Category Archives: Investment

A Rose By Any Other Name… Might Be Called Scentūr

52756089 - colorful shoes and bags with woman sitting on the sofa.Coach, the holding company that ownsCoach leather and several other brands, is changing its name to Tapestry to better represent that they are a multi-faceted fashion house “… not limited to any category, channel or geography,” which was, of course, my exact thought when I heard the new name.

Actually, I thought of the 1971 Carole King album. Apparently, I’m not the only one. When asked for “the first association you have of a company named Tapestry,” the morning crowd at my local Coffee Bean was evenly split between the Carole King album and, as one person put it, “moldy moth-ridden faded banners hanging in dank castles.” To be fair, one person did say, “A classic luxury fashion house incorporating a swath of different brands,” but to be even fairer he copped to reading an article about the change earlier that morning… and then said, “Carole King.”

Name changes can can communicate important messages: Cassius Clay’s transformation to Muhammad Ali signaled his conversion to Islam while making a resonating statement on race relations in the Civil Rights era; Apple Computer’s change to Apple Inc. relayed they were no longer simply a computer company, but were now purveyors of lifestyle technology; and Bruce Jenner’s emergence from her chrysalis as Caitlin signified trading the gold medal platform for a pair of Jimmy Choo slingback platform sandals (available at Bergdorf’s for just $695 —free shipping, free returns).

Corporate name changes, on the other hand, often make me shrug. In 2013 the French luxury brand group PPR changed its name to Kering to, as the New York Times reported, complete “its transformation into a pure apparel and accessories group, shedding some of the broader collection of businesses on which it once depended.”

Ummm, good job guys, mission accomplished!

In 2000 Andersen Consulting (which used to go by the name Arthur Andersen) changed its name to “Accenture” to communicate:

a) Accounting and Nature
b) The Future of Accounting
c) An Accent on the Future
d) An attempt to distance itself from its complicity with Enron in one of the largest corporate scandals in history.

If you guessed “d” you are probably right, though the corporation insists it’s “c.”

My question is to whom are they trying to communicate these renaming messages? I doubt the person buying a Kate Spade handbag cares if the brand is owned by Tapestry, Kering, or even Kerig… They just want the bag.  Does the corporate or investing world take any notice? My guess is it gives CEOs something to talk about when there’s an awkward lull in the conversation at Davos.

If a rose changed its name to Scentūr to communicate “the smell of the future” I’d smile politely and enjoy my bouquet. As for Coach, they have one of the best shades of tan leather, no matter who owns them. As for Tapestry… It’s a really great album.

Photo Copyright: Copyright: mustachegirl / 123RF Stock Photo

Death and Taxes (well, at least death)

Money-PostThough the original title of this piece was “Real Estate Trumps Taxes,” I want to make it very clear that this is an article about real estate investing.

True, it is inspired by reporting that Donald Trump may not have paid taxes for the past eighteen years due to close to a billion dollars of real estate losses. That said, this is about how even small investors can avoid or minimize taxes and is not meant in any way as a political piece to suggest that Trump may be slightly disingenuous when it comes to his comments on people who don’t pay any taxes…

No, this is an article specifically about the way real estate is treated by tax regulations which allow well advised investors to put money in the bank by offsetting gains with losses (some of which only exist on paper). And I want to share with you some real estate investment secrets that don’t require you to attend Krull University. Continue reading

It’s Only A Paper Moon, And It’s Only A Paper Loss

img_0083-1Take any basic accounting class, or go to Vegas for the weekend, and you’ll soon get the concept that financial losses are bad. Which is why you might scratch your head when I tell you that some of my most successful property investment clients ask me to find them properties that will show a loss.

I was recently discussing this concept with a colleague, when he smiled knowingly and said, “I get it, your client’s getting divorced and wants to hide some money.” After assuring him that this wasn’t some film noir-style fraud scheme, I explained that my client was talking about “paper losses.” The quizzical tilt of his head told me that I had some ‘splaining to do. Continue reading

A Multi-Family Investment Portfolio, One Unit At A Time

img_0083-1

Somehow, I never get to be the Top Hat.

I have clients who want to own investment properties. And even though they may own several personal and vacation homes, the idea of putting all of their property investment eggs in one building basket is counter to their successful track record of spreading the risk across different assets.

Regarding real estate, individual investors generally think of the three most common property holdings: office buildings, shopping centers and apartment buildings. And the easiest of these investments to manage and understand is the apartment building — people pay rent, you subtract your expenses and voilà, there’s your net taxable income. (The CPA then works his/her magic by factoring in mortgage interest and depreciation deductions, but that’s something for the next day.)

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Bragging Rights Of The Fraudulent Kind

Morning Coffee

Enjoying my morning coffee and   LA Times, NY Style.

I never thought the Treasury Department’s thresholds for reporting the people behind cash purchases of residential real estate would make me face my bi-Coastal allegiances.

Having grown up in New York, and having lived in Los Angeles for more than half of my life, I’m conflicted. I read the New York Times (electronic edition) every day. I also read the Los Angeles Times (print edition), which, jonesing for a NY experience, I fold in the manner I learned in fourth grade so as to more easily read it on the subway. [That this was taught to me in school as part of the curriculum says volumes about the veneration of The Times. But I digress…]

I identify as a New Yorker, especially when it comes to claiming unparalleled authority on topics such as bagels and pizza. Even more so, I wear the mantle of having grown up in Manhattan with unwarranted snobbery over those from Long Island or New Jersey ― unwarranted as I was simply lucky to have parents cool enough to live in the city, and did not attain that rank of my own merits. Continue reading

Is There Too Much Housing In Downtown LA?

Los Angeles skyline

Even more lights are slated to join the DTLA skyline.

LA is a city with an identity crisis, mainly because it has more identities than “Sybil.”  The “city” part of LA is the downtown area that reached its glory days in the 20s and 30s, hit a decline in the post war years, laid fallow for about 50 years and began its renaissance starting in the late 90s. For what’s supposed to be the economic hub of the city, people can go their whole lives without setting foot in downtown (and truthfully, they’re missing out, but that’s a topic for another day).

Downtown has had a huge residential population boom, going from approximately 14,000 denizens to more than 50,000 over the past 15 years. The tipping point was the introduction of a name brand supermarket that allowed people who always thought it would be cool to live downtown, but were wary of the inconvenience of not being able to get the emergency carton of milk for their Sunday morning coffee, to feel more comfortable. As more units came on line (either through new construction, or the redevelopment of iconic buildings) restaurants, stores, clubs and even a Soul Cycle followed. Suddenly, downtown was a viable place to live. It may also be a victim of its own success. Continue reading

The Election Cycle vs. The Housing Cycle

Screen Shot 2016-08-12 at 11.48.24 AMThere’s a conversation that real estate agents and their clients have every four years, usually starting in July (sometimes August, and in some cases, even September) based on the question, “So, how do you think the election is going to effect the real estate market?” My stock broker tells me his clients ask him the same thing about the stock market. That said, since you may be interested in asking the question, I’ll reply with the same ever hedging answer I get from him whenever I ask about the market: “it depends.” Continue reading