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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 06-20 June 2020 President’s Letter

Secrets Revealed: How to make 3 money flipping houses – even now KREIA’s Mission Statement

Welcome, New Members!

John D. Borders, Jr.: A History of 6 Redlining and housing inequality Nina Musgrave: Actionable items 12 to create change Michelle Rawn: Courts update

Mike Butler: Stay on top of book- 16 keeping during Coronavirus Sharon Vornholt: Setting goals 18 for your business after COVID-19 KREIA Photos

Rebecka Taasaas: Q&A about monitored security services

National REIA News Roundup

Michelle Rawn: KREIA’s 2020 Elections & Sample Ballot

Board Candidate Bios:

38 to 42

Jordan Pohn George Foree Alexis Fentress Rob Bergeron Stacey Duvall Jack May Alisha Higgs Ryan Gettelfinger Lauren Willoughby

Dear KREIA Members and Friends, Once again, this month we will be gathering via Zoom for our main meeting, so please be on the lookout for your email invite with login instructtions for the Thursday, June 25th event. We will likely repeat this for at least July as we determine how best to approach the in-person meetings as soon as possible. Chris McCarty I want to take this opportunity to share the KREIA Mission Statement printed in this newsletter (Page 4) and weave this statement into my words on this page as it relates to the current racial unrest in our city and country. Particularly how KREIA can continue to be a positive force in the continuing efforts to provide real estate investment and financial opportunities for our members – and be part of the solution and dialogue of race equality in housing and opportunity for all of our citizens.

Our Mission Statement clearly spells out our purpose, and this is an excellent time to interpret this content into the current circumstances of racial unrest in our city. KREIA’s Board of Directors will be introducing new initiatives to assist with diversity and inclusion along these same lines, so stay tuned as we convert words to deeds. Martin Luther King once said, “In the end, we will remember not the words of our enemies, but the silence of our friends.” Candid discussions on racial division are difficult. As a native Louisvillian, I see the vestiges of past racial housing segregation and discrimination all around us. I own low-income housing and cannot pretend my observations and the reality of racial circumstances in Louisville are not the result of long-term and systemic racial bias. Of course, we have made much progress and there are millions of discussions going on today on this very uncomfortable subject, and I encourage each of you to step out of any comfort zone and openly discuss this subject across racial lines. I encourage you to understand that our individual perspectives may not be the same as that of another, and to be open to listening to different views. Use the recent tragic racial events to be better and talk openly about how your individual decisions can contribute to positive change. It is not a Republican, Democrat, conservative o8r liberal problem, and our country is on the world stage as protests have overflowed from our cities across the world in solidarity of discrimination and racial bias awareness everywhere. Louisville, like many U.S. cities, has developed and expanded along racial lines by design due to local and federal policies dating back to the post-Civil War era. In this newsletter, attorney John Borders has contributed an essay (Page 6) on historical housing discrimination, redlining and the importance of black home ownership. John’s Continued on Page 4

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 is $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

Rob Bergeron

Rick Littrell

Christopher Jaquith

Jordan Pohn

ParliamenPast tarian Michelle President Rawn Eric George

Greg Nalley

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 shoulder-to-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 support@KREIA.com if you: Want to advertise on KREIA.com • Need help • Have a question

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. 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. Tell all your investing friends. The cost to join as an individual member is $125 per year, with a door fee of $20 at our monthly meetings (which covers the buffet meal and rent on the hall). 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.

Secrets Revealed: How to Make Money Flipping Houses Frank Miller & Hannah Gill headline our June 25th virtual main meeting Even during times of worry and unrest, the work of turning distressed houses into safe and comfortable homes goes on. This month’s KREIA meeting will be an exploration of how to do that. Leading our Zoom call on June 25th will be Frank Miller and Hannah Gill, who are both still actively rehabbing houses. Frank is a Past President of KREIA and teaches flipping and wholesaling through his mentoring company, Believe Investment Group. Hannah is the Rehab Manager for Freedom Property Group, a Louisville-based turnkey rental company. They’re going to tackle the topic of rehabbing houses from various angles. Frank is going to give us a rehabbing overview and hit the highlights. He will go over how to make money flipping houses in our current market. If anyone knows how to do that, it’s Frank. He is a high-volume house flipper – and wholesaler – and he’s going to reveal some of his secrets at our June main meeting. Frank will fill us in on how to: • Find houses to flip • Get financing to rehab them • “Run your numbers” to estimate repairs • Complete a scope of work • Find and manage contractors • Price a flip for a quick, high-profit sale • Walk away making money on a flip Hannah will describe how to use systems to: • Work with contractors • Estimate costs • Write a scope of work • Get better results with less time If you want to learn how to be a successful investor or just polish up your skills, this is a can’t-miss meeting, free for active members. Frank and Hannah take the virtual microphone at 7 p.m. Find out how they’ve adjusted their practices during the challenges posed by COVID-19. 5:30 p.m. Early Meeting: Tax Liens Looking for a safe and secure investment, one that pays about 12% interest? Attorney Chris Wakild gives us an overview of tax liens.

Meet Frank Miller Frank Miller has been a real estate investor for 15 years now. He attends local and out-of-state networking and training events to upgrade his investing arsenal and to improve himself to meet changes occurring in the real estate market. Frank has been involved in over 2,000 transactions in his real estate career – flipping, wholesaling, renting or mentoring. Frank started out investing part-time when he was a fulltime driver for DHL, delivering packages throughout the city. He began by buying tons of single-family rentals to build his portfolio for retirement. Then, when his job was eliminated, he was forced into doing real estate full-time. Frank will tell everyone the first thing you do is not quit your day job! Meet Hannah Gill Hannah Gill is the rehab Project Manager for Freedom Property Group, a Louisville-based residential rehab company. Hannah graduated from U of L in 2011 with a Bachelors of Science and a Masters in engineering. Since joining FPG about a year and a half ago, she’s managed nearly 40 residential rehab projects with an average rehab time of three months, and she is currently managing 10 active rehabs. When she’s not on the phone with contractors, climbing on roofs or inspecting crawl spaces, she’s usually hanging with her dog, baking, teaching yoga, rock climbing, traveling, or tackling a renovation project on her personal home.

Welcome, New KREIA Members! Amanda Breslin Thomas Butler Kristian Conway Nikki Corbin

Joseph Dorazio Robert Garvis William Harris Scott Keeney

Mary Ann Santiago Thomas Woodcock

We hope to meet you soon at one of our monthly events at Woodhaven Country Club. At your first meeting there, be sure to ask for your copy of KREIA’s 2020 Member Directory. In the meantime, please check out the resources below….

KREIA’s New Member Orientation There will be a monthly presentation of the benefits of joining KREIA at every in-person monthly meeting. The presentation will be given from 6:15 p.m. to 6:45 p.m. in the early meeting room at Woodhaven Country Club. If you bring new investors to a KREIA meeting, please point them toward the orientation. See the presentation online: Review board member Rick Littrell’s new member orientation PDF, watch a video of him walking through KREIA’s many benefits, and learn how to secure your Home Depot discounts and cash-back bonuses here: kreia.com/MemberBenefits.aspx

President’s Letter Continued from Page 1 contribution gives historical explanation on how and why our cities have developed as they have along geographic racial lines. This is painful but true information, and I hope as you read John’s writing that you can be mindful that our continuing racial problems are centuries in the making, and that each of us at KREIA can choose to continue the battle to ensure equality for all. I am open to any person that wants to reach out to me directly with ideas or suggestions that make KREIA a better organization for our members. Thank You and God Bless, Chris McCarty KREIA President

KREIA’s Mission Statement At KREIA, our mission is: 1. To foster study and research in the field of real estate investment. 2. To develop, through education and discussion, sound understanding of real estate investment. 3. To improve the methods and techniques of real estate investment. 4. To contribute to the improvement of the teaching and understanding of real estate investment. 5. To develop better public understanding and appreciation of real estate investment problems. 6. To improve, through study and discussion, the status of persons engaged in real estate investment. 7. To encourage and uphold sound, honest practices and maintain real estate investment activities on a high professional and ethical plane. 8. To freely aid, encourage, and share knowledge with members in pursuit of their goals.

GOVERNMENT AFFAIRS LINKS 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

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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 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.

Some of KREIA’s national sponsors via National REIA. For the full list, and info on discounts, visit nationalreia.org/benefits

Redlining: A History of Louisville’s Housing Inequity An examination of the roots of injustice reveals deliberate government action By John D. Borders, Jr. Author’s Note: Long before the protests for racial justice began, Chris McCarty asked me to write an article for KREIA — a model for investor associations around the region — to help members understand the history of redlining and its impact on real estate in Louisville. Life got in the way and I never finished the article. Chris contacted me again recently and we agreed that now is a critical time for us to understand our history. There’s a movement afoot in our country right now for racial justice. The recent deaths of A map of Redlining in Louisville from the Harvard Kennedy School’s Ash Ahmaud Arbery, George Floyd, Breonna Taylor Center for Democratic Governance and others — all unjustified and at the hands of white people – have sparked protests the size and likes of Many of us think that black households today have only a which we haven’t seen since the 1960s. If we’re going to fraction of the wealth of white households because of understand this movement, if we’re going to begin to individual choices made in this generation, or that slavery, understand where the frustration, anxiety, anger and Jim Crow and discrimination are so long ago that they don’t exhaustion we’re seeing from black people comes from, we impact household wealth today. It’s understandable that we have to look backward. We have to examine its roots. We don’t know this history. have to evaluate the systems and events that, beginning I’ve been a real estate attorney for more than 30 years decades and even centuries ago, put our country on the and only recently did I learn how the government — not just inevitable trajectory that brings us to this point today. racist individuals — intentionally and systematically robbed, One of the most significant factors affecting wealth — looted and plundered black wealth in America. This story and its absence in black communities — is homeownership. has never been taught in school and we have never been Equity in a home is the largest asset for most families. That’s made to understand it. But if we want to understand the not so surprising. What is surprising is that homeowners unrest we see in the streets today — and if we want to try have, on average, 80 times the median net worth of renters. to right the wrongs that our government for centuries According to U.S. Census Bureau researchers Jonathan perpetrated – we have to take the time to understand how Eggleston and Donald Hays, using 2015 data, equity in a we got here. home accounts for 34% of the average household’s net Immediately following Reconstruction in the late 19th worth. And while non-Hispanic white households had on century, the government — all branches and levels — average $139,300 of wealth, black households had only encouraged and facilitated segregation and disparity of $12,780. opportunity. It wasn’t an accident, and it didn’t happen a Household wealth, of course, changes everything for that few times. It was planned, designed and executed by the family. If there’s an illness, a loss of a job, additional tuition government, in partnership with private industry and for college, or a family emergency, household wealth individuals. provides the buffer. Homeowners can leverage their equity In 1917, motivated by a fear of communism, the by taking out equity lines to gain access to money. And government began encouraging homeownership as a when that homeowner dies, she passes that wealth on to patriotic duty. The Department of Labor published more her family, who then can buy their own homes, pay college than 2 million posters — all with white faces on them — to tuition or take a vacation. When you have no wealth, those encourage people to buy homes instead of renting them. aren’t options. You have no safety net, no way out, and you Under Secretary of Commerce Herbert Hoover, Better leave nothing to your children. Continued on Page 8 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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Redlining: A History of Louisville’s Housing Inequity Continued from Page 6

neighborhoods, and sometimes ones that were simply next door to black ones, were deemed too risky for insurance. FHA’s Underwriting Manual said, “If a neighborhood is to Homes in America encouraged whites to move to the retain stability it is necessary that properties shall continue suburbs, away from African American families. to be occupied by the same social and racial classes.” During the Great Depression, Roosevelt’s New Deal was Negative factors for an appraisal included “infiltration of particularly important because it helped people out of inharmonious racial or nationality groups.” poverty and because it informed the economic structure of Furthermore, FHA didn’t want banks making loans our country. But from the start, the New Deal left African anywhere but in new suburbs. All the way up to 1952, the American families out. The Public Works Administration Underwriting Manual based risk on whether there was (PWA) built the first public housing for civilians. “compatibility among the neighborhood occupants.” They All of the projects were segregated by race. In many weren’t concerned about creditworthiness. They were instances, neighborhoods that were once integrated were concerned about race. The VA soon followed suit, adopting now segregated. And it concentrated African American FHA’s policies. families in low-income neighborhoods. From the start, the FHA’s and VA’s influence on homeownership cannot be government created housing opportunities for whites while overstated. Whites were now able to get loans on fair terms leaving African Americans with little or none. And it intenfrom banks that previously wouldn’t take the risk but now tionally segregated communities. could because the government was Because most white families could not insuring the loans. Blacks, even those Real estate investors are pay cash for a home or get a mortgage, the with good credit, were not given that entitled to earn a profit, Home Owners’ Loan Corporation (HOLC) same opportunity. Equally impactful, was created, giving people an opportunity the FHA and VA created racially segbut we aren’t entitled to to borrow money with mortgages amorregated neighborhoods by requiring plunder a neighborhood tized over time. Suddenly, homeownerdeed restrictions that prohibited and its people who have ship was possible for middle class families. African American families from moving Because they wanted to keep neighborinto the neighborhoods. been systematically left hoods segregated, and because they only Deed restrictions of this sort would out of opportunity for wanted to make loans to white families, soon be the norm around the country. generations. the HOLC solicited real estate agents to New homes would be built in safe help them color-code neighborhoods. neighborhoods but they would only be Neighborhoods that were deemed the least risky (aka occupied by white families. This changed the face of white) were given the color green while riskier (aka black) America: the middle class would be almost exclusively neighborhoods were given the color red. These designations white. To be clear, white people’s success and black were based purely on race, not on the quality of the people’s failure had nothing to do with hard work. It had to neighborhood. Maps were created with these color codes do with opportunity, created and fostered by the and “redlining” was born. African Americans were now government. deemed by the government to be risky investments so, In 1940, the Lanham Act provided financing for war naturally, private banks and lenders followed suit, utilizing housing. In some places it was given only to whites. In the same maps to make loans to whites only. (If you’re others, it was given to African Americans as well but only in interested, you can find Louisville’s redlining map here: segregated neighborhoods. Under President Truman, the https://datasmart.ash.harvard.edu/news/article/map-of1949 Housing Act made things worse for African American the-month-redlining-louisville-1062 ) families. The Federal Housing Administration (FHA) was created in Public housing was necessary for those who could not 1934, insuring bank mortgages. This meant that banks could afford to buy a home, but the Act allowed segregated take risks on homeowners because the government would housing facilities. This effectively left African Americans insure those loans; in other words, the government would concentrated in high-rise slums with no access to wealth, take the risk rather than the lender. And people wanting to little access to jobs (which had mostly moved out to the own homes could now afford to get a loan, borrowing suburbs) and with none of the protections that a safe home money over time. in a safe neighborhood offers. Public housing had become a Before insuring loans, FHA required the bank to use an ghetto. (It’s important to note that this occurred during the FHA appraisal of the property. FHA’s appraisal standards Great Migration, when 6 million African Americans moved would only permit loans to white borrowers. Racially mixed Continued on Page 10 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.

Redlining: A History of Louisville’s Housing Inequity Continued from Page 8

afford the monthly payment. That changed in Kentucky anyway in 1979 when our highest court ruled in Sebastian v. Floyd that sellers couldn’t evict a homeowner and would out of the South because of violence, discrimination and have to foreclose (with all of its protections for borrowers) little opportunity. This exodus from the towns and cities of in a Contract for Deed. the South into almost exclusively large cities in the North and In the housing crisis of 2008, we learned that many West meant that there was an urgent need for decent defaulting borrowers had been victims of “reverse redhousing for millions of displaced people.) lining,” where banks and lenders targeted African American Following the federal government’s lead, state and local borrowers — regardless of their credit worthiness – for zoning laws — well beyond when they were declared subprime loans (where the interest rates and terms are unconstitutional — made things worse. Toxic and polluting predatory). When the housing crisis occurred, these industries and businesses were zoned into areas populated homeowners were among the first to lose their homes. We almost exclusively by African Americans. Deed restrictions or saw this extensively in West Louisville, where property “restrictive covenants” were created, and enforced by values plummeted and houses were “upside down,” courts, in order to keep blacks out of white neighborhoods. meaning that they weren’t worth as much as the mortgage Realtors made things worse. The code of ethics of the amount. People who had made payments for years on their National Association of Real Estate Boards, now the National mortgages were trapped and could never sell their homes if Association of Realtors, stated that “a realtor should never they wanted to get their money back. That is still the case be instrumental in introducing into a neighborhood … with many homeowners today in West Louisville. This has members of any race or nationality … whose presence will led to the further demise of the neighborhood and its clearly be detrimental to property values in that residents’ ability to build wealth. neighborhood.” Their handbook for brokers warned them to Maya Angelou wrote, “History, despite its wrenching be prepared to address “a colored man of means who was pain, cannot be unlived, but if faced with courage, need not giving his children a college education and thought they be lived again.” Only when we have an understanding of were entitled to live among whites.” what happened in the past — how our In 1948 the Supreme Court declared government and society has systemaIf we’re going to call restrictive covenants unconstitutional in tically excluded African American famiourselves investors, we Shelley v. Kraemer, but the FHA ignored lies from homeownership, and therethe law, encouraging them to be included need to view that term fore from wealth; how West Louisville in neighborhoods. This didn’t really stop isn’t a mistake but, rather, looks exactly more broadly. Let’s until 1962. And while the Shelley case as it was intended; how fears, frustinvest in an individual, a rations and anger are playing out in the prohibited courts from allowing evictions of black residents because of restrictive streets today — can we move fully neighborhood and a city covenants, these restrictions could still be informed into the future. worth living in — for all enforced in civil suits for damages until West Louisville needs — nay, of our citizens. 1972. deserves — responsible real estate Because African American families investment. At a minimum, real estate were legally and practically excluded from safe neighborinvestors who buy properties in West Louisville owe it to the hoods, loans and, therefore, from homeownership, many residents to pay a fair value for the home—regardless of the tried unconventional ways to buy homes. Rent-to-Own and desperation of the homeowner. Seizing a deal because we Contracts for Deed (where the owner carries the financing can ignores history. It ignores the disparity of opportunity for the buyer) became popular around the country, including and the balance of power between the parties. in Louisville. Responsible real estate investing also means renting or Under these agreements, people trying to buy homes selling to others in the neighborhood on fair terms. Real would often pay usurious interest rates or would lose their estate investors are entitled to earn a profit, but we aren’t homes after paying for years because they missed a single entitled to plunder a neighborhood and its people who have payment. Sellers on a Contract for Deed were legally allowed been systematically left out of opportunity for generations. to evict someone who had made payments for years if they Ideally, responsible real estate investing would mean missed a single payment. This, of course, led to the further buying properties, fixing them up, and then selling them on destruction of houses and neighborhoods and stability when fair terms to buyers. Many will need Rent-To-Own, tenants did anything they could to keep their houses, Contracts for Deed or Owner Financing. Rent-To-Own including renting rooms to multiple people so they could Continued on Page 12 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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Actionable Items to Create Change By Nina Musgrave I’m using our newsletter platform in a different way this month. The space created here will have done its work if just one of our readers has a perspective shift and takes action on it. First, a review of a few definitions. Systemic means “related to the whole, not just a particular part.” One of privilege is “an advantage that only one person or group of people has, usually because of their position or because they are rich.” One of racism is “the resulting unfair treatment of members of other races.” To include means “to make or contain something as a part of something else.” That being said — As real estate investors, the power we have as a collective to cause ground-level change in segregated, low-income neighborhoods is enormous. As KREIA members, the power we have to be inclusive and welcoming cannot be overstated. As individuals who are on their way to, or who are currently, experiencing the privileged American Dream (and then some, with Cash Flow), the opportunities we have to influence systemic racism has gone undiscussed for too long. How? Why? These open-ended questions are met with the truth that large-scale solutions to institutional division are bulky. However, when we chunk up these solutions, make them relevant to our organization and individual lives, and take action, we can shorten the transformation time and offer relief to those who are suffering. Hope is not an objective, strategy or tactic, yet it is an essential ingredient. I understand that these suggestions come at a whirlwind time of sustained nationwide protests against racial violence and injustice, intertwined with COVID-19. Shaking hands with a stranger behind the curtain at Woodhaven might not look the same again. Which brings us to the reflection of “How long has it been since I networked with someone from KREIA who doesn’t look like me?” Do not dismiss this reflection. It is important. It is relevant. It matters. ^ Your answer dictates where your responsibility lies in our solution. For many, the answer will be “It’s been a while.” Let’s make it a goal to network with someone who isn’t your race or gender at least twice at each event, to build the relationship – to be inclusive. Listen to them. They know something you don’t, and interaction between members can be one of the most vibrant parts of KREIA. There are actions that can be taken outside of KREIA events, too. Do you own rental property in predominately black areas? Do you intentionally spend money in these neighborhoods? If rental income is not reinvested or spent directly in the neighborhood, inequality is perpetuated because the money has shifted away from the community that

generated it. This continually widens the wealth gap. Whether hiring contractors or looking for cupcakes, supporting black-owned businesses is one of the most effective ways to include others in the prosperity we all seek. Visit BuyBlackLou.com for a database of Black Owned Businesses in Louisville, support them, and help move Kentuckiana forward. Block by block, the condition of properties shapes the lives of residents. Based solely on upkeep and condition, would you live in your rental units as a permanent residence? If not, remember that your individual privilege provides options that others simply may not have. Consider making improvements so the answer can be, “Yes.” The ongoing effects of systemic racism discussed in this newsletter can be lessened by investors who are willing to do the work.

Redlining: A History of Louisville’s Housing Inequity Continued from Page 10 should be converted to Contracts for Deed or Owner Financing as soon as the borrower has reasonable equity built up. Many buyers will need help finding homeownership counseling programs, like the one offered at the Louisville Urban League. When you’re the first person in generations to own a home, homeownership literacy doesn’t come naturally. People deserve to have the tools that will make them successful. This takes time and it takes effort, but it’s a good investment. And one that benefits everyone. If we fix up dilapidated properties, sell them for what they’re worth in the neighborhood, on terms that are fair to both us and the homebuyer, we can feel good about our investments. We’ll also be honoring our nation’s and our city’s history, recognizing the past that created what we see today in poor communities. It’s our responsibility as decent people. It’s our responsibility as residents of a Compassionate City. If we’re going to call ourselves investors, we need to view that term more broadly. Let’s invest in an individual, a neighborhood and a city worth living in — for all of our citizens. If we’re concerned about unrest, about looting, about violence, about justice, about peace, we first acknowledge our past and then we allow it to inform our future. John D. Borders, Jr. is a real estate attorney with the firm of Borders & Borders, PLC and currently serves on the board of directors of the Louisville Urban League.

Update on the Courts By Michelle Rawn As all of you know, we are in unchartered territory and very strange times. As part of the COVID-19 guidelines and precautions, courts both in Kentucky and Indiana have been shut down for all nonemergency cases, which includes evictions, since midMarch. As things are progressing, the courts are starting to reopen. Below is an explanation of the different orders currently in place in Kentucky and Indiana and eviction restrictions for those properties which fall under the guidelines in the CARES Act. The courts in most of Kentucky reopened on June 1. Jefferson County Circuit court reopened on June 1, but the District Courts (where evictions are held) will reopen on June 15. Only those evictions for non-rental lease violations or lease termination/non-renewal are able to be filed at this time. Evictions for non-payment of rent cannot be filed until the State of Emergency is lifted by Governor Beshear or he amends the current executive order that suspended evictions for non-payment of rent. In addition, eviction cases in Jefferson County will be held Monday through Thursday at 9 a.m., 10 a.m. and 11 a.m. They will be handled via Zoom. For those cases that need an in-person hearing, evictions will be held on Fridays from 9 a.m. until 11 a.m. in Courtroom #308. All cases being heard at this time will require the Plaintiff (landlord or property management company) and attorney(s) present on the Zoom call. The defendants are also sent a notice for them to join the Zoom hearing if they so choose. Finally, nothing in any of these Orders relieves the tenant from his/her obligation to pay rent. In Indiana the courts have reopened but the stay on eviction cases, both new cases waiting to be filed and those cases already filed, is still in place pursuant to Executive Order 20-06. The stay is scheduled to be lifted on August 14. At that time, hearings will be scheduled for those cases already in the queue and new cases can be filed with appointed court dates. In addition, eviction hearings going forward in several counties will be handled virtually for the plaintiff and his/her attorney. Only the defendants, the judge and court personnel will be permitted in the court room and the capacity is limited to a total of 10 individuals in the court room at any one time. Finally, nothing in any of the Executive Orders entered in Indiana relieves the tenant from his/her obligation to pay rent. Nationally, the CARES Act applies to those properties, both multifamily and single-family, where the loan for the property is either a Fannie Mae, Freddie Mac or HUDbacked loan; the property is a tax credit development; or the tenants are receiving government assistance with rental

Jefferson County District Court, at 600 W. Jefferson St., is where eviction hearings are held in Louisville. (Google Maps image)

payments, including but not limited to Section 8. If any of the above guidelines apply, then eviction proceedings for non-payment of rent may not be filed until July 26, and the notices given are all required to be 30-day notices; this includes lease terminations/non-renewals and non-rental lease violations (i.e., an unauthorized occupant). Unless Kentucky lifts its suspension on evictions for non-payment of rent by July 26, then only evictions for non-rental lease violations and terminations/non-renewals will be able to be filed. In Indiana, it will still be August 14 even for those evictions that fall under the CARES Act. As all of us know, things are still changing on a daily basis. Please feel free to reach out to me to see if there have been any more developments or updates. I hope you and your families are staying safe and healthy. Michelle R. Rawn Rawn Law Firm, PLLC Tel: (502) 639-9396 Fax: (502) 276-0607 Email: Michelle@rawnlawfirm.com

Quotable Quote “If you can’t fly then run, if you can’t run then walk, if you can't walk then crawl, but whatever you do you have to keep moving forward.” — Martin Luther King, Jr.

Corona Money Tips: Keep Track of Bookkeeping By Mike Butler How would you describe the first half of 2020? How would you describe what has happened so far to our wonderful Louisville, our country, and our world and planet? I hope and pray it gets fixed fast. Back to your real estate business. You’ve probably heard about the “CARES Act” passed by Congress to help Americans when the coronavirus shut down our country. The first CARES Act burned up all of the trillions of dollars in just a few days. Then Congress passed a second package to add more money because all of the funds were depleted from the original stimulus package. Zoom meetings and webinars exploded all over the Internet with attorneys, CPAs and gurus giving their nickel’s worth on what you can and cannot do with this money. It was crazy and it is still crazy because Congress and the government agencies involved in operating all aspects of this CARES Act kept moving the goal posts. They kept changing the rules, and it is still happening today. For example, the PPP (Payroll Protection Program) originally stated you had to burn up all of this money within 56 days, and it could only be spent on X,Y and Z. Locally, take a look at our own Jefferson County Courthouse: Coronavirus shut down our court system, and rental property owners were told evictions could not be filed until a specific date in the future, then it got bumped to the next month, and guess what? It is continuing to get bumped into the future, just like kicking the can down the road. What are you supposed to do? Stay tuned, and it is our responsibility to try to keep current with all of the updates, which is a very tall order for all of us. Here is how you can protect yourself and your business – any business, for that matter. It involves your bookkeeping and accounting. All kinds of loans, grants, free money and more have been available for almost everyone in America. The Feds added an additional $600 PER WEEK to folks who signed for unemployment. Prior to this, the average weekly unemployment check was $384, well below their real weekly paychecks. Now these folks are getting $984 PER WEEK, divided by 40 hours equals an hourly rate of $24.16. It saddens me many seniors on social security might get $1,000 per month to live on. Needless to say, especially with daycare closings, it just makes more sense to not go to work or get a job. Remember, as it stands right now, the Federal supplement comes to a screeching halt July 31st. Now we have your PPP, EIDL and other relief products, loans and grants. Please make sure you implement a simple,

rock-solid method of keeping track of every red cent you spend using any of these funds. CAUTION: As noted in last month’s article, we ain’t seen nuthin’ yet. A lot of the folks who live paycheck to paycheck are living like a rockstar right now because of all the free gravy train money they are getting every week. HANG ON TO YOUR CASH NOW so you can hang in there in August, September and October. July 31st is when the free gravy train money ends, and it will affect investors big time when tenants can’t pay your rent and more. Several brain-dead simple strategies can be used to prevent you from “co-mingling” these funds with other things in your business. The simplest is to open a separate bank account for each loan, grant, or relief measure you received. Use it properly, and this is a no-brainer – document how you spent every red cent. It is your responsibility to make sure you follow the rules, laws and regulations on how you spend each bundle of money. Many of these are forgivable, FREE Money, if you follow the guidelines. Many investors have other businesses in addition to their real estate investing business. A good rule of thumb is to identify how many IRS tax returns you file every year. If you have a plumbing business and your real estate business, you might be able to apply for each entity filing a tax return, but please check with your tax adviser or CPA first. The IRS has extended the April 15th filing deadline. So you still have time to get everything in order for last year, along with having this year current and up to date. In the very near future, you can register for upcoming online training series for using QuickBooks Pro in your real estate business. You will learn a very simple and safe way to keep track of all of your stimulus monies without opening up a bunch of new bank accounts. As always, KREIA members get a discount using coupon code “kreia20” and you can register online at www.QuickBooksForInvestors.com Stay Safe and Stay Tuned for more Coronavirus Updates for Investors.

P.S. Sign Up for Your FREE Investor Training Every Tuesday at 12 noon: MikeButler.com/PowerLunch Mike Butler is a KREIA Past President, a recipient of the Ed Melton Award, a property manager, a high-volume landlord, a principal in Tenant Finder Service, a retired Louisville undercover police detective, and the author of the bestselling real estate book “Landlording on Autopilot.”

Planning for Life After COVID-19

How to set yourself up for success in the last half of the year By Sharon Vornholt So many small business owners are struggling now, and that’s certainly true for real estate investors. It’s almost as if they are frozen in time. Do I buy, or do I wait? There is no easy answer. Today I have put together a few tips on how to set yourself up for success in the last half of this year. You may be wondering exactly how do you get back on track after COVID-19 (or any other life event, for that matter) that derails the goals and the plan you laid out for your business at the beginning of the year. I mean, on January 1st, who could have predicted we would be in this situation now? If you are struggling, if you’ve lost your focus, or you just need someone to point you in the right direction, you’re in the right place. We All Crave Success It’s human nature for us to want to be successful at everything we do in business and in life. You may have setbacks along the way, but if you prepare yourself for the road ahead and really visualize what you want to accomplish, then the only person standing in the way of success is you. Ultimately it’s up to you whether you fail or succeed. Know this: there’s no magic potion or secret formula for success. Even businesspeople and celebrities who seem to be overnight sensations worked hard for many years. The goals you set and the processes you put in place to make those goals a reality are two very big parts of this puzzle, but first you have to get started. Work through the process, pivot along the way as needed, and you WILL set yourself up for success both in business and in life. Getting Started Business as we knew it before COVID-19 has changed dramatically for a lot of folks. People are working from home who have never done that before. Simple things we used to take for granted, like strolling through the office supply store or looking at occupied properties, haven’t been possible in many cases. A lot of investors are struggling when it comes to their business. However, there are also a lot of people who are doing better than ever. They pivoted, made changes in the face of uncertainty, and started to do things differently, and that has made a huge difference. I have put together 3 steps for setting yourself up for success in your business in the last half of this year and going forward.

Step 1. Create New Goals Even though you may be thinking, “I already did this a few months ago and it sounds like a lot of work,” you need to ask yourself how you intend to finish out the last half of this year. Creating these new goals takes you off the hook for your original goals. Now, make no mistake, I’m not saying to completely abandon the original goals you set for the year. I’m just saying that rather than living in this state of overwhelm, you may need a new plan that puts you back on track so that you can accomplish your original goals or pivot and make changes as needed. Once your big goals are broken down into smaller goals, they’re not so overwhelming. This may mean putting together a plan to achieve your goals in a shorter period of time. If that’s the case, maybe you need to increase your marketing so you can bring in more leads. Or it could mean that you need to simply set more realistic, yet attainable, goals for the last half of the year. At the end of the day, this is something only you can decide. The 12-Week Year If you’ve been around me for any length of time, you know I love the book “The 12 Week Year” by Brian Moran. The premise of this book is that by taking your big goals and breaking them down in to 12-week segments, they will be less overwhelming and easier to accomplish. Instead of looking at those giant goals you made – like “double the number of deals I did last year” or “double the amount of net income in the next 12 months” – break down that big goal into something smaller that is easier to accomplish. For example, if your goal was to do 12 deals this year, how many deals would that normally be in each 12week period? The answer is of course 3 deals. Since we have less time left in this year, ask yourself this: How many deals do I need to do in each of these remaining 2 quarters to catch up? Next, what do I need to accomplish each month? Break the tasks down so that you know what you need to do each week to meet your goals. Your small goals should guide you toward your next action steps so that you ultimately reach your big goals. Step 2. Decide Who You Need to Become This is a big one. Much like identifying your ideal client – which in your case would be the group of motivated sellers you target in your business – put into words the type of person YOU want to become. Who is the person you need to become to accomplish your big goals? Once you have that answer, identify what that type of person does differently. Continued on Page 20

Let’s be honest – how many times have you stopped for just a minute to watch something on the news and realized the one-minute segment turned into 30 minutes in front of the For instance, let’s say you want to run a 6- or 7-figure real TV? Maybe it’s something like checking email the first thing in estate investing business. What are some of the habits and the morning that derails your entire morning. Instead of behaviors of investors who have successfully built those checking email the first thing, allow yourself 10–15 minutes kinds of businesses? Do they get up earlier? Do they have a morning routine they are committed to? How did they get to to check and respond to emails at set times of the day, then sign out of email for a few hours. be the CEO of their businesses? If you goal is to build this Time blocking works really well when you need to focus same business, you need to think and act like them. You on one task or client for a certain amount of time. One need to think like a CEO and be the visionary of your busiexample is to set aside time to tackle your marketing. Next, ness. You certainly don’t need to copy exactly what these people are doing, but you’ll need to add some behaviors and set aside time for the next thing that really needs to get habits to your routine that put you on the path to becoming done. Remember, you’re trying to get your focus back and get your business back on track. that person. These people definitely have habits and Some people like short bursts of work, but I much prefer behaviors that differ from most other people. 90 minutes to 2 hours of focused time on a big project before I take a break. Someone once said that once a task is Step 3. Create Systems and Processes to Be Successful The systems and processes you create to reach your goals interrupted, it can take up to 40 minutes to get back on track. Interruptions have a huge impact on your producare much more important than the actual goals themselves tivity. The point here is to figure out something realistic that when it comes to accomplishing them. While a goal keeps will work for you. Set a timer, then get to work. you focused on a direction, the process and/or the systems in place are the actions necessary to achieve that goal. Refine Your Processes and Systems I want you to take a look at your business as it is today. If you feel like your processes or systems aren’t working, What processes do you have in place now that will help you move closer to your goals? If you’re like most small business- focus on improving those instead of changing your goals. Maybe you need to add or subtract a step or add more time people, creating processes and systems are often an afterthought rather than something you do proactively. However, to complete certain tasks. Your goal can be static, but your processes are meant to be fluid and open to change. creating them is a way to make your life easier. They help Every single living, breathing person has the opportunity take you out of the day-to-day tasks (remember… your goal to create the business of their dreams with these simple is to be the CEO), and they help you set yourself up for steps. I can guarantee you the road won’t always be easy, success at the same time. and everyone will have a different timeline for reaching that success. It’s COVID-19 this year that has had a huge impact Be Mindful of How You Spend Your Time on our businesses; it will almost certainly be something You must know how you’re spending the hours in your different in the future. But with focused, hard work and a day before you can make changes. In the beginning, you might consider following a checklist for your daily tasks with desire to succeed, you’ll soon recognize opportunities as they arise that will move you toward your ultimate goals. a time limit for each task. This will help you get your focus back. For instance, start with a morning routine. Those are Final Thoughts and a Freebie the steps you take to start your day each day. This morning If you are struggling to get leads in your business, you routine will look different for everyone. I’m a big fan of Hal should learn about probates. This niche is recession-proof, it Elrod’s book “The Miracle Morning,” but I know myself and is unaffected by market conditions, and you will (sadly) I’m not getting up at 4 a.m. each day. never run out of leads. These folks are some of the most Figure out what your morning ritual or routine looks like and commit to starting each day the same way. We’re crea- motivated sellers on the planet! You get to help people who have an unwanted property and build a profitable business ting habits here. Once you figure out a productive start to your morning, managing the rest of your day will get easier. at the same time: It doesn’t get any better than that. Be sure to stop by the blog and get my FREE “Probate Focus on one thing at a time as you move through your day. Investing Starter Kit.” It’s a quick-start guide to working in this profitable niche. What do You Need to Stop Doing to Be Successful? Maybe you need to ask yourself this question before moving on. What do you need to STOP doing? Maybe it’s to Sharon Vornholt is a local marketing expert with a national presence. Visit her site: LouisvilleGalsRealEstateBlog.com stop turning on the news the first thing in the morning. Planning for Life After COVID-19 Continued from Page 18

Sharon Vornholt headlined May’s virtual main meeting Via Zoom.

KREIA

Photos

Please help us with July’s issue! Email some photos to

kreiaphotos@gmail.com

Above: Ed Gibson addressed the crowd during an actual, live Lunch & Learn event he hosted early in the month. (Photo by Karen McKnight) At left: John Jones led a video tour of his rehab project in Windsor Forest during KREIA’s first Virtual L.O.T.S. event.

Q&A With Rebecka Taasaas of America’s Choice Security Protecting rehabs and investments with monitored security systems Rebecka Taasaas and her husband, Steve, run America’s Choice Security, a company that serves the Kentuckiana area and surrounding counties, installing security systems with monitoring devices for homeowners and investors. You typically think of security devices in your personal home, for protection. What are investors using them for? House flippers use security systems to prevent break-ins during and after flips are completed. Houses are vulnerable when they are empty. We’ve heard of people driving up in a truck and literally moving out an entire house of staged furniture and appliances. What do thieves typically target during construction? When you’re working on a house and bringing in supplies, even electrical, all of these things have value. I had one client lose can lights and all electrical runs. I’ve had clients lose tools and building supplies. A house that is empty and not secured is an easy target and very tempting. Burglars are not ambitious – they’re opportunists. How does the system work? There is a base unit with a color touch-screen keypad that is connected to monitored wireless door, window and motion detectors. You can keep the keypad near the door where workers come in and out. The door where they enter and leave may change depending on the work going on. You can move the base unit around the house as long as there’s a power outlet nearby. The base is freestanding – what we call a desk mount – and does not have to be mounted to the wall. Phone lines and wifi are not needed. You assign each subcontractor a different code and can monitor their comings and goings. There’s always a running history. You know when they show up and when they don’t. It keeps them on their toes because they know they’re being watched. And investors can monitor and arm the system from anywhere using a mobile device. No landline or wifi? It’s wireless and uses a cell module for whatever signal is strongest in the area. We do signal mapping, and usually Verizon is strongest in Louisville and surrounding counties. What if you’re in a place where the signal is weak, such as a rural area? We use a cell booster to amp up the signal. When should a house flipper bring you guys in? We love it when we’re in the buildup stage. I’ve been in houses where we’re down to the studs. We need to have power, at least one working 110 outlet. Do monitoring devices get in the way of contractors and workers?

They give investors and their contractors and subcontractors freedom to come and go and work on their own schedule. One of my clients found out his tile guy likes to work at 2 a.m. How does an alarm get “tripped”? It happens when a door sensor, window sensor or motion detector detects movement and the system is not disarmed by someone entering a recognized code into the keypad. We offer wireless door, window and motion contacts. 60% of break-ins are coming through doors, because that doesn’t look suspicious to neighbors. What happens if the code is not punched in in time? The security system is monitored by Brinks, out of Dallas. We’ve been with Brinks for 8 years. Brinks will go through a series of events on a call list. You can have the property owner, the general manager and partner on the list, and also emergency services. There’s a 9-second delay between tripping the alarm and the first call. Our competition has a delay time up to 2 minutes. A lot can happen in 2 minutes! Do you have other monitoring devices besides motion detectors? Yes, we have smoke detectors, leak detectors, carbon monoxide detectors – and also cameras. For rehabs we do not recommend smart smoke detectors because there’s too much dust. What happens to the service when a flipper sells a flip? Flippers can turn over the equipment and monitoring service to the new house buyer, or they can move the system, free of charge, to their next flip project. Do you work with landlords and rental property? Yes, and I’ve noticed that tenants stay longer in units with security systems. They feel safer. I train the renters how to use the systems. We are super hands-on. When they have a question, they call me. You definitely want a monitored, smart smoke detector in your rental or Airbnb unit so you’ll know if the house catches on fire, and to have the fire department automatically respond to a verified alarm event. How much does the service cost? There is a one-time activation fee of $99 and a monitoring fee of $38.99/month with a 3-year agreement. There is also a non-agreement option. Again, we offer free moves for the flipping community. Visit americaschoicealarm.com to learn more about America’s Choice Security Service’s products and services, and to find out how to schedule a free security review.

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National REIA Real Estate News Roundup

million homeowners past due on their mortgages as of the end of April, the largest number since January 2015. Read the full report: bit.ly/k2006_aprildata

National REIA, of which KREIA is a chapter, reports on issues affecting real estate investors and also provides links to stories of interest from other organizations. Here is a sampling of recent news and resources that Brad Beckett, Airbnb CEO Brian Chesky recently spoke with NBC’s NREIA’s Director of Education & Outreach, has compiled. For Today Show about the future of travel and what steps more news, visit realestateinvestingtoday.com Airbnb has been taking. Chesky predicted that there will be big changes in the travel industry and that it will become more intimate and local in a post-pandemic world. Former Vice President Joe Biden says rent and mortgage Watch on NBC’s Today: on.today.com/2YLqJow payments should be forgiven for those struggling financially during the current economic crisis precipitated by the Coronavirus pandemic. Click here to read more. Last Fall, NREIA’s quarterly online survey told us that over Read the story at Realtor.com: bit.ly/k2006_biden 60% of REI2Day readers listen to podcasts. This infographic from Statista reminds us that podcasts are a pretty big deal. View the infographic: bit.ly/k2006_podcast With the Coronavirus pandemic forcing people to work from home (if they’re able), the number-crunchers over at the NAHB’s Eye on Housing reexamined some data. They took another look at the 2018 NAHB’s consumer preference study (the most recent available) and discovered that 65% of home buyers wanted a home office. Click here to read more. A new report from LendingTree finds that the majority of Read the report at NAHB’ site: bit.ly/k2006_nahb homeowners approved for a mortgage forbearance may not have needed one. According to their research, of the homeowners surveyed 25% of applied for forbearance due to a coronavirus-related hardship and 80% were approved. Read the full report: bit.ly/k2006_forbearance The U.S. government is reporting that privately-owned housing starts in April were at a seasonally adjusted annual rate of 891k, which is 30.2% below March’s revised number. April’s rate for units in buildings with five units or more was 234k. According to the latest CoreLogic Home Price Insights Read the PDF report: bit.ly/k2006_starts (HPI) report, home prices nationwide increased 5.4% (year over year) in April 2020. However, they also caution that 2021 will mark the first year home prices are expected to decline. Read the full CoreLogic report: bit.ly/k2006_decline With interest rates at all-time lows, CNBC's Diana Olick is Continued on Page 32 reporting that mortgage application numbers have risen 54% since early April, which she also says marks the first annual increase since the Coronavirus pandemic. Watch at CNBC: cnb.cx/30Tcn7Z Have you stopped by kreia.com recently? We’ve given prominent placement on the home page to:

Airbnb CEO Says Travel Will Become More Intimate and Local

Joe Biden Calls for Rent Forgiveness

Steady Rise of Podcasts

Most Buyers Want a Home Office

Majority of Homeowners Approved for Forbearance May Not Have Needed It

Housing Starts & Permits Drop Dramatically Due to Pandemic

CoreLogic Says 2021 Will See First Home Price Declines in 9 Years

Mortgage Applications Up 54% Since Early April

COVID-19 Resources

Black Knight Says Past-Due Mortgages Increased by 1.6 Million

According to Black Knight’s “first look” report for April, past-due mortgages increased by 1.6 Million, which was the largest single-month increase ever recorded. There were 3.6

► KREIA’s resource page, maintained by Nina Musgrave kreia.com/Page.aspx?ID=COVID-19-Resources ► National REIA’s COVID-19 Updates page nationalreia.org/covid-19-updates/

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

NREIA News Roundup Continued from Page 28

Wall Street’s SFR Landlords Bet on Surge in Suburban Demand Real Estate News for Investors is reporting that some of America’s biggest SFR landlords are betting on a surge in demand for single-family rentals in our nation’s suburbs. Listen to the Podcast: bit.ly/k2006_sfr

Cleveland: House Flipping Hot Spot The Wall Street Journal says Cleveland, Ohio is a “houseflipping hot spot” and the Coronavirus pandemic has helped. In a recent article they discuss how real estate investors are moving away from the sunbelt to lower-price markets (like Cleveland) and scooping up homes that they turn into rentals. Read the report at Realtor.com: bit.ly/k2006_cleveland

Jobs in Construction Rise By 464k According to recent data from the Associated General Contractors of America, construction employment increased by 464,000 jobs in May. However, the AGC cautioned that the industry remains far short of full employment. Read the full report: bit.ly/k2006_agc

KREIA 2020 Elections By Michelle R. Rawn It’s that time of year again for the KREIA election. The Election Committee would like to inform you of the election procedure. This year due to COVID-19, things will be handled differently. KREIA is run by a board of directors consisting of five officers (President, Vice President, Secretary, Treasurer and Treasurer Elect), twelve at-large board members, the immediate Past President and the Parliamentarian. The officer positions serve for a one-year term, while the at-large board members serve for a two-year term, with six new members being elected each year. The only exceptions are when an at-large board member chooses to run for an officer position before his/her twoyear term has expired; or has to leave the board prior to the end of his/her term. There are no term limits, and all incumbents may run for re-election if he/she so desires. The election will be held online this year as we will not be able to meet in person for the June meeting. There are two ways to vote: 1) active members will log into KREIA’s website and follow a link from the home page to a voting form; or 2) if you are unable to vote online, then you can email me at Michelle@rawnlawfirm.com and I will email you a ballot. The ballot will be available from the KREIA website starting Thursday, June 18, and the link will remain active until 7 p.m. EST on Thursday, June 25. The election will end promptly at 7 p.m. EST on June 25. Any ballots received via email after that time will not be counted. Dennis Erhard and I will count the ballots and notify you of the new board at the end of the virtual main meeting on June 25. If you have any questions about the election or governing process of KREIA, please feel free to contact me. Michelle R. Rawn KREIA Parliamentarian Chairman of the Election Committee Tel: (502) 639-9396 Fax: (502) 276-0607 Email: Michelle@rawnlawfirm.com

KREIA 2020 ELECTIONS SAMPLE BALLOT

Please see below a sample ballot for the KREIA 2020 elections, which will take place virtually either voting on the KREIA website or by requesting a ballot prior to the June 25th meeting by emailing Michelle R. Rawn at Michelle@rawnlawfirm.com. Voting will end promptly at 7:00 pm (EST). Officers (to serve a one-year term) Vote for one person for each position President Vice-President Secretary Treasurer Treasurer-Elect

□ Chris McCarty □ John Jones □ Erik Hitzelberger □ Mike Grinnan □ Wally Kallbreier

Write-in □ _______________ □ _______________ □ _______________ □ _______________ □ _______________

Board at Large (to serve a two-year term) Vote for six people □ Rob Bergeron □ George Foree □ Ken Hodge □ Jack May

□ Stacey Duvall □ Ryan Gettelfinger □ Christopher Jaquith □ Jordan Pohn

□ Alexis Fentress □ Alisha Higgs □ Craig Jennings □ Lauren Willoughby

Meet the Candidates… Twelve people are running for only six open board seats in this year’s election. These are the people who will help decide the future of KREIA – and it’s your job to decide who they will be.

We invited all candidates to write an article introducing themselves, describing their backgrounds and what they’d like to do for KREIA. Turn the page to read the bios of those who took us up on our offer.

How to Cast Your Vote Online To vote online, you will need to find and write down your unique KREIA Member ID number. To find it, sign in at kreia.com, then click or tap the link to “My Dashboard.” On your Dashboard, scroll down until you see the section called “My Profile Information” – your Member ID will be right below. Then go to KREIA’s homepage and click or tap on the prominent link that takes you to our voting instructions page, which in turn leads you to the online ballot. It’s easy! Watch this 1-minute video for a quick walkthrough: bit.ly/k2006_howtovote

KREIA CANDIDATE BIOS

Jordan Pohn I have been a gold sponsor and member of KREIA for just over four years. In 2020, I became a Board member. I want to continue to give back to a great organization that has provided the resources and education that has contributed greatly to the success of so many real estate investors. I have been in real estate for over 25 years. I started my career as a real estate attorney. I am hopeful that being able to look at issues from a different perspective will add value and be beneficial to the board’s ability to serve more people in a greater capacity. My next endeavor was in mortgage lending. I was the owner of a national mortgage company. The organization

went through many different market conditions during its twenty-year run and ultimate sale to Lending Tree. The most challenging time was during the 2008 financial crises. As we are currently experiencing similar difficulties in the world today, I believe I can assist in navigating these waters. Finally, I spent the last four years as the owner of Surepoint Equity, a private lending company that focuses on financing real estate investors. It is through this business that I have been able to meet and understand the needs of the KREIA investors. I have greatly benefitted from being part of KREIA over the last four years and look forward to playing a bigger role in the organization moving forward. Thank you for your consideration.

George Foree I’ve been investing in real estate for 30 years. I joined KREIA over 20 years ago and have been on the board for the last 12 years. I am a wholesaler and a landlord. You probably know me from working the checkin desk at KREIA meetings. Sitting at the front desk, I meet a lot of people and talk to a lot of people. I really like networking. I also follow government affairs and attend govt. meetings. I try to be updated all the time about what the government is doing and how it affects investors. Look at the taxes we pay! Even just to the city of Louisville. Small businesses are the biggest employers in the United States, and real estate owners are the biggest small businesses. Landlords. In KREIA we have 400 members who have thousands of houses. We pay plumbers, electricians and all the trades. Think about it. We put a lot of people on the payroll. Here at KREIA I’ve won the Ed Melton Award. I think I’m

one of two people who have won it who haven’t been KREIA presidents. I’m also on the Fuller Center board and on the boards of veterans’ groups. I really don’t like talking about myself, but I am up for reelection on the board and would appreciate your vote. Here are my tips for new investors: Be patient. People get in a hurry and buy too fast. New people want to buy something tomorrow, when they should be taking their time. Get yourself a neighborhood and learn that neighborhood. Don’t go all over town. And use KREIA’s advertisers, because they know what we’re doing as investors, and that makes it easier for everybody. Also, you have to be careful buying these real estate teachers’ books and tapes, because they all don’t know Kentucky law. If I can help somebody, I will. Call me at (502) 541-1811. You can talk with me or ask for help. Or write me at gforee@bellsouth.net. If you write me, call me to let me know to look for your message.

Alexis Fentress Hey guys! I’m Alexis Fentress, a realtor with RE/MAX Premier Properties and an investor. A few years ago I bought my first single family property. I had no experience, no mentor, and Bigger Pockets was like my North Star. When I found KREIA though, my head couldn’t stop spinning! Since becoming a member, I have been able to connect with some really awesome investors who have offered their time and knowledge. Todd Hunter helped me find a deal and renovate it; Dennis Erhard taught me how to train tenants; Hampton Scurlock helped

me set up an IRA; and Harry Borders taught me how to hide my assets behind LLCs and land trusts, and close. I remember sitting down with Harry at his office when he asked me, “What do you want to see when you get to the top of your ladder?” After some contemplation, I envisioned owning enough single family rentals to support my lifestyle, and spending the majority of my time helping others. Ultimately, I find I am at my happiest when I am lending a helping hand. I would appreciate your vote in the upcoming election and the opportunity to serve.

KREIA CANDIDATE BIOS

Rob Bergeron Hello all, I’m Rob Bergeron, realtor at Housing Associates and owner of The Louisville Network (a resource for wholesalers to send their assignable contracts to my buyer’s list of over 4,000+ people). Last year I served my first term on the KREIA Board. It was WILD! I learned a lot and enjoyed brushing shoulders with some of the brightest minds in our market! I was in charge of increasing our charitable contribution to the Home of the Innocents. Prior to COVID19 we were on pace to double our annual contribution!

You guys rock! Due to COVID-19 and our inability to connect with each other I took on the initiative to keep us connected! As a result, “See You at Noon” was created! It has been a tool to connect with some of the local experts and exchange thoughts and questions about our uncertain market! After getting my feet wet serving on the board, I now feel empowered by leadership to employ new ideas and implement change! I’ve always been a big idea guy and promoted inclusion. I appreciate the opportunity to serve again!

Stacey Duvall I joined KREIA (the first time) sometime around 2004 when we used to meet at Masterson’s. This is where I took the first step to pivot my business model from retail brokerage to investing and growing my business as an investor. Through the years, I have attended several of Mike Butler’s workshops, and I went through Frank Miller’s program recently also! I love learning! As a Real Estate Broker, I have over 20 years’ of real estate experience and knowledge of the Louisville market, focused on helping my clients devise a strategy to build wealth. My specialty has been serving retail and investor sellers, through my unique strategies and changing their paradigm of what it takes to sell a home and helping them maximize their

proceeds. By utilizing tools like 1031 exchanges and the no capital gains rule, I can advise my retail and investor clients on how to maximize their profits when selling. My passion is all about sharing my wealth of knowledge to others so they can be financially free through real estate. I own investment properties and short-term rentals (AirBnBs). I have a very well-rounded knowledge of all things real estate, from the consumer side, tenants, flipping and short term rentals. I’m looking forward to serving the members of KREIA by being a part of the Board of Directors, so I can help and contribute to the members of KREIA, and to share what I know, and to also learn and continue to grow my investment business. Thanks for the opportunity to serve you.

Jack May I’m married 28 years and enjoy mountain biking with my wife Hello. My name is Jack May: Broker/ Owner of May Team Realtors and I’d like to and traveling in our RV with her and our 2 dogs. “If you’re not living on the edge you’re taking up too much be considered for an open board seat. space.” I was licensed in 1997 and worked at Thanks for your consideration. Re/Max until 2008 when I opened up my own brokerage. Since 1997 I’ve sold more than 2,000 homes averaging close to a hundred homes sold each and every year. I’m also a property manager currently managing about 50 rental properties. I have flipped more than a hundred homes over the years and last year decided to get more serious and joined KREIA. I’m also a past president twice of a local BNI chapter and have been a member of that group for 14 years. Over the past year I’ve enjoyed meeting a lot of you guys and want to get more involved. At 57 years old I’d really like to give back to KREIA and our community. 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.

KREIA CANDIDATE BIOS

Alisha Higgs Hello everyone! I’m Alisha Higgs, and I am absolutely fired up about real estate! In July 2019, I took the plunge and purchased my first investment property and since then I have built up an 8-door portfolio in under a year – all while working my full-time job as a senior accountant. It’s possible! Being a new face to the investing world, I believe I would bring a fresh spin to the KREIA Board, especially when it comes to connecting with and inspiring KREIA members who may be new or those who are just dipping their toe in the water. I come equipped with ten years’ experience in corporate accounting, five of those years I spent working in commercial real estate and development. I have an undergrad degree in

Accountancy and Entrepreneurship from the University of Louisville. My professional and educational background has provided me with the skill set and drive necessary to serve in future cabinet positions such as secretary, treasurer, and potentially President. It’s amazing, in July 2019, my goal was to buy 2 houses in my first year – and even that seemed like a stretch. I owe a huge part of my success to KREIA Past President Dennis Erhard and several other KREIA members that have boosted me to next-level thinking. Without KREIA, I know for a fact that I would not be where I am today. It would be my pleasure to give a little piece back to the KREIA members and serve you on the KREIA board of directors.

Ryan Gettelfinger Financial Freedom is what started my Real Estate Investing Career and over the years it has grown into a passion of renovating houses and holding rental properties. For those that do not know me, I’m Ryan Gettelfinger and I’m the guy investing on the other side of the river in Southern Indiana. Most of my deals have been in Indiana, and I still hold properties in downtown Jeffersonville and New Albany. I have done Fix and Flips, Wholesales, BRRRR deals, Seller Finances and more. And while I do not look at myself as being one that has fully “made it” just yet, it’s also true that I’m not “just starting out.”

Real Estate has allowed me to quit my W-2 Employment in 2019 & focus full time on reading the markets, diving into the details, and having time to enjoy life again. And that is just a few things I want to bring to the KREIA Board. I will bring insight to the red-hot Indiana Market. Also, I relate to the vast majority of KREIA members that have only done a handful of deals and want more resources to scale our operations to pull in more money. My specialties are creating processes to streamline and make everything more streamlined and effective. If I were elected to the board, you would have my full commitment to service and provide value to the KREIA Community.

Lauren Willoughby Two of my favorite things in life are 1) learning about real estate and 2) producing content. KREIA provides many opportunities for me to do both. By working on KREIA’s newsletter, I have the privilege of interviewing very smart people who have lots of wisdom to share with our group. More recently KREIA has given me the opportunity to learn a lot about shooting and editing video. It’s been a blast, and we are looking to do more with that! By the way, if you have ideas for articles or videos — an interview or a topic how-to or something else — let us know! Also, if you’d like to write articles yourself or help produce videos, please volunteer. I’m at ibuyhousespdq@ gmail.com if you’d like to get in touch.

I want to give a shoutout to our frequent newsletter contributors: Mike Butler, Nina Musgrave, Michelle Rawn, Jordan Pohn, Sharon Vornholt, Mike Fallot, and our president, Chris McCarty. Thank you for helping us learn. I’m running to keep my seat on KREIA’s board and would appreciate your vote. Even if not re-elected, I plan to keep volunteering with the newsletter and our video projects. As we move through the pandemic and financial downturn, I think we are going to need to help educate each other more than ever. While not yet a full-fledged investor – I do some private lending – KREIA is giving me the confidence and knowledge to move forward. I’ve been a member since 2014.

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UPCOMING EVENTS

Secrets Revealed: How to Make Money Flipping Houses Even during times of worry and unrest, the work of turning distressed houses into safe and comfortable homes goes on. Frank Miller and Hannah Gill will be headlining our June main meeting and sharing tips on how they rehab multiple properties at a time. Early Meeting: At 5:30 p.m. on June 25th, attorney Chris Wakild will discuss investing in tax liens. ❖ July 2nd — 5-7 p.m. KREIA Happy Hour. Host Hampton Scurlock says Bearno’s in Plainview has given us the goahead to resume Happy Hour, though they may have to impose a limit on the number of attendees.

❖ July 7th — Noon-1:30 p.m. KREIA Lunch & Learn. Host Ed Gibson says we’re going for it again – and not online! His plan is that we picnic in a park while networking and learning from a guest speaker – while wearing masks and staying socially distant. Stay tuned for more details. ❖ July 16th — 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. Everyone is invited. We’ll be meeting at Bearno’s in Plainview, though the restaurant may need to limit the number of attendees.

Main Meeting Calendar Here’s what’s coming in the next few months: • July 23: Landlording • August 27: Finance • September 24: REOs & Auctions

We look forward to seeing you at our next main meeting!