Issuu

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 01-20 January 2020 President’s Letter

Paid Advertising Rates

Plan for Success: Chart your road map to real estate wealth

Welcome, New Members

Workshop: Full day of instruction 4 Leap Day Retreat: Day of REI education planned lakeside

New Member Orientation

Mike Butler: New Year, New Decade, New You!

Ed Melton Award: Hank Schild- 10 knecht announces 2019’s winner National REIA News Roundup

KREIA Photos

L.O.T.S. Year in Review

L.O.T.S. Recap: Family polishes 21 another gem in West End Rob Bergeron: What is the Louisville Network?

KREIA Members, Happy New Year, and may 2020 be your best year for real estate investing success and all you aspire to accomplish. In sitting down to write this letter to share and encourage this awesome membership for maximizing accomplishments and focusing on new year’s goals and resolutions, I consulted Google for an appropriate quote to help define this message for Chris McCarty taking action. The following is from Mark Twain: “Twenty years from now you will be more disappointed by the things you did not do than by the things you did.” Financial health and most importantly, financial security, while not the answer to everything in life, is certainly very important. As a real estate investor and mentor, I often discuss how real estate investing success is usually not a get-rich-quick process. Success is not promised but is all but certain if applied with prudent practices and time. This quote uses 20 years and that is certainly ample time to build several fortunes, but depending on your age and goals, you may not have 20 years. Whatever your timeline is, the past is the past and there is no time like now to challenge yourself to specific measurable accomplishments by setting goals and detailing how you expect to succeed. No one will force you, and there are no “goals police” to verify your progress. Achieving your goals is all up to you and the struggle that lies between your ears to succeed and be all you can be. Unless you are one of the very select few, either by luck or inheritance, financial independence does not just happen. Best practices for success should be incorporated into your daily life just like anything else that is important. It takes time, commitment and a plan. KREIA can help with your success, and you can be one of the goal setters who look back at the end of their timeline and say, “I did it! I followed through, stuck to my plan and my financial security for me and my family is sealed. I am no longer dependent on my paycheck or someone else deciding my path.” There will be many opportunities for learning and networking through KREIA in 2020. The KREIA leadership is here to help, and we encourage you to show up, participate and be involved. See you at the meeting, Chris McCarty KREIA President

Social Media: Found on KREIA’s 30 Private Facebook Group… Calendar of Events

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 John Jones

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

Greg Nalley

Hampton Scurlock

Katie Crotzer

Rob Bergeron

Nina Musgrave

Rick Littrell

Christopher Jaquith

ParliamenPast tarian Michelle President Rawn Eric George

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 . . . . . . . . Reserved Includes extra promotion. There can be only one advertiser at this level. Our current Platinum Sponsor, MM Lending, holds exclusive renewal rights until 2021. 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!

Copyright MMXX 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.

Determine Your Action Items for Success Our January 23rd meeting will help you set goals for financial freedom

It’s a new year and a new decade. Is it time for a new investing strategy? Or a reevaluation of where you are on your investing journey – and where you’d like to be? Call it wealth, call it financial freedom, call it never again having to work a day job.… That’s what we’re here for. This month at KREIA we want to help you take stock, refine your plan, and set goals to get there. Whether you’re new to real estate or have been around the block a few times (and maybe you’ve rehabbed a few houses on that block), come join us at 7 p.m. on January 23rd. We’re inviting three veteran investors to help you set yourself up for success…. Erik Hitzelberger: REI Basics A systems-driven rehabber and landlord, Erik Hitzelberger will kick things off Thursday night with a discussion of why real estate makes sense for wealth building. Erik is going to help you figure out where you are on your individual road map to wealth and evaluate strategies to get you there. Holding rental property is vital to achieving real wealth, we all know, but what roles do wholesaling and rehabbing play? How passive or active a real estate investor do you want to be? How much wealth do you need or want? Figuring out these things will help you define your goals, and Erik will offer insight. Erik currently serves as Secretary on KREIA’s board and is a principal in the turnkey rental company Freedom Property Group, which rehabs dozens of houses a year. Mike Fallot: Getting Started As a local lender who funds rehabbers on their house flip deals – and their rehab-andrefi-into-rentals deals (the popular BRRRR method) – Mike Fallot knows a thing or two about real estate investing. Mike has helped longtime investors rehab many, many houses, and he’s helped new investors conquer that first flip. If you’re wondering how to arrange funding for your real estate endeavors, you’ll want to pay close attention during his segment. He’ll walk you through the steps of what’s required to get funding to buy and rehab the deal. Working with rehabbers over the years through his company, MM Lending, Mike can also tell you where some of the optimal places are for investing in Kentuckiana.

Harry Borders: Build Your Business You probably know Harry Borders as one of the most prolific closing attorneys in the area. He also helps new investors create entities best suited for real estate businesses. Should you work out of an LLC, an S-Corp, a C-Corp? Harry will help you figure out what’s best for your niche. Harry will describe who you should have on your real estate team, and he’ll also cover some marketing basics. The Panelists Closing out the night will be a panel of six relatively new investors who are making it happen. With their first steps into investing still fresh in their minds, they will tell us how they got into real estate and share tips they wish someone had told them when they were starting out. Please welcome to the stage these investors: • Nina Musgrave & Ian Hooper – they’ve done rehabs and hold rental property, and Ian is a Realtor. • Luke & Christina Neubauer – they’re heavy into buyand-holds and have had success with Airbnb. • Jacob & Wesley Branch – these early 20-something brothers are wholesaling powerhouses. The Workshop Thursday night’s main meeting is going to be jam-packed with must-know info for investors of all levels. But there’s so much more to teach! So on Jan. 25th, we’re inviting all speakers and panelists back for a 6-hour immersive workshop with more instruction and much more time for Q&A. We hope to see you there! ► Turn the page for more info on Saturday’s workshop.

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!

What’s the deal with the Louisville Metro Council’s new housing ordinance? Attorney Michelle Rawn gets KREIA landlords up to speed on the latest developments.

Welcome, New KREIA Members!

Saturday Workshop: Road Map to Real Estate Wealth

Chase Craddock Kathy Crowe Becky Duncan David Gasbarro Joe Gutgsell Chad Harris Tracy Houchin Craig Jennings Amy Johnston Jennifer Keeney

When you fail to plan, you plan to fail. Don’t fail! Attend our Saturday Workshop and refine your investing road map. The 3 speakers and 6 panelists from Thursday’s meeting return to peel back the onion and answer all your questions. Our plan is that by the end of the day you’ll have set your goals to move forward. Lunch will be included! ● When: Saturday, Jan. 25th, 9 a.m. – 4 p.m. ● Where: Home of the Innocents, 1100 E. Market St., Louisville, KY 40206. In the basement of the Hockensmith Building. (View map at bit.ly/hotihockensmith) ● Cost: $79 for members ($49 early-bird); $179 for nonmembers ($149 early-bird) Early-bird pricing ends January 20th at midnight. Register now at kreia.com and lock in your $30 savings!

Louis Kelmanson Chris King Prince Mathew Tiffany McBroom Angus McKinley Nate McLaurin Elizabeth Neutz Kevin Norman Zachary Perkins Louis Pomerance

Daran Razor Troy Reed Thomas Rohleder Cortez Sampson Gil Schrage Jason Selig Keith Stoner Casey Weiter John Whittington

Leap Day REI Retreat Planned at Taylorsville Lake February 29th comes only once every four years, and you’ll want to mark your calendar for this one. For the first time in a long time, KREIA is planning a retreat – Leap Into Real Estate – a full day of educational real estate presentations, lunch provided, followed by networking/happy hour fun. It’ll take place at a couple of cottages owned by KREIA members. Social Committee organizers Hampton Scurlock and Katie Crotzer are finalizing the speakers, topics and logistics. From what we’ve heard so far, we know you’ll want to kick back with us on Saturday, Feb. 29! MM Lending is the sponsor.

New Member Orientation Debuts Starting this month, we’re adding a new main meeting feature: an orientation session for new members and guests. It takes place immediately after the early meeting. Tables will be brought into the small meeting room, allowing attendees to take notes while eating dinner. KREIA’s Rick Littrell will be leading this month’s presentation. If you’re new and miss this month’s session, don’t fret. Just catch it the next time.

New Year, New Decade, New You! By Mike Butler Happy New Year and welcome to KREIA, fellow investors! The holidays are over. Now it is time to roll up your sleeves and get to work, not swinging a hammer or paintbrush, but using that gray stuff between your ears. At this this time of year, most sharp investors focus on “Quadrant 2” – not urgent but important stuff. As far as your real estate investments and financial concerns, you have already carefully reviewed last year’s goals and results, along with creating this year’s business goals with a roadmap of specific steps to make it easier for you to achieve your goals. These are the things you do every year; but now.… Not only New Year, but now you have NEW DECADE too. Try this on for size. If you are old enough (so many super young investors today ☺) to have been an adult 10 years ago, take a moment and jot down what your life was like then. Of course younger, and this includes me as well. Take a snapshot of EVERYTHING in your life back in 2010. Personal, Family, Business, Financial, and all of those things that are fun that you are passionate about. Perhaps you had a job and now you are “unemployable” due to your efforts and knowledge in creating passive income with rental properties. That alone is a huge achievement. If you are one of the young investors getting started, perhaps you could steal and paste a goal like this, but I encourage you to learn how to do it safely and legally in three to five years instead of 10. This is not a pie-in-the-sky dream. It is very achievable when you write things down, set up some milestone markers, and carefully review your performance. It is absolutely unbelievable all of the powerful free tools and resources available for today’s investor. Just imagine being a real estate investor without the internet, email, cell phones, and texting. If you utilize these free tools, you can “pert near” operate your entire real estate business – buying, renting, selling and more from the beach or sitting out in the ocean on a huge luxury cruise ship. You are really blessed and lucky to have all of these at your fingertips on your smart phone. Reflect back on the available free resources and tools for you back in 2010. Have these free tools and resources doubled, tripled or more since then? Seems like Cave Man days, doesn’t it? This kind of stuff reminds me of an excellent book, perhaps a 15-minute read from front to back, titled “Who Moved My Cheese?” It’s a great financial lesson involving four mice. They are all living high when the pile of cheese is in the same room with them. Reminds me of today’s real estate market. It seems almost every investor had a kick-butt year in 2019. Drum roll, please…

these four mice wake up one morning and discover the Cheese Is Gone! Poof! Not a crumb left. What’s a poor mouse (investor) to do? Two of the mice acted like typical real estate agents. They whined and moaned and cried and complained and just focused on doom and gloom. The other two mice “took action.” They took off and left the other two mice and began their search to “find the cheese.” These two mice succeed and find the cheese. Guess how many other mice are with them feasting on this newfound mountain of cheese? None. These two mice get to feast on this all alone with no competition from other mice for a good period of time. This is exactly how your real estate market is today, yesterday, and in the future. So let me ask you this. What is your “Plan B” when they Move Your Cheese? What are you going to do when the real estate market crashes or the bubble bursts? Interest rates in 2010 for investors were anywhere from 7% to 9%. New investors would have a panic attack. Remember, history does repeat itself, so it’s not a matter of if it’s going to happen again, but WHEN will it happen again. I could go on and on about how this affected investors, builders and developers. And even banks went belly-up. Everyone and their brother, sister and neighbor have jumped on the “Flipping Bandwagon.” It reminds me of the 2008 to 2010 era when 90% of the United States also piled onto this bandwagon…. Then guess what… the real estate bubble and our economy Crashed Big Time. This affected not only our entire country, but it slammed our local economy and real estate investors too. I vividly recall reading back then that Louisville had lost 48,000 jobs! Remember the Obama Bucks for trading in your old car along with getting $8,000 for buying a home? Many local investors hit the wall and filed bankruptcy and disappeared. KREIA membership dropped to 48 active members, seriously. Dennis Erhard and I verified it. To wrap this up, wise investors not only set up annual goals, but they also step back and look at their big picture. For example, if you had 20 nice rental houses paid for, could you survive if everything crashes or the bubble pops? My guess is yes. So go ahead and grab as much cheese as you can right now and establish your NEW DECADE Plan B to ensure you get to keep everything you have worked your butt off to achieve. Happy New Year, New Decade, and New YOU! To Your Continued $uccess!

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

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Revealing the 2019 Ed Melton Award Winner Frank Miller named latest recipient at KREIA’s Holiday Party By Henry Schildknecht Congratulations to Frank Miller, the 2019 recipient of the Ed Melton Award, the recognition given annually at our November meeting to a KREIA member who has contributed to the growth and success of our real estate organization. Frank is the 22nd person to have received this prestigious award that was established in 1998. The award was created in memory of Ed Melton, who was a great advocate of KREIA and an encourager of its members, especially those just photo by bruce w. hinson starting out in real estate investing. www.obedientcamera.com Frank has been a very active member for over 15 years, from the moment he first joined. He has Frank Miller delivered a brief speech after receiving the Ed Melton Award. Who were your mentors? Want to give them a served on the Board for over 10 years and has held the shoutout? positions of Vice President and President. My mentors when I started out in this business were It was of great significance that he received the award at very instrumental to my success. I would have to say the November meeting since he has assumed the role of everyone needs a mentor if you want to invest in real planner of the holiday meeting for the last few years. estate the right way. My mentors in no particular order Frank, like Ed Melton, loves to mentor new investors, and his “Believe” classes have instructed those starting out, were: Joe Burnett, Chris McCarty, Rue McFarland and Hank as well as seasoned veterans, in the finer points of the busi- Schildknecht. When did you join KREIA? ness. As we all know, or should know by now, real estate I joined KREIA over 12 years ago. investing is not a “get rich quick” scheme. It is full of land How many houses would you say you walk through and mines and other traps that can ambush the best of us. evaluate in a year? Frank trains his students from the acquisition phase In a given year I would say I walk through and evaluate through the rehabbing process, using actual real-life experiover 2,000 homes. ences. Graduates of Frank’s “Believe” program certainly What tools or supplies do you always take with you have a great leg up when they proceed on their own. when evaluating mystery properties? (Flashlight, insect His selection by the prior recipients of the Ed Melton repellent, crowbar, etc. <g>) Award reflects his fulfilling of the attributes of the Award: First, my trusty Louisville Slugger as you never know. active in the real estate business, recruitment of KREIA Second, the brightest flashlight on my phone. And then my members, the development of fellowship among the special keys... members, and the contribution to membership education. What is one thing you see in a potential flip house that Therefore, we all give a great round of applause to Frank makes you say, “Nope, not for me”? Miller for his dedication to KREIA and congratulate him as One thing that makes me say no is structural damage. the 22nd recipient of the Ed Melton Award. Because even though it is fixable in most cases, when you Q&A With Frank Miller disclose that to your potential end buyers and agents, a lot of times it scares them off. What is the best deal you ever did? How did you come to be a real estate investor? The best deal that I have ever done that comes to mind I came to be a real estate investor by one night staying is about 3 years ago. I purchased a junk yard with a small up late and watching one of those crazy informercials with boarded house on it for about $2,000. Then after about a guy standing in front of a jet and an exotic car saying real $5,000 worth of cleaning to get the City off my back, I then estate investing can make you a lot of money. So I signed up for the course and was introduced to KREIA shortly after sold it to a business for $75,000. The second-best deal that Continued on Page 14 by Hank Schildknecht. Copyright MMXX 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.

National REIA Real Estate News Roundup Millennials Now Tired of Renting?

National REIA, of which KREIA is a chapter, reports on issues affecting real estate investors and also links to stories of Citing recent housing data, Mad Money’s Jim Cramer interest from other organizations. Here is a sampling of recent says the wait is over as millennials are now buying homes news and resources that Brad Beckett, NREIA’s Director of in larger numbers than before: “After a decade of Education & Outreach, has compiled. cocooning, millennials want to buy homes that represent value, which is in keeping with the way they shop for everything else,” Cramer says. Embedded in the $1.4 trillion Further Consolidated ApproRead the story at CNBC.com: bit.ly/k2001_millennials priations is the SECURE Act, which includes changes IRA investors need to know about. Required minimum distribution age will start at age 72, not 70; contributions to traditional IRAs may be made after age 70½; and you’ll have We have all heard about immigrants coming to America to pay taxes on inherited IRAs sooner. Read the full story on Yahoo Finance: bit.ly/k2001_secure and becoming highly successful… but what about in real estate investing? In a recent episode of the Rental Property Owner & Real Estate Investor Podcast, host Brian Hamrick talks with an Australian man who came to America with no job, no family, no network, and little money – just a “GutThe Wall Street Journal (reposted on Realtor.com) is Feeling” that he could be successful! Nine years later and reporting that some larger U.S. cities are promising tenants he controls over $150 million in commercial real estate. the right to an attorney in eviction cases. Listen to the podcast: bit.ly/k2001_international Read more on Realtor.com: bit.ly/k2001_eviction

SECURE Act Signed into Law

An International Perspective on REI in America

Cities Strengthen Tenants’ Ability to Fight Eviction

Q&A With Frank Miller Continued from Page10 I can remember is when one of my mentors and I purchased a resort in Paoli, Indiana, that had 25 acres with a clubhouse and 12 cabins. We purchased it for around $95,000 and then sold it to some nice retiring couple from Louisville for $175,000 and did nothing to it. As you can tell, I love unique deals!! What’s your best tip for talking with motivated sellers? Treat them like you would want to be treated. And just listen! Ed Melton was known for his win-win deals. What’s a win-win deal for you? A win-win deal is not what I practice! I actually practice one step further in making it a Win-Win-Win deal! So my vision of this is what I teach the students I mentor in my Believe Investment Group. I teach them that every deal you do needs to be a Win-Win-Win for everyone involved. If not, then you will not have repeat business, and in this industry repeat business and integrity are how you become successful and prosper. What would you like to tell new investors? I’d like to tell all new investors out there to make sure you are networking as much as possible. Introduce yourself to 5 to 10 new people each week. Also, come to your local REIA group and do not be shy and sit in the back row. Come

to your local REIA and sit towards the front row, take as many notes as possible, and listen to what the speakers have to say. Next, take action, and shadow an Ed Melton past award winner, and mimic what they do and say. What’s the most rewarding thing about being a real estate mentor with your Believe Investment Group? It’s when you have your past students reach out to you with BIG smiles on their faces and say to you, “I did it, I did this deal and I got a check.” It feels great to help my students achieve success and help them gain one step closer to Financial Freedom. What question did we forget to ask that you’d most like to answer? The question you forgot to ask is WHY! I always ask this of all my students with Believe Investment Group! Why Do You Do What You Do? Most people do not know this about me, but I am pretty laid back, soft-spoken, and am passionate about my family. I have an 18-year-old in college, an amazing wife that helps behind the scenes of running Believe Investment Group – our mentor and training classes – and I also have a 12-year-old who has Down Syndrome and is disabled. So my WHY is that I do what I do for these 3 people in my life and especially for my 12-year-old, because when he gets older I do not want to see him struggle and have to find a way to take care of himself when I am no longer on this Earth!!

photo by bruce w. hinson www.obedientcamera.com Yes, Virginia, there was a Santa Claus at our holiday party. At left: Martha and Hank Schildknecht celebrate Hank’s winning a brand new KREIA honor: The Lifetime Contribution Award. Hank served on KREIA’s board as Past President and Parliamentarian, and he has also received the Ed Melton Award.

photo by bruce w. hinson www.obedientcamera.com

Below: Greg Shell, Johanna Myers and Dan Jones had a chance to catch up at the party.

KREIA

Photos

The Holiday Party Edition See more photos in KREIA's private Facebook group.

photo by bruce w. hinson www.obedientcamera.com Harry Borders and Jill Pawlicki Schmidt kick back near Woodhaven’s bar. Harry appears to have won the “Most Festive Jacket” contest.

photo by bruce w. hinson www.obedientcamera.com

photo by bruce w. hinson www.obedientcamera.com KREIA Past President Hank Schildknecht assembled previous Ed Melton Award winners in preparation for announcing the newest recipient. (Wanna know who won? Find out on Page 10!)

photo by bruce w. hinson www.obedientcamera.com Above: New York magician/mentalist Alex Voz blew our minds during his floor show. Audience volunteer Alexis Fentress gave him an assist. At right: The other half of our holiday party double-header of entertainment – JacknLindsey. The local duo kept the KREIA crowd rocking for hours!

photo by bruce w. hinson www.obedientcamera.com KREIA presented nearly $30,000 to Home of the Innocents President Paul Robinson!

photo by bruce w. hinson www.obedientcamera.com

photo by bruce w. hinson www.obedientcamera.com KREIA Past President Frank Miller is in his element acting as game show host during the giveaways as Lynn Fralick approaches the prize table. Choose carefully, Lynn!

2019 L.O.T.S. Updates

Review of Project Outcomes

L.O.T.S. – or Learning on the Site – is one of the biggest benefits of being a KREIA member! On top of a free lunch, sponsored by MM Lending (thank you!), we get to see projects in action, under construction, before the owner implements her exit strategy. In 2019, we had a variety of opportunities to see experienced investors turn their projects into masterpieces. If you’re wondering how these projects turned out, take a look below. For those of you wondering “How do the L.O.T.S. projects get selected?” the Board has a few criteria, including operating HVAC and water. If you would like to submit your project to be considered for a L.O.T.S. event, please write co-coordinator Michelle Rawn (michelle@rawnlawfirm.com). Remember, the address of the event is sent via email, so make sure you are subscribed. L.O.T.S. events happen the Tuesday following the main meeting and begin at noon. – Nina Musgrave

Address

ZIP

2003 Alta Ave.

40205

Projected Price $ List Price $ Sales Price $ Event Date Airbnb

N/A

1/29

Harry Borders & Jill Pawlicki

7307 Keisler Way

40222

$278,500

$296,500

$278,900

3/5

Beau Hollis

750 S. 44th St.

40211

$179,000

$179,900

$167,000

4/2

Chiquita Lindsay, Kisha Lindsay & Richard Wadlington

305 Breckenridge Lane

40207

$430,000

$465,000

$399,000

4/30

Adam Wilson

2313 Deveron Drive

40216

$158,900

$156,900

$158,900

5/28

Frank Miller

1214 Walter Ave.

40215

$174,900

$159,900

7/2

Joe Worth & Kim Frei

4312 Lynnview Dr.

40216

$120,000

$125,000

$119,000

7/30

4813 Nottinghamshire Dr.

40299

Held as Rental

N/A

8/27

Adam Wilson by Rachelle & Aaron Ulrich Luke & Christina Neubauer

1619 Belmar Dr.

40213

$224,900

10/1

Karl & Pam Bergklint

914 Fountain Ave.

40222

Held as Airbnb

N/A

Under Contract N/A

10/29

Brad & Katie Noe

365 Southwestern Pkwy

40212

$200,000

$199,711

11/19

Richard Wadlington, Kisha Lindsay & Chiquita Lindsay

Was 2019 the year of Airbnb? Short-term rental rehabs bookended the year. In January, Jill Pawlicki Schmidt and Harry Borders hosted at their spectacular Bardstown Road Airbnb.

Under Contract

Hosts

Above, Adam Wilson doubled the square footage of a St. Matthews Cape Cod, the focus of our April 30th L.O.T.S. event. Pam & Karl Bergklint’s Oct. 1st L.O.T.S. home at left was an ambitious project for the first-time solo flippers, but it turned out amazing.

Southwestern Pkwy L.O.T.S. Home: A Closer Look Trio polishes rough Shawnee Park house into a diamond By Lauren Willoughby Kisha Lindsay, Richard Wadlington and Chiquita Lindsay did it again: They followed up their dazzling April 2nd L.O.T.S. house on 44th Street with an even bigger project, and the results are spectacular. This house on Southwestern Parkway has more everything. More square footage, more of Kisha’s signature design touches, and more challenges to overcome. In the 44th Street house, the most attention-getting features were the varied metal and glass light fixtures, the intricate woodwork, and the tiled bathrooms – especially the master bath with the soaker tub and separate walk-in shower with rain shower head. This house pops with those wow This gracious, spacious rehab at 365 Southwestern Parkway has 3,200 square feet. And factors too – breathtaking chandeliers every square foot of the 5BR/3BA house sparkles. (Photo by Lauren Willoughby) and luxurious bathrooms – and adds a new one: the colorful swirl-epoxied basement floor, which “We redid it from top to bottom,” Kisha said of the fools you into thinking you’re walking on a cool new kind of house. They tweaked the floor plan, turning a first-floor marble. It was unanimous: The KREIA crowd loved that floor. bedroom into the master bath of the new master suite. And But the basement, now a selling point, had been one of the project took only four months – but would have gone their biggest challenges. Its floor had buckled and needed to faster, Kisha said, if one of their contractors hadn’t been be dug out and replaced. injured in a motorcycle crash. And if the City hadn’t shut off “We wanted to make sure we didn’t lose any height when their power for two weeks. (The electrician had filed they poured the floor,” Chiquita said, “so we went down a incorrect paperwork.) Their rehab costs totaled $93,000. couple inches.” The amount they dug down leaves plenty of “All the projects we’ve done together we’ve had certain head room. Now the basement houses the home theater obstacles,” Richard said, “and we’ve had certain things go space, a billiards room (which also has a dartboard and an our way also.” arcade game), and a couple of bedrooms – which required As with the last project, much of Kisha’s signature style them having to cut in and make egress windows. was achieved through bargain shopping. You’d never guess she scored an eye-popping chandelier for only $39. Her source? The $5 Hunt store in Okolona. And she offered another bargaining tip, which she used at Lowe’s on her tile purchase: Ask managers for a discount on clearance items if you take all their stock – then stack coupons on top of that. They used FlippinLoan.com funding to buy the house at auction for $32,000, and they expect to sell for $199,711, yielding a profit of about $56,000 after holding and selling costs. But their rehabs are not just about profit to them. “We want to bring the beauty back to the West End,” Chiquita said, “because there are no other houses like this in the area.” Chiquita Lindsay, left, Richard Wadlington and Kisha Lindsay fielded lots of questions from investors. (Screen grabs from YouTube)

Why do we call it “L.O.T.S.”? Because we Learn On The Site!

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What Is The Louisville Network? By Rob Bergeron Through my years of working with wholesalers, I have ascertained that the primary challenges consist of marketing the deal to realize the full value of the property, completing the disposition process with minimal disruption to the property owner, accuracy of repair cost estimates, and accuracy of market comps. In search of a solution to those challenges, The Louisville Network was born. The intent is to create one master list of buyers and off-market deals to benefit both buyers and wholesalers. To accomplish this, each deal will be sent out to the master list with a bid from a professional contractor (when applicable and available), the ARV (after-repair value), and the purchase price. Each assignable contract will be sent out with a CMA (comparative market analysis) from an established licensed realtor. No more guesswork! The wholesalers appreciate this because they don’t need to worry about marketing the assignable contract, and The Louisville Network handles contract-to-close duties (working with lenders, title, etc.). By getting the bid for a BRRRR and/or flip, wholesalers can work backward to create a Win-Win-Win price for the end buyer. The reduction in administrative effort to both parties allows buyers to focus on deal analysis and wholesalers to do what they do best – sourcing deals. Benefits to Buyers: • All deals accumulated in one place in a consistent format, allowing more time to focus on deal analysis • A reliable ARV and current market value • A reliable repair cost estimate • Reliable rental comps Benefits to Wholesalers: • Reduction in administrative efforts within the disposition process, allowing for greater focus on acquisitions • Greater exposure to deals, resulting in fair market value for your contract • Increased buyer confidence due to corroborated ARVs, repair costs and rental comps • Reduction in disruption to sellers Write Rob@TheLouisvilleNetwork.com for more information. Or sign up at www.TheLouisvilleNetwork.com. Rob Bergeron, with ROI Louisville and Keller Williams Louisville, is a KREIA board member and advertiser. Rob enjoys helping wholesalers scale their business, helping his clients become work-optional, and grabbing Chipotle while discussing all things real estate and financial independence. Copyright MMXX 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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If you’re a KREIA member who hasn’t joined our Private Facebook Group, you’re missing out on some networking and other benefits you won’t find anywhere else. For example, here are some recent quick hits from KREIA’s Private Facebook Group: ► KREIA posts members-only video content on the Facebook Group but also provides links to the publicly available videos we post on YouTube. This is handy because you’ll probably miss those videos unless you’ve subscribed to our YouTube channel (youtube.com/reiaky), which we recommend you do! One recent must-see video is Eric George’s 35-minute interview with attorney Michelle Rawn, who answers the questions you’re probably having about the Metro Council’s new housing ordinance. That’s the topic of her early meeting presentation on Jan. 23. Watch the video now to get up to speed on the situation. And be sure to attend the early meeting, because she’ll have updates on the latest developments. ► J.B. needed work done on box gutters on several of his houses and asked for recommendations on people to hire. Two other KREIA members stepped up with names and contact info shortly after. ► A.C. posted her wholesale deal to the group, a breadand-butter, 1,000-square-foot 3/1 ranch in 40258, and she was asking $68K. A few hours later she posted that she had accepted a full-price cash offer because she didn’t want to get into a bidding war situation. Somebody got a good deal. It could have been you! Go to facebook.com/groups/KREIAKY/ and click that Join button to become part of KREIA’s Private Facebook Group.

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UPCOMING EVENTS

Road Map to Real Estate Wealth

❖ Feb. 6 — 5 p.m.-7 p.m. KREIA Happy Hour. Networking at a Are you meeting your goals and benchmarks in your real estate local restaurant. Everyone invited. Jeff OBryan hosts. investing plan? Or maybe you need to create that plan in the ❖ Feb. 12 — 11:45 a.m.-1:30 p.m. KREIA Indiana Sub-Group Luncheon Meeting. Meet up and network with Hoosier first place? Come to KREIA this month and nail down those action items! Speakers include Erik Hitzelberger, Mike Fallot and investors. At Mark’s Feed Store in New Albany (Charlestown Rd & I-265). You buy your own lunch. Brian Haeseley chairs. Harry Borders. Jan. 23, 5:30 p.m. ➢ Early Meeting: Michelle Rawn on new housing ordinance ❖ Feb. 20 — 6 p.m.-7:30 p.m. KREIA Game Night: CashFlow. Want to get out of the Rat Race? Play the CashFlow board ❖ Jan. 25 — 9 a.m. – 4 p.m. Saturday Workshop. The three speakers and six panelists from Thursday night’s main meeting game with other investors pursuing financial freedom. Everyone invited. Hampton Scurlock hosts. return and roll up their sleeves. Free lunch! Early-bird pricing! ❖ Jan. 28 — noon-1 p.m. L.O.T.S. event. We visit Barrett Goff’s current project in the Wyandotte neighborhood. Members only. Main Meeting Calendar Here’s what’s coming in the next few months: Lunch is provided by Platinum Sponsor MM Lending. ❖ Feb. 4 — Noon-1:30 p.m. Lunch & Learn. Meet up for educa- • February 27: Update on Taxes • March 26: Wholesaling & Marketing tion and networking. Members only. You buy your own lunch. • April 23: Rehabbing Check your email for the location. Ed Gibson hosts.

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