February 2019 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 02-19 February 2019 President’s Letter

KREIA Members!

Paid Advertising Rates

Tax Tips: CPA Mike Grinnan fills us in on what’s new and different this filing season

We had one heck of a kick-off to 2019 with over 270 people in attendance to hear Jason Wojo from Lifeonaire last month! I hope you were able to attend or have at least listened to the audio replay online, because his powerful presentation about The 4 Stages of Financial Prosperity and debt-free investing was mind-blowing! Eric George

Welcome, New Members!

QuickBooks Pro Workshop: Heads up! You’ll want to attend!

Government Affairs Report

Mike Butler: QuickBooks Pro workshop ‘eliminates insanity’

Legal Corner: Attorney Michelle 10 Rawn shares adventures from eviction court KREIA Photos

Infographic: Updates on market 14 trends with Nina Musgrave L.O.T.S. Recap: Harry Borders and Jill Pawlicki unveil 5BR/4BA Airbnb in the Highlands

Q&A: Renee Buster on how to keep LLCs in compliance

John Archer: Going online with your business – moving from desktop to online applications

Google Forms+Sheets: A powerful data collection and analysis combo

This month we’re learning about all the new tax laws that went into effect in 2018 and how they can benefit real estate investors and entrepreneurs. There’s a boatload of changes, and KREIA Treasurer and CPA Mike Grinnan will give us the low-down on everything we need to know before filing our tax returns this year! Get a seat up front early and be prepared to take lots of notes! Mike Butler is also helping us get ready for tax season during the Early Meeting at 5:30 when he’ll be giving an overview of how he uses QuickBooks Pro accounting software and his custom system together to run his landlording business “on autopilot.” Mike is also teaching a full-day class on the same topic March 2nd at Wildwood Country Club and is giving KREIA members a KILLER discount, so register online before it’s sold out! See you at the meeting! Eric George KREIA President

Copyright MMXIX 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

Darin O'Neil

Mike Fallot

Hampton Scurlock

Mike Butler

Chris McCarty

Greg Nalley

Clay Smith

Parliamen- Past Pres. tarian Michelle Frank Rawn Miller

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 & more. Work shoulderto-shoulder with active investors! 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 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 . . . . . . . . . . $3,500 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? Catch up with KREIA Sponsor/ Advertiser Chair Dennis Erhard at the meetings. Or email support@KREIA.com.

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!

It’s Tax Time! What’s New & Different? CPA Mike Grinnan talks about filing in the first year after Trump’s big changes CPA Mike Grinnan – also KREIA’s treasurer – headlines February 28’s main meeting with tax tips for investors. This is the first filing year under President Trump's tax changes, so we checked in with Mike to find out what's new, what’s different, and if he or taxpayers are running into surprises. What’s new this year? Opportunity zones are a new thing that allows investment in depressed areas. It’s throughout the country, and it includes certain areas of Jefferson County: downtown, West End, and the Southwest end also. The benefit is that you create a fund and can do 1031 exchanges into the fund, and if you keep the money in the fund long enough then the deferred gain will go away and you get certain tax benefits. The other thing that’s a hot topic is the code Section 199A deduction, where you can take a 20% deduction from your qualified business income. The question has come up about whether or not rental property qualifies as business income. If it does, and you have a profit on your rental property, you can take a deduction for 20% of that profit. Say all your properties added up to $50,000 profit, you take 20% and get a $10,000 deduction. The problem under IRS code is that rental Mike Grinnan property is not normally considered a business activity. But under this new Section 199A, they’re saying that as long as you carry on the activity on a continuous and regular basis for a profit, you could qualify. First they said they weren’t going to allow a deduction for business dinners – no Meals & Entertainment anymore. “Entertainment” is gone, so you can no longer buy U of L basketball tickets and deduct them. But the IRS came back and said they will still allow business meals. Why are people complaining that they’re not getting refunds this year when they got one last year? In comparing the total tax liability, I’m seeing that the tax liability has gone down from ’17 to ’18. But because withholding was adjusted during the year 2018, people have paid in less withholding, and that is what’s affecting the refunds. It’s not whether the taxes went up, it’s more that they paid

in less during the year. When I did everybody’s return last year, I did projections under the new law, and 95% of the people I prepared returns for were going to pay less tax. But when we actually do the 2018 returns, people are judging them based on the refunds, which is not accurate. Last year the buzz was what was coming under Trump. Now his plan is in effect. Have you run across anything that surprised you? They pretty much laid out what we could expect under the Trump plan, but they didn’t get into the details. For example, what I was talking about earlier – the 199A deductions. The IRS just came out with some regulations on that a couple of weeks ago. When we’re trying to apply this new law, we run into situations where we need the IRS to interpret the law as written and how they want it to be handled on a tax return. So those are the big surprises – trying to interpret what the law really meant. Do you have tips for people as they get ready to file? Yes, make sure that you look at the 199A – it’s very important and a big tax deduction. And here’s an issue we’ve run into with people who use their own tax software, maybe TurboTax or others: They do not understand the tax law and why they're getting a rental deduction. They may be inadvertently checking boxes to claim real estate professional status when they shouldn’t be. By doing so they allowed the loss to go through. So, that’s an issue we’re running into. What software do you prefer your clients to use? I like QuickBooks.

5:30 p.m. Early Meeting: Mike Butler 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!

Expert QuickBooks Pro user Mike Butler, author of “Landlording on Autopilot,” will share how he automates his bookkeeping. See pages 4 & 6!

Welcome, New KREIA Members! Joe Coffey Ellsworth Collins Louise Collins Gayle Croghan Kevin Curtiss Dustin Ellis Michelle Foster Murphy Frankhouser Bryan Gillespie Eric Graeser

Kevin Hart Joe Huddleston Diana Jones Barquett Lee Vasil Leskiv Mark Lynch Ricky Mason Joseph Maupin Marcy Mudd Jay Pitts

De Porter LeighAnne Preston Fredie Robinson Christopher Simms Miranda Tarry Kristy Wagner Hannah Wilder Adriana Young

QuickBooks PRO for Real Estate Saturday Workshop Do you have a system in place to keep the books? If not, you need QuickBooks PRO, and you need to learn how to use it the Mike Butler way! Come out on March 2nd to a full-day, live workshop on QuickBooks PRO, taught by Mike Butler. Includes free hot buffet lunch! Read more about it on Page 6! Sign up now for discount pricing! What: QuickBooks PRO for Real Estate Workshop When: Saturday, March 2, 8 a.m. – 4:30 p.m. Where: Wildwood Country Club (not Woodhaven), 5000 Bardstown Rd, Louisville, Kentucky 40291 Instructor: Mike Butler, author of Landlording on Autopilot Cost: $49 for 1, $79 for 2 KREIA members! Registration: Go to QuickBooksForInvestors.com now!

GOVERNMENT AFFAIRS REPORT From the Louisville Board of Realtors By Rue McFarland New Bills of Interest: HB297 Landlord and Tenant. Amend KRS 383.280 to allow proceedings for forcible entry or detainer to include claims for damages and back rent. SB89 Methamphetamine. Create a new section of KRS 65.8801 to 65.8839 to allow a local government to provide for the abatement and decontamination of any property where a methamphetamine contamination has been posted. Provide that a local government may place a lien on the property for costs related to the enforcement of the ordinance and decontamination of the property. HB49 Property Taxes. Amend KRS 132.017, related to property taxes levied by local government entities, to extend the deadline to file a petition to 75 days; allow the names of voters from more than one voting precinct to be on the same sheet of petition paper.

More From State Government Kentucky Realtors Legislative Update from the 2019 General Assembly: To date, Kentucky Realtors group is monitoring 26 bills, supporting 4, opposing 1. Read weekly updates on bills in play in Frankfort at the Kentucky Realtors’ site: bit.ly/kyr_lu

More From Local Government Louisville Metro Government: Get a summary of local affairs (and state) by the Greater Louisville Association of Realtors (GLAR): bit.ly/LRGAU Copyright MMXIX 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.

QuickBooks Workshop Will Eliminate Your ‘INSANITY’ Mike Butler leads a QuickBooks Pro Workshop on Saturday, March 2 By Mike Butler Are YOU still doing the same old thing, year after year, and expecting different results when it comes to keeping your real estate business in order? Are you stubborn and try to tell yourself, “I’m already using QuickBooks,” while still using spreadsheets, post-it notes, and other new techno doodads promising to make your life easier and more profitable? This reminds me of an old joke my Dad used to tell about farmer who went to his local general store and the owner invited him to try this new lightning-fast woodcutter called a “chain saw.” The owner knew if he let the farmer give it a try, he would buy it. The farmer agreed to give it a shot for a week. The following week, the farmer returned to the store just completely wore out and dragging the chain saw. The farmer was furious and told the owner his chain saw was 10x slower than the farmer using his trusty ax. To make a long story short, the farmer had no clue that he had to put gas in the saw and start the motor. The farmer was trying to use the chain saw like a hand saw. This story reminds me BIG TIME of the boatload of stubborn investors who say, “I already use QuickBooks!” Ugh, so painful. Real Estate investing is a different animal when compared to other businesses such as owning a hardware store, legal practice, plumbing business, medical business, restaurants and more. All competent accounting firms and CPAs can keep these in order blindfolded and with one arm behind their back. After having worked with thousands of real estate investors over the past few decades, it’s absolutely mind-boggling to see these investors paying big bucks for incompetent bookkeepers and accountants. Even a CPA here and there as well.

On Saturday, March 2nd, you will have the opportunity to STOP YOUR INSANITY and learn One Simple System to Quickly and Properly Handle Absolutely Everything in Your Real Estate Business. It’s the ONLY Complete PROVEN System for Real Estate using QuickBooks PRO. Are you already paying bills and making bank deposits? If so, just imagine as you pay your bills and make your bank deposits, it does your books behind the scenes. Check this out – then you can just “Push A Button” to see your  Cash Flow Report by property, owner, month, entity and more!  Rehab Report - See exactly how much you’ve spent so far right now, not weeks later!  TAX TIME Reports – already set up thru year 2030!  REMOTE Access – Free remote access from your smart phone, tablet or laptop!  PUSH A BUTTON to email everything to your CPA at Tax Time! No more wheelbarrows and shoeboxes full of manila file folders and receipts!  Never again will you fumble around with spreadsheets and gadgets.  QuickBooks does it all for you, including going 100% paperless… seriously.

Register Now at QuickBooksForInvestors.com If you want to learn from the nation’s master expert on how to use QuickBooks for your real estate business, you must attend this workshop. This training is so powerful, KREIA has made special arrangements for KREIA members. Early Bird Discount of two members for one low price. Your workshop includes Workbook Study Guide and “Hot” Lunch buffet too. No scrambling around like gophers trying to get a fast food lunch. Relax, walk to the next room, have a nice lunch and conversation networking with fellow investors. PLUS, bring your HUD 1 Closing Statements on a property you purchased and later sold. We’ll use it as a class project Continued on Page 22

ATTORNEYS AT LAW Representing real estate investors, mortgage companies, banks, builders and buyers since the early 1970s with…

 Title Insurance Commercial Closings  Contract Prep & Review  Title Searches  Powers of Attorney  1031 Exchanges  Business Formation  Investor Guidance  Wills & Probate

 Residential &

Practicing in Kentucky and Indiana

920 Dupont Road, Louisville, KY 40207 bordersandborders.com • (502) 894-9200 THIS IS AN ADVERTISEMENT

Do You Want Your Business Card to Appear Here? Join as a Business Card Member for only $199/year, and see your ad in a year's worth of KREIA newsletter issues! Copyright MMXIX 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.

LEGAL CORNER

Every Investor’s Favorite Topic: Eviction Court By Attorney Michelle Rawn Most investors who have rental properties have at one time or another had to file a forcible detainer action, more commonly known as an eviction. While it is seldom something that the investor looks forward to, it can be definitely be an interesting experience. Every investor, new or seasoned, should attend eviction court at least once during their investing careers to learn the process. Eviction court in Jefferson County, Kentucky is held Monday through Friday at the Hall of Justice at 600 W. Jefferson Street. Court is held on the 3rd floor in either courtroom #307 or #308 depending on the week; at 1 p.m. (EST) on Mondays, Wednesdays and Fridays; and at 11:30 a.m. (EST) on Tuesdays and Thursdays. Jefferson County is the only county in Kentucky that has eviction court every day during the work week and also has the highest volume of forcible detainer cases filed annually. Last year alone, more than 17,000 forcible detainer cases were filed in Jefferson County. Most investors use attorneys to file their eviction cases. The main reason for this, especially in Jefferson County, is that you will not have to attend the original court date set for the eviction complaint. In Jefferson County, the investor/ landlord/property manager only has to appear if the case is continued for a hearing because the tenant has raised a defense to the eviction or denied the allegations in the complaint when it is for non-rental lease violations. This is not true in the counties surrounding Louisville. Since most counties have substantially fewer cases on the eviction docket, only 6 per week in Oldham County, they will require the landlord to testify before entering judgment in the landlord’s favor. Eviction court in Jefferson County, Kentucky, moves very quickly. There are usually 80 cases on the docket each day; and the court only allots 30 minutes to hear all 80 cases. Most of the judges like to give the tenant an opportunity to speak so that they will feel their concerns have been heard by the court. This is what makes eviction court entertaining at times. As I’m sure you can imagine, the tenants come up with every excuse under the sun as to why they could not pay their rent. My personal favorite is the lady who stated she couldn’t afford to pay her rent because she had to take her children to Disney World for vacation. The look on the judge’s face was classic. He actually asked her to repeat what she said, and she restated her reason for not paying with pride. She was genuinely shocked when the judge entered judg-

The Hall of Justice is located at the corner of 6th and Jefferson.

ment in our favor and told her that she and her children only had 7 days to voluntarily vacate the property or the sheriff would be there to sit out their belongings at the curb. A close second was the man who was being evicted for not paying his tenant portion of the rent. He was on Section 8 and they covered all but $4 of his monthly rent. My client let it go for almost 2 years, but then finally decided she had had enough. The tenant brought his two young children with him to court, hoping to play on the sympathy of the judge. His plan failed when the judge confirmed that his monthly rental portion was only $4. The judge went even further when he informed the tenant that he could have collected aluminum cans each month in order to pay this amount. The tenant responded quite angrily that he would not dig through other peoples’ garbage to pay his rent. The judge, not to be deterred, politely responded that the tenant could save his own cans each month and still probably raise enough to pay the $4. Needless to say, judgment was entered in my client’s favor. One of my favorite judges, who is no longer on the bench in eviction court, would always start by letting the tenants know what would not work as a defense to non-payment of rent. He would explain that losing a job or being in the hospital, etc., was not a valid defense to not paying the rent and that he didn’t want to hear those excuses. It would usually take two or three tenants getting up and trying to make those excuses before the rest of the tenants realized that the judge wasn’t joking. These are just a few of my adventures from forcible detainer court. I’m sure the other attorneys you know could share some as well. Once again, I believe all investors should experience it at least once. It is a true learning experience that can also be entertaining. You can reach attorney Michelle Rawn, of Rawn Law Firm PLLC, at (502) 639-9396 or Michelle@rawnlawfirm.com

PRO-TECH FLOORING Floor Refinishing Specialist Hardwood Floors Installed Floor Repairs • Poly Recoating Dry Foam Carpet Cleaning Insured Member Office

Mobile

Fax

966-9300 500-8775 961-5730 David Williams, Contractor

FREE ESTIMATES

???

photo by bruce w. hinson www.obedientcamera.com photo by bruce w. hinson www.obedientcamera.com Above: Jason Wojo brought the Lifeonaire message of debt-free prosperity to our January meeting. Upper Left: Steve Gill, Louise Alexander, Ed Gibson and Rue McFarland squeezed in for a photo op. At Left: Check out this investing dream team, left to right: Jeff OBryan, Ed Gibson, Dick Vreeland, Mark Hass and Chris McCarty. Wanna bet they were making some deals?

KREIA

photo by bruce w. hinson www.obedientcamera.com

Photos

See more photos in KREIA's private Facebook group.

Data for Thought – Updates on Market Trends I’ve often heard statements like “You guys think if a house is on the market for more than 5 days, you need to lower the price. Remember the market hasn’t always been this hot. It doesn’t necessarily mean it’s priced too high!” I wanted to understand more, so I pulled some simple data. It helped me see that once again, the experienced investors are right! If you’re new, can you imagine a house sitting on the market for over 120 days?? What a different world. – Nina Musgrave Median Days on Market – Jefferson Co. (2009-2018)

Months of Supply – Jefferson Co. (2009-2018)

120

100

20 2010

2012

2014

2016

2018

2010

Offers on Properties, Sight Unseen, US Market 35%

Jun-16

40%

20%

19%

May-17

Nov-17

May-18

2014

2016

2018

Rent Reports – Louisville & Lexington (01/18-01/19)

Offers on Properties, Sight Unseen, US Market 33%

2012

20% 0%

City Name

Median 1 Median 2 M/M rent Y/Y rent BR rent BR rent change change

Louisville

$661

$835

0.20%

1.00%

Lexington

$663

$850

0.00%

0.10%

NOTE: Months of supply is a measure of how many months it would take for the current inventory of homes on the market to sell, given the current pace of home sales Data from Redfin, accessed 2/14/2019

Highlands L.O.T.S. Airbnb: A Closer Look Harry Borders and Jill Pawlicki convert commercial building

The numbers on the short-term rental at the focus of the Jan. 29th L.O.T.S. event are impressive: Sleeping accommodation for up to 16 people in its five bedrooms – with four bathrooms, three floors, two chefs kitchens, one back deck, and one huge front patio (that can comfortably hold up to 40 people!) on a perch overlooking hip restaurant row on Bardstown Road in the Highlands. And last but not least … one Pac-Man machine. The other numbers are impressive too: regular nightly rates above $550 and, wait for it, Derby nightly The short-term rental at the corner of Alta and Bardstown Road is business in the front, party rates at around $7,000. in the back – and upstairs. (Photo by Lauren Willoughby) “It should be really good during wedding parties, bachelor parties and big events. Derby,” attorney Harry Borders said. “Yeah, we're nervous about bachelor parties,” Harry said. Harry and Jill Pawlicki showed off their newly rehabbed They hired a well-known decorator to kit out the place, but and decorated Airbnb/VRBO moneymaker to the KREIA they didn’t like the results, so Jill assumed decorator duties. crowd. It is stunning. The KREIA crowd complimented her on her taste. Harry said he bought this property “by accident” after Jill said she had wheeled so many carts through TJ Maxx dropping a comment to a real estate class he was teaching that the staff knew her name. that he was looking for a building on Bardstown Road. “I “Our house is not this nice,” Harry observed, during the don't want two doors down,” he remembers specifying. “I presentation the two made from the loft area. want on Bardstown Road.” “I haven't been able to decorate our house because I've Challenge accepted. Six months later, he got the call. been decorating this one,” she said. That was over a year ago, and since then the building has “Our house doesn't have a Pac-Man machine.” been in progress, passing through environmental phases, “That's good.” permitting, and lots of construction. The contractor was an Harry said their biggest battle was over the full-size Pacold friend, Larry Carrico, who figured out how to deal with Man machine, which sits by the sliding doors leading to the an unusable third floor by turning it into a loft area. Because this building is zoned commercial, they bypassed huge patio. KREIA consensus gave points to Harry on that one. the Metro Council brouhaha surrounding residential shortMORE NUMBERS term rentals. The first-floor storefront will remain. Landscaping/Fence: $6,000 Purchase Price: $361,000 Harry and Jill were Remodeling Costs: $235,000 Total Project Cost: $622,000 originally going to go with two Airbnb units for Furniture/Accessories: $20,000 Estimated Monthly Income: $8,000 to $10,400 the space (a 3BR/2BA (Traditional rent would have been only $2,000 to $2,400/mo.) and a 2BR/2BA) but followed advice that View photos from the L.O.T.S. event in our private Facebook larger spaces bring in group. But check out the Airbnb listing, with its 40+ profesmore revenue – less sionally snapped photos of the beautiful decor, for the full competition. As is, this short-term effect. Click over to bit.ly/K1902_LOTS. rental will be a magnet Why do we call it “L.O.T.S.”? Because we Learn On The Site! Realtor Jill Pawlicki & Harry Borders. for family reunions, 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.

Starting a Business Entity and Staying in Compliance Q&A with Renee Buster of Borders & Borders In your own business, B&B Location Services, you Now that tax time is here, we thought we’d address another bit of paperwork – how to create a business entity and keep it advertise registered agent services. What’s that? A registered agent is the public point of contact for a in compliance. We caught up with Renee Buster, who assists company, and every state requires that you have one. If people in setting up their entities (and keeping them in court documents need to be served or other important compliance) as a paralegal with Borders & Borders. documents need to make it to the owners, it is the What business entity do most real estate investors use? registered agent’s duty to receive and direct those items to the appropriate people. I only charge $100 per year to do The Limited Liability Company. that, which is pretty competitive. For an additional fee of What is involved in setting up an LLC? Everything starts with the articles of organization, which I $50 I will also take care of filing your annual report for you, which includes the filing fee. Borders & Borders is very like to refer to as the birth certificate of your company. gracious in allowing me to promote my business with What do you need from clients to do this? mutual clients, and I don’t take on jobs for my business that It’s all done online now with the Kentucky One Stop Business Portal. I will work through the portal with them and I would normally do at Borders & Borders. They are very make sure we correctly answer all the questions required by supportive. What does the city require from LLCs? the Secretary of State. When you initially set up an LLC, they If you’re located in Metro Louisville, in Jefferson County, want to know the company name, the name and location of and you’re doing business here, your annual tax filing is the the registered agent, the company’s mailing address, the occupational tax, what tax professionals refer to as an OL-3. name of the person submitting the information, and if the You pay occupational tax only if you have taxable income. company is member-managed or manager-managed. What do member-managed & manager-managed mean? Like the state, you have to file the return even if you don’t Member-managed means the member is both the equity owe taxes. So it’s kind of a hybrid between the state and the and the authority in the company. Whereas with a manager- federal processes and requirements. What are the deadlines for tax paperwork for the city managed LLC, your member is the equity of the company and your manager is the authority. Your manager is the one who and the state? It’s your normal tax time. makes all the decisions at the behest of the members. The What about the deadline for the annual report to the primary decision that the members make is deciding who is state? the manager – or managers. One of the perks of having a June 30. manager-managed LLC is that the members are not disclosed Do you have any tips for people about to launch their to the public. They can only see who runs the company, not real estate business? who owns it. 1. Have a discussion with your accountant and attorney What is the benefit of going through an attorney’s office to customize a plan for you that will meet your needs. to set up LLCs? 2. Keep in mind that if you fail to file your annual report One size does not fit all, so you really want to strategize and you don’t keep your taxes up to date, there are conseand work with an attorney – and your accountant – about quences. If your company is administratively dissolved, it what business and taxation structures will be best for your needs. Working with a paralegal such as myself ensures that can be a bear to reinstate. 3. Network, network, network. all of your i’s are dotted and your t’s are crossed. After an LLC is created, what must be done to keep it in Renee Buster can be reached at Borders & Borders at (502) good standing in Kentucky? 894-9200 or rbuster@bordersandborders.com. To reach her You must file an annual report each year with the Kenat B&B Location Services, call or text (502) 876-7078 or tucky Secretary of State. It basically affirms that you’re still email info@bandblocationservices.com. doing business, that you’re doing business under the name that you registered, and confirms that your company information is correct. In addition to filing your annual report, Kentucky has a state minimum business tax of $175 that you must pay each year for the privilege of doing business in the state. This tax is due even if you have no business activity during the year. Copyright MMXIX 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.

Quotable Quote “Normal is getting dressed in clothes that you buy for work, driving through traffic in a car that you are still paying for, in order to get to a job that you need so you can pay for the clothes, car and the house that you leave empty all day in order to afford to live in it.” — Ellen Goodman Don’t be normal!

TECH CORNER

Going ONLINE With Your Business Transitioning from desktop to cloud-based and mobile apps By John Archer Hi, everyone! I hope your 2019 is everything you expected! Since I started the Tech Corner in our KREIA newsletter, I have focused on the things you should consider for security – your data, backups, passwords and anti-virus applications. I am moving on to reviews of applications to efficiently get more done wherever you are. Over the next months I’ll be discussing Internet or cloud-based applications. Now is the time to consider it. Speed, reliability, and safety on the Internet have improved. The growth of applications for running your business online has exploded, AGAIN. The good news is that it is easier and less expensive than you might think to run online applications! The ones I will be recommending are based on my real-world experience. I have learned almost everything the hard way!

Essential Small Business Software That Won’t Break Your Budget As a small business person, making every dollar count and running your business as efficiently as possible can mean the difference to being in business or not. When you can keep your finger on the business, make money and have fun at the same time, you will have greater success! Google Drive, Microsoft One Drive For storing online files and being able to share them securely with others, both of these do that. Google: If you have a Gmail account, you already have access to Google Drive, Google Docs and associated applications such as Google Calendar and Sheets. If you use Chrome Browser, look for the “Apps” icon. Since this is tax season for many of us, as part of this month’s publiccation, Lauren Willoughby will be discussing the benefits of using Google Sheets. Microsoft Office and One Drive: If you are using Windows 10, you already have access to One Drive. As with Google Drive, you can store a copy of your documents online, automatically sync them from your desktop PC, and access them anywhere securely by logging into your Microsoft Account. Go to https://www.office.com. There you will find online versions of Word, Excel, Outlook, and other software. Set up Outlook and you will have a great experience using

Office online. If you would prefer using Microsoft Office and keep up with the current version, go to Office 365 subscription. If you choose the Personal version of Office 365, for $99 per year you can install it on 5 PCs and your mobile devices. A great deal and well worth the yearly subscription. Talk to you next month! Do you need tech support or consultation? I have been an active IT service provider and consultant for over 35 years. Call me at (502) 648-1417 or send me email at john@premiumpcs.com. Mike Butler: Stop the Insanity With QuickBooks Workshop Continued from Page 6 showing you how to enter it properly in 3 minutes or less. Bring your partner, spouse, bookkeeper, office manager, accountant, and CPA. Who should attend this workshop?     

Flippers and Dolphins Real Estate Investors Wholesalers and Whole-Tailers Buy, Fix Up, and Retail Single Family Rentals, Multi-Family, Mini-storage, Marinas, Mobile Homes  Private Lenders and Hard Money Lenders  IRA Deals, Property Managers, AirBnB, VRBO, Homeaway and more! NOTE: Class size is small due to the room size – Grab Your KREIA Early Bird Discount now – TWO Active KREIA Members for Only $79. Register Now at www.QuickBooksForInvestors.com See You Saturday morning! Bring a couple of good ink pens!

To Your Continued $uccess! FREE Investor Training Webinars every Tuesday at 12 noon www.MikeButler.com

Google Forms and Sheets Make Powerful Combo When you need a quick way to gather and analyze data, try them! By Lauren Willoughby Got Gmail? Then you’ve also got Google Sheets – an Excel workalike that’s totally free and runs in the cloud. If you use Excel but wished it offered more streamlined collaboration features or an easy way to share data with others, give Sheets a try. If you need to update spreadsheets from your smartphone while out and about, try it. And when you combine Google Sheets with Google Forms, you’re lighting the match on a powderkeg combo of tools that can knock out, in no time flat, random tasks in collaborative data collection and analysis. What’s Forms? It’s a free online form builder that creates data-entry screens that look and work great on phones, tablets and PCs. You can build form questions that accept data via short text boxes, long text boxes, radio button choices, checkbox choices, dropdown pick lists, and more. You can even solicit file uploads, such as images (and the files get parked in your free Google Drive). The Google Forms app supports data validation, which gently forces users to enter the kind of data you need. So, no letters get through where you want numbers. Google Forms can email you results immediately after someone fills out the form – or optionally link up to a Sheet, so that each new entry becomes a new row of spreadsheet data. Imagine what you can create with Forms+Sheets:

create a data entry form prepopulated with his rental property addresses, the vendors he dealt with most, and expense types from Schedule E. Getting receipt data into the system involved a little typing but mostly pointing and clicking. The part that took the most time was scanning the receipts before uploading their images into the form. After it was all said and done, I was able to give him totals for each expense type for each property, thanks to Forms+Sheets and the discovery of the mighty, mighty SUMIFS() function. I call this system … the Receipt Wrangler. If you already have QuickBooks – see Mike Butler’s article this issue if you don’t – that will be a much better tool for you to manage your receipt and expense calculations. But if, like me, you haven’t bought QuickBooks yet (I don’t have rentals yet), and you’re game to experiment with Google’s awesome free tools, then follow along with a video screencast and you’ll wind up with your own copy of the Receipt Wrangler. And maybe it’ll spark ideas for more solutions to your data analysis problems. See the screencast at http://bit.ly/k1902_somanyreceipts

• A “driving for dollars” database you can update while parked in front of an ugly house. Replaces pen and paper! • Custom rehab calculators that estimate repair costs as you’re walking through a fixer-upper. • Web surveys that collect results in a spreadsheet.

Speaking of web surveys, check out KREIA’s Member Spotlight survey, now built using Google’s tools. Fill it out at http://bit.ly/kreiaspotlight and watch Forms+Sheets in action. (Well, the Forms part, anyway.) Then you’ll appear in our online Member Spotlight section and maybe in a future issue of KREIA’s newsletter. It’s great for networking, and your parents will be so proud! I’ve been using Forms+Sheets for lots of projects. For the member directory, I created a survey for longtime KREIA members to share which niches they specialize in. But the biggest challenge I put to Forms+Sheets was last year when a landlord friend asked me if I’d help him with his taxes by adding up some receipts. I said, “Sure!” and he handed me a big storage tote full of them. Cue the panic and “Psycho” shower music… The screaming died down quickly, because I remembered the power of Forms+Sheets. It took only a few minutes to Copyright MMXIX 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.

PO Box 91225 Louisville, KY 40291 Return Service Requested

First Class Mail U.S. Postage Paid Louisville, Ky Permit No.1498

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  March 13 — 11:45 a.m.-1:30 p.m. KREIA Indiana SubGroup Luncheon Meeting. Heidi Fore with Keller Williams It’s our first filing year under President Trump’s speaks on how Google Apps can help investors. At Tucker’s tax plan, and CPA Mike Grinnan will tell us what Restaurant in New Albany (State Street and I-265). You buy to look out for – and will answer your questions. your own lunch. Brian Haeseley chairs the event. Thursday, Feb. 28, 5:30 p.m.  March 21 — 6 p.m.-7:30 p.m. KREIA Game Night:  Early Meeting: Mike Butler on QuickBooks Pro CashFlow. Want to get out of the Rat Race? Play CashFlow  March 5 — noon-1 p.m. L.O.T.S. event. We tour one of Beau with other investors pursuing financial freedom. Hollis’ rehab projects. Check your email for the location. Members only. Lunch is provided by Platinum Sponsor MM Lending. Main Meeting Calendar  March 7 — 5 p.m.-7 p.m. KREIA Happy Hour. Networking at Here’s our tentative lineup of topics for the next few months: • March 28: Lease options with Joe Earls a local restaurant. Check your email. Members only.  March 12 — Noon-1:30 p.m. Lunch & Learn. KREIA President • April 25: ‘7 Houses in 5 Years’ with Andrew Holmes Eric George will speak on Airbnb. Check your email for the loca- • May 23: Landlord Tenant Act with Michelle Rawn tion. Members only. You buy your own lunch. Ed Gibson chairs. • June 27: Wholesaling Flips & Flops with Frank Miller

Tax Tips With Mike Grinnan

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