers are experts relative to investors, making it difficult for customers to gauge the level of services and creating the potential for abuse. Financial advisers consistently rank among the least trustworthy professionals, surveys reveal.

Mistrust of brokers seems to be justified, according to “The Market for Financial Adviser Misconduct,” which found that misconduct is an industry-wide problem.

“It’s everywhere, not just small firms. It is pervasive,” said study co-author Amit Seru.

But while misconduct is widespread, it is not spread equally across the industry. Several of the largest financial advisory firms displayed a pattern of misconduct against financially unknowledgeable customers. “Such firms are more tolerant of misconduct, hiring advisers with unscrupulous records,” the researchers write.

Conversely, firms with a low tolerance for misconduct use their clean records to attract knowledgeable customers.

Other key findings from the study include:

About 7% of financial advisers have records of misconduct.

At some large brokerages, more than 15% of advisers have misconduct records.

Misconduct is concentrated in financial firms with retail customers and in counties with low education, elderly populations, and high incomes (including areas like Palm Beach, Florida, where 18% of advisers had misconduct records).

Prior offenders are five times more likely than the average adviser to engage in misconduct.

Roughly 50% of advisers are fired as a result of misconduct; of these, 44% are reemployed in finance within a year.

Nearly 3 in 4 financial advisers disciplined for misconduct are still active after a year.

Firms that hire past offenders tend to have higher rates of misconduct.

Oppenheimer & Co., First Allied Securities, Wells Fargo, UBS Financial Services, and Cetera Advisors are among the financial firms consistently engaging in misconduct.

Brokerages with the lowest misconduct rates include Morgan Stanley, Goldman Sachs, BNP Paribas, SunTrust Robinson Humphrey, and BlackRock Investments.

To count as misconduct, disputes must have settled (not be dismissed or pending). Misconduct includes activities such as recommending unsuitable investment products, misrepresentation, omission of key facts, recommending risky investments, unauthorized activity, negligence, fraud, and breach of fiduciary duty.

True financial misconduct levels are likely higher than the study estimates, according to the researchers.

Free Initial Consultation with a Securities Lawyer

When you need legal help, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Ascent Law LLC8833 S. Redwood Road, Suite CWest Jordan, Utah 84088 United StatesTelephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews

Recent Posts

Technology Lawyer

Business Divorce

How to get a Lawyer when a Detective is Trying to Contact You

Defamation Lawyer

Is filing bankruptcy better than just not paying your creditors back?

Reclaim your financial freedom

Source: http://www.ascentlawfirm.com/how-investors-can-protect-themselves/

[anachef]

Jon Smith Subs To Host Nationwide ‘Fundraising Month’ in January

New Initiative Helps Local Organizations Raise Money

West Palm Beach, FL  (RestaurantNews.com)  Jon Smith Subs® is in the business of satisfying everyone who loves great tasting subs at affordable prices. Jon Smith Subs is also in the business of helping the community by hosting fundraising events in an effort to help raise money for participating organizations, associations, or clubs.

January is officially “Jon Smith Subs Fundraising Month,” and all shops will be donating a portion of its sales to any organization that elects to have its fundraiser at its local Jon Smith Subs shop.

“Fundraisers are a great way for us to give back to local communities,” said Brand President, Jim Butler. “Any organization interested in holding a fundraiser can contact their local shop, receive 20 percent of pre-tax sales on eligible orders, and even receive flyers to spread the word. It’s easy to take part in and everyone benefits.”

Jon Smith Subs, a member of the United Franchise Group, meets the fast-growing, fast-casual food concept with an array of appealing dishes. Known for its marinated sirloin steak subs, other great options include marinated grilled chicken subs, specialties from the grill, giant deli subs, salads, numerous side options and a kids’ menu that includes a combo meal with a choice of turkey, ham, meatball, cheeseburger or grilled cheese.

2018 was a year of impressive growth for the brand, as Jon Smith Subs opened numerous shops domestically. This year, the brand has lofty plans with more than 35 stores already in various stages of development.

For more information about the program or to get involved, visit jonsmithsubs.com/fundraising.

About Jon Smith Subs

The first Jon Smith sub shop opened in 1988 in Palm Beach County, FL with a commitment to serving the absolute highest-quality overstuffed, marinated grilled sirloin steak and real chicken breast subs. Jon Smith Subs has locations in South and Central Florida as well as Ohio, Nevada, Texas, and California—soon in Australia. Jon Smith Subs specializes in freshness, preparing all the ingredients for every sub on-site daily. Its sirloin steak and chicken breast subs are trimmed, sliced, seasoned, marinated, and grilled to order, various catering options are available, and its Plenti-Full Sub platters come as individually wrapped four-inch and six-inch subs. 

About United Franchise Group

Led by CEO Ray Titus, United Franchise Group is home to a variety of internationally recognized brands including Signarama, Fully Promoted, Experimac, Jon Smith Subs, Venture X, SuperGreen Solutions, Transworld Business Advisors, Accurate Franchising, and The Great Greek Mediterranean Grill. With more than three decades in the franchising industry, and 1,600 franchisees in 80 countries throughout the world, United Franchise Group offers unprecedented leadership and solid business opportunities for entrepreneurs.

Media Contact: Barbara Rodriguez 305-631-2283 x 1009 Barbara@inklinkmarketing.com

source http://www.restaurantnews.com/jon-smith-subs-to-host-nationwide-fundraising-month-in-january-010219/

[juditmiltz]

Tax h(e)aven: SoFla brokerages are targeting out-of-state buyers looking to escape new, larger tax burdens

(Illustration by Neil Webb)

Ultra-wealthy out-of-state buyers are flocking en masse to South Florida, scooping up multimillion-dollar homes and condos with plans to establish residency in order to avoid shelling out money to the government as a result of last year’s tax reform, brokers and developers told The Real Deal. The influx has local brokerages doing everything they can to capitalize on the  trend, using their partnerships with far-flung firms to grow their client rosters ahead of the competition.

The out-of-staters are largely top-earning hedge funders, real estate bigwigs, big-time entrepreneurs and CEOs from states such as New York, New Jersey, Connecticut, California and Illinois — places with state income taxes as high as 13.3 percent, and even city taxes in the case of New York City. Florida, on the other hand, has no state income tax.

“It’s one thing when the tax reform gets passed, and it’s another thing when you’re sitting with your accountant and you say, ‘Shit, I could just to move to Miami,”’ said Oren Alexander of Douglas Elliman.

Nelson Gonzalez of EWM Realty International calls the new buyers “tax refugees,” and said they account for 90 percent of those looking at his high-end listings. He has shown properties priced over $10 million or $15 million to at least 40 such ultra-wealthy buyers in the past few months, he said.

When Gonzalez showed a unit at luxury condo building Apogee South Beach to three different buyers who were all in the elevator together, Gonzalez asked, ‘“Why Miami, why are you moving from New York?’ One said ‘Taxes,’ and the others said, ‘That’s why I’m here,’ ‘That’s why I’m here.’”

“Hedge fund guys make $50 to $150 million a year, and these guys can come down here and buy a $10 to $20 million house, and with the tax savings, they get a free house in two to five years, and they get to live in paradise,”Gonzalez said.

Real estate insiders point to Barry Sternlicht, chairman and CEO of Starwood Capital Group as a leader of the trend. In 2015, the mogul bought a waterfront vacant lot on Miami Beach’s North Bay Road and built a mansion for his permanent residence, then later moved his company’s headquarters from Greenwich, Connecticut to Miami Beach. During a keynote session at a University of Miami real estate event in 2014, Sternlicht said, “My generation, which is the tail end of baby boomers, we’re coming. We’re changing our addresses and we’re coming to low-tax states.”

In the U.S., the vast majority of states levy income taxes. For those earning at the top level, the state taxes can be as high as 8.82 percent in New York; 8.97 percent in New Jersey; 6.99 percent in Connecticut; and 4.95 percent in Illinois. California has the highest state income tax in the nation, topping out at 13.3 percent for those earning more than $1 million.

The Tax Cuts and Jobs Act, passed in December 2017, limited the ability of taxpayers to deduct state and local taxes (SALT) from their federal taxable income in 2018. That has dealt a significant blow, experts said.

Changing state residencies to avoid these taxes is not an easy task. You must provide proof that you are not in your former home state for more than 180 days a year. And to establish residency in Florida, you must secure a driver’s license and follow other legal requirements. Florida also has property taxes of about 2 percent of the assessed value, which is a lower rate than that of about half of the states in the country.

It’s “really a no-brainer,” said Camille Douglas, senior managing director at LeFrak, the co-developer of 1 Hotel & Homes South Beach and the future North Miami mixed-use project SoLe Mia. “If you already think it’s nice to have a place in Miami, you’re now hugely motivated to pull the trigger. And it is almost free to become a Florida resident because your tax savings will support it.”

For Eloy Carmenate of Douglas Elliman, the volume of out-of-state residents earning tens and hundreds of millions of dollars who are looking at Miami properties is unprecedented. “I’ve never seen this super wealth come into town like this year,” he said. They’re looking at both condos and houses, Carmenate said, often from Miami Beach’s North Bay Road to the Sunset and Venetian islands.

“They’re pretty down to earth and unassuming,” he said. “They want to be able to walk down the street without bodyguards, go to restaurants.”

According to April figures from the Miami Association of Realtors, people from New York City ranked first among all cities searching for properties on MiamiRealtors.com. California ranked as the top state.

Developer Jules Trump of the Trump Group (no relation to the president) has watched wealthy families come down from the Northeast to vacation at his Acqualina Resort & Spa in Sunny Isles and become buyers at his Mansions at Acqualina and Estates at Acqualina intending to stay.

“After a few days at the hotel, the kids start pressuring, and the wife starts pressuring, and from a little thought in the back of their heads, it becomes a thought that ‘I’ve got to be crazy not to do it,’” said Trump. “They see that the living here is a much nicer lifestyle than what they could ever have in the Northeast.”

Real estate insiders say that while a handful of other states — including Alaska, Nevada, South Dakota, Texas, Washington and Wyoming — do not currently have an income tax, Florida is often viewed as the most desirable residence.

Reaching the out-of-staters

Some brokerages are shifting their strategies to reach buyers from high-tax states. Cervera Real Estate, which has a partnership with Stribling & Associates, held a seminar in New York to educate agents on how to purchase real estate and establish residency in Florida, said Alexandra Goeseke, Cervera’s director of general real estate. Cervera, which in the past typically received several referrals a month from Stribling, is now seeing many more referrals out of New York, she said.   

Douglas Elliman is taking advantage of the presence it has in New York, New Jersey, Connecticut and California, said Jay Parker, CEO of Douglas Elliman’s Florida brokerage. “We’re at a point where the Trump tax plan has paid into our strategy perfectly, because we have agents in those markets that are already comfortable on referral business, and have a client pool that is now motivated and forming inquiries about that transfer [of residency].”

Agents like Elliman’s Carmenate say they are traveling to the Hamptons and New York City repeatedly to market properties and make presentations to prospective buyers.

One Sotheby’s International Realty is also working with its affiliates in markets such as New York, New Jersey, Connecticut and California, according to the firm’s president, Daniel de la Vega. Over the summer, its agents will host events in the Hamptons. “Our strategies include traveling to these markets and hosting events where both brokers and clients alike can learn more about South Florida real estate,” de la Vega said.

Brown Harris Stevens is using its internal referral network and sending agents from Florida to New York to give presentations to agents, said BHS Miami President Phil Gutman. Social media is also being targeted to the Northeast, highlighting property listings and the South Florida lifestyle. It’s helping drive viewers to the brokerage’s website, where traffic has spiked about 25 percent from Northeast buyers, he said.

And Beth Butler, general manager of Compass Florida, said agents in South Florida “are relying on agents in other parts of the country to work their databases and send people our way, and that has been working effectively.” In the $3 to $5 million range, families are gravitating to secondary markets like Naples and Jupiter, she added.

For the Keyes Company, CEO Michael Pappas said sales have skyrocketed in the million-dollar-and-up sector of the market — up 35 percent in the first quarter, year-over-year. “These are sophisticated buyers. Many times, [a purchase] is the beginning of their move,” he said.

Keyes’ commercial brokerage is also hearing from a number of financial firms that want to relocate to Palm Beach County or open branches in the state to escape onerous taxes.

Financial firms are mostly looking at Boca Raton and West Palm Beach, said David Joseph, director of Keyes’ commercial division. Biltmore Capital Advisors, an investment adviser based in Princeton, New Jersey, opened an office in Boca Raton. The firm purchased three office condos in February. Atlantic Street Capital Management, a Stamford, Connecticut-based private equity firm, leased nearly 4,000 square feet at 515 North Flagler Drive in West Palm Beach in April. Parker of Douglas Elliman attributed the increase in high-end residential sales to tax reform, but he said they are also being driven by the “strong maturation of our market.”

“A lot of people are able to make the move, but now we have a product and a market that can substantiate their tastes,” Parker said.

Taxes aren’t the only thing drawing out-of-staters to South Florida, according to de la Vega of One Sotheby’s. Sellers are slashing their prices, especially on the high end of the market, where inventory is excessive. “As you go up in price point, days on the market are increasing and months of inventory are increasing pretty significantly,” de la Vega said. “Everything is price-sensitive and everything becomes a comparable.”

In May, AQR Capital Management co-founder Cliff Asness paid $26 million for a penthouse at 321 Ocean, marking the most expensive condo sale of the year. But the five-bedroom unit actually sold at a 51 percent discount off the $53 million asking price in 2015.

And about a month earlier, Asness’ business partner John Liew picked up a unit at the nearby Apogee in Miami Beach for $13.5 million, $1 million off the ask. Both Liew and Asness are billionaires who live in Greenwich, Connecticut.

Common concessions

Incentives are also a factor for sales. On the new construction side, developers are offering buyers sweeteners to close deals.

For projects that are nearly or just completed, developers are including the finishing touches for buyers — offering to throw in flooring and wall treatments that wouldn’t normally come with a new unit, said Edgardo Defortuna, president and CEO of Fortune International Realty.

Of the six units remaining at Fortune’s Jade Signature, a luxury condo tower in Sunny Isles Beach, Defortuna said he is “finishing” three units. At other projects, he’s seen developers offer the same for units on the less popular configurations for a limited period of time.

That means the developer is eating the cost, which typically ranges from $100 to $150 a foot to “finish a unit well.” The Estates at Acqualina and Turnberry Ocean Club are among those delivering units finished.

For buildings that aren’t as close to opening, developers are still reducing deposit requirements and offering discounts on a per-square-foot basis “if the price is right,” Defortuna said.

While Elliman’s Parker said the firm isn’t “engaged in any sort of incentive-based draws,” some projects Elliman is marketing are now offering furniture packages to buyers for an extra fee.

As the flow of out-of-staters continues, certainly one thing is changing for brokers, according Danny Hertzberg of Coldwell Banker’s the Jills: “We’re all becoming a bit of tax experts.”

from The Real Deal Miami https://therealdeal.com/miami/issues_articles/tax-heaven/#new_tab via IFTTT

[juditmiltz]

Investors set their sights on home rentals in South Florida

Forget building equity over decades and decades. Increasingly, leasing a house over a much shorter span is the norm in South Florida, where the renting of suburban-style houses appears to be on an upswing, potentially leading to pressure on home prices.

“The single-family rental market is extremely strong, and historically so,” said Yoni Dahan, the founder of World Class Realty, an Aventura-based firm that renovates and leases rental houses. “If the trend could be charted, it would show a curve that’s going up.”

For many would-be buyers, housing prices are too steep and interest rates are climbing, while wages seem stuck, according to developers, investors and brokers. Such conditions make renting attractive. Adding to demand, brokers said that the new federal tax law — which limits property tax deductions — has brought more out-of-staters to South Florida, where many are renting before they buy.

At the same time, foreclosures — a feature of the last recession that had seemed to fade as a concern in recent years — appear to be inching upward, and investors are snapping up bank-seized properties from Miami Gardens to Palm Beach Gardens, brokers say, with the aim of becoming landlords.

Measuring the trend with specificity can be difficult, as few major firms track the house-rental segment across the tri-county region. But anecdotal evidence is piling up, including the fact that investor groups, including those from beyond the Sunshine State, are swarming.

In July, Cerberus Capital Management, a New York private equity group, picked up about 200 houses in Miami-Dade, Broward and Palm Beach counties from Miami-based Property Investment Advisors Group. Cerberus paid $47 million, or an average of about $235,000 per home. Property Investment itself began scooping up distressed homes during the recession for as little as $80,000 in some cases, according to news reports.

Similarly, last December, as part of a larger deal, Amherst Holdings bought 174 South Florida houses from Broadtree Residential, a real estate investment trust. The financial services firm from Austin paid $25.7 million for the homes, 165 of which are in Palm Beach County and nine are in Broward.

Amherst has been on a tear as of late, buying and selling rental houses across the country. It acquired 6,000 homes in 2017 alone, which accounted for about a fifth of all the rental houses that traded nationally, according to news reports. Since 2012, the firm, which also has offices in New York, said it has raised more than $2.5 billion of debt and equity capital for rental acquisitions. A call to an Amherst spokesperson was not returned.

In August, Front Yard Residential — a Virgin Islands-based real estate investment trust — grabbed 325 houses in Broward as part of a $485 million takeover of HavenBrook Homes, a Georgia-based property manager. The Broward homes were valued at $25.4 million.

Brokers say they expect even more outside capital to flow into the single-family-home rental market soon. A joint venture headed by Canada’s Tricon Capital is ready to deploy $750 million in that space, some of which is expected to funnel to single-family homes in housing markets such as South Florida, brokers and landlords say.

Eyes are also on New York-based Premium Partners, an aggressive investor that as of September 2017 owned 22,000 homes in 15 cities and has raised $1 billion to purchase 26,000 more, according to Bloomberg.

And the company joins national powerhouses such as Invitation Homes, a Dallas-based entity owned by the Blackstone Group and founded in 2012, which has spent more than $10 billion on 83,000 homes. Many of them are in South Florida, a search of public real estate databases shows. Dallas Tanner, the co-founder of Invitation Homes, was unable to comment by press time.

Local players are active, too, including Miami-based Exceptional Homes Restoration, which in April purchased 52 South Florida houses and one small apartment building for $7.8 million. The seller was the Gram Group, a Spanish investor that began buying foreclosures in 2008, said World Class Realty’s Dahan, who renovated the properties on behalf of Gram. “We had an exit strategy,” he said.

Just a week after that deal, Exceptional flipped the homes for $13.16 million to TGCB Holdings, a Miramar-based firm; the fact that the firm almost doubled its money — and so quickly — shows the strength of the sector, brokers say.

Joshua Wagschal, a principal of Exceptional Homes, did not respond to an interview request. An email sent to Jeffrey Rose, a TGCB principal, went unreturned.

Most of the properties TGCB acquired are in middle-class sections of Broward far from the beach, such as 5733 Wiley Street, a modest pink-stucco four-bedroom ranch-style house on a windswept block in the Lawn Acres section of Hollywood. A lender foreclosed on it in 2011, according to Zillow.com, before selling it to Gram for $74,000 a few months later.

TGCB then paid about $271,000 for the property, which means the value almost quadrupled in seven years. But that may be close to a ceiling for that kind of property, brokers say, which means rentals might be the way to go. A two-bedroom house in Broward might fetch $1,500 a month, while a three-bedroom might get $1,700, they add.

In some ways, investors who snapped up properties at bargain-basement prices in the depths of the recession are lucking out, said Rebel Cook, the president of Rebel Cook Real Estate, based in Palm Beach Gardens.

In the Cabana Colony section there, near Interstate 95, investors moved on many homes with the expectation that developers would someday raze them for luxury housing, Cook said. But those towers never appeared, so investors have become de facto landlords.

“They were just going to rent them out till they could sell them,” Cook said. “But what has happened is a lot of them have turned out to be a really good source of income, so they are not putting them back on the market.”

If distressed homes fuel the home-rental phenomenon, extra energy may now be coursing through the market.

Foreclosures of single-family houses and condos began climbing this summer in the three counties that make up South Florida after declining for years, according to Attom Data Solutions, a research firm. In May, rates were up 4 percent over the previous year, while in June, they shot up 35 percent; in July, it was 29 percent. Florida was one of 21 states to post a year-over-year hike in July.

Affected homeowners, who might have fallen behind on mortgage payments because of Hurricane Irma, are in neighborhoods such as Homestead, Opa-locka and Pompano Beach, brokers said.

“I hate to say it, but foreclosures are where we do our business. It’s our trigger,” said Dahan, who gets most of his leads from banks, he said. Based on the foreclosure news, he added, two European investment firms are scheduled to visit Miami in October to tour distressed neighborhoods. “It’s going to be a good year,” Dahan said.

The ideal home type for the rental market is usually a three-bedroom, two-bath ranch from the 1950s that’s not in a homeowners’ association, which can be a challenge to deal with because such associations ask to screen would-be renters, brokers say.

Also, 50-property portfolios are usually a sweet spot, since those types of houses can be in bad shape and need several months of repairs. The idea is to have at least a few up and running immediately, according to Dahan. A portfolio of that size might cost $8 million, Dahan added, up from $5 million a few years ago.

If the supply is in place, will renters flock?

By some measures, South Florida is rapidly becoming expensive. In Miami-Dade, for example, the median sale price for single-family houses in the second quarter was up 10.3 percent over the same time a year ago, according to the Miami Association of Realtors.

Condos, too, seem to be slipping out of reach of many buyers. They averaged $494,000 in the second quarter, up 22 percent from the year-ago quarter, when they were $405,000, according to a Douglas Elliman report.

Rental prices are therefore more attractive and affordable. Average rental prices for single-family homes in South Florida are hard to track, but as far as traditional apartments go, two-bedroom apartments in Miami averaged $1,821 a month in September, according to data site RentCafé. Three-bedrooms were $2,174 a month, though the three-bedrooms measured about 1,300 square feet, so they were smaller, perhaps, than a standard house.

Aside from renting a home purely because the price is right, millennials like the idea of a home where they can set their own rules and not chafe against the regulations at multifamily complexes, said Robert Rabinowitz, an associate broker with Miami-based The Company Real Estate who represented Gram Group in its Exceptional Homes trade.

Besides, “millennials don’t know where they want to settle down, how long they will work at company XYZ, so they rent,” Rabinowitz said, adding that the market has become “crazy.”

“Demand is outstripping supply in regards to investors,” he said of places such as Deerfield Beach and Boca Raton, adding, “and everybody is clamoring for off-market deals.”

But not everybody is convinced it’s smart to bet on 20-somethings. “Millennials will eventually marry and have children, and they will become homeowners even if interest rates are going up,” said Neil Merin, the chairman of West Palm Beach-based NAI Merin Hunter Codman, a commercial brokerage.

“They’ve watched reality home shows with investors, and they were raised during a recession, so they’re pretty conscious,” Merin said, adding that the home-rental trend seems like a “fad” and so his firm won’t bother with those kinds of deals.

But bulls seem to outweigh bears. Dahan says the rental houses that took a month to rent before are now leased in a day.

And Jordan Kavana, the chief executive officer of Transcendent Investment Management, an Aventura-based home buyer and renter, says that market attitudes have fundamentally changed.  

People who might have once considered buying are now “scarred by the Great Recession,” Kavana said. “They think, ‘My family was displaced, and the only reason I had equity was because of low interest rates. But my equity no longer has to be in my home.’”

When Transcendent was founded in 2008, it focused on existing buildings. Now, unlike many investors, Transcendent, which announced this summer that it snagged $250 million from Chinese sources, focuses on developing new homes in partnership with local builders, Kavana said.

Kavana added that he will develop as many as 3,000 homes for Chinese and other clients in South Florida. Transcendent, which currently has 1,200 rental homes in the tri-county area, plans to deploy $1 billion over the next three years. He added that those existing homes, which Transcendent also manages, boast a 92 percent occupancy rate through the year.

“I think that America,” he said, “will be a rentership nation for a long time.”

from The Real Deal Miami https://therealdeal.com/miami/issues_articles/the-heyday-of-home-rentals/#new_tab via IFTTT

[juditmiltz]

Investors set their sights on home rentals in South Florida

Forget building equity over decades and decades. Increasingly, leasing a house over a much shorter span is the norm in South Florida, where the renting of suburban-style houses appears to be on an upswing, potentially leading to pressure on home prices.

“The single-family rental market is extremely strong, and historically so,” said Yoni Dahan, the founder of World Class Realty, an Aventura-based firm that renovates and leases rental houses. “If the trend could be charted, it would show a curve that’s going up.”

For many would-be buyers, housing prices are too steep and interest rates are climbing, while wages seem stuck, according to developers, investors and brokers. Such conditions make renting attractive. Adding to demand, brokers said that the new federal tax law — which limits property tax deductions — has brought more out-of-staters to South Florida, where many are renting before they buy.

At the same time, foreclosures — a feature of the last recession that had seemed to fade as a concern in recent years — appear to be inching upward, and investors are snapping up bank-seized properties from Miami Gardens to Palm Beach Gardens, brokers say, with the aim of becoming landlords.

Measuring the trend with specificity can be difficult, as few major firms track the house-rental segment across the tri-county region. But anecdotal evidence is piling up, including the fact that investor groups, including those from beyond the Sunshine State, are swarming.

In July, Cerberus Capital Management, a New York private equity group, picked up about 200 houses in Miami-Dade, Broward and Palm Beach counties from Miami-based Property Investment Advisors Group. Cerberus paid $47 million, or an average of about $235,000 per home. Property Investment itself began scooping up distressed homes during the recession for as little as $80,000 in some cases, according to news reports.

Similarly, last December, as part of a larger deal, Amherst Holdings bought 174 South Florida houses from Broadtree Residential, a real estate investment trust. The financial services firm from Austin paid $25.7 million for the homes, 165 of which are in Palm Beach County and nine are in Broward.

Amherst has been on a tear as of late, buying and selling rental houses across the country. It acquired 6,000 homes in 2017 alone, which accounted for about a fifth of all the rental houses that traded nationally, according to news reports. Since 2012, the firm, which also has offices in New York, said it has raised more than $2.5 billion of debt and equity capital for rental acquisitions. A call to an Amherst spokesperson was not returned.

In August, Front Yard Residential — a Virgin Islands-based real estate investment trust — grabbed 325 houses in Broward as part of a $485 million takeover of HavenBrook Homes, a Georgia-based property manager. The Broward homes were valued at $25.4 million.

Brokers say they expect even more outside capital to flow into the single-family-home rental market soon. A joint venture headed by Canada’s Tricon Capital is ready to deploy $750 million in that space, some of which is expected to funnel to single-family homes in housing markets such as South Florida, brokers and landlords say.

Eyes are also on New York-based Premium Partners, an aggressive investor that as of September 2017 owned 22,000 homes in 15 cities and has raised $1 billion to purchase 26,000 more, according to Bloomberg.

And the company joins national powerhouses such as Invitation Homes, a Dallas-based entity owned by the Blackstone Group and founded in 2012, which has spent more than $10 billion on 83,000 homes. Many of them are in South Florida, a search of public real estate databases shows. Dallas Tanner, the co-founder of Invitation Homes, was unable to comment by press time.

Local players are active, too, including Miami-based Exceptional Homes Restoration, which in April purchased 52 South Florida houses and one small apartment building for $7.8 million. The seller was the Gram Group, a Spanish investor that began buying foreclosures in 2008, said World Class Realty’s Dahan, who renovated the properties on behalf of Gram. “We had an exit strategy,” he said.

Just a week after that deal, Exceptional flipped the homes for $13.16 million to TGCB Holdings, a Miramar-based firm; the fact that the firm almost doubled its money — and so quickly — shows the strength of the sector, brokers say.

Joshua Wagschal, a principal of Exceptional Homes, did not respond to an interview request. An email sent to Jeffrey Rose, a TGCB principal, went unreturned.

Most of the properties TGCB acquired are in middle-class sections of Broward far from the beach, such as 5733 Wiley Street, a modest pink-stucco four-bedroom ranch-style house on a windswept block in the Lawn Acres section of Hollywood. A lender foreclosed on it in 2011, according to Zillow.com, before selling it to Gram for $74,000 a few months later.

TGCB then paid about $271,000 for the property, which means the value almost quadrupled in seven years. But that may be close to a ceiling for that kind of property, brokers say, which means rentals might be the way to go. A two-bedroom house in Broward might fetch $1,500 a month, while a three-bedroom might get $1,700, they add.

In some ways, investors who snapped up properties at bargain-basement prices in the depths of the recession are lucking out, said Rebel Cook, the president of Rebel Cook Real Estate, based in Palm Beach Gardens.

In the Cabana Colony section there, near Interstate 95, investors moved on many homes with the expectation that developers would someday raze them for luxury housing, Cook said. But those towers never appeared, so investors have become de facto landlords.

“They were just going to rent them out till they could sell them,” Cook said. “But what has happened is a lot of them have turned out to be a really good source of income, so they are not putting them back on the market.”

If distressed homes fuel the home-rental phenomenon, extra energy may now be coursing through the market.

Foreclosures of single-family houses and condos began climbing this summer in the three counties that make up South Florida after declining for years, according to Attom Data Solutions, a research firm. In May, rates were up 4 percent over the previous year, while in June, they shot up 35 percent; in July, it was 29 percent. Florida was one of 21 states to post a year-over-year hike in July.

Affected homeowners, who might have fallen behind on mortgage payments because of Hurricane Irma, are in neighborhoods such as Homestead, Opa-locka and Pompano Beach, brokers said.

“I hate to say it, but foreclosures are where we do our business. It’s our trigger,” said Dahan, who gets most of his leads from banks, he said. Based on the foreclosure news, he added, two European investment firms are scheduled to visit Miami in October to tour distressed neighborhoods. “It’s going to be a good year,” Dahan said.

The ideal home type for the rental market is usually a three-bedroom, two-bath ranch from the 1950s that’s not in a homeowners’ association, which can be a challenge to deal with because such associations ask to screen would-be renters, brokers say.

Also, 50-property portfolios are usually a sweet spot, since those types of houses can be in bad shape and need several months of repairs. The idea is to have at least a few up and running immediately, according to Dahan. A portfolio of that size might cost $8 million, Dahan added, up from $5 million a few years ago.

If the supply is in place, will renters flock?

By some measures, South Florida is rapidly becoming expensive. In Miami-Dade, for example, the median sale price for single-family houses in the second quarter was up 10.3 percent over the same time a year ago, according to the Miami Association of Realtors.

Condos, too, seem to be slipping out of reach of many buyers. They averaged $494,000 in the second quarter, up 22 percent from the year-ago quarter, when they were $405,000, according to a Douglas Elliman report.

Rental prices are therefore more attractive and affordable. Average rental prices for single-family homes in South Florida are hard to track, but as far as traditional apartments go, two-bedroom apartments in Miami averaged $1,821 a month in September, according to data site RentCafé. Three-bedrooms were $2,174 a month, though the three-bedrooms measured about 1,300 square feet, so they were smaller, perhaps, than a standard house.

Aside from renting a home purely because the price is right, millennials like the idea of a home where they can set their own rules and not chafe against the regulations at multifamily complexes, said Robert Rabinowitz, an associate broker with Miami-based The Company Real Estate who represented Gram Group in its Exceptional Homes trade.

Besides, “millennials don’t know where they want to settle down, how long they will work at company XYZ, so they rent,” Rabinowitz said, adding that the market has become “crazy.”

“Demand is outstripping supply in regards to investors,” he said of places such as Deerfield Beach and Boca Raton, adding, “and everybody is clamoring for off-market deals.”

But not everybody is convinced it’s smart to bet on 20-somethings. “Millennials will eventually marry and have children, and they will become homeowners even if interest rates are going up,” said Neil Merin, the chairman of West Palm Beach-based NAI Merin Hunter Codman, a commercial brokerage.

“They’ve watched reality home shows with investors, and they were raised during a recession, so they’re pretty conscious,” Merin said, adding that the home-rental trend seems like a “fad” and so his firm won’t bother with those kinds of deals.

But bulls seem to outweigh bears. Dahan says the rental houses that took a month to rent before are now leased in a day.

And Jordan Kavana, the chief executive officer of Transcendent Investment Management, an Aventura-based home buyer and renter, says that market attitudes have fundamentally changed.  

People who might have once considered buying are now “scarred by the Great Recession,” Kavana said. “They think, ‘My family was displaced, and the only reason I had equity was because of low interest rates. But my equity no longer has to be in my home.’”

When Transcendent was founded in 2008, it focused on existing buildings. Now, unlike many investors, Transcendent, which announced this summer that it snagged $250 million from Chinese sources, focuses on developing new homes in partnership with local builders, Kavana said.

Kavana added that he will develop as many as 3,000 homes for Chinese and other clients in South Florida. Transcendent, which currently has 1,200 rental homes in the tri-county area, plans to deploy $1 billion over the next three years. He added that those existing homes, which Transcendent also manages, boast a 92 percent occupancy rate through the year.

“I think that America,” he said, “will be a rentership nation for a long time.”

from The Real Deal Miami https://therealdeal.com/miami/issues_articles/the-heyday-of-home-rentals/#new_tab via IFTTT

[juditmiltz]

Investors set their sights on home rentals in South Florida

Forget building equity over decades and decades. Increasingly, leasing a house over a much shorter span is the norm in South Florida, where the renting of suburban-style houses appears to be on an upswing, potentially leading to pressure on home prices.

“The single-family rental market is extremely strong, and historically so,” said Yoni Dahan, the founder of World Class Realty, an Aventura-based firm that renovates and leases rental houses. “If the trend could be charted, it would show a curve that’s going up.”

For many would-be buyers, housing prices are too steep and interest rates are climbing, while wages seem stuck, according to developers, investors and brokers. Such conditions make renting attractive. Adding to demand, brokers said that the new federal tax law — which limits property tax deductions — has brought more out-of-staters to South Florida, where many are renting before they buy.

At the same time, foreclosures — a feature of the last recession that had seemed to fade as a concern in recent years — appear to be inching upward, and investors are snapping up bank-seized properties from Miami Gardens to Palm Beach Gardens, brokers say, with the aim of becoming landlords.

Measuring the trend with specificity can be difficult, as few major firms track the house-rental segment across the tri-county region. But anecdotal evidence is piling up, including the fact that investor groups, including those from beyond the Sunshine State, are swarming.

In July, Cerberus Capital Management, a New York private equity group, picked up about 200 houses in Miami-Dade, Broward and Palm Beach counties from Miami-based Property Investment Advisors Group. Cerberus paid $47 million, or an average of about $235,000 per home. Property Investment itself began scooping up distressed homes during the recession for as little as $80,000 in some cases, according to news reports.

Similarly, last December, as part of a larger deal, Amherst Holdings bought 174 South Florida houses from Broadtree Residential, a real estate investment trust. The financial services firm from Austin paid $25.7 million for the homes, 165 of which are in Palm Beach County and nine are in Broward.

Amherst has been on a tear as of late, buying and selling rental houses across the country. It acquired 6,000 homes in 2017 alone, which accounted for about a fifth of all the rental houses that traded nationally, according to news reports. Since 2012, the firm, which also has offices in New York, said it has raised more than $2.5 billion of debt and equity capital for rental acquisitions. A call to an Amherst spokesperson was not returned.

In August, Front Yard Residential — a Virgin Islands-based real estate investment trust — grabbed 325 houses in Broward as part of a $485 million takeover of HavenBrook Homes, a Georgia-based property manager. The Broward homes were valued at $25.4 million.

Brokers say they expect even more outside capital to flow into the single-family-home rental market soon. A joint venture headed by Canada’s Tricon Capital is ready to deploy $750 million in that space, some of which is expected to funnel to single-family homes in housing markets such as South Florida, brokers and landlords say.

Eyes are also on New York-based Premium Partners, an aggressive investor that as of September 2017 owned 22,000 homes in 15 cities and has raised $1 billion to purchase 26,000 more, according to Bloomberg.

And the company joins national powerhouses such as Invitation Homes, a Dallas-based entity owned by the Blackstone Group and founded in 2012, which has spent more than $10 billion on 83,000 homes. Many of them are in South Florida, a search of public real estate databases shows. Dallas Tanner, the co-founder of Invitation Homes, was unable to comment by press time.

Local players are active, too, including Miami-based Exceptional Homes Restoration, which in April purchased 52 South Florida houses and one small apartment building for $7.8 million. The seller was the Gram Group, a Spanish investor that began buying foreclosures in 2008, said World Class Realty’s Dahan, who renovated the properties on behalf of Gram. “We had an exit strategy,” he said.

Just a week after that deal, Exceptional flipped the homes for $13.16 million to TGCB Holdings, a Miramar-based firm; the fact that the firm almost doubled its money — and so quickly — shows the strength of the sector, brokers say.

Joshua Wagschal, a principal of Exceptional Homes, did not respond to an interview request. An email sent to Jeffrey Rose, a TGCB principal, went unreturned.

Most of the properties TGCB acquired are in middle-class sections of Broward far from the beach, such as 5733 Wiley Street, a modest pink-stucco four-bedroom ranch-style house on a windswept block in the Lawn Acres section of Hollywood. A lender foreclosed on it in 2011, according to Zillow.com, before selling it to Gram for $74,000 a few months later.

TGCB then paid about $271,000 for the property, which means the value almost quadrupled in seven years. But that may be close to a ceiling for that kind of property, brokers say, which means rentals might be the way to go. A two-bedroom house in Broward might fetch $1,500 a month, while a three-bedroom might get $1,700, they add.

In some ways, investors who snapped up properties at bargain-basement prices in the depths of the recession are lucking out, said Rebel Cook, the president of Rebel Cook Real Estate, based in Palm Beach Gardens.

In the Cabana Colony section there, near Interstate 95, investors moved on many homes with the expectation that developers would someday raze them for luxury housing, Cook said. But those towers never appeared, so investors have become de facto landlords.

“They were just going to rent them out till they could sell them,” Cook said. “But what has happened is a lot of them have turned out to be a really good source of income, so they are not putting them back on the market.”

If distressed homes fuel the home-rental phenomenon, extra energy may now be coursing through the market.

Foreclosures of single-family houses and condos began climbing this summer in the three counties that make up South Florida after declining for years, according to Attom Data Solutions, a research firm. In May, rates were up 4 percent over the previous year, while in June, they shot up 35 percent; in July, it was 29 percent. Florida was one of 21 states to post a year-over-year hike in July.

Affected homeowners, who might have fallen behind on mortgage payments because of Hurricane Irma, are in neighborhoods such as Homestead, Opa-locka and Pompano Beach, brokers said.

“I hate to say it, but foreclosures are where we do our business. It’s our trigger,” said Dahan, who gets most of his leads from banks, he said. Based on the foreclosure news, he added, two European investment firms are scheduled to visit Miami in October to tour distressed neighborhoods. “It’s going to be a good year,” Dahan said.

The ideal home type for the rental market is usually a three-bedroom, two-bath ranch from the 1950s that’s not in a homeowners’ association, which can be a challenge to deal with because such associations ask to screen would-be renters, brokers say.

Also, 50-property portfolios are usually a sweet spot, since those types of houses can be in bad shape and need several months of repairs. The idea is to have at least a few up and running immediately, according to Dahan. A portfolio of that size might cost $8 million, Dahan added, up from $5 million a few years ago.

If the supply is in place, will renters flock?

By some measures, South Florida is rapidly becoming expensive. In Miami-Dade, for example, the median sale price for single-family houses in the second quarter was up 10.3 percent over the same time a year ago, according to the Miami Association of Realtors.

Condos, too, seem to be slipping out of reach of many buyers. They averaged $494,000 in the second quarter, up 22 percent from the year-ago quarter, when they were $405,000, according to a Douglas Elliman report.

Rental prices are therefore more attractive and affordable. Average rental prices for single-family homes in South Florida are hard to track, but as far as traditional apartments go, two-bedroom apartments in Miami averaged $1,821 a month in September, according to data site RentCafé. Three-bedrooms were $2,174 a month, though the three-bedrooms measured about 1,300 square feet, so they were smaller, perhaps, than a standard house.

Aside from renting a home purely because the price is right, millennials like the idea of a home where they can set their own rules and not chafe against the regulations at multifamily complexes, said Robert Rabinowitz, an associate broker with Miami-based The Company Real Estate who represented Gram Group in its Exceptional Homes trade.

Besides, “millennials don’t know where they want to settle down, how long they will work at company XYZ, so they rent,” Rabinowitz said, adding that the market has become “crazy.”

“Demand is outstripping supply in regards to investors,” he said of places such as Deerfield Beach and Boca Raton, adding, “and everybody is clamoring for off-market deals.”

But not everybody is convinced it’s smart to bet on 20-somethings. “Millennials will eventually marry and have children, and they will become homeowners even if interest rates are going up,” said Neil Merin, the chairman of West Palm Beach-based NAI Merin Hunter Codman, a commercial brokerage.

“They’ve watched reality home shows with investors, and they were raised during a recession, so they’re pretty conscious,” Merin said, adding that the home-rental trend seems like a “fad” and so his firm won’t bother with those kinds of deals.

But bulls seem to outweigh bears. Dahan says the rental houses that took a month to rent before are now leased in a day.

And Jordan Kavana, the chief executive officer of Transcendent Investment Management, an Aventura-based home buyer and renter, says that market attitudes have fundamentally changed.  

People who might have once considered buying are now “scarred by the Great Recession,” Kavana said. “They think, ‘My family was displaced, and the only reason I had equity was because of low interest rates. But my equity no longer has to be in my home.’”

When Transcendent was founded in 2008, it focused on existing buildings. Now, unlike many investors, Transcendent, which announced this summer that it snagged $250 million from Chinese sources, focuses on developing new homes in partnership with local builders, Kavana said.

Kavana added that he will develop as many as 3,000 homes for Chinese and other clients in South Florida. Transcendent, which currently has 1,200 rental homes in the tri-county area, plans to deploy $1 billion over the next three years. He added that those existing homes, which Transcendent also manages, boast a 92 percent occupancy rate through the year.

“I think that America,” he said, “will be a rentership nation for a long time.”

from The Real Deal Miami https://therealdeal.com/miami/issues_articles/the-heyday-of-home-rentals/#new_tab via IFTTT

[nicolesrollins]

Tax h(e)aven: SoFla brokerages are targeting out-of-state buyers looking to escape new, larger tax burdens

(Illustration by Neil Webb)

Ultra-wealthy out-of-state buyers are flocking en masse to South Florida, scooping up multimillion-dollar homes and condos with plans to establish residency in order to avoid shelling out money to the government as a result of last year’s tax reform, brokers and developers told The Real Deal. The influx has local brokerages doing everything they can to capitalize on the  trend, using their partnerships with far-flung firms to grow their client rosters ahead of the competition.

The out-of-staters are largely top-earning hedge funders, real estate bigwigs, big-time entrepreneurs and CEOs from states such as New York, New Jersey, Connecticut, California and Illinois — places with state income taxes as high as 13.3 percent, and even city taxes in the case of New York City. Florida, on the other hand, has no state income tax.

“It’s one thing when the tax reform gets passed, and it’s another thing when you’re sitting with your accountant and you say, ‘Shit, I could just to move to Miami,”’ said Oren Alexander of Douglas Elliman.

Nelson Gonzalez of EWM Realty International calls the new buyers “tax refugees,” and said they account for 90 percent of those looking at his high-end listings. He has shown properties priced over $10 million or $15 million to at least 40 such ultra-wealthy buyers in the past few months, he said.

When Gonzalez showed a unit at luxury condo building Apogee South Beach to three different buyers who were all in the elevator together, Gonzalez asked, ‘“Why Miami, why are you moving from New York?’ One said ‘Taxes,’ and the others said, ‘That’s why I’m here,’ ‘That’s why I’m here.’”

“Hedge fund guys make $50 to $150 million a year, and these guys can come down here and buy a $10 to $20 million house, and with the tax savings, they get a free house in two to five years, and they get to live in paradise,”Gonzalez said.

Real estate insiders point to Barry Sternlicht, chairman and CEO of Starwood Capital Group as a leader of the trend. In 2015, the mogul bought a waterfront vacant lot on Miami Beach’s North Bay Road and built a mansion for his permanent residence, then later moved his company’s headquarters from Greenwich, Connecticut to Miami Beach. During a keynote session at a University of Miami real estate event in 2014, Sternlicht said, “My generation, which is the tail end of baby boomers, we’re coming. We’re changing our addresses and we’re coming to low-tax states.”

In the U.S., the vast majority of states levy income taxes. For those earning at the top level, the state taxes can be as high as 8.82 percent in New York; 8.97 percent in New Jersey; 6.99 percent in Connecticut; and 4.95 percent in Illinois. California has the highest state income tax in the nation, topping out at 13.3 percent for those earning more than $1 million.

The Tax Cuts and Jobs Act, passed in December 2017, limited the ability of taxpayers to deduct state and local taxes (SALT) from their federal taxable income in 2018. That has dealt a significant blow, experts said.

Changing state residencies to avoid these taxes is not an easy task. You must provide proof that you are not in your former home state for more than 180 days a year. And to establish residency in Florida, you must secure a driver’s license and follow other legal requirements. Florida also has property taxes of about 2 percent of the assessed value, which is a lower rate than that of about half of the states in the country.

It’s “really a no-brainer,” said Camille Douglas, senior managing director at LeFrak, the co-developer of 1 Hotel & Homes South Beach and the future North Miami mixed-use project SoLe Mia. “If you already think it’s nice to have a place in Miami, you’re now hugely motivated to pull the trigger. And it is almost free to become a Florida resident because your tax savings will support it.”

For Eloy Carmenate of Douglas Elliman, the volume of out-of-state residents earning tens and hundreds of millions of dollars who are looking at Miami properties is unprecedented. “I’ve never seen this super wealth come into town like this year,” he said. They’re looking at both condos and houses, Carmenate said, often from Miami Beach’s North Bay Road to the Sunset and Venetian islands.

“They’re pretty down to earth and unassuming,” he said. “They want to be able to walk down the street without bodyguards, go to restaurants.”

According to April figures from the Miami Association of Realtors, people from New York City ranked first among all cities searching for properties on MiamiRealtors.com. California ranked as the top state.

Developer Jules Trump of the Trump Group (no relation to the president) has watched wealthy families come down from the Northeast to vacation at his Acqualina Resort & Spa in Sunny Isles and become buyers at his Mansions at Acqualina and Estates at Acqualina intending to stay.

“After a few days at the hotel, the kids start pressuring, and the wife starts pressuring, and from a little thought in the back of their heads, it becomes a thought that ‘I’ve got to be crazy not to do it,’” said Trump. “They see that the living here is a much nicer lifestyle than what they could ever have in the Northeast.”

Real estate insiders say that while a handful of other states — including Alaska, Nevada, South Dakota, Texas, Washington and Wyoming — do not currently have an income tax, Florida is often viewed as the most desirable residence.

Reaching the out-of-staters

Some brokerages are shifting their strategies to reach buyers from high-tax states. Cervera Real Estate, which has a partnership with Stribling & Associates, held a seminar in New York to educate agents on how to purchase real estate and establish residency in Florida, said Alexandra Goeseke, Cervera’s director of general real estate. Cervera, which in the past typically received several referrals a month from Stribling, is now seeing many more referrals out of New York, she said.   

Douglas Elliman is taking advantage of the presence it has in New York, New Jersey, Connecticut and California, said Jay Parker, CEO of Douglas Elliman’s Florida brokerage. “We’re at a point where the Trump tax plan has paid into our strategy perfectly, because we have agents in those markets that are already comfortable on referral business, and have a client pool that is now motivated and forming inquiries about that transfer [of residency].”

Agents like Elliman’s Carmenate say they are traveling to the Hamptons and New York City repeatedly to market properties and make presentations to prospective buyers.

One Sotheby’s International Realty is also working with its affiliates in markets such as New York, New Jersey, Connecticut and California, according to the firm’s president, Daniel de la Vega. Over the summer, its agents will host events in the Hamptons. “Our strategies include traveling to these markets and hosting events where both brokers and clients alike can learn more about South Florida real estate,” de la Vega said.

Brown Harris Stevens is using its internal referral network and sending agents from Florida to New York to give presentations to agents, said BHS Miami President Phil Gutman. Social media is also being targeted to the Northeast, highlighting property listings and the South Florida lifestyle. It’s helping drive viewers to the brokerage’s website, where traffic has spiked about 25 percent from Northeast buyers, he said.

And Beth Butler, general manager of Compass Florida, said agents in South Florida “are relying on agents in other parts of the country to work their databases and send people our way, and that has been working effectively.” In the $3 to $5 million range, families are gravitating to secondary markets like Naples and Jupiter, she added.

For the Keyes Company, CEO Michael Pappas said sales have skyrocketed in the million-dollar-and-up sector of the market — up 35 percent in the first quarter, year-over-year. “These are sophisticated buyers. Many times, [a purchase] is the beginning of their move,” he said.

Keyes’ commercial brokerage is also hearing from a number of financial firms that want to relocate to Palm Beach County or open branches in the state to escape onerous taxes.

Financial firms are mostly looking at Boca Raton and West Palm Beach, said David Joseph, director of Keyes’ commercial division. Biltmore Capital Advisors, an investment adviser based in Princeton, New Jersey, opened an office in Boca Raton. The firm purchased three office condos in February. Atlantic Street Capital Management, a Stamford, Connecticut-based private equity firm, leased nearly 4,000 square feet at 515 North Flagler Drive in West Palm Beach in April. Parker of Douglas Elliman attributed the increase in high-end residential sales to tax reform, but he said they are also being driven by the “strong maturation of our market.”

“A lot of people are able to make the move, but now we have a product and a market that can substantiate their tastes,” Parker said.

Taxes aren’t the only thing drawing out-of-staters to South Florida, according to de la Vega of One Sotheby’s. Sellers are slashing their prices, especially on the high end of the market, where inventory is excessive. “As you go up in price point, days on the market are increasing and months of inventory are increasing pretty significantly,” de la Vega said. “Everything is price-sensitive and everything becomes a comparable.”

In May, AQR Capital Management co-founder Cliff Asness paid $26 million for a penthouse at 321 Ocean, marking the most expensive condo sale of the year. But the five-bedroom unit actually sold at a 51 percent discount off the $53 million asking price in 2015.

And about a month earlier, Asness’ business partner John Liew picked up a unit at the nearby Apogee in Miami Beach for $13.5 million, $1 million off the ask. Both Liew and Asness are billionaires who live in Greenwich, Connecticut.

Common concessions

Incentives are also a factor for sales. On the new construction side, developers are offering buyers sweeteners to close deals.

For projects that are nearly or just completed, developers are including the finishing touches for buyers — offering to throw in flooring and wall treatments that wouldn’t normally come with a new unit, said Edgardo Defortuna, president and CEO of Fortune International Realty.

Of the six units remaining at Fortune’s Jade Signature, a luxury condo tower in Sunny Isles Beach, Defortuna said he is “finishing” three units. At other projects, he’s seen developers offer the same for units on the less popular configurations for a limited period of time.

That means the developer is eating the cost, which typically ranges from $100 to $150 a foot to “finish a unit well.” The Estates at Acqualina and Turnberry Ocean Club are among those delivering units finished.

For buildings that aren’t as close to opening, developers are still reducing deposit requirements and offering discounts on a per-square-foot basis “if the price is right,” Defortuna said.

While Elliman’s Parker said the firm isn’t “engaged in any sort of incentive-based draws,” some projects Elliman is marketing are now offering furniture packages to buyers for an extra fee.

As the flow of out-of-staters continues, certainly one thing is changing for brokers, according Danny Hertzberg of Coldwell Banker’s the Jills: “We’re all becoming a bit of tax experts.”

from The Real Deal Miami & Real Estate News News | & Curbed Miami - All https://therealdeal.com/miami/issues_articles/tax-heaven/#new_tab via IFTTT

[walterfrodriguez]

Tax h(e)aven: SoFla brokerages are targeting out-of-state buyers looking to escape new, larger tax burdens

(Illustration by Neil Webb)

Ultra-wealthy out-of-state buyers are flocking en masse to South Florida, scooping up multimillion-dollar homes and condos with plans to establish residency in order to avoid shelling out money to the government as a result of last year’s tax reform, brokers and developers told The Real Deal. The influx has local brokerages doing everything they can to capitalize on the  trend, using their partnerships with far-flung firms to grow their client rosters ahead of the competition.

The out-of-staters are largely top-earning hedge funders, real estate bigwigs, big-time entrepreneurs and CEOs from states such as New York, New Jersey, Connecticut, California and Illinois — places with state income taxes as high as 13.3 percent, and even city taxes in the case of New York City. Florida, on the other hand, has no state income tax.

“It’s one thing when the tax reform gets passed, and it’s another thing when you’re sitting with your accountant and you say, ‘Shit, I could just to move to Miami,”’ said Oren Alexander of Douglas Elliman.

Nelson Gonzalez of EWM Realty International calls the new buyers “tax refugees,” and said they account for 90 percent of those looking at his high-end listings. He has shown properties priced over $10 million or $15 million to at least 40 such ultra-wealthy buyers in the past few months, he said.

When Gonzalez showed a unit at luxury condo building Apogee South Beach to three different buyers who were all in the elevator together, Gonzalez asked, ‘“Why Miami, why are you moving from New York?’ One said ‘Taxes,’ and the others said, ‘That’s why I’m here,’ ‘That’s why I’m here.’”

“Hedge fund guys make $50 to $150 million a year, and these guys can come down here and buy a $10 to $20 million house, and with the tax savings, they get a free house in two to five years, and they get to live in paradise,”Gonzalez said.

Real estate insiders point to Barry Sternlicht, chairman and CEO of Starwood Capital Group as a leader of the trend. In 2015, the mogul bought a waterfront vacant lot on Miami Beach’s North Bay Road and built a mansion for his permanent residence, then later moved his company’s headquarters from Greenwich, Connecticut to Miami Beach. During a keynote session at a University of Miami real estate event in 2014, Sternlicht said, “My generation, which is the tail end of baby boomers, we’re coming. We’re changing our addresses and we’re coming to low-tax states.”

In the U.S., the vast majority of states levy income taxes. For those earning at the top level, the state taxes can be as high as 8.82 percent in New York; 8.97 percent in New Jersey; 6.99 percent in Connecticut; and 4.95 percent in Illinois. California has the highest state income tax in the nation, topping out at 13.3 percent for those earning more than $1 million.

The Tax Cuts and Jobs Act, passed in December 2017, limited the ability of taxpayers to deduct state and local taxes (SALT) from their federal taxable income in 2018. That has dealt a significant blow, experts said.

Changing state residencies to avoid these taxes is not an easy task. You must provide proof that you are not in your former home state for more than 180 days a year. And to establish residency in Florida, you must secure a driver’s license and follow other legal requirements. Florida also has property taxes of about 2 percent of the assessed value, which is a lower rate than that of about half of the states in the country.

It’s “really a no-brainer,” said Camille Douglas, senior managing director at LeFrak, the co-developer of 1 Hotel & Homes South Beach and the future North Miami mixed-use project SoLe Mia. “If you already think it’s nice to have a place in Miami, you’re now hugely motivated to pull the trigger. And it is almost free to become a Florida resident because your tax savings will support it.”

For Eloy Carmenate of Douglas Elliman, the volume of out-of-state residents earning tens and hundreds of millions of dollars who are looking at Miami properties is unprecedented. “I’ve never seen this super wealth come into town like this year,” he said. They’re looking at both condos and houses, Carmenate said, often from Miami Beach’s North Bay Road to the Sunset and Venetian islands.

“They’re pretty down to earth and unassuming,” he said. “They want to be able to walk down the street without bodyguards, go to restaurants.”

According to April figures from the Miami Association of Realtors, people from New York City ranked first among all cities searching for properties on MiamiRealtors.com. California ranked as the top state.

Developer Jules Trump of the Trump Group (no relation to the president) has watched wealthy families come down from the Northeast to vacation at his Acqualina Resort & Spa in Sunny Isles and become buyers at his Mansions at Acqualina and Estates at Acqualina intending to stay.

“After a few days at the hotel, the kids start pressuring, and the wife starts pressuring, and from a little thought in the back of their heads, it becomes a thought that ‘I’ve got to be crazy not to do it,’” said Trump. “They see that the living here is a much nicer lifestyle than what they could ever have in the Northeast.”

Real estate insiders say that while a handful of other states — including Alaska, Nevada, South Dakota, Texas, Washington and Wyoming — do not currently have an income tax, Florida is often viewed as the most desirable residence.

Reaching the out-of-staters

Some brokerages are shifting their strategies to reach buyers from high-tax states. Cervera Real Estate, which has a partnership with Stribling & Associates, held a seminar in New York to educate agents on how to purchase real estate and establish residency in Florida, said Alexandra Goeseke, Cervera’s director of general real estate. Cervera, which in the past typically received several referrals a month from Stribling, is now seeing many more referrals out of New York, she said.   

Douglas Elliman is taking advantage of the presence it has in New York, New Jersey, Connecticut and California, said Jay Parker, CEO of Douglas Elliman’s Florida brokerage. “We’re at a point where the Trump tax plan has paid into our strategy perfectly, because we have agents in those markets that are already comfortable on referral business, and have a client pool that is now motivated and forming inquiries about that transfer [of residency].”

Agents like Elliman’s Carmenate say they are traveling to the Hamptons and New York City repeatedly to market properties and make presentations to prospective buyers.

One Sotheby’s International Realty is also working with its affiliates in markets such as New York, New Jersey, Connecticut and California, according to the firm’s president, Daniel de la Vega. Over the summer, its agents will host events in the Hamptons. “Our strategies include traveling to these markets and hosting events where both brokers and clients alike can learn more about South Florida real estate,” de la Vega said.

Brown Harris Stevens is using its internal referral network and sending agents from Florida to New York to give presentations to agents, said BHS Miami President Phil Gutman. Social media is also being targeted to the Northeast, highlighting property listings and the South Florida lifestyle. It’s helping drive viewers to the brokerage’s website, where traffic has spiked about 25 percent from Northeast buyers, he said.

And Beth Butler, general manager of Compass Florida, said agents in South Florida “are relying on agents in other parts of the country to work their databases and send people our way, and that has been working effectively.” In the $3 to $5 million range, families are gravitating to secondary markets like Naples and Jupiter, she added.

For the Keyes Company, CEO Michael Pappas said sales have skyrocketed in the million-dollar-and-up sector of the market — up 35 percent in the first quarter, year-over-year. “These are sophisticated buyers. Many times, [a purchase] is the beginning of their move,” he said.

Keyes’ commercial brokerage is also hearing from a number of financial firms that want to relocate to Palm Beach County or open branches in the state to escape onerous taxes.

Financial firms are mostly looking at Boca Raton and West Palm Beach, said David Joseph, director of Keyes’ commercial division. Biltmore Capital Advisors, an investment adviser based in Princeton, New Jersey, opened an office in Boca Raton. The firm purchased three office condos in February. Atlantic Street Capital Management, a Stamford, Connecticut-based private equity firm, leased nearly 4,000 square feet at 515 North Flagler Drive in West Palm Beach in April. Parker of Douglas Elliman attributed the increase in high-end residential sales to tax reform, but he said they are also being driven by the “strong maturation of our market.”

“A lot of people are able to make the move, but now we have a product and a market that can substantiate their tastes,” Parker said.

Taxes aren’t the only thing drawing out-of-staters to South Florida, according to de la Vega of One Sotheby’s. Sellers are slashing their prices, especially on the high end of the market, where inventory is excessive. “As you go up in price point, days on the market are increasing and months of inventory are increasing pretty significantly,” de la Vega said. “Everything is price-sensitive and everything becomes a comparable.”

In May, AQR Capital Management co-founder Cliff Asness paid $26 million for a penthouse at 321 Ocean, marking the most expensive condo sale of the year. But the five-bedroom unit actually sold at a 51 percent discount off the $53 million asking price in 2015.

And about a month earlier, Asness’ business partner John Liew picked up a unit at the nearby Apogee in Miami Beach for $13.5 million, $1 million off the ask. Both Liew and Asness are billionaires who live in Greenwich, Connecticut.

Common concessions

Incentives are also a factor for sales. On the new construction side, developers are offering buyers sweeteners to close deals.

For projects that are nearly or just completed, developers are including the finishing touches for buyers — offering to throw in flooring and wall treatments that wouldn’t normally come with a new unit, said Edgardo Defortuna, president and CEO of Fortune International Realty.

Of the six units remaining at Fortune’s Jade Signature, a luxury condo tower in Sunny Isles Beach, Defortuna said he is “finishing” three units. At other projects, he’s seen developers offer the same for units on the less popular configurations for a limited period of time.

That means the developer is eating the cost, which typically ranges from $100 to $150 a foot to “finish a unit well.” The Estates at Acqualina and Turnberry Ocean Club are among those delivering units finished.

For buildings that aren’t as close to opening, developers are still reducing deposit requirements and offering discounts on a per-square-foot basis “if the price is right,” Defortuna said.

While Elliman’s Parker said the firm isn’t “engaged in any sort of incentive-based draws,” some projects Elliman is marketing are now offering furniture packages to buyers for an extra fee.

As the flow of out-of-staters continues, certainly one thing is changing for brokers, according Danny Hertzberg of Coldwell Banker’s the Jills: “We’re all becoming a bit of tax experts.”

from The Real Deal Miami & Real Estate News News | & Curbed Miami - All https://therealdeal.com/miami/issues_articles/tax-heaven/#new_tab via IFTTT