KREIA July 2019 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 07-19 July 2019 President’s Letter

Paid Advertising Rates

Googlefy Your Life: Heidi Fore shows us how to save time and money using Google’s tools

Welcome, New Members!

Correction

Government Affairs

Mike Butler: Ignorance of the law 6 is no get-out-of-jail-free card KREIA Election Results: Parliatarian Michelle Rawn reports Infographic: Nina Musgrave looks at local housing data

Be a Skip Tracer: Renee Buster shows us how in this Q&A KREIA Photos

L.O.T.S. Recap: Joe Worth & 20 Kim Frei tackle Beechwood home National REIA News Roundup

KREIA Members! For my final President’s letter I want to leave you all with some things I’ve learned over the years investing in real estate and volunteering my time for KREIA. I joined in May of 2008, roughly a month after I moved to Louisville from north of Indianapolis, just as the “Great Recession” was taking hold of our Eric George country, although at the time I had no clue just how bad it would get. I remember being excited to find a local group of real estate investors to network with, and also nervous going to that first meeting and not knowing anyone there in a room full of 200+ people! This was back when we still met at the old Masterson’s building on the corner of South 3rd St & Cardinal Boulevard, which was demolished later to make way for what is now Cardinal Towne student apartments at UofL. My girlfriend at the time (now my wife, Christina) and I walked in and really had no clue of what to expect, but we grabbed our food and found a table to eat at, and luckily we picked a table with some really nice folks who got us acquainted with how KREIA works and what to expect at the meetings. I honestly don’t recall what the topic was that night, but I was just glad to meet other like-minded people who were interested in real estate and were willing to share with us! We met at least twenty or thirty investors that night, including Jay Bowman, Ed Gibson, Dick Vreeland, Simone Mancuso, and Duffy Ford, among many others, and I consider them all good friends to this day. With these friends and many others at KREIA, we’ve networked together, done business together, and leveraged each other’s knowledge on various topics to help us all grow as investors and entrepreneurs, and that’s exactly what KREIA is all about and why I decided to eventually run for the board a few years later! From the beginning I knew I wanted to get into rental properties, flip houses, and do wholesaling, but I didn’t exactly know where to start. KREIA definitely helped with that! Continued on Page 26

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 Chris McCarty

Advertise With KREIA

Secretary Erik Hitzelberger

Vice President Mike Butler

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

Frank Miller

Lauren Willoughby

Hampton Scurlock

Greg Nalley

Katie Crotzer

Rob Bergeron

Rick Littrell

ParliamenPast tarian Michelle President Rawn Eric George

John Jones

Nina Musgrave

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!

Use Google to Save Time & Money

Put your business communication and task management in the fast lane We real estate investors could certainly use an injection of technology to help us keep track of leads, remind us to follow up with motivated sellers, estimate rehab costs, catch up with team members, set up custom phone numbers, and keep close tabs on our tenants. But which pieces of software to use? There are so many choices it’s overwhelming. And expensive. Why not make the easy choice and at least try the powerful set of tools that’s right under our nose – and which happens to be free! Wrap your brain and your hands around some Google goodness. Yes, Google. If you’ve never ventured beyond the search engine, you’re missing out on a lot of power. Google puts a whole system of software on the cloud, accessible from your computer’s Web browser or from apps on your phone or tablet. There’s an email service (Gmail!), word processor, spreadsheet, calendar manager, note keeper, slideshow creator, website manager, contact manager, file manager (with 15Gb of storage), online telephone service (with voicemail and forwarding), video hosting (YouTube!), video conferencing system, team chat … and the list goes on. And it’s free to use. And if you’ve got Gmail, you’ve already got all that software, even if you didn’t know it. Wondering how to harness that Google power? You could do a lot of reading or YouTube searching. Or you could attend this month’s main meeting. You’re in luck. Google expert Heidi Fore is paying us a visit on July 25th. Be sure to get through the buffet line and in your seat by 7 p.m. to hear from Heidi about how to make efficient use of Google’s software. Heidi will explain how, using Google tools, you can save time every day doing what you need for your business, make more profit, and improve your business communications. If anyone knows about using technology to build efficiencies, it’s Heidi – who’s also a business consultant and a high-volume broker and agent with Keller Williams.

At the main meeting Heidi is planning to teach us how to: • Use Google Keep for checklists of what needs to be done at each property • Use Google Contacts to keep track of all the people in your network – and sync with your phone • Use Gmail to mass email other investors about your properties for sale • Use Google Forms for taking rental applications and submitting offers faster • Use Drive folders for each property's closing docs, applications, papers, photos of property • Use Gmail to organize your inbox • Use Google Sheets to perform all kinds of calculations: to determine if a property is a good buy or not, to look at your entire portfolio of properties on one Sheet to see which ones are performing better than others, and make budgets In advance of this month’s main meeting, we queued up a couple of questions for Heidi: What is the greatest benefit to using Google tools? I can work from anywhere in the world using Google tools. They have given me freedom. I have kept my businesses going while working from my condo in Jamaica, my condo in Costa Rica, and as I've traveled across the United States in my RV. Which Google tool do you use most on a daily basis? Google Calendar – it is linked to everything else and it tells me the most important tasks I must accomplish each day. I've been using Google's email hosting tools for the last 8 years. Continued on the next page

5:30 p.m. Early Meeting 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!

Join us in the small meeting room to hear from Develop Louisville about a program for lead abatement.

Welcome, New KREIA Members! Amy Bailey Ben Bass Craig Beauregard Elizabeth Delano Daniel Flach Heidi Fore Stephen Hawkins Nick Hollifield Kim Hunter Brett Leake

Brandon Malone Karen McKnight Lucas Parker Clayton Rogers Diamond Shirley Jason Smith Jordan Swaidner Jeff Thompson Patrick Yost

Googlefy Your Life Continued from Page 3 Learning More With Heidi Heidi has prepared a 12-module video series (get more info at bit.ly/k1907_googlefy) that goes into more depth, and she’s giving us a discount. KREIA members can get 10% off by visiting this address: bit.ly/k1907_heidideal About Heidi Heidi has been a real estate agent for 17 years, since 2002. She owns a real estate company which helps people buy and sell houses in Kentucky and Indiana, people using the homes for their personal use and for investment properties. For the last 4 years, she was able to sell more than 100 houses here every year even though she was living in Jamaica. She is able to keep the business steady from anywhere in the world using Google tools. Many years ago, Heidi made it to the pages of Realtor Magazine as a “30 UNDER 30,” one of 30 Realtors under 30 years old because of the unique marketing she was doing in her successful career. She was named the chairperson of the National Association of Realtor’s Young Professional Network, which launched her speaking career, training agents around the country how to do what she did. Heidi Fore is a business consultant for real estate agents and entrepreneurs in 3 countries. She has personally bought and sold many businesses and investment properties over the years and she brings that expertise to her seminar students and coaching clients.

Correction In last month’s print newsletter, we ran an incorrect photo next to Ken Hodge’s board candidate bio. Many apologies for the error, Ken!

GOVERNMENT AFFAIRS REPORT State Government Roundup Kentucky Realtors Legislative Updates. Read weekly updates on bills in play in Frankfort at the Kentucky Realtors’ site: bit.ly/KYR_LEGU

Local Government Roundup 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.

Ignorance of the Law Is No Get-Out-of-Jail Free Card A cautionary tale showing why you need to follow Fair Housing laws… By Mike Butler While working my full-time job as an undercover police detective, I had the opportunity to see a lot of things “behind closed doors.” One of the most powerful phrases most investors and Americans do NOT understand is the title of this short article. I cannot tell you how many folks sitting in the back seat of a police car after being arrested for a crime would say, “I did not know that was against the law.” Don’t allow yourself to fall into this same mindset. As an investor, you are expected to know the laws and the rules to this game called real estate investing. FAIR HOUSING: Are you up to speed, current on all the Fair Housing laws involving Federal, State, and local fair housing? How about steering? Block busting? And more? HUD’s Fair Housing detectives do their darndest to try to capture investors just like you violating the Fair Housing laws. They MUST catch you to justify their jobs. If they get zero results – they get their budgets slashed. (It’s a government thing, you might not understand.) Here’s a real-life example that happened right here in Louisville. A local real estate investor called me a few years ago about getting cited by the Fair Housing Police. This fellow owned a two-story, 24-unit apartment building for over 15 years. He ran a one-man show. He did everything – applications, repairs, trash, books, paid bills, collected and deposited the rents. One day, a lady pulled into his parking lot, slowly got out of her car, beating and banging with an aluminum walker, struggling very hard to walk up the sidewalk to greet him. She asked if he had any vacant apartments to rent and he promptly responded, “Yes, I Do.” (He had a vacant unit on the first floor and one vacant unit on the 2nd floor.) See, the lady obviously had some very serious physical challenges. He proceeded to show this lady the vacant unit on the first floor. He never mentioned the vacant on the 2nd floor, assuming it was too difficult for her to climb the stairs. He really thought he was being nice and respectful to this lady. WRONG! BINGO! Just Hooked Me a Big One! This lady was a HUD Fair Housing Detective all decked out for her role as a very crippled-up lady with a walker. Everything these detectives do is always audio-recorded, if not both audio and video, in today’s world. This poor investor had absolutely ZERO wiggle room to get out this predicament. He violated HUD’s Fair Housing

Law by not offering to show this crippled-up lady the vacant unit on the 2nd floor. Had he offered to show her that one, he would have been fine; however, he did not offer to show it, and he committed a federal crime. Now before you get your panties all in a wad, you might say, “That’s Entrapment!” This retired Louisville Police Detective and real estate investor agrees 100% with you, but We Are Wrong! This investor, and it could be me or you, Are Guilty Until Proven Innocent when it comes to Fair Housing laws. Can the investor in this case say, “I did not know that was against the Fair Housing Law?” He can say it all day long. But he still has to shell out well over $10,000 to his attorneys, and this is not counting if he can somehow settle with HUD and pay a very stiff fine. This is NOT Fair, but it is the law. So, please, please, make education a big priority. You can get your short and simple Free Fair Housing training at bit.ly/MikeButlerFairHousing Be very careful in today’s real estate market. Always use the proper disclosures and always do things the right way, the professional way. PROTECT YOURSELF NOW! “I Did Not Know This Is Against the Law” is not a get-outof-jail-free card. To Your Continued $uccess!

P.S. Sign up for Your FREE Investor Training Every Tuesday at 12 noon. Go to https://MikeButler.com/PowerLunch

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2019 KREIA Election Results KREIA members voted during the June 27 main meeting By Michelle R. Rawn I would like to thank everyone for their patience and understanding in my handling of the first KREIA election and to everyone who came out and voted. I learned a few things that we need to revise next year that will hopefully make the process a little more streamlined. KREIA would like to thank everyone who ran for the officer and board positions this year. We had a very exciting election with a runoff for both the President and Vice-President positions and 22 individuals running for the board at large. The results are as follows: President – Chris McCarty Vice-President – Mike Butler Secretary – Erik Hitzelberger Treasurer – Mike Grinnan Treasurer Elect – Wally Kallbreier

Those elected to KREIA’s Board of Directors: 2-Year Board Term • Katie Crotzer • Dennis Erhard • Rue McFarland • Frank Miller • Greg Nalley • Hampton Scurlock 1-Year Board Term

• Rob Bergeron • Rick Littrell • Nina Musgrave Please remember that even if you were not elected to the board you can always volunteer or participate by joining one of the numerous committees. Please talk to new KREIA President Chris McCarty if you are interested in helping out. Thank you.

Michelle R. Rawn Chairman of the Election Committee Tel: (502) 639-9396 Fax: (502) 276-0607 Email: Michelle@rawnlawfirm.com

Past Parliamentarian Hank Schildknecht checked in with current Parliamentarian Michelle Rawn at the ballot box. (Photo: Mike Fallot)

KREIA Committees Need Volunteers Would you like to help out? KREIA is a volunteer-driven organization, and we always need volunteers. Not only does volunteering help the group, it helps you! It gives you another way to network with experienced investors and raises your visibility – helping get your name out there. As people-centric as the real estate business is, that’s always a good thing. Here are some of the committees you could bring your time and talents to: Programs & Education, Membership, Government Affairs, Website, Newsletter, Advertiser Liaison, L.O.T.S., Marketing, and more.

Local Info from Harvard’s “State of the Nation’s Housing Report” Since 1988, Harvard’s Joint Center for Housing Studies has released an annual “State of the Nation’s Housing Report.” The 2019 report recently came out and verifies trends real estate investors have noticed, namely slow construction recovery, migration to Florida, Texas, Arizona and North Carolina, and lack of affordable housing supply. The following charts show trends in Kentucky and surrounding markets. The full report can be found online at the link below. – Nina Musgrave 2017 Homeownership Rates Metropolitan Area Bowling Green, KY

Number of Share of Homeowners Homeowners Total Households (Thousands) (Percent) (Thousands) 40.9 62.5 65.4

Renter Households by Income (2007-2017) Numbers show in Thousands

Less than $15,000

$45,000 $75,000 $15,000 to $30,000 to to and $29,999 $44,999 $74,999 Over Total

Elizabethtown-Fort Knox, KY

35.4

61.0

58.0

Lexington-Fayette, KY Louisville/Jefferson County, KY-IN Owensboro, KY

120.8

59.6

202.6

335.7

66.8

502.6

Kentucky

142

127

483

33.6

68.9

48.7

Louisville/ Jefferson County, KY-IN

141

Percent of Total

28%

24%

20%

Change in Median Land Prices (Median Land Price Per Acre) 2012

2017

Change 2012–2017 (Percent)

146,800

154,700

5.4

146,800

150,600

2.6

Metropolitan Area Louisville/Jefferson County, KY-IN Kentucky

Historical Months of Supply Months of Supply Metropolitan Area Louisville-Jefferson County, KY

2013 5.4

2014 4.9

2015 4.6

2016 3.3

2017 2018 2.4 2.4

2007

2017 Kentucky

153

134

111

114

581

Louisville/ Jefferson County, KY-IN

175

Percent of Total

24%

19%

20%

22%

15%

Research obtained from https://www.jchs.harvard.edu/state-nations-housing-2019 accessed on July 14, 2019.

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.

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How to Be Your Own Skip Tracer

Q&A With Renee Buster, who tracks down missing motivated sellers Have you ever found properties you’d love to buy, but you can’t locate the owners? Because they’ve moved, skipped town or otherwise fallen off the grid? That’s when you need to activate your inner detective and do a bit of skip tracing — looking for folks who are hard to find. We sat down recently with Renee Buster, who runs her own skip-tracing company, B&B Location Services, LLC, and quizzed her on how to go about finding people. Renee gave us some tips and resources for do-it-yourself skip tracing, and she also described scenarios for when it’s time to call in the big guns. • You’ve mentioned during advertiser pitches at meetings that you don’t do bulk skip tracing. What’s that? Bulk skip tracing is a service or person or who gives you lots of information about lots of leads. Most services of this nature run a computer algorithm. The information you get may be helpful or it may be garbage. If you want a lot of information about a lot of leads, you want to use a bulk skip tracer. You can work them yourself and figure out which information is good, which is not. You can get that for less than a dollar each hit. Who can investors use for bulk skip tracing? American SkipTracers, IDI, Need To Skip, and many others. DealMachine has its own bulk skip tracing. What about services like Spokeo that turn up in Google searches for “people finders”? Spokeo, BeenVerified, White Pages — those are all good sources of information when what you’re looking for is someone you’ve lost contact with. Someone who’s “living on the grid,” so to speak. Those people are fairly easy to find. It’s the ones who are hiding from a debtor, hiding from the law, or hiding from an ex-husband — anyone who’s living off the grid on the fringes of society — those people are more difficult to find, and you need bigger guns, so to speak. And you have bigger guns? I do have bigger guns. How do you use your big guns? I start with the free information: Google and social media such as Facebook and Instagram. You’d be surprised at what people will share on social media. Another freebie people can use is KOOL, the Kentucky Offender Online Lookup, which tells you if someone is incarcerated in the state corrections system. Go online and Google sex offender registry. It’s free for anybody to go in and nose

around. Sex offenders in the state of Kentucky have to be registered where they live and work. As far as my paid services, I use TLO. They have all kinds of stringent security and safety rules. They come out to inspect you before they even allow you to use their service. And then you have to submit to random inspections later. TLO runs off TransUnion, Experian and EquiFax, the three top creditreporting agencies, so of course they don’t want that information falling into the wrong hands. Another service I subscribe to is called LocatePLUS. They’re better than BeenVerified or Spokeo, but they’re not as aggressive with their security as TLO is. I subscribe to another service called BellesLink. One of the benefits of using me as your skip tracer is that I turn a cold lead into a warm lead. Because of privacy laws I always make the first introduction: I call to make sure it’s OK with the “skip” if I share their personal, private information. I call them and say, “Hey, I know an investor who’s interested in buying your property at such-and-such — is it OK if I share your phone number and your address with them?” Sometimes I get a yes, sometimes I get a no, but when I get a no I give them a little guilt trip. I say, “Listen, they hired me. I don’t get paid unless they know that I have made this contact and that I produced good information. Can you at least call them and tell them you’re not interested, but that I’ve made this contact so I can get paid?” And people are like, “Sure!” Then the ball is in your court. Why do you need permission to share their information? I have to abide by the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, common-sense privacy practices ... I’ve got access to information that the average Joe doesn’t have. I don’t want that coming back to bite me. I don’t know that you’re not looking for your ex-husband so you can kill him, you know? If you located people using one of the easy ways, would you still have to get their permission to share information? No. Depending on the source of information and how I find it, I may not have laws that I need to comply with. But if I check a box on TLO, I need to comply with that box. Most people are not going to pay me to do what they can do themselves for free or less than my fee. So most of the people you work with have gone through the easy channels before they reach out to you? Correct. That is one of the questions I ask when they first contact me: “What have you done to skip trace this yourself?” So that I’m not duplicating their efforts or wasting my time doing something that they’ve already done. Continued on Page 30

photo by bruce w. hinson www.obedientcamera.com Eric George mans the microphone in his last meeting as KREIA President. Hail to the Chief!

photo by bruce w. hinson www.obedientcamera.com KREIA Past President Frank Miller, center, catches up with Duna Bolotte, left, and Rue McFarland, right, who is a KREIA co-founder.

KREIA

Photos

See more photos in KREIA's private Facebook group.

photo by bruce w. hinson www.obedientcamera.com At KREIA we are proud of our toddler outreach program. It’s never too early to get investors started on the right path. Here, Margaret Reed clarifies a point about hard money lending for her grandchild.

photo by bruce w. hinson www.obedientcamera.com KREIA held elections last month, and V.P. Candidate Mike Butler came dressed for the occasion.

photo by bruce w. hinson www.obedientcamera.com Last month we tried a new layout: networking area moved beyond the bar and rectangular tables brought to the front. KREIA member Chris Simms (2nd from left) checked out the new seating.

photo by bruce w. hinson www.obedientcamera.com She got the shot! This is our members’ favorite way to take notes.

Whether they’re on Team iPhone or Team Android, investors find common ground and ways to network companionably around KREIA’s dinner tables.

photo by bruce w. hinson www.obedientcamera.com Clay Smith kicked off June’s landlording doubleheader.

photo by bruce w. hinson www.obedientcamera.com Dan Jones shared a chat with KREIA Past President Connie Horsey.

photo by bruce w. hinson www.obedientcamera.com

Beechmont L.O.T.S. Home: A Closer Look Joe Worth and Kim Frei tackle a gut job with second flip

At the July 2 L.O.T.S. event, Joe Worth and Kim Frei gave a shout-out to the Beechmont neighborhood. Beechmont was the site of the July 2nd L.O.T.S. event, where the couple hosted in their recently listed 1214 Walter Ave. flip house, just a stone’s throw from Taylor Boulevard. “This is a beautiful area,” Joe enthused. “Iroquois Park is right down the road. It’s close to the interstate and Churchill Downs. So if anybody is interested in flipping properties, come over to Beechmont.” The neighborhood is home to this, their second flip project – and also what was to The house at 1214 Walter Ave. needed a ton of work but ended up as a polished be their third: “There’s a house a couple 5-bedroom, 3-bath home. (Photo by Wendy Kays) doors down that we just put under contract.” (As we went to press, Joe told us they ended up rooms and three full baths. There’s a covered front porch, a letting another KREIA member take over that property.) huge back deck ready for entertaining, a large back yard and a Joe and Kim purchased this house – Flip No. 2 – at a two-car garage. foreclosure auction for $71,310, using funding from The finishes are attractive – an island that separates the flippinloan.com. Having now received an offer on the house, kitchen and dining areas, lots of built-in shelving, an they can report that they’ve made money: Estimated profit industrial-style kitchen faucet, a tiled wall in the first-floor is about $34,000. bathroom, and more. It ticks off many boxes for buyers. “We listed it really high, at $174,900,” Joe said. “You A lot of work went into this house, which had been vacant never know, right? You can’t increase your price — you can for more than a year. The plumbing was riddled with multiple only drop it.” They did drop it by $10,000, then the very next cracks – not to mention that three full bathrooms needed to day accepted an offer of $159,000. be kitted out. A new HVAC system was installed. “We were happy because the offer was a lot higher than Many areas of the floor were no longer level, requiring we initially thought new joists and subflooring. The mudroom at the back of the this property would house was jacked up, framed, and transformed into the sell for, so we took attractive first-floor bath. The original first-floor half-bath just it.” Even at the off the kitchen was turned into a pantry. Closets were added lower selling price, to two rooms in the lower level, turning them into legal they’re near the top bedrooms. of the neighborThe bill for framing amounted to $3,541. The electrician’s hood. Zillow reports bill, for a new panel, all new light fixtures, switches and that this home is outlets, came to $4,685. Flooring, mostly carpet, with some valued more than linoleum and vinyl, cost $4,700. The cost for drywall and paint 50% higher than – so many walls! – totaled $5,850. But the highest single the median home in expense was the plumber’s bill at $6,400. Beechmont. Rehab costs for everything totaled up to $37,041, and the The house has a rehab took about 4½ months. lot going for it to “The toughest part about flipping houses is finding a good justify a good price: team,” Joe said. “Your contractor, that’s the biggest almost 2,300 headache.” square feet of living Continued on Page 26 space that comJoe Worth and Kim Frei, left, discussed Why do we call it “L.O.T.S.”? Because we Learn On The Site! prises five bedtheir rehab. (Photo by Mike Fallot) 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.

Eric George’s President’s Letter Continued from Page 1 With the market tanking at the time, I saw a great opportunity to buy and hold for the long run, and I quickly decided to focus on a niche I’d been interested in since I was in college — renting houses to college students! I learned as much as I could about all the surrounding neighborhoods around UofL, learned from other KREIA members already doing it, and for the first several years focused solely on buying great deals in a relatively small area near campus. That focus has done really well for me over the years, and I know it can for you too. Over the last eleven years I’ve learned a lot about rehabbing, wholesaling, private lending, and of course student rentals, but it was that focus early on that really made my business sustainable and grow. For me, you can’t beat residual income, so even though I’ve done lots of rehabs and wholesales, I still choose to focus on buying selective assets that produce consistently high cash flow. I went to a BUNCH of classes and seminars at KREIA and elsewhere, and eventually I joined a big coaching program to help “boost” my real estate investing career, but I can’t really single out one class, workshop, or course that “changed everything” for me, instead it was the accumulation of that education and networking over the years that got me where I am today. In reality, the local contacts and knowledge I’ve received at KREIA are the most important assets I’ve acquired! I can definitely say that volunteering for KREIA’s board and joining the various committees has certainly helped me meet and learn from a lot of savvy local investors who are well-connected, and those folks have introduced me to many other investors, contractors, vendors, lenders, etc., that I’ve relied on over the years investing in real estate. I encourage anyone who wants to advance their investing career to do the same and start networking and volunteering for KREIA as soon as possible! It hasn’t all been roses, however, as I’ve done some bad deals, worked with some shady contractors, and learned some hard lessons over the years. Luckily, I’ve been able to rely on good people at KREIA to help me through it all and find better contractors, accountants, and attorneys, and to avoid unscrupulous people. Not everyone you’ll meet has your best interests in mind, but if you network enough and aren’t afraid to ask a lot of questions, you’ll find lots of people at KREIA who truly care about you and want to see you succeed. Those are the people to lean on in tough times and who you’ll celebrate with in good times. The worst thing you can do in life and in business is make mistakes and not learn from them, change course, and grow from it!

With all that said, I’m very proud of everything that we’ve accomplished at KREIA over the last several years, including bringing back the Saturday workshops taught by local experts, adding more networking events for our members every month, building a great website and online presence for our members, and more than tripling our membership since 2014 to over 600 today! We’ve done all these things to provide our members with more value and improve the quality of the education and networking at our events. I want to personally thank every board member and volunteer that has helped us grow into the dynamic association that we are today, as none of this would have been possible without your help and support! I’m looking forward to seeing the new leadership continue this growth forward, and I’ll see you all July 25th as we swear in those newly elected members at the next monthly meeting! Eric N. George Outgoing KREIA President Beechmont L.O.T.S. Recap Continued from Page 20 Joe did tackle some of the labor himself. “I had to fire some guys, so I had to be hands-on,” he said. Great job, Joe and Kim! Congratulations on your second flip. And kudos to you for improving the neighborhood. When MM Lending’s Mike Fallot introduced the two at the beginning of this L.O.T.S. event, he reminded everyone how beneficial it is for investors to bring vacant houses back to life and return them to the tax rolls. It was a good message for the two government reps in attendance to hear as well. In the crowd were Nicole George, Council member for the area (Metro District 21) ,and McKenzie Cantrell, State Representative for Kentucky’s District 38. To view more photos from the flip, just Google the street address and look at the listing. But if you want to see Joe and Kim’s video walkthrough of the house, look up their company – DreamWorth Homes – on Facebook. THE NUMBERS Purchase Price: $71,310 Total Rehab Costs: $37,041 Miscellaneous: $9,000 Commissions/Closing Costs: $7,500 Total Profit: $34,149

National REIA Real Estate News Roundup National REIA, of which KREIA is a chapter, reports on issues affecting real estate investors and also links to stories of interest from other organizations. Here is a sampling of recent news and resources that Brad Beckett, NREIA’s Director of Education & Outreach, has compiled.

Trump to Eliminate Barriers to Affordable Housing Development The removal of bureaucratic obstacles is the target of a new initiative recently launched by the Trump Administration. In late June, the President signed an order creating the White House Council on Eliminating Barriers to Affordable Housing Development, which includes members from eight federal agencies. A recent article in the Wall Street Journal (reposted on Realtor.com) says the council’s mission is to explore using federal programs to push local governments to soften or eliminate rules that block housing construction, which they point out is an issue that has stymied officials at all levels of government for many years. Read the full story at Realtor.com: bit.ly/k1907_trump

Starter Home Prices in Each State There has been a lot of discussion about inventory and the lack thereof in the housing market. Data has shown that nationwide there is a general lack of starter homes in the market. The folks over at howmuch.net recently crunched the numbers to compare the median home value versus the median value of a starter home in each state. View the infographic here: bit.ly/k1907_starter

Report Shows Home Prices Outpacing Wages in 40% of Markets According to the latest U.S. Home Affordability Report (from ATTOM Data Solutions), home prices are outpacing wages in 40% of U.S. housing markets and are less affordable than the historic average in 61% of local markets. In addition, they report that that median home prices in Q2 were not affordable for average wage earners in 353 of 480 U.S. counties they analyzed. To come up with their numbers, they determined affordability for average wage earners by calculating the amount of income needed to make monthly house payments on a median-priced home, assuming a 3% down payment and a 28% maximum “front-end” debt-to-income ratio. Read the ATTOM Data report: bit.ly/k1907_homeprices

How to Be Your Own Skip Tracer Continued from Page 14 So you’d rather have the tougher cases? Correct. I tell clients if they’re looking for a shotgun approach, please go to your batch skip tracers. But if you’re looking for one specific property where you just haven’t been able to locate the information, contact me. Are real estate investors your biggest pool of clients? Yes, although I also do post-judgment skip tracing for attorneys. With judgments, including evictions, I pretty much have carte blanche to find them, so then I don’t have to worry about which box I’m checking. A lot of people don’t realize that you can renew judgments. Before they expire, have your attorney renew them so you continue to have the right to collect at some point. Have you done a lot of work for KREIA members? I have. One of my real estate investor clients likes to brag that I found the cell phone number for a guy living in Saudi Arabia for him. An attorney hired me once to track down witnesses to the signing of a will. I’ve had KREIA members come to me when they’ve bought a property at the Commissioner’s Sale and it has a right of redemption. A lot of people don’t realize you can get that waived and take possession of the property sooner, so you can get in there and start rehabbing immediately. Some clients just want to have people served. Maybe they got the eviction, but they didn’t get the judgment right away. We also perform private process serving. If the sheriff is failing to perfect the service, we can try. That sometimes requires a bit of skip tracing as well. What else can you tell us about being a skip tracer? Skip tracing is a lot of connecting the dots and seeing things other people may not see. In one case I kept calling a number and found out it was an ex-wife. She was very forthcoming with anything that she thought might be helpful. I have fairly high callback rates — nobody ever answers the phone — and leave good voicemail messages. I’ll even text people if they don’t respond, because there are people out there who never check their voicemail. That’s one reason I have a business cell instead of a landline. I can text people and let them know, “Hey, I’m not a bill collector, I’m not anybody that you don’t want to talk to. I might actually have a solution to some of your problems.” I charge $75 per “skip.” If I simply can’t produce any valuable information for you, I don’t charge anything. The next time one of your “I want to buy your house” letters bounces back in the mail, don’t give up hope. Don’t throw away that lead! Use skip-tracing resources to take the extra step of tracking down the owners and get that deal before someone else does. To reach Renee Buster of B&B Location Services, call or text (502) 876-7078 or email info@bandblocationservices.com.

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UPCOMING EVENTS

Save Time and Money With Google Learn how to use Google's free tools to become more efficient in your real estate business – get things done easier, faster, and enjoy more free time. Heidi Fore shows us how she uses Google’s collection of tools to run her business from anywhere in the world. July 25, 5:30 p.m. ➢ Early Meeting: Lead abatement program ❖ July 30— noon-1 p.m. L.O.T.S. event. We tour Adam Wilson’s rehab in the Shively neighborhood off Cane Run Road. Members only. Lunch is provided by Platinum Sponsor MM Lending. ❖ Aug. 1 — 5 p.m.-7 p.m. KREIA Happy Hour. Networking at a local restaurant. Check your email. Jeff OBryan hosts. ❖ Aug. 6 — Noon-1:30 p.m. Lunch & Learn. Meet up for education and networking. Check your email for location. Members only. You buy your own lunch. Ed Gibson chairs.

❖ Aug. 14 — 11:45 a.m.-1:30 p.m. KREIA Indiana Sub-Group Luncheon Meeting. Meet up with Hoosier investors. Closing attorney Mike Kemp is tentatively scheduled as guest speaker. At Tucker’s Restaurant in New Albany (State Street and I-265). You buy your own lunch. Brian Haeseley chairs. ❖ Aug. 15 — 6 p.m.-7:30 p.m. KREIA Game Night: CashFlow. Want to get out of the Rat Race? Play the CashFlow board game with other investors pursuing financial freedom. Hampton Scurlock hosts.

Main Meeting Calendar Here’s our tentative lineup of topics: • August 22: Landlord Tenant Act with Michelle Rawn • September 26: Student Housing • October 24: To be announced

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