Nothing Shady About This NFL Player
His nickname may be Shady, but there’s nothing shady about Lesean McCoy’s business acumen…
Shady has the distinction of playing on the last two Super Bowl-winning teams. He didn’t play a single snap in either game, but he earned Super Bowl rings for being on the roster. I guess you could say he mastered the art of passive income.
As his Hall of Fame playing career winds down, Shady has his eyes set on another lofty goal in the next phase of his life: to build a real estate empire. And he’s starting with Opportunity Zones, a program launched by the 2017 Tax Cuts and Jobs Act (“TCJA”). Congress created the Qualified Opportunity Zones (“QOZ”) program to encourage development in economically distressed communities across the country designated as Opportunity Zones by the various state and federal authorities.
One of the Opportunity Zone program hallmarks is the significant tax breaks given to investors for investing in needy communities. McCoy knows a thing or two about the power of tax savings since, as a player for the Tampa Bay Buccaneers, he pays no state income tax on his salary. Florida has no state income tax.
It’s estimated that 1 in 6 Americans live in Opportunity Zones.
There’s intense interest from investors to lift these communities while taking advantage of the significant tax benefits – including Lesean McCoy. His real estate firm, Vice Capital, develops properties in Opportunity Zones and currently owns 60 properties under its umbrella.
As part of National Financial Literacy Month, McCoy was recently profiled in a CNBC article discussing his investing journey. In the article, McCoy admits that he hadn’t always been this financially literate or savvy.
In his early NFL career, McCoy admitted he had no clue how to handle finances. The thought of making money from his large NFL paychecks didn’t even cross his mind – neither did the thought of saving: “Now being in my 12th year in the league, looking at all the investments I’ve made from the good to the bad, I think I’ve learned,” McCoy told CNBC. He now says he’s more motivated to further “generate finances not only for myself but also for my family.”
Not initially armed with the knowledge or education necessary to look beyond his playing days to continue making money, he has educated himself and learned from others to put himself in a position to continue earning even after his playing days are over. And real estate is where he is focusing.
Recognizing the value of education in investing and generating additional streams of income from besides football, McCoy mentioned that another mission post-football is to help NFL players learn “how to make money other than just playing football.”
Why Opportunity Zones?
LeSean was skeptical when LeRon first introduced LeSean to Opportunity Zones in 2017 when he learned the legislation was passed under President Donald Trump’s administration. “Who is this really for?” he asked his brother.
After researching legislation and identifying the tax exemptions, LeSean determined it was a “win-win.” It helped that the legislation had bipartisan support, including U.S. senators Sen. Cory Booker (D-NJ) and Sen. Tim Scott (R-SC). “And on the other side, as a humanitarian, you’re able to affect certain communities that need that change,” added LeRon. “Those are usually inner-city areas.”
“We want to build that empire in real estate,” LeSean said.
Building an empire is what LeSean is setting out to do, but he wouldn’t be able to do it without someone he trusts – his brother. LeSean has made $63 million in his career, according to Spotrac. Because LeSean still had a day job in the NFL, he asked his brother to help operate Vice, which was launched in 2018.
“The hard part for players is trusting,” LeSean said. That’s what stops many players from looking at passive investment opportunities – trusting others to handle their money – because there are so many horror stories of players being ripped off by so-called “experts.” LeSean was fortunate to find someone he trusted. “My brother is a guy that I trust like no other, so that’s probably why it works so well with real estate. He’s constantly teaching me.”
Why Real Estate?
As retirement nears, LeSean said real estate is his focus. Asked about stocks or investing in bitcoin, LeSean said he tried the investments but is no longer interested.
“My thing is real estate,” LeSean said. “That is something I understand. I don’t need to take someone else’s word for it and the ups and downs – it’s just a lot. With real estate, I can see what’s going on; I can see my money, touch it and feel it.”
McCoy’s approach to investing is a lesson for us all. Leery of the stock market and bitcoin volatility and all the unknowns that go into the ups and downs of pricing, McCoy prefers something tangible and flows cash.
McCoy is an example not to other NFL players wondering about life away from football but to all other investors. We all need to think about generating income aside from our day jobs if we have any hope of achieving financial independence.
Michael Foley, president and CEO of Humabilt Capital, oversees the entitlement process, funding, and operations for Humabuilt Capital. Mr. Foley has been a full-time real estate investor since 1995 during which time he has developed hundreds of single-family homes, townhomes, condominiums, and apartments. Mr. Foley started his investment ventures in Long Beach, California, and has expanded to Apex and Durham North Carolina. Mr. Foley is a graduate of the University of California at San Diego.