Reardon Anderson - September 2021

Reardon Anderson - September 2021

ReardonAnderson C O U N S E L O R S A T L A W

ReardonAnderson.com

September 2021

MOST ENTREPRENEURS SKIP THIS STEP — AND IT COSTS THEM

TOP 5 REAL ESTATE ‘DUE DILIGENCE’ MISTAKES

NO. 2: ENSURE YOU UNDERSTAND THE UNDERWRITING GUIDELINES. Before you spend too much time conducting due diligence on any one particular property, make sure to talk to your lender about your plan for requesting a loan, and double-check the dollar amount they’d consider lending to you. Since 2008, federal restrictions force bank lenders to be conservative with their commercial real estate lending — if the property doesn’t fit certain guidelines, it may not be a good candidate for a hard money loan.

If you're buying a property for commercial purposes, it can be extremely expensive for you to have any closing delays. Unfortunately, due diligence mistakes are easy to make because it’s hard work and the boring side of commercial real estate investing. Yet, proper due diligence is often what separates successful investors from the rest. Here are several potential mistakes you can avoid with a little preparation (or by hiring a real estate lawyer!) and ensure your closing can happen in a timely manner, without any bumps in the road. NO. 1: CALCULATE THE CORRECT PROPERTY VALUES. It’s better to be conservative in any valuations of a commercial property — and this alone can require a lot of homework. Pull up sales comps, check out similar properties in the market, and talk to local commercial brokers about local property values. In looking to continually serve our clients, Reardon Anderson is gauging client interest in monthly webinars to explain issues impacting individuals and businesses in 2021 and beyond. If you think this would be an added value, please let us know your thoughts by emailing Info@ ReardonAnderson.com . Thank you so much for your support!

NO. 3: HAVE THE PROPERTY PROFESSIONALLY INSPECTED.

NO. 5: DON’T ASSUME LENDERS ACCEPT THIRD-PARTY REPORTS. Before you arrange for any third-party reports (i.e., environmental reports, condition assessments, or appraisal reports), ask your lender if they have a preferred appraiser, engineer, or inspector they can recommend so you don’t need to pay for additional reports at the last minute. Keep in mind that private lenders may conduct their own appraisals as well. Don’t be fooled into thinking that shopping for property can be as simple as looking at pictures — it can be a very complicated and involved process. That’s why it’s a good idea to get legal help on your side. At Reardon Anderson, our expert legal team would love to represent you and get many of these tasks off your hands right away — just give us a call!

This can be a deadly step to skip. It’s a good idea to have a contractor or a commercial construction professional inspect the property, looking out for spaces that might have been built without a permit and ensuring the building complies with the federal Americans with Disabilities Act (ADA) codes so you don’t have surprise costs after closing. NO. 4: LOOK OVER THE EXISTING TENANT’S LEASES. Specifically, you’re looking out for any nonstandard provisions in their lease. If you’re purchasing a rental property, you should be familiarized with the cancellation provisions, contraction provisions, fixed rents, and caps on expenses that can be passed on. Even if you’re not planning to rent the property in the immediate future, these all affect the value and income-producing potential of your property!

–The Reardon Anderson Firm

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Remember the ‘McDonald's Hot Coffee’ Lawsuit? It Was Justified All Along

STOCK MARKETS — THE NEWEST TIKTOK TREND

What Can You Expect of the Future Market? Starting in 2020, an expanding number of stock traders and investors have swept TikTok’s platform. Robinhood, a no-commission brokerage app, had millions of downloads before GameStop and other popularized stocks took off in January this year. More than half of Charles Schwab’s new 866,000 retail customers in 2020 (up 81% from 2019) are under 41 years old. Why is this happening? “Young people are saying, ‘Investing is cool, investing is cool,’” Farnoosh Torabi, a longtime personal finance expert who started the “So Money” podcast in 2015, told The New York Times. But while the GameStop frenzy was largely stoked by Reddit and novice traders, some of these young investors are quite serious. These investors fall into two parties: ones who build portfolios meant to last, and ones who are actively trading in and out of stocks quickly based on price patterns. You’d think the second category’s demand for technical knowledge would diminish the available content, but it’s almost the opposite — many TikTok creators are committed to educating others in how to be a retail investor from home and how to do it right. Active approaches are risky, after all. Studies show that retail traders tend to lose money, and even professional money managers can’t compete with the broader market over time. Young traders can certainly take on too much risk with disastrous results, which is why many financial influencers, or “finfluencers,” also educate their viewers on reliable financial investments. Influencer Austin Hankwitz, 24, now at half a million followers on TikTok, illustrated how contributing $250 a month to a Roth individual retirement account, starting at age 18, could yield $1.3 million upon retirement. How will this affect the market? Bard Barber, a finance professor and chair of the Graduate School of Management at the University of California, Davis, says the surge of new investors is typical of bull markets. “It’s more of the same, but on steroids.”

Back in 1992, an elderly woman named Stella Liebeck sued McDonald’s in what became known as the infamous “hot coffee lawsuit.” The public relations team at McDonald’s has made sure the case is remembered as frivolous, but, like the third-degree burns Stella Liebeck suffered from a cup of McDonald’s coffee, her lawsuit was dead serious. The facts were simple: Mrs. Liebeck used the drive-thru with her grandson, who was at the wheel. Once the car stopped moving, she placed the cup of coffee she’d just ordered between her legs and tried to add some creamer. The cup tipped over, dumping the contents into her lap, causing third-degree burns over 16% of her body. She required hospitalization for 8 days. Whirlpool debridement of the burns and skin grafts followed. She was at least partially disabled for more than two years, and that’s to say nothing of her pain and suffering.

For all of this damage, Mrs. Liebeck asked McDonald’s for $20,000 — arguably not even enough to pay her hospital bills.

When McDonald’s refused to pay more than $800, the case went to court, and it came out that they’d known for at least 10 years about the dangers their hot coffee represented, with over 700 recorded burns and several lawsuits. But in 1992, their policy was to store coffee at 180–190 degrees F, which is almost the boiling point! Furthermore, McDonald’s higher-ups testified on the stand that no matter what happened, they had no intention of changing their behavior. Unsurprisingly, at the end of the trial, McDonald’s was hit with a $2.9 million penalty. Although the penalty was later reduced, McDonald’s still dragged Mrs. Liebeck’s name through the mud in the press, with their version of the story being the one that stuck in the public consciousness. But it wouldn’t change the fact that they had to pay her around $700,000 at the end of the day — or that their coffee is now being served at a reasonable temperature.

As our offline lives resume, it may test who is serious about investing and who only participated

as a hobby. But the ultimate test may come when the market runs into its next downturn.

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WHAT IS A PARALEGAL? A Reardon Anderson Labor Day Special

An attorney may be an important figurehead for a case to go smoothly, but our incredible legal team is what keeps Reardon Anderson working effectively as a whole. If you’re a new client or aren’t too familiar with the legal industry, you might wonder: What is a paralegal, anyway? A paralegal is also known as a legal assistant, and, while they cannot provide legal advice, they are experts in researching and staying on top of drafting reports while maintaining client communication. They may be responsible for interviewing witnesses and clients and preparing civil documents such as wills, contracts, mortgages, and separation agreements. Truthfully, a day in the life of a paralegal will look very different depending on the field of law they work in — some will assist attorneys who spend a lot of time in courtrooms, investigate facts of a case while drafting pleadings and motions, and help an attorney in presenting this evidence during trial.

documents, drafting correspondence, or preparing legal documents like contracts and mortgages. In some fields, like personal injury, a paralegal may be busy corresponding with a client’s doctors and getting a medical report to present in court. At our firm, our paralegals juggle a lot of different tasks in a well- organized effort to support our attorneys, and we couldn’t be more grateful. Although paralegals cannot “practice law” — such as providing legal advice, representing clients, accepting a client’s case, or demanding a client’s fee — they can help an attorney carry out all other legal tasks so a case can be successful. A common complaint in the legal industry is how hard it can be to get ahold of an attorney. A paralegal makes it much easier for attorneys to stay in close contact with their clients, and a paralegal’s behind- the-scenes administrative work also helps lawyers act more quickly to changes in a case.

Thank you so much, paralegals, for what you do! We couldn’t run Reardon Anderson without you!

Others may work for attorneys who never spend any time inside the courtroom, but spend their time reviewing and cataloging

ONE-PAN APPLE CIDER CHICKEN

INGREDIENTS

1 1/2 lbs boneless, skinless chicken thighs

2 tsp Dijon mustard

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4 tsp olive oil, divided

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1 tsp salt, divided

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3 sweet apples, cut into 1/2-inch slices 2 tsp fresh rosemary, chopped, plus more for garnish

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1/2 tsp black pepper, divided

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1/2 cup apple cider

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DIRECTIONS

1. Sprinkle chicken with 1/2 tsp salt and 1/4 tsp pepper. Set aside. 2. In a small bowl, combine apple cider and mustard. Set aside. 3. In a large skillet over medium heat, warm 2 tsp olive oil. When shimmering, add chicken thighs top-side down. Cook for 4 minutes, then flip and cook for 4 more minutes. Transfer to a plate and cover with foil. Wipe the skillet clean. 4. Heat the remaining oil in the skillet, then add sliced apples, remaining salt and pepper, and rosemary. Cook for 5 minutes. 5. Return the chicken to the skillet and add apple cider-mustard mixture. Cook for 5 minutes, then serve sprinkled with rosemary!

Inspired by WellPlated.com

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INSIDE THIS ISSUE

1 2

What’s ‘Due Diligence’?

How McDonald’s Spun the ‘Hot Coffee Lawsuit’ Stock Markets — The Newest TikTok Trend What Is a Paralegal? One-Pan Apple Cider Chicken 3 Things All Students Need Before Moving to College

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PREPPING FOR AN EMPTY NEST?

3 THINGS TO DO BEFORE YOUR GRADUATE LEAVES

Congratulations to parents sending their children off to college or “the real world” this year! Parenthood is not for the faint of heart — from toddler meltdowns to angsty teenage years, you might be counting down the days to an empty nest.

the fridge will be fully stocked without ravenous teens emptying it regularly! But before you drop your child off at college or their new home, make sure they can manage laundry, cook basic meals, and keep a tidy space. Some basics to cover include the difference between hot and cold wash and how to make scrambled eggs. MAKE A BUDGET Living as a broke young adult is almost like a rite of passage to “real” adulthood, but you can make this experience easier just by opening that often taboo door and talking about money. Explain the processes or budgeting systems that work for your family and guide your child through their potential living expenses. Try test runs so they understand how much they will have to spend on necessities, like groceries, hygiene items, and gas. Pro Tip: Before your children take off, don’t forget to schedule one more dental appointment! We can set up recurring appointments during breaks to ensure their oral health is never compromised.

Yet, that doesn’t make your child moving off to college any easier.

Fear not, for you can help your child live more independently at college in many ways and give yourself peace of mind knowing that your baby is going to be fine. PREPARE LEGAL DOCUMENTS Once they turn 18, your child is no longer under your care — legally speaking. You can no longer make decisions for them, including medical decisions, should they become incapacitated and unable to make their own decisions. Connect with a trusted attorney to create medical and financial powers of attorney that give you these rights. (Just consult with your child first before doing so!)

COVER THE HOUSEHOLD BASICS If there’s one thing to look forward to, it’s all the laundry you won’t have to do anymore. And

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