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Every Step of the BRRRR Method, Done Right

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By Gwen Payne

The BRRRR method — Buy, Rehab, Rent, Refinance, Repeat — isn’t a get-rich-quick trick. It’s a gear shift. A rhythm real estate investors use to build momentum without constantly starting from scratch. Done well, it builds equity, generates cash flow, and recycles capital. Done poorly, it’s a blueprint for burnout. Here’s how to move through each phase with clarity, caution, and repeatable strategy.

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Look for Margin, Not Magic

Don’t confuse momentum with urgency. BRRRR works only when your initial buy has real margin. You’re not just buying a property, you’re buying a spread between what it is and what it could be. That spread needs to exist in the numbers, not just your imagination. The goal is to acquire undervalued properties that have enough room for rehab costs, cash-out appraisal, and rental income, without being a money pit in disguise. If you don’t have a cushion on the buy, the rest of the cycle collapses.

Structure Your Money Before You Swing a Hammer

A rehab plan without secured funding is a fantasy. Before you start ripping out drywall, you need to know exactly how you’re paying for the demo, the labor, the materials — and the 12 things you forgot to budget. That’s where investor rehab loans come into play. Whether you’re using a hard money loan, a line of credit, or a construction draw schedule, you need funding matched to the scope and timeline of your project. Don’t blend this with personal financing. Don’t depend on the refinance bailing you out. Rehab funding should stand on its own.

Protect the Container Before You Fill It

Once you own property, you own liability. That’s why many investors form LLCs early, especially if they’re building a rental portfolio in a single state. Creating a California LLC through ZenBusiness is a way to draw a line between your personal and business finances. More than a legal checkbox, the right structure helps simplify bookkeeping, centralize expenses, and protect your assets if something goes sideways. It’s not about looking big, it’s about building with protection in place from the start.

Your Rent Price Shouldn’t Be a Vibe

A rehabbed property doesn’t rent itself, and overpriced units stay vacant. The rent you charge isn’t about your mortgage; it’s about the market, the comps, and the tenant profile. That’s why setting rent rates that maximize income come into play. Investors often use tools like the 1% rule or rent-to-value ratios, but those are only starting points. Real pricing discipline means tracking market absorption, adjusting for seasonality, and being honest about what your unit offers relative to nearby options.

Refinance Is a Strategy, Not a Shortcut

Cash-out refinancing isn’t just a step in the BRRRR loop, it’s the make-or-break moment for many deals. If you bought low, rehabbed smart, and rented well, the bank should now see your property as a performing asset. But timing and terms matter. Some lenders won’t refinance immediately after rehab. Others will apply seasoning requirements. Understanding the refinancing roadmap for investors, including loan-to-value limits, appraisal hurdles, and rate implications, is essential before you even close on your first deal. Don’t assume the refinance will happen on your timeline. Build your entire cycle around what your lender is actually willing to do.

You’re Not Bulletproof, and Neither Is the Model

It’s tempting to see BRRRR as a machine: plug in money, out comes equity. But the method is sensitive to interest rates, appraisal trends, neighborhood shifts, and tenant issues. Vacancy eats cash flow. Construction delays push your refinance window. Appraisers don’t always agree with your spreadsheets. Recognizing the BRRRR pros and cons isn’t just for risk-averse beginners, it’s for experienced investors who’ve seen great deals turn sour because they assumed every cycle would match the last. Building margin of error into every phase isn’t just wise, it’s survival.

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Growth Doesn’t Mean Chaos

Repeat doesn’t mean replicate. Scaling a BRRRR portfolio doesn’t work if each property is its own circus. Growth requires operational rhythm, not just vision. That means templates, systems, relationships. Using project management tools for rehab timelines. Standardizing your finishes to speed up estimates. Building a vendor bench so you’re not scrambling for a plumber at 10 pm. Investors who succeed long-term are the ones who build systems for repeat BRRRR growth, not just the ones who close the most deals. Speed doesn’t come from rushing, it comes from reducing friction.

BRRRR isn’t magic. It’s a system, one that only works if you treat each phase like its own discipline. You need to buy with room, fund with clarity, rehab with control, rent with realism, refinance with eyes open, and scale with systems. Shortcutting any of these steps doesn’t save time, it just passes risk to your future self. Done right, BRRRR lets you grow without going broke. Done wrong, it traps you in a loop of stress and sunk costs. The model works. The question is whether you’ll work it with precision, or chase it with hope.

Building Personal Power: From Inner Agency to Outward Influence

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You shape the outcome, but others decide on your credibility and trust. They are the ones who determine if you have power.

By Dan J. Harkey

Summary

Personal power isn’t a title, a job description, or a corner office. It’s the capacity to shape outcomes—starting with yourself and extending to teams, organizations, and broader networks. Some of it is intrinsic (self-awareness, competence, emotional regulation). Some of it is socially conferred (credibility, reputation, trust). The two reinforce each other: inner agency builds consistent behavior; consistent behavior earns external confidence; external confidence increases your scope for action, which, in turn, strengthens your inner agency.

Below is a practical, field-tested playbook for building personal power that holds up in demanding environments—such as boardrooms, negotiations, investor pitches, and high-stakes projects.

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1) Embrace Self-Awareness: The Cornerstone of Personal Agency

Power without self-knowledge becomes volatile. Power with self-knowledge becomes reliable.

Do this:

  • Values Audit (30 minutes): Write down your top five values (e.g., truth, stewardship, independence, excellence, service). For each, identify one behavior that demonstrates it weekly. If you can’t name the behavior, it’s not yet a value; it’s a wish.
  • Strengths & Gaps Map: Identify 3 “edge strengths” (these are the skills or traits that you excel at, better than 80% of your peers) and 2 “rate limiters” (these are the skills or traits that are holding you back, capping your impact).  Design one experiment per limiter over the next 30 days (e.g., “Run one high-stakes meeting with a written agenda and time boxes to counteract rambling.”).
  • Trigger Journal: For two weeks, note moments when you were annoyed, defensive, or overly eager.  Ask: What was threatened—status, certainty, autonomy, relatedness, or fairness?  Labeling triggers reduces their power.

Why it works: Self-awareness converts reactivity into choice.  People feel safer following those who are consistent under pressure.

2) Build Irrefutable Competence: That Compels Respect

Personal power grows fastest when you can consistently solve complex problems.  Confidence might get you into the room; competence keeps you there.

Do this:

  • Deliberate Practice: Pick one “needle-moving” capability (e.g., complex deal structuring, regulatory navigation, risk assessment, persuasive writing).  Block 5 hours weekly for deep practice: case reps, scenario drills, post-mortems.
  • Skill Stacking: Combine adjacent skills that multiply influence—e.g., financial modeling + narrative writing + negotiation.  Power often emerges at the intersection of disciplines.
  • Portfolio of Evidence: Document wins: before/after metrics, testimonials, decision memos, decks, and artifacts.  Quiet competence is good; visible competence is power.

Why it works: Decision-makers tend to gravitate towards those who reduce uncertainty.  Expertise shortens arguments and tilts the table in your favor.

3) Use Emotional Intelligence as a Force Multiplier

Influence is emotional before it’s logical.  Emotional intelligence (EQ) amplifies your technical value.

Do this:

  • Name → Normalize → Neutralize: When tension rises, name the emotion (“There’s frustration in the room”), normalize it (“It makes sense given the deadlines”), then neutralize it (“Let’s break the decision into two steps.”).
  • Active Listening Protocol: Ask one clarifying question, paraphrase the other party’s core concern, and only then propose options.  People support what they feel heard in.
  • After-Action Reviews: After negotiations or meetings, debrief: What did I notice (signals)?  How did I behave (impact)?  What will I change next time?  EQ compounds through feedback loops.

Why it works: Trust doesn’t just flow to the most intelligent person; it flows to the person who makes others feel understood while steering toward results.

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4) Command Presence and Communicate with Precision

Presence is not theatrics; it’s the discipline of being clear, calm, and consequential.

Do this:

  • BLUF Your Messages (Bottom Line Up Front): Start with the conclusion, then support.  Busy people reward clarity with their attention—and attention is a valuable currency.
  • The 3×3 Rule: For essential communications, aim for three key points, each supported by three facts/examples.  It’s memorable without being simplistic.
  • Nonverbal Hygiene: Open posture, measured pace, strategic pausing, and direct eye contact (more while listening than while speaking).  Presence is often felt before it is understood.

Why it works: In high-stakes contexts, people equate brevity and structure with mastery.  You signal reliability when you never waste a moment.

5) Grow Your Social Capital: Power Flows Through Networks

You don’t “have” power in isolation; you access power through relationships.  Networks provide information, resources, and reputational transfer.

Do this:

  • Map Strong & Weak Ties – Strong ties mobilize quickly; weak ties expand opportunities.  Maintain both.  A quarterly check-in with weak ties (share an insight, a relevant article, or a congratulatory note) pays outsized returns.
  • 5-Minute Favors: Make intros, annotate an article with insights, or review a draft.  For instance, you could introduce a colleague to someone in your network, share your thoughts on an industry article, or provide feedback on a project draft.  Compounding generosity builds a bankable reputation.
  • Mentor Matrix: Identify one mentor for strategy (someone who can guide you in your career path), one for craft (someone who can help you improve your skills), and one for character (someone who can advise you on personal and professional development).  Different mentors cover different blind spots.

Why it works: Social capital is an option—the right call to the right person at the right time.  People lend you their credibility when you’ve invested in them first.

6) Control Your Narrative: Reputation by Design, Not Default

You will be known for something; decide what it will be.  Narrative is how others summarize you when you’re not in the room.

Do this:

  • Positioning Statement (25 words): “I help [who] achieve [outcome] by [method], especially when [constraint/pressure].” Use it across intros, bios, and profiles.
  • Proof-of-Work Cadence: Publish brief, high-signal insights (monthly), share case lessons (quarterly), and give talks or guest sessions (semi-annually).  Consistency beats volume.
  • Crisis Playbook: When things go sideways, respond within 24 hours, state what you know and what you’re doing, and set a specific update checkpoint.  Silence invites speculation; clarity builds trust.

Why it works: Humans think in stories.  A coherent, consistent narrative makes you legible—and legibility is power.

7) Practice Decisiveness and Own the Outcomes

Decisiveness isn’t impulsive; it’s disciplined choice under uncertainty.

Do this:

  • The 70% Rule: Make most decisions when you have ~70% of the information.  Waiting for perfect information is often more costly than making a decision and iterating on it.
  • Pre-Mortems & Post-Mortems: Before starting, list potential ways the plan might fail and consider mitigating them in advance.  After execution, analyze what actually happened.  This habit boosts hit rate and credibility.
  • Single-Threaded Ownership: For every decision, identify a single accountable owner (possibly yourself).  Distributed accountability is disguised non-accountability.

Why it works: People follow leaders who make decisions and then learn from them—accountability compounds into trust and authority.

8) Manage Energy and Boundaries: Power Requires Fuel

Sustained influence demands stamina.  If you’re depleted, your judgment and presence degrade.

Do this:

  • Calendar as Strategy: Color-code deep work, meetings, and recovery.  Protect two 90-minute blocks of deep work per day for high-cognition tasks.
  • Keystone Habits: Sleep regularity, strength training twice weekly, walking meetings for ideation, and no-phone first 30 minutes of the day.
  • Boundaries Script: “I can’t do X by Friday, but I can do Y by Tuesday with the same quality.” Boundaries increase respect when paired with alternatives.

Why it works: Energy is the rate limiter of power.  The best strategy dies in a tired body.

9) Lead With Ethics: Trust Is the Ultimate Power Multiplier

Power built on fear is brittle; power built on trust is anti-fragile.

Do this:

  • Fairness First: In negotiations and team decisions, explain your reasoning and acknowledge tradeoffs.  Even “no” can build trust if it’s transparent.
  • No-Surprise Rule: Stakeholders should never be shocked by bad news.  Early warnings and frequent updates convert risk into manageable work.
  • Credit Assignment: Publicly attribute wins to contributors; absorb blame as the leader.  Your reputation will precede you.

Why it works: Ethical consistency lowers perceived risk in working with you.  People share information and opportunities when they feel safe and trust is established.

10) Make It Measurable: Metrics That Matter for Power

What gets measured compounds.

Leading Indicators:

  • Opportunity Flow: Number of unsolicited asks for advice, intros, or collaboration per month.
  • Influence Radius: Count of cross-functional projects or rooms where your input is sought.
  • Response Latency: Average time you take to respond to critical stakeholders (signals reliability).

Lagging Indicators:

  • Outcome Hit-Rate: Percentage of projects that meet or beat their defined success criteria.
  • Network Depth: Number of relationships where you can ask for (and receive) meaningful help within 48 hours.
  • Reputation Poll: Twice a year, ask 5–7 colleagues: “What three words describe me professionally?” Track drift toward your desired narrative.

A 30/60/90-Day Power-Building Plan

Days 1–30: Foundation & Focus

  • Complete your Values Audit, Strengths & Gaps Map, and Positioning Statement.
  • Select one craft capability to deepen (e.g., negotiation, expert writing, domain analysis).  Block 5 hours/week for deliberate practice.
  • Start Trigger Journal and run two Active Listening reps in real meetings.
  • Publish one proof-of-work post or memo and reconnect with five weak ties using 5-minute favors.

Days 31–60: Credibility & Communication

  • Lead two meetings using BLUF and the 3×3 Rule; solicit feedback on clarity and pace.
  • Run one pre-mortem for a key initiative; define single-threaded ownership and decision thresholds.
  • Host a learning roundtable (60 minutes) to share a case study and invite debate—teaches, positions you as a resource, and expands network density.
  • Update profiles and bios with your positioning statement and recent artifacts.

Days 61–90: Scale & Solidify

  • Seek a cross-functional project where your skills intersect with a new group; aim to become the go-to for one specific problem type.
  • Publish a quarterly case lesson (what went right/wrong, numbers, and takeaways).
  • Conduct a mini reputation poll with five trusted peers or clients; compare the three words they use to your target narrative; adjust behaviors accordingly.
  • Identify and formalize your Mentor Matrix: one strategy mentor, one craft mentor, one character mentor.  Set a monthly cadence with each.

Field Tactics for High-Stakes Moments

  • When the room is tense, slow your speech by 10–15% and lower your volume slightly, then ask a clarifying question.  Calm is contagious.
  • When you’re challenged: Thank the challenger, reflect their point accurately, and add a “Yes, and…” bridge: “Yes, and here’s the constraint we’re operating under…”
  • When time is short: State the decision, the single riskiest assumption, and the next check-in time.  This triage preserves momentum and credibility.
  • When you made a mistake: Own it in one sentence, state the remedy in two, and name the safeguard in one.  Then move forward.

Common Pitfalls (and Fixes)

  • Performative Confidence: Swagger without substance erodes power fast.  Fix: Anchor confidence in artifacts—results, models, memos, and measurable wins.
  • Overreliance on Title: Formal authority is a loan; personal power is equity.  Fix: Behave in ways you want attributed to you—especially when no one is watching.
  • Networking Without Value: Collecting Contacts Is Not Capital.  Fix: Lead with valuable insights, introductions, and thoughtful questions.
  • Decision Paralysis: Waiting for certainty is often a hidden “no.” Fix: Decide at 70%, set a review checkpoint, and be explicit about what would change your mind.
  • Inconsistent Narrative: Mixed Signals Confuse Stakeholders.  Fix: Choose a positioning statement and reinforce it in how you show up, what you share, and what you decline.

The Compounding Effect of Personal Power

Think of personal power as a flywheel:

·         Self-awareness produces calm and integrity.

·         Competence produces results that others rely on.

·         EQ and presence attract trust and attention.

·         Networks and narratives expand your reach.

·         Decisiveness and accountability cement your reputation.

Each turn of the flywheel reduces friction for the next turn.  Over months, this has become a visible influence.  Over the years, it becomes gravitational pull—opportunities find you, decisions tilt your way, and your voice shapes the agenda.

The most reliable way to build personal power is to start inside, prove it outside, and keep the loop spinning with consistency, generosity, and courage.

Here’s a one-page checklist summary of the article for quick reference:

✅ Personal Power Builder: One-Page Checklist

1.  Self-Awareness

  • Complete Values Audit (Top 5 values + behaviors)
  • Map Strengths & Gaps (3 edge strengths, two limiters)
  • Keep a Trigger Journal for 2 weeks

2.  Competence

  • Block 5 hrs/week for deliberate practice
  • Stack adjacent skills for leverage
  • Build a Portfolio of Evidence (wins, metrics, artifacts)

3.  Emotional Intelligence

  • Use Name → Normalize → Neutralize in tense moments
  • Apply Active Listening Protocol (clarify → paraphrase → propose)
  • Run After-Action Reviews after key interactions

Dan Harkey
Educator & Private Money Real Estate Lending Consultant
[email protected] 949 533 8315
www.danharkey.com

AB-130: The New California Law that States That a Homeowner Association Fee Violation Cannot be More than $100?

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By Dan Harkey

Abusive HOA practices: Some homeowner associations harass their property owners with continuous fee assessments for every little thing. The propensity is irritating and makes property owners feel like another big brother is watching and harassing them. The practice is abusive and creates a bureaucratic infrastructure that supports itself on the backs of homeowners.

Summary

Abusive HOA practices: Some homeowner associations harass their property owners with continuous fee assessments for every little thing. The propensity is irritating and makes property owners feel like another big brother is watching and harassing them. The practice is abusive and creates a bureaucratic infrastructure that supports itself on the backs of homeowners.

It may now be a better strategy to merely pay a $100 fine to keep them off your back.  And smile all the way to the refrigerator for a cold beer or glass of wine.

The new California Law, which caps most homeowner association (HOA) fines at $100, is Assembly Bill 130 (AB 130), effective 1 July 2025.

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Language of the new Law:

SEC. 3.

 Section 5850 of the Civil Code is amended to read:

5850.

 (a) If an association adopts or has adopted a policy imposing any monetary penalty, including any fee, on any association Member for a violation of the governing documents, including any monetary penalty relating to the activities of a guest or tenant of the Member, the board shall adopt and distribute to each Member, in the annual policy statement prepared pursuant to Section 5310, a schedule of the monetary penalties that may be assessed for those violations, which shall be in accordance with authorization for Member discipline contained in the governing documents.  Monetary penalties shall be reasonable.

(b) Any new or revised monetary penalty that is adopted after complying with subdivision (a) may be included in a supplement that is delivered to the members individually, pursuant to Section 4040.

(c) A monetary penalty for a violation of the governing documents shall not exceed the lesser of the following:

(1) The monetary penalty stated in the schedule of financial penalties or supplement that is in effect at the time of the violation.

(2) One hundred dollars ($100) per violation.

(d) (1) Notwithstanding subdivision (c), the board may impose a penalty stated in the schedule of monetary penalties or supplement that is in effect at the time of the violation that is greater than one hundred dollars ($100) per violation, if the violation may result in an adverse health or safety Impact on the common area or another association Member’s property.

(2) Before imposing a penalty on a violation pursuant to this subdivision, the board shall make a written finding specifying the adverse health or safety Impact in a board meeting open to the members.

(e) A late charge or interest shall not be charged to a Member for a monetary penalty.

(f) An association shall provide a copy of the most recently distributed schedule of monetary penalties, along with any applicable supplements to that schedule, to any Member upon request.

SEC. 4.

 Section 5855 of the Civil Code is amended to read:

5855.

 (a) When the board is to meet to consider or impose discipline upon a Member, or to impose a monetary charge as a means of reimbursing the association for costs incurred by the association in the repair of damage to the common area and facilities caused by a Member or the Member’s guest or tenant, the board shall notify the Member in writing, by either personal delivery or individual delivery pursuant to Section 4040, at least 10 days before the meeting.

(b) The notification shall contain, at a minimum, the date, time, and place of the meeting, the nature of the alleged violation for which a Member may be disciplined or the nature of the damage to the common area and facilities for which a monetary charge may be imposed, and a statement that the Member has a right to attend and may address the board at the meeting.  The board shall meet in executive session upon the request of a Member.

(c) A Member shall have the opportunity to cure the violation before the meeting.  The board shall not impose discipline in either of the following circumstances:

(1) The Member cures the violation before the meeting.

(2) If curing the violation would take longer than the time between the notice provided pursuant to subdivision (a) and the meeting, the Member provides a financial commitment to remedy the violation.

(d) If the board and the Member are not in agreement after the meeting, a Member shall have the opportunity to request internal dispute resolution pursuant to Section 5910.

(e) If the board and the Member are in agreement after the meeting, the board shall draft a written resolution.  The written resolution, signed by the board and the Member of the dispute pursuant to procedures not in conflict with the Law or governing documents, binds the association and is judicially enforceable.

(f) If the board imposes discipline on a Member or imposes a monetary charge on the Member for damage to the common area and facilities, the board shall provide the Member with a written notification of the decision, by either personal delivery or individual delivery pursuant to Section 4040, within 14 days following the action.

(g) A disciplinary action or the imposition of a monetary charge for damage to the common area shall not be effective against a Member unless the board fulfills the requirements of this section.

 Key provisions of AB-130:

$100 fine cap: For most violations of the HOA’s rules, the association cannot fine a homeowner more than $100 per violation.  This is a significant reduction from previous practices, where daily fines could quickly escalate into thousands of dollars.

  • No interest or late fees: The Law explicitly prohibits HOAs from charging late fees or interest in monetary penalties, which in the past could cause a financial hardship for residents.
  • Health and safety exception: HOAs can still issue fines above the $100 cap if the violation poses an adverse public health or safety risk.  However, the board must first make a written finding detailing the specific health or safety Impact at a public meeting.
  • Right to cure: Before a fine can be imposed, the homeowner must be given the opportunity to correct the violation.  If the issue is fixed within the specified timeframe, the HOA cannot impose a penalty.  The Law also requires homeowners to receive at least 10 days’ advance notice before a disciplinary hearing.
  • Written decision: After a disciplinary hearing, the HOA board must issue a written decision to the homeowner within 14 days. 

Context of the Law:

AB 130 was enacted to address and curb what lawmakers and housing advocates described as excessive and punitive HOA fines that contribute to the state’s housing affordability crisis.  The goal was to rebalance power between homeowners and HOA boards, focusing on compliance with regulations rather than using hefty fines as a form of revenue or harassment. 

What violations allow fines over $100?

Under California’s Assembly Bill 130 (AB 130), an HOA can fine a homeowner more than the $100 cap only if the violation creates an “adverse health or safety Impact.”

The board must first issue a written finding detailing the specific risk at an open meeting before imposing a higher fine.  While the Law does not provide an exhaustive list of qualifying violations, legal experts and related HOA sources have provided examples.  These are generally conditions that expose residents to a risk of harm or negatively Impact the well-being and safety of the community.

Examples of health and safety violations:

Safety hazards: Violations that create unsafe conditions in common areas, such as:

  • Use glass containers in areas near pools or other hazardous locations.
    • Parking illegally in a fire lane or in a way that blocks visibility for drivers.
    • Setting off fireworks.
    • Not properly securing aggressive or dangerous pets.
    • Hazardous construction or maintenance on a property.
  • Public nuisance and property damage: Actions that cause damage or threaten the structural integrity of a property:
    • Severe hoarding that leads to insect or rodent infestations.
    • Improperly disposing of hazardous materials.
    • Performing unpermitted or dangerous work, such as with plumbing or electrical lines.
  • Air quality issues: Some HOAs may classify secondhand smoke as a health risk, potentially allowing for higher fines.  This is especially the case for secondhand marijuana smoke that infiltrates another unit.
  • Excessive noise: While a single loud party may only warrant a $100 fine, a violation that significantly disrupts sleep and well-being, particularly in high-density buildings, may be deemed a health issue.
  • Short-term rentals: Some HOAs may impose higher fines on unapproved short-term rentals, mainly if they are found to disrupt community security. 

What is required for higher fines:

 To enforce a fine higher than $100 for a health or safety violation, the HOA board must follow strict procedures: 

 ·       Hold an open meeting for homeowners.

·       Make a written finding that the violation poses a specific, adverse health or safety risk.

·       Include a copy of this finding in the disciplinary hearing notice sent to the homeowner. 

What other enforcement options can HOAs use besides fines?

In addition to fines, California HOAs can employ several other enforcement options, including suspending a homeowner’s privileges, pursuing legal action to enforce compliance, and engaging in alternative dispute resolution (ADR).  These options are typically outlined in the association’s governing documents, such as the Covenants, Conditions, and Restrictions (CC&Rs).

 Suspension of privileges:

An HOA may have the power to suspend a homeowner’s rights to use specific standard amenities for violations, provided that due process requirements are met and permitted by the governing documents.

 Examples of suspendable privileges:

  • Use of standard facilities like pools, gyms, or clubhouses.
    • Access to community meeting facilities for non-association functions.
    • Special services, such as valet or guest parking.
  • Limitations: Under California Law, an HOA cannot suspend an owner’s right to:
    • Attend board meetings (except for executive sessions).
    • Vote in elections (as of 1 January 2020).
    • Access basic utilities like water, electricity, or gas. 

Alternative Dispute Resolution (ADR):

For many disputes, California Law requires an HOA to engage in ADR before filing a lawsuit.  If a Member requests it, the HOA must participate in a “meet and confer” to resolve the issue.

 Mandatory ADR: Civil Code §5930 requires ADR for most enforcement actions in the superior court.

  • IDR (“meet and confer “): An internal dispute resolution process where the Member and HOA board meet in good faith to resolve the issue.  If the owner requests IDR, the association must participate.
  • Mediation: If IDR fails, the parties can agree to mediation with a neutral third party. 

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Legal action:

For severe or persistent violations, an HOA can seek legal remedies to force compliance.

Injunctive relief: The HOA can file a civil action in court to obtain an injunction, a court order that requires the homeowner to correct a violation.

  • Litigation for compliance: The association can file a lawsuit to enforce its governing documents legally.  If the HOA prevails, the court may order the homeowner to comply and pay the association’s legal fees and costs.
  • Foreclosure: While fines cannot be used for nonjudicial foreclosure, if a homeowner fails to pay assessments, the HOA can place a lien on the property and pursue a judicial foreclosure. 

Self-help remedies:

In some cases, the HOA’s governing documents may grant the board the authority to take direct action to correct a violation on the owner’s property.

For an unapproved modification that violates architectural rules, the board might be able to enter the property and remedy the violation itself.

  • Caution: This option is high-risk and carries significant legal exposure; therefore, it is rarely used and should only be considered after consulting with legal counsel. 

Dan Harkey
Educator & Private Money Real Estate Lending Consultant
[email protected] 949 533 8315
www.danharkey.com

How to Launch a Small Business in the Sharing Economy

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By Beth Harris

The sharing economy isn’t some far-off trend — it’s already reshaping how people work, live, and start businesses. If you’re stepping into the small business world through platforms like Airbnb, Turo, TaskRabbit, or even launching your own micro-rental concept, you’re not just joining a movement — you’re helping define its next chapter. The barrier to entry is low, but the need for clarity, preparation, and adaptability is higher than it looks. Here’s what you need to know before diving in.

What is the Sharing Economy?

At its core, the sharing economy is a collaborative peer-to-peer model where individuals use technology to share access to goods and services, often through decentralized platforms. It’s less about ownership and more about access. You don’t need to build a hotel chain to run a lodging business — you just need a spare room and a compelling listing. The model thrives on underused assets and builds efficiency by connecting people directly. It also shifts power away from traditional institutions and into the hands of agile entrepreneurs — like you.

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Types of Businesses You Could Start

This is where things get interesting. The sharing economy covers everything from transportation and housing to tools, equipment, expertise, and time. Think beyond the usual suspects like Uber or Airbnb. There are examples of sharing economy business models that include renting out camera gear, launching pop-up coworking spaces, offering freelance kitchen space for home bakers, or hosting educational micro-events in your home or studio. What you already own — a vehicle, skills, space, or time — could be a business foundation. The challenge isn’t finding the right opportunity. It’s picking one that fits your lifestyle and risk tolerance.

Writing a Business Plan

Just because the model feels informal doesn’t mean your business should be. A solid plan turns a casual side hustle into a strategy. Whether you’re building something part-time or chasing full independence, how to write your business plan matters more than ever. It should define your offer, your audience, your operating costs, your growth path, and — crucially — how you’ll stand out in a market that’s growing noisier by the week. Don’t write a plan for investors. Write it for yourself, so you know what you’re actually building and why it’s worth your time.

Creating a Brand

Branding in the sharing economy isn’t about logos or taglines — it’s about trust. That means consistency, clarity, and repeatability. You’re not just selling a service; you’re convincing someone to choose you over an app’s default option. A clear brand builds familiarity, and it can anchor everything from your profile name to your visual design, tone of voice, and customer experience. The key? Don’t fake scale. Instead, craft a brand that feels human, present, and easy to remember. You’re not trying to out-corporate the corporations.

Researching the Competition

Before you launch, ask this: who’s already solving the problem you’re targeting, and how are they doing it differently? Don’t guess. Learn. How to perform competitor analysis doesn’t mean you obsess over what others are doing. It means you understand pricing baselines, value gaps, and customer pain points you might be able to solve more clearly or affordably. Use reviews, listings, social comments, and comparison sites to see how people talk about what’s missing — then position yourself as the answer. You don’t need to be the biggest. You just need to be the one that feels like a better fit.

Choosing the Right Business Formation

When it’s time to go from idea to legal entity, things can get confusing fast. But formalizing your business is what protects your personal finances and gives you credibility with customers and platforms. You don’t need a lawyer or a mountain of paperwork. Services now let you get a new formation plan for your LLC without needing to become a legal expert. They walk you through basic decisions — like whether an LLC fits your risk profile — and let you focus on building, not interpreting compliance documents. For small business owners in the sharing economy, speed matters. But so does structure.

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Accepting Payments Smoothly

Getting paid shouldn’t be a pain. But in the sharing economy, your payment setup often determines whether you’re seen as credible or amateur. Choosing how to accept credit card payments securely and efficiently is more than just a technical decision — it’s part of your brand experience. Whether you’re using Stripe, Square, PayPal, or a marketplace’s native toolset, make sure transactions are fast, mobile-friendly, and frictionless. No one wants to deal with clunky invoicing or ask how to pay. Make it obvious. Make it easy. And test it yourself before anyone else does.

Starting a business in the sharing economy feels simple on the surface — list a service, find a customer, get paid. But surviving (and thriving) means treating your side hustle with the seriousness of a real venture.

Unlock the secrets to real estate success with REI Wealth Magazine and transform your investment strategies today!

Beth Harris

As the founder of businesstipscenter.com, Beth Harris knows a thing or two about making smart business decisions. She founded her company with the goal of providing entrepreneurs with an all-access platform full of business resources and tips. Beth understands that every day brings new opportunities to make the best decisions possible for your business. That’s why she’s dedicated to making it happen.

Rising Property Taxes and Insurance: A Growing Concern for Homeowners

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By Rick Tobin

Property tax and homeowners insurance payments have risen so much in many U.S. regions that the monthly property tax and homeowners payments can both be as high as an average mortgage payment. It’s truly a pity that the monthly PITI (Principal, Interest, Taxes, and Insurance) payments have reached unaffordable levels for so many homeowners across the nation.

An analysis by Lending Tree that was published and updated in May 2025 found the median property taxes across the nation rose by an average of 10.4% between 2021 and 2023.

Whether or not a homeowner owns their property with or without a mortgage, they must continue to pay at least their property tax payments or risk losing the residential or commercial property to a future foreclosure tax sale.

By comparison, the decision to hold a homeowners or landlord insurance property on a free and clear property is solely up to the property owner who is willing to take the risk associated with fires, floods, and other damaging events. Many landlords today with free-and-clear properties may also have negative cash flow, so they stop paying for insurance.

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Property Tax Trends

Let’s take a closer look at what was gathered, analyzed, and shared by both Lending Tree and the Tax Foundation as it relates to property tax and homeownership trends through 2023:

● U.S. homeowners paid a median property tax payment of $2,969 annually, or about $247 per month.

● Homeowners without a mortgage can select insurance policies with lower coverage limit amounts because they don’t have to also protect a mortgage lender on the same policy. As a result, the annual premium amounts are usually lower for homes with no mortgage debt.

● Homeowners without a mortgage for their free-and-clear properties paid a median of $2,474 in annual property taxes, while those with a mortgage paid almost $869 more per year at a median of $3,343.

● More than 40% of U.S. homes today are now owned without a mortgage. Some of these homeowners choose not to obtain any insurance for their properties to keep expenses low. In theory, this may make sense until a future firestorm or horrific flooding situation damages their property so severely that they must tear it down.

Low and High Property Tax Regions

Depending on the price paid and the tax assessment percentage rate for the subject property’s county region, annual property taxes paid can vary from $1,000 to $100,000+ per year.

Between 2021 and 2023, property taxes increased in each of the 50 largest metro regions. The three metropolitan regions with the lowest annual property tax payment increases were as follows:

1. Pittsburgh, PA: +4.4%
2. Philadelphia, PA: +8.2%
3. Milwaukee, WI: +8.3%

Conversely, the three metropolitan regions with the highest annual property tax increases were located here:

1. Tampa, FL: +23.3%
2. Indianapolis, IN: +19.8%
3. Dallas, TX: +19.0%

This same Lending Tree study found that among the 50 largest metropolitan areas, Birmingham, Alabama, had the lowest median annual property taxes at $1,091 per year. Memphis, Tennessee and Louisville, Kentucky had the second and third lowest annual property tax payments out of the 50 largest metro regions at $1,856 and $1,912, respectively. Amazingly, Birmingham’s annual property tax payments were 41.2% lower than the #2 lowest annual property tax region in Memphis.

Among the 10 metros with the highest annual property taxes, four are located in California and two are in Texas. Out of the large 50 metros, these three regions have the highest annual median property taxes:

1. New York, NY: $9,937
2. San Jose, CA: $9,554
3. San Francisco, CA: $8,156

Birmingham, Alabama and Phoenix, Arizona pay the smallest percentage of their home value in property taxes out of the 50 largest metropolitan regions at an effective tax rate of just 0.48%. Both Las Vegas and Denver pay slightly higher amounts at 0.50%.

Surprisingly, Buffalo, New York (2.11%), Chicago (2.08%), and Cleveland (1.74%) had the three highest effective tax percentage rates out of the top 50 metropolitan regions.

Property Taxes by County

Within each state, counties can assess different property tax percentage rates and special assessments that can increase or decrease the property taxes paid by each homeowner. Sometimes, counties or county equivalents can run out of cash and file for bankruptcy. If so, they may increase the property tax percentage rates owed to help cover their annual budgets for schools, roads, and other expenses.

Lowest Property Taxes

In 2023, the lowest annual property tax bills in the nation were found in 11 counties, or county equivalents (parishes, boroughs, etc.), with median property taxes of less than $250 per year, according to the Tax Foundation.

These counties, or county equivalents, had property tax amounts at $250 per year or less, as follows:

● Alabama: Lamar and Choctaw counties
● Alaska: Northwest Arctic Borough, the Kusilvak Census Area, and the Copper River Census Area
● Louisiana: Allen, Avoyelles, Madison, Tensas, and West Carroll parishes
● South Dakota: Oglala Lakota County

In many regions of Alaska, there are actually $0 property tax payments due each year. As such, these areas in Alaska would officially have the lowest property tax rates and payments in America.

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Highest Property Taxes

Now, let’s review the 16 counties with the highest median property tax payments in the nation that all have annual tax bills exceeding $10,000 per year:

● California: Marin County
● New Jersey: Bergen, Essex, Hunterdon, Monmouth, Morris, Passaic, Somerset, and Union counties
● New York: Nassau, New York, Putnam, Rockland, Suffolk, and Westchester counties
● Virginia: Falls Church City

Additionally, two counties in New Jersey (Hudson and Middlesex), three counties in California (San Francisco, San Mateo, and Santa Clara) and the Western Connecticut Planning Region in Connecticut have annual median property taxes above $9,000 and slightly below $10,000.

Reasons for Increasing Property Taxes

Property taxes are the primary tool for financing local governments. For example, property taxes comprised 27.4% of total state and local tax collections in the U.S., which was more than any other tax revenue source.

Property taxes collected are then used to fund schools, police departments, fire and emergency medical services, roads, and other services. As a percentage of local tax collections in regions like counties, property taxes accounted for more than 70% of local tax collections in fiscal year 2022.

Rapidly increasing salaries, underfunded pension needs, and overall county budget increases for county employees are also reasons why property taxes are going higher to cover these budget deficits.

Because home prices have reached all-time record highs in many U.S. regions, the corresponding property tax assessments have risen as well because they are based on the home purchase price or latest assessed value.

Skyrocketing Insurance Costs

Sadly, insurance costs are seemingly increasing at an even faster pace across the nation than property taxes and monthly mortgage payments.

It’s not uncommon these days for homeowners or landlords to pay $500, $1,000, $2,000, or $5,000+ per month (not year) to have sufficient insurance coverage that protects them and their mortgage lender.

As I’ve shared in past articles like The Drying Disaster-Relief Insurance Pools, a large number of insurance companies and government agencies that back insurers may be technically insolvent after several decades’ worth of costly and deadly firestorms, floods, hurricanes, tornadoes, and other natural or manmade events.

California’s own “insurer of last resort” named the FAIR Plan had upwards of $336 billion of property exposure a year ago with just a cash surplus between $300 and $700 million, as per the California Assembly Insurance Oversight Committee.

This FAIR Plan budget analysis took place well before the absolutely horrific firestorms that hit my former neighborhood of Pacific Palisades and Altadena near Pasadena, which I shared back in January 2025 one week after the firestorms hit these beautiful regions as I shared in my Steps to Recover from the Pacific Palisades Firestorm article.

There are 10 times more California homes in low-fire risk zip code regions than homes in high-fire risk regions that currently have much more expensive California FAIR (Fair Access to Insurance Requirements) Plan insurance, according to CBS News Los Angeles.

Fire Hazard Severity Zones (FHSZ) & Local Responsibility Areas (LRA)

On March 24, 2025, OSFM (Office of the State Fire Marshal) issued the 2025 Recommended Local Responsibility Area (LRA) FHSZ maps for California.

FHSZ Classification

Properties are designated as Moderate, High, or Very High Fire Hazard Severity Zones based on:
● Terrain and topography
● Vegetation and fuel conditions
● Fire history and frequency
● Climate and weather patterns

As a result of the issuance of this map, a large number of homeowners in California are losing their insurance and have no other option to choose from than the usually more expensive FAIR Plan.

Just recently, the California FAIR Plan proposed the raising of home insurance rates by an average of 35.8% starting next spring in 2026, according to this article by the San Francisco Chronicle. If this hike request is approved by the state, it would be the largest payment increase in at least seven years.

However, approximately half of California FAIR Plan customers might experience annual rate increases of 40% to 50%, while other customers could see their rates jump by more than 300%.

The Lock-In Effect

I’ve written about the lock-in effect over the years as it primarily relates to homeowners who didn’t want to sell or refinance their record low mortgage rates.

It’s not just homeowners who hold near record low 30-year fixed mortgage rates who are not motivated to sell their homes whether or not they can afford the monthly payments. Rather, a large number of homeowners today aren’t selling their homes because of factors such as fear of higher future property taxes if they acquire a more expensive home.

Many homeowners also don’t want to pay higher insurance and/or lose their low fixed rate mortgage that might be somewhere between 3% and 5%. Other homeowners are afraid to make any claims on their insurance policies even if completely justified because they don’t want to risk losing their insurance or seeing their annual premium payments double or triple.

As a result, the lock-in effect also applies to a combination of mortgage rate, insurance, and property tax swings that may be almost impossible for the average homeowner to afford if they decided to sell their home.

It’s somewhat akin to a deer-in-the-headlights type of frozen reaction for many homeowners where they don’t know what to do and the safest decision may be to sit tight and do nothing. Yet, the same holds true for potential buyers who are currently renting. Can they afford these rising mortgage, tax, and insurance payments?

At some point, home prices will be affected, for better or worse, when the number of sellers exceeds buyers or the number of buyers exceeds available home listings.

Rick Tobin

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details. 

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Understanding the Tax Treatment of Cryptocurrency

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By Robert P. Russo, CPA PC

The tax treatment of cryptocurrency, particularly for activities like “staking,” has become a critical topic for investors. The IRS continues to clarify its position on digital assets, with new rules and reporting requirements taking effect in 2025. Here’s an updated look at what you need to know.

What is Staking?

Staking is a way for cryptocurrency holders to earn rewards by participating in the security and operation of a blockchain network. It’s a key function of blockchains that use a “proof-of-stake” consensus mechanism. Instead of using powerful computers to solve complex puzzles (the “proof-of-work” method used by Bitcoin), proof-of-stake networks rely on users who “lock up” or “stake” a certain amount of their cryptocurrency.

By staking your crypto, you are essentially helping to validate and verify new transactions and create new blocks on the blockchain. In return for your participation and for keeping your crypto locked, the network rewards you with additional units of that cryptocurrency. This is similar to earning interest in a traditional savings account, but with the added risks and volatility of the crypto market.

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How Staking Rewards Are Taxed

According to the IRS, cryptocurrency is treated as property, not currency. This means that when you receive staking rewards, they are considered a form of income.

  • When to Report Income: You must include the fair market value of staking rewards in your gross income in the year you gain “dominion and control” over them. This generally means when you can sell, exchange, or otherwise dispose of the rewards.
  • Calculating Fair Market Value: The amount of income you report is based on the fair market value of the cryptocurrency on the date you received it.
  • Filing Requirements: This income is typically reported on Form 1040, Schedule 1.

New for 2025: Broker Reporting and Form 1099-DA

Beginning January 1, 2025, there are significant changes to how cryptocurrency transactions are reported to the IRS.

  • Form 1099-DA: Crypto brokers and exchanges are now required to issue a new form, Form 1099-DA, to report digital asset sales and exchanges to both you and the IRS. For transactions in 2025, this form will report the gross proceeds from your sales.
  • Cost Basis Reporting: While brokers will report gross proceeds for 2025, they are not yet required to report your cost basis (the original value of your crypto plus any fees). This is scheduled to begin in 2026. Therefore, for your 2025 tax return, you will need to rely on your own records to calculate capital gains and losses.
  • Wallet-Level Accounting: The IRS now requires investors to track cost basis on a wallet-by-wallet basis, rather than using a universal accounting method.

Capital Gains and Losses

After you receive staking rewards and report them as income, any subsequent sale or exchange of that cryptocurrency is a separate taxable event.

  • Capital Gains: If you sell your staking rewards for more than their fair market value on the day you received them, you will realize a capital gain.
  • Short-Term vs. Long-Term: The tax rate on your capital gains depends on how long you held the asset before selling.
    • Short-Term: If you held the crypto for one year or less, your gain is taxed at your ordinary income tax rate.
    • Long-Term: If you held the crypto for more than one year, your gain is taxed at the lower long-term capital gains tax rates (0%, 15%, or 20%, depending on your income).
  • Form 8949 and Schedule D: You will need to use Form 8949 and Schedule D to report your capital gains and losses.

*Disclaimer: This blog post is for informational purposes only and is not a substitute for professional tax advice. Book an appointment to discuss your specific situation.

MEET ROBERT P. RUSSO, CPA PC

As the founder and principal of Russo CPA, P.C, Bob pleasantly surprises clients (plus the IRS and lawyers) with his proactive, caring, and interested approach. Bob’s authentic passion for both numbers and people is why his accounting firm is sought after by everyone from solopreneurs to CFOs. And it’s what energizes his fast-growing team of top CPAs who follow his lead by providing impeccable service to clients – without the CPA geek speak.

The only thing geeky about Bob is his favorite reading material: the latest tax regulations, codes, and rulings (so he can secure every possible tax advantage for his clients). You might mistake Bob for the charismatic entrepreneur and CFO behind an internet travel startup or a visionary real estate developer. That’s because he held those roles during his 30-year career as an accountant, which began at a high-profile accounting firm. While CPAs aren’t required to have “field” experience, the best ones do. But Bob doesn’t define success by his own achievements, it’s what he achieves for his clients. Because of his entrepreneurial past, Bob relates so well to his clients. In addition to serious tax savings most firms would miss, he empowers his clients with real-world accounting and financial insights to increase business.

Bob is even results-driven outside of work, whether it’s finishing the 2012 NYC Iron Man or volunteering for 12 years as President of a kids’ soccer league. While his bottom-line results are always impressive, what matters to Bob are the people who benefit from them.

When he’s not immersed in accounting, Bob is with his family, cooking up elaborate 18-course meals or globetrotting.

Robert P Russo CPA PC
Certified Public Accountants
231 W. 29th Street (bet 7th & 8th Ave)
Suite 500
New York, NY 10001
O: 212-279-9800
C: 917-207-9278
F:866-396-2310
www.robertprussocpa.com