November 2020 KREIA Newsletter by KREIA .com

Providing Education, Resources & Networking Since 1978 Kentucky’s premier investment club for landlords, rehabbers and wholesalers Meeting the 4th Thursday of every month (except November & December) KREIA.COM • facebook.com/groups/kreiaky • twitter.com/reiaky Vol 11-20 November 2020 President’s Letter

Paid Advertising Rates

Holiday Party 2020: We’re holding it on Zoom on Nov. 19th

Welcome, New Members!

Workshop: Real estate ownership 4 seminar coming in December Mike Butler: It’s that time again – 6 time for tax planning Michelle Rawn: Courts update

Help the Home of the Innocents: 10 Speak up at your next closing Government Affairs Links

Nina Musgrave: Easy-to-create 14 vendor list saves time, headaches Lauren Willoughby: Need an extra phone? Got $49 to spare?

KREIA Photos

L.O.T.S. Recap: Donnie Adkins flips a rental into a flip

National REIA News Roundup

Sharon Vornholt: How to Build Rapport with Probate Sellers

Calendar of Events

Monthly Newsletter for KREIA Members KREIA Members and Friends, Greetings, Happy Thanksgiving, Merry Christmas, Happy Holidays and Happy New Year! Thursday, November 19, we will once again meet online on Zoom for the last regular monthly KREIA meeting of the year as we conclude this crazy 2020. It’s certainly a year to be remembered and likely the most unique Chris McCarty of our times. It is hard to summarize or speak of 2020 in any usual way as it has been anything but. Certain parts of our new COVID-affected economy have suffered, but the majority of all real estate endeavors have prospered as low inventory and interest rates have pushed real estate values higher again this year. My messages and suggestions are to keep doing what is working and to keep a careful watch on the financial horizon for anything that may be a threat to what is currently driving our industry. Otherwise, the indicators are strong for continued great news for real estate and our KREIA members. We will celebrate the meeting this month with some entertainment and a change from the usual structured meeting schedule. We’ll have a few laughs and extra time to virtually network with friends and your favorite mentors. I personally wish to extend a very special and heartfelt thanks to all the dedicated people who contribute to KREIA each month with their time, leadership and tireless effort to make the monthly KREIA meetings, resources and other outside events possible, beneficial and informative. As an organization, we are doing well with 700+- members and are stable despite the challenges of not being able to gather. KREIA is one of the very few remaining – and certainly about the largest – REIA groups in the nation that is completely non-profit and served by volunteers. The officers, board and volunteers are 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

Greg Nalley

Hampton Scurlock

Rob Bergeron

Christopher Jaquith

Jordan Pohn

Stacey Duvall

Alexis Fentress

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 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.

Illustration by Nina Musgrave

You’re Invited! Please come hang out with us online. For the first time in our decades of KREIA holiday parties, we are not able to gather together and celebrate in person. But we’re still meeting up online for a virtual party to kick off the holiday season, and we hope you join us! So, don your best holiday duds and, for one more time this year, fire up the old Zoom app.

What are we doing for our online Holiday Party? We’re going to: ● Meet KREIA board leaders ● Hear True Real Estate Confessions: The good, the bad and the ugly deals, described for your enjoyment and edification ● Hold FREE raffles & drawings for gifts, gift cards and gift certificates ● Pay tribute to the Home of the Innocents ● Present the Ed Melton Award WHEN: Thursday, November 19th, 6 p.m. WHERE: The Internets! A festive Zoom call HOW MUCH: Free for KREIA members! HOW: Register at kreia.com for more info

Welcome, New KREIA Members! Deena Burks Bobby Conley Marx De Sa Andrea Dewey Brandon Dones Kenneth Felts Jr Don Johnston Terrence Keene Daniel Knapp

Brittany Lewis Jon May Jordan Means Diane Miesner Miatia Parker Daniel Ramirez Donald Reinhardt Shannan Reinhardt Nan Roth

Zach Shipp Vonda Shuff Pamela Smith George “Adam“ Tetrick Andrew Walters Cedric Ware

KREIA’s New Member Orientation There will be a short presentation of the benefits of joining KREIA at every regular monthly main meeting. While we’re virtual, tune into our Zoom call at 5 p.m. to hear from Jordan Pohn and Stacey Duvall. The next orientation is scheduled for January 28. Online Presentation: You can view a recent presentation by Jordan and Stacey by visiting the Intro to KREIA page at kreia.com (About/Intro to KREIA on the menu). On the Member Benefits page (Join/Member Benefits), you’ll learn how to secure your discounts and bonuses.

KREIA Real Estate Ownership Workshop Comes to West Louisville YMCA On Thursday, December 10, from 6 p.m. to 8 p.m., KREIA is going to present the “Real Estate Ownership Workshop.” It will be both a virtual event, streamed on Facebook Live, and a live, in-person event held at the West Louisville YMCA. And later we will be posting the video also to KREIA’s public YouTube channel. The event is open to KREIA members and non-members alike. Attendance at the YMCA will be first-come, first-serve, so plan accordingly. The plan is to present the workshop as an experts panel. George Foree, Donnie Adkins and Kisha Lindsay – all longtime, successful real estate investors – will be among the speakers. All three have experience in house flipping and in producing passive income via rental property. Guests will learn a lot! And questions from the audience are encouraged. The workshop will cover real estate from both a homebuyer’s perspective and that of an investor.

The new West Louisville YMCA is now open to the public at 1720 West Broadway. (Google photo)

President’s Letter Continued from Page 1 already working hard to fill the 2021 schedule with relevant content and networking opportunities, along with some new and fresh ideas. I hope each of you has an opportunity to take a breath, appreciate your accomplishments and enjoy time with family and friends this Holiday and Christmas season. As this year winds down, take inventory of your goals achieved and those yet to be conquered. Rest up and be prepared to hit 2021 head on with new challenges and favorable outcomes for all your hard work. See you at the meeting! God Bless, Chris McCarty KREIA President 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

It’s That Time Again – Time for Tax Planning By Mike Butler What a weird and unique year, but life goes on. Be careful and stay safe! I’m writing this article on November 11, and we have about 7 weeks before 2020 is over. Now is the time to s-l-o-w down and carefully review your “Quadrant 2” items. For starters, let’s take a careful review of your finances and real estate business. It’s a great opportunity to get a jump start on wrapping up this year and setting the stage to be ready to rock’n’roll next year. Take a look at your goals you set for this year. How are doing? Critique yourself. What did you do great, and what needs help? Do you need to adjust your goals for next year? Any lessons learned this year? How will politics, our economy, and COVID19 affect you and your real estate business next year? Turkey Day holiday weekend is perfect timing to take a close look at your “Important, But Not Urgent” items. (Quadrant 2 stuff. (Quadrant 2 stuff. Read more about time-management “quadrants” in Stephen Covey’s book The 7 Habits of Highly Effective People.) In your real estate business, do you have everything organized and ready for tax time? NOW is the time to take a financial snapshot in order to properly plan to make adjustments to reduce income taxes, make your maximum contributions to your self-directed Roth IRAs, your Health Savings Accounts, and education IRAs for your kids and grandkids. We all received our Jefferson Co. property tax bills last week, and don’t forget, our property taxes were hit again with another JCPS school tax. If these tax bills made your jaw drop and your bank account take a super hit, try this. Right now you should know how much all of your property tax bills total, and don’t forget all of the smaller city taxes too. Once you learn what your total property taxes are for the year, you could open a bank account dedicated to setting money aside every month just for property taxes. This is good planning. For example, if your total property taxes for this year are $24,000, you could deposit $2,000 every month starting in December. This time next year, you will have $24,000 in this special bank account to pay property taxes without a huge hit to your operating account. Don’t forget you get a 2% discount when you pay your property taxes before December 1. Please do NOT try to convince yourself you can make the $2,000 month deposit on your own. To make sure you do this the right way, contact your bank and set up a

monthly transfer payment as a deposit into your property tax bank account. If you have loans with escrowed funds held by your lender, ALWAYS double-check and triple-check they have paid your property taxes properly. Ultimately, the owner of the property is responsible for paying property taxes. You cannot say, “My lender screwed up.” If you have escrowed funds: Step 1: Go online to the Jefferson County Sheriff website’s tax search page (jcsoky.org/ptax_search.htm) and look up your property address and you will see if your property taxes have been paid. (This website has a whole new look this year.) Step 2: If the taxes have not been paid, contact your lender to get your account in order. If your lender screws up, you are still responsible. A final word on property taxes: If you have purchased or sold any real estate since July, double-check these addresses because your tax bill may have been mailed to the previous owner. If you are the previous owner and receive the tax bill for a property you sold, please be kind and scan and email to your buyer. If you find yourself having a hard time with your bookkeeping and accounting, I will do a little self-promotion here because I want to help you make your real estate business run slick as snot. My www.InvestorBooksPro.com system is America’s Only Complete System for Real Estate using QuickBooks. Let me toot my horn just a little bit here. Last year at this time, the IRS wrapped up an 11-month, 3-year deep dive audit of everything I own. As you might expect, I was terrified because I don’t recall any person I know saying they loved when the IRS came knocking to audit their tax returns and bookkeeping. Lo and behold, I was wrong. After enduring 10 long, high-anxiety, paranoid-filled months, my IRS 3-year deep dive audit resulted in me getting a complete GREEN LIGHT! I was dumbfounded. No extra income tax, no interest, no penalties… in fact, I got more money refunded. So, bottom line, let me tell you I could not run my business without my system, and you have the opportunity to get a big discount as an active KREIA member. Get all of the details and more at www.InvestorBooksPro.com – the IRS blessed my system with a complete green light! I asked Mike Grinnan CPA if I could share this, folks, and he told me Continued on Page 32

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Update on the Courts By Michelle Rawn There have not been many changes to eviction court since the update last month. As you are aware, the CDC issued an eviction moratorium for evictions for nonpayment of rent through the end of the year. This moratorium is nationwide but only applies to evictions for non-payment of rent, and all adults on the lease must submit a CDC Renter’s Declaration to obtain the protection of the moratorium. Most counties in Kentucky are now continuing these cases until after the first of the year, but the landlord and/or the attorney is still not permitted to question the tenant as to the validity of the Declaration. In Indiana, the Supreme Court provided guidelines and direction to the eviction court judges and magistrates that permit the court to take evidence to provide each category of the certification and to determine its validity. Evictions for non-rental lease violations (unauthorized occupants, disturbing the quiet use and enjoyment of the neighbors, etc.) and non-renewals/lease terminations were not affected and currently can proceed. Those types of evictions are moving forward as usual. The moratorium did not cancel or suspend rental payments, but it basically guarantees that a tenant cannot be evicted for non-payment of rent for the rest of 2020. Currently there is a lawsuit filed challenging the validity of the CDC order and the authority with which it was put in place. That case is currently with a federal judge for review and decision. Until a ruling, though, the eviction moratorium will remain in place through December 31, 2020. During this time, if your tenants reach out to you to accept payment from a rental assistance program or want to try and work out a payment arrangement, you will want to think strongly about this before saying no. These rental assistance programs might be your only chance to receive payment for at least part of the rent owed while the moratorium is in place. Also, we are coming into the holiday season. Here is what this means for eviction court through the rest of the year: ► Floyd County, Indiana, has already had its last eviction court docket for the year. The next court date is January 14, 2021. ► Clark County, Indiana, is holding eviction court through December 2, 2020, and then will shut down until January. Per the court staff last week, they have already started giving out January dates. ► And Jefferson County will shut down eviction court the last 3 weeks of the year. As all of us know, things are still changing rapidly. Please

feel free to reach out to me or John at my office 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

There’s Still Time to Raise Money for Children in Need at Your Next Closing We’ve written about this before, but it’s worth repeating. If you’ve got a closing coming up, please keep the Home of the Innocents in mind. Another casualty of COVID-19 is our usual method of helping raise money for the Home of the Innocents, KREIA’s charity of choice: We haven’t been able to hold our 50/50 Raffle at main meetings. We haven’t had live, inperson main meetings since February! With the year ticking away, along with our ability to present a nice, fat year-end check to benefit the children of HOTI, KREIA board members Hampton Scurlock and Rob Bergeron had an inspiration: why not approach area attorneys and title companies to try something creative? So here’s the deal: If you’re holding a closing with one of these companies between now and December 31st, tell them you’re with KREIA to have $10 donated to the Home of the Innocents: ▪ Borders & Borders ▪ Rawn Law Firm ▪ Rounsavall Title Group ▪ The Law Office of Brad Lammi ▪ Millennial Title Win-win-win! A big thanks to all these companies. Let’s get closing and help those kids!

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

Easy-to-Create Vendor List Saves Time & Headaches This holy grail keeps projects moving forward—frequent updates are key

By Nina Musgrave My experience and training in this industry have taught me to have multiple vendors in any given area. For example, roofers frequently get overloaded during heavy rain, so I need more than one that I trust. Using my Vendor List, I can easily keep track of the ones I don’t frequently use. I simply refer to the list, call companies I’ve worked with before, and keep going. Trust me, this beats thinking, “Did they even show up last time?” or searching “Roofer” in my phone while throwing up prayers. My Vendor List is a Google Sheet. The columns are selfexplanatory – company name, complete address, phone, email, personnel info and cell number, best way to reach, accounting/billing contact, trade type, and several columns for notes. Notes may include a property and description of work, reasons not to hire again, or something important to remember next time. And yes, rows are color coded in a way that adds information about the vendors. The beauty of my list lies in its simplicity. There are minimal qualifications to get on the list, and I have removed very few rows. Just because a company is on the list does

not mean that it is a preferred vendor. As vendor information changes, it is updated, which is key for the list to remain current. Unfortunately, several wonderful experiences with a painter don’t equal Forever Bliss. Row colors are adjusted as needed. Once the row color is changed, the sheet is resorted or re-filtered and I still have a solid list of trusted contractors to call when needed. The Sheet is a user- and permission-friendly way for our team and our partners to have access to this essential information. I learned from successful investors that contractor screening interviews, complete documentation and workmanship are all factors I should consider, which determines the colors I assign to the rows. At first I felt incredibly judgmental saying a contractor was good (green) or bad (red), and I really wanted to be able to work with every contractor on the planet – which I now know is impossible. And even though I wanted a free handout of a list like the one I have now when I first joined KREIA, I am glad I didn’t get one. It was pointed out that vendors who work well for me may not work well for you, and that’s OK. It’s your list that counts.

Need an Extra Phone? Got $49.99 to Spare? Investors can always use an extra phone… By Lauren Willoughby Can you imagine running your real estate business without a cell phone? Bet you can’t! Acting as your computer-on-the-go, your personal assistant, your camera, your video production studio, and, um, your phone, today’s models are more powerful and expensive than ever. Apple’s new iPhone 12 Pro Max, starting at $1,099, is a case in point. Looking for a new phone? Could I interest you in an older Android burner phone that costs only $49.99? No? OK, what if along with the phone you also got a year of cellular service that includes 1,500 minutes of talk time, 1,500 text messages and 1.5 gigabytes of data? That’s $49.99 for a whole year of service. That’s a phone and annual service plan for cheaper than what most pay for a month of service on their expensive daily driver phones. Motorola Moto e5 When I saw that deal on ebay, a direct buy from Tracfone, I had to jump. Here’s why you and other real estate investors might want to jump too:

The $49.99 phone I bought with the prepaid year of Tracfone service is a Motorola Moto e5, and it’s now my backup phone. It came with a wall charger, a cigarette lighter charger, and generic Bluetooth earpods. The Moto e5 has a 1.4GHz quad-core processor, a bright 5.7-inch hires display, front-facing camera, 8 MP rear camera, 2Gb of RAM, 16Gb of storage – and a microSDXC slot to add more. I bought the Moto e5 last month and have been very pleased. One of my favorite features is the fingerprint sensor that quickly wakes up the phone. If you would like to try a $49.99 Tracfone package too, go to ebay.com and type this in its search bar: tracfone year of service That’ll pull up a list of phones with bundled service plans. Look for the phones that say “Buy Directly From Tracfone” to get the best price: There are aftermarket vendors there who sell the same packages for more. Besides the Moto e5, you’ll also find Tracfone selling an LG Rebel phone with similar features for $49.99. And also more expensive Samsung Galaxy phones – not the flagship Galaxy models but respectable variants. OK, what if you’re thinking that 1,500 minutes is not a lot? Yes, it can go fast. If you do run out of minutes, text and ● You’re Android-curious. If you’re a longtime iPhone user data before the year is out, you could always buy a refill and who wants to give the Android operating system a try, this is top up – though that may cost more than what you paid for an inexpensive way to do it. Maybe you’ve heard about the phone and year of service! Android-only apps – such as Podcast Republic, Expense IQ But if you’ve got Wi-Fi, you could bypass the cellular Money Manager or AndrOpen Office – and would like to service to do most everything and cross the 12-month finish check them out. line with plenty of minutes, text and data left over. For ● You want a backup emergency phone in case your daily example, you could use the Google Voice app to make free driver is lost or damaged. calls to landline and cell phones using Wi-Fi. You could use a ● You want extra phone numbers to attach to different cheap Skype plan ($2.99/month) to make calls also. And flavors of your “I Buy Houses” marketing campaigns. with Google Voice you can send and receive texts too. ● You have more than one Google Voice number and What about when the year is up if you opt not to refill would like your extra number to ring through to an actual the plan? What can you do with an old phone that can no phone. (Google Voice doesn’t let you assign multiple virtual longer make calls over its cellular network? With Wi-Fi you numbers to a single physical phone.) could do the above Google Voice and Skype calling and also: ● You have lots of young relatives who need phones, and you want to avoid iPhone prices. Cool holiday gifts! ● Load up the phone with free games and give it to a kid. ● You have technophobic tenants, and you’d like them to ● Turn it into a podcast/audiobook player for your car start using the online resources you’ve built for them – stereo. You could pack that phone with dozens of hours of repair request forms, for example. Buy those renters a real estate podcasts and investing books from Audible. cheap phone and then teach them how to use the systems ● Make it part of a home security system, with motion you’ve set up. detection, using an app called Alfred. (Visit alfred.camera) 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.

photo by bruce w. hinson www.obedientcamera.com Above: Has your money game got game? Test your financial IQ by competing with other investors playing CASHFLOW 101 at our KREIA Game Night events. There will be assets to accumulate, deals to buy or reject, and financial statements to fill out. It’s like Monopoly – on steroids! Hampton Scurlock and Alexis Fentress host. October’s Game Night was our last at Bearno’s. Future Game Nights will be held at Martin’s Bar-B-Que Joint near Westport Road and the Gene Snyder. It’s the same place where we meet for Lunch & Learn and Happy Hour. Below Left: Some KREIA members showed up for networking and social face time at KREIA’s November Happy Hour – held at our new BBQ venue. (Photo by Alexis Fentress) Below Right: A player fills out an Income Statement for CASHFLOW.

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

Hallmark L.O.T.S. Home: A Closer Look Donnie Adkins shifts a rental into a flip for big profits By Lauren Willoughby In the original plan, the flip house near Dixie Highway and Algonquin Parkway that Donnie Adkins bought back in June wasn’t supposed to be a flip at all. Donnie had nearly completed renovating it into an attractive rental when he posted some photos on Facebook and Instagram. That attracted the attention of a few real estate agents, and before long, offers started coming in. So, instead of keeping The house Donnie Adkins purchased “as is” at 2623 Allston Ave. had been listed on the MLS by the house as a rental and another KREIA investor for $88,900, but Donnie negotiated for a better price. (Photo by Eric George) collecting $1,100 or $1,150 a month, Donnie accepted an offer he couldn’t refuse. estate for six years, building up a rental portfolio that “After everything is done, I pay the bank back, the realtor allowed him to quit his day job, this is the year that he and fees and commission, we should probably be walking away his wife starting flipping houses. with a little bit over $50,000,” Donnie said. “We were really “I’m new at flipping,” Donnie said. “We have probably low on this house, and we sold it for really high.” flipped four or five houses this year. All this year. Our first If investors need an object lesson in why Zillow’s Zestiwe sold was in February 2020.” Look for the mate should not be trusted, this 3-bedroom, 2-bath brick “I would say the worst flip I ever video from house delivers it: The Zestimate is a little over half of what had was the first flip. Because it was this L.O.T.S. event to be posted soon to Donnie sold the house for! The house is also a good example one of those situations where I our Videos page. of Louisville’s current climate for real estate. wasn’t really super familiar with a “The market was so hot,” Donnie said. “It's sizzling.” lot of the lingo and the terminology. But I took some of the classes around town. I took a lot of what KREIA had to offer. In the original And I took a lot of that to heart.” plan, turning this As Donnie led us on a tour of this house during the Nov. house into a rental was also meant to 3rd L.O.T.S. event, which was live-streamed on Facebook, he help with Donnie’s kept pointing out finishes and choices more in line with a rental – peel-and-stick flooring in the bathrooms, no family’s tax situadishwasher in the kitchen – but honestly, the house looked tion. “Because we've fantastic. New windows, new flooring throughout, a basement that’s been transformed into a stunning living area…. had several flips this year, I knew we It’s no wonder the offers came flooding in! needed a little bit THE NUMBERS of extra rental Purchase Price: $76,000 income to kind of Renovations: About $24,000 offset some of Estimated Sale Price: $148,000 those taxes at the Estimated Profit: About $50,000 end of the year.“ Donnie Adkins welcomed us into his flip Though Donnie Why do we call it “L.O.T.S.”? Because we Learn On The Site! house. (Photo by Lauren Willoughby) has been doing real 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 National REIA, of which KREIA is a chapter, reports on issues affecting real estate investors and also links to stories of interest from other organizations. Here is a sampling of recent news and resources that Brad Beckett, NREIA’s Director of Education & Outreach, has compiled. For more news, visit realestateinvestingtoday.com

Yardi Says the Return to Normal Remains Slow and Volatile According to the latest Yardi Matrix Multifamily Report, the average U.S. multifamily rent in September was $1,463. Summing this up, Yardi says that since the beginning of the pandemic, overall rents have only been up or down by a few dollars each month with an overall national rent decline of $8 since February. Read the report: bit.ly/k2011yardi

Real Estate Rehab Checklist

Most-Searched Items on Amazon Does the Amazon truck swing by your house on a regular basis? There is a very good chance that it does, just like for millions of other people across the nation. This infographic from Visual Capitalist does a deep dive into what exactly people are searching for on the shopping behemoth. View the infographic: bit.ly/k2011amazon

The Top 10 Housing Markets Most Vulnerable to Pandemic’s Impact In a recent special report, ATTOM Data looked at the U.S. housing markets that are more or less at risk of an economic impact related to the Coronavirus pandemic. Their findings showed that pockets of the Northeast and Mid-Atlantic regions were the most vulnerable in Q3, while the West and Midwest fared less risk. Read the report: bit.ly/k2011impact

U.S. Migration Patterns Revealed

FortuneBuilders reminds us that buying property to upgrade and then sell for a profit is an excellent way to make Investors can glean a lot of information about where money and build wealth. Their infographic offers up a handy people are moving to and from by looking at U-Haul rental checklist to quickly estimate repairs on that potential flip. data. The John Burns Real Estate Consulting firm recently See the infographic: bit.ly/k2011checklist released an update to its analysis of U-Haul rental rates between U.S. cities. They say this information gives valuable insight into the nation’s migration patterns, which they’ve dubbed “The Great American Move.” Read the full story: bit.ly/k2011migration According to the NAHB’s Eye on Housing, softwood lumber prices surged a record 29% in September, pushing building materials up 4.4% in 2020. They report that higher lumber Millennials have taken over from the Baby Boomers as prices have added nearly $16k to the price of an average new the largest generation to date and make up a majority of single-family home since mid-April. “The monthly increase is the largest in the history of both the seasonally adjusted and our nation’s workforce. With that in mind, the folks over at RENTcafé recently crunched the numbers from rental appliunadjusted data sets.” cations across the country and identified those cities where Read the full report: bit.ly/k2011lumber millennials represented the highest share of apartment applicants. Louisville comes in at Number 8. Woo-hoo! Read the full story: bit.ly/k2011renters

Softwood Lumber Prices Surge in September

15 Hot Cities for Millennial Renters

New California Law Gives Tenants, Housing Groups & Local Gov’t First Crack at Buying Foreclosures

Mortgage Delinquencies Up 2.8%

According to Mortgage News Daily, a new California law taking effect on January 1st will seek to hinder a repeat of the thousands of single-family homes that converted from ownership to rental properties during the “Great Recession.” The new law (formerly SB1079) will reportedly give tenants, affordable housing groups and local governments “first crack” at buying foreclosed homes. Read the report: bit.ly/k2011california

According to the latest CoreLogic Loan Performance Insights Report, as of July, 6.6% of mortgages were delinquent by at least 30+ days, including those in foreclosure. In July, 2019 that figure was 3.8%. Unemployment levels in hard-hit areas remain stubbornly high, leaving some borrowers house-rich but cash poor. Read the full story: bit.ly/k2011delinquent Continued on Page 28

How to Build Rapport with Sellers of Probate Property Even During a Pandemic By Sharon Vornholt I’ve been getting a lot of questions and concerns from investors about working probates during a pandemic. They are worried about how to build rapport with sellers during this difficult time. How do they not come off as cold-hearted opportunists? First of all, I would like to address the fact that this is a valid concern for investors. It affects the way you interact with sellers. If you don’t understand the probate process it won’t take long for the seller to figure that out, and you may say the wrong thing. However, if you understand two things, you realize that this isn’t a problem but rather a golden opportunity to help these overburdened, overwhelmed sellers move forward with settling the estate. What are those two things? THE PROCESS and STARTING THE CONVERSATION ► Tips for Understanding the Process Understanding the probate process is the first step when it comes to knowing how to build rapport with sellers of probate property. You simply cannot have an intelligent, compassionate conversation with the seller unless you understand the probate process. Once these folks open the estate, the next steps are laid out for them. After the estate is opened and the letters of testamentary are ready, the next step is to liquidate the assets in the estate, which includes selling any property in the estate. This is when you can buy the house. The letters of testamentary from the court spell out who is in charge. Another way to put it is that the letters clearly state who the person is that has the legal right to sell the property. I like to call this person the decision-maker. Remember that the decision-maker is the only person who can sign the documents related to the purchase of the property. Now, it’s quite likely that another member of the family will be the person showing you the property or communicating with you, and that’s pretty normal. However, when it comes to signing the sales and purchase contract, only the court-appointed personal representative can do that. Armed with a basic understanding of this part of the process, we can move forward with how to have easy conversations with the sellers. ► How to Start the Conversation with the Seller I wrote a whole blog post previously about the “Art of Conversation” and here is a link to that – http://bit.ly/k2011conversation. When it comes to having

conversations with these sellers, probably the most important thing to remember is that they are just regular people, and this is just a conversation. This will be a conversation guided by how you can help them with the sale of the property and any other challenges they have related to the property, such as: ● Back taxes owed ● Fines from code enforcement due to deferred maintenance, tall grass, or similar things ● Cleaning out the house and/or the garage ● Junk on the property In your conversation, you will want to find out what they need help with. Another way to put it is, what’s holding them back from moving forward with the sale of the property? Conversation Starters Here are seven tips that will help make this process easy for you. 1. Once you arrive at the property, introduce yourself and then simply say, “Tell me about the property.” Your job is to listen – to really give them your full attention. Listen for clues about their motivation. Show them you are empathetic by giving them your full attention. 2. They may begin to walk through a room or two as they tell their story. Remember that sharing their stories and their memories are important to them. This is an important piece when it comes to building rapport with these sellers. Patience is your friend. Don’t be tempted to look at your watch or check your phone. 3. Resist the urge to dive right into asking specifics about the property. That comes later. Rushing the process is a mistake. Your ability to do this will be an important reason why they will choose you over your competitor. Your competitor is most likely coming to the property and starting with this step. 4. Look for visual clues to guide the conversation. For instance, if you see golf clubs in the corner and you know their dad has passed away, simply ask, “Oh, was your dad a golfer?” Maybe you see a collection of cookbooks in the kitchen. In that case, you would say, “Oh, did your mom love to cook”? Unless the house has been completely cleaned out (which is unlikely) there will always be visual clues to guide the conversation. Continued on Page 26

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.

Sharon Vornholt: How to Build Rapport with Sellers of Probate Property Continued From Page 24 5. After you do this a few times, you will instinctively know when it’s time to move on with questions about the property. This is when you will want to ask questions about the age and condition of the roof and the major systems. I also like to ask then if there are any problems with the property I should know about. You will be amazed at what people will tell you just by asking an open-ended question like this. As you walk through the property you can ask them about specific things you notice. The key thing to remember is that you have followed the steps I have laid out, and you’ve already put the seller at ease and begun to build rapport. At this point, they will be ready to get down to specifics. One final question I like to ask is, “If you were going to live here, what would you do to the house”? This question will likely lead to another whole conversation that lays the groundwork for changing the seller’s expectations. That’s another thing I talked about previously on the blog in a post called “How To Negotiate Like a Pro by Changing the Seller’s Expectations.” Here is the link to that – http://bit.ly/k2011expectations 6. Once you have asked them about the repairs and updates they would do if they were going to live there, that opens another door for you. It allows you to remind them that after you buy the house and do all the repairs and updates that are needed, your buyer will want and expect those same things in a newly renovated house when you are ready to sell it. When they tell you that they can do the work cheaper themselves, just agree with them. You can let them know that they can certainly do that if they are willing to invest their money and put some sweat equity into the property. They will definitely get more money for the house by doing all the repairs and updates needed than you can pay for an “as-is” property. At this point, it’s a good idea to remind them that your expertise is in helping folks just like them who have a property in an estate to sell find a quick, hassle-free solution to their problem. Let them know that you hire qualified contractors to do all the work. Since the new buyer will almost certainly have a home inspection done on the property, it’s important that all the work is done professionally and to code. Continued on Page 32 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 Continued From Page 22

Negotiation Tip – Be a “Don’tWanter” of the Deal

Existing-Home Sales Surge 9.4% in September

Longtime investor Lou Gimbutis says that “there is a basic principle of negotiation that is fundamental” and applies to every level of human interaction. “Other things being equal, when you push or move towards someone, they will have an automatic tendency to pull away.” Read the article: bit.ly/2011negotiation

The National Association of Realtors is reporting that existing home sales jumped 9.4% in September to a seasonally-adjusted annual rate of 6.54 million (up 20.9% from one year ago). Total housing inventory at the end of September was 1.47 million units. Read the report: bit.ly/k2011surge

Foreclosure Activity at Historical Lows Due to Moratoria According to ATTOM Data’s Q3 2020 U.S. Foreclosure Market Report, foreclosure filings were down 81% from one year ago to the lowest level since they began tracking quarterly filings back in 2008. “Foreclosure activity has, for all intents and purposes, ground to a halt,” said Rick Sharga, executive vice president of RealtyTrac. He added that once moratoriums are lifted, there will be a “significant – and probably quite sudden – burst of activity.” Read the report: bit.ly/k2011foreclosures

Californians Reject Bid to Expand Rent Control For the second time in two years, voters in California have said no to expanding rent control. Proposition 21 would have allowed local governments to put rent control in place for many types of housing. Read the news story: lat.ms/36ykeJl

What Rental Property Owners Need to Keep in Mind if Selling “Owning rental property these days is a ‘mixed bag,’” said NREIA COO Charles Tassell told Business Insider. That’s caused some owners to want to step away. Read the report: bit.ly/k2011selling

Sharon Vornholt: How to Build Rapport with Sellers of Probate Property Continued From Page 26 7. Finally, before you ever make them an offer, there are a couple more questions you want to ask them. First of all, ask them if they need help cleaning out the house. Let them know that you can do that for them. This is where so many people get stuck. Next, ask them, “Is there anything else holding you back from moving forward?” You are looking once again for motivation. Here’s another way you can put it: “Is there anything else I can help you with that will make this process easier for you?” Final Thoughts I hope these tips will make you see that these conversations don’t have to be difficult. When it comes down to how to build rapport with sellers of probate property, taking a common-sense approach is really all that is necessary. If you want to learn more about probate investing, there are a couple of ways you can do that. There is a lot of information on my blog and podcast, so you can start there at LouisvilleGalsRealEstateBlog.com/blog/. I also have a sample probate letter that you can download for free. If you want to take your knowledge of this subject to a whole new level, then I encourage you to check out my course Probate Investing Simplified (probateinvestingsimplified.com) while it’s open for the final time this year.

Mike Butler: It’s Time Again for Tax Planning Continued from Page 6 absolutely. If you need a little help or tweaking, let’s schedule a screen share to make sure you have everything in order. Just visit www.MikeButler.com. To wrap this up, take advantage of the upcoming threeday Turkey Day Holiday weekend to carefully review your “Important, But Not Urgent Items.” Stay $afe, be careful, and make sure you keep a can of wasp and hornet spray in every vehicle! (Teach your kids how to use it.) To your continued $uccess

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 best-selling real estate book “Landlording on Autopilot,” now available in its 2nd edition.

● Sharon Vornholt is a local marketing expert with a national presence. Visit her site, LouisvilleGalsRealEstateBlog.com, to find years and years of articles with tips on wholesaling, marketing, branding, probate, and other real estate topics. On her podcast, Sharon interviews well-known investors from all over the country.

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

UPCOMING EVENTS ❖ December 3rd — 5-7 p.m. KREIA Happy Hour. Network and socialize with other real estate investors. We’re meeting up at Martin’s Bar-B-Que Joint near Westport Road and the Gene Snyder. Please attend only if you feel safe to do so, bring a mask, and observe the restaurant’s COVID-19 requirements.

Main Meeting Calendar Here’s what’s coming up next: • January 28th: First main meeting of 2021

Are You a Member of KREIA’s Facebook Group?

Join Us Online on November 19th Will there be fun? Yes! Will there be prizes? Yes! Will there be food and drink? We’re depending on you for that! The fun starts at 6 p.m. Register now at kreia.com.

Join now, if you haven’t already, to network with other investors online over the holidays. You’ll find wholesalers posting their deals and an experienced group of landlords and house rehabbers standing ready to answer your questions. Go to https://www.facebook.com/groups/KREIAKY

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