March 31, 2022 • 29 mins
Nema Daghbandan is a Partner with Geraci LLP. His practice encompasses all facets of real estate transactions, primarily representing lenders, brokers, and loan servicers. His practice revolves around the preparation of documents and providing compliance advice to mortgage professionals related to nationwide commercial, residential, construction, and multi-family loan transactions. He also provides advice on documentation related to loan transactions, including servicing agreements, spread agreements, secondary market documents, leases, lien releases, procurement agreements, intercreditor agreements, and subordination agreements.
Mr. Daghbandan also possesses a deep expertise in loss mitigation and advises mortgage professionals in the management of defaulted loans and the remedies available to creditors.
Mr. Daghbandan has been recognized by his peers in the legal community as a Super Lawyers® Rising Star from 2016-2020. Only 2.5% of attorneys receive this distinction. He also received a perfect 10/10 rating from attorney review site AVVO®.
What you can do to help
Communicate your opposition to legislators via phone, letter, and email. You may download and customize the sample letters below to tell your personal story of how AB 1771 will affect you and your business.
VISIT: https://aaplonline.com/articles/advocacy/ca-flip-tax/
The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669. For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.
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Narrator (00:00):
This is The Norris Group's real estate investor
radio show the award-winningshow dedicated to thought
leaders shaping the real estateindustry and local experts
revealing their insider tips tosucceed in an ever -changing
real estate market hosted byauthor, investor and hard money
lender, Bruce Norris.
Aaron Norris (00:20):
Hey, everybody back again with Nema with Geraci
Law Firm and also AAPL, makesure to check the show notes for
sample letters that you can usewith your legislators. And let's
get to it. Very cool. I reallyappreciate that. And I'm going
to take over a little bit andI'm going to give you a little
bit of nuance on how to playthis, and if you ever taken an
(00:40):
improv class that there's a ruleand improv. It's Yes, and you
never say no on stage because itshuts the other person down. I'm
going to slightly tweak thatit's going to be no but and what
I want you guys to do is reallyfocus on SB 9, SB nine is where
we're able to do lot splits inCalifornia, or we're able to
basically turn a single familyresidence R-1 lot into four
(01:02):
units under current ADU Laws, Ithink there's a significant
opportunity to separateourselves from Wall Street. But
I want you to understand thedata that a lot of these
legislators are looking at. AndI told ATTOM Data this two years
ago, they haven't listened. Iemailed them again today. I
emailed Oscar and Jordan againtoday at the California
Association of Realtors, tellingthem like I don't know anybody
(01:24):
who's separating iBuyers fromthe data, and let me walk you
through what they're doingwrong. They're not meaning to
it's just been this way. And soanyway, it ATTOM Data puts out
something called the HomeFlipper Report, probably a lot
of you are signed up for it.
They define a home flipper bysomebody who non owner occupant
who buys and sells somethingwithin 12 months. Here's the
problem with that. iBuyers inCalifornia, especially last year
(01:48):
decided to completely switchgears, they're not renovating
homes for the most part, whatthey're doing is they're buying
a house that needs very littlework. You'll notice in most
areas, it's houses that are post1980. Very similar, you know,
square footage, bedroombathroom, and you're lucky these
days if you get new paint.
(02:08):
What's really interesting isbefore the webinars with Nema, I
found Zillow said on average,they spent around $5,500, I
can't find it now I wonder ifthey updated the investor
letter, but I'll find it again,open to where is not sharing
that information on average howmuch they spend. But these guys
are not flippers. And here's theproblem with that ATTOM Data is
(02:29):
actually picking them up asflippers, which is, is not good,
because they're not, they don'tadd value, what they're adding
is transactional speed. They'renot doing what investors do,
they don't do the ugly ones.
They're doing the easy ones,which means very little work on
the inside very little repairs,and they don't want to deal with
people problems. If you're, ifyou use PropertyRadar, I want
you to do something veryspecific. In PropertyRadar, you
(02:51):
can actually select location Iwas, go to the county level,
there's a quick list withinPropertyRadar where you can say,
hey, I want to look at flippers,and there's this really cool way
in PropertyRadar that actuallydefines market flip, short sale
flip and REO flip.
Unfortunately, PropertyRadaralso says, hey, look, they're
(03:12):
only looking at six months. Andthe reason is PropertyRadar said
Hey, you can't flip a house insix months, you must be
terrible. And you know, onceupon a time, that was really
true, true. The problem islately, we have more ADUs built
being built. And we also havesupply chain disruption. But I
want you to see I pulled thislist all, all over California.
Hopefully, you can't see that onthe, move that, hopefully you
(03:34):
can see my screen I want you toshow the over here is the
purchase seller and who boughtthem. I'm just going to scroll
through really quick so you cansee Zillow purchases who it went
to, and I want you to try tospot entities if they're
flipping directly to entities. Isee people okay, I see one
entity. But for the most part,all the stuff they bought last
(03:57):
year, the vast majority is goingto owner occupants. So, these
guys Zillow, in particular, inthis case is being shown up as a
flipper when 90% of the timeit's going to an owner occupant
eventually, very quickly withintypically 60 to 90 days to
putting new paint really goodvacuum job and they're putting
it back in the market to be soldto an owner occupant. Why?
(04:21):
Because they're making money onevery piece of their transaction
loan closings, you name it.
Okay. Um, another point of ifyou need fodder for how terrible
government is at creatingaffordable housing. This is want
you to notice the, the addresslamayor.org and under summary of
HHH pipelines, HHH was a $1.2billion tax that they
(04:46):
implemented in 2016. The goalwas for them to create 10,000
affordable units, but I want youto look right here I can't
select it, but it says theaverage total development cost
per unit almost $600,000 You'renot reading that incorrectly. I
think there's been a little over1000 units and five years that
have been implemented. And theTurner school has put out some
(05:07):
data on 2018 and 2019 ADUs arecrushing this, absolutely
crushing this, and it's led byowner occupants. So, if you need
an example of local, a SouthernCalifornia government that is
doing a terrible job of creatingaffordable housing, all you have
to do is look at the summary ofthe HHH fund and the government
is actually giving you the datato show them how bad they're
(05:29):
doing. It's hard, it's not easyto do in the chat, and I'll post
it on our website is as well.
I'll post this one because thishas the three different letters.
This was what he was talkingabout the sample letter for real
estate, you'll see the email hasthe webinar here, you'll of
course have access to this one.
And this is the one that Iparticipated in. Last week, just
(05:49):
talking about all the data,Darren Bloomquist is on there
from auction.com as well. But Iwanted you to get a sense of
some, some of where they'repulling the data from. This is
not your meaning. They don'tmean to be terrible. They just
are. They're just notunderstanding Main Street from
Wall Street. If you can do me afavor, provide data to your
local market, lead with data.
(06:12):
Data is not emotional. It's justdata. And then I want you to, if
you flip houses, providepictures, show them before and
after possible. Because some ofyou guys do hoarder homes,
you're adding accessory dwellingunits. And guess what? They have
to meet their RHNA numbers. Ifyou're not familiar with RHNA
numbers. Last year, in October,every city within the state of
(06:32):
California got their allotmentof affordable housing numbers
that they have to build the nexteight year,s talking to local
development professionals, theyhave to build if they were to do
it alone at rates that they'veonly accomplished once for the
next eight years. They cannot doit without the private sector.
And right now SB 9, which wentinto effect in January, is not
(06:52):
available for investors. SB 10is however it gives the city an
option. SB 9 is where you'reable to basically turn a single
family life before, SB 10 iswhere you're able to turn like
an R-1 lot and the citydesignates where they want them.
But you're able to create a10plex plus 2 ADUs and 2 JADUs
(07:12):
for a total of 14. So, it'swhere they want density. But not
all cities are going to playball. So, if they really want
affordable housing, they wouldgive the private sector access
to that. We have the skill, wehave access to private capital
like hard money lenders, likeNorris Group. And we know what
we're doing, we can get thesedone. They don't have to do
this. We can help. So, withthat, I'm going to start let's,
(07:35):
if you have questions, go aheadand put them in the chat for me.
The first question is investorsinto opportunity zones,
designated areas not exempt.
I'll take this, you only get thefull benefit of opportunity
zones, if you hold it for 10years. So, no, it falls outside
the guidelines. If you sell itearly, you would. Nema, are you
thinking the same thing?
Nema Daghbandan (07:55):
Yeah, that's correct. I mean, and the other
answer to is it's not exemptotherwise, right. So, there's
not a special exemption foropportunity zones.
Aaron Norris (08:03):
Would a nonprofit be exempt?
Nema Daghbandan (08:07):
That's an interesting question, right?
Which is, I assume as muchbecause, can they? That's a
great question. I don't know,individuals it's attack. You
know, like I this is my lack ofknowledge of nonprofits like,
what? Do nonprofits filed taxes?
I'm sure they do. Right, like,and so like...
Aaron Norris (08:24):
They do, they might be exempt entities. And
the only reason I bring it up isbecause SB 1079, if you're not
familiar with Califonia SB 1079,is where California is really
bad data. To implement a, ifyou're buying at auction,
somebody can raise your hand, agovernment entity owner occupant
or non a nonprofit can raiseyour hand in fist within 15 days
(08:47):
and buy it for you for one moredollar.
Nema Daghbandan (08:49):
Yeah.
Aaron Norris (08:50):
The dirty facts are, there's some very big
companies that opened anonprofit. Oh, yeah. And they're
pushing the small guy out. So,the very thing that they tried
to stop, and again, it wasn't awinning. They even talked to a
legislator trying to get them tounderstand the data. Yeah, it's,
it's terrible. Can I buy in anentity and sell the entity and
(09:11):
not the property?
Nema Daghbandan (09:14):
Yeah, you know, so the technical answer is no,
because it would it's sale ortransfer, right. And so I think
that, that if you were to talkto the Franchise Tax Board on
this issue, as well, now youtransfer the property, right,
regardless of whether you soldit that in that instance, and
obviously it's very hard totrack in that situation. So, you
know, what, you know, it'sultimately a question of whether
the taxing authority was able topierce through and understand
(09:37):
whether a transfer actuallyoccurred. Hey, if they were able
to do that, then yes, they wouldqualify at that point of the
transfer. But again, you know,depends on how disciplined the
taxing authorities are going tobe in that situation.
Aaron Norris (09:49):
And the truth of the matter is, from what I've
seen, you have to take thingsout of entities. The state of
California has been really pickyabout wanting the underlying
people's name. I've seen thatquite a bit, so I knew it was
going to come up. So, I decidedto ask him. Um, and they're
keeping track of this by youhave to file the affidavit or
(10:10):
something to say that you'regoing to live in it right? That,
that's how they're going to keeptrack of it somehow.
Nema Daghbandan (10:15):
Yeah, my assumption is that that upon
sale, there's a form and theform says, I've lived in this
property. No, I have to attach.
You've lived in the property forthe preceding seven years or my
first property that I everpurchase. And it's done through
at a station on some sort ofgovernment form.
Aaron Norris (10:29):
Okay. Mark is asking how likely is the bill
author to amend the bill byexempting owner occupants to
make the legislation moreappealing to the general public?
Nema Daghbandan (10:40):
You know, never say never, because I guess, you
know, anything can happen withlegislation. I can't imagine a
world in which it passes as isright. It's just too wide. It's
without exempting owneroccupants as a general rule. I
can't imagine a world in whichthis actually moves forward. And
but that is a really goodquestion. But what if you fix
that, right? What if becausenow, it's just the boogeyman of
(11:02):
real estate investors all itsleftover, and it's a much less
sympathetic audience. And so thegood thing is, at least from a
coalition perspective is no oneis asking for amendments right
now, there is no one is sayingis this this, 'Yeah, I get this
legislation to make sense.' Butit could use a little bit of
finessing the current positionis, this makes no sense.
Aaron Norris (11:23):
I'm trying to think, I'm trying to think of
amendments midweek and promotelike, okay, maybe 10% of the
sales price has to be put intorepairs into the property to
account. To your point, what isan investor? I don't consider
iBuyers at this point ininvestor, because they, they're
not putting money back into theproperty. I don't know, I we're
not funding any loans as anexample, where the investor is
(11:45):
only putting in $5,000. A goodvacuum job and some new polls
and some cabinets.
Nema Daghbandan (11:51):
I mean, this is this is the interesting, first
step that's actually been on theright path or on a better path
recently, right. We've seenthis, loosen attention. You
know, this happened in New Yorkrecently, where they tried to do
the exact same thing, this fliptax, liens. States are terrible
copycats, but another, it diedin New York, that it did not
move, which is great. Andhopefully it doesn't do anything
(12:13):
here either. But, but you know,and similarly, as I was there,
you know, ancillary stores I wasin Florida for a while was
effectively mortgage lenderlicensing issue, but the crux of
it, and the reason why we becameeligible is they were passing it
for their affordable housinglegislation. But if you went to
Florida, what they did there wasbrilliant, they basically says,
(12:33):
I don't care about the county'srules related to the permitting
process, the state is going tomandate to the counties, the
maximum time period, you haveto, to either deny the permit or
to you know, to to offer amanager, and in his took, they
took the control out of thecounty's hands, right. And so,
that sounds like a great idea tome, like there's many things we
(12:54):
could do. And so it's the, youknow, you can do a tax credit,
there's lots of things thatwould actually, if the goal is
more housing, and moreaffordable housing, there are
other ways to get there.
Generally speaking, thegovernment spending money
doesn't do it., right. That's,as you've already demonstrated,
(13:15):
the few case examples we havewhere, and California has money,
we have, you know, whatever itis right now $40 billion
surplus, we got plenty of moneyto try to build houses. But no
one's trying to build houses.
That's not what, that's not whatthe government is good at doing
right?
Aaron Norris (13:33):
They could have turned that, that HHH fund into
like a credit line for ADUs forowner occupants, I don't care.
They made money...
Nema Daghbandan (13:42):
You want to build affordable housing, and
we'll give you a 1% line. That'sa lot of ways to do you know
what I mean? Like...
Aaron Norris (13:48):
Yeah.
Nema Daghbandan (13:48):
Give them a reason to build it. Give them a
reason to build it, right.
That's what they're looking for.
Aaron Norris (13:53):
Yeah, I just think it's such a huge opportunity for
investors to say no against thisone, but to bring up SB 9 and to
make it affordable. And youcan't take anything for granted
the this stuff if we don't sayanything, if we don't educate
our legislators it can gothrough. And I think for the
most part data is a very nonemotional way to do it. And a
great way to do it. And it'svisual too if you armed them
(14:14):
with the data and visuals,you're doing their job for them.
Nobody else is going to come upwith that. And I've already
shown you the data that they'relikely pulling from. I did check
with Darren, he used to work forATTOM Data. I emailed Rick
Sharga as well. And Mike isstill how you're doing it. But I
just showed you on ATTOM Data,what they're considering a flip.
So, we know that's typically themost quoted data source when it
(14:35):
comes to investors. I'll seewhat the car comes back with
because they, they might belooking at only all cash deals.
But even iBuyers have a hugeline of credit. So, I don't know
how they're separating that. ButI the problem with including
iBuyers too is it messes up theaverage profit and it messes up
the holding times big time. So,investors if they're taking over
(14:57):
a certain amount of time,they're not showing up on the
list, iBuyers will more often,which is just a shame. And
unfortunately, Zillow justannounced that they're they sent
2000 properties to Pretium. Whenthey close shop, when they're
closing down the Zillow Offers,2000 went to them. And this
drives me nuts. So, the way thatthe national media covers this,
(15:18):
and iBuyers almost seem morethan happy to let them do it as
they're like, Oh, we're only 2%of the market. No, you're not in
every market. And you're not inevery pie box. You're in, I
think, Openedoor's in 41 marketsat this point, but they're in a
very particular buying arena,you know, FHA and under, for the
most part, so when they'rebuying that those are houses
(15:40):
that millennials will never geta chance to own. So, we're
blocking a very specificcategory of buyers out of
homeownership, which is notgreat. So, and builders are not
building for the most part inthat range, because it's not as
profitable. Yeah. So, anyway,any other questions for Nema
about this? Trying to think ofif there's any questions, I
(16:02):
haven't thought of that keepcoming up.
Joey Romero (16:04):
Aaron, can ask question?
Aaron Norris (16:06):
Sure.
Joey Romero (16:07):
So ,what is the goal of what we're doing today,
activating them to do what? Isit really to, you know, be at
the table of affordable housing,or is just hey, let's, let's
find a way to kill this bill,because it's just going to hurt
everybody. Because if they werereally serious about affordable
housing, they would do a lot ofthings about, you know, the
(16:27):
barriers too, you know, makethings pencil, right. So, what
are we asking, you know, thepeople on this call, people are
gonna listen to the radio, whatis it truly that we want to
happen,
Aaron Norris (16:38):
I would love to see more investors in general,
be activated. I mean, not allinvestors, especially Mom and
Pop belong to a local, theydon't belong to CAR, maybe they
don't have a license, meaningthey're not a private lender, so
they don't belong to theCalifornia Mortgage Association.
Maybe they don't belong to theBuilder Association, because
they're just, they're not doingenough volume. The truth is,
these organizations take a lotof the heat, and they spend a
(17:00):
lot of money educating our, ourlegislators, but we can do that,
too. We don't have to be amember of anything, we just have
to know in matters. And we haveto show up, when you're not at
the table, you're on the table.
And this definitely affects you.
And at the same time, yourlegislators should start to
learn to trust you as the localexpert, they should, you know,
(17:21):
why not show off your work, showthat hoarder house the worst
houses in the neighborhood, youturned around into something
wonderful. And let them know,Hey, you're interested in
building and the play ball withSB 9, you just right now you
don't have the opportunity,because it does not include you.
SB 9 by the way, it doesn'tmean, the state has set the
guidelines, but it doesn't meanthat localities can't play ball
(17:43):
and make exemptions for you. So,the state is one that sets the
bar, but the local localitiesare the ones that are deciding
which rules play for you.
Nema Daghbandan (17:54):
And if I could jump on that, too. I mean, it's,
it's very, it's a steep point,which is that the the
legislators are expecting thetrade associations to get
involved. And that's great. Andthey have a voice and they
particularly have a great datavoice. Right is hey, let me help
you. Let me just educate you.
And that's really the primaryrole of trade associations, I
good intentions, but let meeducate you on results. And
that's fine, has a role to play.
(18:17):
When we were in Florida, and,and an issue came up for
mortgage lender licensing, youwould think that the person
should should be speaking withthe mortgage lender? Not at all,
we had the local reassure, andthe local reassure and the guys
were trying to say, look, Icannot obtain bank financing. It
does not exist for this asset.
Right? So, you're putting me andmy crew out of work. That's what
(18:39):
you're gonna do. That's your,that's what you're gonna do. So,
you think you're harming whatyou think is predatory lender,
that predatory lender is theonly guy who's going to give me
a loan, right. And it was justthis lightbulb that occurred in
front because this was happeningin committee. And they were
standing up there one on oneexplaining their personal
experience. And you just saw itfinally clicked going, oh, like,
(19:00):
that's who's being hurt. And Ithink that's what you're really
seeing in this situation aswell, which is a real estate
investor is just this thought intheir head of what that person
is, right? It's greedy landlordwho's kicking out tenants all
day, right? That's the one thingthat's all they know about you
is you're kicking out tenants,right? And trying to get in,
(19:22):
it's dispelling that myth,right? And I think that the more
that is just, oh, I, you, I nowget a rumor. One day health
insurance, the next day realestate the next day, you know,
whatever the issue of the dayis, that's what they're talking
about. And so if you can helpthem understand, because they
don't understand real estate, atall.
Aaron Norris (19:44):
Yeah.
Nema Daghbandan (19:44):
If they did.
They wouldn't propose this.
That's what we're saying. So, ifyou can actually help explain
the role of the real estateinvestor and how this actually
benefits, um, you know, your,your voice is much more
compelling than the tradeassociation.
Aaron Norris (19:57):
I, I'm part of something then an affordable
Housing Coalition that's goingthrough the Council of
Governments put together SCAG.
And I believe in SouthernCalifornia, it's everybody but
San Diego. So, there's a coursethat 40 of us out of 400 were
selected to go through thiscourse. I'm one of two private
sector, individuals and lastMonday, we had our session, and
they brought up this issue. AndI'm like, Guys, I'm going to
(20:18):
tell you now I'm going to beatyou guys up. I'm all the data is
wrong. This is how wrong and sheshared a Washington Post
article. Washington Post did notsource their data. Um, I don't
know where they're pulling from,but I bet you anything I know
where they did. And if so, thisis how we're doing it, they're
doing it. And here's why it'swrong. And they had never heard
that before. I was like, 'Whenis the last time as an example,
(20:40):
in Riverside, I pulled this databecause I was part of another
Housing Coalition. Because I'm anerd out here. And I was like,
okay, when's the last timeyou've talked to landlords about
what you want? About what'spossible?' And like, 'Well, we
haven't' I'm like, 'Exactly,'they already own inventory. Have
you told them that you wantADUs? Have you talked to
landlords with lots over 10,000square feet, that could clearly
(21:01):
fit an ADU? Of course, youhaven't? Guess, I think the
average circulation of the pressenterprise is something around
100,000. We're not like PalmSprings, or San Diego or LA,
we're a secondary beauty market,we don't matter. I guess, the
problem is that the majority oflandlords, you know, a huge
portion of landlords live out ofthe county, so they're not
paying attention. So, unless youmail them something, or they
(21:23):
happen to be a subscriber to theOrange County Register, or the
press enterprise. Third, we'regonna hear it. So, who would you
also start letting them knowlike, you're already creating
this letter, sample of yourwork, some pictures, who else
would you send it to that youthink would be impactful in
government?
Nema Daghbandan (21:42):
Yeah, here's what I was saying, the
interesting thing is, if I hatewhat I do, meaning I hate, my
job primarily is reacting tolegislation, right? That's
really, it. It's the mostannoying thing because it's
like, it's your it's a firedrill every time and you're
fighting. And it's so hard to dowell, right. And I you know,
that's awesome. I saw, you know,in the chat box here is one of
(22:03):
the people here, right. Like, Ithink the challenge thing is so
many people can be verypolitical in their approach this
it's not a politics issue atall, like, truly, I truly
believe Assemblymember Ward isdoing the right thing in his own
eyes. I don't think that's anounce of ill will here.
Aaron Norris (22:18):
Agree.
Nema Daghbandan (22:19):
I think he's got he is he was elected to try
to help people and he thinkshe's helping people. That's it.
And so, um, the, it's reallygetting more involved in general
with local politics, right? Assilly as it seems like, this is
what happens when you're in avacuum. And no one knows, like,
this is the stuff that comes outof it. And so I think it's even
(22:40):
if you're not an assembly memberin our district is having
conversation be like, hey, like,I just want to dismiss off,
like, I've noticed that there'sa you know, I think California's
got a really big housingaffordability problem. What are
your thoughts, right? Like, I'dlove to talk to you about it,
cuz I'm an in real estate, Iwould love to give you some
ideas and like some things thatCalifornia's done really well.
And I think there's some thingsthat might be able to help you a
little bit. Any sort of, ofconnection at that level. Really
(23:04):
will, you know, the big pictureof this thing is, is what is
ProAct? You know, what's anotherSB 9 that we could do whatever
improvements that we can do, ormaybe tax credits or other
things we could do that wouldactually generate real inventory
and help right that's, that'sthe, that's that love to see.
Right?
Aaron Norris (23:21):
Yeah. And they're motivated they need to I didn't
explain this what happens ifthey don't meet their their RHNA
numbers in the next eight yearsat the state can takeover which
has never happened before, butthe state can take over planning
departments and just say you arenot getting that done. So, we're
gonna do it for you. And thenyou lose complete local control.
But they also lose access tofunding for transportation, CDBG
(23:42):
funds, which go to nonprofitsthat help a lot of support local
projects, fordable housingprojects, you don't want to lose
that money. So, they'remotivated to work with you. But
we need we we need each other toreally show up some of the
places that I think can show upeveryone smile. You can show up
at council meetings at the locallevel.
Nema Daghbandan (24:03):
Yes.
Aaron Norris (24:03):
And share your ideas. You can show up as a
local chamber and start to getknown as you know, let people
know what you do. You don't haveto show up all the time. If
you're in an area that's countydriven, and a lot of money lands
of the county, so show up yourcounty version of council
meetings and let them know whatyou're doing for affordable
housing and building ADUs and itnever hurts to show up and tell
(24:26):
them about timelines like letthem know how they're doing.
When it comes to build permitsor turnaround time, with under
ADU law, they're supposed to behitting a 60 day maximum
timeline or it's consideredapproved. I don't necessarily go
for that strategy. They can makeyour life very difficult. Don't
want to play ball that way. Butthat's definitely something. My
(24:49):
council member asked me lastyear like what do I tell my
constituents about ADUs? I'm allit's out of your control. You
don't have any say so and thestate regulated and sorry.
Nema Daghbandan (25:00):
Aaron you, you're you've led the fight on
call Yimby right? Like there'sto like a philosophical shift
that kind of needs to happenhere, right? Like that's, that's
the real challenge we'reultimately facing here. I mean,
I live in Mission Viejo andlike, I'm getting flyers right
now because like, oh my god,they're planning on developing
some, you know, real estate inthis dilapidated, like, shopping
centers. That is just, you know,an eyesore, candidly, I don't
(25:21):
like guys like, there are giantfor the love of God, let someone
move here. This is crazy. Thisis crazy. This cannot be
forever. We have to, at somepoint recognize that people
should be able to live in thisplace. And if, if you don't,
you're not gonna be able to bethere, right? Like this is gonna
be a weird place. If we continueto let status quo occur it
(25:42):
already is.
Joey Romero (25:43):
Aaron. Somebody asked, what would Assembly
Member Ward's district is, itscoastal San Diego from Solana
Beach to Mexico. And includingparts of downtown.
Aaron Norris (25:56):
San Diego is one of the most cutting edge. I
didn't create YIMBY, by the way,there's a whole club of yes, in
my backyard. But there's a bigmovement around ADUs. And I
think we should really bepushing SB 9, because it's such
a creative way to get moreinventory. But anyway, any other
questions for Nema while, we gothim on the phone, I know we're,
(26:17):
I've, I've run out my clock andI'm not paying for your time, I
feel so bad. And I, and I justwant to thank you for your time
too. I know you, you've workedso hard, and I don't think
people know some of the thingsthat you've helped stopped
including in MLS, NMLS rules inFlorida, I got my NMLS license
(26:38):
thinking that you are going tohave to in Florida or you
couldn't do hard money outthere. You were instrumental in
getting that stop. So, it's,it's everyday folks leading with
data leading with visualsunderstanding what you do, and
you become the trusted. Andthat's how you play the game.
And, again, I don't think any ofthis is real meaning it's just,
you know, you've got a, anintern that pulls bad data when
(27:00):
it came to SB 1079. The one withthe trustee sale, the redemption
period, they were using, theywere comparing California to, I
forgot if it was Detroit, or itwas some some city that was
losing population for the past50 years, and they use their
TARP money to tear down houses,California really has never done
that. And as of two years ago,they were still spending some of
(27:21):
that money tearing down houses.
So, it was completelyinappropriate. But unless they
have somebody that they trustthat's presenting that data
didn't go with the intern. So,when you're not at the table,
you're on the table, you know,where can people find out more
about you, and the law firm?
Nema Daghbandan (27:39):
Sure, appreciate that. You know, the
on LinkedIn, probably primarilyfrom a social media perspective.
And so you can look at my nameas easiest way to probably grab
a hold of me there.
Alternatively, you know, we'vegot our website, we've got
Geraci, and my, my name here, soGeraciLLP.com. I work at
GeraciLawfirm.com, you know, Iwould be happy to chat with
(28:01):
anybody after the fact,particularly for people to want
to get mobilized. And that'sreally a good way to get plugged
in and loved to be a part of it.
Any person. Like I said, if youhave a, an ability to get a
meeting with AssemblymemberWard, I'd love to get a group of
people going down to the forthat. That is the you know,
winning heart in mind is theultimate battle. And if we can
(28:21):
do that, then you know, you'vereally, you know, helped out a
lot of people.
Aaron Norris (28:25):
There are a lot of people on this call that were
from the San Diego market. So,if you need to connect, I will,
I will definitely I'll have themreach out but let me know.
Nema Daghbandan (28:34):
Thank you.
Aaron Norris (28:34):
Nema, really appreciate it. Thank you so much
for joining us.
Nema Daghbandan (28:36):
Take care Aaron.
Aaron Norris (28:37):
Okay, bye. Bye, everybody. What can we do to
stop this? Well, I posted thelink to AAPL online, they've got
all the letters, you can helpspread the word then there's
three different letters onthere. There's the, let's see,
there's a homeowner letter, areal estate investor letter and
a lender letter. So, if you fallinto one of those many letters,
(28:59):
you know, however many you fallunder, send a different letter.
I don't know. All right. Have agood one, everybody.
Narrator (29:07):
For more information on hard money, loans and
upcoming events with The NorrisGroup, check out
thenorrisgroup.com. Forinformation on passive investing
with trust deeds, visittngtrustdeeds.com.
Aaron Norris (29:22):
The Norris Group originates and services loans in
California and Florida underCalifornia DRE License 01219911,
Florida Mortgage Lender License1577, and NMLS License 1623669.
For more information on hardmoney lending, go
www.thenorrisgroup.com and clickthe Hard Money tab.
This is The Norris Group's real estate investor
radio show the award-winningshow dedicated to thought
leaders shaping the real estateindustry and local experts
revealing their insider tips tosucceed in an ever -changing
real estate market hosted byauthor, investor and hard money
lender, Bruce Norris.
Aaron Norris (00:20):
Hey, everybody back again with Nema with Geraci
Law Firm and also AAPL, makesure to check the show notes for
sample letters that you can usewith your legislators. And let's
get to it. Very cool. I reallyappreciate that. And I'm going
to take over a little bit andI'm going to give you a little
bit of nuance on how to playthis, and if you ever taken an
(00:40):
improv class that there's a ruleand improv. It's Yes, and you
never say no on stage because itshuts the other person down. I'm
going to slightly tweak thatit's going to be no but and what
I want you guys to do is reallyfocus on SB 9, SB nine is where
we're able to do lot splits inCalifornia, or we're able to
basically turn a single familyresidence R-1 lot into four
(01:02):
units under current ADU Laws, Ithink there's a significant
opportunity to separateourselves from Wall Street. But
I want you to understand thedata that a lot of these
legislators are looking at. AndI told ATTOM Data this two years
ago, they haven't listened. Iemailed them again today. I
emailed Oscar and Jordan againtoday at the California
Association of Realtors, tellingthem like I don't know anybody
(01:24):
who's separating iBuyers fromthe data, and let me walk you
through what they're doingwrong. They're not meaning to
it's just been this way. And soanyway, it ATTOM Data puts out
something called the HomeFlipper Report, probably a lot
of you are signed up for it.
They define a home flipper bysomebody who non owner occupant
who buys and sells somethingwithin 12 months. Here's the
problem with that. iBuyers inCalifornia, especially last year
(01:48):
decided to completely switchgears, they're not renovating
homes for the most part, whatthey're doing is they're buying
a house that needs very littlework. You'll notice in most
areas, it's houses that are post1980. Very similar, you know,
square footage, bedroombathroom, and you're lucky these
days if you get new paint.
(02:08):
What's really interesting isbefore the webinars with Nema, I
found Zillow said on average,they spent around $5,500, I
can't find it now I wonder ifthey updated the investor
letter, but I'll find it again,open to where is not sharing
that information on average howmuch they spend. But these guys
are not flippers. And here's theproblem with that ATTOM Data is
(02:29):
actually picking them up asflippers, which is, is not good,
because they're not, they don'tadd value, what they're adding
is transactional speed. They'renot doing what investors do,
they don't do the ugly ones.
They're doing the easy ones,which means very little work on
the inside very little repairs,and they don't want to deal with
people problems. If you're, ifyou use PropertyRadar, I want
you to do something veryspecific. In PropertyRadar, you
(02:51):
can actually select location Iwas, go to the county level,
there's a quick list withinPropertyRadar where you can say,
hey, I want to look at flippers,and there's this really cool way
in PropertyRadar that actuallydefines market flip, short sale
flip and REO flip.
Unfortunately, PropertyRadaralso says, hey, look, they're
(03:12):
only looking at six months. Andthe reason is PropertyRadar said
Hey, you can't flip a house insix months, you must be
terrible. And you know, onceupon a time, that was really
true, true. The problem islately, we have more ADUs built
being built. And we also havesupply chain disruption. But I
want you to see I pulled thislist all, all over California.
Hopefully, you can't see that onthe, move that, hopefully you
(03:34):
can see my screen I want you toshow the over here is the
purchase seller and who boughtthem. I'm just going to scroll
through really quick so you cansee Zillow purchases who it went
to, and I want you to try tospot entities if they're
flipping directly to entities. Isee people okay, I see one
entity. But for the most part,all the stuff they bought last
(03:57):
year, the vast majority is goingto owner occupants. So, these
guys Zillow, in particular, inthis case is being shown up as a
flipper when 90% of the timeit's going to an owner occupant
eventually, very quickly withintypically 60 to 90 days to
putting new paint really goodvacuum job and they're putting
it back in the market to be soldto an owner occupant. Why?
(04:21):
Because they're making money onevery piece of their transaction
loan closings, you name it.
Okay. Um, another point of ifyou need fodder for how terrible
government is at creatingaffordable housing. This is want
you to notice the, the addresslamayor.org and under summary of
HHH pipelines, HHH was a $1.2billion tax that they
(04:46):
implemented in 2016. The goalwas for them to create 10,000
affordable units, but I want youto look right here I can't
select it, but it says theaverage total development cost
per unit almost $600,000 You'renot reading that incorrectly. I
think there's been a little over1000 units and five years that
have been implemented. And theTurner school has put out some
(05:07):
data on 2018 and 2019 ADUs arecrushing this, absolutely
crushing this, and it's led byowner occupants. So, if you need
an example of local, a SouthernCalifornia government that is
doing a terrible job of creatingaffordable housing, all you have
to do is look at the summary ofthe HHH fund and the government
is actually giving you the datato show them how bad they're
(05:29):
doing. It's hard, it's not easyto do in the chat, and I'll post
it on our website is as well.
I'll post this one because thishas the three different letters.
This was what he was talkingabout the sample letter for real
estate, you'll see the email hasthe webinar here, you'll of
course have access to this one.
And this is the one that Iparticipated in. Last week, just
(05:49):
talking about all the data,Darren Bloomquist is on there
from auction.com as well. But Iwanted you to get a sense of
some, some of where they'repulling the data from. This is
not your meaning. They don'tmean to be terrible. They just
are. They're just notunderstanding Main Street from
Wall Street. If you can do me afavor, provide data to your
local market, lead with data.
(06:12):
Data is not emotional. It's justdata. And then I want you to, if
you flip houses, providepictures, show them before and
after possible. Because some ofyou guys do hoarder homes,
you're adding accessory dwellingunits. And guess what? They have
to meet their RHNA numbers. Ifyou're not familiar with RHNA
numbers. Last year, in October,every city within the state of
(06:32):
California got their allotmentof affordable housing numbers
that they have to build the nexteight year,s talking to local
development professionals, theyhave to build if they were to do
it alone at rates that they'veonly accomplished once for the
next eight years. They cannot doit without the private sector.
And right now SB 9, which wentinto effect in January, is not
(06:52):
available for investors. SB 10is however it gives the city an
option. SB 9 is where you'reable to basically turn a single
family life before, SB 10 iswhere you're able to turn like
an R-1 lot and the citydesignates where they want them.
But you're able to create a10plex plus 2 ADUs and 2 JADUs
(07:12):
for a total of 14. So, it'swhere they want density. But not
all cities are going to playball. So, if they really want
affordable housing, they wouldgive the private sector access
to that. We have the skill, wehave access to private capital
like hard money lenders, likeNorris Group. And we know what
we're doing, we can get thesedone. They don't have to do
this. We can help. So, withthat, I'm going to start let's,
(07:35):
if you have questions, go aheadand put them in the chat for me.
The first question is investorsinto opportunity zones,
designated areas not exempt.
I'll take this, you only get thefull benefit of opportunity
zones, if you hold it for 10years. So, no, it falls outside
the guidelines. If you sell itearly, you would. Nema, are you
thinking the same thing?
Nema Daghbandan (07:55):
Yeah, that's correct. I mean, and the other
answer to is it's not exemptotherwise, right. So, there's
not a special exemption foropportunity zones.
Aaron Norris (08:03):
Would a nonprofit be exempt?
Nema Daghbandan (08:07):
That's an interesting question, right?
Which is, I assume as muchbecause, can they? That's a
great question. I don't know,individuals it's attack. You
know, like I this is my lack ofknowledge of nonprofits like,
what? Do nonprofits filed taxes?
I'm sure they do. Right, like,and so like...
Aaron Norris (08:24):
They do, they might be exempt entities. And
the only reason I bring it up isbecause SB 1079, if you're not
familiar with Califonia SB 1079,is where California is really
bad data. To implement a, ifyou're buying at auction,
somebody can raise your hand, agovernment entity owner occupant
or non a nonprofit can raiseyour hand in fist within 15 days
(08:47):
and buy it for you for one moredollar.
Nema Daghbandan (08:49):
Yeah.
Aaron Norris (08:50):
The dirty facts are, there's some very big
companies that opened anonprofit. Oh, yeah. And they're
pushing the small guy out. So,the very thing that they tried
to stop, and again, it wasn't awinning. They even talked to a
legislator trying to get them tounderstand the data. Yeah, it's,
it's terrible. Can I buy in anentity and sell the entity and
(09:11):
not the property?
Nema Daghbandan (09:14):
Yeah, you know, so the technical answer is no,
because it would it's sale ortransfer, right. And so I think
that, that if you were to talkto the Franchise Tax Board on
this issue, as well, now youtransfer the property, right,
regardless of whether you soldit that in that instance, and
obviously it's very hard totrack in that situation. So, you
know, what, you know, it'sultimately a question of whether
the taxing authority was able topierce through and understand
(09:37):
whether a transfer actuallyoccurred. Hey, if they were able
to do that, then yes, they wouldqualify at that point of the
transfer. But again, you know,depends on how disciplined the
taxing authorities are going tobe in that situation.
Aaron Norris (09:49):
And the truth of the matter is, from what I've
seen, you have to take thingsout of entities. The state of
California has been really pickyabout wanting the underlying
people's name. I've seen thatquite a bit, so I knew it was
going to come up. So, I decidedto ask him. Um, and they're
keeping track of this by youhave to file the affidavit or
(10:10):
something to say that you'regoing to live in it right? That,
that's how they're going to keeptrack of it somehow.
Nema Daghbandan (10:15):
Yeah, my assumption is that that upon
sale, there's a form and theform says, I've lived in this
property. No, I have to attach.
You've lived in the property forthe preceding seven years or my
first property that I everpurchase. And it's done through
at a station on some sort ofgovernment form.
Aaron Norris (10:29):
Okay. Mark is asking how likely is the bill
author to amend the bill byexempting owner occupants to
make the legislation moreappealing to the general public?
Nema Daghbandan (10:40):
You know, never say never, because I guess, you
know, anything can happen withlegislation. I can't imagine a
world in which it passes as isright. It's just too wide. It's
without exempting owneroccupants as a general rule. I
can't imagine a world in whichthis actually moves forward. And
but that is a really goodquestion. But what if you fix
that, right? What if becausenow, it's just the boogeyman of
(11:02):
real estate investors all itsleftover, and it's a much less
sympathetic audience. And so thegood thing is, at least from a
coalition perspective is no oneis asking for amendments right
now, there is no one is sayingis this this, 'Yeah, I get this
legislation to make sense.' Butit could use a little bit of
finessing the current positionis, this makes no sense.
Aaron Norris (11:23):
I'm trying to think, I'm trying to think of
amendments midweek and promotelike, okay, maybe 10% of the
sales price has to be put intorepairs into the property to
account. To your point, what isan investor? I don't consider
iBuyers at this point ininvestor, because they, they're
not putting money back into theproperty. I don't know, I we're
not funding any loans as anexample, where the investor is
(11:45):
only putting in $5,000. A goodvacuum job and some new polls
and some cabinets.
Nema Daghbandan (11:51):
I mean, this is this is the interesting, first
step that's actually been on theright path or on a better path
recently, right. We've seenthis, loosen attention. You
know, this happened in New Yorkrecently, where they tried to do
the exact same thing, this fliptax, liens. States are terrible
copycats, but another, it diedin New York, that it did not
move, which is great. Andhopefully it doesn't do anything
(12:13):
here either. But, but you know,and similarly, as I was there,
you know, ancillary stores I wasin Florida for a while was
effectively mortgage lenderlicensing issue, but the crux of
it, and the reason why we becameeligible is they were passing it
for their affordable housinglegislation. But if you went to
Florida, what they did there wasbrilliant, they basically says,
(12:33):
I don't care about the county'srules related to the permitting
process, the state is going tomandate to the counties, the
maximum time period, you haveto, to either deny the permit or
to you know, to to offer amanager, and in his took, they
took the control out of thecounty's hands, right. And so,
that sounds like a great idea tome, like there's many things we
(12:54):
could do. And so it's the, youknow, you can do a tax credit,
there's lots of things thatwould actually, if the goal is
more housing, and moreaffordable housing, there are
other ways to get there.
Generally speaking, thegovernment spending money
doesn't do it., right. That's,as you've already demonstrated,
(13:15):
the few case examples we havewhere, and California has money,
we have, you know, whatever itis right now $40 billion
surplus, we got plenty of moneyto try to build houses. But no
one's trying to build houses.
That's not what, that's not whatthe government is good at doing
right?
Aaron Norris (13:33):
They could have turned that, that HHH fund into
like a credit line for ADUs forowner occupants, I don't care.
They made money...
Nema Daghbandan (13:42):
You want to build affordable housing, and
we'll give you a 1% line. That'sa lot of ways to do you know
what I mean? Like...
Aaron Norris (13:48):
Yeah.
Nema Daghbandan (13:48):
Give them a reason to build it. Give them a
reason to build it, right.
That's what they're looking for.
Aaron Norris (13:53):
Yeah, I just think it's such a huge opportunity for
investors to say no against thisone, but to bring up SB 9 and to
make it affordable. And youcan't take anything for granted
the this stuff if we don't sayanything, if we don't educate
our legislators it can gothrough. And I think for the
most part data is a very nonemotional way to do it. And a
great way to do it. And it'svisual too if you armed them
(14:14):
with the data and visuals,you're doing their job for them.
Nobody else is going to come upwith that. And I've already
shown you the data that they'relikely pulling from. I did check
with Darren, he used to work forATTOM Data. I emailed Rick
Sharga as well. And Mike isstill how you're doing it. But I
just showed you on ATTOM Data,what they're considering a flip.
So, we know that's typically themost quoted data source when it
(14:35):
comes to investors. I'll seewhat the car comes back with
because they, they might belooking at only all cash deals.
But even iBuyers have a hugeline of credit. So, I don't know
how they're separating that. ButI the problem with including
iBuyers too is it messes up theaverage profit and it messes up
the holding times big time. So,investors if they're taking over
(14:57):
a certain amount of time,they're not showing up on the
list, iBuyers will more often,which is just a shame. And
unfortunately, Zillow justannounced that they're they sent
2000 properties to Pretium. Whenthey close shop, when they're
closing down the Zillow Offers,2000 went to them. And this
drives me nuts. So, the way thatthe national media covers this,
(15:18):
and iBuyers almost seem morethan happy to let them do it as
they're like, Oh, we're only 2%of the market. No, you're not in
every market. And you're not inevery pie box. You're in, I
think, Openedoor's in 41 marketsat this point, but they're in a
very particular buying arena,you know, FHA and under, for the
most part, so when they'rebuying that those are houses
(15:40):
that millennials will never geta chance to own. So, we're
blocking a very specificcategory of buyers out of
homeownership, which is notgreat. So, and builders are not
building for the most part inthat range, because it's not as
profitable. Yeah. So, anyway,any other questions for Nema
about this? Trying to think ofif there's any questions, I
(16:02):
haven't thought of that keepcoming up.
Joey Romero (16:04):
Aaron, can ask question?
Aaron Norris (16:06):
Sure.
Joey Romero (16:07):
So ,what is the goal of what we're doing today,
activating them to do what? Isit really to, you know, be at
the table of affordable housing,or is just hey, let's, let's
find a way to kill this bill,because it's just going to hurt
everybody. Because if they werereally serious about affordable
housing, they would do a lot ofthings about, you know, the
(16:27):
barriers too, you know, makethings pencil, right. So, what
are we asking, you know, thepeople on this call, people are
gonna listen to the radio, whatis it truly that we want to
happen,
Aaron Norris (16:38):
I would love to see more investors in general,
be activated. I mean, not allinvestors, especially Mom and
Pop belong to a local, theydon't belong to CAR, maybe they
don't have a license, meaningthey're not a private lender, so
they don't belong to theCalifornia Mortgage Association.
Maybe they don't belong to theBuilder Association, because
they're just, they're not doingenough volume. The truth is,
these organizations take a lotof the heat, and they spend a
(17:00):
lot of money educating our, ourlegislators, but we can do that,
too. We don't have to be amember of anything, we just have
to know in matters. And we haveto show up, when you're not at
the table, you're on the table.
And this definitely affects you.
And at the same time, yourlegislators should start to
learn to trust you as the localexpert, they should, you know,
(17:21):
why not show off your work, showthat hoarder house the worst
houses in the neighborhood, youturned around into something
wonderful. And let them know,Hey, you're interested in
building and the play ball withSB 9, you just right now you
don't have the opportunity,because it does not include you.
SB 9 by the way, it doesn'tmean, the state has set the
guidelines, but it doesn't meanthat localities can't play ball
(17:43):
and make exemptions for you. So,the state is one that sets the
bar, but the local localitiesare the ones that are deciding
which rules play for you.
Nema Daghbandan (17:54):
And if I could jump on that, too. I mean, it's,
it's very, it's a steep point,which is that the the
legislators are expecting thetrade associations to get
involved. And that's great. Andthey have a voice and they
particularly have a great datavoice. Right is hey, let me help
you. Let me just educate you.
And that's really the primaryrole of trade associations, I
good intentions, but let meeducate you on results. And
that's fine, has a role to play.
(18:17):
When we were in Florida, and,and an issue came up for
mortgage lender licensing, youwould think that the person
should should be speaking withthe mortgage lender? Not at all,
we had the local reassure, andthe local reassure and the guys
were trying to say, look, Icannot obtain bank financing. It
does not exist for this asset.
Right? So, you're putting me andmy crew out of work. That's what
(18:39):
you're gonna do. That's your,that's what you're gonna do. So,
you think you're harming whatyou think is predatory lender,
that predatory lender is theonly guy who's going to give me
a loan, right. And it was justthis lightbulb that occurred in
front because this was happeningin committee. And they were
standing up there one on oneexplaining their personal
experience. And you just saw itfinally clicked going, oh, like,
(19:00):
that's who's being hurt. And Ithink that's what you're really
seeing in this situation aswell, which is a real estate
investor is just this thought intheir head of what that person
is, right? It's greedy landlordwho's kicking out tenants all
day, right? That's the one thingthat's all they know about you
is you're kicking out tenants,right? And trying to get in,
(19:22):
it's dispelling that myth,right? And I think that the more
that is just, oh, I, you, I nowget a rumor. One day health
insurance, the next day realestate the next day, you know,
whatever the issue of the dayis, that's what they're talking
about. And so if you can helpthem understand, because they
don't understand real estate, atall.
Aaron Norris (19:44):
Yeah.
Nema Daghbandan (19:44):
If they did.
They wouldn't propose this.
That's what we're saying. So, ifyou can actually help explain
the role of the real estateinvestor and how this actually
benefits, um, you know, your,your voice is much more
compelling than the tradeassociation.
Aaron Norris (19:57):
I, I'm part of something then an affordable
Housing Coalition that's goingthrough the Council of
Governments put together SCAG.
And I believe in SouthernCalifornia, it's everybody but
San Diego. So, there's a coursethat 40 of us out of 400 were
selected to go through thiscourse. I'm one of two private
sector, individuals and lastMonday, we had our session, and
they brought up this issue. AndI'm like, Guys, I'm going to
(20:18):
tell you now I'm going to beatyou guys up. I'm all the data is
wrong. This is how wrong and sheshared a Washington Post
article. Washington Post did notsource their data. Um, I don't
know where they're pulling from,but I bet you anything I know
where they did. And if so, thisis how we're doing it, they're
doing it. And here's why it'swrong. And they had never heard
that before. I was like, 'Whenis the last time as an example,
(20:40):
in Riverside, I pulled this databecause I was part of another
Housing Coalition. Because I'm anerd out here. And I was like,
okay, when's the last timeyou've talked to landlords about
what you want? About what'spossible?' And like, 'Well, we
haven't' I'm like, 'Exactly,'they already own inventory. Have
you told them that you wantADUs? Have you talked to
landlords with lots over 10,000square feet, that could clearly
(21:01):
fit an ADU? Of course, youhaven't? Guess, I think the
average circulation of the pressenterprise is something around
100,000. We're not like PalmSprings, or San Diego or LA,
we're a secondary beauty market,we don't matter. I guess, the
problem is that the majority oflandlords, you know, a huge
portion of landlords live out ofthe county, so they're not
paying attention. So, unless youmail them something, or they
(21:23):
happen to be a subscriber to theOrange County Register, or the
press enterprise. Third, we'regonna hear it. So, who would you
also start letting them knowlike, you're already creating
this letter, sample of yourwork, some pictures, who else
would you send it to that youthink would be impactful in
government?
Nema Daghbandan (21:42):
Yeah, here's what I was saying, the
interesting thing is, if I hatewhat I do, meaning I hate, my
job primarily is reacting tolegislation, right? That's
really, it. It's the mostannoying thing because it's
like, it's your it's a firedrill every time and you're
fighting. And it's so hard to dowell, right. And I you know,
that's awesome. I saw, you know,in the chat box here is one of
(22:03):
the people here, right. Like, Ithink the challenge thing is so
many people can be verypolitical in their approach this
it's not a politics issue atall, like, truly, I truly
believe Assemblymember Ward isdoing the right thing in his own
eyes. I don't think that's anounce of ill will here.
Aaron Norris (22:18):
Agree.
Nema Daghbandan (22:19):
I think he's got he is he was elected to try
to help people and he thinkshe's helping people. That's it.
And so, um, the, it's reallygetting more involved in general
with local politics, right? Assilly as it seems like, this is
what happens when you're in avacuum. And no one knows, like,
this is the stuff that comes outof it. And so I think it's even
(22:40):
if you're not an assembly memberin our district is having
conversation be like, hey, like,I just want to dismiss off,
like, I've noticed that there'sa you know, I think California's
got a really big housingaffordability problem. What are
your thoughts, right? Like, I'dlove to talk to you about it,
cuz I'm an in real estate, Iwould love to give you some
ideas and like some things thatCalifornia's done really well.
And I think there's some thingsthat might be able to help you a
little bit. Any sort of, ofconnection at that level. Really
(23:04):
will, you know, the big pictureof this thing is, is what is
ProAct? You know, what's anotherSB 9 that we could do whatever
improvements that we can do, ormaybe tax credits or other
things we could do that wouldactually generate real inventory
and help right that's, that'sthe, that's that love to see.
Right?
Aaron Norris (23:21):
Yeah. And they're motivated they need to I didn't
explain this what happens ifthey don't meet their their RHNA
numbers in the next eight yearsat the state can takeover which
has never happened before, butthe state can take over planning
departments and just say you arenot getting that done. So, we're
gonna do it for you. And thenyou lose complete local control.
But they also lose access tofunding for transportation, CDBG
(23:42):
funds, which go to nonprofitsthat help a lot of support local
projects, fordable housingprojects, you don't want to lose
that money. So, they'remotivated to work with you. But
we need we we need each other toreally show up some of the
places that I think can show upeveryone smile. You can show up
at council meetings at the locallevel.
Nema Daghbandan (24:03):
Yes.
Aaron Norris (24:03):
And share your ideas. You can show up as a
local chamber and start to getknown as you know, let people
know what you do. You don't haveto show up all the time. If
you're in an area that's countydriven, and a lot of money lands
of the county, so show up yourcounty version of council
meetings and let them know whatyou're doing for affordable
housing and building ADUs and itnever hurts to show up and tell
(24:26):
them about timelines like letthem know how they're doing.
When it comes to build permitsor turnaround time, with under
ADU law, they're supposed to behitting a 60 day maximum
timeline or it's consideredapproved. I don't necessarily go
for that strategy. They can makeyour life very difficult. Don't
want to play ball that way. Butthat's definitely something. My
(24:49):
council member asked me lastyear like what do I tell my
constituents about ADUs? I'm allit's out of your control. You
don't have any say so and thestate regulated and sorry.
Nema Daghbandan (25:00):
Aaron you, you're you've led the fight on
call Yimby right? Like there'sto like a philosophical shift
that kind of needs to happenhere, right? Like that's, that's
the real challenge we'reultimately facing here. I mean,
I live in Mission Viejo andlike, I'm getting flyers right
now because like, oh my god,they're planning on developing
some, you know, real estate inthis dilapidated, like, shopping
centers. That is just, you know,an eyesore, candidly, I don't
(25:21):
like guys like, there are giantfor the love of God, let someone
move here. This is crazy. Thisis crazy. This cannot be
forever. We have to, at somepoint recognize that people
should be able to live in thisplace. And if, if you don't,
you're not gonna be able to bethere, right? Like this is gonna
be a weird place. If we continueto let status quo occur it
(25:42):
already is.
Joey Romero (25:43):
Aaron. Somebody asked, what would Assembly
Member Ward's district is, itscoastal San Diego from Solana
Beach to Mexico. And includingparts of downtown.
Aaron Norris (25:56):
San Diego is one of the most cutting edge. I
didn't create YIMBY, by the way,there's a whole club of yes, in
my backyard. But there's a bigmovement around ADUs. And I
think we should really bepushing SB 9, because it's such
a creative way to get moreinventory. But anyway, any other
questions for Nema while, we gothim on the phone, I know we're,
(26:17):
I've, I've run out my clock andI'm not paying for your time, I
feel so bad. And I, and I justwant to thank you for your time
too. I know you, you've workedso hard, and I don't think
people know some of the thingsthat you've helped stopped
including in MLS, NMLS rules inFlorida, I got my NMLS license
(26:38):
thinking that you are going tohave to in Florida or you
couldn't do hard money outthere. You were instrumental in
getting that stop. So, it's,it's everyday folks leading with
data leading with visualsunderstanding what you do, and
you become the trusted. Andthat's how you play the game.
And, again, I don't think any ofthis is real meaning it's just,
you know, you've got a, anintern that pulls bad data when
(27:00):
it came to SB 1079. The one withthe trustee sale, the redemption
period, they were using, theywere comparing California to, I
forgot if it was Detroit, or itwas some some city that was
losing population for the past50 years, and they use their
TARP money to tear down houses,California really has never done
that. And as of two years ago,they were still spending some of
(27:21):
that money tearing down houses.
So, it was completelyinappropriate. But unless they
have somebody that they trustthat's presenting that data
didn't go with the intern. So,when you're not at the table,
you're on the table, you know,where can people find out more
about you, and the law firm?
Nema Daghbandan (27:39):
Sure, appreciate that. You know, the
on LinkedIn, probably primarilyfrom a social media perspective.
And so you can look at my nameas easiest way to probably grab
a hold of me there.
Alternatively, you know, we'vegot our website, we've got
Geraci, and my, my name here, soGeraciLLP.com. I work at
GeraciLawfirm.com, you know, Iwould be happy to chat with
(28:01):
anybody after the fact,particularly for people to want
to get mobilized. And that'sreally a good way to get plugged
in and loved to be a part of it.
Any person. Like I said, if youhave a, an ability to get a
meeting with AssemblymemberWard, I'd love to get a group of
people going down to the forthat. That is the you know,
winning heart in mind is theultimate battle. And if we can
(28:21):
do that, then you know, you'vereally, you know, helped out a
lot of people.
Aaron Norris (28:25):
There are a lot of people on this call that were
from the San Diego market. So,if you need to connect, I will,
I will definitely I'll have themreach out but let me know.
Nema Daghbandan (28:34):
Thank you.
Aaron Norris (28:34):
Nema, really appreciate it. Thank you so much
for joining us.
Nema Daghbandan (28:36):
Take care Aaron.
Aaron Norris (28:37):
Okay, bye. Bye, everybody. What can we do to
stop this? Well, I posted thelink to AAPL online, they've got
all the letters, you can helpspread the word then there's
three different letters onthere. There's the, let's see,
there's a homeowner letter, areal estate investor letter and
a lender letter. So, if you fallinto one of those many letters,
(28:59):
you know, however many you fallunder, send a different letter.
I don't know. All right. Have agood one, everybody.
Narrator (29:07):
For more information on hard money, loans and
upcoming events with The NorrisGroup, check out
thenorrisgroup.com. Forinformation on passive investing
with trust deeds, visittngtrustdeeds.com.
Aaron Norris (29:22):
The Norris Group originates and services loans in
California and Florida underCalifornia DRE License 01219911,
Florida Mortgage Lender License1577, and NMLS License 1623669.
For more information on hardmoney lending, go
www.thenorrisgroup.com and clickthe Hard Money tab.
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