February 2022 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 2-22 February 2022 President’s Letter

Main Meeting: Are you ready to file taxes? Pick a CPA’s brain!

Welcome, New Members!

Workshop News: KREIATREAT is sold out, but Vena is on Zoom Mike Butler: Workshop benefits John Mays: Black History Is American History

6 10

Nina Musgrave: Noise levels can 16 lower asset values – fight back Sharon Vornholt: How to find off- 18 market deals KREIA Photos

L.O.T.S. Recap: Highlands make- 24 over with Brad & Kristy Wagner Lauren Willoughby: Flash drives 24 for REI data on the go

National REIA News Briefs

Hunter/O’Bryan Scholarship

Ian Hooper: Donations for HOI

Dear KREIA Members and Friends, Welcome to the year of opportunity! Since the last time we were together, the Federal Reserve has made dramatic changes in the monetary policy that has helped fuel the economy and raise asset prices over the last 12+ years. Some of the possible outcomes of these actions are listed below. Regardless of what happens, Erik Hitzelberger though, increased chaos and volatility is highly likely. This is good news for us as investors. As we discussed a few months ago, “Chaos is a Ladder.” In case you didn’t already know this, the Federal Reserve has a dual mandate in terms of controlling the economy. Chairman Powell and the rest of the Board are tasked with both making sure target employment levels and target inflation rates (2%) are met. For over a decade, these goals have dictated lowering rates and pumping money into the economy through Qualitative Easing (QE). As you are aware, the GDP growth last year (5.9%) was the highest it’s been since 1984, but inflation is well above target levels. Furthermore, labor shortages are creating issues throughout the economy despite employment returning to pre-pandemic levels. Both sides of the Fed’s mandate require a reversal in policy. The Fed announced in the fall that QE would be tapering off over the course of 2022 and we would likely see 1-2 rate hikes. Last month, however, Chairman Powell stated that those plans were not sufficient. QE is now expected to end in March and Quantitative Tightening (QT – taking money out of the economy) is going to begin around the same time. These changes coupled with rate hikes will create the aforementioned volatility. The possible outcomes of the new policies include: Outcome 1: It works: The changes have the desired income of pumping the brakes and both growth and inflation settle into target ranges. Jobs, wages and corporate profits stabilize at new normal rates and the government becomes a little less involved in driving the economy. Woohoo! Continued on Page 32

Illustration by Nina Musgrave

KHA Assistance Fund: Apply to receive up to $35,000 Government Affairs Links

Calendar of Events

Copyright MMXXII 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 Erik Hitzelberger

Vice President Stacey Duvall

Advertise With KREIA

Secretary Jordan Pohn

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

Frank Miller

Greg Nalley

Hampton Scurlock

Rob Bergeron

Christopher Jaquith

Alexis Fentress

Ian Hooper

Mary Conrad

John Mays

Karen McKnight

Michelle Rawn Parliamentarian

Chris McCarty Past President

Lauren Willoughby Media Manager

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 alongside active investors! Ask for someone to direct you at the checkin desk at the main 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!

CPA Mike Grinnan Gets Us Up to Speed on Taxes He’ll tell real estate investors what they need to know at KREIA’s Feb. 24th meeting Investors have come through another year of Covid and changing tax rules. What’s new? What’s different? Investors need to know, because tax season is upon us, and it won't be long until it’s time to file. CPA Mike Grinnan will explain all in our February main meeting. Plus, he’ll answer your questions from the floor during the meeting — and will have some time for one-on-one queries after. If you’ve been wanting to pick a CPA’s brain – here’s your chance! Mike gave us an outline of what he’s planning to cover: • • • • • • • • • • • • • •

Recovery debate Credit Child tax credit and advance payments IRS operations Real estate entities Real estate tax rules Passive losses Real estate professional status Real estate activities Buy and wholesale Buy, fix up and sell Buy, fix up and rent VRBO and Airbnb 1099s Qualified business deduction

They say “it’s not what you make – it’s what you keep,” and if you want to keep more of what you make, you can’t afford to miss this meeting! So, please plan to be through the buffet line and in your seat (or on the Zoom call) by 7 p.m. so you Mike described his perwon’t miss a minute of Mike’s sonal venture into investpresentation.

Meet Mike Grinnan

ing during 2020’s Holiday Zoom call.

Mike Grinnan has been an accountant for more than 40 years – and a CPA for about 37. Mike said he has always been interested in real estate investing, “but my passion is, obviously, accounting. So, I’m really fortunate to work with a lot of real estate investors.”

Illustration by Nina Musgrave

While his profession gives him a firsthand look into how people make a living flipping or renting out houses, Mike’s first personal venture into real estate came in his 40s when, as a partner in his CPA firm, he participated in the ground-up construction of a 5-story commercial office building. The building became the firm’s new headquarters. Check out Mike’s website, jmgcpa.com, for tax resources he has collected of relevance to investors. Mike also serves on our board as KREIA Treasurer.

Agenda for KREIA’s Main Meeting • 5:30 p.m. – Early Meeting with Ryan Engelbrecht of BDry • 6 p.m. – Member Orientation with Jordan Pohn • 6:15 p.m. – Welcome, announcements, property pitches and sponsor pitches. Buffet line opens! • 7 p.m. – Feature presentation: “Real Estate Tax Updates with CPA Mike Grinnan” Register now for this event at kreia.com. We’ve decided to re-open Zoom registration, so if you can’t make the meeting in person at Woodhaven Country Club, you can still attend online over a Zoom call. For KREIA members, in-person attendance at Woodhaven costs the usual $20 (to cover the buffet meal and our usual expenses); participating in the Zoom call is free for members.

5:30 p.m. Early Meeting: Ryan Engelbrecht How’s your basement? Has it been a little soggy lately with the weather we’ve been having? Get tips from this month’s early speaker, Ryan Engelbrecht from BDry & RamJack Foundation Repair.

Welcome, New KREIA Members! Matt Baer Braden Ballard Matthew Basa Eric Bielefeld Scotty Boggs Nathan Bradshaw Russ Crews Brandt Davis Byron Gabehart Tracy Hart Todd M Hart Sr Rodney Hasberry Lori Hernandez Still Tiffany Hibbs

Gant Hill Zay Holste Victoria Hunkin Matthew Ireland Michelle Kaufman Mason Lankford Dustin Markwell Reece Marshall Roberto Medina Patience MillerCarter Dr. Adil Mohiuddin Trevor Nethery Lisa Nicolussi Naiesha Roberts

Miguel Rodriguez Andrea Schlosnagle Jared Schlosnagle Jay Schulten Max Schweiger Jaelyn Sloan Jimmy Smith Tim Steinhauer Jesse Stemle Semmie Thomas Aaron Tomes Justin Truax Keenan Wilson

KREIA’s New Member Orientation Jordan Pohn will give a short presentation of the benefits of joining KREIA at every regular monthly main meeting. We offer many educational and cost-saving opportunities! Join him in the small conference room at 6 p.m. Online Presentation: You can view a recent session with Jordan and Stacey Duvall 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.

KREIATREAT – KREIA’s Retreat at Taylorsville Lake – Is Sold Out We hope you were one of the lucky registrants who scored a seat at Feb. 25th and 26th’s KREIATREAT. And speaking of seats, if you are one of the lucky 45, we have an important announcement: Event host Hampton Scurlock asks that you please bring your own seat! Camp chair, folding chair, kitchen chair… bring whatever you have. The other important announcement is that you will learn so much! We have a two-track seminar schedule, so check out the lineup of speakers at the event page on KREIA’s website. You’ll be learning from Mike Butler, Frank Miller, Andrew Schlag, Dennis Erhard, Sharon Vornholt, Luke Neubauer, Katie Crotzer, Joe Hampton, Stacey Duvall Jay Bowman, Eric Feller, Alisha Higgs, Joe Worth, Jacob Michal and more. You have some tough decisions to make, because you can’t sit in on every workshop. But you can’t go wrong whichever seminars you choose to attend. And later when we post the KREIATREAT video replays on the website, you can catch up with the seminars you missed. All KREIA members will have access to the replays, so if you did miss the cutoff, don’t feel bad – you’ll still be able to watch, listen and take notes. Psst: If you did miss the cutoff, you’re not without options for live real estate investing training this weekend, because…

Vena Jones-Cox Holds Creative Finance Workshop on Zoom How much more could you pay for properties with 0% owner financing? The answer is a lot more than you can pay for cash, and that’s a huge advantage in a market where sellers want top dollar. In Vena Jones-Cox’s Feb. 26th workshop – which she’s calling “Masterclass: How (and Why and When) to Get 0% Interest Seller Financing When You Buy” – she will talk about which sellers will agree to 0% interest financing and why, how to calculate the right monthly payment, how to also make these deals no money down, what the contracts look like, and what to do with these deals once you’ve found them. The workshop starts at 9 a.m. on Saturday morning and goes for six hours. Yes, everyone who registers will receive the video replay and copies of her documents. So, even people bringing chairs to Taylorsville Lake on the 26th will also have an opportunity to catch Vena’s workshop – sorta like the DVR’d version. Early-bird registration for KREIA members is $47. For nonmembers it’s $97. Sign up now at kreia.com Copyright MMXXII 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.

Is KREIATREAT for You? By Mike Butler After watching Ed Melton make his annual pilgrimage every January to sunny Florida for the big Investor Conference, it puzzled me why this already superstar-successful investor would attend these conferences with a great keynote speaker along with a parade of speakers selling their books and cassette tapes. Myself, Jay Long, Chris McCarty, Brian Haeseley, Mark Lechner, Chris Dischinger, Wayne Gallavin, Charley Bentley and many more investors (too many to list here) attended these 3- and 4-day conferences to learn, network, and discover new resources to Work Smarter, Not Harder. In fact, Mark, Chris, and Jay Long were featured in the Guerilla Marketing Session. The mindset was work hard, play hard, and we all lived up to it. Back to Ed Melton. I asked Ed why he did this every year, sit on your butt for four days in Florida in January. Ed told me he did this for several reasons: 1. Education – you never know everything in this real estate business. Every year I pick up several great tips to implement that add 10’s of thousands of dollars to my bottom line. Yes, I will sit for four days with my butt getting numb to gain these benefits for my family and business. 2. Florida weather in January is a lot better than in Louisville, Kentucky. 3. Business Expense – Ed said this event is an “Education Expense” for his business. 4. Networking – Ed got to meet serious investors from all across America. Many of these conferences had well over 1,000 investors in attendance. Ed went to breakfasts, lunches, suppers, and the bars to network, learn, and share ideas, tips, and strategies along with meeting and making new friends across the country. Unlike with most REIA groups, meeting other serious investors outside your area is an opportunity to share realworld success strategies and failures without fear of schooling your local competition. Ed picked up many new tips and strategies just from networking. The challenge was to find these serious investors at these annual conferences. 5. Vendors – These are the folks/businesses who sponsor and pay to have a booth set up in the hall outside the big meeting rooms. The bigger conferences seemed to have 100+ vendors. Absolutely anything to benefit any real estate business seemed to be the reason they paid money for a booth to show you their products and services. 6. Louisville, Kentucky – does not have any conferences like this. Sure, other cities have big conferences. But Ed said, “If I have to pay for travel and lodging, I’m going to do it in Florida every year in January.”

7. Ed’s Bottom Line – “All I need is to pick up one tip or strategy and it can add thousands to income and profit while saving my precious time.” Mark Your Calendar Now for KREIATREAT the weekend of Feb 25th-26th at Taylorsville Lake, an event hosted by Hampton Scurlock, your board member. This is a great opportunity for you to learn from very successful investor experts who achieved their success right here in your own back yard! You cannot get this kind of education and training, complete with Question & Answer sessions, from experts in your local market. Hampton told me class size is limited to about 45 folks, so grab your seat now before it sells out. [Editor’s note: The event has already sold out.] I have reviewed his class schedule and topics, and this is a must-attend education event if you are serious about your real estate business. The next time you see Hampton, tell him “Thanks for KREIATREAT.” I am looking forward to seeing you at this event — make it happen! Remember, LIFE does NOT have a Pause or Rewind Button! It’s up to you to make it happen. 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. ● Mike Butler kicks off our KREIATREAT event on Friday, February 25th. From 6 p.m. to 7:15 he’ll be talking about the buy-and-hold strategy — being a landlord. And Mike knows his stuff! He’s a longtime, many-doored landlord; a property manager; and the author of a well-reviewed book on real estate investing. If you are one of the 45 who were able to register, be sure to stick around after Mike’s presentation! From 7:30 p.m. until 9 p.m. there will be networking and a Happy Hour event.

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Black History Is American History, in Real Estate Too By John Mays As we reflect on Black History Month, it calls to remembrance all the significant achievements of Black Americans in real estate. Many of these significant achievements have been under-highlighted, undercelebrated and even missing from history. We’ll celebrate just a couple today. Mary Ellen Pleasant (1815–1904) - Black Real Estate Investor & Entrepreneur Mary Ellen Pleasant was a 19th-century real estate magnate, entrepreneur, financier, and abolitionist. She was arguably the first African American self-made millionaire, preceding Madam C. J. Walker by decades. Mary Ellen Pleasant may not be a household name, but her story rivals that of any great American investor or entrepreneur. In the 1800s, Pleasant became a millionaire in the United States despite the significant obstacles she faced as a Black woman. She established boarding houses, a string of laundries, restaurants, and other services. She was a cofounder of the Bank of California. Pleasant was Mary Ellen Pleasant. Source: Wikipedia an incredible Creative Commons investor and an even better social citizen. The more that she made, the more that she had to share to help people in need. Her support helped many enslaved Black Americans to be transported to freedom through the Underground Railroad.

Philip A. Payton Jr. (1876–1917) – First Black Real Estate Broker In a career that spanned less than 20 years, Philip A. Payton Jr. became known for providing African Americans in New York City with an opportunity to live in quality housing in the northern Manhattan community of Harlem. As a real estate broker, property manager and owner, Payton gained a national reputation among African American business leaders during the first decade of the 20th century. As we celebrate this rich history of Black Americans, we also celebrate this current generation of socially conscious Philip A. Payton Jr. Source: Wikipedia Creative Commons Black real estate investors, many of whom had humble beginnings, and are the first investors and entrepreneurs in their families. This group is venturing out to revitalize then rent out sustainable, affordable homes and putting their time and treasure back into their communities. These investors are not just talking the talk, they’re walking the walk and brining tremendous value back to the neighborhoods and legacy they hale from. I’d like to take this moment to acknowledge and celebrate the many successful Black real estate investors / entrepreneurs in our community who desire more than a financial return for their families – they’re working to bring about a renaissance in the communities they care so much about. Huge shoutout to these KREIA Members: George Foree, Chiquita Lindsay, Anthony Silver, Marcus Britton, Donnie Adkins, James “Butch” Thompson III and the many, many others who continue to educate, inspire, and lift while they climb. John Mays is an investor and current KREIA board member. John and his wife, Joy, are passionately in love with each other and unapologetically obsessed with real estate investing. They enjoy supporting and coaching other couples on their journeys to build generational wealth while putting love and family first.

5236 Dixie Hwy Copyright MMXXII 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.

SomeMMXXII of KREIA’s national sponsors via National REIA.•For list,•and info on visit nationalreia.org/benefits Copyright Kentuckiana Real Estate Investors Association P.O.the Boxfull 91225 Louisville, KY•discounts, 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.

Noise Levels Can Be a Nuisance & Lower Asset Value Sound disruptions monitored more; use materials to differentiate homes By Nina Musgrave For more information on noise levels by location visit https://maps.dot.gov/BTS/NationalTransport ationNoiseMap/ Dropping the decibels on a property may not seem like a priority. However, across the United States, real estate investors are finding that noise levels impact asset value. I’ve lived directly under the flight path to Louisville Muhammad Ali International Airport – those planes were my nemesis! Through research, I discovered there are certain neighborhoods in Louisville where the Airport Authority installed insulated windows to reduce air traffic noise. Residents have sued, and lost, claiming that airplanes were trespassing in the air above their homes. Recent lending guidelines from HUD show the decibel levels are a factor in new project funding, and Realtor.com lists “Noise Level” as part of the information to consider for a property. If you’re looking for ways to set your property apart, reducing noise disturbance is one way. Here are some ideas:

Noise-Reducing Underlayment

Soundproof Panels

Acoustic Paint

Noise-Reducing Windows

Soundproof Caulk

Soundproofing Wool Insulation

Tips for Finding Off-Market Deals By Sharon Vornholt Editor’s Note: This article was published originally on Sharon Vornholt’s website: LouisvilleGalsRealEstateBlog.com Sharon has allowed us to publish it here. Be sure to visit her site for more resources! Some of the most lucrative deals you will ever come across are off-market deals, and today I have some tips for finding them. There’s no doubt that there is a lot of competition for deals on the MLS. However, the MLS isn’t the only source of good deals. There are a lot of properties that are never listed by an agent, and that’s what I want to talk about today. Here’s something you need to know. The MLS Statement 8.0 Clear Cooperation Policy The National Association of Realtors (NAR) enacted a new policy at the end of 2019 called the MLS Statement 8.0 Clear Cooperation Policy. The intent was to regulate off-market properties on the MLS. What it comes down to is that brokers and agents must submit the property listing to the MLS within 24 hours of marketing the property to the public. What this means for real estate investors is that if agents have a distressed property that has not yet been entered into the MLS, it’s often called a “pocket listing.” These real estate agents have time to call their favorite real estate investor and give them a heads-up about the property. This has always been the case in my area as long as I have been in this business. The agent gets a quick sale, and the investor gets a great deal without any competition. This is just one example of how working with agents who understand investors can work to your advantage. It can put you on their radar so that when they have a deal that isn’t right for the MLS, they think of you. What Exactly Are Off Market Properties? Off-market properties are those that are not listed on the MLS. Working with these properties has always been my favorite way to find deals. Why is that? There are several reasons: • There is so much less competition for these properties

than on the MLS. • It has been my experience that these are often more

profitable deals than properties listed on the MLS. • I like having the opportunity to speak directly with the seller rather than going through an agent. This isn’t so much about negotiation as it is about finding a solution to the seller’s problem.

You are able to do creative things to make the deal work for the seller that you might not be able to with a property listed on the MLS. You can agree on things like giving the seller extra time to move, and other special concessions you might be able to offer like paying back taxes, helping with moving costs, etc. It’s just easier to create a “win-win” for both parties that are not solely focused on price. Where Do You Find These Deals? They are everywhere. Here are some methods and tips for finding off market deals. 1. Direct mail marketing. This is my favorite way of finding and marketing to folks. It is one of the most efficient and consistent ways to generate leads in your business. Often you will be dealing with sellers who just don’t want the hassle of listing their property on the MLS. These folks will be looking for a quick, hassle-free solution that gets them out from under whatever problem they are experiencing. You’ll need to determine what type of property you are searching for. Are they probates, pre-foreclosures, absentee owners, or some other type of off-market seller? Then you will want to figure out how to reach these sellers. 2. Networking. Networking is one of the best ways for finding off-market deals. And one of the best things about networking is that it’s free for the most part except for the occasional meeting fee or buying a meal. You can often find a deal quickly with this strategy, and you can also set yourself up to get referrals for years to come. 3. Your lead generation website. The magic of your lead generation website is that people are out there looking for you. Typically, these folks have a problem they need to solve, and they are searching for a solution. You want to be their solution. The fact that they are searching for you makes them very motivated sellers. A properly optimized website can generate leads 24/7 on autopilot. 4. Driving for dollars. This is a free or low-cost way to find distressed or vacant properties (except for the gas). I personally know folks who have had great success driving for dollars. The main drawback to this investing strategy is that it’s not really scalable. 5. Online Websites. Online sites that have a property listed would include auction sites, “for sale by owner” sites, and property listed on Zillow that’s not yet listed on the MLS, to name a few. Online websites can be a great source for offmarket deals. 6. Wholesalers. A good wholesaler can also be a great source of deals, especially if you don’t have the time or the Continued on Page 30

Heidi Fore walked us through steps we need to take to turn our vision into reality during January’s “Be the CEO of Your Business” main meeting. We had a packed house!

photo by bruce w. hinson www.obedientcamera.com

At Left: Rebecka Taasaas, from America’s Choice Security Services, checked in with KREIA’s George Foree at the meeting. Below Left: There were many tears at Todd Hunter’s Celebration of Life ceremony, but there was also love, comfort and smiles for the many happy memories shared. (Photo courtesy of Alexis Fentress) Below Right: Mary Conrad and Alexis Fentress went to Tampa to represent KREIA at the recent RMG Mastermind meeting. Networking, education, lunch! (Photo courtesy of Alexis Fentress)

KREIA

Photos

Visit KREIA’s Private Facebook Group to see more of Bruce Hinson’s photos – in color!

Highlands Rehab House: A Closer Look Brad & Kristy Wagner share their experiences at 1309 Morton Ave. This Highlands house, just off Barrett near E. Broadway, is stunning – and getting it that way took a lot of time and money. KREIA Past President Frank Miller, who introduced the flipping couple, Brad and Kristy Wagner, said, “I believe this is one of the biggest L.O.T.S. we’ve ever done, as far as price point – I don’t think we’ve ever done almost a half-milliondollar house.” The couple removed walls to open up space in the house, which at some point in its history had been a duplex. Now it’s a spacious 2,333-square-foot home with 4 bedrooms, 3.5 baths, and very attractive finishes. Getting there involved “contractor issues – and other issues,” Brad said, and there was a $40,000 bump in the budget. Watch the presentation and walkthrough video shot by Eric George (another KREIA Past President) at KREIA’s website to get a feel for the house. The work looks great, guys! Thank you for inviting us into your project.

KREIA members gathered on the porch and steps of the home that was the focus of our Feb. 1 L.O.T.S. event. (Photos courtesy of Eric George) Find the video from this L.O.T.S. event to be available soon on our Videos page.

THE NUMBERS Purchase: $145,000 Rehab Cost: $218,000 Est. Sales Price: $460,000 Closing/Holding/Realtor fees: $55,000 Potential Profit: $42,000 The ceilings were high – and so was the budget of this Highlands rehab. Brad and Kristy Wagner described their experiences and challenges in whipping the house into shape.

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

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.

Take Your Real Estate Data With You The best flash drive for the job is the one you can’t leave behind By Lauren Willoughby Call them flash drives, thumb drives, pen drives, jump drives ... call them remarkable. These USB gadgets come in all shapes and in mostly small sizes. Some are embedded into toy racecars, some are built into actual pens, and some are designed to live on your keyring. However they’re shaped, it’s their ability to connect to your computer and to hold thousands of copied documents that make them remarkable. What’s the best tool for the job? The one you have on hand. So, my favorite flavor of flash drive is one that plays nice on my keyring. It goes wherever I go. That means gigabytes of my files can go with me. And your files can go with you too. Your lease templates, your PowerPoint presentations, your printable lead-based paint advisories, your contacts, your contracts, your tax info... not to mention tons of photos and videos of your rental houses, ready for upload into listing sites. As a tech nerd and longtime user of flash drives, I recommend buying a drive having these qualities. My ideal flash drive must... • Be designed to live on a keyring, with an opening large enough so that it can spin freely around the ring. (So the drive won’t jam and painfully jab your hip from inside your pocket.) • Be compact, shorter than your keys, and as thin and unobtrusive as possible. (Again, to avoid discomfort while it’s nested in your pocket.) • Have all-metal, one-piece construction with no moving parts, for durability. (Many of my plastic flash drives and pivoting drives ended up in pieces.) • Be at least USB type 3.0 (much faster than the old USB 2.0 drives). Though if you spot USB 3.1 or 3.2, that’s even better (speedier). • Be at least 64Gb in size (a capacity to meet most needs, and a sweet spot for pricing). • Be built by a well-known tech company (SanDisk, Kingston, Lexar, Samsung, Crucial, Sony, PNY or other name brand).

These characteristics help ensure that a flash drive will be reliable and always on hand – or wherever your car keys are. So if you need a file at a closing with no time to dash home, your flash drive can save you … if you remembered to copy those important files. It can also hold hundreds of family photos – which you can copy for relatives when visiting.

The 128Gb Lexar JumpDrive M45 USB 3.1, $18.49 at Amazon. I haven’t had it long, but I like it. The PNY 128GB Elite-X USB 3.2, another recent acquisition. My, it is fast! $17.99 from Amazon.

The 128Gb Kingston Data Traveler SE9 G2 USB 3.0 is my daily driver – and you can tell by signs of wear. It’s about 3 years old and still going strong. Amazon is selling newer models now, but this is my favorite design.

Data Security Keep your sensitive files encrypted. That way, if you lose your car keys, you don’t also have to worry about your private and sensitive flash drive data ending up in the hands of a bad actor. Some drives include their own secure storage and encryption software, but I recommend using VeraCrypt, free and open source. You can download it from veracrypt.fr in Windows, Mac and Linux versions. VeraCrypt lets you create a password-protected drive within a drive. And that virtual drive looks like (and is) a file – but an encrypted file that is unreadable unless opened in the VeraCrypt app with the correct password. For video tutorials on how to use VeraCrypt, go to YouTube and type “how to use veracrypt” in its search field.

Safety and Best Practices Portability means sometimes you may be using your flash drive on computers you don’t own and maintain the integrity of. How to avoid being infected by foreign computers? Well, there is some risk. Ask the owners if they regularly scan for viruses. And do run a virus scan occasionally on your computer’s hard drive as well as your flash drive. Continued on Page 28

National REIA News Roundup

NAHB’s 2021 Q4 Trends Report

According to the NAHB’s Q4 Housing Trends Report, the National REIA, of which KREIA is a chapter, reports on issues share of adults planning to buy a home within 12 months fell affecting real estate investors and also links to stories of for two consecutive quarters, going from 17% in Q2, to 16% interest from other organizations. Here is a sampling of recent and 15% in Q3 and Q42021, respectively. news and resources that Brad Beckett, NREIA’s Director of Read the report: bit.ly/k2202trends Education & Outreach, has compiled. For more news, visit RealEstateInvestingToday.com

The Most Dangerous Jobs in the U.S.

The U.S. government is reporting that the national vacancy rates for Q4 2021 were 5.6% for rental housing and 0.9% for homeowner housing. Read the report: bit.ly/k2202vacancy

The folks over at Statista recently crunched the numbers from the Bureau of Labor Statistics to illustrate the “most dangerous jobs” in America, based on fatalities. Roofers come in at 3rd place and construction trades 4th. Infographic: bit.ly/k2202dangerous

Zillow Expects Home Values to Grow 16.4% Through December 2022

Supply Chain Issues Leaves Homes Without Garage Doors & Gutters

Zillow is also predicting a growth rate of 7% for existing home sales – to levels not seen since 2005. Read the article: bit.ly/k2202zillow

A recent article in the Wall Street Journal (reposted on Realtor.com) discusses how the building industry is struggling with global supply-chain woes, pandemic-related factory closures, transportation delays and port-capacity limits. Read the article at Realtor.com: bit.ly/k2202supply

U.S. Homeownership & Rental Vacancy Rates for Q4 2021

The Do’s and Don’ts of a Successful Rehab Project On a recent episode of the Rental Property Owner & Real Estate Investor Podcast, Brian Hamrick talked with Van Sturgeon, an experienced entrepreneur, developer, general contractor, and rehabber who owns over 1,000 properties across North America. Van talks listeners through the do’s and don’ts and shares tips on how to save money on renovations. Listen to the podcast: bit.ly/k2202rehab

U.S. Population Growth Lowest on Record in 2021 The NAHB’s Eye on Housing recently took a close look at recent Census data, which showed population increased by 393,000 to an estimated 332 million from the previous year. However, 2021’s estimated population growth rate of 0.12% was the lowest on record since the Census Bureau began collecting this data back in 1900. Read the report: bit.ly/k2202population

Sun Belt Dominates Zillow’s Hottest Housing Markets for 2022 As many have suggested, the housing market will remain hot well into 2022. With that in mind, Zillow says that the number one driver of hot markets will be in the south, and leading the way will be none other than Tampa. Read the article: bit.ly/k2202sunbelt

Unused Office Space Converted into Apartments at Record Pace Some of the projects are in even places that current zoning wouldn’t allow. Watch the video at CNBC: cnb.cx/3LFDXL8

Announcing KREIA's Hunter/ O'Bryan Scholarship Many of you knew or were impacted or helped by my friends Jeff O'Bryan and Todd Hunter, who we've lost recently. Both gentlemen had a passion for real estate and helping others. KREIA has started a Hunter/O'Bryan scholarship where we can give away one KREIA membership to a deserving non-member. Please contact or message me privately (502-694-2378, scurlockfinancial@yahoo.com) if you would like to nominate someone who would benefit from joining KREIA but for whom money may be an obstacle. This person must be 18 years old or older, should have a desire to learn about real estate, and must not already be a member of KREIA. The scholarship will be awarded by a committee decision. – Hampton Scurlock

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.

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 MMXXII 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.

Lauren Willoughby: Take Your Real Estate Data With You Continued from Page 24

How Far We’ve Come… I remember back in the 1990s when I saw my first 1gigabyte hard drive. It was almost the size of a lunch box, heavier than a brick, and cost more than $1,000. At work, during the unboxing, we all stood around and paid tribute to this miraculous piece of technology. (This drive was later to be seen occasionally in the break room freezer when our network guy needed to cool it down.) A decade later I bought my first flash drive, a whopping 128-megabyte, thumb-sized plastic model that cost only $128! Today we can buy thimble-sized, name-brand 512gigabyte flash drives for well under $100. It boggles the mind.

Donate ‘Most Needed Items’ to the Home of the Innocents By Ian Hooper In addition to KREIA’s raffles and cash donations to the Home of the Innocents, let’s donate in other ways – by helping them source their “Most Needed Items.” You can find an updated list of the Home of the Innocents’ requests by following this menu path at their website – Help the Home / Donate / Wish List. Or you can go there directly using this URL: https://www.homeoftheinnocents.org/help-thehome/donate/wish-list/

Flash Drive Tips

Here’s the current list of most-needed items • Remember to keep your flash drive up to date by 1. Hair grease copying over important files that you update 2. Electric razor frequently. 3. Facial tissue • Avoid knockoff flash drives and no-name imports, 4. Pull-ups (Size 4T-5T) which might be Trojan horses infected with identitystealing tools. You may be tempted by cheaper, If you bring any of these items to KREIA’s Jan. 27th main higher-capacity, no-name flash drives, but it’s better to meeting, I will deliver them to the Home of the Innocents. avoid them. Especially avoid buying no-name drives on Look for a box on your way in at Woodhaven. ebay from a company shipping from overseas. Please Another way to help is to buy requested items through stick to name-brand flash drives, and buy them HOI’s Amazon Wishlists at the same website link above. unopened from a reputable source, such as a big-box tech or office supply store. I feel safe buying such flash drives through Amazon, but I’ve also heard some people say they avoid sourcing flash drives from Amazon. • Have a backup flash drive synced up with your daily driver. Flash drives can fail or be lost. • Also keep a copy of your files in the cloud, using DropBox, Google Drive or some other secure, off-site storage solution you trust. Having had one laptop • If you use encryption software, avoid naming your stolen and another suffer a catastrophic hard drive vault files things like “MyBankingPasswords” or failure, I recommend you keep copies of your most “CrackMeIfYouCan” – that’s just tempting fate, or important files in multiple secure locations. asking for a kneecapping from a Bond villain. • Here’s a good case for a pivoting flash drive: Get the • If you use VeraCrypt, always remember to close down kind that has the usual USB-A connector on one end the software after you’ve completed your session. and a spiffy new USB-C connector on the other. Some • Always eject your flash drive after you’re finished Macbooks have only USB-C ports. USB-C is becoming using it. Yanking a flash drive from a USB port before more common on Windows PCs too and may in time the system gives you the all-clear can lead to data supplant the current “universal” USB-A type you see corruption and annoying error messages. Google “how everywhere, even on TVs. Some flash drives, like to eject a flash drive” if you need a refresher. SanDisk’s pivoting iXpand, have a USB-A or USB-C connector on one end and a Lightning connector on In a former life, Lauren Willoughby wrote tech articles for The the other, which means you can use it to share files Courier-Journal, TechRepublic, and the PCM & Rainbow comwith newer iPhones and iPads (though some even puter magazines. Now she digs real estate and collects cats. newer models of the iPad use USB-C).

Sharon Vornholt: How to Find Off-Market Deals Continued from Page 18 interest in marketing directly to the seller yourself. Here’s a little disclaimer: Do your own due diligence on the property to be sure it’s actually a deal. Not all wholesalers actually have a good deal to sell. 7. Public Records. You can often find off-market deals searching public records. Examples of these deals would be probates, pre-foreclosures, divorce, code violations and so much more. Many of these lists can also be purchased. As the foreclosure moratorium ends, there will be a lot of opportunities for investors to help those folks who find themselves in a tough situation. Probates will always be a strong source of leads. You know probates are my favorite lead source. 8. Real estate agents and builders. My advice to you is to always be upfront with these folks and let them know you are an investor. Both builders and agents often come across good deals that they aren’t interested in purchasing themselves. 9. Tired landlords. There are going to be a lot of these folks as the eviction moratorium ends. Many landlords have had a tough time since the start of the pandemic and are just beaten down. Some of them will be ready to sell their portfolio as evictions resume. You may very well come across some of these investors in your local REIA.

Probates are the Cash Cow of Off-Market Deals Finding off-market deals that provide you with a neverending supply of leads has never been easier when you work probates. These leads are not affected by market conditions, and there will always be folks who need our help with the property in the estate. Foreclosures, REO’s and other types of off-market properties are affected by market cycles. That’s not true in the case of probates. The vast majority of these properties that are bought by investors will need work. Properties needing repairs and updates are what most investors specialize in. However, there are those properties that will be the exception. They are some good properties that come your way due to “time and circumstances” problems. What does that mean? Here’s an Example… An example of that would be when you have an out-ofstate executor who needs to sell the property in the estate. It might be too much trouble for them to fly across the country multiple times to settle an estate. Remember that they are looking for a hassle-free solution. In many cases, this means they would be willing to take less money for the property than they would get if the property were listed, and they are OK with that. I encourage you to dive into the niche of probates and learn how to take advantage of this very lucrative niche. Continued on Page 36

Erik Hitzelberger: President’s Letter Continued from Page 1 Outcome 2: A little too much too soon: During 2018, the Fed tried to implement a QT policy. The economy was not nearly as strong as it appeared, however. The stock market dropped and growth slowed drastically in the 4th quarter of that year. The Fed said, “Oops,” and reversed course. We could see a similar result this time. Meh Outcome 3: Waaaay too much: Rate increases and QT spook the markets and drive fear into employers and consumers. Investors take their wins and pull money off the table, sparking a correction in asset prices (stock market drop). Growth comes to a screeching halt. Yikes! Outcome 4: Still not enough: Growth and Inflation continue unabated. Supply chain issues aren’t resolved, and we enter a dangerous cycle of wage and price increases that can only be offset by really harsh measures. (Think 1979). Holy S***! If I had to bet on anything, it’s this… We will quickly discover that this country has even more Economists than we do Virologists. The talking heads and keyboard warriors will be out in full force stating with absolute certainty what will happen next. When this happens, I encourage you to remember a few things. 1) Economics is the study of behavior. Economists theorize how people will react to a given set of economic conditions. We have not seen these specific circumstances before, so any prediction is, at best, an educated guess. The markets may go up, they may go down, or they may stay flat. Anyone who tells you with certainty anything else is uninformed, lying or both. 2) Educated and prepared investors stand to benefit in every scenario. Chaos leads to emotional decisions. Those who stay calm and focused, follow the numbers, and focus on their goals will be successful. 3) Buy-and-hold real estate provides a hedge against Continued on Page 36

Erik Hitzelberger: President’s Letter Continued from Page 32

Sharon Vornholt: How to Find Off-Market Deals Continued from Page 30

inflation and cash flow regardless of property value so long as you follow the numbers.

Probate Investing Simplified If you don’t know how to get started with probate investing, I can help. You can become a probate investing expert in just six short weeks if you complete my course and implement the information you learn. If you want to fast-track your success, check out my probate investing course called “Probate Investing Simplified:” ProbateInvestingSimplified.com This will be one of the best investments you could ever make in yourself.

As always, KREIA is here to support you. We remain committed to providing you with education and tools you can use to build financial freedom. To that end, Mike Grinnan (CPA and Board Treasurer) will be giving his annual tax change update at this month’s main meeting. I encourage each of you to attend and take notes. Tax planning may not be as flashy as wholesaling or rehabbing, but, in reality, keeping money in your pocket instead of giving it to the government just because of what you know is damn sexy! We will continue to meet both in-person and via Zoom this month. Please join us whichever way you feel most comforttable by pre-registering at KREIA.com. This is the year of opportunity. Show up, learn, take action and seize what is in front of you. To your investing success! Erik Hitzelberger KREIA President

Sharon Vornholt is a local marketing expert with a national presence. Visit her website, 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. ► If you’re attending the KREIATREAT on Feb. 26th, be sure to look for Sharon on the expert panels!

Gov. Andy Beshear Announces Team Kentucky Homeowner Assistance Fund From a Feb. 7, 2022 KHC press release – In partnership with Kentucky Housing Corporation (KHC), Gov. Andy Beshear launched the Team Kentucky Homeowner Assistance Fund, a program that can help homeowners impacted by the pandemic rebound and avoid foreclosure. The program is funded through $85.4 million in federal American Rescue Plan Act funds that the commonwealth received to protect homeowners impacted by COVID-19. Starting on Feb. 7, 2022, qualifying homeowners can visit TeamKYHAF.ky.gov to apply for up to $35,000 in assistance to help with delinquent mortgage payments, property taxes, homeowner’s and/or flood insurance, homeowners association fees and utility costs. If approved, the funds will be paid as a grant directly to mortgage servicers, utility companies, county property tax administrators, insurance agencies or homeowners associations.

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 KREIA’s Government Affairs Board Chair: Rue McFarland

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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 ❖ March 1st — Noon – 1 p.m. L.O.T.S. event. We visit Alexis Fentress’ latest rehab project. Platinum Sponsor Flippin Loan CPA Mike Grinnan fills us in on what’s new provides a free lunch to members! and what has changed – and what you ❖ March 9th – Noon – 1:30 p.m. Lunch & Learn. Duna Bolotte need to know before going to file your hosts this educational event. For members only. 2021 taxes. Topics in his outline include ❖ March 10th — 5 p.m. – 7 p.m. KREIA Happy Hour. Networkthe Recovery Rebate Credit, real estate ing at Woodhaven. Everyone is invited. Bring a friend! entities, passive losses, tax rules & more. ❖ March 17th — KREIA Game Night. Join us at Martin’s Bar-Bth Attend and pick Mike’s brain! February 24 , 5:30 p.m. - 9 p.m. ► 5:30 p.m. Early Meeting: Ryan Engelbrecht from BDry Water- Que for a competitive, educational game of CASHFLOW. proofing/Foundation Repair talks soggy basements.

Are you ready to file?

Main Meeting Preview

❖ Feb. & — KREIA Retreat at Taylorsville Lake. Local real estate pros headline 10 investing seminars! Limited to 45 active KREIA members. It’s already sold out! ❖ Feb. 26th – 9 a.m. – 3 p.m. Workshop: How (and WHY) to Get 0% Interest Financing When You Buy properties. Vena Jones-Cox teaches a Zoom-based seminar. 25th

26th

Here’s what’s coming in the months ahead: March 24th: Auctions, Short Sales & Foreclosures April 28th: Financing Your Deals May 26th: Property Management & Property Scorecard June 23rd: 1031 into Vacation Rentals

We’re Back at Woodhaven, Baby! PRE-Register Now at KREIA.com