Post Hurricane Updates – Investment Cleanup  Part 1- Personal Residences

There is no easy path for those indi­vid­u­als as well as investors who have been affect­ed by a vari­ety of storms and oth­er weath­er-relat­ed con­di­tions over the past few months. As we look at areas in North Car­oli­na through­out the south­east and in areas on the West Coast of Flori­da we real­ize how quick­ly lives can be changed.

Octo­ber 15, 2024

By Al DiNi­co­la, AIF®, CEPA™
DST 1031 Spe­cial­ist
NAMCOA® — Naples Asset Man­age­ment Com­pa­ny®, LLC
Secu­ri­ties offered through MSC-BD, LLC Mem­ber of FINRA/SIPC

This is a three-part series.

First and fore­most, we real­ize and under­stand how dif­fi­cult from an emo­tion­al stand­point it is for fam­i­ly mem­bers who have been infect­ed by the storms. We do not want to min­i­mize the per­son­al tragedies fam­i­lies have endured over the past few months. The loss of life that some fam­i­lies have expe­ri­enced will nev­er be replaced. Invest­ment prop­er­ties and mate­r­i­al items can be replaced but the loss of a fam­i­ly mem­ber or a friend is absolute­ly dev­as­tat­ing.

We were very for­tu­nate with our office in Naples, Flori­da expe­ri­enc­ing min­i­mal dam­age dur­ing three named storms in 2024. Per­son­al­ly, I con­sid­er my fam­i­ly to be extreme­ly lucky liv­ing in Sara­so­ta, FL where the eye of hur­ri­cane Mil­ton came ashore. As we dri­ve around areas affect­ed by the Hur­ri­canes, we mar­vel at the way cit­i­zens and neigh­bors reach out and help each oth­er.

There will come a point once the after­math and clean up from the hur­ri­cane begins that affect­ed peo­ple may see a light at the end of the tun­nel. This peri­od of time will be dif­fer­ent for each and every fam­i­ly as well as each and every investor who owns prop­er­ty in the affect­ed area.

What we will attempt to cov­er in this brief series is how to deter­mine which direc­tion investors may need to fol­low because of the storms. There are three aspects of this series of writ­ings: per­son­al res­i­dences, §1031 invest­ment prop­er­ty and §1033 invest­ment prop­er­ty. We will also com­ment on the Delaware Statu­to­ry Trust (DST) prop­er­ties that investors have frac­tion­al inter­est and the man­age­ment of those DSTs.

The effects on the indi­vid­ual investors with their pri­ma­ry res­i­dence will have long last­ing impli­ca­tions as indi­vid­u­als will sort through the insur­ance process. Pol­i­cy hold­ers with insur­ance will wres­tle with the amount of insur­ance cov­er­age as well as the type of insur­ance in place at the time of the storm. Pol­i­cy hold­ers with flood insur­ance may face the 50% reg­u­la­tion under the Nation­al Flood Insur­ance Pro­gram (NFIP) FEMA. There are many sources for cur­rent infor­ma­tion, but a quick sum­ma­ry pro­hibits improve­ments to a struc­ture exceed­ing 50% of its mar­ket val­ue.

The ques­tions may also involve if we are per­mit­ted to rebuild can we afford to rebuild. Low lying areas in Flori­da that were built in the 50s, six­ties and 70s may now be sub­ject to new build­ing codes. These build­ing codes may require addi­tion­al safe­guards in the con­struc­tion which increas­es the over­all cost of the replace­ment prop­er­ty. In North Car­oli­na there are loca­tions that have access issues with roads that are no longer in place, mak­ing even get­ting to the prop­er­ty a large issue.

We want to per­son­al­ly thank our investors who have reached out to us per­son­al­ly to check up on us since we were in the path of one of the Hur­ri­canes. We were very for­tu­nate in our gen­er­al loca­tion and don’t know what to do it’s Flori­da to have been spared with any loss. We will do our best to keep all of our investors informed on the con­di­tion of their invest­ment prop­er­ties. We will also do our best to ana­lyze invest­ment cleanup after these types of events.

I am part of a Com­mu­ni­ty Emer­gency Response Team (CERT) local­ly and we do rec­og­nize the dam­age, and stress can be over­whelm­ing dur­ing and after the storm. Look­ing in the rear mir­ror and poten­tial­ly as a guide in the future here are items our team and oth­ers stress.

1. Safe­ty First: Ensure that it’s safe to enter your home. Watch for haz­ards like struc­tur­al dam­age, gas leaks, or downed pow­er lines. Our team uti­lizes short range radios to com­mu­ni­cate since often cell phones may not oper­ate.
2. Doc­u­ment Dam­age: Take pho­tos and videos of all dam­age for insur­ance claims. Make a list of dam­aged items. Many home­own­ers also take pho­tos before the storm.
3. Con­tact Your Insur­ance: Noti­fy your insur­ance com­pa­ny as soon as pos­si­ble. They’ll guide you on how to file a claim and what infor­ma­tion they need. Yes, the insur­ance com­pa­nies may be very busy.
4. Secure Your Prop­er­ty: If it’s safe, board up win­dows and doors to pre­vent fur­ther dam­age. Con­sid­er hir­ing pro­fes­sion­als for major repairs. How­ev­er, licensed con­trac­tors should be used and do not pay for repairs in cash and try to go through the insur­ance com­pa­ny.
5. Clean Up: Remove stand­ing water and debris, if pos­si­ble. Mold can devel­op quick­ly, so prompt action is cru­cial.
6. Tem­po­rary Hous­ing: If your home is unin­hab­it­able, look into tem­po­rary hous­ing options, which might be cov­ered by your insur­ance.
7. Local Resources: Check for local aid orga­ni­za­tions, such as the Red Cross, that can pro­vide assis­tance and resources.
8. Men­tal Health: Con­sid­er your emo­tion­al well-being. Hur­ri­canes can be trau­mat­ic, so reach out to friends, fam­i­ly, or pro­fes­sion­als for sup­port.
9. Stay Informed: Keep up with local news for updates on recov­ery efforts, resources, and assis­tance avail­able in your area.
10. Plan for the Future: Once you’ve addressed imme­di­ate con­cerns, con­sid­er how to bet­ter pre­pare for future storms, such as cre­at­ing an emer­gency plan or retro­fitting your home.

In our area of Flori­da, we have seen many home­own­ers drag fur­ni­ture, kitchen cab­i­nets, wood­en floor­ing, as well as oth­er mate­ri­als to the curb in front of their homes.  Cities and coun­ties will even­tu­al­ly clean up these dis­card­ed items.  All res­i­dents will need patience with the clean up process as many attempt to get back to some sense of nor­mal­i­ty.

Next, we will cov­er the Sec­tion 1031 tax deferred exchange sit­u­a­tion and poten­tial tim­ing changes.

Investor Restric­tion:

DST’s (Delaware Statu­to­ry Trusts) are for accred­it­ed investors only.  Con­tact your invest­ment advis­er for addi­tion­al details on how a DST may be a solu­tion to your 1031 Exchange and com­pli­ment your finan­cial objec­tives. For more infor­ma­tion on how to prop­er­ly set up an IRC 1031Tax Deferred Exchange or if you are an accred­it­ed investor and would like addi­tion­al infor­ma­tion on a DST con­tact Al DiNi­co­la at 239–691-8098 or email adinicola@namcoa.com.

This is not an offer to pur­chase or solic­i­ta­tion to pur­chase any secu­ri­ty, as such be made only through an offer­ing mem­o­ran­dum or prospec­tus.  Invest­ing in secu­ri­ties, real estate, or any invest­ment, in any form, involves risk, includ­ing but not lim­it­ed to the poten­tial of los­ing some or all of your invest­ment dol­lars when you invest in secu­ri­ties. You should review any planned finan­cial trans­ac­tions that may have tax or legal impli­ca­tions with your per­son­al tax or legal advi­sor.   NAMCOA, LLC is a Reg­is­tered Invest­ment Advi­sor, reg­u­lat­ed by SEC (Secu­ri­ties and Exchange Com­mis­sion). Our cor­po­rate office is locat­ed at 999 Van­der­bilt Beach Road, Suite 200, Naples Flori­da 34108. Secu­ri­ties Offered through MSC-BD, LLC, Mem­ber of FINRA/SIPC. 8215 SW Tualatin ‑Sher­wood Rd, Suite 200 Tualatin, OR 97062. MSC-BD, LLC and NAMCOA are inde­pen­dent­ly owned and are not affil­i­at­ed. 

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