September 2018 KREIA Newsletter by KREIA .com

Providing Education, Resources & Networking Since 1978 Kentucky’s premier investment club for landlords, rehabbers and wholesalers Meeting the 4th Thursday of every month (except November & December) KREIA.COM • facebook.com/groups/kreiaky • twitter.com/reiaky

Monthly Newsletter for KREIA Members

Vol 09-18 September 2018 President’s Letter

Paid Advertising Rates

Meet the Candidates: Elections 3 are approaching! Q&A with three candidates running for local office Welcome, New Members!

Lauren Willoughby: Not in the private Facebook group? Here’s what you’re missing

Clay Smith: Tips to save time and money

KREIA Photos

L.O.T.S. Recap: First-time flipper 13 David Rathke pulls off a tough rehab in Irish Hill Mike Butler: Finding killer deals is an ‘Easter Egg Hunt’

KREIA Members! This month we have a special treat for you at our monthly meeting and I hope you can attend, because we’re featuring three local citizens running for different positions in Jefferson County government at our Meet The Candidates Night! While politics may not be your “thing,” we think it’s very important you know who is running and what their positions are, and especially how they may be able to help the local real estate industry and other local businesses thrive and grow in the years to come!

Eric George

We invited a dozen local candidates, both incumbents and newcomers, and as of this writing we have confirmed Angela Leet, who is running for mayor, John May, who is running for Property Valuation Administrator, and Bobbie Holsclaw, who is the current Jefferson County Clerk! This will be a great opportunity for you to ask these candidates your own questions during the Q&A session to help you decide who deserves your vote this year! Get to Woodhaven early to reserve your seats up front! I also want to let you know we’re hoping to have the new KREIA Member Directory finished and available at this month’s meeting! We’re adding a lot of GREAT info and resources to the directory that we think you’ll LOVE, so expect a lot more than just a list of names and numbers! If we don’t make the cut somehow this month, it will definitely be available at our October meeting next month. Lastly, if you’ve had any trouble logging into your account recently or haven’t been receiving emails from us, we do apologize, but we think it’s been resolved now. If you need any help, please send an email to support@KREIA.com or send us a message via our Facebook page! See you at the meeting! Eric George KREIA President

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

Your KREIA Leaders

President Eric George

Vice President Tamara West

Advertise With KREIA

Secretary Erik Hitzelberger

Treasurer Mike Treasurer-Elect Grinnan CPA Wally Kallbreier

Board of Directors

Put your message in front of the most active rehabbers, landlords and wholesalers in the state! KREIA offers five membership levels for businesses. Go to KREIA.com and join at one of these annual advertising levels to get your ad in every issue of KREIA's newsletter and be invited to make ad pitches at meetings:

Business Card Membership . . . . . . . . $199 Includes your business-card-sized ad. Admission at monthly meetings remains $20. Premium Levels: These four advertising levels include your ½-page ad in each issue!

Rue McFarland

George Foree

Dennis Erhard

John Jones

Lauren Willoughby

Mike Fallot

Hampton Scurlock

Mike Butler

Chris McCarty

Greg Nalley

Parliamen- Past Pres. tarian Michelle Frank Rawn Miller

Darin O'Neil

Get involved with KREIA. You can help with the monthly meetings, L.O.T.S. program, this newsletter, Saturday workshops, Government Affairs roundups, marketing, the KREIA website and more. PLUS You Get EXTRA KREIA points for everything you do! Ask for someone to direct you as you check in at the front desk at monthly meetings.

KREIA's newsletter is published monthly and serves to educate you and to remind you of upcoming monthly meetings. About KREIA: The Kentuckiana Real Estate Investors Association is a members-only, nonprofit organization focused on education, networking and resources for today's investor. Whether you are just starting out in real estate investing or are working on your hundredth deal, KREIA can help you learn more, earn more, and have more fun doing it. Group discounts are available. Contact us at News@KREIA.com if you want to: Advertise on KREIA.com • Sponsor a monthly meeting Sponsor a L.O.T.S. program • Sponsor Saturday Workshops

Bronze Membership . . . . . . . . . . . . . $499 Includes free admission to monthly meetings for one person. Silver Membership . . . . . . . . . . . . . . $699 Includes free admission to monthly meetings for two people. Gold Membership . . . . . . . . . . . . . . . $999 Includes free admission to monthly meetings for two people and gives you a skirted table in the vendors area. Platinum Membership . . . . . . . . . . $4,995 Includes everything the Gold level offers, plus extra promotion from KREIA. You'll be our designated events sponsor, and we will promote you accordingly! New ½-page advertising levels and pricing are in effect for new member signups and upon renewal for current advertisers. Questions? Send email to News@KREIA.com or catch up with KREIA Sponsor/Advertiser Chair Dennis Erhard at the meetings.

Join KREIA Joining KREIA is easy: Go to KREIA.com and click the "JOIN" option on the menu. The cost to join as an individual member remains at $125 per year, with a charge of $20 at the door for monthly meetings. Click JOIN at KREIA.com to find out about all the benefits of membership for both individuals and businesses. Too many to list here!

Meet the Candidates With elections coming up, let’s talk issues – and talk to some people running! By Mike Butler Hey Fellow KREIA Members: Years ago, you, your family, friends, and fellow KREIA Members who own real estate in Jefferson County really did not pay attention too much to local politics and elections. WHY? I’m guessing because our local government seemed to use common sense and logic as leaders in Louisville. Today is a whole new ball game. Although I cannot cover everything, look how our local politicians have affected your homes and investment properties. We no longer live in Mayberry.

At this time, the following candidates will be making short presentations with Q&A at our September Meeting.

• Code Enforcement does not always enter friendly Angela Leet – candidate for Louisville Mayor violations on your properties with a “date to be done by” Bobbie Holsclaw – candidate for Jefferson County Clerk for everything like they used to. They’ve got items in the John May – candidate for Jefferson County PVA code now where they can issue FINES on the spot for violations they see when they’re driving down the street. Please invite every property owner you know to attend If your tenants set out their garbage cans the wrong way this KREIA Meeting. Family, friends, neighbors, church folks, or at the wrong time, you will get a fine. If tenants park with two car wheels on the grass, it’s a fine. Same thing if fellow workers and more. A lot is riding on November’s election as it can greatly their grass is too tall. affect real estate owners. • HUD Section 8 Program is very anti-landlord today. Bring a notebook and a couple of good ink pens. • Metro Council passed an ordinance requiring all rental properties to be registered on their website or you will Angela Leet be fined $100 per day for non-compliance. angelaleet.com • Your Government Affairs Committee Chairman, Rue She is an engineer, mom, businesswoman, Metro McFarland, and George Foree have aggressively worked Council member, and community leader. She is with local, state, and federal levels to help protect running against Mayor Greg Fischer. property owner rights. WARNING: In Today’s world, GOVERNMENT is now your partner in your real estate business. I cannot stress enough how important political elections are in our industry and businesses. Your Program Director and Vice President Tamara West has worked very hard inviting local candidates to attend this meeting. Out of the candidates who were invited, three have responded and confirmed.

John May mayforpva.com He is a Kentucky certified real estate appraiser, a licensed Kentucky real estate broker, and former Jefferson County property valuation administrator.

Bobbie Holsclaw jeffersoncountyclerk.org As clerk, she is responsible for the recording various legal instruments, licensing of motor vehicles and collection of delinquent property tax.

5:30 p.m. Early Meeting: Security Special Door Prize for Pre-Paid Registrations! Active Members: $20 • Guests: $30 • Former Members: $30 Register now at kreia.com. Receipt emailed for your records.

PRE-PAY NOW!

Todd Hancock with KREIA advertiser The Flying Locksmiths describes ways to secure your investment properties – and your wallet!

Welcome, New KREIA Members! Louise Alexander Kevin Allen John Archer O.T. Blankenship Marilyn G. Brown Mike Brumleve Barry Christensen Nathan Edmonds Terry Gage

LaKita Jenkins Chris Kurtz Aundrea Moorman Bobby Owens Jr Dan Palacios Andrea Pettus Robert Reid Robert Rivera Joel Shelton

Christine Starks Rebecka Taasaas Miguel Antoni Couto Telarroja Robert Weigel Deborah Williams

Not in the Facebook Group? Here’s What You’re Missing By Lauren Willoughby KREIA has more than 450 active members, but only 252 of us are in the private Facebook group. The rest of us? Here’s what you’re missing. You’re missing photos and videos from KREIA events – and from investors posting their own projects. You know how photographer Bruce Hinson buzzes around taking great shots at the main meetings? Only a few photos turn up in the newsletter, but all of them end up on Facebook. You’re missing requests for contractors and tradespeople that get responses from other investors, including names and phone numbers. Often the most interesting thing about a Facebook post is the conversation that kicks off in the comments. Here’s a sampling of posts from the last week:  Someone shared a news story about the shooting of a woman who was serving an eviction notice. That led to follow-up comments from local landlords explaining how they deal with evictions, the letters they send and when they get an attorney involved – and which attorney.  An investor posted his plans for a house he just closed on: “Paid $55k, needs about $10k and will flip it for $145k after at least one year of renting it so I can 1031 out of it to protect the profit. Will rent for $900/month.” Sounds like a cool strategy – I hope he posts updates!  Someone asked how to find out if a property has tax liens on it, and two investors replied with links to county website search pages.  An investor asked for recommendations on licensed and insured GCs and got a response from a contractor who might be able to help her, starting in October. A follow-up request for drywallers and framers netted her the names and phone numbers of four workers.  An investor/agent posted notice of an upcoming open house on a rental or possible flip in Crestwood. Want to join? Visit facebook.com/groups/KREIAKY/

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Time- and Money-Saving Tips By Clay Smith The copper lines on your HVAC unit that run from your house to the AC condenser need to be insulated and the open holes sealed. Many houses fail inspections for this. You can special order American Standard Champion 4-inch toilets from Lowes. Their 4inch drain can reduce plumbing calls in rental properties. Item #424943 for $199. During inspections, it's a good idea to take pictures of make, model and serial numbers on appliances, water heaters, HVAC and mechanicals. This helps when estimating costs and reporting theft. When flipping, consider offering a warranty that covers an old furnace or condenser instead of replacing it. This can save you money and make the buyer feel protected. Did you know? Louisville Water and LG&E offer combined billing statements, making accounting much easier.

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photo by bruce w. hinson www.obedientcamera.com

photo by bruce w. hinson www.obedientcamera.com John May, who’s speaking at the September meeting, dropped by last month too.

Joe Varnadore from NoteSchool paid us a visit to headline the August meeting, teaching us about how to profit by buying the paper behind the property.

KREIA

Photos

photo by bruce w. hinson www.obedientcamera.com Above: A KREIA meeting is a hot ticket! Remember that you can pre-register online and breeze in through the pre-pay line. Below: Can you spot the KREIA board members and officers? Hint: They’re dressed for a luau. At right: KREIA President Eric George is stylin’ in his peach-colored lei.

photo by bruce w. hinson www.obedientcamera.com photo by bruce w. hinson www.obedientcamera.com

See more photos in KREIA's private Facebook group.

Irish Hill L.O.T.S. Homes: A Closer Look

First rehab for Louisville transplant David Rathke is a challenge David Rathke quit his corporate desk job, moved from New York to Louisville, and decided to rehab a house. Bold move! But it’s looking to pay off. A friend introduced him to the owner of this house in the hot Irish Hill neighborhood. David said that after the initial meeting he followed up with the owner for two weeks, “but I was a little too aggressive in my approach.” Then he tried changing tactics. “Instead of just trying to get a deal, I kind of tried to help him. Once I did that, with that mindset, it worked out.” It worked out for the seller too, who was able to pay off some bills. David said in the year he’s had the house, his plan for it has changed. When he helped manage a friend’s Airbnb, he thought he might make this house a short-term rental too. He 1317 Hull St. in Irish Hill was acquired for $65,000. (Photos by Lauren Willoughby) even projected earnings of $80,000 per year. But after he learned that a house down the street sold for With total rehab costs topping $145,000, the house $359,000, he shifted gears and turned the house into a flip. should be a stunner – and it is. It features modern, David said he wanted to immerse himself totally in the contemporary styling with its massive windows and project to understand it. “I had no experience. I couldn’t tell attractive hardwood maple floors, which he said he bought you the difference between a wood screw and a drywall on closeout. screw. That’s my history, right?” But he jumped in and tackled The $13,000 that went toward the bathrooms was some of the hands-on work, with the guidance of his father- money well spent! The tiled master bath in particular is in-law, who’d once built a house. gorgeous, with its glass-paneled, walk-in shower. The open David did the rough-in work on the HVAC, electrical and living area features sky-high ceilings and a long granite plumbing himself. “I was all about the budget,” he said, and island, which holds the sink. If David gets his asking price, saving through sweat equity. 1,400 man hours’ worth! he’ll score a sweet six-figure payday. There was a hiccup with contractors, when the first ones Someone in the crowd asked if he’d ever take on a “destroyed the framing and then they were demanding more project like this again. “The next project I take on will follow money.” David said he told them, “I’m going to pay someone the Frank Miller model,” he said, adding that he’d joined a lot more money, but it’s not going to be you.” Frank’s coaching class, and planned to work with simpler “So then I spent 30 days rehabs. running around, looking for “This has been a great learning experience, but I’ll never framers. Remember, I’m not take on this much. I’ll do a rough-in once,” David said. “I from Louisville.” would like to thank Frank Miller for his support, and Mike David said his current Fallot and KREIA.” ??? challenge now is figuring out Louisville comps and trying THE NUMBERS to understand the ARV, and Purchase & Closing: $67,000 R.E. Commission: $17,505 that he’d learned a lot just Total Rehab Costs: $145,796 Total Costs: $240,301 by talking for half an hour Est. Sale Price: $389,000 with investors who’d showed Carrying Costs: $8,000 Estimated Profit: $148,699 Closing Costs: $2,000 up to see his L.O.T.S. house. “You all are the experts for Why do we call it “L.O.T.S.”? Because we Learn On The Site! what’s going on here.” L.O.T.S. host David Rathke

Finding Killer Deals is an Easter Egg Hunt! By Mike Butler “How do you find deals?” is by far, the number-one question investors ask of the super-successful investors who seem to trip over deals every week. These successful investors can be the old veteran well-seasoned investor to the fairly new Energizer Bunny Investor who has a huge wholesaling machine. My immediate reply when asked this question is, “What is your definition of a deal?” This usually results in the “Deer in the Headlights” look. Why an Easter Egg Hunt? Because it’s simple and most folks understand how an Easter Egg Hunt works. Assuming you know how it works, let’s jump right in. The “EGGS” are real estate deals. Some folks who join REIA groups expect magic pill results. For some reason, they envision becoming a millionaire in short order after starting with nothing. This is where your Easter Egg Hunt begins. You, along with the hundreds of other REIA members, attend this Easter Egg Hunt wearing their FREE Monkey Glasses for members. These glasses allow you and the hundreds of others to see only the Blue Eggs. This means you and hundreds are fighting to grab the blue eggs. After you invest in education for yourself and your business, you graduate to the “Good Glasses,” allowing you to see all of the Blue Eggs and the Red Eggs. Now, there is less competition because you and maybe 50 investors are wearing the “Good Glasses.” Keep in mind, those hundreds of investors wearing their free monkey glasses canNOT even see the red eggs. This equals less competition. As you continue to invest in education and training for yourself and business, you graduate to the “Better Glasses.” Now you and perhaps a dozen other investors can see all of the SOLID Colored Eggs. Now you can see deals those other investors cannot see and you have a lot less competition. Eventually, after investing in education and training, you will graduate to the “X-Ray Vision Glasses,” allowing you and 4 other investors to see ALL of the eggs… blue, red, all solid colored, all plaid, striped, polka-dots, rotten, airbrushed, etc. THE RESULT: After having invested in yourself and business and graduating to the “X-Ray Vision Glasses,” you end up with next to no competition. Now you can attend the Easter Egg Hunt and there is no need for you to be in frantic race competing against all of the investors wearing their free monkey glasses. Now, you can take one step in the Easter Egg Hunt and you have the skill and ability to see a boatload of deals those other investors cannot see.

Your EDUCATION and TRAINING Gives You The POWER to See and Capture Killer Deals. CHEW ON THIS: Years ago, Jay Long and I traveled all over the country attending Boot Camps, Seminars, and Workshop to learn as much as we could in the shortest amount of time. (It Worked!) How Much Does a College Education cost? I am NOT against education in any way; however, in the real world, it is very surprising to see how many folks have college degrees and have jobs like a cashier, bank teller, or delivering something for a company. Think about taking the same amount of money and investing in high-quality education-training-mentoring for yourself and your business. Lastly, if you are dead serious about your real estate investing and you refuse to invest in yourself and business, I promise, you will get to attend the “School of Hard Knocks” and those seminars are 10x more expensive, frustrating, and eat up your precious and valuable time. Final Note: It burns my butt to hear investors tell new investors to never get your real estate license. This is insane! Think about it. These ding-dongs are telling you to not get education and training. ALL of my mentors have their real estate broker’s license in their state. Education is powerful. If you want to play in this game, you must learn the pieces and parts and how they work. Plus, as a real estate agent or broker, there is no headache or bad things. In fact, it is just the opposite as it gives you more opportunities to resources and a big boost working toward your X-Ray vision glasses. If you are licensed in your state, you must simply disclose you are licensed in your state. Keep in mind, I am NOT encouraging you to list properties for sale or represent buyers and sellers. You will be your Only Customer. In Summary, invest in your education and training so you can toss your free monkey glasses and graduate to your X-Ray vision glasses. FREE Investor Training POWER LUNCH Webinars every Tuesday at 12 noon. Register now at www.MikeButler.com/powerlunch To Your Continued $uccess!

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THE Local Resource for Landlords, Rehabbers & Wholesalers Meeting the 4th Thursday of every month (except November & December) at Woodhaven Country Club, 7200 Woodhaven Road, Louisville, KY 40291 KREIA.COM • twitter.com/reiaky • instagram.com/reiaky • youtube.com/KreiaDotCom facebook.com/reiaky (public) • facebook.com/groups/kreiaky (private)

UPCOMING EVENTS

Meet the Candidates Mayoral candidate Angela Leet, PVA candidate John May and Jefferson Co. Clerk Bobbie Holsclaw will discuss the issues and answer your questions. Thursday, Sept. 27, 5:30 p.m.  Early Meeting: Todd Hancock talks security  October 2 — noon-1 p.m. L.O.T.S. event. Location is in the Edgewood neighborhood, near Fern Valley and Preston Highway. Check your email for the address. Lunch is provided.  October 4 — 5 p.m.-7 p.m. KREIA Happy Hour. Networking at a local restaurant. Check your email. Members only.  October 9 — 11:30-1 p.m. Louisville Lunch and Learn. Q&A with longtime investor Dennis Erhard. Members only. You buy your own lunch. Ed Gibson is the organizer.

 October 10 — 11:45 a.m.-1:30 p.m. KREIA Indiana SubGroup Luncheon Meeting. Meets the 2nd Wednesday each month at Tucker’s Restaurant in New Albany at State Street and I-265. You buy your own lunch. Brian Haeseley chairs.  October 18 — 6 p.m.-7:30 p.m. KREIA Game Night: CashFlow. Want to get out of the Rat Race? Play CashFlow with other investors pursuing financial freedom.

"KREIA advertising down, the absolute best advertising Local investors share their experiences with vacation rentals. dollar ever spent for Thursday, Oct. 25, 5:30 p.m. Borders & Borders!"

Airbnb: Short-Term isRentals by far, hands Holiday Party

Time to celebrate! Frank Miller is planning our year-ender. Thursday, Nov. 15, 5:30 p.m.

PRE-Pay Now at KREIA.com to Qualify for a Big Door Prize Drawing!