Commercial Real Estate Blog by Madison
Author Archives: Elliot Zaks

The Changing Face of Philanthropy – Will Real Estate Investors Join the Trend?

By: Elliot Zaks, Principal, Madison Commercial Real Estate Services

The Millennials generation is transforming the way the world lives, works and plays. Business as usual is no longer the case as the next generation displays changing ways of doing business. One of the major differences in the business world of Millennials versus their predecessors is the stress on business being about more than the bottom line. According to Deloitte’s 2015 Millennial survey, 73 % of Millennials believe that businesses should focus on people and purpose, not just products and profits.

In the past, it may have been traditional to give a percentage of profits to charity, or to add a charitable donation to each sale. But as the world changes, the world of business philanthropy is changing as well. In order to attract the next generation of investment dollars, entrepreneurs are making philanthropy a key part of their business strategy. Will real estate investors join the trend? Continue reading

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Up or Down? Changing Capital Gains Taxes

By: Elliot Zaks, Principal, Madison Commercial Real Estate Services

The White House tax plan, as described in President Obama’s 2015 State of the Union Address on Tuesday, has revived the long debate over the use of taxes to close income gaps. In an effort to overhaul the tax code for a more progressive system, the President has proposed several significant changes.

The new proposal would raise the top tax rate on long term capital gains. Changing the rate from the current 23.8% to 28% would affect approximately the top 1% of earners. (This new rate includes the Affordable Care Act’s 3.8 percent investment income surtax on high income taxpayers.)

The new plan also proposes to impose capital gains tax on many inherited assets. Taxing capital gains at death, rather than allowing them to pass on to heirs income-tax free, would also have a major effect on the well-to-do. Other elements in the new plan include expanding middle class tax breaks, permanent expansions of the earned-income credit for the working poor, and a tax on large financial institutions.

We are sure to hear heated discussions on this subject over the next few weeks. It is unlikely that the Republican-controlled Congress will sign the President’s tax proposals into law. But it is worthwhile to consider both sides of the debate, and its potential effect on the real estate industry. Continue reading

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Happy Anniversary to the Trusted Advisor Blog

By: Elliot Zaks, Principal, MCRES

We are pleased to celebrate the anniversary of the Trusted Advisor blog. It’s been four years since our first post entitled “Two Recent Court Rulings Impact Related- Party 1031 Exchanges.” Since September 2010, the Trusted Advisor has consistently published informative and helpful articles. Topics have touched on such diverse topics as crowd sourcing, mortgage fraud, real estate easements and development rights. We’ve blogged regularly, averaging 32 posts per year. In that time, we’ve had 104,917 page views and 38,002 readers.

Read on to find out our top ten posts! Continue reading

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Confirming the Facts with Tenant Estoppel Certificates

By Elliot Zaks, Principal, Madison Commercial Real Estate Services

Each tenant estoppel certificate constitutes one or two pages within the hundreds of pages of closing documents of any commercial real estate transaction. Estoppel Certificates can easily be overlooked in the flurry of paperwork preceding a transaction. However, the tenant estoppel certificates are a valuable source of information which should be reviewed carefully by potential buyers or lenders.

Each estoppel certificate is a representation by a party signing the certificate to the addressee of the certificate. Signing the estoppel certificate establishes certain facts which the signing party may not later contradict, dispute or recant. In the landlord- tenant relationship, the tenant estoppel certificate is used to confirm the current status of the tenant and landlord’s rights and obligations under an existing lease.

A tenant estoppel certificate is generally used when a commercial property owner is seeking to sell or refinance the property. Tenant estoppel certificates are commonly used to clarify the tenant’s understanding of the lease agreement to potential lenders or buyers.

Here is why Estoppel Certificates are of value to both the buyer and the lender.
Continue reading

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Potential Pitfalls in DIY Deals in Real Estate

By Elliot Zaks, Principal, Madison Commercial Real Estate Services

Do-it-yourself projects may be a worthy endeavor for a handy homeowner refinishing a deck or a green thumbed gardener installing a herbaceous border. However, in the complex world of real estate transactions, DIY measures may backfire. Buyers seeking to cut costs with DIY methods can miss out on some vital resources.

The residential home market is experiencing a shift in attitudes. Rising interest rates and stiff credit requirements are causing a slow down in residential mortgage lending, as buyers struggle to get home loans. Rather than submit to the strict rules of the banks and creditors, many home buyers are turning to all cash deals. While cash buyers have the advantage of evading lender’s regulations, they should be careful not to forego essential industry safeguards. Continue reading

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Mortgage Fraud: Beware of Illegal Schemes

By: Elliot Zaks, Principal, Madison Commercial Real Estate Services

Mortgage fraud is a growing threat to the real estate industry. Although most people involved are honest, there are some borrowers, loan officers, title agents and attorneys engaging in criminal activity in order to make a quick buck. The real estate market is still suffering from the aftermath of the industry meltdown. Suspicious activity reports for mortgage-related fraud is climbing steadily each year, reaching 93,508 in 2011, versus the 46,717 reported in 2007.* While reporting suspicious activity is up, new technology has also made fraud easier than ever. Computer systems leave a window open for enterprising and technology-savvy criminals. All it takes is an Internet connection and a copy machine to produce a false Satisfaction of Mortgage document.

In a recent seminar hosted by the Madison Learning Center, the Vice President and Claims Director at one of the nation’s major title insurance underwriters discussed the various ramifications of mortgage fraud. Here are some of the most common scams now and some of the warning signs to spot potential fraud. Continue reading

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Silver Lining – A Positive for the Real Estate Refi Industry from the Government Shut-Down.

By Elliot Zaks, Principal, MCRES

All eyes are on Washington, as President Obama signs a bill ending the 16-day partial government shutdown. While it’s back to business for furloughed federal employees, and reopened national parks, what other impact might the government’s shutdown have on the daily lives and businesses of most Americans? Continue reading

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