Corporate Transparency Act: Avoiding Felony And Jail Time | Real Estate Notes Show

Episode: Avoiding Felony And Jail time W/ Jeff Watson | Corporate Transparency Act Dave's Goals and Plans: - Been in notes space since 2010, started with analyzing deals for a fund - Started buying own notes around 2011-2012 after getting into real estate in 2005 with rentals - Planning to fly out from Philadelphia to Node Expo in November - Recently analyzed creative finance deals (CFDs) and considering buying and converting them despite liability concerns - Planning future episodes discussing CDF conversion and switching liability implications Nathan's Goals and Plans: - Got started in real estate in 2009, bought first non-performing note in 2010 - Previously did fix and flip and landlording before transitioning to notes - Flying down from Canada to Node Expo in November - Runs DME (Diversified Mortgage Expo) conferences - Views note buying as easier and better return compared to rental properties for same capital Key Recommendations: - Buy conference tickets early - saves money and helps organizers with planning and understanding attendance numbers - Get registered to vote and encourage like-minded friends to vote for business-minded candidates - Reach out to connections with LLCs or other business entities to inform them about Corporate Transparency Act compliance requirements - Connect with others in note space through conferences like Node Expo to learn and network - If using CFDs, understand liability risks and consider conversion strategy to traditional note structures Topics Discussed: - Corporate Transparency Act requirements and January 1, 2024 implementation - Evolution from rental properties to note investing as superior strategy - Dodd Frank legislation and ongoing advocacy efforts in Washington DC - Creative Finance Deals (CFDs) - benefits, drawbacks, and conversion strategies - Node Expo conference coming November in Dallas - Federal legislation overreach into small business and privacy concerns Guest Insights: - Corporate Transparency Act is deepest federal overreach into American business ever seen, effective January 1, 2024 with 3 months compliance deadline from September - Note investing is superior to rental properties and short sales - allows working from financial calculator, iPhone, and laptop without physical labor - Successfully backed into $30 million property through deed-in-lieu foreclosure in 2011, clearing 31 title exceptions - demonstrates power of paper-side investing - Government assumes small business owners are drug dealers, money launderers, or traffickers without evidence - Dodd Frank legislation has been challenged for 12 years regarding seller financing issues, with ongoing advocacy in Washington DC welcome back to another real estate note show I'm your host Dave puts alongside me Nathan Turner how you been h Hello doing well doing well awesome well today we're g to get into the corporate transparency act which is a big thing to unravel but before we get there how have you been we haven't talked in a few weeks it's been a little while yeah it's true no things are good kids are back in school getting kind of back into the groove of things and it's been good just getting back into normal routine yeah that's awesome man um school is you know School sports we have everything going on right now um you know night time is no longer hours right that summertime is over and kaput um and we've been doing a lot of getting back to normal in in the real estate note space um with some big conferences coming up uh node Expos coming up here in November um if you're interest that kind of stuff we have a link in our website if not just email we have a link directly to it so definitely jump in there and go see Eddie and the crew down there uh down Dallas but yeah I just I just posted on that yesterday so it's I mean it's I know it's a little bit out I'm more of a planner it's surprises me how many people buy tickets the week of but yeah no get your tickets early yep Pro tip absolutely for those who are organizing a conference it makes a big difference first of all you save some money if you get your bir ticket but really it gives me a chance as the organizer to understand what the numbers are it just makes planning that much easier so yeah do a favor tick it early then be there so for those who don't know what we're talking about there's a nationwide note conference there a couple of them Nathan runs one of them um there's note School runs note Expo with down Dallas and it's fabulous time to connect with other people in the note space note creators note sellers just learn what's going on and face to face uh we'll both be there um I'll be flying out of Philly Nath will be flying down from Canada um but it's a really cool thing for those who don't know who we are um I've been in the notes space since 2010 started with a fund um analyzing deals and then started buying my own around 2011 2012 uh but I got into real estate 2005 uh with rental stuff and I became a note buyer and I've been doing note buying forever uh feels like Nathan has a similar background go ahead very similar I got started in 2009 bought my first non performing note in 2010 uh before that I was same thing I was doing some real estate Fix and Flip and landlording uh and when I got into notes I'm like the realization that this is a much easier way to go uh for the same amount of money or better uh and so it's for me it's no-brainer there's some pros and cons and you gotta weigh that out for whatever your investing strategy is but to myself I'm a big fan absolutely um you know we've gotten more in the idea of creative Finance notes and those people seem to just starting to get what we're doing as note buyers right and that interest um we we've actually analyzed a couple cfds recently and as much as I'm not into them I'm going to look to buy them and convert them and all that stuff I get it guys yeah I get it you're creating cfds for the ease of it but there are some drawbacks I just don't want the liability and we're going to work on that um in a couple shows where we'll probably talk about how to convert over successfully um but the not space show yeah yeah I think it'd be big good because I think a lot of people want to know if it's worth it to switch over right what's the liability of not and what's the benefit of having a cfd right and we'll get into that in a future show if you have other yeah if you have other ideas guys if you want to talk about let us know awesome um if you are looking to learn about more about conferences reach out to Nathan about DME Diversified mortgage Expo um you can always reach out to our website we have a link inside the chat um that will allow you to get this week's Jeff Watson's information uh as well as our podcasts our YouTube videos and things like that so yeah lots of good stuff coming up yeah's a great time yeah get work done it's great absolutely so I would encourage all those who aren't connected friends wise who have an LLC who have an escort or have some kind of thing there to make sure you reach out and to um tell them about today's call either the recording podcast or whatever it is so that you can make sure that you learn everything has to do with this because this is a huge topic um that's going to transform a lot of things if it goes through so well it's already currently it's law we've got registered by the end of the year Jeff will tell us all about that yeah pros and cons and all that kind of good stuff yeah absolutely so let's bring Jeff in without further Ado Mr Jeff Watson attorney Jeff Watson how have you been I'm doing better and better gentlemen it's always a privilege to be here with you yeah excellent good to have you thank you very much for joining us for a little bit this morning and kind of explain to everyone what this is what's going on but before we get there who are again how how do you come to speak on this topic well that's a great question I mean I could do the old Billy Crystal shtick on you right now who am I you know and who am I and you know go through all three all three words and emphasize each one but I'm not gonna um it's it when you when you see it in the movie it's hilarious but anyhow that's because it's Billy Crystal but uh my name's Jeff I'm a lawyer licensed to practice law in the state of Ohio only in the state of Ohio and I have been a real estate investor since January of 1994 started out as a landlord did some did I did um what what there's some term that for it that everybody's got all glammed up over in the last few years but I would buy a rental ugly rental I'd fix it up I'd refinance it you know and then i' you know stick a tenant I'd have a tenant in there and so on I I thought that was the way to go I mean I was that was before somebody put it into a course and you know put all sorts of lipstick on it you know you know makeup and sent it out the door as of some info product I was doing it you know lots of other people were doing it um then I got you know but at the whole time I'm still practicing law full-time litigation downtown Cleveland in court doing Administrative Hearings literally five days a week just exhausted but still had to build a rental portfolio because I knew swapping hours for dollars had a limited life expectancy so anyhow fast forward I then leave the law firm after 13 years there start my own practice and um I start getting drugged more and more into the real estate stuff less and less into the personal injury medical legal litigation more and more into the real estate started out pretty heavy in short sales turned the short sale industry upside down because I understood transactions in ways that most people didn't get it because I brought a lawyer brain to it and then um moved from there and then I met a guy by the name of Eddie speed and after getting to understand Eddie speed and figuring out what he was talking about getting it getting getting to understand speedis Ms if you know what I mean um I looked over I looked at myself one day in the mirror and I said I don't think I'm going to be doing any more of these anymore which is referring to uh buying and fixing rentals done if if I can't get it my attitude now about real estate investing is if I cannot do it with a financial calculator my iPhone my laptop and addictive phone it doesn't get done it just doesn't get done I don't touch hammers saws paint brushes I don't touch it okay that's that's all there is to it you know and Eddie was a big Eddie was a big help of me getting to that point because you know he saw when you got a hold of paper versus you know bricks and sticks what happened and then I then I moved away from I moved away from that because I mean buying a defaulted note is such a better more Superior investment strategy than begging to do a discount on a on a short sale I'm done I'm done I am no more gonna be that little boy standing there with a with a bowl you know Oliver Twist please sir may I have some more porridge or gr no I want to be the bank and we pulled off of I pulled off a transaction for a client like that back in 2011 it was a Monumental deal um we backed into we backed into title through a deedon Le foreclosure cleared 31 exceptions on a title commitment and I have watched what that client has done with that property to this day and he has probably 10x it in the last 13 years it is now easily a $30 million property nice and we we came into it for three million all total um it just just Monumental so I saw the power of how to do notes and work deals from from the paper side and all the time I've got clients that are you know like hey Jeff you understand real estate you're still a lawyer you still know what to do you know can you look at this issue can you look at that issue and then lo and behold our federal government in its Infinite Wisdom air quotes on that Infinite Wisdom stuff there folks just want you to hear it you know know there's a little sarcasm there comes along with different pieces of legislation the first one was the brilliantly thought out Dodd Frank and so we've been charging up the hill in C we've been charging up the hill on on Dodd Frank for about 12 years now trying to get some of that change regarding seller financing and that's been a that's been an ongoing Joy I mean I was in Washington DC just earlier this week on that topic I'll be back there next week on that topic and it's just folks if you if you don't hear anything else I say about this voting matters voting matters get registered to vote make sure all of your like-minded friends are registered to vote and vote vote for common sense business-minded people I'm not going to tell you what party to vote for because I've got I I've Got Friends on both sides of the aisles that own rental properties and they understand it you know so just you know just vote for people understand business okay and then then so we fought do Frank we're fighting do Frank and then we get this this next thing that comes down the road and I'm I'm going to cut the bio short we get this next thing coming down the road called the corporate transparency act and that's what we're gonna talk about today yeah once again the government and its Infinite Wisdom believing that small business owners mom and popop entrepreneurs that we are either drug dealers money launderers sex traffickers human traffickers or some other bad nefarious person MH that they need to know what we're doing with everything we do in our businesses and everything every time we buy and sell an asset they need to know about it and I'm like you know there's so many better ways to enforce you know moneya laundering issues and so on I mean there's just but no they've got to make they got to make an invasion of privacy a primary as aspect for them so in act so the corporate transparency act became enacted January 1st of 2024 after it been installed for a couple of years now just so you understand this bill got passed three years ago it got passed as part of a huge defense Appropriations bill that sailed through the Democrat lead house sailed through the Democrat Le Senate and landed on President Biden's desk and I don't know in a Moment of clarity or senility he signed it bam we now have the deepest overreach into American Business we've ever seen and we'll get into How Deep The overreach is so it becomes a effective January 1st of this year because they have finally built a website that they believe is capable of capturing and storing all the data um and so now we're facing it here we are this is September of 24 folks we're down to three months and a week to comply with this thing now I know a lot of people have already done it and I've talked about this in the past I was talking about this a year ago and my recommendation was let's wait and see right let's wait and see and and there was a brief moment for about 36 48 Hours where I thought this thing was dead when a federal judge in Alabama ruled it was unconstitutional and I was like Yay in fact I was at a conference I literally CH I literally pivoted and changed the topic because I was gonna talk about that and so for 36 hours we all thought it was dead so I I spoke on a completely different topic um 387 hours later the federal judge comes back and says oh my ruling is just limited to the group of plaintiffs that brought this lawsuit so it's unconstitutional to the people who filed the lawsuit but anybody else who didn't file the lawsuit it's still constitutional as to them wow now wrap your head around that one for just a moment yeah okay now I know there's other cases that are percolating in other districts and so on and candidly I think the federal government is just trying to run out the clock the Department of Justice is just running out the clock let's get to the end of the year that we got a bunch of people who are now potential felons and now we can go do something with them now you know without diving too deep into politics but let's face it laws are passed by politicians and then they're enforced by bureaucrats and I don't think who is this act affecting oh Dave this act is affecting pretty much every small business in America I'll go through the list of who it doesn't affect and it's all of the big boys it's a lot of the big highly regulated companies and so on they don't have to but any sort of holding company any sort of sole Proprietors any sort of any sort of entity a corporation at LLC anything that does a partnership anything that's doing business that has you know a handful of employees has a few million in assets has this it applies to them and what if they don't what they this well they face penalties and fines up to 500 and some odd dollars a day and if they're deemed to be egregious enough they can be prosecuted for a felony second deegree felony I believe for just not filing you didn't do anything illegal you didn't it's not your books are bad you're lot you know laundering money failing to report on yourself is now a felony think about that for just a moment that's a headline right there failing to report on yourself is a felony see I've I've grown customed you know my entire life it's been a felony to to lie about how much money you made on your taxes sure okay you you know you can argue all day long over deductions I you can't go to jail for for them when they disallow your deductions okay but if you deliberately under report your income yep that's a felony and I can understand that sure well when you choose to not disclose what you own in the virtue of what companies or businesses you own well now it's a felony as of as of now and if you don't comply by the end of this year it's it's no buo it's not good you're you're looking at you're looking at trouble you know oh man do they have I mean just to kind of explore all the thoughts on this do they have an enforcement armor this in place already good question I don't know if they have really built up the enforcement arm yet I think they're still trying to figure out a lot of these things and so this is kind of why I've switched my position I mean if you've listened to me earlier on this topic I was saying in October of 23 wait until October of 24 to file because it's just how the government works I'm now punting and I'm now going saying I'm going to wait until about November 12th I'm going to wait till about November 12th and there's a couple of reasons why I'm waiting uh one of them is I'm going to just see if another court case Pops in other words I'm gonna wait to see what happens in the November elections sure um and I think what what's changed my mind about that is I've spoken to some me several members of Congress about this about this legislation about this law and everyone that I've spoken to just looks at me and shakes their head and go we didn't we didn't vote for it we could we'd get rid of it and maybe that'll happen but folks don't Bank on that because if they get rid of it it's not going to be until after next year and you're already then GNA be a felon you will have already violated the law wow penalties and all that will probably still apply I doubt they'll just say ah it's okay yeah no I don't think they're gonna say it's okay and I mean God forbid we don't have much of a change in the structure of our government and we we continue to gridlock in some form or another you know then it's then it's still going to be there it's still going to be there so you know I'm wait I'm waiting until like November 12th and then I'm gonna then I'm G to just sit on and carve out a couple of days and take care of all the filings for me and some of my clients I've got I've got one client with probably about 40 entities they're going to have to report and is this something done that the individual can do or your CPA do or okay you can do it you can hire someone to do it for you you're you can ask I would not have your accountant do I don't believe your accountant is qu legally qualified to do it I think in my estimation if I'm really gonna put on my lawyer lawyer glasses and thinking hat the the way the statute is written it is so vague in some areas that I think you're going to need a lawyer to look at each and every one of your entities to determine who in that entity as an owner has substantial control because the definition of substantial control is so vague that it's open to wide interpretation and I don't think anybody other than someone who can think around corners like a lawyer should be able to think around corners can apply that principle to each and every business structure you have because let's face it every entrepreneur I know is creative they've got unique side agreements they've got special you know special little deals you know oh you've got this percentage I've got this percentage but in the event of this then the percent okay you got to know all that stuff okay so what jumped out to me when we at the DME you're talking about this was isn't just me filing right it's my spouse may have to file even though if they have a controlling interest in one of the companies which they may not have any day-to-day involvement right they may have no day-to-day involvement but but you know if you're married and you have used your marital relationship for good tax strategic planning and you form let's say you formed a multiple member LLC whether you're in a community property state or non-c commmunity property State because you want the advantage of a multiple member LLC for partnership tax return purposes then both both parties are going to have to be reported on the filing for that entity wow even though one of them absolutely does nothing other than keep your home alive you know so that when you come home there's actually a place there where you can eat you know and so and and believe me hey so there's a lot there's a lot of married couples out there that have set up this structure where one of them has no clue how the other one's running the business and it's vice versa I mean I've seen it where you know they've got two businesses she's going hard in one he's going hard in the other but they both own it together both those things you're have to report you're gonna have to be reported in both of them so yeah and so let's I'm trying to really just get my head around so like I mean where did this come from where they what are they trying to gather what's the purpose of this law en there is a belief there is a belief that data is good and there is a belief in our federal government that if we have more data on our US citizens that are doing business and if we have more data on people who are doing business in the United States then we can better Fair it out who's doing drug dealing who's doing money laundering who's financing terrorism who is doing human trafficking who is doing this who is doing that okay and so the IRS is supposedly getting millions of tax returns every year showing what a business is doing and what it's making but the IRS doesn't necessarily get the data as to who really owns it now let's face it the way we do business in America today with some of the rules we have in corporations and llc's and some of the creative structuring that's done there yes you can you can shift ownership interests around and the money that goes with it and you can play if you have a Criminal Mind you can make you can take advantage of some loopholes wow now is reporting how many you know reporting how many rental property holding companies I own is that GNA stop drug dealing is that gonna stop money laundering no right they're shotgunning it and not sure who's doing what right they're just trying to gather it that flips the other side how do I know my information safe on the back end oh Dave come on man Dave on the 21st page of the 22 Page Long bill it says that we have to afford a high level of security to the data that they collect and that there's a special penalty if someone if it goes wrong but I got news for you I got news for you having been involved in companies that where employees failed fishing tests where cyber Security Experts can come in and show all the gap and the weaknesses and where human beings are involved somebody's going to click on the wrong link on the wrong fishing email and the next thing you know some trojan horse is going to get implanted and it's gonna suck all that data out we've already seen it China has billions of Records on American Service members billions of Records on American government employees so anybody that knows how to do this is going to be able to steal this data and what kind of information are we reporting we are reporting the full home addresses and the current business actual physical location of every business in the United States and everybody who owns 25% or more of it or has substantial control over that business so your full name and identifying information including tax ID number but not social security number they don't want that the IRS already has that yeah and so know they they're Gathering all that information so here's what I foresee here's what I foresee and this is the part that scares the Daylights out of and somebody's gonna be like oh Jeff your tinf foil Hat's too tight and I'm gonna be like no I I understand how people work and think let's just say that with the advances we're seeing in computers with AI and everything else that if now I can access an individual's tax returns an individual's beneficial ownership interest filing and I can access their credit file and I can access their banking information I can determine very quickly are they cheating on their taxes are they engaged in anything else that I don't like and it can get to the point someday where somebody could look at my bank account and go oh every month he has a large check going to that church oh every month he has a large check going to that missions organization we don't like that behavior we're gonna Target him for something there I said it yeah I said it you know or or that you know and you know now I went down the extreme so let me back up let me back up they could look at it and say okay wait a second he's got a $10,000 Rolex on his wrist he's driving an $85,000 car but he's reporting $22,000 in earned income something doesn't compute sure you know so then they're going to look at and say well what else is he oh wait a second oh he inherited this Roth IRA okay now we understand or he owns this apartment complex that shows up on this other return and he's got all this you know depreciation cancelling out all the other income okay fine but they'll they can figure all that out oh and if the guy didn't inherit a Roth IRA doesn't have a rental property and runs a business and has 22,000 in reported income but a $10,000 roox and drives an $85,000 new vehicle yeah paid for without a bank loan on it they're going to be like what's going on we gota go see Christina asked a question how did truss do trust have to report okay anything different for a trust yes things are different for a trust at this moment in time okay a trust is a contract it is a private written agreement between individuals and as long as there is not a entity involved with the trust as long as there's not a corporation partnership or LLC involved with the trust that trust does not have to report who its beneficial owners are because a trust is not an is not a structure it is not a an arrangement that requires filing with a secretary of state or a tribal Authority or a government agency in order to be brought into legal existence a trust comes into existence upon the agreement of of more than one person okay how about solo 401ks a solo 401K in and of itself does not have to but it's sponsoring employer does remember you cannot have a solo 401K unless you have a company by which it is generating earned income from which tax returns are being filed and pay is being withheld going into the 401K so the sponsoring entity owned by the same person has got a report awesome yeah questiony yits now but here but don't panic Tammy Don't Panic Don't Panic your government overlords are here to help you yeah there's proposed rules on cash transactions and trusts involving real estate that are still being written and they're not out for comment yet but there's proposed rules great have been nonprofits like you know Church organizations and other nonprofits do they have to there are I can show you a list of who does not have to report and I believe churches and nonprofits are on that list okay and so we can do one or two things guys if if we want to handle the screen share we can do it otherwise I can just send you this document that came from the federal government that has a nice formatting and layout and it's pretty pretty easy to read so guys if you want that information there's a link inside uh the chat where you can get all the information um do you have it on your website and everything too I'm gonna send it I'll just email it to you guys I'll just email it to you guys yep and let me if you want I can pull it up let me see do we can we do share screen right now we could if you want to sure that makes just go ahead it'll it'll help people see what we're doing here yep it should be available go ahead well let's make sure my computer does what I tell it to do because I don't need it to share the commercial real estate deal I'm working on right now all right so what we've got here is the first question of what under the law what company you know who has to report okay reporting company definition all right let's see if we can get all these pop-ups to not pop and actually before you get into that you got up at the top there Boi small compliant like and that's the new term I've heard is now they're called beneficial ownership information yes yeah so this is this is I'm sh I'm sharing now selections from the document I'm going to make available to anybody that wants it okay okay but let's just go through this was the company created under the laws of one of the states or an Indian tribe of the United States the answer is yes it's going to have to report if the answer is no is it an LLC I'm trying to find a spot to put my mouse where I'm not going to keep triggering all this stuff and then was the company created by filing a document blah blah blah any one of those things that are yes it may be a domestic reporting company was it registered to do business in any us or tribal jurisdiction by filing something if it's a foreign entity then it may be a foreign reporting company okay so now let's so we've got that to deal with now let's come down here and I'm G to skip over a few pages and here's a short list of exemptions this is a short list if you think you're on the list you need to consult with your own attorney I'm gonna emphasize that again consult with your own attorney as to whether the entity that you think you have is really exempt okay all right so I've gotta just flip the phone over because I'm GNA otherwise okay so it is it a security reporting issue so if you've got an entity that reports the SEC it's exempt government Authority Bank Credit Unit depository institution holding company Money Services Company check cashing business are you a broker or dealer in Securities are you doing a Securities Exchange or clearing agency you know all these different things let's come down a little bit more do any of those the security ones does that include a fund like a 506 it very May well we'll get into the we'll get into that in just a minute okay but if we come down here and we're looking at a tax exempt entity such as a church it doesn't have to report but here's number 23 down at the bottom an inactive entity let me talk about how they Define that it doesn't have a bank account it has less than a, Dollar in assets okay that's what they consider to be inactive all right so now let's go take a look at this let's go the one you asked about was a which one was you asking about Nathan a fund like a 506 C fund that's what I've got so let's go see if it fits under um one or 10 let's go see what we've got here okay is the entity and issuer of class of Securities registered under section 12 of the security exchange Act is it required to file supplementary periodic impementation under Section 15D of the SEC that's number one if you answer yes to either of those you're exempt okay okay so let's jump down to number 10 just see if you qualify there the answer is yes okay we'll check that um is the entity a broker or dealer as those terms are defined in security exchange act okay you got to hit both in number seven okay well let's go look at number 10 that's number 10 you got hit both of these is the entity an investment company or investment advisor as defined as either the Investment Company act or an investment advisor in section 202 of the investment advisor act and is the entity registered with the SEC so if you've set up a fund and it's identified as an investment company and it's registered with the SEC you're exempt gotcha think I'm good okay okay okay hang on just one second I've gotta you're buzzing so this is a big thing for all it's a time sensitive thing yeah that's okay so just real quick guys so this is an important thing I know we're kind of going over with the legality words that Jeff's using but you just need to understand that this is something you need to file before the end of the year Jeff saying pushed off till after election to see what happens if one party gets in more likely will be pushed off if another party gets in it most likely will be pushed forward so that's the only reason right now to kind of hold off is you can go ahead and file this right Jeff right now they can go on and file if they want to they can go on and file if they want to my attitude is I'm going to file in the middle of November because I'm waiting to see I'm waiting to see how much more streamlined they make this because they've gotten it a lot more streamlined they've gotten a lot more simplified okay but let's just talk about what if you don't do this okay what happens if my company does not report beneficial ownership interest in the required time frame okay if a person okay so if you've made a mistake if you got to go back and fix something you got 90 days to fix it and you'll be okay however should a person willfully fail to report or update beneficial ownership information to finsen as required under the reporting R finsen will determine the appropriate enforcement response in consideration of its published enforcement Factor the willful failure to report or update and the willful provision of or attemp provision of or attempt to provide false or fraudulent information may result in civil or criminal penalties including civil penalties of up to 500 for each day and up to $10,000 and up to two years in prison is serious stuff so when you go to prison for more than 180 days went from a first-degree misdemeanor to a felony wow so we're talking this is how a business owner can become a felon by doing nothing wow think about that just think about that for one second I feel bad for those who never knew about this right there's so many small companies out there had never heard of this they talk the attorney every couple years when they need them and their CPA might not even mentioned it and this could affect so it's not only us guys it's telling the community out there hey if they have a small business you need to make sure you're aware of this Fred's lawnmower repair Al's Roofing and Bob's lawnmowing service all have to comply because you know Fred and Bob and Al They Might Be laundering money for the cartel just saying you know you know and there's somebody that's going to hear me say this and they're going to really not agree with me they're going to be like well Jee you're you're not serious about this yes I am serious about this listen I am very vehemently politically and morally opposed to money laundering I'm not a fan of tax evasion okay I don't I won't tolerate it I won't I've had clients ask me to help them do it and I won't do it but at the same time I'm not a fan of a government that says simply because I run a business and I don't do anything other than run a business make sure my customers are taken care of make meet payroll and pay my taxes that now I'm a felon because I forgot to go tell you who owns my business so two quick questions we have from Levi one is uh what is a pulled investment vehicle for reporting purposes don't know that's go ask his own attorney on that question because if he has one go ask and then Dan uh on Facebook ask I want to share this information with others is the Matrix found online is there a link to it or is something you built the Matrix I showed you is available from finan and I will make the whole PDF of 57 Pages available to both Nathan and Dave by the end of the podcast yep awesome thank you so and the Matrix is not mine I'm literally going from something that I got updated off of the finsen website uh month ago yep The Matrix is everywhere yeah one other question here Levi writer is asking what is a pooled investment vehicle for reporting purposes that's a great question Levi ask your own attorney got it yep because it's going to depend upon how you've structured it have you registered it with the SEC and so on because if you have registered it with the SEC and you've gotten compliance it's probably an exempt entity but if you haven't it's not exempt so we're talking like even like a syndication may be exempt if you're doing like a syndication may be exempt if it's followed all the dots in the eyes because remember a syndication is being done under the supervision of an exempt entity such as a broker dealer or Securities office right right so it may be exempt okay yeah that's something I've got to figure out in the next um two months yeah you know I've got a client with a number of syndications that everything is run through a broker dealer office so yeah yeah well Jeff I think this is something people should definitely keep and tune into your website you can get just information through the link that we provided earlier um and for those who want to catch us this will be on our YouTube in our podcast um I would encourage you guys um to follow along with Jeff's page he's has a constant flow going on um and talk to your attorney talk to your real estate attorney whoever you work with and ask is this required for me um if you're not sure ask um I wouldn't go the Assumption of I'm not sure so I'm ignore it because I hate to see see any one of you guys get a felony or go to jail or get fined just simply because you didn't know um do matter if we care or not yeah Dave let let me interrupt you and I'm sorry I know we gotta pay attention to the time but yes this is important not only do you have to report who is the beneficial owners according to the way the company is structured but you also have to report who has substantial control so substantial control could be the president presid the CFO general counsel chief executive officer Chief Operating Officer and then you can have anybody who has the ability to make decisions at a strategic level of the company can you fire a senior officer can you bump somebody off the board of directors that's important and if you look at the catchall down here at the bottom you got to love this any other This Is How They Define substantial control okay you're going to love this any other form of substantial control over the reporting company so we Define substantial control by using the same words yes great control exercise in a in new and unique ways can still be substantial for example flexible corporate structures may have different indicators of control than indicators included here so there may be a situation where as you pay down the debt on a company that you're acquiring you obtain more and more control of the company and so once that pendulum swings to where now you have control or an ownership stake in excess of 24% now you've got to go back and report so I mean there's a lot there's so many gotas and traps in this oh my Lord and so my best recommendation is this whenn in doubt report yeah whenn and doubt report yeah sure so I've got some figuring out to do but I'm just as we're going through here I've got a fund which I'm going to double check and make sure I'm exempt there I've got a nonprofit I think I'm exempt there and then anything else I do is actually owned by my Canadian Corporation so I think I'm exemp there too let me ask you this Nathan has the Canadian Corporation done any business in the continental United States has it filed anything in the in the states sure has yep then it needs to report all right so close you thought you thought you were home free so close just when you thought you were out they pull you back in a close yeah we file a tax return every year and all that good stuff so I mean yep all the business is done in the US so y yeah well Jeff I know we're kind of getting close on time and I know that you have and the reason we did an earlier call guys is Jeff's schedule is tight um you know Jeff before we get to the last question um are you to be anywhere any kind of conferences speaking conferences coming up in the next few months yep I've got two on my calendar right now I'm going to be teaching all about private lending literally how you originate a note on on rental residential real estate stuff like that in a commercial context we're not we're not talking about originating notes to Consumer borrowers we're talking about originating notes to commercial borrowers I'm going to be talking about that at a seminar in or Orlando Florida the 11th 12th and 13th of October um you can go find that out on my Facebook page you can see it on my blog Watson invested.

comom and then I'm going to be speaking at node Expo and I'm just going to tell everybody right now I'm G to be speaking about when you sell a partial does it become a security or not interesting can you make can you you know is it possible and the answer I'm going to just tease you and say the answer is yes there are ways you can sell a partial and make it become security and that means you've got a whole lot more responsibility so the question really is can you do a partial deal and it not become a security that's the question and how do that little teaser make sure you get your tickets be there yes we just talking about that go ahead Nathan let you finalize our call yeah we're always we bring on people that are experts in their field and and in real estate and so curious what you see what's your crystal ball giv your history and things you know what do you see coming down the pipe where are we headed in terms of real estate housing notes what do you see um we are at a Crossroads we are at a Crossroads and I don't know which way we're going to go in certain respects we are either going to have a prosperous inflationary economy or we're going to have a recessionary inflationary economy we're going to be we either going to fall headlong into stagflation and I mean not just the stagnant recession but also inflation or we're going to go into an area where we've got economic prosperity and we've got inflation I do not see a path forward that does not include inflation there is going to be some substantial pain in certain sectors of the commercial real estate market yeah office buildings are in deep deep deep deep ugly kimch um there's a lot of short-term loans coming du on apartment complexes that is going to be a challenge um I can already tell you that some of the big boys in the pros are gearing up and I'm already seeing it and I can also tell you that the that the workout Specialists that the big lenders and the big and the big facility companies they are overwhelmed they're just overwhelmed with all the workouts they're trying to do okay kicking the can down the road trying to find something viable to make happen but what we've got is an unprecedented opportunity to either absolutely obliterate yourself financially or make some wise decisions and secure yourself in your future of prosperity and I'm going to tell you right now I'm doing everything I can to get my hands on Hard Cash Flow appreciating even cash neutral assets when the FED cut the rate the other day I just looked across my portfolio everything I control took the total value of everything I control and I just factored a bump you know a a 3% bump just because of that because inflation is just we just flicked a little more oxygen and gasoline towards the inflationary fire and somebody's going to say to me well Jeff how do we get rid of inflation the answer is painfully simple but it's painful yeah we have to put Congress on a diet we have to go explain to both members of both members of both parties in both houses hey yo act add an extra trillion dollars every three months to the federal debt is not sustainable nope we have to run a surplus for the next 10 years holy God you're going to have to live on less than what you've been getting that's an amazing concept I mean I thought we all did as human beings well but but Dave here's the part that gets me there was a continuing resolution that worked its way through Congress in the last week and there were some conservative members of Congress who voted against it and this is the reason why they voted against it they go why are we continuing spending at pandemic levels the pandemic's over and it's a really good point that no one will answer and so you have to put Congress on a diet yeah now I'm gonna I'm going to get some hate mail on this and I don't care I am convinced I am convinced that you could tear out 10% of every agency's budget take them back to pre-pandemic level of spending and then rip out 10% from there and then if we just simply get the tax code the right way and we get the regulatory burdens lifted and we turn back to the natural resources that are out where Nathan is all the way down past where I live and so on all the way down to the Gulf of Mexico and we just drill and we do it in a smart responsible way we are going to become the number one wealthiest economy in the world and I'm going to explain it to you this way we live in an energy economy yep our information technology is dependent upon energy yeah if we don't have access to good reliable energy irrespective of clouds and winds and everything else out there we're in trouble is this your is your comment you're running for president soon or what absolutely not absolutely not I no I'm just I'm just repeating back to you the stuff that I have heard from some really good leaders that are already in DC that are doing the best they can do in their situation and you know I'm trying to get some more guys there more guys and gals that are there get them there um I'm working aggressively right now and I'm going to tell you my number one c number one candidate I'm F focusing on right now is in the state of Ohio the 13th congressional district it is akan Canton area Blue Collar lunch bucket hardworking people and they've got a choice they can stick with the first term Progressive absentee representative that lives in Columbus Ohio or they can go to a guy that has been there for decades that has represented them very well in the state legislature and who happens to be a good friend of mine Kevin cin and I want to see Kevin take that seat one more common sense business owner small business owner in Washington DC making laws that affect the rest of us that's what I'm aiming for that's awesome yeah I see we had another vote from Cindy Coleman that she's going to vote for you for president as well thank you Cindy for another vote but yeah thank you it's amazing to hear you know just common sense and that's something we we have to get back to just basic common sense and I think we get lost in that translation because of all the hand pandering that goes on um yes just be aware guys we don't want to get too political but just be aware of how it's going to affect your future how's it affect your kids how does it affect your business um and just we don't want to shortterm game this and say okay what's going to happen for next year we have to long look long term I the idea of us adding discussing Capital to our budget the efficiency every year um is scary right um but this CTA that you we're talking about the show is important for you guys to make sure you file so you avoid the fines avoid the jail time avoid the felony and just share the information because some people don't know about it and you don't want them to get affected by something they just weren't aware of cuz I'm going to tell you if I wasn't the space I haven't heard this at all spoken anywhere but at conferences with Jeff and whatnot so spread us to your local Reas please yeah so I'm I'm gonna if you permit me I'm gonna just pitch I'm gonna close with one selfish little pitch um absolutely I want to give you my perspective I have been doing a tremendous amount of studying and writing I'm writing a book it's at the publisher now title of the book is Boaz on business based upon the character that we see in the Old Testament book of Ruth yeah and I want to close with with this comment Boaz made an investment decision looking forward three generations not a short-term trade three generations wow think about that that's how that's the kind of investor Boaz was he was thinking three generations down the road that's how we should be that's a century yeah yeah it is yeah well Jeff always a pleasure thank you hang on for a minute I appreciate having you on live show for all those this will be recorded it's on our podcast all that good stuff we will be back in a few weeks stay tuned for more information thanks a lot guys hang out thank you.