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

Monthly Newsletter for KREIA Members

Vol 3-22 March 2022 President’s Letter

Dear KREIA Members and Friends,

Main Meeting: Foreclosures, Short Sales & Auctions – Oh, My!

Welcome to March Madness!

Welcome, New Members!

Mike Butler: How much cash reserves do you need?

John Mays: ‘Sheroes’ in real estate

Alexis Fentress: Reporting back 16 from a REIA Mastermind meeting

Nina Musgrave: Updated foreclosure & flipping data

KREIA Photos

L.O.T.S. Recap: Shane Garza 24 and his team rehab Valley Village house – and pay forward on education

The annual celebration of NCAA basketball rolls out this month with every bit of the pageantry and fanfare it deserves and then some. From nail-biting conference tournaments to the drama of Selection Erik Hitzelberger Sunday to the endless discussions of “who busted whose bracket,” the sports world spends most of March focused on the pinnacle of collegiate basketball.

By the time you read this, the field in both the men’s and women’s bracket will be narrowed from 68. The remaining respective Sweet Sixteen teams will be poised to head into the final two weekends with every player, coach and fan focused on being the last team standing, cutting down the nets and hoisting the trophy. It is instructive to remember what we are watching is the culmination, not simply of the season, but of years and years of work. What we aren’t seeing is the countless hours shooting in the gym, the physical and mental conditioning, and the tireless effort of overcoming setbacks and pushing through obstacles. We should also note that the men and women who suit up this week are all winners regardless of the final score, and not in the participation medal sort of way. Millions of kids pick up a ball on the playground or in a gym every year. Only a fraction of 1% can say they made it to The Dance. These are the ones who chose to keep coming back to the court when everyone else decided it was easier to watch from the stands.

National REIA News Briefs

Rent Perfect: Help with leasing and tenant screening

As I look around KREIA, I see individuals with banners in the rafters. Champions in the game of financial freedom. Those who have done the work and are now reaping the rewards. I see others who are slogging through deal after deal.

Upcoming RMG Zoom Classes 28

Continued on Page 4

Ian Hooper: Donations for HOI

Windows Tech Tip: Supercharge 30 Your Clipboard 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!

Foreclosures Are Firing Back Up – Are You Ready? Is it time to shift strategies? KREIA’s March 24th meeting will give you insight As real estate investors we’re always looking for distressed properties. And properties do not come more distressed than those where homeowners get foreclosed on — where their houses are headed to auction, or where they’re underwater on their mortgage and need to get out quick. Are lenders willing to do short sales now? Will banks begin to accept less than what they are owed when homeowners want to move out and move on? Foreclosures deals and short sales have been slim pickings lately for investors. High demand and high prices, along with moratoriums on foreclosures and evictions (thanks to COVID-19), have resulted in a competitive market the likes of which we’ve never seen. Just ask any investor who frequents Jefferson County’s Master Commissioner Sale. But moratoriums are ending, inflation is back, and homeowners who took forbearance are seeing big bills coming due. Unless another government intervention or some other X factor makes itself known, it’s looking like the dam is about to burst on foreclosures. Will the market again be like what it was back around 2010? At March's main meeting, KREIA V.P. Stacey Duvall is going to interview and moderate for a panel of local experts who know the ins and outs of foreclosures, auctions and short sales. They’ve been through a market cycle or two and can offer us the benefit of their experience. So, be sure to be through the buffet line and in your seat by 7 p.m. to hear from: ▪ ▪ ▪ ▪

Debbie Richardson Eli Williams Frank Miller Julie Bex

Got questions? We know you do. Please jot them down while you’re thinking about them and bring them to the main meeting.

Illustration by Nina Musgrave

March 24th Meeting Agenda 5 p.m. - Doors open at Woodhaven 5:30 p.m. - Early Meeting begins in the conference room 6: p.m. - Jordan Pohn explains KREIA’s many benefits in his New Member Orientation 6:15 p.m. - The buffet line opens! Also, at the microphone, there will be announcements, property pitches and sponsor pitches 7 p.m. - The panelists take the floor for our feature presentation

Remember Your Lanyard! If you've been to an “in-person” KREIA main meeting lately, you’ve probably picked up one or more color-coded lanyards that identify what kind of investor you are. Please remember to bring your lanyards with you to our main meetings! Color Key Reminder: Blue = Buy-and-Hold Investor; Orange = Flipper; Yellow = Real Estate Agent; Red = Wholesaler; Green = New Member; Purple = KREIA Sponsor; Black = Board Member.

5:30 p.m. Early Meeting: Julia King Got credit problems? Is something preventing you from getting the loans you need, whether for your business or as a consumer? Julia King, of King Financial Repair, can help.

Welcome, New KREIA Members! Tim Barnes Fredrick Gayot Drew Schaefer Marybeth Jarrett Alyson Anderson Craig DiSanto Grace Lee Jordan Clark Donald Bibb Selina Robinson Asia Collins Steve Hoffman

Scot OBryan Latonia Scharf Angela Chambers Jeremiah Hoagland Kyle Tabler Damion Simms TA Foree Tom Simms Dan Woods Carl Millsap Kristina Simms Jay Schulten

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.

Erik Hitzelberger: President’s Letter Continued from Page 1 Honing their skills. Understanding the big goals, but never taking their eye off the ball in the moment. And I see those of you who are filled with all the energy and excitement of a 5-year-old on a playground, but to whom the basket looks so high. Regardless of where you are, KREIA is here for you. Your board is dedicated to provide education on every aspect of the game via main meetings, Saturday sessions and special events (shout out to Hampton, Alexis and all of the speakers at KREIATREAT!). If you decide it’s time to pivot or add a new wrinkle to your game plan, I assure you we have a member who is not only an expert, but also willing to share their playbook. More than that, you have a base of raving fans. We want you to succeed. We also understand that not every deal gives us what we want. Some are very financially rewarding. Others provide experience and education whether we wanted it or not. In the immortal words of Jimmy V, the most important thing is that you “survive and advance.” The only thing we cannot do is take action on your behalf. I’ve stretched this analogy about as far as I can, but there are only a couple of sentences left, so I might as well keep going. It’s game time. You can sit back and watch everyone else, or you can step onto the court and give it your all. The choice is yours. We will continue to meet both in-person and via Zoom this month. Please join us whichever way you feel most comfortable by pre-registering at KREIA.com. Show up, learn, take action and seize what is in front of you. To your investing success! -- Erik Hitzelberger KREIA President

Cash Reserves: How Much is Enough By Mike Butler Odds are you’ve probably already thought or asked yourself this question after you have jumped into the game of real estate investing. Perhaps you’ve asked other investors, bankers, financial advisors or agents about cash reserves. But… who are you asking? When you have questions to ask about your real estate investing business, you must carefully select a qualified real estate investing expert or two or three. On an extreme note, pretend you own and operate a bakery: Would you ask a barber questions about running your bakery? Of course not. The 3rd Fatal Mistake of investors is “Getting Bad Advice… especially from Poor People!” Now let’s get back to your question of how much cash to keep on hand. Let’s go back two years when COVID-19 shut down our economy. Businesses closed and shut down and many went belly up due to not having any cash reserves to survive such an unforeseen tsunami. Not only businesses, but reflect a moment on how this “trickled down” to employees, vendors and transportation folks. This touched almost everyone in our economy, except for those businesses who sold masks and plexiglass dividers. You probably know many folks affected by this unexpected shutdown in our economy, and the effects still linger on today for your real estate investing business. Don’t forget the national campaign of getting on the “Don’t Pay Rent” bandwagon! If you have rental properties, odds are, this affected your rental business and tapped into your own cash reserves. Replacement windows take six months or more from your order date to arrival date. Lumber prices spiked through the roof, and these kinds of shortages and delays continue throughout our supply chain. Let’s get you some variations on simple answers to how much cash should keep on the back burner. • Dave Ramsey, famous radio show host and author, tells his listeners to always keep an emergency fund of at least $1,000 for those unexpected expenses that happen in life. • Jim Gaunt, first President of Fifth Third Bank of Kentucky, at one time required investors to keep and maintain 10% of their total loan balances owed in a Fifth Third Bank account as one of their conditions to qualify before you could get approved for your next investor loan. For example, if the combined total of all your Fifth Third loans were $2,300,000, you would have to keep and maintain a minimum balance $230k in cash at Fifth Third.

• Then you have financial advisors and experts with all kinds of recommendations from “no need to have cash on hand” to “keep a minimum of 12 months’ worth of expenses as cash reserves.” What should you do? How much cash should you keep on hand as your emergency fund? Your answer should be realistic and not a theory or concept. The best way to be realistic is to take a serious look and factor in recent events, history, and what you expect to happen in the near future. Take a look at recent history. The COVID-19 debacle impacted a boatload of investors, and many have hit the wall and gone belly-up. This never-happened-before series of events slammed investors. First, our economy was shut down. It was weird to drive around town and see perhaps maybe 10% of what the normal traffic would be. Many businesses were shut down. Employees’ and tenants’ job income went to zero, along with the many investors who had jobs and/or businesses – they too had their income crash to zero. At this point in the beginning, everyone hoped and prayed this was short-term. No one expected the financial nightmare to continue even today. The Wendy’s restaurant near my home closes every day at 3 p.m. due to no help, and their dining room is closed. Only the drive-thru is open. Then you have the eviction moratorium and the foreclosure moratorium, along with many other federal, state, and local issues. Now ask yourself: If this were to happen again, how much cash would you need to “survive?” Try this simple formula on for size:

STEP 1: Grab a notebook and a sharp crayon and write down ALL of the expenses you have every month. Write down every expense, both for your real estate business and your personal expenses, including groceries, cell phone bill, gas for your vehicles, etc. It’s very important you write down every red cent you pay out every month. Don’t leave anything out. STEP 2: Next, write down all of your income when things are going great, including your job/business income and rents from your tenants. Then take your total income number and subtract your total expense number and hopefully you will have a positive number and not a negative number. STEP 3: Take a look at your total expenses for the month and multiply it by 6 months. This will be a big ugly number, and this should be your guide on the minimum of cash reserves to keep on hand. Continued on Page 32

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‘Sheroes’ in Real Estate By John Mays Shero = a woman admired or idealized for her courage, outstanding achievements, or noble qualities, a heroine. From March 1st – 31st we celebrate Women’s History Month to help remind ourselves of the accomplishments of women throughout the years to our culture and society. As a male whose formative experiences in this industry were with some remarkable real estate professionals, agents, and brokers – who could only be described as superwomen, or as some would say, Sheroes – I would like to pay tribute. These women who helped me exemplified power, purpose, prudence, protection, and prosperity in every way. Women have truly made a distinguished history in the real estate industry in a very short timeframe, even in the midst of historical barriers. Did you know that before 1974, women were not legally permitted to obtain a mortgage without a male cosigner? But now today, women actually outpace men in getting mortgages. In fact, single women have bought more homes than single men Barbara Corcoran is every year since at least 1981. one of the most Also today, women reprerecognizable real sent the majority of real estate estate moguls in the professionals in the United world. She built the largest residential States and even make up 67% realty in New York, of realtors. and now she's a Shark The population of women on "Shark Tank," investors and owners is conABC's hit reality show. tinuing to grow. Although "I started my real estate company with a precise numbers are debated, $1,000 loan and built it current research suggests that into a $5 billion about 30% of property investbusiness.” (Photo: ors in America are women. barbaracorcoran.com) This statistic makes it clear that a gender disparity persists, but that gap is rapidly closing. And to none of our surprise, when comparing their performance to others, some records indicate that women

tend to outperform men on their investment returns, often by as much as 2:1. Studies from industry experts are paying attention to what makes women particularly successful as property investors, noting strengths like careful market research, lowrisk property choices, and a willingness to commit long-term. The future is looking brighter and brighter for women in real estate investing. The challenge is on now for every KREIA member to make some special time to celebrate the women in real estate who have impacted you and your journey, and a great time to double-down on support for those women who you seek to elevate and help enlarge their territory. The challenge is on now for With millions of every KREIA member to dollars in sales, make some special time to Quiana Watson has celebrate the women in developed a real estate who have reputation as the top impacted you and your real estate professional for the journey, and a great time to metro Atlanta area. double-down on support The broker has been for those women who you ranked in the top 2% seek to elevate and help of realtors according to the National enlarge their territory. Association of Let’s take this moment Realtors. (Photo: to highlight the amazing Quiana Watson’s women leaders on the Facebook page) KREIA Board of Directors who work selflessly to steer and lead this organization and its members to a prosperous future: Alexis Fentress, Mary Conrad, Karen McKnight, Michelle Rawn (Parliamentarian), Lauren Willoughby (Media Manager), and KREIA Vice President Stacey Duvall. 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.

Reporting Back From a REIA Mastermind Meeting By Alexis Fentress Friends, I had the honor of attending our first RMG (REIA Mastermind Group) meetup, which was held in Tampa, Florida, and hosted by Vena Jones-Cox this past February. If you didn’t get a chance to read John Jones’ article in KREIA’s January newsletter, I highly encourage you to do so, because he does a thorough job explaining who RMG is and what they do. Anyway, John stumbled upon this mastermind group over a year ago when he was KREIA’s Vice President and Programming Director. He was searching for our next wholesaler speaker – and he found Vena, who’s a longtime real estate investor, mentor and the head of two Real Estate Investor Associations in Ohio. Vena kept insisting that John sit in on a few RMG meetings to get a feel for how valuable this mastermind group could be for our organization. He was impressed. Since becoming a part of RMG, KREIA leaders haven’t yet been able to join them in person, but Jordan Pohn has been attending their monthly Zoom calls. I felt like we may be the underdog going into this on Day 1, but I quickly realized how much we do well, as a board and organization. For three days straight, members from 10 other investor groups gathered in one room and tackled all the good and bad about our groups, from 9 a.m. to 4 p.m. I learned so much and met some really awesome people! What I loved the most was being in a room surrounded by others who are as passionate about serving their members as I am. I also was extremely honored to represent one of the more established REIAs. Day 1 we all shared our stats about members, meeting attendance, and hot topics. I found out there were eight non-profit and four for-profit investor associations in RMG.

Five of the REIAs had over 500 members, while only two had over 800 members (KREIA was one of them). One main question we answered at the end of the day was, “What topics do members most attend?” The answer from the group Alexis, along with leaders from other REIAs, spent a lot of time around tables, whether was: mobile they were hashing out plans for future real home parks, estate meetings or networking over a meal. AirBnB, BRRRR, something with “millionaire” in the title, Trade Show/Vendor Show, and meetings with prizes. You’re probably wondering how the topics were chosen, and on the first day of the mastermind Vena had each group throw out 2 questions/problems they wanted to discuss, and that’s the topics were chosen. We also covered how to take care of the speakers, and membership prices. During Day 2 we brought it back home and reminded ourselves of our club’s vision, then discussed which national speakers we liked and didn’t like. On the last day, Day 3, we discussed all things related to social media and receiving reviews. We also talked about additional focus groups, volunteers, vendors, ethics, and vendor/sponsor contracts. There was a lot of information to capture, and I was glad to have Mary Conrad by my side. She represented us well and provided the group with specific statistics about our organization. If you know me, you know how much I love KREIA, and how eager I am to give back. Being a part of RMG now is priceless to me, because now I have somewhere to go to learn how to become a better board member for you. I am excited to bring back new, innovative ideas to better the club, but still keeping our vision at the forefront: education. If you are interested in getting more involved in KREIA, please reach out. We are always looking for volunteers. Alexis Fentress is a buy-and-hold investor, a KREIA board member and a real estate agent with RE/MAX.

Alexis and Ali Spika shared a selfie moment. Ali is from REIN, Real Estate Investors of Nashville. (Photos: Courtesy of Alexis Fentress)

► See Page ?? For a schedule of RMG Zoom Workshops

Updated Foreclosure & Flipping Data from ATTOM Trends offer insight for benchmarks and new market opportunities By Nina Musgrave, KREIA Volunteer, Investor More information can be found at www.ATTOMdata.com. This article uses their U.S. Foreclosure Market Report (Feb. 2022) and U.S. Home Flipping Report (Q3 2021).

The latest home flipping report shows that 5.7% of home sales in the United States are properties that have been flipped, a number that is relatively unchanged, but up, over the last few years. Among counties with 10 or more home flips in Q3 2021, the highest rates included:

Camden County, NC (15.9%) Iberville County, LA (12.5%) Across the United States, foreclosure filings in February Lumpkin County, GA (15.1%) Mccurtain County, OK (12.5%) 2022 are up 11 percent from January 2022, and 129 percent Logan County, KY (14.7%) Palo Pinto County, TX (12.4%) from January 2021. Ten percent of those properties were Canadian County, OK (14.4%) Fannin County, GA (12.2%) lender-repossessed REOs, down 45 percent from January Adams County, OH (13.4%) Dekalb County, TN (12.1%) 2022. The report shows that 1 in every 5,320 housing units The average time to complete the remodel and transacthad foreclosure filings in February 2022. States with the highest foreclosure rates are New Jersey, Illinois, Ohio, South tion was 147 days, the lowest turnaround time since Q3 Carolina, and Nevada. The top ZIP codes with a population of 2010. Gross-flipping profits are at their lowest point since early 2011, around $68,800 nationwide, compared with the 10,000 or more with the highest foreclosure rates are: original purchase price. For perspective, this is a 32% ROI. Markets with the largest returns on investment during the 48047: New Baltimore, MI 44110: Cleveland, OH third quarter of 2021 on typical home flips were Buffalo, NY 44108: Cleveland, OH 60473: South Holland, IL 33409: West Palm Beach, FL 08070: Pennsville, NJ (ROI of 130.6 percent); Oklahoma City, OK (127.6 percent); 60429: Hazel Crest, IL 44105: Cleveland, OH Florence, SC (125.8 percent); Pittsburgh, PA (124.6 percent) 44112: Cleveland, OH 34759: Kissimmee, FL and Scranton, PA (123.2 percent).

photo by bruce w. hinson www.obedientcamera.com Above at left and right: CPA Mike Grinnan briefed a room full of investors about 2021’s tax updates at February 24th’s main meeting. Below: Alexis Fentress snapped a cell phone photo of Ryan Engelbrecht during the early meeting. Ryan, with BDry Waterproofing and Foundation Repair, talked about leaky basements. At Bottom: Getting from Woodhaven’s parking lot to the meeting hall was an “umbrellasrequired” endeavor. Later, KREIA landlords were probably hearing about new basement leaks. Bottom Right: Woodhaven’s buffet was looking good – and so was Beverly Setree, back on her feet after months in a wheelchair.

photo by bruce w. hinson www.obedientcamera.com

KREIA

Photos

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

photo by bruce w. hinson www.obedientcamera.com

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

Valley Village Rehab House: A Closer Look Shane Garza and team dove deep into their processes for visitors By Lauren Willoughby KREIA members who attended Shane Garza’s March 1st L.O.T.S. event at 13404 Hopedale Way in Southwest Louisville were lucky in many ways. Not only was the free lunch exceptional (sandwiches from McAlister’s – thank you, Chris and Margaret!), but so was the education. Shane and his team – Project Manager Mickie Anderson, Host Shane Garza said this 3-bedroom house, built on a slab, was a simple project: “It’s just paintAcquisition Manager Jamie and-carpet – put on some lipstick and clean it up.” His team acquired it from a homeowner who Gibson, and Marketing Coordi- turned it into a rental and then realized he didn’t want to be a landlord. (Photos: Lauren Willoughby) nator Kylee Carl – practically gave us a master class on what’s working today forthem in Shane’s team does direct mail too, but he said it’s not marketing and flipping houses. The 10-page handout they performing as well as their other marketing efforts. “Over the distributed, which included printouts of their Property Repair last few years, response rates on direct mail sank.” Estimate Checklist (PREC), Scope of Work, and Materials list Back to texting: “Our newest lead channel is our Launch spreadsheets, was an education in itself. Control,” said Kylee. It’s an investor-focused text-messaging Investors who before hadn’t given much thought to using platform (launchcontrol.us) that offers local phone numbers, texting platforms for deal sourcing probably left with a drip campaigns, and “one-click Podio push.” burning desire to jump in. “I handle all the texting for now,” Kylee said. “We have several lead channels,” said Jamie, who added Shane also mentioned Lead Sherpa (leadsherpa.com), an that they found this particular house through cold calling. SMS and skip-tracing service that can do lead stacking, as a “We have seven virtual assistants who work for us that are resource. calling three different markets.” “They’re great websites,” Shane said. “So what you do is The VAs are based in the Philippines, Kylee added. “We put a list in there, and you text these people. Some people actually put them through a class every morning with an don’t want to be bothered on the phone – they’d rather be English tutor to help them get better with their accent.” texted.” Jamie pointed out that texting has allowed them to cover more ground with their marketing funnel. There’s not time to make individual contact with up to 20,000 leads. But with texting, “we can at least make some type of contact with them. So far we’ve really had a good response rate.” Kylie, who likes absentee lists, added: “Ever since I’ve started texting with the absentee list, the response rate has gotten a lot higher.” When a promising lead filters through, Jamie goes into action using a “rough estimate calculator” to evaluate the deal. “We always look for multiple exit strategies,” he said. “The numbers were good enough on this one that there were several.” Mickie Anderson, Kylee Carl, Shane Garza and Jamie Gibson were awesomely Continued on Page 36 transparent L.O.T.S. hosts!

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 News Roundup National REIA, of which KREIA is a chapter, reports on issues affecting real estate investors and also links to stories of interest from other organizations. Here is a sampling of recent news and resources that Brad Beckett, NREIA’s Director of Education & Outreach, has compiled. For more news, visit RealEstateInvestingToday.com

Buying Vs. Renting in America’s Largest Cities On a recent episode of Real Estate News for Investors, Kathy Fettke says rents are not just making a rebound after a dip during the pandemic, they’re blowing right past the monthly cost of buying a home in more than half of the largest housing markets. Listen on Spotify: spoti.fi/3ubMSf9

Construction Spending Up 1.3% in January The U.S. government is reporting that total construction spending in January 2022 was at a seasonally adjusted annual rate of $1,677.2 billion, which is up 1.3% from December’s revised estimate. Read the full report: bit.ly/k2203construction

The Typical Home Changes Hands Every 13.2 Years Redfin says that after steadily rising for a decade, homeowner tenure flattened near its peak in 2021. They point out that in 2021, the typical American homeowner had spent around 13.2 years in their home. Read the report: bit.ly/k2203tenure

Construction Industry Adds 60k Jobs According to recent data from the Associated General Contractors of America, construction employment increased by 60k jobs between January and February, 2022, marking the steepest pace in nearly 40 years. Read the report: bit.ly/k2203jobs

You Need to be Marketing Daniel Hart says full-time investors don’t just spend more time investing, they also take a different approach, in that they treat it as a business. Real estate is actually a people business that happens to involve houses, so full-time investors know they need to be working with people to create deals, not just browsing listings, or looking at wholesaler emails that pass by. Read the article: bit.ly/2203marketing

Federal Judge Blocks Oregon’s Ban on ‘Real Estate Love Letters’ In early March, a federal judge blocked implementation of a new Oregon law that effectively banned personal letters (aka ‘Love Letters’) written by prospective homebuyers to sellers. According to the Washington Examiner, the law, which went into effect in early January, sought to stop sellers from making decisions based upon factors such as race, gender, or sexual orientation as a result of influencing letters. Read the article: washex.am/3qhO6V3

S&P CoreLogic Case-Shiller Index Saw 18.8% Annual Home Price Gain The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 18.1% annual gain for December 2021, which they say is another record high. Read the report: bit.ly/k2203pricegain

Disney to Build Condominiums and Single-family Communities According to a recent report on FOX Business, Disney has announced that it will entering the residential real estate space with a new community called Storyliving. The first one will be called Cotino and will be built in Rancho Mirage, California, with additional future locations under exploration. Read the article: fxn.ws/3ImpwJ3

Income Sources of Older Households With the Baby Boomers firmly in the retirement lane (with the blinker on, of course) and subsequent generations already there, the folks over at the U.S. Census Bureau recently published a new report detailing the income sources of older households. “Low-income households are more dependent on Social Security, while more affluent households have significant income from pensions and retirement.” Read the report: bit.ly/k2203income

State Individual Income Tax Rates & Brackets for 2022 According to the Tax Foundation, individual income taxes are a major source of state government revenue and account for roughly 36% of state tax collections with 42 states levying individual income taxes. Read the report: bit.ly/k2203statetax Continued on Page 26

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.

Need help with tenant screening and leasing? Try Rent Perfect for solutions to thorny landlording problems Take a look at Rent Perfect! It’s backed by private investigators. And as a KREIA member (and through KREIA’s affiliation with National REIA), you receive some discounts. Here’s what happens when you’ve found an applicant: Give Rent Perfect your prospective tenant’s email address, and they send him or her an online application. The $39 application fee goes to Rent Perfect, but in return you’ll get an applicant report that includes this information: • • • • •

Criminal record (if any) Past evictions (if any) Credit history Address history Sex offender registry info

Investigators at Rent Perfect also check data for jurisdictions that don’t offer instant reports, to help you get a profile that is up-to-date. When you’ve found the right renter, you can use Rent Perfect to forward him or her a state-specific lease that can be filled out electronically. And you can modify the lease to suit your needs. Finally, Rent Perfect also offers more tools that can help you get insurance and collect rent affordably and quickly over the Internet. And their tools are mobile-friendly! Rent Perfect was formerly known as ISC, Investigative Screening and Consulting. Call 1-877-922-2547 for more information. When you visit their website, rentperfect.com, you can fill out a quick form to receive an emailed copy of the ebook “Steer Clear of Your Next Eviction: A Guide for Rental Property Owners.” In the book, Rent Perfect President David Pickron writes about common mistakes made during the application process, warns of costly red flags and offers money-saving tips to help you avoid having to evict your tenants. David Pickron also hosts his own podcast with more tips for landlords. You can find it at Apple Podcasts, Spotify or your usual podcast source. You can also listen here: podcasts.rentperfect.com

National REIA News Briefs Continued from Page 24

New Home Sales Down 4.5% in Jan. The U.S. Government is reporting that sales of new singlefamily houses in January 2021 were at a seasonally adjusted annual rate of 801k, which is 4.5% lower than December’s revised rate and is 19.3% lower than one year ago. The median sales price of new houses sold in January was $423,300 with an average sales price of $496,900. Read the report: bit.ly/k2203newhome

Higher Lumber Prices Add Nearly $19k to the Cost of a New Home We continue to post about rising lumber prices and their impact on the housing industry. In a recent report, CNBC’s Diana Olick says the price of lumber has been on a roller coaster since the start of the pandemic, and it’s disrupting the housing market. Watch the video: cnb.cx/3MV87dQ

More Than a Third of Americans Rent a Self-Storage Unit Storagecafe says self-storage has seen tremendous growth recently. In fact, according to their recent analysis, roughly 38% of Americans use self-storage, with General X and Baby Boomers leading the way. Read the report: bit.ly/k2203storage

FHFA House Price Index Says Prices Rose 17.5% Year-Over-Year According to the latest Federal Housing Finance Agency’s (FHFA) House Price Index (HPI), U.S. house prices rose 17.5% from Q4 2020 to Q4 2021. Read the report: bit.ly/k2203fhfa

Zumper’s Rent Report for Feb. ’22 Rental information site Zumper recently released their monthly National Rent Report showing that their median national rent for 1-bedroom apartments in February 2022 was $1,393 and the median two-bedroom rent was $1,708. Read the report: bit.ly/k2203rent

Zombie Properties Down in Q1 as Foreclosure Activity Rises According to the ATTOM Data’s Q1 2022 Vacant Property and Zombie Foreclosure Report, there were 1.4 million residential properties in the U.S. sitting vacant, representing 1.4%, or one in 73 homes, across the nation. Read the report: bit.ly/k2203zombie

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.

Upcoming RMG Workshops: Held Online via Zoom Call

Donate ‘Most Needed Items’ to the Home of the Innocents

One of the benefits of KREIA’s joining the REIA Mastermind Group (RMG) is becoming part of its educational network. Vena Jones-Cox and her associates plan twicemonthly Zoom-based training sessions, tapping many real estate investing experts to teach workshops covering the gamut of real estate topics. So far, KREIA members have taken online classes on analyzing leads, managing rentals systematically, creative financing, and more, via RMG Zoom workshops. The next workshop coming up is March 26th’s “How to Negotiate Win-Win Deals with Sellers,” taught by Ray Sasser – who’s been investing for more than 30 years. Sasser plans to cover how to establish credibility, how to deal with different seller personality types, and the “10 power principles of negotiation.” We’ve just received the 2022 2nd Quarter schedule of RMG Zoom workshops. Check out what’s coming! If any interest you, watch for registration pages coming soon to KREIA’s home page.

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:

● April 9 – How to Make Deals at EVERY Stage of the Foreclosure Process: “We’ll show you where and how to get short sale deals, the inside secrets of getting bank-owned property offers accepted, the rules around FNMA, FHA, and VA foreclosure bidding, and more.” ● April 23 – Hands-on Workshop: The Definitive Guide to QuickBooks Online for Real Estate Entrepreneurs with Jerry Fink: “Join recovering CPA and real estate Investor Jerry Fink for a hands-on class about basic accounting terminology, how to set up a chart of accounts, pay bills, write checks, create invoices, enter incoming rents, wholesale fees, and checks from sales of houses, utilizing reports, and more.” ● May 7 – How to Pump Up Your Retirement Account with (Creative) Real Estate Investments: “Feeling ‘stuck’ with your small-dollar IRA or 401(K), and looking to grow it faster? Equity Trust Company’s own John Bowens will share the basics along with creative ways to grow that account fast, starting with little money (master leases, partnering and joint venturing with others) and some more advanced structures like IRA-owned LLCs and lending trusts. This is an all-new class built JUST for people who are stalled out in their quest for big retirement incomes.” ● May 21 – Wholesaler Quick-Start Day with Vena JonesCox: “Here’s the step-by-step, no-BS guide to exactly what you need to know about, and work that goes into, a wholesale deal. (And things you should absolutely AVOID doing, unless you enjoy spinning your wheels and not getting paid).” ● June 11 – Using Lease/Options to Buy and Sell Houses with Taylor Takacs and Dave Corsi: “Lease/options are

https://www.homeoftheinnocents.org/help-thehome/donate/wish-list/ Here’s the current list of most-needed items 1. Hair grease 2. Electric razor 3. Facial tissue 4. Pull-ups (Size 4T-5T) If you bring any of these items to KREIA’s March 24th main meeting, I will deliver them to the Home of the Innocents. Look for a box on your way in at Woodhaven. Another way to help is to buy requested items through HOI’s Amazon Wishlists at the same website link above.

powerful tools: you can use them to control properties without ownership (and without the seller needing to pay capital gains taxes!) when you’re the buyer. And get big, nonrefundable upfront fees plus rent plus little to no management or repair costs when you sell.” ● June 25 – How to Start and Scale an Airbnb Business (without much money) with MeiLani Hock: “MeiLani Hock started her short-term rental business using OTHER PEOPLE’S PROPERTIES and has built that into a full-time income in just a few short years. If you’d love to get into the short-term rental market, but don’t have the big bucks it takes to buy great properties, you’ll love this intense training on how to find, evaluate, control, and run short-term rentals that you don’t even own.”

Windows Tech Tip: Supercharge Your Clipboard

holding the text you want pasted and then click it. The Clipboard History also holds copied images, showing a thumbnail in their Clipboard History boxes. CTRL-V still works as it always has – to paste in the item most recently copied to the Clipboard. (And for text, CTRLIn 2018 Microsoft snuck a time-saving feature into SHIFT-V still handily pastes in the last bit of text, but stripped Windows 10 that I just now learned about, and it’s making of its formatting attributes.) my life easier. To delete an item from the Clipboard History – or to “pin If you do a lot of boilerplate copying and pasting, like I do, it” or to clear Clipboard History items – click on the three you’ve probably wished you could store more than one dots in the upper-right corner of a Clipboard box to get an snippet of text at a time in Windows’ Clipboard. Now you option menu. can. Just turn on Clipboard History. Here’s how: For me the best use of the Clipboard History comes when I need to send the “same email” to a bunch of different 1. Click the Windows Start button. people, but there are a few paragraphs that need to say 2. Click the Settings gear icon. different things based on each recipient’s situation. 3. Click the System icon. I keep a text file stocked with the custom paragraphs and 4. Scroll down in the left panel of the System window copy each one into the Clipboard separately – and then until you see the Clipboard option, then click it. they’re waiting for me in the Clipboard History’s top boxes, 5. Toggle the Clipboard History setting to “On.” ready for custom pasting when I go to copose those emails. Want a video walkthrough of enabling and using Now when you do a CTRL-C to copy something to the Clipboard, it remains in the Clipboard even after you copy in Windows’ Clipboard History? Visit this URL: another item – it doesn’t get wiped out. bit.ly/k2203clipboard To paste something in from the Clipboard History, plant your cursor and do a Windows-V (hold down the Windows If you do, a friendly robot at YouTube will walk you key while tapping the V key). That’ll get you a little window through the whole process. with boxes representing the items you’ve copied into the – Lauren Willoughby Clipboard. The newest item is in the top box. Locate the box

Mike Butler: How Much Cash Reserves Do I Need? Continued from Page 6 It can be a huge challenge to discipline yourself to keep this cash on hand, especially if you are growing your investing business. Here’s a simple tip on how you can make this easier to pull off. Every sharp investor has a self-directed Roth IRA. I highly recommend Carl Fischer’s CamaPlan (CamaPlan.com) because they have the lowest annual fees. (I still have Roth IRA accounts with Equity Trust, but their annual fees are too high compared to CamaPlan.) Your annual contributions to your self-directed Roth IRA are made from your “after tax dollars” meaning you have already paid income tax on your contribution money. The Roth IRA begins with your already paid income tax contribution, and all of your profits are tax-free. With the traditional IRA, on the other hand, your contributions are tax-deferred, resulting in you having to pay income tax on all of your profits. Here’s your magic. Your self-directed Roth IRA is like having the “ultimate savings account.” If you are old enough to remember, growing up our parents encouraged us to open a “savings account” at our local bank. In order to withdraw any money from your savings account, you had to physically go to the bank and fill out a withdrawal slip. This was a lot more cumbersome than writing a check on your checking account. Well guess what? Your self-directed Roth IRA is just like that, but a lot safer for you. Continue to make the maximum allowable contribution every year for your Roth and your spouse’s or partner’s Roth. Because you have already paid income tax on the monies you contribute to your Roth every year, your contributions can be treated just like – even better than – old-school savings accounts. For example, assuming you have a spouse and/or partner and each of you contribute the maximum of $6,000 ($7,000 if you are 50 or older) ever year, after 5 years your total contribution would be $30k each. With two people, that’s $60,000 in cash that you can withdraw with no penalty, no interest, no harm, no foul. Why, how can you do this? Remember, you already paid your income tax on your contributions!! If you are 50 years old or more, your combined total is $70,000. I am NOT encouraging you to deplete your cash contributions in your Roth. This is just an extra strategy to help you maintain your 6 months of expenses as your cash reserve to survive unexpected loss of income. Another not-well-known strategy involves life insurance. I’m not an expert on life insurance other than paying my monthly premium, but I’ve learned and observed over the years that investors can “borrow” money from their life

insurance policy at a low interest rate. As they make payments with interest back to the policy, their life insurance policy gets to keep the interest, growing your cash value. Some investors have used this strategy on their parents’ life insurance policies. You must find an expert on insurance strategies who can hold your hand and walk you through the process properly. If this interests you, start with your life insurance agent. HELOCs, lines of credit and credit cards, etc., can be closed and shut down by the lender when our economy takes a hit. Don’t rely on those as access to cash. Even if you pull out the maximum cash on those items, many lenders have called total balance due now when those accounts are shut down. What a mess. Continued on Page 36

L.O.T.S. Event With Shane Garza Continued from Page 21

Mike Butler: How Much Cash Reserves Do I Need? Continued from Page 32

When the numbers on a property check out, Jamie passes the property over to Mickie, who manages the rehab. “After we come into a home and we do our PREC, we design a scope of work,” said Mickie. “That is what we send out to our contractors, and they bid on it. It’s very detailed.” The company measures two metrics: flip time (the duration of the rehab) and money turnover (from when they started spending money on a project to when they make money). “Our goal for flip time is 11 weeks, and our goal for money turnover is 15 weeks,” Mickie said, adding, “My main goal is to streamline and standardize our processes so that we can flip faster, so that our money can get back to us faster.” “It’s hard to find good contractors that do good work that you trust that will adhere to your goals,” said Mickie. “Something I really work to do is to foster that relationship, because they don’t work for us, they work with us. But we have the same end goal in mind, and that’s to grow our business.” Shane said his company uses two main contractors. Back to Chris McCarty and Margaret Reed of Platinum Sponsor Flippin Loan, Shane gave them a shoutout in his Continued on Page 38

Your self-directed Roth IRA and the insurance strategy cannot be shut down or closed. 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 Also, catch Mike’s real estate investing podcast: www.5hrRealEstateWeek.com Mike Butler is a KREIA Past President, a recipient of the Ed Melton Award, a property manager, a high-volume landlord, a principal in Tenant Finder Service, a retired Louisville undercover police detective, and the author of the best-selling real estate book “Landlording on Autopilot,” now available in its 2nd edition.

L.O.T.S. Event With Shane Garza Continued from Page 36

GOVERNMENT AFFAIRS LINKS

backyard presentation to the KREIA crowd: Flippin Loan gave his company the funding for this deal. “We’ve been working with Flippin Loan for several years. They’re so easy to deal with,” Shane said. “Because of our relationship, it’s as easy as a text... ‘Hey, we need x amount of dollars on this property. We think the after-repair value is this,’ and then Chris will do his due diligence on it and give us a thumbs-up.“ Shane also gave a shoutout to Freedom Property Group for their PREC sheet, which he modified with his own contractors’ prices. Thank you for hosting us, Shane, Mickie, Jamie and Kylee! And thank you for your transparency in explaining your processes and answering our questions.

THE NUMBERS Purchase: $85,000 Rehab Cost: $27,000 Est. Sales Price: $155,000 Realtor/Misc. fees: $11,500 Estimated Profit: $31,500

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

Find the video from this L.O.T.S. event to be available soon on our Videos page.

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

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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

Foreclosures Heat Up: Are You Ready? We've invited a panel of local experts to explain how to acquire properties at auction, at foreclosure sales, and as short sales through the banks. Join us to hear from: Debbie Richardson, Eli Williams, Frank Miller, & Julie Bex. KREIA V.P. Stacey Duvall moderates. March 24th, 5:30 p.m. - 9 p.m. ► 5:30 p.m. Early Meeting: Julia King, of King Financial Repair, talks about improving your credit and getting the loans you need. ❖ March – 9 a.m. – 3 p.m. Workshop: How to Negotiate Win-Win Deals with Sellers. Investor Ray Sasser teaches a Zoom-based seminar that covers how to deal with different seller personality types, establishing credibility, and more. 26th

❖ March 29th — Noon – 1 p.m. L.O.T.S. event. We visit Jim Young’s latest rehab project. Platinum Sponsor Flippin Loan provides a free lunch to members! ❖ April 6th – Noon – 1:30 p.m. Lunch & Learn. Duna Bolotte hosts this educational event. For members only. ❖ April 12th – Noon – 1 p.m. Tool Tip Tuesday With Tamara West. Investor/broker demonstrates investor resources. ❖ April 14th — 5 p.m. – 7 p.m. KREIA Happy Hour. Networking at Woodhaven. Everyone is invited. Bring a friend! ❖ April 21st — KREIA Game Night. Join us at Martin’s Bar-BQue for a competitive, educational game of CASHFLOW.

Main Meeting Preview Here’s what’s coming in the months ahead: 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