Other issues on the TR-GRC agenda include protecting the interests of housing providers by supporting clearer mandates on how tenants or landlords get housing sup- port and retaining 1031 Exchanges. Anything that hurts housing providers’ bottom line in turn either passes on to tenants or contributes to smaller housing providers (small businesses) leaving the business. DAYONTHE HILL: THE FIRST STEPOFTHE GRC In October, members of the American Association of Private Lenders and Think Realty gathered virtually for a day of meetings with staffers in Washington, D.C. to discuss proposed legislation that would impact housing providers and private lenders. In 2019, each company organized an in-person Day on the Hill event and members were excited to continue the discussion that successfully began two years ago. The purpose of Day on the Hill is to explain what hous- ing providers and private lenders do for the real estate industry and to voice the effect of barriers that proposed legislation would impose. AAPL and Think Realty are owned by Eddie Wilson. “It is important to establish who we are and how we can be of service to legislators. We take a consultative approach, and our methodology is one of advocacy,” he said. Policymakers were responsive to concerns and the event’s 11 meetings with legislators on both sides of the political aisle helped raise awareness for the real estate investing and private lending industries. Staff requested additional information that would help them better understand these issues and the plight of their constituents. Kat Hungerford, secretary for both the AAPL and Think Realty Government Relations Committees said, “Throughout our advocacy efforts, we’ve found that our largest hurdle is that legislators do not see private lend- ers and real estate investors as small business owners who support communities and help homeowners into properties they would never have had access to other- wise. Instead, they hold a view popularized by reality TV, where the money is easy, and the underlying stories of blighted property recovery remain untold. Day on the Hill is our chance to tell the real story of what we do and why we matter.” The main talking point at the 2021 Day on the Hill was Regulation D. Congress adopted Regulation D in 1982 to “to simplify existing rules and regulations to facilitate capital formation, particularly for small businesses, con- sistent with the protection of investors.”
“Throughout our advocacy efforts, we’ve found that our largest hurdle is that legislators do not see private lenders and real estate investors as small business owners who support communities and help homeowners into properties theywould never have had access to otherwise.”
KATHUNGERFORD, AAPL
“Protection” occurs by limiting private placements, in large part, to “accredited investors.” Accredited investors are defined by income or asset tests and/or credentials (CPA, attorney, broker dealer, etc.). will prohibit almost all self-directed IRA investments into private offerings and require IRA accountholders who have invested in these assets to liquidate their positions within two years. SECTION 138312 SECTION 138314 will prohibit an IRA accountholder from investing in a business if they or a family member is an officer of the business, or they own >10% of the company. Current rules only have the ownership threshold at 50 percent and require prohibited accountholders who have invested in these assets to liquidate within two years. These provisions appear to be motivated by the highly publicized story about Peter Theil by Publica where the Pay- Pal founder “turned a retirement account worth less than $2,000 in 1999 into a $5 billion tax-exempt piggy bank.” AAPL and Think Realty’s position is to strike Section 138312 and 138314 from the federal tax bill, which if passed, would force self-directed IRA accountholders to move from private to public offerings; private lenders and private funds would face significant hardship to find new sources of capital; and small businesses would continue to struggle with recovery after already enduring economic
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