May 2021 KREIA Newsletter by KREIA .com

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

Monthly Newsletter for KREIA Members

Vol 5-21 May 2021 President’s Letter

Paid Advertising Rates

Legacy Wealth Building 101: Foundations of finance

Saturday Workshop

Welcome, New Members!

Mike Butler: Comfort Zone 6 question: Would you do this deal? Michelle Rawn: Courts Update

KREIA 2021 Elections preview 10 Government Affairs Links

Sharon Vornholt: A guide to 14 vetting, hiring and managing VAs Hampton Scurlock: 529 for 5/29, 16 or an Education Savings Account? KREIA Photos

L.O.T.S. Recap: Stacey Duvall transforms rental in Highview

Nina Musgrave: Rising Lumber Prices, a timeline

National REIA News Briefs

Election Sample Ballot

Dear Members and Friends, I was talking recently with a good friend about this changing real estate market, with its fast-rising prices and record low inventory, resulting in fewer financial opportunities despite the highest consumer demand in several decades. Chris McCarty As we were talking, I was reminded of the best-selling 1998 book “Who Moved My Cheese” by Spencer Johnson. The book details the struggles of several mice who had grown dependent on a steady supply of cheese that only required the mice to “show up” and eat their meals from an ever-present supply. One day the mice show up and the cheese is gone. How the individual mice cope with the change is the lesson, and how each of us can learn or not from this parable by successfully adjusting to change.

The story details how some of the mice did a better job than the others on finding alternate solutions to new cheese supplies by changing their attitudes and options for finding new access to the cheese. Like all parables, this is a story allowing the reader to relate to their own life struggles – and in our case to the changing landscape of the real estate market with its lack of available listings, willing sellers or available inventory to choose the next listing, flip or wholesale transaction. It was much easier in past years, which gave us generally more favorable conditions to replicate our respective investment models and repeat them time after time for the same profitable results. Today’s real estate market requires us to evolve as the traditional means to find deal opportunities are ever more competitive, elusive and limited. We need to emulate the successful mice: The ones that were open-minded about finding new ways to get the cheese – by exploring and using trial-and-error methods – eventually got it. Continued on Page 4

KREIA’s Amendments to 36 Restated Bylaws & Constitution Copyright MMXXI 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 MMXXI 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.

Unlock Financial Freedom for You and Your Family Learn foundations of finance – and overcome limiting beliefs – at May 27th meeting By Erik Hitzelberger “Somewhere, someone is waiting on you to become the person you were created to be.” This quote has resonated with me for years. Your legacy and mine will be (or at least should be) defined not by our job titles or affiliations but by the impact we have on others. Your someone may be your spouse, a child, a coworker, or a person you have not yet met. Moreover, it is highly likely more than one person. Most of us feel the desire to have significance and contribute to the lives of others, but too often we let our beliefs and fears prevent us from having the impact we could have. This is particularly true when it comes to money. Misplaced financial beliefs (some of which are long and deeply held) have us prioritizing the urgent over the important and/or taking actions that diminish rather than improve our financial standing. Good people both deserve and need financial freedom. Money is simply a tool that allows you to magnify your gifts to the world. Abundant quantities are readily available. We simply need to 1) understand how to access it; and 2) dedicate the energy to doing so. Here are just a few of the concepts that may be holding us back. If you have ever said or thought any of these things, it’s time to re-evaluate your belief system: ► It takes money to make money ► I need to send my kids to college ► Financial Planning is for people who have money ► Investing is too risky ► I don’t know enough to be an investor ► Contributing to my 401K is a good investing strategy ► My company will take care of me ► I can rely on the government (Social Security, Medicare, etc.) ► Democrats / Republicans will help / hurt me ► I need to wait for the market to … This month we are going to discuss how to create passive income and build wealth. We will cover how incremental changes based on fundamental financial principles help change our mindsets, our actions and our results. We will cover why and how investing, especially in real estate, can create financial security and allow you to be the person you need and want to be. Somewhere, someone is waiting. Pre-register now at kreia.com for Thursday night and for the workshop on Saturday, June 5th (see Page 4 for info). The member attendance fee at Woodhaven on May 27th is the usual $20 (for non-members it’s $30). The Zoom livestream is free for members and only $10 for non-members.

Photo illustration by Nina Musgrave

Meet Erik Hitzelberger Prior to founding multiple real estate investment companies, including Freedom Property Group, Erik spent several years driving innovation in the corporate world by leading engineering teams. He then decided to pursue his entrepreneurial passions in real estate. Since flipping his first home in 2006, he has been involved in hundreds of rehab projects and maintains a portfolio of rental properties. Erik believes success is achieved via the Actions we take, the Community we surround ourselves with and the Education we obtain. Erik counts KREIA as one of the most important networking and education groups he is involved in and has tried to support the community by serving on the Board for the last seven years, including as Vice President and Secretary. When he isn’t working, Erik enjoys spending time with his family and friends, traveling, reading and playing golf. During football season, Erik cannot be found.

Agenda for KREIA’s May 27th Main Meeting • 5:30 p.m. – Early Meeting: Hard Money Lending with Jordan Pohn • 6 p.m. – Orientation with Jordan Pohn & Stacey Duvall • 6:15 – Announcements, property pitches, sponsor pitches, & Michelle Rawn’s Legislative Update. Buffet line opens! • 7 p.m. – Legacy Wealth Building 101 with Erik Hitzelberger

5:30 p.m. Early Meeting: Hard Money Need money to tackle your next house flip – or your very first one? Find out how you can borrow the funds needed to purchase & rehab a house. Jordan Pohn of SurePoint Equity explains how it works.

Welcome, New KREIA Members! Zakk Bailey Sherry Berry Timothy Bingham Adam Blandford Robert Breckinridge John Changaris Victor Cody Chloe Cohen William Cravens Arturo Garcia Willie Harden

Lee Harmeling Kevin Johnson Kyle Kocks Dwight LaTell Jonathan Leal Tony Long Shakeith Malone Jeanitra Moore Sean Owens Mick Place John Risimini

Julie Salters Tal Siman Tov Tara Viljoen Gerard Wagner Paul Widman Donna Williams Ronald Young

KREIA’s New Member Orientation Jordan Pohn and Stacey Duvall will give a short presentation of the benefits of joining KREIA at every regular monthly main meeting. Please join them in the small conference room at 6 p.m. 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.

Workshop: Legacy Wealth Building Want to learn more about creating a legacy of passive income for your family? Erik Hitzelberger returns on June 5th to lead us in a Saturday workshop that will: 1. Explore additional beliefs that are holding us back from being successful 2. Discuss behaviors we can adopt to overcome those beliefs 3. Provide activities for building a solid financial plan 4. Help you create financial goals and milestones 5. Analyze Macro Trends – look at the role that inflation and government may play on your investments ► When: Saturday, June 5th, 9 a.m. – 1 p.m. ► Where: TBD (please check the website later) ► Cost: $97 for members, $147 for non-members; or earlybird pricing of $47 for members, $97 for non-members. Chris McCarty: President’s Letter Continued from Page 1 There are no easy answers to today’s real estate buying, selling and investing challenges. I know for certain that this market will force out the people who fail to adapt. I also know that this market will allow those who are successful in adapting to prosper. When our market will get back to normalcy is unclear today. If what you are doing has stopped working, try adjusting your approach as did the mice in the book. If you are reading this newsletter, you are likely a member of KREIA and have already taken some steps to gain from what this great organization has to offer. Step up, reach out and participate in the KREIA organization to help you find your success (cheese). If success is not your issue, perhaps you can help a fellow member who is struggling to be where you are. We will be meeting in person this month at Woodhaven Country Club on Thursday, May 27th, beginning at 5:30 p.m. We will be at regular capacity and will also be simulcasting the meeting to the membership by Zoom, if that is a better option for you. If you plan to attend in person at Woodhaven, the only payment option will be to register and pay online in advance at KREIA.com. We will not be accepting payments at the door and will not be able to accommodate you if you are not preregistered. See you at the meeting! Chris McCarty KREIA President

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

Answer This Question to Test Your Comfort Zone Would You Do This Deal? By Mike Butler To maximize your learning in this short article, you must participate in a bit of role playing or you will be wasting your time. Take it at face value, nothing more, nothing less, to learn from this powerful little exercise. If you’re like me, you were raised with all kinds of financial advice including the old phrase, “Money is the root of all evil.” Many of us were brainwashed with this idea, which was intended to force us to accept that it’s okay to be poor. HOGWASH! Throw that phrase out of your head. Over the years, my experience is that Evil People with Money will still be evil. Good People with Money will still be good people. Comfort Zone Scenario: Two months ago, you met a motivated seller at his home. Great house – 3-bedroom, 2bath brick ranch with a full unfinished basement. It’s in great shape and at most may need a coat of paint. PLUS, it’s in a great neighborhood and will make a great rental for your portfolio. This house is worth $120,000 in today’s market. Unfortunately, this meeting with the homeowner did not work out, and you left him with your business card. Today is Thursday. This seller calls you with an update. He tells you his home is going to be auctioned off at the courthouse at 10 a.m. this coming Tuesday, and he lets you know he owes $40,000 on it. This seller said you were the only investor who treated him in a nice, friendly manner, and he would much rather see you get it for $40,000 than see the bank get it for $40,000. Remember, it is very important you stick to this role playing – please do not allow your brain to create other things right now. Stick to this script. Inside you’re doing the Toyota Happy Dance and are super pumped up about your opportunity for the deal of the year. But… you are also in a pickle. You have ZERO cash, and you do not have any access to cash to buy this house tomorrow or Tuesday. Your only resource to fast cash to buy this house is your local Uncle Guido, the loan shark. You reach out to Uncle Guido to see if he will loan you $40,000 to buy this house. Uncle Guido says he will gladly loan you the $40,000 to buy this house – at 48% interest. Here’s your comfort zone question:

Will You Do This Deal? What is your first mental, knee-jerk reaction? BE HONEST!

When teaching this exercise in class, I’ve found that: • More than half the class say they will NOT do this deal • About 15% of the room say they WILL do this Deal • The others never raised their hand on either How do you eat an elephant? One bite at a time. Let’s break this deal down into little bites. I selected 48% interest for two reasons. First, you and I both agree it’s an outrageous interest rate. The next reason is this number makes it very easy for me to teach the lesson: 48% interest divided by 12 months = 4% per month 1% of $40,000 is $400. Multiply this by 4 to get 4%, and this number is $1,600 Now here’s your “real question”: Would you pay $41,600 to own this $120,000 house for 30 days? And further, what could you do with it in 30 days or less? • Wholesale the house to another investor? • Cash-out refi for a long-term rental? • Paint it and retail it, especially in today’s hot market? If your first mental, knee-jerk reaction was NO, you would have missed out on a huge deal. Sure, 48% is outrageous; however, borrowing at this insane crazy rate still gives you a deal of the year. 4% interest for 30 days is only $1,600. This is cheaper than a furnace, roof, kitchen, bath and more. And to think you might have kicked this to the curb because of the interest rate… please think again. The message and lesson here is not to borrow money at high rates, but to give careful consideration to all the variables and components in structuring your deals. Remember, you and I were brainwashed into believing we must borrow money at the cheapest rate possible. We were also encouraged to RUN, Forest, RUN when we are presented with interest rates we deem too high. This brainwashing will definitely affect your ability to structure great deals when you have no cash, or no access to any cash. 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 bestselling real estate book “Landlording on Autopilot,” now available in its 2nd edition.

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Update on the Courts By Michelle Rawn I thought I was going to have really good news to put in the newsletter this month advising everyone that a federal court in D.C. struck down the CDC eviction moratorium. But as I’m sure you are aware, the Department of Justice filed a notice of appeal and an immediate stay on the order, which was granted, so things have not changed. Currently the eviction moratorium will expire on June 30, 2021. As this deadline has been extended numerous times, I believe it will be extended again unless the original order is upheld on appeal. The CDC moratorium is nationwide but only applies to evictions for non-payment of rent where all adults of the leased premises have submitted a signed CDC Renter’s Declaration. Evictions for non-rental lease violations (unauthorized occupants, disturbing the quiet use and enjoyment of the neighbors, etc.) and non-renewals/lease terminations are not affected by the CDC eviction moratorium and currently can move forward as usual. The moratorium did not cancel or suspend rental payments, but basically guarantees that a tenant cannot be evicted for non-payment of rent. While this moratorium is in place, 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. Some of the assistance programs can pay as much as 12 months past rent, plus 3 months future rent. Please be sure to review all of the requirements of the rental assistance programs as most of them require the landlord to not evict the tenant for any reason for a set time period once the funds are received, and some also require you to provide a 30-day notice going forward for non-payment of rent instead of the standard 7-day notice. Obtaining an eviction judgment has become more difficult in all situations. Per order of the Supreme Court of Kentucky, the courts are slowly starting to open up and return to normal. As of now, most jurisdictions are still requiring eviction hearings to be online. Hopefully, things will be able to return to pre-Covid normal someday soon. As all of us know, things are still changing rapidly. Please feel free to reach out to me or John in 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

2021 KREIA Election It’s that time of year again for the KREIA election. The Election Committee would like to inform you of the election procedure. KREIA is run by a board of directors consisting of five officers (President, Vice President, Secretary, Treasurer and Treasurer Elect), 12 at-large board members, the immediate Past-President, and the Parliamentarian. The officer positions serve for a one-year term. The atlarge 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 two-year term has expired or has to resign prior to the end of his/her twoyear term. There are no term limits, and all incumbents may run for re-election if he/she so desires. Nominations will be taken from the floor at the April and May meetings for the five officers and six at-large board positions each year. Nominations will be closed after the May meeting, and the election will be held at the June regular meeting. Those elected at the June meeting will be sworn in take office at the July regular meeting. If you would like to nominate someone, or if you would like to run yourself, please contact me via email at Michelle@rawnlawfirm.com or announce the nomination from the floor at the April or May meeting. All board members are required to participate on at least one committee. Several members are actively involved with more than one committee and several are a committee chair. In order for KREIA to be successful, all board members are required to be an active member helping at all KREIA events. Please see Page 33 for the sample ballot for those individuals who will be running for officers and board members. There is still plenty of time for you to throw your name in the hat. If you have any questions about the election or governing process of KREIA, please feel free to contact me. – Michelle R. Rawn, Chairman of the Election Committee

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

Guide to Working with Virtual Assistants By Sharon Vornholt Editor’s Note: This is a condensed version of Sharon’s comprehensive, updated guide to hiring and working with virtual assistants – VAs – which she has published on her website and allowed us to borrow. Be sure to visit her site for the downloadable PDF version of the guide and other resources. For the PDF, visit bit.ly/sharonva and scroll to the link at the bottom of the article. For Sharon’s other offerings, visit LouisvilleGalsRealEstateBlog.com

Most folks choose the second option. They will try to do it all until they feel like they are drowning. I would like to propose to you that it should actually be the first option. Outsource something early on that will create leads and revenue for your business. Begin working with a virtual assistant now so that he or she will grow with you as your business grows. Let’s talk about the #1 reason people have for not working with virtual assistants.

Reason #1. I Can’t Afford It! Yes, you can. Just start small. ● You can get a quality virtual assistant for $4 or $7 per hour for tasks that don’t require special skills. For upperHiring and Working with Virtual Assistants Hiring and working with virtual assistants doesn’t have to level work like web security or anything more complicated (or requires a higher level of skill), you can expect to pay be hard. One of the biggest mistakes real estate investors more. A highly skilled VA will be in the range of $20 an hour. make is waiting too long to get help. I know because I was guilty of this. Whether it’s hiring an actual employee or a virtual assistant, you need to do it sooner rather than later. Reason #2. I Don’t Know Where to Start That’s actually a pretty common fear business owners That’s the reason I have put together this comprehensive face. So just feel the fear and move forward anyway. It’s guide to hiring and working with virtual assistants. I want important to realize that no two real estate businesses are you to just take the leap and get started. alike. The plan you create for your business will be unique to your particular situation. The Problem In the comprehensive guide (find it at Sharon’s website), Let’s face it: one person just can’t do it all. We need help if our businesses are to grow and thrive! I would go so far as we will cover all the pieces to the puzzle for hiring and working with virtual assistants such as: to say you need to outsource or die a slow, painful death • Where do I find someone? from being overworked and overwhelmed. Once you dive • How much will it cost? into working with virtual assistants, it can change your life. • Which tasks should I outsource? So what do you do if you can’t hire an employee right out • What should I outsource first? of the box (which, by the way, most people can’t do)? You • How to create procedures ONCE that you can use over need to look at outsourcing some of the work. You can start and over again small, but make a plan now and get started. Many people • What is a task package, and why do I need one? start this process by hiring and working with virtual • How to create simple training videos in 15 minutes or assistants (or VAs, as they are commonly called). less for your VA using Zoom, Loom or Screencast-o-Matic • And much, much more You Need a Master Plan You really need a master plan for hiring and working with How Do I Figure Out What to Outsource? virtual assistants, and here it is in the simplest of terms: The first few things you outsource should be something Your plan should be to fire yourself. That’s right. You that at least has the potential to generate income for your want to make yourself irrelevant in your business. You do business. Since money is the number one reason we don’t this by outsourcing everything (over time) except those tasks that require you to be the face of the business. When outsource early in our businesses, it’s not unreasonable to want to outsource something that will generate leads or you can’t afford to hire an employee, hiring virtual assistants can be a real lifesaver. Some of us actually prefer generate revenue. The other thing to outsource is things you hate doing or are really bad at. having VAs rather than actual employees. There is a great book on this topic called “Clockwork” by Mike Michalowicz. After reading this book, you will be Which Comes First? crystal clear on which tasks you should be focusing on and Is it creating the work for virtual assistants to grow my which tasks you should outsource. business faster or waiting to hire someone until I have Continued on Page 22 grown my business and I am swamped? Copyright MMXXI 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.

529 for 5/29? Or an Education Savings Account? By Hampton Scurlock May 17th is this year’s personal income tax filing deadline and September is National College Savings Month, so why are we talking about 529 plans and Education Savings Accounts now? Well, it is a great time to save for the future, and May 29th is actually 5/29 and a great topic for a helpful article regarding two tax-favored types of savings accounts that are often used for college and/or education expenses. Education Savings Accounts (ESA) and 529 College Savings Plans are both designed to fund college and education expenses on a tax-free or tax-favored basis once funds are contributed. Both allow for tax-deferred growth of investment and tax-free withdrawals for qualified expenses/withdrawals (usually for college and/or education-related expenses). It is possible to have both plans, but there are contribution limits (and income restrictions on the ESA). This is a powerful benefit when saving for college and education expenses. You can open up a 529 plan with a financial advisor or directly with a plan provider. Every has state has a plan or plans that you can choose from, which gives you a large amount of choices. Kentucky’s plan is direct sold (no commissions) and offers a variety of mutual fund investment choices at KYSaves529 (kysaves.com). KYSaves529 also offers an in-state tuition rate benefit if you move out of state and exclude the value of Kentucky 529 plans for need-based financial aid (see their website for details). They even have an app for your phone, and friends and family can contribute or send a gift to the child’s account (up to the contribution limits, which vary by plan). KYSaves529 also offers the ability to make monthly contributions in the amount of $25 or more from your bank account, or $15 per pay period from your paycheck. According to Investopedia.com, all state plans allow contributions of at least $235,000 per child/beneficiary, and Kentucky allows $350,000 total contributions per child/beneficiary. You can also look into an ESA – Education Savings Account – which allows you to self-direct the investments into real estate or alternative investments. The ESA’s

contribution limit is $2,000 per child per year (subject to income limits). I am a fan of these accounts because they have greater investment flexibility, allowing for investments in real estate, tax liens, land, etc. This gives the ESA a huge benefit not offered by 529 accounts. You need a custodian to set up an ESA, and National REIA sponsor Equity Trust Company (trustetc.com) offers these services, as do other banks and custodians. KREIA members get a discount on setup and annual fees with Equity Trust. Your kids or grandkids may not be real estate investors yet, but they could be. Kids can learn about money and

investing this summer at a couple of KREIA’s Game Night events. On June 17th and July 15th, bring the kids (ages 6 and up) to Martin’s Bar-B-Que Joint (3408 Indian Lake Drive). This is a great opportunity for everyone to have some fun and learn valuable investing skills. There will also be adult versions of the game being played at the same time. KREIA members are encouraged to bring guests and potential KREIA members to our Game Night and Happy Hour events. You do NOT have to be a KREIA member to attend our social events. KREIA Happy Hour happens the first Thursday of every month, from 5 p.m. to 7 p.m., and Game Night happens the third Thursday, from 6 p.m. to 8 p.m. I hope to see you there. Hampton Scurlock is a KREIA Board Member, investor, mentor, and father of 2. The preceding is just for informational purposes only and is an opinion and not investment, legal, tax, or fashion advice. Consult a paid professional before making any legal, tax, investment, or important decisions. Refer to IRS publications for information on taxes, 529s and ESA plans. Also refer to a 529 plan’s website or custodian website for specific information.

photo by bruce w. hinson www.obedientcamera.com

Above: Our “Rehabbing for Investors” main meeting on April 22nd was our first time back at Woodhaven in over a year, and we capped the event at 100 members. It was great to be back! Woodhaven kept us supplied with masks and hand sanitizers. This month we should be back to full strength. Below: We had technical difficulties hearing Parliamentarian Michelle Rawn’s Legislative Update from the Zoom call until investor Ed Hardman suggested a brilliant idea: Have V.P. John Jones call her and hold the phone up to the mic. Thanks, Ed!

KREIA

Photos

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

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photo by bruce w. hinson www.obedientcamera.com

photo by bruce w. hinson www.obedientcamera.com Above: Woodhaven gave us plastic gloves to use in the buffet line.

photo by bruce hinson obedientcamera.com

At Left, left to right: Stacey Duvall, Wendy Kays and Jacqueline Smith coheadlined KREIA’s first all-women rehabbers panel. They rocked it. They were on fire!

Highview Hoarder House: A Closer Look Stacey Duvall transforms house into moneymaker for her portfolio Stacey Duvall walked the talk when she hosted KREIA’s April 27th L.O.T.S. event. Following on the heels of April’s main meeting, where she was a co-presenter on the topic of “Rehabbing for Investors,” she invited KREIA members to examine her latest rehab house in progress. But it wasn’t a typical project for her – this was a hoarder house that took, count ’em, nine 30-yard dumpsters and two weeks to clean out. “We bought this house at a funeral,” Stacey said of being Stacey said of the acquisition. She was approached by a family member at a Stacey Duvall and her husband, Ron Burns, teamed up to turn this 2-bedroom, 1-bath “very, very distant relative’s” service house at 5904 Tralee Lane into a 4/1, forcing appreciation. (Photos by Alexis Fentress) in December. The family member knew Stacey was in real What did Stacey and Ron do to fix up the house? In a estate and mentioned he had a house. rehab that took about 4 months, they removed a wall be“I’m going to burn it to the ground,” he said. tween the kitchen and living room, adding a beam, “which “I said, ‘Don’t do that! Let me look at it. We’ll figure it completely changed the feel of this house,” Stacey said. out.’” “I am my own GC. Ron and I do all the subcontracting So they met at the house, encountered the piles of stuff ourselves,” she said, adding that the house didn’t need that prevented them from taking a close look at the interior, much structural work – mostly mechanicals and cosmetics. and made a creative finance deal: Stacey and her husband, “One of the biggest transformations was the bathroom.” fellow investor Ron Burns, would buy the house subject to The bath underwent a complete gut, down to the studs. the existing $49,000 mortgage. Now it has a new vanity, toilet and Look for the tub, along with an elegantly tiled floor. Normally L.O.T.S. video from Another big project they undertook this L.O.T.S. event hosts showcase propwas converting a poorly insulated fam- to be posted soon to erties they are rehabour Videos page. bing for retail sale. But ily room – which had originally been a Stacey is a buy-and-hold 2-car garage – into 2 more bedrooms. Stacey said having 4 bedrooms means they’ll get a higher appraisal (by about investor: When she acquires a property, she $35,000) and can ask for $400 more per month in rent. Stacey, who’s also an interior designer, picked out her refinances it into a rentown finishes. Though the goal was durability – “we use a lot al and adds it to her of tenant-proof materials like luxury vinyl tile and granite portfolio using the counters” – the result is gorgeous. BRRRR method (Buy, After the closing, where they’ll pay off the underlying Rehab, Rent, Refinance, loan, Stacey said they’ll use the funds left over from the 75% Repeat). At this L.O.T.S. event, cash-out refi, around $110,000, to buy more houses. KREIA members got a treat. They got to see THE NUMBERS how Stacey rehabs a Purchase: $49,000 Post-refi PITI: $1,000 rental – and also a math Fix-Up Costs: $56,000 Monthly Rent: $1,635 lesson showing the magAll-in Costs: $105,800 Real estate power couple: Stacey is a Monthly Gross Cashflow: $635 ic of a best-case BRRRR New Appraisal: $215,000 broker who’s sold real estate for 22 years. Ron “has been doing flips and deal: big cash at closing, Why do we call it “L.O.T.S.”? Because we Learn On The Site! remodels for forever.” plus big cashflow. 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: Guide to Working With VAs Continued from Page 14

First Steps for Hiring, Training, and Working with VAs Write down everything you do in your business. Be sure to include things you should be doing but don’t currently have the time to do (or you’re just avoiding). Look at all of those tasks, whether daily, weekly, monthly or even occasionally. Once you think you have everything written down, the next thing is to separate them into two lists: tasks that have the potential to generate leads or income and those tasks that aren’t directly revenue-producing. Things like clerical work don’t generate income (unless this is your business). Those would go on the non-revenue generating list. For now, I want to concentrate on revenue and leads. You will probably have some of these things listed below on your revenue and lead generation list. Most marketing activities can be outsourced like: • Direct Mail • Bandit Signs • Cold Calling • Responding to leads from your website • Social media posts (for business). These can be prescheduled by your VA using a free service like Hootsuite, Coschedule, or SmarterQueue. • Return mail. Most people are throwing these leads away. Try to find new addresses for these folks using Google or by skip tracing them. These leads are golden! Some tasks have the potential to generate revenue, but the result won’t be immediate. These are things like: • Posting articles to articles to your website • Creating videos • Video editing • Uploading your videos and optimizing on YouTube • Sending thank you cards to sellers once you have looked at their property • Creating lead magnets or freebies for your website • Sending video “thank you notes” to sellers using a service like Bonjoro. There are so many more things that are perfect for outsourcing. You will need to make your own list. Planning for the Future Once you have figured out your income and leadgenerating activities, you can begin making your second list. These are not necessarily revenue-generating activities, but they are things you don’t want to do. These are prime things to consider when you are hiring and training virtual assistants. If you are a new real estate investor, you will probably have to wait to implement the tasks on this list. But if you

have been in business for a while, you might be able to outsource some of these types of tasks now. So what are these tasks? • Things that you hate to do • Repetitive things that don’t require a lot of skill or knowledge to do • Things that you really aren’t very good at that someone else would be better at doing. This list will be different for almost everyone. Once again, these are not revenue-generating tasks, but they are things that eat up your time and ultimately need to get done. Here are 5 things I would personally put on my list: 1. Bookkeeping – it’s not hard, but I hate to do it 2. Entering contacts into my database 3. Regular updating of my lists. This is a tedious job, and I really hate doing it. It is also something I put off doing. 4. Research on properties 5. Help with my podcast and my blog Your long-term plan should include any tasks (that should be done regularly) that you routinely put off doing. These are things that should be outsourced. Get rid of them! Where Do You Find an Affordable Virtual Assistant? So…exactly where do you find a VA or part-time worker for your real estate investing business? This is actually one of the easier parts of outsourcing. Before you ever get to the stage of hiring and training a virtual assistant, you have to find someone to interview. Here is Where to Start Your Search If you are looking to hire someone, here are some places to start. You can find both short-term and long-term help from sites like Upwork. For graphics and other occasional things you need to have done, I have used all the other sites listed below. • Upwork • Fiverr • 99 Designs (for graphics) • Rev (for transcription) These are just a few places you can find someone to help out in your business I’ve had good luck with Upwork. The person helping me with my blog and my podcast came from Upwork. Here’s a big shout-out to Carol. She is awesome! Here’s a tip for you. When you find someone good, try to hold onto them. Let them know that you appreciate them. You’re Going to Pay More for Special Skills The more specialized the skills needed for a particular job, the harder it may be to find someone. You can also expect to Continued on Page 24

Sharon Vornholt: Guide to Working With VAs Continued from Page 22

On Average, How Much Will It Cost Me? You can find a low-level VA for somewhere around $3-$6 an hour. The median annual salary in the Philippines in 2021 is just under $13,000 a year, which is around $6 an hour. My recommendation is to pay your people more than the average wage if they do a good job.

pay them more because they have special skills. If you find the right person, they will literally change your life. Another point to consider is whether you want to spend months training someone to do higher-level work, or do you Starting the Hiring Process want to pay someone who is already good at these things, When I first started looking for someone on Upwork, I pay what they are worth and move on? posted my job and waited to see who applied. Then I sorted That’s exactly what you want to do. Hire a specialist. through those online applicants in the same way you would if they were actual job applications sitting on your desk. My Awesome VA’s When you post jobs, you’ll find that suddenly everyone I have a VA that I mentioned before that keeps things up has the skills you are looking for. and running on my websites and my server. My main VA, I have a different procedure today: I like to look at the Carol, is located in the Philippines. She is amazing. Carol does higher-level work for me. She is smart, detail-oriented, candidates and then reach out to them. I look for someone really good with software, and she is very efficient with her specifically on Upwork that has listed the skills I’m looking for in their online resume. time. I’m very lucky to have her. I had another person named Sheila who was located in Time to Interview the Philippines when I first started working with her. She After narrowing the list of possible candidates, I asked has since relocated to New Zealand. She started working for me probably 6 or 7 years ago doing lower-level tasks. I think each to do a “video Interview.” Doing the interview over Zoom made my decision much of her as “family” now as I watch her children grow up easier. One of the people I was most interested in had through the magic of Facebook. indicated that she worked just over 2,000 hours for one Your VA is a valuable part of your team, and it’s imporperson the previous year. (Hours worked is tracked by tant to work with them much like you would an actual Upwork.) This was ultimately the person I chose in part employee that works in your company. Good communibecause of her ongoing relationship with one employer. All cation is critical. of the reviews on her work were excellent. One of the biggest reasons I chose her, though, was due So, Where Do I Find My VA’s? to our Zoom interview. So what did I learn from this? I find them primarily on Upwork. Her English was excellent, so there was a good probaUpwork is easy to use, and they have good systems for tracking the time people on your team spend on your work. bility that her transcription skills would be better than average. She presented herself as an intelligent, very professThey send you regular weekly updates, but you can check sional, detail-oriented person that wanted to do a good job. your VA’s time log online at any time. I would always recommend doing a video interview. VAs I also use Fiverr all the time. I love Fiverr. I guess you could say that I (kind of) have a “Fiverr addiction.” To date, I won’t have any problem with that request. They do these all the time. Zoom interviews also let them check you out. have ordered more than 100 “gigs,” as they are called. If you aren’t familiar with Fiverr, it is a site where you can get just about anything done for $5 plus a small service charge, Training Your VA You need to be really thorough when it comes to training so be sure to check it out. VAs. You can’t expect them to do a good job if you don’t have good procedures for training them. I like to put What If No One Is Interested? together what I call a “task packet” for lower-level workers. Someone will always be interested. What do I include in this online packet of information? Typically, several people will respond to your posting, so • An overview of the job I want to be done you will always have candidates to choose from. You want • Step-by-step instructions to look at their skills and check their ratings on Upwork. • Any login information needed to do the job (I Good ratings are extremely important. I look for applicants use LastPass for sharing password links) with a 98%-100% positive rating. I also look at the recom• A screen capture video for further clarification menddations from past clients. Some might call this a little bit of overkill, but I have I like to find someone who has worked for another person for a long time. That usually means they are a good, found that it makes this process a whole lot easier for Continued on Page 34 reliable candidate. 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.

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 MMXXI 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.

Timeline of Rising Lumber Prices: 2007-Present In the news or industry publications, you’ve probably read about lumber prices being at an all-time high. I’ve even heard it called “gold” in Home Depot! So, what’s driving up prices? We know the basic effects of supply and demand, but what is the history of our current lumber situation? We can look as far back as we want—here, I’ve selected to stop at 2007. A friendly reminder to our readers: In these uncertain times, increasing material costs and inventory shortages must be heavily considered when we’re planning our projects. -Nina Musgrave Minimal amount of mills COVID Precautions restarting or adding exacerbate labor 150 sawmills shut Harvesting of lumber capacity. Continued constraints. Booming down or idled in the restricted due to shortages and higher residential market results Great Financial Crisis protect habitats prices expected in huge demand shock

2007-2011

2011-2020

2007-2020 Thousands of acres of timberland burned in North American wildfires

Mar 2020-Present

Present-2022

Mar-May 2020

Nov 2020-Present

Mills shut down or reduced production due to COVID

Prices double & triple. Lumberyard throttling and rationing of sales

Inspired by John Burns Real Estate Consulting, originally published on March 5, 2021.

This Photo by Unknown Author is licensed under CC BY-SA

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 ???

How Remote Work May Impact Housing Location Preferences

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 A new report from Apartment List says remote workers news and resources that Brad Beckett, NREIA’s Director of moved more than on-site workers over the past year, but Education & Outreach, has compiled. For more news, visit most moves were local. In addition, they found that “more realestateinvestingtoday.com space” was the top motivator for pandemic moves, regardless of remote work status. Read the report: bit.ly/k2105remote

Billions in Coronavirus Aid Is Slow to Reach Renters & Landlords

Throughout the pandemic, National REIA has encouraged housing providers to work with their tenants and share resources – especially the Emergency Rental Assistance Program. However, a recent article in The Wall Street Journal (republished on realtor.com) said that billions in COVID-19 aid have been slow to reach renters and landlords because state and local agencies disbursing federal rent relief have never had to allocate such huge sums so quickly. Read the article at Realtor.com: bit.ly/k2105aid

Demand for Land Sees Increases During the Pandemic According to a recent report from the National Association of Realtors, land sales rose at a healthy pace in 2020 compared to a collapse in transactions of commercial real estate structures. “…But zoning regulations will pose constraints to residential land development.” Read the report: bit.ly/k2105land

Kidde Recalling TruSense Smoke and Smoke/Carbon Monoxide Alarms

Prices for Used Pickup Trucks Are Skyrocketing We all know about skyrocketing lumber prices. Well, here’s another indicator worth noting; A recent report on FoxNews says a sharp drop in the supply of new vehicles due to the ongoing chip shortage combined with a strong demand for cars has led to an increase in the prices of used pickup trucks. They report that the average wholesale price for a pickup hit $30,093 in mid-April, up from $28,121 in March. In April 2020 it was $17,201. Read the story at FoxNews: fxn.ws/3yvbYay

Best Cities for 1st-Time Homebuyers Realtor.com says homes across the country are selling within days (with multiple offers), pricing out buyers of all ages—especially millennials. That in mind, their numbercrunchers researched to find out the best cities for firsttime buyers. “Smaller, less-hyped cities took the crown.” Read the story at Realtor.com: bit.ly/k2105first

Biden Wants to Close Longtime Real-Estate Tax Loophole

The United States Consumer Product Safety Commission The Wall Street Journal is reporting (reposted on says Kidde is recalling TruSense Smoke and Combination Realtor.com) that, tucked into President Biden’s new $1.9 Smoke/Carbon Monoxide Alarms due to risk of failure to alert trillion spending package, is a provision going after 1031 consumers to a fire. exchanges. According to the report, Biden’s proposal would See the recalled models: bit.ly/k2105alarm abolish 1031 exchanges on real-estate profits in excess of $500k. Read the story at Realtor.com: bit.ly/k2105loophole

Housing Starts Down Nearly 10% in April 2021

Rentable: May Rent Prices on Rise

Oh, what a difference a month can make. The U.S. government is reporting that privately‐owned housing starts Rentable says that the median nationwide rent price for in April were at a seasonally adjusted annual rate of one-bedroom units in April was $1,131 (up 0.62%) with 1,569,000, which is 9.5% lower than March’s revised number. two-bedroom units coming in at $1387 (up 0.36%). However, this figure is 67.3% higher than one year ago. See the data set of U.S. cities: bit.ly/k2105rentable Read the U.S. Census PDF: bit.ly/k2105starts Continued on Page 34 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 2021 ELECTION SAMPLE BALLOT The KREIA 2021 election will take place both virtually and in person. This year you will be able to choose to vote in person at the June 24th meeting, online at the KREIA website or by requesting a ballot prior to June 21 st by emailing Michelle R. Rawn at Michelle@rawnlawfirm.com. In-person and online voting will end promptly at 7 p.m. (EST) on June 24 th. Absentee voting ends at 11:59 p.m. (EST) on June 21st. (This preview lists candidates who have declared themselves. More candidates may come forward.)

OFFICERS (to serve a one-year term) Vote for 1 person for each position President: Vice President: Secretary: Treasurer: Treasurer-Elect:

□ Erik Hitzelberger □ Stacey Duvall □ Jordan Pohn □ Mike Grinnan □ Wally Kallbreier

Write-In □ ______________ □ ______________ □ ______________ □ ______________ □ ______________

I approve the 1st amendment □ Yes to the KREIA Constitution:

□ No

I approve the 1st amendment □ Yes to the KREIA By-Laws:

□ No

Please review these documents starting on Page 36

BOARD-AT-LARGE (to serve a two-year term) Vote for 6 people □ Donnie Adkins □ Eric Feller □ Rue McFarland □ Hampton Scurlock

□ Marcus Britton □ Alexis Fentress □ Karen McKnight □ Steven Staub

□ Will Chandler □ Ian Hooper □ Frank Miller □ Erin Wegrzyn

□ Mary Conrad □ John Mays □ Greg Nalley □ Komeneci ‘Neech’ Yates

Sharon Vornholt: Guide to Working With VAs Continued from Page 24

National REIA News Briefs Continued from Page 30

everyone involved. Also, when you thoroughly document everything needed to perform the task or complete the project, you have a procedure in place if you should ever need to train someone else down the line. I typically use Zoom or Screencast-o-Matic for creating these screencast videos. You can also use Loom. All of these are really easy to use. There is a free version of these programs to get started with.

What the Reapportionment Numbers Mean

Communicating With Your Virtual Assistant Once you start hiring and working with virtual assistants, it becomes all about making the process easy. Asana, Dropbox, and Trello are a few of my favorite tools. They work together seamlessly. I use Asana to communicate with my VAs and Dropbox to store files like videos and audios. Trello helps keep me organized. The beauty of this is you can now attach files from Dropbox right in Asana. You can also have multiple teams. Here’s a really cool thing, too. It was one of my VAs that originally told me about Asana! Outsourcing Your Direct Mail I have all of my postcard mailings done by a postcard mailing service. That is one of the easiest things to outsource, and there are many different companies you can use. You can pretty much set it up to be on autopilot. Today, it’s also cheaper to outsource your direct mail letters to a company for printing and mailing. My go-to company for direct mail marketing is Open Letter Marketing. The type of mail piece matters! For some of my niches, like probates, I only use (mail merged) white computer-generated letters that look like the envelopes have been hand-addressed. ● Want a PDF Version of This Guide? We couldn’t fit all of Sharon’s comprehensive guide in these pages. Please go to bit.ly/sharonva for the full PDF version. You’ll get tons more info on how much to pay your VA, payment methods, the hiring and vetting process, examples, personal experience, and thoughts on what you can do in-house with direct mail marketing for leads. 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.

In late April the U.S. Census Bureau released their state population counts from the 2020 census that will, among many things, be used to determine how many congressional seats and electoral votes each state receives. The Cook Political Report recently put together a short analysis of what this means for the 50-state composition of the next Congress as well as the electoral map across the nation. View the analysis: bit.ly/k2105census

The Cost of the Pandemic Payouts to the U.S. Budget How much has the U.S. government spent responding to the Coronavirus pandemic? Howmuch.net’s infographic takes a snapshot spanning federal agencies and how much they have received to combat the pandemic. “It’s quite eyeopening….” View the infographic: bit.ly/k2105payout

Foreclosure Activity Continues to Increase Despite Moratorium ATTOM Data says, despite moratoria, there were a total of 33,699 U.S. properties with foreclosure filings in the first quarter of 2021. While this figure is down 78% from one year ago, it does represent a 9% increase from Q4, 2020. Read the report: bit.ly/k2105foreclosure

Regulatory Costs Add $93k to New Home Prices Just when you thought lumber prices were jacking up home prices, along comes a new study from the NAHB that says government regulations (imposed by all levels of government) account for $93,870, or 23.8% of the current average sales price of a new single-family home (currently $397,300). Read the report: bit.ly/k2105costs

Demand for Second Homes Has More Than Doubled Redfin says the rise in demand for second homes is more than twice the increase for primary homes, with the number of buyers who locked in mortgage rates for primary homes rising a whopping 178% from one year ago. Read the report: bit.ly/k2105demand

KREIA’s Amendments to Restated By-Laws & Constitution KREIA members, at our June 2021 meeting you will be voting on our organization’s restated constitution and bylaws. Here they are for your examination. 2. The Board of Directors shall consist of not less than (5) and not FIRST AMENDMENT TO RESTATED BY-LAWS OF THE KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION more than sixteen (16) Active Members and the elected officers of this Association shall consist of a President, a Vice President, and INC. a Secretary and/or Treasurer and a Parliamentarian who shall be selected in the following manner: I. MEMBERSHIP a. Before the end of February each year, the Parliamentarian, subject to the approval of the Board of Directors, shall appoint a nominating committee of three persons, which shall consist of the then sitting President, the Parliamentarian and one Board of 1. Active Members Persons who have paid the required annual fee Director, to nominate candidates for the Board of Directors and the may be accepted as Active Members of KENTUCKIANA REAL offices of President, Vice President, Secretary and Treasurer. ESTATE INVESTORS ASSOCIATION INC. by a vote of the Membership on the nominating committee shall not preclude its Board of Directors. member from becoming candidates for office.

Individuals may be invited by the Board of Directors to become members of this Association according to the following classifications and terms:

Active Memberships expire annually and shall be construed as subject to renewal on each anniversary of the Active Membership date; PROVIDED, that a member shall be considered in good standing only after annual dues have been paid into the Corporate Treasury for the current fiscal year.

2. Honorary Members Honorary Members shall be renamed as Lifetime Members and this membership shall be obtained by completing at least one full term as President of the KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. Annual Dues shall be waived for Lifetime Members. 3. Dues The Board of Directors shall have the power to change the amount of dues levied annually on the members. 4. The Directors may specify the terms and conditions of membership. For each classification they may require from applicants as much information as they consider necessary to determine the applicant’s eligibility for membership in the Association.

b. The Parliamentarian shall be appointed annually by the Board of Directors. The Parliamentarian may resign at any time or be removed from office by committing an action which violates the Code of Ethics of the KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION, INC., or takes such other action which permits removal from office by a vote of the Board of Directors. c. The President, Vice President, Secretary and/or Treasurer shall be elected each year for office and serve terms as officers for one (1) year each. Directors shall be elected for two (2) year terms with eight (8) and seven (7) Directors elected in alternate years. d. The candidates nominated shall be announced at the first regular meeting of the Association convened after their selection, at which time the opportunity to make additional nominations shall be given. A person may be nominated as a candidate for the Board of Directors by submitting their name in writing to the Parliamentarian.

At the June meeting of the Association, from 5:30 p.m. EST until 7 p.m. EST, the Parliamentarian shall cause ballots, containing the names of the Candidates, to be circulated to all Members of the KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. who are eligible to vote and who are present at the meeting. In addition to these ballots, appropriate explanatory 6. The Board of Directors has the right to remove any active mem- material pertinent to the time and method of balloting shall be ber for cause, or for a violation of the Code of Ethics of the KEN- circulated, including full explanation of the method to be followed TUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. for absentee voting. Balloting shall be by person at the annual meeting or by absentee ballot in the form determined by the 7. The Board of Directors may designate the terms upon which Parliamentarian. Those receiving the largest number of votes in the non-members are admitted to the professional and business balloting are elected. The results of the election shall be announced meetings of the Corporation. at the end of the June meeting. 5. Any member of the Association may resign at any time. Any member whose payments are thirty (30) or more days in arrears shall be dropped from membership and be required to reapply in order to become a member.

II. ELECTION OF OFFICERS AND DIRECTORS

1. Active members of KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. who are eligible to exercise voting privileges shall be eligible to become Officers or Directors of this Association.

3. If an Officer, or a Director, after election becomes incapacitated for service, the vacancy shall be filled through appointment by the President with the approval of the Board of Directors to serve until the next regular election. Should the President become Continued on Page 38

KREIA’S AMENDMENTS TO RESTATED BY-LAWS & CONSTITUTION incapacitated, the Vice President shall serve the remainder of the President’s term and the Board of Directors shall choose one of the Board of Directors to serve as the Vice President until the next regular election. 4. Officers and Directors shall be eligible for re-election. 5. All active members of KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. shall be eligible to vote as well as to hold office. 6. Any officer or Director missing three consecutive board meetings may be replaced at the discretion of the Board. III. DUTIES OF OFFICERS 1. The President shall be the chief executive of the Association, he or she shall act as Chairman of the Board of Directors and of the Executive Committee, and perform all other duties prescribed for him or her by the Constitution and these By-Laws and any additional duties consistent therewith as directed by the Board of Directors. 2. The Vice President shall assist the President, carrying out such special duties as may be assigned by the President, or by the Board of Directors. 3. The Secretary shall conduct correspondence with members and others; he/she shall exercise special diligence to assure the full and complete preparation and the safekeeping of the Minutes and the Historical Records of the Association in permanent form. 4. The Secretary shall maintain contact with all activities of the Association, supply information to the officers and Directors as requested and perform other duties appropriate to the Office of Secretary as directed by the President and the Directors. 5. The Treasurer shall receive annual payments and other moneys, deposit the same in a bank approved by the Directors, and invest funds as authorized and directed by the Board of Directors. The Treasurer shall be responsible for all disbursements and exercise diligence that each and every disbursement is made in accordance with the operating budget approved by the Board of Directors. The Treasurer shall supervise the issuance and shall sign disbursement checks and shall be responsible for the keeping of accurate and proper accounting records, for the preparation of reports on the financial condition of the Association whenever required by the Directors or the President. At least once each month the Treasurer shall prepare and submit a financial report, including but not limited to a profit and loss statement and balance sheet, to the Board of Directors. The Treasurer shall be bonded in such amount as prescribed by the Board of Directors. The Treasurer shall keep records regarding the status of each member and keep the Secretary or other designated members advised.

IV. COMMITTEES 1. The Executive Committee shall be made up of the President, the Vice President, the Secretary, the Treasurer, and three (3) members of the Board of Directors, who shall be appointed by the President. This Committee shall be responsible for the execution of the actions of the Board of Directors, including the conduct of the routine and interim affairs of the Association. 2. The President shall appoint, subject to the approval of the Board of Directors, such additional committees as he/she may consider desirable to assure the effective operation of the Association. The actions of these committees shall be subject to the approval and supervision of the Executive Committee. 3. The Ethics Committee shall consist of the current President, Immediate Past President, the Parliamentarian and at least one additional former President. This committee shall review all ethics complaints and make decisions as to whether a violation has occurred and the action to be taken against the active member, up to and including removal from the Association. 4. The President shall be an ex-officio member of all committees except the nominating committee. V. AMENDMENTS AND CHANGES IN BY-LAWS These By-laws may be amended in the manner provided for in Article V of the Constitution. In witness whereof, we have hereunder set out hands this ______ day of ______________, 2021.

______________________________________ Christopher L. McCarty, President STATE OF KENTUCKY COUNTY OF JEFFERSON On this _____ day of ________________, 2021, before me a notary public within and for said County and State personally appeared Christopher L. McCarty as President on behalf of KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. to me known to be the person who executed the FIRST AMENDMENT TO RESTATED BY-LAWS OF THE KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION, INC. and he acknowledges and swears to that he executed the same as his free act and deed for the uses and purposes therein expressed. ______________________________ Notary Public KY State at Large Printed Name: _________________ My Commission Expires: _________________ Notary ID: _____________________________ Continued on Page 40

KREIA’S AMENDMENTS TO RESTATED BY-LAWS & CONSTITUTION FIRST AMENDMENT TO RESTATED CONSTITUTION OF THE KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC.

ARTICLE – I THE NAME of this Non-Profit Corporation shall be KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. with its principal place of activity and business in the state of Kentucky and it is organized under the Kentucky non-profit corporation Act. The term, REAL ESTATE, as used herein, includes those business activities involved in buying, selling, renting, repairing, financing or trading real estate for investment purposes. The duration of this corporation shall be perpetual. ARTICLE II THE PURPOSE of this Corporation shall be: 1. To provide education, resources and networking opportunities for its members in regard to real estate investing activities and techniques. 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. ARTICLE III The GENERAL PLAN OF OPERATION of KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. shall be to pursue the purpose stated in Article II hereof, by conducting meetings for education and discussion, by soliciting, accepting, and receiving contributions to be used for the purpose stated and to administer the business affairs undertaken in support and accomplishment of these purposes. This Corporation shall not conduct activities for pecuniary profit, nor shall any fees or commissions or other monetary benefit accrue to any member of KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. In carrying out its operations this Corporation may receive or acquire real or personal property by purchase, gift, grant, devise, lease, or otherwise and may hold, use, invest, expend, convey, or dispose of any such property in trust for any of the purposes for which it is created. In the event the activities of this Corporation are ever terminated, such property as it may at such time hold, shall be liquidated, and after payment of its just debts, the proceeds received therefrom, if any, shall be used as directed by the

members eligible to vote in attendance, or represented by proxy, or absentee ballot, at the meeting called for the purpose of settling the affairs of this Corporation, PROVIDED, that the beneficiary of such action is a non-profit organization located within the State of Kentucky, and PROVIDED FURTHER, that no member of this Corporation because of such devise shall receive any pecuniary profit or benefit therefrom. ARTICLE IV MEMBERSHIP. Any person who has contributed to the support of this Corporation may become a member of KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. upon acceptance and approval of the Board of Directors, according to the provisions stated in the By-Laws hereof, PROVDED, that the Board of Directors shall have power to remove any member for cause, and PROVIDED FURTHER, that any member may resign. ARTICLE V The Government and Management of the KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. shall be vested in the Board of Directors subject only to such limitations as are contained in the By-Laws, which shall be adopted, amended, revised, or eliminated as follows: (a) the Board of Directors may propose amendment to the By-Laws by resolution setting forth the proposed amendment and directing that it be submitted for adoption at a meeting of the members; or (b) any five members may set forth a proposed amendment by petition by them subscribed, which petition shall be filed with the Secretary of the Corporation. Notice of the meeting of the members, stating the purpose including the proposed amendment, shall be given to each member entitled to vote on the proposed amendment, and to such office and director regardless of his voting rights. If notice required by this clause has been given, the proposed amendment may be adopted by an affirmative vote of at least three quarters of the votes cast by members of this Corporation who are eligible to vote, PROVIDED, that balloting may be at a regular or special meeting, in person, by proxy or absentee ballot, duly called for such purpose, when specifically authorized in the By-Laws. The Board of Directors shall consist of a President, a Vice President, a Secretary, and a Treasurer, and such number of Directors as may be specified in the By-Laws; and PROVIDED that, inclusive of the officers, the Board of Directors shall be composed of not less than five (5) and not more than sixteen (16) natural persons; all of whom are voting members of KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. The terms of office of the Officers and Directors may be prescribed in the By-Laws, PROVIDED, that no term extends longer than three (3) years, and PROVIDED that, in the absence of specific provisions in the By-Laws, the terms of all officers and directors shall be for one (1) year. The Officers and Directors shall be elected by the members of this Association eligible to vote, at the regular annual meeting, at a special meeting duly called for this purpose, or by mail ballot, or absentee ballot in such manner as may be prescribed in the ByLaws, or, in the absence of a specific provision in the By-Laws, at the discretion of the Board of Directors. Continued on Page 42

KREIA’S AMENDMENTS TO RESTATED BY-LAWS & CONSTITUTION The Officers and Directors of this Corporation shall enter upon their respective duties at the beginning of the fiscal year for which they have been elected to serve and shall hold their respective offices until their successors have been duly elected and sworn into office and have entered upon the discharge of their duties. ARTICLE VI THE FISCAL YEAR of this Corporation shall begin on the first day of July and end on the thirtieth of June of the following calendar year. THE ANNUAL BUSINESS MEETING of this Corporation shall be held between the first day of April and the thirtieth day of June each year, at such time and place as the Board of Directors shall determine. The Board of Directors shall have power to call such meeting; PROVIDED, however, that in the absence of such action by the Board of Directors by June 10 th in any year, any five (5) members who are eligible to vote may issue a call for this annual meeting. Business may likewise be transacted at any regular or special meeting PROVIDED the members who are eligible to vote have been notified of the time, the place, and the principal purpose of such special meeting at least ten (10) days prior to the convention of the meeting. For the purpose of transacting business, a quorum shall consist of at least 30% of the total number of the members who are eligible to vote. Meetings for professional education and discussion shall be in accord with the objectives stated in Article II herein and shall be held not less frequently than once each month, PROVIDED, that the Board of Directors may, by specific action, cancel such meetings for not more than four (4) consecutive months. Such meetings shall be construed as regularly called meetings for the transaction of business with quorum requirements as stated for the annual business meeting. THE BOARD OF DIRECTORS shall meet upon the call of the President, or of any three (3) Directors. Meetings shall be held not less frequently than quarterly throughout each fiscal year, or more frequently if deemed necessary for the efficient and expeditious transaction of business. A majority of the Board of Directors shall constitute a quorum for the transaction of business at any Board of Directors’ meeting. Business meetings of KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC., including meetings of the Board of Directors, shall be conducted in accordance with procedures set forth in ROBERTS RULES OF ORDER, Current Edition, PROVIDED, however, that such procedures are not in conflict with the Constitution and By-Laws of KENTUCKIANA REAL ESTATE INVESTORS ASSOCATION INC. ARTICLE VII Members of KENTUCKIANA REAL ESTATE INVESTORS ASSOCIATION INC. may adopt whatever By-Laws are deemed necessary or desirable for the efficient operation of the Corporation, PROVIDED, only that proposed By-Laws are consistent with the Constitution of the Corporation. ARTICLE VIII This Constitution may be amended by affirmative vote of at least two-thirds of the members eligible to vote. Voting shall be by ballot, either in person or absentee, or by proxy and may be conducted at a meeting called for that purpose.

ARTICLE IX The name and address of each incorporator who are natural personal of full age are: Noble Roberts 1418 Goddard Avenue Louisville, KY 40204 ARTICLE X The first Board of Directors shall consist of the fifteen members elected by the general membership and whose terms of office are prescribed in the By-Laws. Seven persons will be elected for a period of one year and eight persons elected for a period of 2 years. ARTICLE XI The personal liability of members is limited to the dues paying obligation as stated in the By-Laws. ARTICLE XII This Corporation shall have no capital stock. The registered address of the Corporation is Rawn Law Firm, PLLC, Attn: Michelle R. Rawn, 9302 New LaGrange Road, Suites E & F, Louisville, KY 40242, and shall be updated as necessary on the Kentucky Secretary of State’s website.

In witness whereof, we have hereunder set out hands this ______ day of ____________________, 2021. ______________________________________ Christopher L. McCarty, President STATE OF KENTUCKY COUNTY OF JEFFERSON On this _____ day of _______________, 2021, before me a notary public within and for said County and State personally appeared Christopher L. McCarty as President on behalf of Kentuckiana Real Estate Investors Association, Inc., to me known to be the person who executed the FIRST AMENDMENT TO RESTATED CONSTITUTION OF THE KENTUCKIANA REAL ESTATE INVESTORS ASSOCATION INC. and he acknowledges and swears to that he executed the same as his free act and deed for the uses and purposes therein expressed.

______________________________________ Notary Public KY State at Large Printed Name: __________________________ My Commission Expires: _________________ Notary ID: _____________________________

Presorted First Class Mail U.S. Postage Paid Louisville, Ky Permit No.1402

PO Box 91225 Louisville, KY 40291 Return Service Requested

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

Legacy Wealth Building 101 Erik Hitzelberger shows how we can build passive income, overcome limiting beliefs, and create a legacy of wealth for ourselves and our family. May 27, 5:30 p.m. - 9 p.m. ► 5:30 p.m. Early Meeting: Jordan Pohn of SurePoint Equity reveals how to get funding to flip a house ❖ June 1st — noon-1 p.m. L.O.T.S. event. We visit Erik’s rehab of a 12-plex. Members only. Lunch provided! ❖ June 3rd — 5 p.m.-7 p.m. KREIA Happy Hour. Networking at Martin’s Bar-B-Que Joint (East). Everyone invited. ❖ June 5th — Wealth Building Workshop. Erik returns to teach us more about investing. Get your KREIA discount! ❖ June 8th — Noon-1:30 p.m. Lunch & Learn. Meet up for education and networking. Members only. You buy your own lunch. Ed Gibson hosts.

❖ June 10th — 5 p.m.-7 p.m. Happy Hour BONUS Event. Networking at Woodhaven Country Club. Meet KREIA’s board members and board candidates. Hampton Scurlock hosts. ❖ June 15th — Noon-1 p.m. Tool Tip Tuesday. Tamara West hosts a virtual Zoom call where she demonstrates software and resources helpful to investors. Members only. ❖ June 17th — 6 p.m.-8 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 invited. Hampton Scurlock and Alexis Fentress host.

We’re Back at Woodhaven, Baby! Come one, come all to this month’s main meeting! Bring your non-member investing friends! We have no attendance limit this month. But we do have one big change: Online preregistration is now required. Pre-register now at kreia.com!

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