THE INVESTOR HOW TO SET 2017 REAL ESTATE GOALS YOU’LL ACTUALLY REACH Presented by Vena Jones-Cox
5 Things Your Attorney Wishes You’d Do Right Now to Reduce Your Risk Presented by Ben Bauer
We bet you set some big, hairy, audacious goals for 2017…right? So why risk missing your target AGAIN? The science of goal setting, focus, and getting things done has come a LONG way since the days of “Write it down and you’ll manifest it into your life”. In other words, there are actual, tangible steps you can take to REACH those income, wealth, and freedom goals that we hope you’ve set for yourself this year. Whether you’re starting your business this year or growing it to new levels, you’ll find out: • How to set the right goals to start with— fewer of the right kind will actually get you further • How to focus on doing the things that will actually “move the needle” and stop getting stuck in the thick of thin things
• How to make sure you have the resources you need to actually reach those goals (and how REIA can help you with that) • How to head off subconscious roadblocks like procrastination, fear, and overwhelm that have always gotten in your way before Vena Jones-Cox will share the latest in brain science and show you the same techniques and hacks she uses to run 3 separate real estate-related businesses with gross revenues of well over $1 million a year. You’ll leave with a template for designing and following up on your 2017 goals, so that you don’t lose focus in the long year to come.
Attorney Ben Bauer grew up in the real estate investing business, and now works with real estate investors in his law practice every day. And he’s got some things to tell you that he wishes every wholesaler, retailer, landlord, note buyer, and private lender would move to the top of their New Year’s Resolutions. From having the RIGHT asset protection in place to writing down a succession plan to some very basic, easy-to-implement ways to reduce your risk of losing money, being sued, or otherwise getting yourself into trouble, this hour will give you a game plan to build and protect your wealth this year. Start your new year out right by joining your peers with the Real Estate Investors Association of Greater Cincinnati (REIAGC) at the first meeting of the new year on Thursday, January 5 at the Crowne Plaza Hotel in Blue Ash beginning at 6 pm.
Start your year off right and end it more prosperously with REIA of Greater Cincinnati! 10945 Reed Hartman Hwy | Ste. 113 Cincinnati, OH 45242 P: 513 407-3137 www.cincinnatireia.com
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2017 BOARD OF DIRECTORS & COMMITTEE CHAIRS President Anita Johnson 513 334-0444 Vice President Drew White 513 207-9846 Secretary Jim Shapiro 513 515-6717 Treasurer Scott Ellsworth 513 272-8400
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The REAL ESTATE INVESTORTM is published 12 times a year by the REAL ESTATE INVESTORS ASSOCIATION OF GREATER CINCINNATI. The subscription cost is $120 per year. First class postage paid. © Copyright 2016 by the REAL ESTATE INVESTORS ASSOCIATION OF GREATER CINCINNATI. All rights reserved. Reproduction or dissemination in whole or in part, in any form whatsoever, is expressly prohibited. Printed in the USA. The information contained herein and information shared at meetings and events is believed accurate, but it is not guaranteed or warranted in any manner. The information is provided with the understanding that neither the author(s), program speaker(s), nor the publisher (or its directors, officers, employees or agents) are engaged in rendering legal, accounting or other professional advice. REIAGC does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. We recommend you perform your own due diligence and seek appropriate legal, accounting, or other professional advice before making any investment.
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Board Members Ben Bauer Gina Bowden Eric Kottner Narendra Mundhe Cheryl Long Linda Hull Tom Terlau
Cincinnati REIA 10945 Reed Hartman Hwy | Ste. 113 Cincinnati, OH 45242 P: 513 407-3137 | F: 844 734-2472 www.cincinnatireia.com
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WHOLESALING FOCUS GROUP
6:30 pm | Perkins 7108 Hamilton Avenue North College Hill Michelle Clayton - 513 400-4937
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GENERAL MEETING
6 pm -5 Things Your Attorney Wishes You’d Do Right Now To Reduce Your Risks 7:30 pm - How to Set 2017 Real Estate Goals You’ll Actually Reach Crowne Plaza Blue Ash
FRIDAY MORNING MEETUP 9 am to 11 am Crown Plaza Blue Ash 5901 Pfeiffer Road, Blue Ash Linda Hull - 513 549-7821 Cheryl Long - 513 429-2583
INVESTORS LUNCH
11:30 am - 1 pm Century Inn Restaurant 10675 Springfield Pike Dave Jasper - 513 942-5110 or Max Arroyo 513-772-5736
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LANDLORD FOCUS GROUP 6:30 pm Crosley’s Sports Cafe 4901 Vine Street, Cincinnati Scott Ellsworth, 513 659-5531 Jim Shapiro, 513 515-6717
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GENERAL MEETING 6 pm - How to Pick and Implement the Exact Right Strategy for You OR Big Profits, No Taxes with 1031 Exchanges 7:30 pm - Short Sale Strategies That Work Crowne Plaza Blue Ash
CREATIVE BUYING AND SELLING FOCUS GROUP 6:30 pm Perkins, 7108 Hamilton Avenue North College Hill
NORTHERN KENTUCKY FOCUS GROUP 6:30 pm at PeeWee’s Place 2325 Anderson Road Crescent Springs, KY Brandon Brewer - 859-240-7339 Tom Terlau - 859-653-6412
FORECLOSURE NOTE BUYING SHORT SALE FOCUS GROUP 6:30 pm, Wendy’s Restaurant 5909 Mulhauser Road Deb Meyer - 513 266-4008 or John Dohtery - 859-653-3290
GET STARTED RIGHT RIGHT NOW
MISSION STATEMENT
OF THE REAL ESTATE INVESTORS ASSOCIATION OF GREATER CINCINNATI (REIAGC) • Encourage our members’ success through education and professional services • Represent REIAGC members as positive, ethical contributors to the economic and the social well-being of our community
PRESIDENT’S CORNER
By Anita Johnson, REIA of Greater Cincinnati President Happy New Year! I hope everyone had a wonderful holiday season, and that you’re looking forward to everything that 2017 will bring. Last year was a great year and I said then that I was truly honored to serve as the president of REIAGC. And in 2017 I find myself once again saying that I am truly honored to serve as the president of REIAGC, now for a second year. I am looking forward to another exciting and awesome year!
are going to absolutely LOVE the topics and lineup we have for you this year! And of course, we cannot forget about providing opportunities for you to just simply network with your fellow investors! We’re continuing to do that this year with the Friday Morning Meetup, which was started with the sole purpose of providing a forum just for networking and allowing our members to get to know one another. In addition to that, since we all know that food and conversation naturally go hand-in-hand, we will be providing light hors d’oeuvres before the meetings. This will give you an opportunity to grab some food and strike up a conversation with others in the room….you know, the ones sitting right next to you in the meeting that you oftentimes don’t even what their name is let alone what they do, because you both just got there and the meeting has started. Take the time to get to know your fellow members at the meeting, as you just might learn a little more than the topic being presented.
Yes, we are going to continue to bring you great programming and this year will be even better, as we surveyed you and took your input to heart as to the topics that YOU would like to see, hear, and learn more about. The top areas of interest that you wanted to hear more about: how to get started, wholesaling, retailing, finding deals, and creative buying and selling. We heard you, and this year’s meeting topics, speakers and all-day Saturday sessions definitely reflects your input. And we Again, Happy New Year to you, and have a great year of will be doing more of the early meeting sessions that investing! are split into beginner sessions and advanced sessions so that we meet the needs of all of our members. You Anita Johnson
FRIDAY MORNING MEET UP
FORECLOSURE NOTE BUYING SHORT SALE FOCUS GROUP
Have deals to sell? Services to provide to real estate investors and landlords? Or just want some time to just hang out with fellow real estate investors, landlords, and service providers with no agenda except making connections? Then join our Friday morning meetup—it’s free and open to the public.
Your seller has filed bankruptcy and they say they owe nothing on the house. Awesome! But what does that really mean? Does that mean it’s really free and clear? Does it mean that the $150,000 lien and the 2nd mortgage for $40,000 have been removed and you can buy the house for enough to pay the seller and close the deal?
This morning networking meeting doesn’t have a topic, but just the chance to meet with fellow entrepreneurs and service providers. This meeting will take place the Friday after the 1st Thursday of every month.You’ll meet great, helpful people and make connections to build your business. A breakfast buffet is optional and available for purchase - prices are $12 for hot buffet and $8 for cold buffet, available in the lobby/atrium area until 10:30am. Our next meeting is scheduled for Friday, January 6, 2017, from 9 am to 11am at the Crowne Plaza Blue Ash located at 5901 Pfeiffer Road in Cincinnati 45242.
Join us January 26 at 6:30 pm when we talk about how to work with a house that the seller has filed bankruptcy. Learn the difference between dismissed and discharged. And how to find a deal that makes sense when a bankruptcy is involved. Vacation is over and the Note/Foreclosure SubGroup is back in full swing with the New Year helping you understand what you need to know to buy and sell notes, work in foreclosures, short sales and everything you need to close the deals. See you at the Wendy’s Restaurant on Mulhauser Road off of the I-75 Union Center Exit in West Chester. Dinner and networking starts at 6:30p and Deb will start at 7:15pm. You won’t want to miss this meeting! For more information, Call Deb McMillan Meyer 513-2664008 or John Dohtery 859-653-3290 The Investor
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COMING UP AT THE JANUARY 19 MEETING NEW INVESTOR’ FOCUS GROUP: SO MANY OPPORTUNITIES, SO LITTLE TIME: HOW TO PICK AND IMPLEMENT THE EXACT RIGHT STRATEGY FOR YOU WITH VENA JONES-COX Wholesaling, retailing, lease options, rentals, notes, creative buying, private financing: as a new investor, you may find yourself overwhelmed by the sheer number of cool, money-making things you could be doing. But until you choose the right one, you can’t take the important NEXT step of, you know, doing something. This session is all about the objective criteria you can use to make a decision, stick to it, and make some money. Join us at 6 pm on January 19 at the Crowne Plaza Hotel in Blue Ash. ACTIVE INVESTORS FOCUS GROUP: BIG PROFITS, NO TAXES WITH 1031 EXCHANGES WITH SCOTT ELLSWORTH, CPA The market is on the rise again, which means that you might be staring a big ol’ capital gains and depreciation recapture tax in the face when you sell your investment properties. There’s absolutely no reason to pay a dime of those, though, when section 1031 of the internal revenue code says you can roll your profits into your next deal without Uncle Sam taking his pound of flesh first. There are strict rules, though, about who holds your money, how long you have to find the next property (or maybe properties!) and some newer opportunities to buy your next property BEFORE you sell the old one. CPA Scott Ellsworth tells all and answers your questions in this eyeopening session. oin us at 6 pm on January 19 at the Crowne Plaza Hotel in Blue Ash.
closure while negotiating big discounts with their banks and making a nice profit for helping out. Kristin will share the good and the bad of short sales in 2017: the opportunities, the challenges, and what you’ll need to do next if you want to pursue discounted deals in pre-foreclosure. She’ll share: • What short sales real are, and what’s in it for the bank, the seller, and you • Which types of situations are most likely to end in a successful negotiation for you, and which you might not want to waste your time on • How much of a discount you can realistically expect • What the process looks like and what you need to be ready for And she should know; with over a decade’s experience beating banks down to investor pricing on their overleveraged, defaulted properties, she’s got the in-thetrenches skills and education you need to tap. We’re thrilled to have such an active member of our community who’s also willing to spend an evening sharing “inside secrets” we hope you’ll take advantage of this opportunity! Join us at 7:30 pm on January 19 at the Crowne Plaza Hotel in Blue Ash.
MAIN MEETING: SHORT SALE STRATEGIES THAT WORK WITH KRISTIN CALENDINE The #1 request of the REIAGC community this year was, “Introduce us to more ways to get great deals!” So we’ve convinced Kristin Calendine, perhaps our most active and seasoned short sale expert, to educate you about her world: a world in which she helps families avoid fore-
Benjamin A. Bauer, Attorney at Law 10999 Reed Hartman Hwy., Suite 108A (513) 851-7600 Ɣ ben@thebauerfirm.com -
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January 2017
WELCOME NEW AND JANUARY CREATIVE RENEWING REIAGC DEALMAKING FOCUS GROUP MEMBERS! REIAGC Would like to welcome its new members and thank its renewing members in the month of November: Virdell Hicks - The Hicks Associates Viveca Douglas - R D Property Housing Agent Paul Wiehe - Direct Options Daniel Meyer Joel Weaver Antillio Lee Blaze True Lisa Engelman Joyce Brown Keith Hardig - BKH Contracting Tom Brinkmann Chris Turner - CA Homes LLC Beth Hartley Minnie Hartley Zach Theilman
MORE WEALTH THROUGH COLLABORATION: HOW TO FIND CASH AND CREDIT PARTNERS TO DO DEALS WITH Does the idea of “giving up” part of the ownership of your deals give you the willies? Would you much rather take on debt than take on a partner? What if we told you that by bringing on partners, you could do a lot more deals with a lot less risk, and that you’d easily exceed the profits you’d make on your own? What if we further mentioned that you can “give away” as little as 10% of your deal to get all the money you need? What if…Nah, you’re gonna have to come to the meeting to hear the rest. It’s at Perkins at Hamilton and Cross County in College Hill on January 23rd at 6:30.
The Investor
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JANUARY INVESTORS LUNCHEON Debbie Greenebaum, will be our guest speaker at our January 10th, 2017 meeting. Debbie Greenebaum is the Housing Coordinator for Hamilton County Developmental Disabilities Services (HCDDS). The mission of HCDDS is to promote and support opportunities for people with developmental disabilities to live, work, learn and fully participate in their communities. Since 1980, she has worked with adults with disabilities in a variety of non-profit, government and for-profit settings in Ohio and Illinois. In her current role, Debbie provides housing resources for HCDDS Service Facilitators and is a liaison to HCDDS contract housing providers.
Contact REIAGC for more information
What is your portfolio worth?
Come join us and discuss the benefits of working with Hamilton County Developmental Disabilities Services. For more information, contact Max Arroyo at 513-772-5736. Location: Century Inn Restaurant, 10675 Springfield Pike, Cincinnati, OH 45215. Phone: (513) 771-4816. Time: 11:30AM – 1:00PM
Max J. Arroyo, Jr. Vice President Investment Property Asset Manager Berkshire Hathaway Profesional Realty Commercial Services
7311 Tyler’s Corner Place West Chester, OH 45069 Direct: 513-772-5736 Leasing and Service: 1-888-288-5912 E-Mail: Marroyo@bhhspro.com www.firstcirclepm.com A member of the franchise system of BHH Afiliates, LLC
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Find out from Steve Hering stevehering@prodigy.net 513-253-2644 We have portfolios to buy and sell
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THE ROAD TO SUCCESS IS EASY? BY SHAUN MCCLOSKEY
When I hear someone say that success is easy, it always raises my BS sensors. It really concerns me when someone says this, but then I have to look at myself because I say this as well. The difference is, I really mean it. But in order for success to become easy, you’re going to have to play a different game than most. I’m not suggesting that becoming successful requires no work and that there are no struggles, but when I say that the road to success is easy, I’m suggesting that when someone has a plan and they follow it, that success is attainable to all, and it can be done in a relatively short period of time. We live in a world in which we idolize success and as a result we pursue it with all that we have. As a culture we have defined success as having a lot of money. We want it so badly that we look for shortcuts, we’ll compromise our values, and we’ll tear down things that are important to us in order to attain it. We’ll go into debt. We’ll buy things we don’t need to impress people we don’t care about. What we
all really want is life. We want freedom. We want to be able to spend time doing and experiencing the things in life that provide the most fulfillment, however, most of us today have given up any hopes of this life in pursuit of the almighty dollar. What we teach at Lifeonaire is that if we will simply follow a plan, that success is easy. It’s an easy road. What we have found is that the world around us is pursuing success every
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other way, that what makes pursuing the path to success difficult is that we have to go against the grain and do things differently than those around us. The path is easy, but getting to the the right path and living and doing things differently than others around us is the challenge. It’s a challenge for a number of reasons: 1. The biggest reason it is a challenge is because we have few examples of people to follow. The masses are striving for success, seeking to make more and more money. Money is the primary focus of many peoples lives today, however, this seems to be the wrong path as evidenced by the results. 2. How we define success may be different. Being successful at making a lot of money doesn’t guarantee us that we’re going to live a great life. There is plenty of evidence around us that demonstrates this. Have you ever heard of or known someone that has a lot of money and is still miserable? Their goal in life is to make money, not to live life so they get exactly what they are pursuing. Let’s be very honest for one moment. What does success mean to you? To me it means having the freedom to live the life that I want to live. To do what I want when I want. To be free to experience relationships with those closest to me.
When I talk with others their definition of success tends to boil down to something similar. Take the time to imagine the life that you want, and now thing of everyone that you know personally. How many people do you know who are living the life that you would like to live? If you are like everyone else I know, you’re struggling to come up with names. Everyone is out there pursuing this life, however, very few people ever get there. This is evidence to me that the reason success seems difficult is because most people are on the wrong path. If they were on the right path, we’d be able to come up with a list of names of people in our lives who are experiencing that ultimate freedom that everyone wants. At Lifeonaire, we show you how easy it is to achieve prosperity and success. It starts with getting on the right path, and then following a simple plan down that path. It also starts with setting the game up to win. That’s especially tough for most people today since their game is loaded up with a lot of obligations and no vision for what it is they really want. Getting on the right path means creating the vision for what you want your life to look and then establishing a plan to get from where you are to where you want to be. Sounds simple enough, however, the problem with most of America today is that even if they had a vision and a plan, most are so bogged down with existing obligations that they don’t have the time to pursue their vision even if it is clear.
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John C. Wagner | 513.857.9179
January 2017
PAINTING OVER WALLPAPER BY PETE YOUNGS, MR. REHAB I cut corners every chance I get to save money on my rehab investments. One of the things that I do is to paint over wallpaper when possible. As long as you follow my steps below, you should have no problem getting a pro finish that will last for years to come. STEP 1: Make sure all the edges and seams are glued down tight. I have found that most pro’s in the business carry Elmer’s school glue to stick down and loose paper (or vinyl in most cases) and repair seams. This is the white glue that is non toxic and water clean up. STEP 2: Use blue tape, referred to as long mask and may be left on a surface up to a week without removal problems. Tape off all mirror frames, doorknobs, window and door trim as well as baseboards etc. STEP 3: If your wallpaper has a bright pattern, you may want to prime the surface with an oil based primer to kill the colors from bleeding through the paint. If you are painting a tinted color, you can have the paint dept. tint your primer to the color of your paint. This will eliminate painting multiple coats.
STEP 4: This step is very important to make sure that you do not have a difference in color shade between the cut in portion and the roller portion. The biggest rule of painting with the best results is to always roll into a wet edge. Most
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of us will cut in the room with a brush and then roll the room. This is wrong…Cut in one wall, then roll that wall. Allowing the cut in to dry before you roll will give a color shade difference when you roll into it , basically being two coats where you overlapped with your roller. Doing one wall at a time will give you the wet edge you need for the brush and roll to dry at the same pace. STEP 5: Use a three speed fan, set on medium to blow at the wall as you paint each wall. Most wallpaper has a tendency to bubble up as the paint dries. Using the fan slows down the drying of the paint and it will stop the bubble effect on the wall. Even if it bubbles just a little at first, the fan will make the bubbles disappear when fully dry.
STEP 8: This is my final step before cleaning up the area and moving on. I had removed the light switch cover plate before painting. Before I put it back, I will place a small piece of masking tape on the back. On this tape, I will smear a color sample of the paint I used for that room on it. I will also write the color code used for tinting and the store I got the paint from. Therefore, even if the paint can gets lost…I will always have the color code to have the same paint made for next time, or a sample that the store can computer match for me. This works great if you are as forgetful as I am sometimes. For more information on rehabbing houses for less, visit www.peteyoungs.com
STEP 6: Use a latex paint that is acrylic and water based whether you used a primer first or not. This way anytime you need to repaint, you can just use latex right over the previous paint. Also, your clean up will be easier and your paint tools will clean up with just soap and water. STEP 7: Allow the paint to dry totally before putting on a second coat (if needed) or before removing the tape from the protected areas. When you remove the tape, sometimes it is important to use a razor knife to cut along the line where the tape and paint meet. This way you will not pull any paint up as you remove the tape.
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WHAT’S IN THE WAY OF YOUR SUCCESS? BY VENA JONES-COX
Here’s a fun experiment. Ask the next 10 real estate gurus, association leaders, and successful investors you meet this simple question: “Why do most of the people who start out to succeed in real estate never make a dime?” You’ll hear a lot of variations on two basic theories: “They’re not willing to do the work,” and, “Fear.” But I’ve always believed that these explanations are too simplistic, and reduce what’s really a very complex set of personal and psychological reasons down to something that SOUNDS a lot like, “If you don’t make it like I did, you just don’t have the willpower to do what needs to be done, even though you’re scared to do it.” Or, to be even more reductionist, “You just didn’t want it badly enough.” But, as it turns out, what’s getting in your way isn’t purely about willpower—it’s other about things that pull against and overwhelm our self-discipline. The good news is, these things are definable, predictable, and, to some extent, within our power to control. But until we recognize their influence and take steps to get them working FOR us rather than AGAINST us, it’s likely that we won’t succeed in ANY difficult project, whether it’s doing deals or losing weight or ceasing to bite our nails.
you want it?” 2. Personal ability. Do you have the skills and resources to do it? As much as we’d like to think that with enough determination, we can achieve anything, the reality is that it’s unlikely that a 6’ tall 40 year old with no training and no native talent will become a prima ballerina. Nor is it likely that a newbie real estate investor with no formal training will become a millionaire property tycoon in the next 12 months. In the real estate business, this is made pretty clear to us by gurus, group leaders, and even other real estate entrepreneurs, so even though motivational gurus tend to gloss over it to some extent, we tend to understand the importance of developing our skills and knowledge pretty thoroughly. 3. Social motivation. Multiple studies show that if you want to change a human behavior, the most effective way to do so is to show “social proof” that the behavior you want is the norm, and behavior you don’t want is socially unacceptable. In other words, if the people you hang out with cheer you on, tell you what you’re doing is a great thing, and encourage you to move forward, you’ll do so much more easily than if they make fun of you, encourage you to go drinking instead of working on your business tonight, and so on. Or, to put it another way, you’d do better in real estate if you’d go to that REIA meeting tonight than if you decide to hang out with your negative-nelly friends.
New, scientific studies on the field of willpower show that there are actually 6 influencers in our ability to continue to move forward in the face of adversity and ultimately succeed in our goals. According to a 30 year study of success and failure by behavioral expert Al Switzler, these influencers are:
4. Social ability. This area has to do with more formalized support than your friends can give you—more the type of support you get from your colleagues, coaches, mentors, real estate association, and so on. Social ability means you have an ongoing source of skills, feedback, and motivation that comes from people who have the knowledge and ability to give you those skills and feedback. You know, like a…me.
1. Personal motivation—the ONLY factor that most motivational literature addresses. Personal motivation encompasses the question of “Do you want it, and how badly do
5. Rewards and incentives. No one does ANYTHING without the expectation of some reward. At the same time, we all feel rewarded and incentivized by different things. You may
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be a person for whom the check you get at the end of the deal is enough to keep you going day in and day out—but most people, clearly, aren’t like that. Many motivational gurus suggest setting up a reward structure that means something to you (I made 50 offers this week, thus I’m treating myself to a massage), but the real key is to understand what you feel rewarded BY, and setting up your life so that when you do things that you’re supposed to do, you get things that make you feel good. 6. Structural ability. Structural ability has to do with your environment and whether it’s set up to make good actions easy and bad actions hard. Want to lose weight? It’s probably a good idea to throw away the ice cream. Want to work on your real estate business this evening? Might want to move your office to a room where there’s no TV. Need to make 20 offers this week to do a deal? I hope you have offer forms you can use. Take a look at your own real estate efforts and how well you’re controlling these environments. • Do you really want to succeed at what you’re doing? Have you created your “big why”, that tells you what you want your life to look like when you’re successful, and that drives you to keep on keeping on, even when things get frustrating, or boring, or hard?
• Do you get the structural support you need? Do you go to your association meetings? Do you attend the Inner Circle webinars? Heck, do you even read this e-letter? Do you have a formal or informal coach or mentor? • What makes you feel rewarded? Is it recognition? A sense of accomplishment? A nice meal out? extra time with your family? How can you get those things as a result of doing what you need to do today? • Is your environment set up in such a way as to make positive behaviors easier? Do you always have a seller interview form nearby, so that there’s no excuse not to return that call right now? Do you work in an environment where distractions are minimal? Have you automated recurring tasks like mailing and posting craigslist ads so that they just happen, without your involvement? Like success in any arena, real estate success isn’t JUST about willpower—it’s about getting your entire environment pulling with you, rather than holding you back. All the motivation in the world can’t overcome won’tpower of the forces acting against you, so grab control of them today and watch your business blossom.
• Do you know enough about the strategy you’re pursuing to make a real list of things that have to be done in order to make that deal or build that business? If not, get thee some education on your strategy, NOW, because otherwise you’ll just be like a rat randomly trying passageways in a maze. Maybe you’ll find the cheese, but you’d do it a lot faster and with less mistakes if you had a map. Which is a good course. Like mine. • Do ANY of your friends or family really support you in what you’re doing? As in, actively cheer you on? If not, can you find someone who does? Are you careful to not talk about your business to loved ones who discourage or undermine? And to spend MORE time with people who do support you?
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www.federleinc.com
HOW TO INCORPORATE APPRECIATION FOR MAXIMUM WEALTH-BUILDING BY DAVE VAN HORN
Whether you’re new to investing or you’re a seasoned real estate investor, there are really two ways to build a real estate portfolio that helps you attain financial freedom or stability. One is by investing for cash flow and the other is through appreciation. While some investors may prefer one of these strategies, others try to incorporate both.
some, but now my strategy is a mix between further consolidation and paying down on the debt in order to cash flow more as I approach retirement. As all of this is happening, I’m starting to realize that cash flow isn’t always everything. If the area changes, the properties become more obsolete and the cash flow may not be what it once was.
For many years, I thought buying properties that cash flowed was the only way to go, especially since that extra cash helped to cover the cost of repairs and rising taxes. More recently, covering the cost of rental licenses and inspections has become a consideration as well.
INVESTING FOR APPRECIATION Today, as a higher income earner, cash flow isn’t my only consideration. I’m willing to consider less yield, as I don’t really need more income. I also like nicer properties in better areas with some chance of appreciation, even if they don’t cash flow quite as much. If I can get newer places with better schools, I can attract better tenants, and with more demand, I can keep raising rents. I may also see more significant appreciation in the surrounding counties with more jobs and economic growth.
Some towns where I’ve been investing in for the last 30 years not only charge inspection fees but also re-inspection fees, and now they want everyone to be licensed and to carry permits. It’s gotten so bad that our property management company is starting to charge for inspections due to how time-consuming and burdensome they are. As for me and my long time real estate investor buddies, sometimes we discuss the recent chain of events over the last few years, and the idea of investing in cash flowing properties as a buy-and-hold strategy no longer seems as appealing as it once was back in 1989 when I first started.
Today, I invest more for capital gains than for just income. As I mentioned, though, this wasn’t always the case. If you’re not a high income earner and you’re just starting out in investing, it’s probably more prudent to invest in real estate for cash flow (to add income streams and to protect yourself from the asset’s possible loss in value). Of course, this decision should really be guided by your investing goals.
Back then, if you had a problem tenant, you could actually call the township and they would help you get them out. Today, things have really changed. Not too long ago, I called the township to report an abandoned car in the alley behind my property, and the next thing you know, the township was fining me for the abandoned car.
The ultimate goal, in my mind, would be to incorporate both into your real estate portfolio. That way, your cash flowing assets can offset the properties that don’t bring in that much cash flow. If you are investing in a property for the potential appreciation, another way to increase your cash flow on the deal may be to tap into the available equity.
But as my investor buddies (with 100+ properties each) have pointed out lately, if it wasn’t for their flips, they wouldn’t be making much money. When using the buy-and-hold strategy, with its increasing property taxes, wear and tear, and constant turnover, they’re lucky if they break even. Keep in mind, these were places that usually always cash flowed at least $300 a month and were blue-collar, 2 and 3-bedroom homes that were under $100,000 outside of Philadelphia.
TAPPING THE EQUITY The one strategy I’ve employed lately in the nicer properties I have that have appreciated is to tap into the equity with a home equity line of credit (or HELOC) with a low rate, and then either lend the money out to rehabbers with 1318% returns or to invest the money in performing notes. The spread I’ve created through this arbitrage model has more than offset the lower cash flow I once had and has made these properties the gems in my portfolio.
SO, WHAT’S AN INVESTOR TO DO? Most of you know my story, that I was on the path to own 100 properties too, but I stopped at 40 places and moved more into the note and private money space. Today, I still have 19 buy-and-hold properties, and it’s getting tougher and tougher to deal with all of the challenges. Some of the areas that were once cash flowing great aren’t in the greatest neighborhoods or have the best clientele anymore, and to be quite honest, they really haven’t appreciated all that well.
So, which strategies are you using to add gems to your portfolio — investing for cash flow, appreciation, or both? Dave Van Horn is President at PPR The Note Co. - an operating entity that manages several funds that buy/sell/hold residential mortgages, both performing and delinquent. Dave has been in the Real Estate business for 25 years, starting out as a Realtor and contractor and moving onto everything from fix and flips to Raising Private Money.
In the last uptick, I was fortunate to be able to consolidate The Investor
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4 STEPS TO HOLD YOURSELF ACCOUNTABLE TO THE GOALS YOU SET FOR 2017 BY NASAR ELARABI, BIGGERPOCKETS.COM Are you ready for 2017? What are you going to do differently than what you did in 2016? I hope at this point you are writing down your goals. This is a very important piece to get what you want. I got into personal development in 2010. And since then, I’ve been utilizing vision boards, writing down goals, meeting with mentors, and performing goal review. I can’t believe there are still people who at a bare minimum don’t write down their goals. And for the people who say these things don’t work, you are right. In order for these to work, you must actually get out and do some work. Your actions must align with your goals. My life has been getting better every year by utilizing these techniques. And when I say “getting better,” I don’t just mean by making me more money. I’m talking spiritually, mentally, and physically. CREATE A VISION BOARD. Let’s address the vision board. Vision boards are great. And once your vision board is done you, should hang it up. I meet plenty of people who have done a vision board, then throw it into the attic, never to be seen again. In that case, a vision board probably won’t do you any good. So, be sure to hang your vision board in a place you have to see every day. Now, if you want to be a wholesaler, rehabber, landlord, etc., you should definitely put a house on your vision board. If you can’t find pictures in magazines to accommodate your needs, then just write it in with a marker. Once your vision board is complete, take a picture of it with your smartphone. And if you think it will help, use it as your phone wallpaper. If you think you might need help creating your vision board, go on Meetup.com and search “vision board parties.” I swear, every January there’s literally 80 or so Meetups holding vision board parties. WRITE DOWN ALL OF YOUR GOALS. Having goals is essential to achievement. If one of your friends pulled up to you and says, “Hey, hop in. Let’s go,” you’d reply with, “Where we going?” If your friend then says, “I have no idea,” you might tell the friend you have better things to do than to ride around aimlessly. Let’s apply that to your life. It’s never a good idea to wander around aimlessly. Therefore, you need goals to know where you are going. Once you identify your goals for the year, then you need to put them on a paper. Try to be detailed if possible. For example, you may want to do six wholesale deals, two flips, and 14
pick up one rental. If that’s your goal, you need to write each of those down. Also, do not forget to write down spiritual, health, and other goals. FIND A MENTOR. Let’s just say you don’t have money to pay for a mentor or a coach in whatever specific niche. You can try to attend local Meetups via Meetup.com, BiggerPockets, and your local real estate club. If you are willing, invest time in organizations by volunteering, attending meeting, or serving others. Then you might be able to pick up a free mentor like I did. If you don’t want to do that, then mentors don’t have to be personally in your life. You can have virtual mentors — I’ve had many mentors I never met. I remember first starting out watching motivational videos on Youtube while writing out letters. The key is to listen to them and take action. PERFORM A GOAL REVIEW. After the year is over, it is important to perform a goal review. That means you sit down, review your progress, and figure out what you have to do to be better, why you fell short, and what changes need to happen. Many people do not do this. I actually just started doing this for the first time this year. The review process gives you time to reflect. You can do this alone or with your team, mentors, or coaches — but it must be done. You need to hold yourself accountable to ensure your are making the progress your mouth says you want. Always remember, we don’t get out of life who we say we are; we get out of life who we are. In conclusion, I hope this was helpful. All these things above, plus the most important piece — which is taking action — can give you a very lucrative 2017. If you do all of this above and take no action, then these things won’t work. There is no shortcut to success. These things I mentioned are just some components to help you achieve your success. If you don’t want your 2016 to look like your 2017 then you should definitely do something different. Remember, insanity is doing the same thing over and over and expecting something other than the same bad results. Nasar Elarabi is a corporate failure who was saved by Real Estate. Nasar is now a Wholesaler, Rehabber and Landlord in the Charlotte area. Nasar may have just barely graduated college but can flip a house like an acrobat. Nasar’s work can also be found at RealEstateDoru.com.
January 2017
Vendor Members Directory Business Accounting
Accounting
Company
Contact Info
Chuck Vonderhaar, CPA
Chuck Vonderhaar 513-563-0598 chuck@cpvcpa.com
www.cpvpa.com
Ellsworth & Associates, CPA’s www.ellsworthcpa.com
Building Supplies
Butler County Edge-Co www.edgcowholesale.com
Scott & Deanna Ellsworth 513-272-8400 sellsworth@ellsworthcpa.com
Business
Company
Contact Info
Inspection Services
Criterium – Cincinnati Engineers www.criterium-cincinnati.com
Mathew Klein 513-474-9600 criterium-cincinnati@fuse.net
Property Mgmt
Berkshire Hathaway HS Commercial Division
Max Arroyo 513-772-5736 marroyo@bhhspro.com
www.firstcirclepm.com
Brent Fening 513-868-2068 edgcobp@yahoo.com
Rehab & Restoration
Cincinnati Home Improvement Co., LLC www.cincyhomeimprov.co
Building Supplies
Pease Warehouse
Building Supplies
Surplus Warehouse
Cleaning Products
OdorXit www.OdorXit.com
Cleaning and Evictions
Swept Away Property Cleanouts
Exterminator
Formula Exterminators
Financial Services Financial Services
www.peasewarehouse.com
www.surplus-warehouse.com
Badcat Properties, LLC www.badcatproperties
Dayton Capital Partners www.DaytonCapitalPartners.com
Financial Services
Excellent Financial
Financial Services
www.guardiansavingsbank.com
Guardian Savings Bank
Financial Services
ReCasa Financial Group, LLC
Financial Services
Spring Valley Bank
Floor (wood) Restoration System Floor Restoration
www.recasafinancial.com
www.springvalleybank.com
Fabulous Floors of Cincinnati
Stephen Pease 513-867-9926 Stevep@peasewarehouse.com
Rehab & Restoration
Brent McCleneer 513-245-2222
Rehab Project Mgmt
swcincinnaticlrn@ecbarton.com
Sasha Allen 513-344-3972 TeamAllen@fuse.net
Real Estate Brokerage
Federle Inc., Realtors
Fred & Cindi Goff 513-671-7378 cindi.goff@gmail.com
Real Estate Brokerage
Outside The Box Real Estate www.OTBrealestate.com
Christina Carey 513-509-2705 Christina@OTBrealestate.com
Sam Moore, Jr. 513-485-8599 moorejrsam@hotmail.com Darrin Carey 937-458-3303
Real Estate Services
LD and SL Properties
Stephen Hering 513- 253-2644 stevehering@prodigy.net
Real Estate Services
CORE Group www.coregroupre.com
Jiries Dawaher 513-504-5565 jtd8.re@gmail.com
Darrin@DaytonCapitalPartners.co m
Kelvin Mitchell 888-493-6075 excellentfinance@aol.com Sharon Altman 513-923-4100 saltman@GuardianSavingsBank. com
Legal
The Bauer Firm, LLC www.thebauerfirm.com
www.bestexit.com
www.federleinc.com
Real Estate Services
Exit My Foreclosure
Restoration
Icon Environmental
www.ExitMyForeclosure.com
Marty Russell 513-545-1637 martysrussell@gmail.com Dennis Taylor 513-851-4021 dennist123@aol.com
Kristin Caledine 513-509-9814 Kristin@ExitMyForeclosure.com Jeremy Clayton 513-396-6653
www.IconPropertyRescue.com
clayton@IconEnvironmental.net
Security
ADT Security Services
Kristen McClanahan 513-497-7990 kmcclanahan@adt.com
Tenant Screening
National Tenant Network
John Spafford 877-579-3520 john@ntnonline.com
Title
Servicelink
Wholesale Properties
You Buy Houses
Jon O'Connor 513-354-4400 joconnor@mcswaincarpets.c om
Contractor Services
BKH Contracting
Ben Bauer 513-851-7600 ben@thebauerfirm.com
Financial Services
Secured Investment Lending
Nancy Lawler 614-221-6770 nlawler@recasafinancial.com
Dave Woodcamp 513-761-6688 springvalleybank@cinci.rr.co m David Caldwell 513-453-4006 Donald Boling 513-300-9203
www.mcswaincarpets.com
Dan Poske 513-301-0247 dposke@cmsllc.com
Exit Best Realty
Olmec Reflections, INC. McSwain Pro Floors
BildWise www.BildWise.com
Real Estate Brokerage
davidcaldwell@ fabulousfloorsusa.com
Flooring
www.united-installs.com
Josh Appelman 859-916-5201 josh@united-installs.com
Deb Meyer 513-266-4008 deb@odorxit.com
www.fabulousfloorsusa.com
www.olmeccarpetcleaninginc.com
United Installs, LLC
Christopher Penn 513-898-1878 cincinnatihomeimprovement@g mail.com
OlmecReflectionsinc@gmail.com
The Investor
www.ntnonline.com
www.svclnk.com
www.youbuyhouses.com
securedinvestmentlending.com
John Wagner 513-857-9179 John.wagner@svclnk.com Drew White 513-471-0141 DrewWhitePix@gmail.com Keith Hardig 513-266-8719 keith@bkhcontracting.com Brittany Kiah 407-878-2830 Brittany@securedinvestmentlend ing.com
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