THE INVESTOR CAN YOU LEARN ANYTHING FROM A GUY WHO HAS DONE MORE THAN 200 REHABS? Presented by Jerry Fink
At the Early October 6 Meeting Handyman 101 Presented by Tabletop Facilitators So you got that property and now it needs some work. What are some of the basic things that you can do on your own to save the cost of a repair call? In this session, REIAGC will bring table top facilitators who will teach you the basics of repairs which will save you on those costly repair bills! Join us for the early meeting on Thursday, October 6, 2016, beginning at 6 pm. The meeting is located at the Crown Plaza at 5901 Pfeiffer Road in Blue Ash, Ohio.
FREE MARKET UPDATE COMING TO A LOCATION NEAR YOU!
It is a FACT...estimating repair costs is a crucial skill you must master to be successful in any facet of real estate investing. Not possessing these skills will cost you THOUSANDS, keep you from realizing your greatest return on your investment, or keep you from selling that wholesale deal to the ready, willing and able rehabber or landlord. The Real Estate Investors Association of Greater Cincinnati’s (REIAGC’s) two- time past president and resident rehab guru, Jerry Fink, will be covering what you need to do when you inspect a house.
Get ready to prosper when the market changes by attending the Real Estate Investors Association of Greater Cincinnati’s (REIAGC’s) 10 Strategies For Prospering In the 2016 – 2017 Market. Three dates are available to Greater Cincinnati investors: At the main meeting session on Thursday, October 6, 2016, at the Crown Plaza beginning at 7:30 pm, Jerry will explain what you are looking AT.... what you are looking FOR... and what it will COST to fix it. The Crown Plaza is located at 5901 Pfeiffer Road in Blue Ash, Ohio. Bring your questions because you will get answers but don’t miss this valuable session on Rehab for Dummies!
OCTOBER 8 9 AM – Noon in Mason, Ohio OCTOBER 11 6 PM – 9PM in West Chester, Ohio OCTOBER 13 6 PM to 9 PM in Hebron, Kentucky For more information, see the article on page 6 of this issue of The Investor!
10945 Reed Hartman Hwy | Ste. 113 Cincinnati, OH 45242 P: 513 407-3137 www.cincinnatireia.com
July 2013 61 A
2016 BOARD OF DIRECTORS & COMMITTEE CHAIRS
OCTOBER 2016 Sunday
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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 Board Members Eric Kottner Narendra Mundhe Cheryl Long Linda Hull Tom Terlau Association Manager Nancy Terry 513 407-3137 Cincinnati REIA 10945 Reed Hartman Hwy | Ste. 113 Cincinnati, OH 45242 P: 513 407-3137 | F: 844 734-2472 www.cincinnatireia.com
Disclaimer
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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WHOLESALING SUBGROUP
6:30 pm | Perkins 7108 Hamilton Avenue North College Hill Michelle Clayton - 513 400-4937
GENERAL MEETING
6 pm - Handyman 101 7:30 pm - Can You Learn Anything From A Guy Who Has Done 200 Rebhas? Crowne Plaza Blue Ash
INVESTORS LUNCH
11:30 am - 1 pm Century Inn Restaurant 10675 Springfield Pike Dave Jasper - 513 942-5110 or Max Arroyo 513-772-5736
20 24 25
LANDLORD SUBGROUP
6:30 pm Crosley’s Sports Cafe 4901 Vine Street, Cincinnati Mary Brickler, 513 557-8632
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GENERAL MEETING
6 pm - TBA 7:30 - TBA 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 SUBGROUP 6:30 pm, Wendy’s Restaurant 5909 Mulhauser Road Deb Meyer - 513 266-4008 or John Dohtery - 859-653-3290
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
2 | The Investor ||August October2015 2016
PRESIDENT’S CORNER
By Anita Johnson, REIA of Greater Cincinnati President Fall is here, the summer months are now behind us, and the days are definitely getting shorter. It’s a good time to begin thinking about all of those repair projects you’ve been putting off but that need to be done, as you’ll want to do them before winter gets here. Really, where has this year gone? Before you know it we will be in 2017! This time of year is always a busy time of year for us here at Real Estate Investors Association of Greater Cincinnati (REIAGC), as we have started the planning process for all of our meetings in 2017. Yes, in order to make sure that we continue to bring you the quality educational programming that you’ve come to know us for, we take a couple of months toward the end of each year to plan for the next year. Each year we think about all of the requests we’ve had and the topics that would most meet our members’ needs as we develop the plan for the year ahead. It’s also the time of year when we start preparing for one of the largest real estate conferences in the country, which is the Ohio Real Estate Investors Association (OREIA) Conference. This year the conference is once again in Cincinnati and will be held the first weekend in November at the Great Wolf Lodge in Mason, Ohio. You’ll be hearing a lot more about the OREIA Conference as we get closer, and same
as last year, we will be looking for lots of volunteers. To find out all about this year’s convention and to register, visit the OREIA convention website at www.OREIAconvention.com or call 1-888-996-7342 to register. This month’s all-day Saturday session is the highly requested Property Bus Tour with Jerry Fink. This session is ALWAYS in high demand, as knowing what to look for and properly estimating repairs are skills that every real estate investor needs. And you couldn’t ask for a better instructor – Jerry Fink, who has done a number of rehabs over the years and is our own in-house guru for rehabs, will show you what you need to look for when you go to a property. You’ll also get a repairs estimate sheet, detailing out all areas for inspection and current typical repair costs. The bus tour will take place on Saturday October 8, so you need to hurry and sign up if you haven’t already done so. Finally, don’t forget to attend one of our subgroup meetings or the Friday Morning Meetup. These are great opportunities for you to get to know your fellow investors and network with like-minded individuals. And remember, REIAGC is always looking for volunteers, so if you have an interest in helping with any one of our events please let us know. As I always say, “everyone has something to contribute.” Have a great October!!
Anita Johnson
LANDLORD SUBGROUP BUYING YOUR RENTALS CREATIVELY! with Nick Modarelli Every serious landlord can tell you that if you’re buying rental properties with just your own resources, you will eventually run out of both cash and credit. It’s only a matter of time. And when that day finally arrives, you’ll have a decision to make: learn how to get by with just the properties you bought, or find some creative ways to get all the properties you want. It’s your choice. If you decide you want more, then you’ll need to learn how to tap into the magic of leveraging other people’s resources, such as OPM - which stands for “Other People’s Money.” Now even though that was probably the first resource that came to mind, it’s not the only one available to you. You can also leverage the power and profitability of OPL (Other People’s Loans) and even OPP (Other People’s Properties). How can you learn to do all of that? By coming to the October 18 Landlord Subgroup where speaker, author, and full-
time real estate entrepreneur Nick Modarelli will show you how to use some creative techniques such as: seller-held carrybacks, land contracts, equity sharing, subject to’s, land trust partnerships, lease-purchases, and master leases just to name a few. Nick has been in real estate for nearly 30 years and has honed his trademark non-conventional approach to real estate as a necessary means for surviving - and even thriving - in a wide variety of crazy market cycles. He’s written several real estate courses going back to the mid 90’s, and has recently combined the best of all of these courses into a very entertaining and highly insightful book entitled: Full Frontal Real Estate Investing:How to crush it in virtually any economywithout ending up broke, burned, or butt-naked The Landlord Subgroup meets at Crosley’s Sports Café at 4901 Vine St. in St. Bernard. The presentation begins at 7:00, but plan on getting there at 6:30 to get a good seat, order some food, and network with other landlords to make valuable new connections. YOU WON’T WANT TO MISS THIS ONE! HOPE TO SEE YOU THERE!
The Investor
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FRIDAY NKY SUBGROUP MEETING MORNING MEET UP SCHEDULE CHANGE
DOES LANDLORDING MEAN ANYTHING TO YOU? IF IT DOES OR IF IT DOESN’T… Are you a wholesaler and you don’t see the value in understanding landlording? Or maybe you are a rehabber and you have no interest in rentals. So landlording means nothing to you, right? WRONG. If you wholesale, landlords are a prime buyer. If you rehab, landlords are a prime buyer too. And if you are a landlord it better be obvious what landlording means to you!
Due to scheduling and the holiday’s, the REIAGC Friday Morning Meet Up will be taking a break. We will not have a meeting in October nor November. Please plan on attending our next meeting on December 2!
In all cases you won’t want to miss what Mary and Joe Brickler have to share on September 27 at the Northern Kentucky Focus Group meeting. During the past 8 years Mary and Joe have picked up Four Families, Duplexes, and Single family homes at ridiculously low prices and have grown their rental business from 2 units to 85 units by using simple methods in evaluating property. Here are some of the secrets they will share: •
How much to pay for the property using the potential income that it will make rather than comps or ARV • How they have used government grants to rehab their properties • How they have gotten one property [almost] GIVEN to them by the City of Cincinnati and are working to buy the next one at a ridiculously low price • How they have turned ’drug-alley’ to “welcome-home” to nice tenants • Mistakes they’ve made and lessons learned — so you don’t have to learn the hard way Come hear some of their rules for success and most importantly, how you can apply those same rules to your business. Join us as Mary and Joe share their journey over the past few years, where they are now, and their plans for the future. Oh yea, bring your questions. They will answer anything you can come up with. Be good to yourself and don’t miss this event on September 27. See you there!
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October 2016
INVESTOR GROUP LUNCHEON At the October 11, 2016, Investor Group’s Luncheon, an attorney will present an overview on tax free exchanges 1031 exchanges. Q - WHAT IS A TAX-DEFERRED EXCHANGE? In a typical transaction, the property owner is taxed on any gain realized from the sale. However, through a Section 1031 Exchange, the tax on the gain is deferred until some future date. Section 1031 of the Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business, or for investment. A tax-deferred exchange is a method by which a property owner trades one or more relinquished properties for one or more replacement properties of "like-kind", while deferring the payment of federal income taxes and some state taxes on the transaction.
owner has reinvested the sale proceeds into another property, the economic gain has not been realized in a way that generates funds to pay any tax. In other words, the taxpayer's investment is still the same, only the form has changed (e.g. vacant land exchanged for apartment building). Therefore, it would be unfair to force the taxpayer to pay tax on a "paper" gain. The like-kind exchange under Section 1031 is tax-deferred, not tax-free. When the replacement property is ultimately sold (not as part of another exchange), the original deferred gain, plus any additional gain realized since the purchase of the replacement property, is subject to tax. Find out the benefits of exchanging versus selling and the different types. Location: Century Inn Restaurant, 10675 Springfield Pike, Cincinnati, OH 45215. Phone: (513) 771-4816. Time: 11:30AM – 1:00PM
The theory behind Section 1031 is that when a property
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REAL ESTATE MARKET UPDATE: 10 STRATEGIES FOR PROSPERING IN THE 2016-2017 MARKET Free 3-Hour training explores the best ways for landlords, flippers, new investors and olds pros to make money in the “new” market (with NO expensive seminars or courses for sale…REALLY…) Sponsored by the Non-Profit Ohio Real Estate Investors Association (OREIA) We’re now 7 full years into the “real estate recovery”, and all the signs point to a downturn in the market in the next 12 months. But before you break out into a cold sweat, remember…fortunes are made when the real estate market turns, up OR down. If the last 10 years have shown us anything, it’s that the way you make a fortune in the real estate business is by: • Understanding which opportunities are hot, • Which have passed; • And which are coming up next Whether you’re a brand-new real estate entrepreneur or an old pro, you can’t rely on outdated information, strategies, and techniques in this fast-changing market.
to stay AHEAD of the curve. In this free, up-to-the minute workshop, I’ll share the market forces at work today that will change the way you make money in the coming months. My name is Vena Jones-Cox, and I’ve been investing in real estate for more than 2 decades. I’ve completed over 800 deals in “good” markets and in “bad”. I’ve made millions starting with no money and no experience, and shown tens of thousands of people just like you how to do the same. This fall, I’m hitting the road on behalf of the non-profit Ohio Real Estate Investors Association to: • When the massive decline in deal inventory, increase in competition, and continued lack of easy financing might ease up, and what to do when it does, and what to do in the meantime • What the “changing market” means to you as a wholesaler, retailer, note buyer, or landlord. • Show you the best ways to buy, sell, rent, and finance deals for maximum profit in the next 12 months • Help you understand the strategies you need to learn and focus on NOW, so that you don’t waste your time or spin your wheels with outdated information
To maximize your profits and build wealth fast, you need
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October 2016
No, I don’t have a crystal ball - but I do have a history book, which is just as valuable in figuring out what comes next. And I can tell you that: in just 3 hours, I can help you understand your next steps to making money in real estate investing in the next year. I’ll show you • what’s being implemented by wealth seekers just like you all over the United States… • what you’ll need to do and know to take care of your immediate cash needs AND your long-term wealth and retirement goals… • and tell you how to take the next steps toward getting what you need to insure your family’s financial success in the weeks and months to come. Join me, and you’ll discover: • Which strategies can realistically get you out of debt in the next 6 months-1 year, and get you cash in your pocket to build those “rainy-day” reserves and build future wealth • Which strategies you can truly implement with no credit • How to choose the TYPE of property you, personally, should invest in—single family homes, commercial properties, or maybe alternative investments like notes and mortgages—and the pros and cons of each, so that you can make the right decision right now • How to avoid critical mistakes that could cost you big • How to reach your goals, once and for all, and stop
“getting ready to get ready” and JUST DO IT If you have a passion for financial independence, but need specific guidance about what to do in today’s changing market, join me for free real estate training and let me show you how to change your life! Seminar is absolutely FREE, and you WON’T be pitched on a multi-thousand dollar program, GUARANTEED. Money-making education with no pressure or obligation. Save your seat NOW before space runs out! Call (888) 5519389 or register online at www.trainwithvena.com and select your favorite location!
The Investor
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WHAT IS AN OPERATING RATIO
BY ANTHONY CHARA, APARTMENT MENTORS Operating Ratio is a calculation that will tell you how efficiently or inefficiently an Apartment Complex is being operated.
all new appliances, new windows, new roof, new mechanicals (AC, boiler/chiller, elevator), new fix-tures and/or new kitchens/baths, then your expenses will be lower.
Calculating the Operating Ratio is simple as long as you have all the correct figures to use. The two figures you need to calculate the ‘OR’ are the OE or Operating Expenses (TIMMUR), except your debt service/mortgage payments, and the EGI or Effective Gross Income.
How do you find out what the average OR is for the area in which you want to purchase? One way is to speak with several commercial brokers in that market that specialize in Apartments. We prefer brokers with a CCIM designation. You can find them at www.CCIM.com The second way is to speak with several Property Managers in that market. Another way is to go to the web site www.IREM.org and purchase the information from them. IREM conducts an annual survey of thousands of Apartment owners/managers nationwide and compiles a plethora of information that is extremely useful. The downside is that the re-port is several hundred dollars to purchase and it may not even include the market that your potential property is located in. You can also find CPM’s (Certified Property Managers) on the IREM web site that can tell you the average Operating Expenses too.
In order to find the OR, you take the Operating Expenses (OE) and divide it by the Effective Gross Income (EGI). Example: OE / EGI = $57,542 / $136,291 = 42.2%. As a rule of thumb, the OR should be between 40%-50%. This will vary depending on several factors such as the age of the building, how re-cently it was rehabbed and the area of the country where the building is located. We’ve found that buildings further north tend to have higher OR’s and buildings further south have lower OR’s. The more recently the building has been rehabbed or the newer it is the lower the OR will be too. Of course, that will also depend on how extensive the rehab was. If all someone did was throw on some new paint, replace an appliance and put in new carpet, your expenses will be higher. Now, if they put in
Once you know what the average Operating Ratio is in your market you can use that for comparison purposes. If the average should be between 40%-50% and you find a complex with an OR of 28%, it usually means that the seller is either hiding information or they are just very efficient. In some
Building Value LLC 4040 Spring Grove Ave. CincinnaƟ, OH 45223 (513) 475-6783 www.buildingvalue-cincy.org 8
John C. Wagner | 513.857.9179
October 2016
cases the owner maybe doing their own management and, therefore, they don’t include a management percentage which you will need to do. In other cases they literally are lying to you and trying to hide expenses which you’ll have to uncover during the due diligence phase if you get that far. We’ve seen several complexes that are over 40 years old with no recent rehab work completed where the OR was as low as 26.9% in one case and around 22% in another case. On the other hand, if you find a complex with an OR above 50% that can mean some big bucks for you. As an example, if you find a property with an OR of 51% and the market average is 44% in that ar-ea, and, if you can get the expenses under control, then every dollar you save will literally go straight to your bottom line. However, we wouldn’t recommend buying the complex unless you can figure out why the expenses are out of whack beforehand. If you buy it first with the hope that you’ll be able to figure it out later, you may be in for a rude awakening. Another reason I look for properties that have Operating Ratios above the market average is some-thing called ‘Forced Appreciation’. In the example above, if I know prior to closing why the expenses are so high and know I can lower those expenses to or close to the market average, then not only does that produce more cash flow for me, but it also increases the value of the property via Forced Appreciation. Let’s say
I lower the expenses by $500 per month. Number one, my NOI (Net Operating Income) will in-crease $6000 per year. ($500 x 12 months = $6000) That also equates to $6000 more in my pocket. Via Forced Appreciation, if my property is in an area that has an average Cap Rate of 10% and my NOI just increased by $6000, then the value of the property just went up $60,000!!! Here’s why; a $6000 increase in NOI divided by the Cap Rate of 10% equals $60,000. ($6000 / .1 or 10% = $60,000) What if my property is located in an area with a CR of 8%? $6000 divided by 8% equals $75,000. ($6000 / .08 = $75,000). That’s the power of Forced Appreciation at work. Try doing that with a Single Family Home! Another great thing about Forced Appreciation is that it’s in effect anytime your NOI increases. What if you had a 30 unit property and increased the rent on each unit a whopping $10 per month? That would equate to an annual increase of $3600. A $3600 increase in NOI, divided by the market Cap Rate in your area, let’s say 10%, equals an increase in value of $36,000. What if your market Cap Rate is 8%? That means your equity just increased to $45,000. (30 units x $10 x 12 months = $3600 / .08 = $45,000) I love apartment buildings!!!
The Investor
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THE 2016 OREIA NATIONAL REAL ESTATE SUMMIT FOR REAL ESTATE INVESTORS & LANDLORDS NOVEMBER 3RD-6TH | GREAT WOLF LODGE AND WATER PARK - CINCINNATI, OHIO COLOR YOU INSPIRED... What’s more motivating than 15 of the most successful investors and entrepreneurs in the United States presenting their best strategies for building wealth and earning cash in today’s market for 4 solid days? Easy...having 750 like-minded success-seekers to share the experience with! And that’s just what you’ll get at the 2016 National Real Estate Strategies Summit—the Nation’s largest conference for real estate investors, landlords, rehabbers, wholesalers, note buyers, and the folks who support them! COLOR YOU READY... • Are you really ready to grab the reins of your own financial future, and take an active role in your own wealth? • Are you ready to step up and take your real estate business to the next level? • Are you ready to stop playing games and devote some real time and energy to making that happen?
Then you’re ready for the Summit—it’s a gift of time, focus, and growth you give yourself. COLOR YOU INFORMED... There’s nowhere else in the country, and no other time of the year, where you can absorb the best strategies from the top minds in real estate. There’s no place like the Summit to explore new ideas in: • Multiple asset classes, including residential, commercial, and notes • Every way to finance a deal from conventional to owner to private financing • Negotiation and marketing ideas that put you ahead in the “hot” market • Best ways to make money in the current economy— wholesaling, renting, rehab-bing, and more Attendees, experts, and real estate association leaders all agree: the National Real Estate Strategies Summit by OREIA is the most informative, up-to-the-minute, success-building, and downright FUN real estate conference in the country.
dŚĞ EĂƟŽŶĂů ͞EĞǁ Strategies Summit”
2016
ĨŽƌ ZĞĂů ƐƚĂƚĞ /ŶǀĞƐƚŽƌƐ ĂŶĚ >ĂŶĚůŽƌĚƐ
^ĂǀĞ dŚĞ ĂƚĞ͊ November 3 - 6 Great Wolf Lodge Conference Center Mason, Ohio
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October 2016
COLOR ME EDUCATED... 15 Super Experts to School You in Most Up-to-the-Minute, Money-Making Topics George Antone: Be a Debt Millionaire * Donna Bauer: Forget Properties, Buy Financing * Dick Desich: How I Invented the IRA Industry * Gene Gaurino: Super Profits in Senior Housing * Larry Harbolt: Down to Earth Seller Financing * Kathy Ken-nebrook Get Your Phone Ringing off the Hook with Motivated Sellers * John Martinez: Close More Deals * Joe McCall: Build a Passive Wholesale Business * Frank Rolfe: Mobile Home Park Profits *Brad Sides: Analyze Your Market Right * Jeffrey Taylor: 10 Ways to Increase Your Rental Cash Flow* and more...
pendence in the real world. Just $17 when you pre-register with adult admission. SATURDAY EVENING BANQUET: Enjoy networking AND in-spiration with dinner for just $37 per person. COLOR YOU CONVINCED— Join Us November 3rd - 6th in Cincinnati For the Real Estate Event of the Year! Log on to www.OREIAConvention.com or call us at 888996-7342
All these sessions and the trade show as part of your tuition at just $197 per person, $297 for 2 ($40 off for local association members) THE ADVANCED DEAL MAKER’S FORUM Truly Advanced Deal-Making, Asset Protection and Tax Strategies on Thursday from 8:30 am to 5:00 pm for $247 for 1, $347 for 2 (includes main convention). You must have a minimum of 5 year’s experience and 50 deals completed to attend
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The Top 5 Secrets to Getting Properties Cheaper Than Anyone Else with Jason Roberts and Rachael Schneider If your problem is not enough deals, spend the day learning how to create and track marketing that rocks. Choose either detailed all-day seminar FREE with your tuition! YOUNG ADULT ENTREPRENEURIAL ACADEMY WITH INSTRUCTOR JIM WOOD Saturday and Sunday 8:30 a.m. - 5 p.m. Bring your 15-22 year olds and we’ll show them how to build financial inde-
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5 SMART STRATEGIES FOR NEWBIE WHOLESALERS TO FIND AN END BUYER BY MARCUS MALONEY
When starting out, wholesaling can be terrifying. There are so many questions that need answering. You read all the blog articles you can find. You study all the course material you’ve purchased. You’ve found and listen to all the real estate podcasts on iTunes, but your biggest fear still haunts you: “WHAT IF I CAN’T FIND A BUYER!?” In this article, I will provide you a few solutions to help you overcome this fear and describe some great exit strategies to prevent this from happening. What you are facing is normal. Believe me, it’s typical. This question will always be in the back of your mind, even when you become a seasoned investor. This is one of the greatest challenges, but if you prepared thoroughly, you will be able to minimize this risk. Note that I said “minimize the risk,” not “eliminate the risk.” So let’s dig in. FIVE SMART STRATEGIES FOR NEWBIE WHOLESALERS TO FIND AN END BUYER 1. Have an Exit Strategy Having an exit strategy is essential when planning any investment or executing any plan. You must be able to visualize the end goal and work to achieve that end goal. For wholesalers, that end goal should be a transaction where all parties are satisfied with the results. This will include the seller, buyer, tenants, and yourself. One major mistake newbies make when starting out is focusing on the money they may potentially make. I have repeatedly addressed how important a good transaction is — because you would like for those you’ve helped to refer you to others in similar situations. A good exit strategy will help you facilitate great transactions, which will result in referral sources. So what do you need to create a good exit strategy? For starters, know your market. 2. Know Your Market Are you really familiar with your market? Do you truly know what areas you need to focus on to find your first deal? You have to know your market. You have to know what pockets of your area are highly desirable for investors. It’s good to be aware of the areas fix and flippers desire, as well as those areas that are great for buy and hold investors, land deals, and scrape projects (new builds). In each market, there is a sub-market, and in each sub-market, there is a niche of that sub-market. For example, you may be interested in starting with a certain subdivision of your city. This 12
is great because you will be able to focus all your marketing and branding in this area. You can become known as the subject knowledge expert for this area. 3. Know Your Buyers This is really overlooked by a number of newbies. If you have a true relationship with your buyers, you will be able to ask them about a deal before you have it under contract. What? Did I just hear that right? Yes — when you have a solid buyer base, you become familiar with who buys in certain areas and what they are looking for. There have been numerous deals where I was able to present the deal to a buyer, and they informed me exactly what they would be willing to pay for the property. At that point, it was basically a matter of negotiating with the seller what my assignment fee would be. I already knew the sell price, so I had to work on the buy price. This definitely minimizes the risk and allows you to be confident knowing that your seller and buyer are going to be happy. 4. Use Online Marketing Sources Now, being a newbie, you will not have these relationships established with buyers. That is understandable. So you will want as much exposure as you can get. It is advantageous to get as many eyes on the property as possible in a very short period of time. If you truly have a deal, it will sell, but if the margins are thin, it will take a little longer. So here are a few online strategies you can do to market your property. Posting the property on these sites is not an exact science, but you will have buyers calling you regarding access. Post numerous pictures of the property along with the number of bedrooms and bathrooms, the property square footage, and the lot square footage on sites like Zillow, Craigslist, Backpage, FSBO listing sites, Postlets, and any other media outlet. The only disadvantage to doing this is the property owner may see their property listed. To ensure we are covered we have added in our contracts that we reserve the right to market the property as well because we are Realtors. We have not received any push back from the sellers when adding this verbiage to our contract. 5. Use Offline Marketing Sources I wrote an article a while ago regarding networking (“The Beginner’s Guide to Highly Effective Real Estate Networking“). You will need to utilize these skills when trying to find offline resources for your deals. This will take some serious initiative, so sitting behind the computer will not work.
October 2016
You will need to build your network. This will take attending meet up groups, attending local real estate club meetings, and other places where investors gather. You should already be doing this, but in case you’re not, you need to get started. These are the places where you will find true cash buyers, landlords, and lenders. By becoming familiar with the players in your area, you will be able use them as a resource for your deals. You have to remember, a relationship requires time and it’s about give and take — not just take.
ad for a weekend or two can bring you buyers. Conclusion
Also by networking, you can find joint venture partners who may have that extensive buyers list to help you. Again, by building these relationships, you will be able to do many more deals together versus alone.
If you know if any additional tools to get your property in front of buyers, please share. We all face this challenge in the beginning.
If the property is vacant or the seller does not live near the property, a for sale sign or a bandit sign marketing the property is a resource as well. I had to do this on a rundown shack that I had under contract. A neighboring church bought the property to use it as a parking lot. Remember, buyers can come from anywhere, and this shack definitely proved that to me.
You cannot get a property under contract without knowing what constitutes a good deal and having an exit strategy. You also have to know your market, your buyers, and marketing channels to make your deal visible. Being knowledgeable in these areas will minimize your risk when wholesaling real estate.
About the author: Marcus Maloney G+ is the Executive Officer of 3rd Generation Management & Holding LLC, which is a family owned and operated real estate investment firm. The firm’s goal is to provide affordable solutions in real estate while providing exceptional opportunities for community redevelopment for the residents of Phoenix, Arizona. You can follow Marcus on Twitter
Another offline source that most people tend to overlook is the good, old fashioned newspaper. Yes, that’s right — the newspaper. Many seasoned investors still scan the real estate section in the local newspaper. The cost of running an
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Investing in real estate is a serious decision. Don’t go it alone. • Investment Analysis and Due Diligence Assistance • Accounting Services Different levels of service to match your budget • Clean, organized records means less hassle at tax time • Tax Planning and Compliance
Ellsworth & Associates 513-272-8400
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9624 Cincinnati Columbus Road Suite 209 West Chester, OH 45241
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8 INDISPUTABLE REASONS REAL ESTATE AGENTS NEED TO PRIORITIZE EMAIL MARKETING By Anum Yoon
Real estate agents need to make email marketing a priority. In a survey of agents, email campaigns were named one of the top three effective marketing strategies, right behind referrals and featured listings.
comfortable. Email is convenient for your clients. They can look at the listings you’ve included in an email at any time that works for them — and not necessarily the time you call them.
Here are eight reasons why email marketing needs to be up high on your list.
EMAIL IS CUSTOMIZABLE TO A CLIENT BASE If you have specific niches of clients — first-time home buyers, move-up home buyers, or downsizing buyers who are looking for a smaller place — email marketing lets you create information and listings specific to each niche. You can market to both buyers and sellers. In addition, of course, you can literally customize an email to a specific client. Email Contributes to Your Brand
EMAIL IS WIDESPREAD Eighty-five percent of Americans use email and the internet. Of people between the ages of 18 and 29, that figure is a whopping 98 percent. Of the 15 percent of the U.S. population who do not use email and the internet, a large percentage are over the age of 65. You want to send your messages where they will be received, and an extraordinarily high percentage receive email. EMAIL CAN SELL YOUR LISTINGS FOR YOU A lot of real estate marketing is done through bringing prospective buyers to your listings. Email, though, can bring them in virtually. A beautiful home — or one with the amenities a buyer is looking for — can sell itself through pictures. Show the bay window, the backyard, and the kitchen. Sending the pictures via email is a great way to interest a prospective buyer into physically looking. EMAIL GIVES PROSPECTIVE CLIENTS USABLE INFORMATION When you have a listing that is right up a prospective client’s alley, you want to give them background as well as pictures. What’s the square footage? Is it gas or electric heat? What’s the school district? You can give this information by phone, of course. Give it by email, though, and the clients have plenty of time to look at their leisure. EMAIL IS CONVENIENT FOR CLIENTS Clients like to be treated well. Many do not like a hard sell, but are comfortable with real estate agents who make them
For maximum effectiveness, all your marketing should contribute to your brand. Are you the information source for firsttime home buyers in your area? Do you provide information on mortgage rates? Inspections? Has your organization been named agent of the year? All this information can go in your email. You can run a series on how to find the right mortgage, for example. EMAIL DRIVES YOUR OTHER MARKETING A good real estate agent site will have a web page with listings, of course, as well as Facebook and Twitter accounts. A good email campaign will link in to all your media and drive customers to your web site and Facebook accounts, with updates on Twitter. EMAIL CONTRIBUTES TO REPEAT AND REFERRAL BUSINESS One of the most important functions of email is the way it allows you to keep in touch with past clients. You can easily craft an email customized to them. Recent real estate news combined with news in your community and even news about mortgage rates can be genuinely helpful and appreciated. In addition, if the recipients are asked about real estate agents, your name will be in front of them for a referral. Of course, each client has a real estate life cycle. When the time comes for the moveup buyer to downsize, or the first timer to move up, your name will be familiar and at their fingertips. Email is an accessible and customizable way to letting your properties sell themselves and of keeping your brand before your client base. Marketing with email should be a top priority for real estate agents. Anum Yoon is the founder and editor of the millennial money blog, Current on Currency.
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October 2016
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
www.peasewarehouse.com
www.surplus-warehouse.com
www.sashaallen.vpweb.com
Financial Services
Badcat Properties, LLC
Financial Services
Dayton Capital Partners
www.badcatproperties
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
Exit Best Realty
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
Sam Moore, Jr. 513-485-8599 moorejrsam@hotmail.com Darrin Carey 937-458-3303 Darrin@DaytonCapitalPartners.co m
Kelvin Mitchell 888-493-6075 excellentfinance@aol.com Sharon Altman 513-923-4100 saltman@GuardianSavingsBank. com
Nancy Lawler 614-221-6770 Dave Woodcamp 513-761-6688 springvalleybank@cinci.rr.co m David Caldwell 513-453-4006 Donald Boling 513-300-9203
Legal
The Bauer Firm, LLC
www.mcswaincarpets.com
www.thebauerfirm.com
Realtor Real Estate Services
OlmecReflectionsinc@gmail.com
www.bestexit.com
www.federleinc.com
www.OTBrealestate.com
Homes By Bethanny www.homesbybethanny.co m
CORE Group www.coregroupre.com
Real Estate Services
Exit My Foreclosure
Restoration
Icon Environmental
www.ExitMyForeclosure.com
Josh Appelman 859-916-5201 josh@united-installs.com Dan Poske 513-301-0247 dposke@cmsllc.com Marty Russell 513-545-1637 martysrussell@gmail.com Dennis Taylor 513-851-4021 dennist123@aol.com Christina Carey 513-509-2705 Christina@OTBrealestate.com Bethanny Johnson 513-307-9349 bethanny@bethannyjohnson.com Jiries Dawaher 513-504-5565 jtd8.re@gmail.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 513-579-3520 john@ntnonline.com
Title
Servicelink
Wholesale Properties
You Buy Houses
Financial Services
Secured Investment Lending
nlawler@recasafinancial.com
Olmec Reflections, INC. McSwain Pro Floors
BildWise www.BildWise.com
Real Estate Brokerage
davidcaldwell@ fabulousfloorsusa.com
Flooring
www.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
www.ntnonline.com
www.svclnk.com
www.youbuyhouses.com
John Wagner 513-857-9179 John.wagner@svclnk.com Drew White 513-471-0141 DrewWhitePix@gmail.com
Jon O'Connor 513-354-4400 joconnor@mcswaincarpets.c om Ben Bauer 513-851-7600 ben@thebauerfirm.com
The Investor
securedinvestmentlending.com
Brittany Kiah 407-878-2830 Brittany@securedinvestmentlend ing.com
15
Cincinnati REIA 10945 Reed Hartman Hwy., Ste. 113 Cincinnati, OH 45242
PRESORTED STANDARD U.S.POSTAGE PAID
CINCINNATI, OH PERMIT NO. 777
REIAGC Meetings Cincinnati REIA is Moving! th Our General are held at: Beginning Thursday April 7Meetings our general meetings will be held at:
Crowne Plaza- Blue Ash 5901 Pfeiffer Road Æ” Cincinnati, OH 45242
Located at I-71 & Pfeiffer Road Be sure to come and check out our beautiful new location!
SATURDAY, OCTOBER 15, 2016 9AM – 5 PM DEPARTURE LOCATION: REIAGC OFFICE 10945 REED HARTMAN HWY., CINCINNATI, OH 45242
Rehab Basics: Home Inspections
Even if you never plan to rehab a house, you still NEED to understand how the process works, and what it costs to fix up a house. And what better way to learn than to spend the day with the investor himself, to see and hear the What / Why and How as he evaluates a property? Get on the bus and learn how the “exit strategy” determines the Scope, the Budget, the even the Offer Price! EVEN ONE new idea or nugget of information from this event will earn significant returns on your next rehab, turnover, or even wholesale deal. Ask yourself when you’ll EVER get the opportunity to learn how to evaluate…and value…a retail deal, a rental deal or a wholesale deal property along-side an expert again? This is a unique chance to get the inside scoop on the challenges and opportunities in rehab in Cincinnati today. You’ll see 3 real investment properties – on the market today, plus get invaluable rehab tips and advice from your tour leader, Jerry Fink, who has rehabbed over 200 houses. This knowledge is critical whether you are the Retailer…the Landlord…the Wholesaler…even the Private Lender – EVERY Real Estate Professional needs these skills.
REGISTRATION----------------------------------------------------------------------------
Advanced registration is required due to chartering the transportation. Register no later than October 13th at the REIAGC Member rate of $149 for 1 and $179 for 2! Name: ____________________________________________________________________________________________________ Address:___________________________________________________________________________________________________ City:__________________________________________________State:________________________Zip:____________________ Phone:_______________________________________________Email:________________________________________________ 2nd Attendee:_______________________________________________________________________________________________ NOTE: Please contact REIAGC staff with any accommodation or special needs. Make your selection: REIAGC Member Registration Rate: ______$149 for 1 Non-Member Registration Rate: _____ $179 for 1 ______Register me free thru Express Success!
or or
_____ $179 for 2 _____ $199 for 2
Check method of payment: ______Check _____Credit Card Number: _______________________________________________________________________ Exp. Date: _____________________ CID#__________________________ Signature:__________________________________________________________________________________________________ Please return completed form to REIAGC at the address below or register online at www.CincinnatiREIA.com. Cancellations are accepted without penalty up to 72 hours prior to the start of the event. REIAGC 10945 Reed Hartman Hwy, Suite 113, Cincinnati, OH 45242 www.CincinnatREIA.com | Info@CincinnatiREIA.com | (513) 407-3137