Real Estate Journal - Fall 2017 by National Real Estate Investors Association

Real Estate Journal

Fall 2017

2. Who Did I Rent To...? An Update On Terrorism Awareness for Property Owners, Managers and Staff 3. Search for Meaning and Real Estate Investing 4. Real Estate Investor Groups Receive Awards of Excellence 5. A Huge Victory for Ohio Landlords With Implications Across America 6. Smart Home Technology That Will Help Sell Your Next Deal 8. Don Leiby Awarded Ambassador for Peace Medal

15. How Do I Get Started Investing in Real Estate? 16. The Time We Paid Cash for a House in 3 Days 17. Take a “Vacation with an Education” on National REIA’s 21st Annual Cruise 18. Rent Control Bill on Hold after Landlord Opposition 19. Watch Your Words 22. Five Cost-Effective Bathroom Updates Every Property Needs

11. NREIA Legislative Update $4.95

Member Spotlight Jeff Rappaport

eff Rappaport started his real estate career in 2000 after quitting his job with no savings. He bought a training program from a late-night infomercial on How To Buy Real Estate With No Money Down. That purchase lead to another and then on to a 3-day seminar in Atlanta, GA. In 2001, he co- founded the Salt Lake Real Estate Investment Association. He and a partner grew the group to over 150 members. Beginning in the middle of 2008 to the latter parts of 2011 he lost everything in the real estate crash and was out of real estate completely. Then, an unexpected chance encounter of a very special individual changed everything! He met Rebecca Jensen at the end of 2013 and without her even knowing it, she convinced him

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Vol. 2 Issue 4

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hen it comes to “doing it” there’s only one place that “gets it done”… the Home Depot. For many years, National REIA members have been able to take advantage of incredible savings achieved through rebates from Home Depot’s ProExtra program thanks to their exclusive partnership with NREIA. Whether it’s paint, appliances or drywall for that house-flip, NREIA members continue to save thousands of dollars on their investment projects. And now, there’s more! National REIA members can save 15% on in-store purchases of exclusive Hampton Bay cabinets (excluding Designer Series). This is a deal that you won’t want to miss.

In order to take advantage of this new promotion, National REIA members will need to obtain a special coupon that is redeemable in stores only, not online. To get your coupon, please visit your local REIA or online at www. NationalREIA.org/HDcabinets. For questions, please call 888-7627342. Hampton Bay cabinets offer attractive styling and convenient storage options all at budget friendly prices. With quality features typically found only in much more expensive cabinets with long lead times, Hampton Bay stands out as a great value. Home Depot stores stock 31 cabinets and accessories per finish backed

up with 74 additional products available via special order. Kitchen cabinetry is fully assembled, ready to install, and is available in finished or unfinished styles. The Home Depot is the world’s largest home improvement specialty retailer. They offer customized cost reduction solutions meet the evolving needs of real estate investors at all levels of the industry. Thanks to a special partnership, National continued on page 8

Facing the Financial Realities of Housing by Chris Kuehl, Ph.D.

ot that the housing market has ever been easy to understand – there are just so many variables to consider and we all know that nothing is as local and specific as the real estate market. Within the borders of a single city there can be dozens of market forces at work that drive prices, demand and development. When one adds the national issues involved with large scale investing and the pressure of demographics the situation gets ever more complex. There are two major issues driving the housing sector these days and

both have been around for a while. The first has to do with the financial realities of housing –increasingly higher prices in the hot real estate markets, the impending hike in mortgage rates and the lack of supply as there are too few existing home owners willing to sell while builders have been hampered by everything from a shortage of skilled labor to the dearth of construction loans. The market for the starter home is challenged as there are plenty of people that are seeking that home but lack the financial resources to make the decision. This ties into the second major issue – the behavior of the millennial. This has been a highly

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perplexing generation and a great deal of energy has been devoted to trying to figure this group out. It is still not clear how much of their behavior is deliberate and how much is reactive. This is the cohort that came into their own in the middle of the worst recession since the one in the 1980s. They have been struggling to catch up ever since and many have the added burden of very expensive student loan debt. Some of their attitude towards housing is based on their lack of financial security but some of that position may be related to real attitude shifts as compared to those in the Baby Boom generation continued on page 7

Real Estate Journal

Who Did I Rent To...?

An Update On Terrorism Awareness for Property Owners, Managers and Staff by Charles Tassell

his is a phrase you never

want to hear coming from yourself! However, if you have been in the business very long, the thought has probably crossed your mind.As property owners and managers, the thought that the terrorists on the three different flights on 9/11 rented from someone, sends a chill down our spine. Add to that the chill of balancing the tension of the threat of a federal discrimination lawsuit if decisions are based on color, race, religion, or national origin. As screening agents, we often want to act like the proverbial ostrich with our head in the sand. As good stewards of our properties and as citizens of our country, we can still address concerns without discrimination. Attention needs to be focused on actions and behaviors rather than the 7 pillars of the protected classes. Consistent application

of screening, leasing, and rules is essential to professional management. One of the valuable steps is to be sure to keep records of applicants – with photo IDs. Just verifying IDs can help eliminate problems upfront. Operationally, a wary eye during these times is also a best management practice. There are several key behaviors that are indicators of potential problems. These indicators, like red flags, warn us of potential problems. Additionally, each of us has a built-in detection system we commonly refer to as intuition, or gut feeling. Those who work

with the public long enough, and who train themselves to avoid the “7 deadly sins” of discrimination, can be effective in seeing the signs of trouble. While no one indicator may be the clincher, a combination, or the means by which you are made aware of the indicators, may be a sign that more expertise should be brought to bear on the situation. The Federal Bureau of Investigation and the Department of Homeland Security would rather hear from you before an event arises, than as part of a follow up incidence report. Just a word about contacting the FBI and DHS: succinct, accurate, and timely information is the most effective. Whether you choose to call their 800 numbers or email a concern via their websites, please know that they are responding to the information. You may never hear from them – but that silence doesn’t mean nothing happened. Neither department will typically comment on an

ongoing investigation, with good reason: they don’t want to tip off the potential criminal. On the other hand, please do not be alarmed if investigators arrive at your doorstep seeking additional information. Pending your review of the badges or IDs, please work with them in a calm, discrete, professional manner. Again, asking about their investigation, unlike TV, will not result in a plot discussion. Unlike dealing with the local drug dealer, whose thuggery was probably learned on the streets and in local penitentiaries, the slightly more sophisticated criminal or terrorist, foreign or domestic, most likely will have had some training, including training that suggests minimizing suspicion. A few best management practices can change your perspective and have an additional impact on security. It is a tried and true statement that if a resident, after continued on page 13

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The views & opinions expressed herein by various authors may or may not reflect those of National REIA, its partners, advertisers or affiliates. 2

Real Estate Journal · Fall 2017

Real Estate Journal

Search for Meaning and Real Estate Investing by Rebecca McLean, Executive Director, National REIA Happiness cannot be pursued. It must ensue.” Victor Frankl

f you have ever read Victor

Frankl’s Man’s Search for Meaning, you understand the depth of this quote. To be happy we have to have a purpose, a reason for being. To this end many people today are not just pursuing a job or career, they are looking for a calling. Making money is certainly still important but many people want more – not just more stuff, more meaning. I am so grateful to be able to say that my time at National REIA has been a calling. Not just to pursue what I love doing but being able to facilitate for others a pursuit of their passions. Think about it in Maslow’s hierarchy of needs, housing is on the second level of the pyramid. People need the safety of a place to call home. As I

have said for so many years – what estate investment trusts, not HUD we do matters. Investors make a based projects, are the backbone of difference in people’s lives and in our nation’s housing. Our members communities. as a whole address all the issues that Please don’t roll your eyes or are vital to today’s housing market laugh. It is far too easy to take what – affordable housing, first time we do lightly –especially as we are buyers, community rehabilitation, caught in the day to day activities etc. Investors are vital to the housing of rehabbing, landlording, or lending. If we do what we do well, market and to the communities we serve. In 2007 we can have –2010 during amazing impact. *Practice your trade well. Pursue the worst of If we don’t take it your passion with pride. And the crash and seriously, then it always introduce yourself as a real when the value is irresponsible. housing Several years estate investor with dignity and of delight. You, after all, have found p l u m meted ago as we a n d entered our your path to purpose. conventional relationship with financing our lobbyists and political advisors I was forced to had all but disappeared investors truly evaluate our industry in the were the only ones keeping light of “big” politics and the “hot” communities alive, preventing issues that surround real estate. entire neighborhoods from being It was then that I realized how vacant and falling into disrepair. important we are to the nation’s Housing options offered by economy and the population in investors are often the more general. Real estate investors, not affordable housing option, large apartment owners, not real providing housing opportunities to a wide range of incomes. Real estate investors were providing “workforce housing” long before the term was coined. Tighter underwriting and income verification standards have also made it much more difficult for potential home buyers to qualify for loans. This is how investors help with single family homes as rental properties or that are available with

a rent-to-own option. Not only can investors provide more suitable properties (often larger and with yards!) within traditional rental arrangements but they can also provide more creative terms for financing or other creative ways to own a property.In these ways we empower families and build communities. We, as real estate investors, get to pursue a mission – and an important one at that! In today’s culture, we have become dulled to the more stuff = better life message. Most of us have gotten to a reasonable level of comfort. We (the collective we) aren’t as driven by the dream of a bigger house, more expensive car or more exclusive vacation anymore. Americans, especially, want more... not more stuff... more experience, more life. How many books, podcasts, movie themes, etc. contain some part of a search for meaning message? This should be our clue. We have an opportunity that many never receive. We can make an impact by improving communities or affecting lives via housing, “Doing well by doing good.” *Original quote generally attributed to Benjamin Franklin

National REIA is one of the founding members of The Seller Finance Coalition, which was formed in February of 2014 to advance the interest of the seller finance industry. Last year the Seller Finance Coalition continued to grow with the addition of several thousand new grass roots members across the country. For more information about the SFC and the Seller Finance industry, visit www. SellerFinanceCoalition.org. Follow them on Twitter @SFCdotORG and like them on Facebook. Real Estate Journal · Fall 2017

Real Estate Journal

Real Estate Investor Groups Receive Awards of Excellence

ho were the nation’s top real estate investment groups in 2017? That question was put to the test at

the National Real Estate Investors Association’s annual meeting this past June in Austin, Texas. Three groups (representing small, medium and large) received an Award of Excellence for their outstanding efforts in six major categories; Government Affairs, Community Service, Communications, Membership Development, Education and Strategic Industry Partners Marketing. National REIA’s Awards of Excellence are a celebration of all the accomplishments their members have achieved throughout the past year. Their bestowal honors the most outstanding real estate investment associations from all across America. The 2017 NREIA Awards of Excellence winners are:

Large Group:

Mid-America Association of Real Estate Investors, Kansas City, Missouri

Medium Group:

Alamo Real Estate Investors, San Antonio, Texas

Small Group:

REIA NYC New York City, New York

In addition to the three Awards of Excellence winners, eighteen real estate investor groups received Honors of Merit for their outstanding efforts over the past year.

2017 Honors of Merit winners:

Government Affairs: Small - Real Estate Investors Association of Toledo, OH

Communications: Small - Illinois REIA

Education: Small - Illinois REIA

Medium - Traction REIA DC/VA/MD

Medium - ACRE of Pittsburgh, PA

Large - Investment Community of the Rockies, CO

Membership Development: Small - North Metro REIA

Strategic Industry Partners Marketing: Small - Illinois REIA

Medium- Traction REIA DC/VA/MD

Medium - Traction REIA DC/VA/MD

Large - Investment Community of the Rockies, CO

Large - Investment Community of the Rockies, CO Community Service: Small - Metro East REIA, MO Medium - Traction REIA DC/VA/MD Large - Investment Community of the Rockies, CO

Real Estate Journal · Fall 2017

Real Estate Journal

A Huge Victory for Ohio Landlords With Implications Across America by Jeffery S. Watson, Esq.

saying that because of that anxiety, a doctor has prescribed a dog for you, does not necessarily meet the reasonable person standard to expect a landlord to understand that the person applying has a disability.

n Monday, August 7, 2017, the 11th District Court of Appeals in the State of Ohio unanimously issued a written decision whereby they reversed part of the earlier decisions affirming the finding by the Ohio Civil Rights Commission that a landlord named Helen Grybosky had committed housing discrimination. The most contentious area in this case had to do with comfort or assistance animals for individuals claiming to suffer from anxiety. Approximately nine years ago, testers working for a local fair housing organization repeatedly contacted Helen and asked her carefully-crafted questions. They concluded that she had discriminated against people with disabilities by saying she needed to charge a deposit for someone wanting to rent who had a comfort or assistance animal because of their anxiety. Helen was initially urged by her first lawyer and by the fair housing agency to settle the case. The first lawyer was authorized to pay $1,000 to settle it, but the fair housing agency wanted $5,000 to $10,000. Thereafter, the matter went to a full multi-day hearing before an Administrative Law Judge working for the Ohio Civil Rights Commission. That judge found that Helen Grybosky and her son (who had no ownership interest in the property and never discussed anything with any of the testers) had discriminated regarding both households with children and people with disabilities. This decision staggered the Gryboskys and their counsel when, as a combination of the attorney’s fees, compensatory damages and punitive damages, the cost was quickly reaching six figures and

beyond. In a full appellate hearing before the Ohio Civil Rights Commission, the Ohio Civil Rights Commission adopted the judge’s finding regarding liability but significantly reduced the damages recommended to under $10,000. Thereafter, Ms. Grybosky, through her counsel, appealed the matter to the Court of Common Pleas in Ashtabula County wherein the property in question was located. The trial court modified the Civil Rights Commission decision in part and affirmed it in part. It was in this appellate court decision that things got very interesting and technical, so please bear with me. The judgment from the 11th District Court of Appeals affirmed in part and reversed in part the decision of the trial court. The Court of Appeals decision specifically states that only the portion of the trial court decision finding in favor of the Civil Rights Commission was reversed, thereby leaving the portion of the trial court decision finding in favor of the landlord in place. It is that language beginning on page 10 of the trial court decision that is important for landlords today, particularly when facing issues regarding tenants requesting comfort or assistance animals. The

trial court stated on page 11 that: Every person is presumed to know the law. Landlords are expected to know that they may not discriminate against disabled person or persons with children in offering rental housing.... “Disability” means a physical or mental impairment that substantially limits one or more major life activities, including the functions of caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working; a record of a physical or mental impairment; or being regarded as having a physical or mental impairment. Several times the testers indicated to Ms. Grybosky that they were inquiring on behalf of someone who had severe anxiety that affected sleeping and who had an assistance animal prescribed. The trial court found that “[t]he fact that a doctor has recommended or even prescribed a therapy animal, without more, would not place a reasonable person on notice that the condition described by the testimony in this case substantially limited a major life activity.” What the court is saying is that just saying you have anxiety and

Several takeaways from this case exist: • Anxiety may be a symptom of a disability, but on its own, it is not a disability. • Medical excuses can be written for conditions that are not disabilities (i.e. do not impact major life activity). • Landlords are held to a reasonable person standard. As such, we cannot ask about disability or medical conditions; but if a prospective tenant volunteers such information, it is important to accurately record what is being said by the prospective tenant. • Landlords need to have a policies and procedures manual, and they need to follow it and be sympathetic and empathetic while doing so. The more you sympathize and empathize with a prospective tenant, the more the prospective tenant will tell you. The more the prospective tenant tells you, the better able you are to make a decision regarding renting or not renting.

Jeffery S. Watson is an attorney who has had an active trial and hearing practice for more than 25 years. As a contingent fee trial lawyer, he has a unique perspective on investing and wealth protection. He has tried over 20 civil jury trials and has handled thousands of contested hearings. Jeff has changed the law in Ohio 4 times via litigation. Read more of his viewpoints at WatsonInvested.com.

With National REIAU, we have made learning from some of the best fast, easy and inexpensive. National REIAU delivers great low-cost, highquality investor training on exactly the subject you want, exactly when you want it. Learn more by visiting www.nationalreiau.com Real Estate Journal · Fall 2017

Real Estate Journal

Smart Home Technology That Will Help Sell Your Next Deal by Than Merrill

case, they’ll pay for themselves in four to six years—and they should last 20 to 30 years.”

mart home technology has

become synonymous with the most impressive houses on the market, and for good reason: it’s one of the most universal amenities today’s buyers covet. And why wouldn’t they? Smart home technology improves on the traditional home in just about every way imaginable. Perhaps even more importantly, it’s no longer relegated to the most expensive houses on the market; every home can partake in the latest trends. t’s worth noting, however, that smart home technology isn’t only for buyers, but sellers as well. In fact, those investors looking to sell their next deal faster and for more money should consider adding the right smart home technologies to their property. Smart Home Technology You Can Bank On In order to sell a property with smart home technology, you must first understand why people want it in the first place. If for nothing else, you can’t give the people what they want if you can’t understand their basic needs. Remember, as a real estate investor, you are a problem solver. If you can uncover the issues prospective buyers need solutions for, you stand a much better chance at selling a deal faster and for more money. So, without further ado, here are the reasons buyers will be looking for deals with smart home technology, and what you can do as an investor to satisfy their inquiries: Home Safety I am convinced that nothing is more important to prospective buyers than a home’s propensity for safety, not even price. Case in point: most homeowners are more than happy to pay more for a home they can feel comfortable living in, and even raise a family in. While it may sound trite, you can’t put a price on safety; it’s one of the few things that are literally invaluable to prospective buyers — a sentiment only magnified in buyers with young children. As long as most buyers feel the same, there is absolutely no reason your products shouldn’t give them the one thing they covet the most: safety. 6

It’s as simple as that: there is more demand than ever before for a safe home. As a real estate investor, it’s in your best interest to give the majority what it wants. If you can offer a house that meets the criteria of the majority of buyers, there is no reason you shouldn’t expect to sell it for more money in a shorter period of time. Fortunately, the advent of technology no longer requires us to surround our homes with a moat to keep us safe. In fact, creating a safe living space is as simple as adopting the latest smart home technology. A number of security systems exist in which homeowners can tap into smart home technology. Perhaps even more importantly, said systems are more than capable of alerting the proper authorities, whether it be the police or the fire department. When all is said and done, the most basic component of a smart home technology security system is the standard camera. It’s the average camera that will make most people feel a little safer. ” Almost all the users that we talk with prefer to have a camera,” says David DeMille, director of A Secure Life. “ It gives a lot of comfort to know how things look when you’re not there.” One of the most popular camera options available to compliment your smart home technology is none other than the Nest Cam. In addition to syncing with other Nest products, the Nest Cam is fully capable of streaming live footage to your smartphone, as well as alerting you of unwanted noises and motion. And, at around $200, the Nest Cam is a relatively cheap smart home technology security

If solar panels seem like too big of an investment for your next deal, there is an easier way to introduce smart home technology to your property that helps ease the burden of monthly energy bills: smart thermostats. As it turns out, the same company that made the Nest Cam I mentioned early also makes one of today’s best smart thermostats. Otherwise known simply as the Nest, these smart thermostats actually learn the temperatures you deem optimal. As a result, they are capable of turning option. off when the desired temperature is reached, effectively eliminating Energy Conservation overuse. It literally programs itself Outside of home safety, smart and pays for itself in one fell swoop. home technology has become It’s worth noting, however, synonymous with conserving that smart home technology isn’t energy and resources. In fact, the relegated solely to technology right home additions can actually as we know it. While the very drive down the cost of living. Who phrase conjures of miles of wiring, wouldn’t want to do that? computer access and hard drives, As it turns out, the majority of smart home technology can just as millennial buyers have placed easily refer to windows, insulation, an emphasis on green home and doors. That said, you may want improvements, or those that can to consider installing windows and simultaneously reduce their carbon doors that regulate temperature footprint and energy bill. Whether more effectively. it’s cutting their energy bill in half or reducing water consumption, Lifestyle & Convenience most prospective buyers are more In addition to safety and than interested in the ways your energy conservation, smart home product can actually help them technology is entirely capable of save money, so why not give them improving our quality of life and what they want? convenience. And while a bit more It would be nearly impossible superficial than the previous two to talk competently about smart points I have made thus far, who home technology without doesn’t want a home that boasts mentioning the one thing that is the latest and greatest gadgets? taking the country by storm: solar If for nothing else, smart home power. As energy bills rise and the technology is nothing more than cost of electricity becomes enough a sizzle feature; one that is meant to factor into the purchase of a to create demand and capture the home, more and more buyers are attention of onlookers. So, the convinced that solar panels are next time you introduce some a good investment, and for good new technology into your home, reason: compound savings over the don’t forget to compliment safety life of the home. features and green technology with While not cheap (the average- thosethings that are just plain fun. size 5-kilowatt solar system will After all, your job is to sell a home, run owners somewhere in the and nothing will make your job neighborhood of $20,000), solar easier than providing a product panels can save roughly $150 to that people want. $200 a month in energy bills. At I maintain that there is one that rate, most solar panel systems room in the house worthy of the take about 15 years to pay for best smart home technology: the themselves. According to Realtor. kitchen. At the very least, kitchens com, however, “ the upfront cost sell homes. The more you can do to of solar panels may soon dip to less than $10,000. And when that’s the continued on page 11 Real Estate Journal · Fall 2017

Real Estate Journal

Financial Realities ...continued from page 1 and even the Gen-X population. The question is where does the real estate market go from here? The dominant thought for the past few years has been that millennials will continue to be attracted to the multi-family unit. They are not yet starting families at the rate their predecessors did. They do not yet have that permanent job that offers an opportunity to settle in one place. They are not as attracted to the house as investment as they watched the struggles of their parents when they had to sell their homes and took big losses in the process. Is that preference starting to change? Will the millennial start to shift towards the single-family home? There are those in the investment community that think this is the case and they are starting to put their money on that bet. One approach has been to get more engaged in the single-family home rental market and there have been some dramatic moves of late. The latest was the combined effort of Invitation Homes and Starwood Waypoint Homes. The combined company (to be called Invitation Homes but led by Starwood CEO, Fred Tuomi) will have 82,000 homes

in 17 markets with a combined worth of $11 billion. This is large but still just a drop in the bucket as far as the total market is concerned. The company and others that are going down the same road are betting that renting will continue to appeal to the millennial and they also expect that some of the retiring Boomers will choose this option as well – a way to reduce the work of owning a home while maintaining the advantages of a single-family dwelling. Rents remain strong as far as single-family units. Actually, the rental market in general is good as there are still many who prefer the rental option or who can’t afford to get into buying their own home as long as demand exceeds supply. The question is always –how long does this last. Real estate is notoriously flexible as there are not that many barriers to entry as compared to other industries. The demand for rental property has stimulated rapid growth in the multi-family sector but there are some concerns that overbuilding is starting to become a problem in some cities. There is also the fact that many of these multifamily projects are being built in suburbs and exurbs far away from

the preferred living options for the millennial. They have demonstrated a desire for more urban living where they have better access to mass transportation and the amenities of an urban environment. This is where the opportunity for the single-family rental property comes in. There is an incentive for the owner to renovate and rent as there is demand sufficient to drive rents up. This is essentially the process of gentrification and it has been occurring in almost every major (and many minor) cities. The majority of this development is relatively small scale but there is enough taking place to interest institutional investors who are employing a variety of strategies – everything from creating new companies to using REITS. Despite the development of the Invitation Homes model the majority of the investment groups that are engaged in this market are mid-size and regional. The fact that real estate is always locally driven makes it all the more important for investors to know the region they are engaged in. The mid-level institutional investors are paying close attention to regions and areas they know well. This does not preclude the national players

from trying to roll up several of these regional projects once they have been established. As is always the case, there will be an end to this ideal situation. What happens as demand starts to fade for the single-family rental? Will the investors of today stick around for the next up cycle? Will they quickly exit and move on? What brings this growth to an end? The general sense is that at some point supply will exceed demand and the rents will fall. This could come as more of the Baby Boomers turn loose of their homes. Right now, there is not much interest in selling but mortality will play a bigger role in years to come and these homes will be on the market. If this coincides with a desire on the part of the millennial to own a home as opposed to renting the whole picture begins to change but this remains a development some years in the future.

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Real Estate Journal

Don Leiby Awarded Ambassador for Peace Medal

by Brad Beckett

here are probably not a lot

of people that can tell you Neil Armstrong’s favorite flavor of ice cream, but Don Leiby can. As a young sailor serving on the aircraft carrier USS Essex during the Korean War, he got to know a young fighter pilot named Armstrong, who was also stationed aboard the ship. Apparently Leiby, who served as a cook aboard the famous ship, was the man who made the ice cream and, according to Leiby, “everybody knew me.” Leiby would go on to become a highly successful real estate investor and an “ambassador” of the National Real Estate Investors Association. Neil Armstrong would, of course, go on to become the first man to walk on the moon. The rest is history. This past summer, Don Leiby was awarded the Ambassador for Peace Medal by the government of South Korea. The medal is an expression of appreciation from the Republic of Korea to American servicemen who served during the Korean War from 1950-1953. Leiby traveled to South Korea as part of the Korean War Veterans Revisit Korean Program to receive the honor on July 27th – which marked the 64th anniversary of the signing of the armistice that effectively ended the Korean War. In an accompanying statement on behalf of the Korean people,

the award proclaims “It is a great honor and pleasure to express the everlasting gratitude of the Republic of Korea and our people for the service you and your countrymen have performed in restoring and preserving our freedom and democracy. We cherish in our hearts the memory of your boundless sacrifices in helping us reestablish our free nation.” After his stint in the Navy, Leiby made his way back to Sinking Spring, Pennsylvania to buy his first home in 1957 – which he still lives in today. In fact, most of his real estate investments are within an arm’s reach, to which he is quick to say that he can “see them all from his roof.” He doesn’t believe in absentee landlords and feels it’s important to be able to personally take care of his tenants. “If something goes wrong with one of my units, I can get there in a few minutes,” said Leiby. He was later instrumental in starting the annual National REIA cruise (see article on page 17) which was, quite possibly, inspired by his experience in the Navy. Leiby once said that joining your local REIA is like “taking vitamins for your job” and that they’re like a big family. Indeed….National REIA now has chapters all across the nation and is still going strong. Just like Don Leiby – who at age 86 recently climbed to the base camp of Mt. K2 (the 2nd highest mountain in the world). For more information about National REIA or to find a chapter near you, visit www.NationalREIA. com. Tell them Don Leiby sent you.

Don Leiby receiving his honor in South Korea, July 2017

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Real Estate Journal · Fall 2017

Real Estate Journal

Real Estate Journal Â· Fall 2017

Real Estate Journal

Real Estate Journal Â· Fall 2017

Real Estate Journal

NREIA Legislative Update Point of Sale Federal Suit - 6th District Court August started off with an amazing confirmation of the Constitution, or at least the 4th Amendment. Two towns in Ohio had legislation requiring “pointof-sale” inspections for all housing. The 1851 Center for Constitutional Law brought the lawsuit, even having it certified so that the illegal fees captured by the Cities were returned as well. The spokesman Maurice Thompson, Esq. stated, “Local governments do not have unlimited authority to force entry into Ohioans’ homes or businesses. To the contrary ‘houses’ are one of the types of property specifically mentioned by the Fourth Amendment; and Ohioans have every moral and constitutional entitlement to exclude others, even government agents, from their property,” adds Thompson. “The right to own property in Ohio has little value if local governments can continuously chip away at one’s right to actually make use of that property, requiring government permission slips for basic arrangements such as the sale of one’s home to a willing buyer.” The 1851 Center is part of a national network of think-tanks

and legal advocates on behalf of Constitutional issues, such as property rights. The gains made by each precedent in individual Federal Districts, slowly begin to restore Constitutionally protected Rights. To reach out to either a think-tank or Legal Advocate in your area please visit www.SPN. org. Vacant building license update A heads up for all speculators: letting a property sit may be creating more regulation and cost in your community. With housing markets tightening, few communities have patience for properties left sitting vacant and idle. Similar to the cost perspective of many landlords, communities look at vacant houses as a loss of revenue and an invitation for blight. All too often owners are the cause of that blight, whether they are overstretched for capital or taking on too many projects at once, or even if their contractors get behind. No matter the cause, many municipalities have had enough. Vacant Building Licenses, and their ensuing fees, are typically designed to both track vacant properties to make sure the basics (mowing, paper removal, trash

pick-up, etc.) are being maintained, as well as increase the carrying costs to incentivize re-investment or disposal of the asset. Whether it is title-less zombie properties somewhere in the foreclosure process or the speculator’s dream, more and more municipalities are not willing to sit by idly. If there are communities in your area struggling with idle properties or considering Vacant Building Licenses, consider reaching out to the Mayor and City Managers to speak at your local REIA meeting. Encourage them to invite investment in to their community and partner with the municipality especially if they are targeting certain areas for redevelopment. Real Estate Investors can have a wonderful impact on a community – just don’t be shy in reaching out.

top issue of a broad coalition of housing-related organizations and has outspoken support from numerous Congressmen and Senators. While the program has its flaws, and they are real, there is also the realization that without this program in place significant numbers of real estate transactions would be severely impacted. The National Association of Realtors estimates that 40,000 transactions a month could be stalled with the expiration of the program. The reality of the program moving forward is pretty good – the battle comes with every additional item that is amended to a bill that is perceived as critical, bipartisan, and necessary. Reach out to your local Congressional office and encourage them to not just to support it, but pass it – quickly and cleanly.

Flood Insurance The national Flood Insurance program is set to expire on September 30, 2017. HR 2874 is the likely replacement bill. However, in today’s dysfunctional Congress any bill that moves – even one like Flood Insurance which has broad bi-partisan support – can become bogged in the mire of The Swamp. On a more positive note, this is a

Smart Home Technology ...continued from page 6 increase the appeal of the kitchen, the better. And few things will do more to catch a buyer’s attention than the advent of the smart fridge. Specifically, the Samsung Family Hub Refrigerator is an eyecatching (albeit impressive) piece of smart home technology just about anyone would want. With cutting-edge cooling technology, a touch screen fit for a king, app-sync technology and an interior camera capable of streaming to your smart phone, it would be easier to tell you what this smart fridge doesn’t have; it really is a sizzle feature. And there is no reason to think your prospective buyers wouldn’t want one in their own home. If the price of Samsung’s Family Hub is too much for your budget, consider upgrading to other technologies that promote a life of leisure — without the cost, of course. Smart locks, for example, are a great way to regulate who can and can’t enter your home. Some even allow you to let people in while you are away by inputting a one-time code into your cell phone. That way, you don’t have to race home to meet the plumber Real Estate Journal · Fall 2017

or let in a family member that lost their key. Smart home technology can come in a variety of shapes and sizes, but that doesn’t mean you need to get everything. If you want to sell your house fast, and for more money, you simply need the smart home technology that the majority of people want. In meeting the buyers’ needs, you can greatly increase your chances of selling a home. And, if you aren’t quite sure what to implement in your next rehab, the ideas I laid out here should be a good starting point. Than Merrill is Founder and CEO of FortuneBuilders, Inc. He has bought and sold hundreds of properties nationwide during his investing career and founded FortuneBuilders with the simple idea of sharing his knowledge and passion for real estate with aspiring investors. As a graduate of Yale University and a former NFLplayer, Than attributes his success in sports, business and investing to coaching, education and systems. Learn more at www.fortunebuilders.com.

Real Estate Journal

Real Estate Journal Â· Fall 2017

Real Estate Journal

Who Did I Rent Too?... ...continued from page 2 proper notice, will not provide entry for maintenance repairs, there is most likely something amiss. The same is true for regular property reviews, whether it is a monthly, quarterly, or even an annual walk through. There are two key types of situations that your rental unit may be used for: a staging area or as material support. When a rental property or unit is used for a staging area, it is likely occupied by numerous non-related individuals, coming and going at odd hours. Typically most normal human interactions are avoided. While avoided eye contact can seem to be a concern, please remember that for some cultures eye contact is considered a form of conflict, and is avoided out of courtesy, thus avoided eye contact in conjunction with other behaviors, may be more evidence for concern. Additionally there may be demands for longer notice before being allowed in the

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Real Estate Journal · Fall 2017

rental with some rooms still kept “off limits”. Both threatening and nervous body language should be a red flag during routine maintenance inspections and repairs. How the rent is paid can also raise questions. Rent being paid without obvious signs of employment, or heavy reliance on cash can be concerns. Additionally, checks from odd sources, or credit card payments from names other than those on the lease might be a concern, especially if during the application process different expectations were set, such as a job. Aside from the odd personal interactions, a staging area may have normal items, but ones that seem out of place, for example, agriculture products like fertilizer in an apartment, propane tanks, toxic chemicals, or a number of electronic parts or phones in various stages of disassembly. This may also be why tables are covered –with items obviously obscured from sight. Consider if things you see are in places that don’t make sense. Does it seem suspicious? The material support facet is a different kind of problem. The lack of people around, the storage of boxes – marked or unmarked, and the access at odd hours may give rise to appropriate suspicions. An emergency maintenance repair may stumble on something odd. For instance, moving boxes are normal. Four months into a lease, if there is no furniture, no clothes, and still a variety of boxes, that’s suspicious. Again, there may be a collection of normal items, but not ones that normally go together, such as duct tape and electronics, fuel cans, and maps. Even a variety of employment rejection letters, especially with different names for the address, can be a sign of a problem. Surveillance equipment should also be a red flag. We are not considering the resident with the weekend wedding photography gigs, or the bird and flower aficionados. Covert photography and wireless micro-cameras may be appropriate for the Private Investigator, but law enforcement may interested in who else is using such equipment. This includes sonic magnifiers, also known as listening devices. Another odd sign for either type of location will be strange amounts and types of trash. Whether it is a single family home or a multifamily building – most residential trash is pretty common and consistent. Similar to signs of drug use, odd smelling fluids and chemicals or unusual amounts of more commercial types of products

can be a cause for alertness. Packaging with varying names to the same address, within a similar time frame can also raise suspicion, as should uniforms being delivered for those not in that line of work. While a property manager or maintenance worker may see an occasional strange thing, please do not forget the neighbors. While some neighbors love to complain, they just might be on to something. Especially when they say, “it was odd...” or “such and such seemed out of place.” Their statement may resonate with other concerns, in which case, it may be time to take action. In any situation where you have concerns, it is best to contact law enforcement agencies. Do not confront suspicious characters on your own. For your own personal safety and the safety of other residents, reach out immediately. As the Bureau of Justice Assistance, part of the U.S. Department of Justice, points out,

“Preventing terrorism is a community effort. By learning what to look for, you can make a positive contribution in the fight against terrorism. The partnership between the community and law enforcement is essential to the success of antiterrorism efforts. Some of the activities, taken individually, could be innocent and must be examined by law enforcement professionals in a larger context to determine whether there is a basis to investigate.“ As members of the rental and multi-family industry, it is incumbent on each of us to be keep an eye out for suspicious activity. With recent pushes to drive more domestic terrorism, especially in the US, our wary eye may be the difference in preventing the next major incident.

Reporting Options

Concerns can be reported through several different venues. 1. Visit a FBI office in person 2. Fill out an online tip form at www.fbi.gov 3. Utilize other tip sites, such as www.ic3.gov 4. Or call 1-800-CALL-FBI (225-5324) Calls are routed to the appropriate office or department. If you would like to establish an ongoing relationship with the FBI for national Security concerns, please contact your local FBI office and speak to a representative from the Joint Terrorism Task Force. Always remember for emergencies call 911. 13

Real Estate Journal

Real Estate Journal Â· Fall 2017

Real Estate Journal

How Do I Get Started Investing in Real Estate? by Christian Bryant

of my favorite responsibilities as President of NWREIA & PAROA is mentoring real estate investors. Roughly 90% of my new clients are either people that I have helped for free in the past or people they refer. I have helped hundreds of investors over the years and find new investors share similar questions or problems. There are three main hurdles that all investors must get over and in my experience the majority struggle with at least one of them. In my opinion, these hurdles are also the three most important skills of every real estate investor. First is the ability to have a conversation and be likeable. An investor’s net worth is directly related to their network. Growing up I was an introvert. I was the kid who was friends with everyone in school but never outgoing, stood on the sidelines during dances, and was ultimately happiest alone with my thoughts. It was simply what made me feel comfortable. When I got into sales about ten years ago I realized that I had a problem. My natural state in a room full of professionals that I don’t know is to be quiet and just get through it. To be successful, though, I needed to learn how to “work a room” and have a pleasant conversation with complete strangers. At first I took to reading a few books on how to be personable. Many of those books are very good reads and worth the investment. It finally “clicked” in my brain when I realized that the key is to relax, focus on the other person and listen. Without getting personal you ask about their work, their family, their goals, etc. Then sit back and truly listen to what they are saying. Fight the urge to interrupt and respond thoughtfully. The only thing that you should have running in the background of your mind during the conversation is trying to figure out how you could help them. Then it just comes down to the basics, being respectful and remembering your manners. The second hurdle that new investors struggle with is simply getting started. Let’s face it, committing to your first deal is nerve wracking. You could lose all your money. You could go into massive debt. You could get sued or ne

Real Estate Journal · Fall 2017

to ask yourself is, what happens if you never even try? Maybe you’re financially safe, but how many life goals will you be giving up on? How many years will you be adding to your retirement age? To me these thoughts are much more terrifying than the thought of failure or debt. Remember that I said take an “educated” leap. Real estate investing is a risky business and much can go wrong. Do not skip your research and due diligence taken advantage of. At some point, talk about getting into real estate prior to committing to a deal. There you must take an educated leap investing continue talking about it will be a point, though, where into that first deal. Most people that their whole life. The first question continued on page 22

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Real Estate Journal

The Time We Paid Cash for a House in 3 Days by Chad Carson

profitability) of being able to buy a piece of real estate quickly. But ne time my business partner before I tell you about my deal, and I paid cash for a house I want to tell you a similar story and bought it in 3 days! The about Warren Buffett. deal was agreed to on a Wednesday, and we closed on that Friday. I’ve Buffett Acts Fast During a been marketing “I Buy Houses, Crisis, Receives BIG Profits Fast Cash” for years, but I have to During and soon after the 2008 admit this was a first. Our previous financial crisis, three well-known best was another cash closing in companies, General Electric, only 2.5 weeks. Goldman Sachs, and Bank of There are a couple of reasons I America, faced similar problems. want to tell you about this deal. First, Like many other businesses in it’s just an interesting story that America, they were running might inspire you to buy your own dangerously low on short-term real estate investments. Second, cash. The companies all had it reinforces the importance (and good long-term business models,

but they were all affected by the mortgage crisis. So, as the general public panicked, other lenders and the stock market would not give these companies the shortterm cash they needed. And if they didn’t receive cash, they risked losing everything So guess what all three companies did? They called Warren Buffett and told him their dilemma. Buffett wisely decided to give them the money they needed, $3 Billion to G.E., $5 Billion to Goldman Sachs, and $5 billion to Bank of America. In the case of G.E. and Goldman Sachs, Buffett received

preferred shares that gave him 10% yearly dividends, plus he received a 5-year warrant (similar to an option) to buy more shares at a set price. The Bank of America deal was similar, but he received a 6% dividend and a 10-year warrant at a very attractive price to buy more shares. What did all of that mean for Buffett and his company Berkshire Hathaway? As of 2013, Buffett had made approximately $3.7 BILLION profit on his $5 Billion Goldman Sachs investment and over $1.4 BILLION on his $3 Billion G.E. investment. And by the way, both companies already paid him his original investment back in 2011! And the Bank of America deal was the sweetest of all. As of 2017, his gains from dividends and the stock warrant were $13.5 billion! Not bad almost tripling his money in 6 years! So this was a VERY profitable and safe deal for Warren Buffett. And as real estate investors, we can do the same thing. (In the interest of full disclosure, I own shares of Berkshire Hathaway) Think about the elements of Warren Buffett’s deals. He bailed out quality companies that were in a crisis. Some of their crisis resulted from the poor overall economic situation. And some of the crisis resulted from shortterm business problems within the companies, like G.E.’s unprofitable finance division, G.E. Capital. But even though the companies lacked short-term cash, Buffett saw that the companies were fundamentally sound and could be turned around. Buffett quickly gave them cash when banks and the general public were too short-sighted. That quick, confident, creative cash infusion gave him his profits. I look for similar characteristics when I “bail out” under-performing pieces of quality real estate. Sometimes the real estate itself is distressed, as in a major fixer-upper property. But sometimes the real estate is good and the owner is in a liquidity crunch, which was the case with our own 3-day purchase. Our 3-Day Real Estate Investor Bailout The house we bought was in good condition with renters in place. Our price was significantly below the full value, and the rental income produced gave us a very

continued on page 23 Real Estate Journal · Fall 2017

Real Estate Journal

Take a “Vacation with an Education” on National REIA’s 21st Annual Cruise

et’s face it, the majority of

conferences take place at some convention center in some far-off place, which may or may not allow you to relax and have a good time. That’s where National REIA’s annual cruise is completely different. Even the name of the cruise says it all; “A Vacation with an Education”– and it is all that and much, much more! The ship will depart from Ft. Lauderdale in late February embarking on a 7-day journey with stops in the Cayman Islands and Mexico’s famed Yucatan Peninsula. Along the way will be a

variety of educational programs & events geared specifically toward the real estate investor. This year’s special guest, Walter Wofford will teach you the mastery of making deals and how use real estate to fund your retirement. See the ad on page 9. But wait, there’s more! This is also a conference (the education part) so you won’t want to miss any of the many roundtable, panel discussions, networking, games and social activities – including cocktail parties. Topics include; Asset protection, Peerto-Peer lending, Crowdfunding,

Development, Senior Housing, Alternative Investments, Financing and Equity shares. In addition, National REIA will be providing industry & legislative updates as well as other nationally-renowned speakers. This season’s cruise takes place on Royal Caribbean’s Freedom of the Seas –a marvel of maritime engineering that’s packed with awesome amenities (the fun part). Through a special arrangement, National REIA has various options available starting at $889 per person (double occupancy). Are you unable to make this

Winter’s cruise? Don’t worry.... another one is just around the corner in early 2019. Watch for more information in the coming year from National REIA. For more information or to sign up, please visit www.NationalREIACruise.com.

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Real Estate Journal

Rent Control Bill on Hold after Landlord Opposition by Kathy Fettke

A bill to repeal that law was put on hold until next year, however, after fierce opposition from landlords. But the central issue in California, and other regions dealing with rent control issues --“Who does it really hurt?” If you haven’t heard it by name, the rule that helps make it possible to survive as a landlord in California is the 1995 Costa-Hawkins Rental Housing Act. Key features include a rent control exemption for units built after 1995 and an exemption from any kind of rent control for single family homes across California. It also requires that local rent control rules contain a “vacancy decontrol” provision. That makes it possible to raise the rent to market rates during the vacancy gap between tenants. Bannon said the landlord side of the debate covers three main issues: One, is that most property owners are not wealthy Wall Street executives. He says: “They are teachers, policemen, and firefighters who made the decision that they are going to invest their hard-earned dollars into a piece of property for their retirement, their kid’s schooling, their grandkids schooling.” Second, that rent control serves as a statemandated transfer of wealth from the property owners to the tenants, and third it runs contrary to the concept of “property rights”.

he battle is raging in some parts of the country over “rent control”. Markets that have seen some of the biggest gains in home prices are now engaged in housing affordability issues for renters -- and that’s resulted in cries for rent caps, and other controls. Landlords, on the other hand, say the plan will backfire, and only make matters worse. California is ground zero for many of these debates. In cities like San Francisco, the job market is thriving, demand for housing is high, and home prices have skyrocketed. That’s pushing up rents and creating an affordable housing shortage for low- and middle-income renters. Tom Bannon of the California Apartment Association said in a recent interview: “We find ourselves in a very interesting position where you’ve got a lot more jobs than you have new housing being built whether it’s for sale or for rent housing. And that’s when basic supply and demand kicks into gear.” So, rents rise, and at least a dozen California cities have adopted rent control ordinances to hopefully solve the problem. There’s now also an effort to overturn a state law that has protected some California landlords, and the viability of the rental housing industry, for decades. Repeal Hurts Independent Landlords What’s at Stake Consider this: Assembly Bill 1506 would do There’s a petition at the change. away with statewide rules that org website saying the repeal will exempt single-family homes, “DEVASTATE HOUSING” in including condominiums and California. One property owner townhomes, from rent control, wrote a message on that page along with homes built after 1995. explaining that she’s a long-time

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Visit www.RealEstateInvestingToday.com 18

school teacher in the Los Angeles area who owns a 1930’s triplex. She says she also has long-time happy tenants who are paying below market rates. She doesn’t want to raise the rent on those tenants despite higher costs for maintaining the building. She cites the cost of a handyman who charges twice what she’s paid as a school teacher. She does, however, hope to raise rents to market levels when the current tenants leave, eventually. She’s counting on the rental income for her retirement. Bannon calls the situation a “double-edged sword”. He says: “There has to be a happy compromise between rents that continue to soar and putting in enough supply to moderate those rent increases where owners will get a comfortable return on their investment -- enough return on their investment that they make a decision that they are going to put their capital, their hardearned dollars into a piece of rental property.” He says without that happy compromise, rental creation and ownership will become too difficult under rent control, investment dollars will go away, and employers will move out of state, taking jobs with them. Bannon says: “For California to continue to be economically strong, you need to have a housing jobs balance. And if you curtail or you do something that’s going to create a disincentive for people to invest in housing, the jobs will go away relatively fast.” More Investment Needed, Not Less According to Bannon, the solution is not rent control, it is to build more housing. He says the repeal will only serve to discourage investors and developers, which is the opposite of what we need. He says developers want assurances that their projects won’t be hobbled by rent control, or by complicated and costly permitting rules and regulations. And he says the Legislative Analyst’s Office for the California Legislature, agrees with him. The state agency issued a report a few months ago called “California’s High Housing Costs” and blames the problem on multiple barriers to the construction of new housing including: “community resistance

to housing, environmental policies, lack of fiscal incentives for local governments to approve housing, and limited lands for new housing construction.” In the report, it advises the Legislature to adopt policies that encourage significant increases in the building of new homes and apartments in high demand areas. Bannon says: “Whenever you have rent control and there’s uncertainty, new construction generally lags way behind because people, investors, are not comfortable investing their dollars. So, I would urge everybody to read Legislative Analyst’s report on how to solve the problem. He says the solution is simple: “You build, and you build quickly.” Real Wealth Network has experienced this first hand. Our company acquired and syndicated a 200-unit apartment building across from the Google headquarters in Mountain View. Our business plan has been to re-entitle the land to 800 units of mixed use space. The Silicon Valley is in desperate need of housing, yet the hoops our investment group have had to go through to make this happen have been enormous. The city has finally agreed to the plans if we designate a large percentage of the units as affordable housing. If cities made it easier and more profitable for developers to create housing, there would be more construction. That would increase inventory in a market that’s starving for more homes, and soften prices. Affordability levels could then be achieved more naturally. To find out more about our Mountain View project and others that are currently underway, visit www.RealWealthCrowd.com. We often talk about any new projects at our live events, which are posted on our website. Kathy Fettke is the Co-Founder and Co-CEO of Real Wealth Network. She is passionate about researching and then sharing the most important information about real estate, market cycles and the economy. Author of the #1 best-seller, Retire Rich with Rentals, Kathy is a frequent guest expert on such media as CNN, CNBC, Fox News, NPR and CBS MarketWatch. Learn more at www.RealWealthNetwork.com.

Real Estate Journal · Fall 2017

Real Estate Journal

Watch Your Words by Jane Garvey "Whether you think you can, or you can't, either way you are right." Henry Ford

t is no secret that attitude can be everything in making things happen. Believing that we can achieve our dreams is one of the most surefire predictors of whether we will or won't. So, how do we use this knowledge to our advantage? I am going to suggest that we change our language. There are powerful words that all of us can use to spur creativity and help us find solutions, and there are words we use that shut us down in resignation to our fate. Make the right choice and you will start believing that you can. That is a very important first step to success. Looking at the quote from Henry Ford, we want to change our thinking to "I can". See how the words "I can" feel? In some circumstances they are empowering, but in others we may not really believe them. Think of

Real Estate Journal Âˇ Fall 2017

something you would like to be doing, but aren't. Do you believe you can do it? If you believe you can, why aren't you? What is holding you back? I find the words "How can I?" to be very powerful when I am feeling like I can't. When I use these in connection with something that I would like to be doing I suddenly have a whirlwind of thoughts and ideas. Very often it helps me change my energy and attitude about the possibility of success. Use them in a group setting and you will kick off a brainstorming session that may very well produce the answers you are looking for. Sometimes we setup barriers for ourselves because we are afraid. New investors may say: "I don't know what to say", or "I don't have the money". These excuses can stand between them and their dreams for years. The question "What should I say?" will open the door to ideas and may get you started on searching and learning. "How can I do this with the resources I have?" or "Who do I know that can help me with the money?" are both questions

of exploration that will help you resolve the money barrier. Some committed investors with a "can do" attitude just proceed confidently in pursuit of their dream and find that even though they may stumble a few times, eventually the barriers fall away. You do not need to be perfect to do it, doing it is what is important, and you will find that "practice makes perfect". So the questions of exploration which get our ideas and creativity flowing often start with the words How, What, Where and Who. Use them to expand your ideas, your thinking, and your actions. Using the same words you used to make an excuse, and turning it into a question can make a huge difference, and just may change your life.

smoking. If you define yourself as a non-smoker, and keep defining yourself as this, then your behavior has to come into alignment. One of the powerful things about the phrase "I am" is that it is in the present. Changes to our behavior and our thinking are things we have to make in the present. We can make plans for the future, but the actions we take today are what make those plans come to fruition. So, whenever possible change your words to the present tense, and then take the action associated with them. "I am going to make 5 offers." Using the words "going to" changes this to a future action so it is nowhere near as powerful as saying: "I am making 5 offers." Even if both actions are actually taking place in the same time frame, one has more certainty with it than the For instance, turn: "I can't ." other, making it more likely that you actually do it. into: We also use questions to explore "How can I ?" the dark side: what went wrong, turn: why didn't I get the results I "I am afraid to ." expected. To me, these questions into: feel heavier than asking "What "What can I do to make myself can be learned from this?, or How more comfortable doing ?" can I improve on this? The earlier turn: questions invite us to explore the "I don't know how to ." problems, the later questions invite us to explore the same problems into: but in a positive, solution seeking "Where can I find out how to ?" manner. I recommend that you listen to and: "I don't have ." yourself and the words you use. Pay particular attention to the into: way you talk about the things you "Who do I know that can help want to change in your life. How with ?" do the words make you feel? Are you empowered by them? Do Every January I hear people they invite exploration of possible talking about their New Year's solutions? If not, change the resolutions. For many people this words. Success can be as simple is an annual exercise in futility. as choosing the right words in our They say things like self-talk. "I am going to give up ", and then they proceed to do so for a few days, weeks, or even months. Jane Garvey is President of the Chicago Creative Investors Association. The whole time they are doing it, they are feeling deprived, and eventually they go back to their old habits. What has gone wrong? In my opinion it is the simple fact that they were relying on will power and denial. Will power can only carry you so far before the effort is too much, and denial makes you think that you are deprived of something you deserve. Neither works very well for long-term success. Here is another approach that has proven successful. I have a friend who chose the words, "I am" to define himself as what he wants to be. For instance, he said to himself "I am a non-smoker" as he quit 19

Real Estate Journal

Member Spotlight ...continued from page 1

A 24-unit in Pocatello, ID they wholesaled and made a $25k assignment fee

to get back into real estate. In May of 2014, he started Wasatch Home Buyers, Inc. and the following year Rebecca joined him as his partner. They are both very active members of the Utah Real Estate Investment Association (Utah REIA). Please tell us a little about who you are and what you did before getting into real estate investing: Prior to getting into real estate I was a Youth Director for a Community Center in Salt Lake City, Utah. I worked with children ages 6-18. I loved my job and I was good at it! Things got very political and I knew it was time for a change. I wanted a new challenge and I wanted to make more money! So, I quit my day job and told my family I was going to be a real estate investor. My family was skeptical, to say the least, but supportive. My friends thought I was crazy! I just knew I could make this my career!

enough to open my eyes to what could be. By purchasing that information, I must have been put on some list because I started to get invitations to attend seminars all over the country. Fortunately, I chose the right seminar to attend and it gave me the knowledge and confidence to keep going. To date, I have spent over $300,000 on my education.

Describe a typical work week for you as a real estate investor: We have our Monday morning meeting with our team where we talk about what happened over the last week, what the goals are for the coming week and make sure everyone is on the same page. Most of my responsibilities are talking to sellers in person or on the phone (much more on the phone), making offers and making sure the rest of the team is working as efficiently as possible. A big part of my responsibilities is to create relationships. We do a couple of Where is your current Meet-ups and are active in the market and what is your Utah REIA to grow our business focus or area of expertise? We currently work in two and personal networks. Most of markets – Utah and Idaho. We are my job can be done from my desk stationed in Utah so we service at home. the entire Wasatch front. We work How long have you been virtually in Idaho. In fact, I only have been to Idaho one time in investing in real estate? my life and it was about 30 years Since 2000 with about 2.5 years ago. We are primarily wholesaling off (as mentioned earlier). That properties right now which makes it about 15 years total. includes single-family residences, multi-family, commercial and Tell us about your first deal: land. We specialize in being My first deal was prior to me problem solvers. We use a lot of quitting my job. I controlled a creative finance in our business. single-family residence with a In the past, I have done rehabbing, Lease Option. I found a tenant/ buy and hold, some development buyer and collected $5,000 nonand even notes. refundable option deposit. Little did I know, the seller went behind How did you get started? my back and conspired with the Back when I got started in tenant/buyer to push me out of real estate there was no internet. the deal. I ended up losing it on Information was not readily a technicality. Even though it did available. As I said earlier, I not work out well for me I learned purchased a real estate course that it could work! I needed that through an infomercial. It was confidence. The second time I not great information but it did got back into real estate (2014) 20

They profited handsomely after wholesaling this multiplex using a “We Buy Houses” ad on Craigslist

I wholesaled a 6-plex in Idaho How much time do you put that I never saw. I split a $13,000 into your real estate education? assignment fee with a partner. I am a big proponent of education. To this day we are part of several Mastermind Groups, How do you fund attend seminars fairly regularly your investments? I have not used conventional and do some teaching of our own. I financing through a bank since the also like a number of Podcasts that late 1990’s. If we are wholesaling I listen to regularly. Education can a property we don’t need any come in many different forms. The financing. When we buy the REIA, Meet-ups and Masterminds property we use private and hard are really beneficial and most of it money funds or creative financing comes from networking with other investors. with the seller. Has coaching or mentoring Do you have a real estate license? I have never had a real estate played a part in your success? Wow, I can’t think of anything license and have no plans on more important than coaching or getting one in the future. mentoring! My very first mentor

This home was part of an owner-financing deal that did really well

What projects are you currently working on? We currently have 13 projects going on and that could be closer to 18-20 in the next week. Out of the 13, eleven are wholesale deals. We also have some single-family homes, land and multi-family properties that we are wholesaling. The two other properties we actually bought and will immediately put them back on the market after some paint and carpet. We don’t like big renovations. Quick and easy is our motto!

has been around over 30 years and is an expert on so many different aspects of real estate. I am currently part of a Mastermind Group with two other nationally renowned people that have pushed us to take our business to the next level. And then, the next level! There are also a number of others that have been very influential in my real estate education and growth. We do some mentoring as well and love being able to help new investors reach their goals! It is truly satisfying to be able to pay it forward! continued on page 21

Real Estate Journal · Fall 2017

Real Estate Journal

Member Spotlight ...continued from page 20 What are your current and future goals? Our primary goal is to continue the growth path we are currently on. We certainly have financing goals for the next 5 years. In 2018, the goal is to gross $2.4MM. However, it is not all about money! We want to systematize our business so we can create freedom. The main goal is to have time for what is the most important – family, health and happiness!

generating leads and leveraging others to make things happen. I think the biggest struggle is getting out of my own way. Changing my beliefs and creating the right mindset! The mind is very powerful and if you are not careful, it will create barriers that can ultimately be your demise. On the other hand, if you do consistently work on your mindset your potential is endless. You are capable of so much more than you can ever imagine!

What do you like most What has been your top about what you do? Jeff & Rebecca with the family of one of his employees, Mohammed (front center), who struggle in this business? Personally, I like being able to moved his family to Utah from Iraq for a better live and to live the American Dream. Keep in mind, I have started out twice in this business with no help people! That may be sellers, How important is joining a business and he is great at getting money. We had to be creative in buyers, team members or other local REIA to a new investor? you in the right mindset! investors. I want to make an impact Every new investor should be on peoples’ lives. a part of their local REIA. It is a Do you have any interesting super place to network with other hobbies or something unique Do you have a tip or investors. We have experienced that you like to do? advice that you would pass investors that do a presentation I am a sports enthusiast and love along to other investors? every month and the content to play poker. Unfortunately, I don’t know how is extremely valuable. Lastly, if to make it only one tip. So, my you really want to be a real estate Does your business investor it makes sense that you three tips to success are: have a website? should be hanging out with people 1. Network/Education – meet other WeOfferOptions.com that are actually doing it. The investors at REIA’s, Meet-ups and relationships you make with other online. Learn the basics of what Social media accounts? investors can be life changing! you want to be doing. Wasatch Home Buyers What is your favorite self2. Mentor – learn from someone that is doing what you want to do help or business book? Anything from Tony Robbins. 3. Take massive action – quitting is I am a huge fan! Remember the not an option Jeff and Rebecca after a mindset goes a long way in this Utah REIA meeting

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Five Cost-Effective Bathroom Updates Every Property Needs by Sarah Fishburne, Director of Trend and Design, The Home Depot

n spaces like the bathroom,

small updates can create a big impact. Taking the time to make easy bathroom upgrades is a perfect way to increase the value of a property and keep residents happy. Here are five suggestions for bathroom updates that won’t break the bank: 1. Design with Tiles Tiles provide the backdrop for a bathroom so it is important to keep them looking fresh and up-todate with the latest design trends. Get creative with various colors, patterns, textures and sizes to bring your space to life. To keep your property marketable to varying audiences, try using a shade of blue, which is one of the most popular colors in both kitchens and baths. These Cashmere Blue tiles from the Merola collection add just the right amount of color and texture. Or for more modern spaces, upgrade to subway tiles which will create a sleek finish. For real estate investors who are looking for a quick fix,

Smart Tiles are designed with an looking for functionality and style. easy peel-and-stick application so Glacier Bay vanities, which come they can be installed in minutes. fully assembled, make this upgrade a breeze. (There are some vanities included in the new Home Depot 2. Fix Your Faucets Keep your property desirable by Cabinet program. See page 1 for upgrading to WaterSense certified more detail). faucets. These products are EPA certified to be at least 20 percent 4. Brighten Up more water efficient without Light Fixtures sacrificing performance or design. Install light fixtures that show The MOEN Kleo Mid-Arc Faucet off your property and help set the makes your property sustainable mood. Lighting is key to making a by reducing water usage and comes property attractive, especially if the in a chrome finish with a reflective, space lacks natural light. Sconces mirror-like shine. WaterSense and vanity lights are perfect for certified faucets are available in brightening up a bathroom and a variety of styles like brushed adding to the overall design of nickel, chrome and bronze to fit a space. Try a chandelier as a any bathroom design needs. statement vanity light for a bold look or go more minimalistic with the Minka Lavery Downtown 3. Upgrade Vanities In most bathrooms, space is at Edison Sconces. These fixtures are a premium. Upgrading a vanity industrial in style but their brushed requires very little installation time nickel finish gives them a modern and is a great way to maximize twist. space and increase storage options in bathrooms. Vanities act as a focal point in your space while providing practical solutions such as hiding unattractive plumbing, storing toiletries and increasing counter space. These features are important to consumers who are

5. Add Accessibility for the Aging Increase your potential customer base by making your property suitable for aging baby boomers. The number of households headed by a person aged 65 or older will increase by roughly 19.7 million, according to a report published by The Harvard Joint Studies for Housing Studies. Improve the accessibility and safety of your property for older residents by upgrading bathrooms with ADA-compliant amenities such as grab bars and shower seats. Additionally, tilt frame mirrors provide increased visibility for residents in wheelchairs. These simple additions will create a lasting impact on the functionality of your property. Sarah Fishburne is the Director of Trend and Design for The Home Depot. A trained Interior Designer, she leads a team of designers to bring great design to the store shelves nationwide. Her expert eye for design and style in every corner of the home began with her award-winning work at nationally recognized design firms, where she designed model merchandising and sales centers for national builders.

Get Started Investing...continued from page 15 you must take that leap. Trust in your analysis, education, and the advice that you received from your mentors. The third hurdle is what I contend is the only major difference between the 5% who make a sizable living and those who struggle. That is the realization that this is not a hobby! Here’s a little tough love for you: either fully commit to making this happen or move on. When you are an investor you must treat it like a real job. The dream is of course to be able to work 10-20 hours a week on your portfolio, but that typically

only happens after years of hard work. In the beginning, you need to commit as much free time as possible. The amount of time obviously varies for each person. but whether it’s five or 80 hours a week, keep moving forward. Eliminate time-wasting activities and fill that time with selfeducation, attending networking events, real estate investing classes, and searching for or analyzing your next potential deal. If you feel ready to tackle these three hurdles the next step is deciding what your first investment

will be. Typically, your financial situation will determine this. If you have some money to invest then you of course have more options. I suggest picking something that you are interested in and focus on that as your first. If money is tight or non-existent then you may want to consider starting with something like lease option deals, which don’t require a cash investment and won’t rely on your credit. There really is a first deal for every level of investor, which means there’s no excuse to hold back. Get out there and get started!

What are you waiting for? If you need help finding or analyzing your next deal, let’s schedule a meeting. Christian Bryant is President of IRC Enterprises (specializing in Property Management, Evictions, & Residential/ Commercial Sales for Investors) and is President of Northwest REIA, in Portland, Oregon. For more information please visit www.IRCEnterprises.com.

National REIA members can save 15-25% off of your annual office supply purchases at Office Depot/Office Max with 15-55% off pricing on over 1500 items most commonly purchased by businesses in all categories. Learn more at www.NationalREIA.org 22

Real Estate Journal · Fall 2017

Real Estate Journal

The Time We Paid Cash ...continued from page 16 profitable, steady return. This is like the dividends Buffett received on his investments. This was good for us, but why did the owner want to sell under those terms? Because the owner needed cash for another problem situation that could’ve resulted in big losses without a quick solution. Banks wouldn’t loan the owner money because of bad credit. Other investors who might’ve been interested either couldn’t move that fast or just didn’t think creatively enough. We also gave the owner something as important as shortterm cash: hope for a recovery. The owner retained an option to repurchase the property at a higher price. Does this sound familiar to the Buffett deals? This gave the owner the ability to solve the shortterm crisis and still own their investment property over the long run. In the end, the former owner chose to walk away. We would have been fine in either scenario, but we certainly were not unhappy with that result. You’ve probably heard me recommend that you read the free Berkshire Hathaway Annual stockholder letters. Getting an idea that led to this deal is a perfect example of why you should. You never know what you can learn and apply from an old investing master like Buffett!

gets their purchase money from fund). When you can just write sometimes close the same week if slow-moving, finicky, and picky a check for real estate, you’ve set the paperwork is all in order and funds are available. bank lenders? yourself up for big profits. If you go this route, make sure you borrow from experienced Where can you get Find Partners With Cash investors. An experienced investor or a Line of Credit sources of cash? Here are a few ideas: If you don’t have either source usually understands risks and may of cash, find a partner who does. be willing to act much faster than Get a Line of Credit Can you get a line of credit on Partnerships, at their best, match an inexperienced investor. your existing home or assets? This two or more people who lack type of loan is the quickest source resources that the other partner(s) Most Fast, Buy More of bank loans because you secure has. I started this way and still use Real Estate Deals The opportunities for good deals the funds before you need them. this method today when I run out of my own cash. will continue as long as people Once it’s in place, a line of credit own real estate, as long as people allows you to just write a check run short of cash, and as long as like a checking account. Be careful, Find Experienced Private however, that you invest this cash Lenders With Self-Directed the economy goes up and down. In other words, good deals will be safely. If you can’t pay the line of Retirement Accounts credit back quickly, you risk losing Self-directed retirement available forever. So put your own your home! accounts are a good source of cash purchase strategy together, Save Cash cash for your deals. The process and start looking for your own This sounds obvious, but make a to borrow money from someone’s 3-day purchases. goal to not always be the borrower. IRA custodian is not as easy as Save some of your salary and from your own bank account, but a your investment profits in an good custodian can move fast. My opportunity fund (vs a rainy day IRA custodian, American IRA, can

Where Can You Get Cash to Solve Liquidity Problems For Others? I didn’t write this article to brag about our own deal. The purpose is to encourage you to raise your own cash so that you can make good real estate deals, too. Ask yourself how you can set yourself apart from the rest of the real estate market that

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