Michigan Landlord Magazine January February March 2018

MICHIGAN

LANDLORD January, February, March 2018

2018

www.rpoaonline.org

Michigan Landlord & Real Estate Investor FREE CONFERENCE

& EXPO

SPECIAL EDITION CONFERENCE GUIDE

HOW TAX CUTS & JOBS ACT IMPACT REAL ESTATE INVESTORS p. 34 February 22-24 2018

DeVos Place • Grand Rapids,MI

FEATURING 8 NATIONAL SPEAKERS ALSO FEATURING: • Breakout Sessions • Over 30 Vendors

Multi-Family Wealth Anthony Chara

Increasing Cash Filthy Riches Flow from Rentals through Real Estate

Buying Notes

Self-Directed IRA’s

Using Other People's Money

Nick Sidoti

Donna Bauer

Larry Goins

• Networking Opportunities See page 29 for a complete schedule!

Lifeonaire

Shaun McCloskey

Edwin Kelly

Sponsored By: Noel Selewski Agency, Inc.

Columbo’s Floors to Go • Compass Realty • Culver CPA Group Indoor Climate Solutions • Sherwin-Williams

REI Automation Brittany Calloway

Chris McClatchey

RENTAL PROPERTY OWNERS ASSOCIATION

Haven’t signed up yet?

The Home Depot 2% RPOA Rebate Program Sign Up for The Home Depot Rebate Now! The RPOA membership in the National Real Estate Investors Association makes RPOA members eligible to receive this extremely valuable rebate.

Sign up for The Home Depot rebate program through the RPOA and receive 2% back on all your purchases*— no matter how small or big.

This rebate is on top of any other discount or sale price, including contractor rates!

Call the RPOA today and start saving!

616-454-3385 * For semi-annual purchases over $5,000. Rebate checks are sent out semi-annually, usually in March and August.

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WHERE LANDLORDS GO FOR SUCCESS

IN THIS EDITION

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19

34

FEATURES 4

FROM THE DESK OF THE DIRECTOR

5

NEW MEMBERS

11

MEMBER-TO-MEMBER DISCOUNT PROGRAM

24

UPCOMING SEMINARS & EVENTS

33 AD-O-GRAMS 33

CREDIT & DECISION REPORTING PROCEDURES

ARTICLES

VOLUME 54, NUMBER 1

6

THE ROAD TO SUCCESS IS EASY?

www.rpoaonline.org

16

HOW TO GET 2 OR 3 TIMES MORE RENT AND MUCH BETTER TENANTS—WITHOUT SECTION 8

19 23

2018 MICHIGAN LANDLORD & REAL ESTATE INVESTOR FREE CONFERENCE & EXPO GUIDE NOTE BUYING: THE FASTEST, EASIEST, SAFEST WAY TO MAKE HUGE PROFITS IN REAL ESTATE

24

REAL ESTATE HYPNOSIS: DIAGNOSING THE 3 BIGGEST LIES OF REAL ESTATE INVESTING

26

WHERE DO YOU FIND GREAT DEALS ON APARTMENTS?

30

WHAT IS A SELF-DIRECTED IRA AND HOW DO YOU KNOW IF YOU HAVE ONE?

32

WHERE TO FIND FILTHY RICHES HOMES

34

THE TAX CUTS & JOBS ACT IMPACTS REAL-ESTATE INVESTORS

MICHIGAN LANDLORD editorial goal is to provide a forum for real estate investment and rental property ownership and management ideas and news. Our articles, columns, and other features should not be construed as investment advice, nor does their appearance imply an endorsement by the Rental Property Owners Association of Kent County or the Real Estate Investors of Michigan of any specific real estate investment or management strategy. An investor’s and manager’s best course of action must be based on individual circumstances.

January / February / March 2018 MICHIGAN LANDLORD 3

RENTAL PROPERTY OWNERS ASSOCIATION

From the Desk of the Director Just a few weeks away—February 22-24, 2018! That’s the date for the RPOA’s FREE annual conference, 2018 Michigan Landlord & Real Estate Investor Conference & Expo.

I know I say this every year, but this year is no different—the event is bigger than ever! We are featuring eight national speakers and hosting courses on the hottest topics in real estate investment, including: multi-family investment, short-term rentals, note buying, self-directed IRA’s, seller financing, investing outside your local market, increasing rental cash flow, automation systems for real estate investment, wholesaling, flipping, doing deals with other people’s money, fairing housing and service, comfort and support animals—and more!

We will be hosting over 30 exhibitors too, including banks, property management companies, real estate auction services, insurance providers, building suppliers, accountants, real estate services, and more.

We know you won’t want to miss this opportunity to increase your investment skills and network with over 900 other real estate investors from all across Michigan.

Check out the details on pages 27-30 and register soon. (Don’t forget—its’ FREE!) See you in February!

616-301-4195

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WHERE LANDLORDS GO FOR SUCCESS

WELCOME NEW MEMBERS 1118 Holding, LLC 6291 Marsh Rd LLC Achterhof, Shirlee Affinity Financial Group Akire Properties LLC Alicey Property Renovation Allen, James & Therese America's One Title Anivy Real Estate Investments Archer, John Badic Properties Ball, Robert Bamblam LLC Barney, Jeff Beacon Realty Group Becker, Aurelia Big Brother Homes, LLC Big Rapids Property Owners Association Blakely, Grant H Boersma, Bill Bonnet, Ed J Brandt, Arlene Bravata, Tony Butterfield, Forrest Candlelight Properties LLC Carter, Marshall II Carver, Roger & Judy Chandler and Chandler Financial LLC Childress & Associates Realty LLC Crosby, John E Curtiss, Craig D & L Homes LLC DeLong, Melissa K DesNoyers, Paul E DiMambro, Dan Doyon, Kyle Dugan, Mike Elliott Inc. Escobar, Gloria & Douglas Evans, Thomas Jon Fairfield Property Management Freeman, Eric - BR Gardiner, Michael Glatz, Susan Goldenrod Properties LLC

Gordon, Jonathan GR Affordable Housing, LLC Grimm, Janet and Steve Hartman, Violet M Haskins-Norris, Toni R Hedg-Peth, Michelle Henckel, Russ Hicks, Cyndi Higgins, Edward L Hires, Robert & Laura Holbrook, Amanda Holdsworth, John E Homes and Loans of West MI LLC Hudson, Paul R Patterson Property Mgt Impetus Invest, LLC Paulsen, Darryl Integrated Property Services Peets, Gary LLC Red Maple Properties LLC Isaev, Natalia & Vyacheslav Riebel, Christopher J.C. Leahy & Co LLC Ries, James D Jazdzyk, Timothy Paul River City Living LLC Jennings, Richard A Roland Management Group Jones, Alexander Rustin Property Management Kais, Saleh K S&H Properties LLC Kellogg Const Sak, Carolyn Kent Rentals LLC Schiller, Deborah A Kirchenbauer, Karen M Schreuder, Andy & Katrina Kramer, Carol Taylor Sell Your Michigan Home Kreis, Enderle, Hudgins & SGSM LLC Borsos, P.C. Shaback Properties KSC Investment LLC Shephard, Stephanie & Leila Properties, LLC Donovan Lovejoy, Fred & Tara Singleton, Joyce M M.A.A.K. Properties LLC Speas, Mark Martlew, Walter (Barney) Stanton, Bruce Matuk, Phil Streidl, Cameron McClain Properties Inc Stucky Property Meekhof, Butch Management LLC Meyer, Randy Synergy Landmark Michigan Lawn Service & Snow Inc Miller, Charles S Naves, Ruth Nelson, Ingrid Norris Property Group LLC Northpointe Bank Padilla, Marc Parriott, Pam

Tamm, Julia & Przybylski, Rose Taylor, Virginia K Towns, Betty Union St Property LLC United Properties of West MI VanSingel, Scott A Veenstra, Cindi and David Veersma, Curt Velo Law Office Verhey Carpets East Inc Vogelmann, Karen Vuong, Trang Watson, Kyler Webb, Philip West Coast Ventures LLC West, Amy Whalen, Bob Wittkowski, Janice V Wright, Cheyenne Wyma, Mark & Monda X Ventures Zalokar, Bob

January / February / March 2018 MICHIGAN LANDLORD 5

RENTAL PROPERTY OWNERS ASSOCIATION

NATIONAL SPEAKER HIGHLIGHT

The Road to Success is Easy?

by Shaun McCloskey Hello fellow real estate investors!

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.

I’m not speaking from some kind of theorizing pulpit—I’ve been there and done that. I’ve spent countless hours pursuing a real estate get rich approach to find myself burnt out and a stranger to my family. I lost site of the real goal. I learned the hard way—so you don’t have to.

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What I teach through my Lifeonaire training is that if we will simply follow a plan; success is easy. It’s an easy road. What I have found is that the world around us is pursuing success in every other way-making pursuing the path to success difficult. For true success--we have to go against the grain and do things differently than those around us. The path is easy, but getting to 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.

WHERE LANDLORDS GO FOR SUCCESS

Take the time to imagine the life that you want, and now think 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 the life of ”get rich,” 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.

Through 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.

your perspective forever. What you’re going to learn absolutely changed my life just 4 years ago, and I can’t wait for it to do the same for you.

See you soon!

Shaun will be presenting at 3:30 p.m., Saturday, February 24 at the Michigan FREE Landlord & Real Estate Investor Conference & Expo at DeVos Place, River Overlook Area, Downtown Grand Rapids. Shaun will help provide the finishing touch by showing you how to implement all you’ve learned during the conference in a sane way to make you “life rich.” Shaun McCloskey is a seasoned real estate investor, author and coach based in St. Louis, MO. that has used real estate as an investment strategy and educational tool to change thousands of lives across the United States. He is the author of several real estate investing courses and is widely known for his expertise in the fields of pre-foreclosure and short sales. Although by the world’s standards Shaun was considered to be a very successful entrepreneur, in 2007 he realized that he was working far too much and was consumed by his business. By implementing the LIFEonaire and debt free investing principles you’re about to learn into his own life, this is now a thing of the past. “Everyone says they want to be a millionaire, but what they really want is LIFE!

Debt is one of the biggest obligations people have which hinder them from really living life. Most people mistakenly believe you can’t run a legitimate real estate business without incurring debt. I’m here to tell you otherwise. Because of this, get prepared to learn new strategies that you can implement at the RPOA’s Michigan Real Estate Investor Conference in Grand Rapids. I’ll be there on Saturday, February 24, where we’ll pull back the curtain on what it means to design a real estate business that has your life in mind first. Most people design their businesses with how much money they’ll make, but we’re going to teach you the exact opposite of this. We’ll show you how to get on the right path, and then create a business that serves that path and purpose. And the best part? We’ll show you how to do that while being 100% debt free. I can’t wait to share this with you and change

January / February / March 2018 MICHIGAN LANDLORD 7

RENTAL PROPERTY OWNERS ASSOCIATION

SELEWSKI SPECIALTY UNDERWRITING, LLC For All Your Landlord REO Insurance Needs Program Highlights: 1.

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Insure unlimited properties on one policy Easy online access to your policy to add/change/remove properties Insure vacant/rehab/new builds/tenant occupied homes on the same policy One easy monthly bill for all properties insured Insure multiple entities on one policy Replacement cost or Actual Cash value available Simple Property Reporting form Insure Property in any of the 48 continental states

Call today for your free quote, whether you have one property or one hundred, we can help.

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Important information for: Farm Bureau Great Lakes Mutual Insurance customers As of 10/01/2014 Farm Bureau Insurance will no longer be associated with Great Lakes Mutual Insurance. This change in carrier may result in a premium change. If you are currently insured with Great Lakes Mutual and you would like to keep your policy where it is, you will need to switch to a licensed agent. Our agency has been writing with Great Lakes Mutual for the past 6 years and we have an outstanding record with the carrier and our customers. Please contact our office today if you would like to keep your policy with Great Lakes Mutual Insurance. We can write in any area of Michigan, West, East, North, South.

Noel Selewski Agency Inc. Ph: 855-50-INSURE (855-50-467873) Email: nselewski@yahoo.com www.noelselewskiagency.com

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WHERE LANDLORDS GO FOR SUCCESS

WE ARE CPA’S WHO OWN REAL ESTATE

SAVING YOU TIME & MONEY

Do you know where your money is going, or how to stop the leaks? We let you focus on running your business, and we handle the numbers . . . saving you time and money.

culver | group CPAs & Business Advisors

616.456.6464 . culvercpagroup.com . 1419 Coit . Grand Rapids

January / February / March 2018 MICHIGAN LANDLORD 9

RENTAL PROPERTY OWNERS ASSOCIATION

According to the latest Zillow Rent Forecast (covering August 2016 through August 2017) rents will rise in 34 of the 35 largest U.S. metros. Overall, rents are forecasted to rise 1.7% over the next year, the same rate of increase as the past 12 months. Interestingly, the northwest cities of Seattle & Portland are projected to rise 7.2% and 6% respectively-which will outpace San Francisco's projected increase of 4.9%. Go here for more. http://realestateinvestingtoday. com/zillow-forecasts-rising-rent-large-u-s-metros/

Is it time to check your

Install a smoke detector in every bedroom of your home and in the hall that leads to one or two bedrooms, and make sure there is at least one on each floor of your home, even in your basement.

Smoke Detectors?

Test your smoke detector each month and replace it if it doesn't work or if it is already 8 to 10 years old.

Smoke alarm safety is very important.

Having enough smoke alarms and keeping them in working condition are important fire safety steps you can take to save lives in your home and in the homes of your renters.

Replace your smoke detector batteries at least once a year and especially when you hear the warning signal that the battery is low.

BUY MORE & SAVE! Buy 20 - SAVE 10% Buy 100 - SAVE 15% Buy 200 - SAVE 20%

SKU 50001194 SKU 5069026 Grand Rapids City Approved Detectors

Rylee’s

Grand Rapids - 1234 Michigan St. NE 616.451.0724

ryleesace.com

Hardware

1205 Fulton St. West 616.233.4711

Walker - 4300 Remembrance Rd. 616.453.7741

WE’RE HERE TO HELP: MONDAY - SATURDAY 8AM - 8PM, SUNDAY 10AM - 5PM

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RPOA Member-to-Member Discounts:

WHERE LANDLORDS GO FOR SUCCESS

Members offering members BIG savings.

Check out the discounts being made to RPOA members only: Patronize one of our Associate members participating in the Member-to-Member Discount Program!

ANDERSON BROS STEAMATIC Carpet cleaning – 3 Rooms for $119 | furniture cleaning – $15 off of $75 or more | 10% discount on area rug cleaning (in shop only and free pick up and delivery). Call for a free quote 616-949-2453. www.absteamatic.com

BENDER MAINTENANCE & HOME IMPROVEMENT 10% off hourly rate for RPOA members. Property maintenance, general repairs; prepare property to rent at acquisition; inspection compliance for Section 8, City of Grand Rapids. General Contractor, Cer tified Lead Renovator, RPOA Member. 616885-0132.

COMPASS REALTY RPOA exclusive discount! Up to $500 off listing services.

Call Tom at 616-550-4447 or www.teamkoetsier.com.

DISCOUNT HOME IMPROVEMENT RPOA members: receive 6% off your order. 616-451-3600.

FARM BUREAU INSURANCE Jeff Lamborne Farm Bureau Insurance Agency offers group discounts. Call Jeff for details.

616-447-0274.

GRAND RAPIDS CARPET & FURNITURE CLEANERS RPOA Members receive 4th room free! Call Dave, 616-453-5368.

HOME DEPOT

JR MORTGAGE SERVICES

RMS LLC

Sign up for the Home Depot rebate program through the RPOA and receive 2%* rebate on all your purchases—no matter how small or big. Call the RPOA office to get your rebate program started now! 616-454-3385.

Free appraisal for 1 to 4 family unit homes with closed loan application for RPOA members only. Jim Riley, 616-292-4491.

*2% OF TOTAL PURCHASES OVER $1,249

Protect your investment! RPOA members, call for special pricing.

Need something other than carpet cleaning? We provide FREE ESTIMATES on all of our services: air duct and dryer vent cleaning, tile and grout cleaning, and flood/fire/mold restoration.

Call the Simple & Quick cleaning and restoration experts! 616531-1666

Towing of abandoned and improperly parked cars on your property. Offering to RPOA members at no cost. Free signage for RPOA members if required by State of Michigan laws. Call 616-475-9836 for impound or email impounds@rmsonline.us.

SEMI-ANNUALLY.

INDOOR CLIMATE SOLUTIONS Offering all RPOA members Grand Rapids heating inspection stickers for $50.00 each and 5% discount on repair or replacement of any HVAC equipment. Over 40 years experience servicing and installing furnaces, boilers, air conditioning.

616 - 8 91 - H E AT (4328) www.indoorclimatesolutions.net.

JACK’S LAWN SERVICE Jack’s Lawn Service is offering an exclusive discount to RPOA members only. Call for your exclusive discount today. 616698-8616.

JB HARRISON INSURANCE AGENCY Independent agents repre­ senting several companies (Auto-Owners, AAA, Citizens, Hastings, Hartford, Pioneer State Mutual, Progressive). We do the shopping for you. Group discounts available for RPOA members. Call Mike Murphy at 616-868-0050 for details.

MODERNISTIC CLEANING & RESTORATION

OFFICE MAX/ OFFICE DEPOT O f f i c e M a x o f fe r s s p e c i a l discounts on expensive supplies like ink cartridges. More than a vendor or a supplier…they’re your strategic partner, your ally, your advocate. To access this discount, contact the RPOA office. 616-454-3385.

REPUBLIC WASTE REMOVAL SERVICES Exclusive RPOA New Members and Existing Members discount $12.13 rate per month is good for one year. Republic reserves the right to increase rates at any time. Call Roy James at 616662-6862.

RYLEE’S ACE HARDWARE 10% discount on all purchases.

S o m e r e s t r i c t i o n s a p p l y.

Offer valid at our two Grand Rapids stores, 1234 Michigan St. NE and 1205 Fulton St. West and our Walker store, 4300 Remembrance Rd. www.ryleesace.com.

SHERWIN WILLIAMS Sherwin Williams offers a 30% discount on paint products and also offers a 30% discount on paint sundries. Applicators are discounted 35%. Other pricing is very competitive within the local market. A special discount card must be obtained from the RPOA. 616-454-3385.

SOS HOME REHAB $10 off the first work order perfomed for RPOA Members only. Call Shane Sarver at 616-446-4899 or email at ssarver@soshomerehab.com

Associate members who would like to participate in the discount program should call 616-454-3385.

"The promotion of offers, including discounts, rebates and other such benefits, goods, and services provided by the Rental Property Owners Association of Kent County (“RPOA”) members and advertisers within the Michigan Landlord magazine (collectively, the “Offers”), are for informational purposes only and are not an endorsement or recommendation. The Offers are not made by the RPOA or the Michigan Landlord magazine and the advertiser/member is solely responsible to you for the delivery of any goods or services. Your correspondence or business dealings with, or participation in the Offers or promotions of, advertisers/members found in the Michigan Landlord magazine, including payment and delivery of related goods or services, and any other terms, conditions, warranties or representations associated with such dealings, are solely between you and such advertiser/member. Neither the RPOA nor the Michigan Landlord magazine guarantees the existence or continued existence of any Offers, which may change from time to time. You agree to waive and release the RPOA and the Michigan Landlord magazine from and against any and all liability, loss or damage of any sort, incurred as the result of any such dealings with, or as the result of the presence of, any advertisement or promotion within the Michigan Landlord magazine.”

July / August / September January / February / March2017 2018 MICHIGAN MICHIGANLANDLORD LANDLORD 11 11

RENTAL PROPERTY OWNERS ASSOCIATION

GreatLakes_BC_Doerner.qxd:GreatLakes-bc-40791.qxd

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Phone (616) 531-8810 Bill Doerner 3455 Byron Center Ave. SW Fax (616) 531-8811 Phone (262) 790-5885 12705 Robin MI Lane Wyoming, 49519 Toll Free (800) 821-8846 Toll Free (800) 236-5599 Brookfield, WI 53005 jdelange@greatlakeslaundry.com Mobile (616) 644-3717

bdoerner@greatlakeslaundry.com

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WHERE LANDLORDS GO FOR SUCCESS

Work With Realtors Who Actually Own Rental Properties.

Multi-Family and Commercial Specialist

+ Heating & Cooling 24/7 Emergency Repair Furnace, Rooftop & A/C Systems Repair & Replacement Municipal Housing Inspections

+ Boiler Systems 24/7 Boiler Repair Installation & Replacement Preventative Maintenance State of Michigan CSD-1 Boiler Inspections

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Tub & Shower replacement Fixture & Faucet Replacement

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January / February / March 2018 MICHIGAN LANDLORD 13

RENTAL PROPERTY OWNERS ASSOCIATION

Real Estate Auction Specialists

LASTBIDrealestate.com has sold 1,000 + properties on behalf of lenders, estates, trusts, court receivers, businesses, professionals and private individuals Properties sold include: • Recreational • Residential Homes • Large Acreage • Vacant Lots • Commercial • Waterfront • Industrial • Agricultural Visit LASTBIDrealestate.com or call 1-800-527-8243 to speak with one of our licensed professional REALTORS®

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WHERE LANDLORDS GO FOR SUCCESS

Tenant History Website Includes 6 Counties - Free for RPOA Members The Tenant History Website now includes eviction records from six Michigan counties, including Kent, Muskegon, Ottawa, Kalamazoo, St. Joseph, and Allegan Counties. All records include money judgment evictions. Possession only judgments are excluded in some areas due to local policy.

And, don’t forget, RPOA members also share the tenant history records on the site. The site now includes over 200,000 records searchable by name. The Tenant History Website is free for use by RPOA members. Go here to start using the site now or to register:

www.tenanthistorywebsite.org

IMAGINE: Having access to money to pay your bills even if you didn’t collect RENT.

IMAGINE: Having $50,000 - $100,000 Unsecured for UNEXPECTED EXPENSES.

IMAGINE: Never passing up another DEAL.

STOP IMAGINING! GET QUALIFIED TODAY:

Aurelian Unsecured Business Lines of Credit

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January / February / March 2018 MICHIGAN LANDLORD 15

RENTAL PROPERTY OWNERS ASSOCIATION

NATIONAL SPEAKER HIGHLIGHT

How to Get 2 or 3 Times More Rent and Much Better Tenants— Without Section 8

by Nick Sidoti You have heard it all before. Some of us have even said it ourselves: ”Being a landlord can be a pain.” Most people in this country will agree that it makes a lot of sense to buy property and invest in real estate. We also know all the benefits of investing in real estate. You probably have heard that real estate is the “IDEAL” investment: Income, Depreciation, Equity Buildup, Appreciation, Leverage

tenants you have and the more chances you have of getting the “tenant from hell”.

Income is the main reason and benefit for investing, but real estate has a very big drawback “BAD TENANTS”. I’ve heard all the horror stories and the warnings from other people who say; “Don’t ever be a landlord it will make you crazy” or “The day I sold my properties was the best day of my life” or “Tenants will break everything” or “Tenants don’t pay their rent, steal from you, and skip out on you”. Remember the movie “Pacific Heights”? Anyone who has ever invested in real estate or has had a friend who invested in real estate has a “tenant from hell story”. Sad part is, these complaints and stories are true. As you have probably guessed, I have my own stories and have had a couple tenants from hell.

It was because of being burned out by these OK tenants that I decided not to go down the same path that every other landlord was going down. I was no longer going to be a general practitioner. I was going to be a specialist—a housing specialist with a niche of providing housing for those in need. I developed a system of getting much better than OK tenants; I was getting GREAT TENANTS--and more money. When I say more money, I am talking about a lot more money, doubling or tripling my cash flow without buying more property. The system I am talking about is “The Landlord’s Guide to Special Needs Housing”.

Most of my “normal tenants” in the past 30 years of investing have been okay. Notice I said okay, not great.

They stay a year or two; they pay their rent between the first and the fifth most of the time. Most of them left their rental in OK condition--OK meaning I still had to clean up after them, clean up their junk, paint the units, strip out all the carpeting and replace it. Then there were the tenants that were very far from being “OK.” They did not pay their rent on time; they were slobs that destroyed my property. The old saying is true, “One rotten apple spoils the whole barrel”.

It wasn’t long before these rotten apples caused me to get burned out. I was spending my time managing, also known as running adult day care centers, and no longer looking for deals and investing in real estate. Real estate investing is a game. It is all in the numbers. If you want to be financially independent you have to keep buying properties and building your portfolio. But, the more you buy, the more

16

Even if you never get the tenant from hell and all your tenants are “OK,” when you start building your portfolio, buying more property and getting more and more tenants, even the OK tenants will burn you out.

To learn how you can GET 2 OR 3 TIMES MORE RENT AND MUCH BETTER TENANTS don’t miss my presentation at the RPOA Conference on February 24.

Nick will be presenting at 1:10 p.m., Saturday, February 24, 2018 at the Michigan FREE Landlord & Real Estate Investor Conference & Expo at DeVos Place, River Overlook Area, Downtown Grand Rapids. Nick Sidoti™ AKA “DR CASHFLOW™” has been investing since 1979 and the national expert on student and special needs rentals. He has lectured to thousands at real estate conventions across the country since 1981. He is an award-winning columnist for his column, “DR. CASHFLOW™", which is featured monthly in some of the most widely circulated real estate investor publications in the nation.

Nick has been profiled and featured in the KIPLINGER FINANCE MAGAZINE for his innovative ideas on increasing cash flow with Special Needs Housing™.

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WHERE LANDLORDS GO FOR SUCCESS

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U

It’s true. Your source for paint is also your source for flooring.

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January / February / March 2018 MICHIGAN LANDLORD 17

RENTAL PROPERTY OWNERS ASSOCIATION

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18

WHERE LANDLORDS GO FOR SUCCESS

CONFERENCE PROGRAM GUIDE

2018

CONFER ENCE GUIDE 2018

Michigan Landlord & Real Estate Investor FREE CONFERENCE

& EXPO

February 22-24 2018 DeVos Place Grand Rapids,MI

ALSO FEATURING: • Breakout Sessions

Multi-Family Wealth Anthony Chara

FEATURING 8 NATIONAL SPEAKERS

Increasing Cash Filthy Riches Flow from Rentals through Real Estate

Buying Notes

Self-Directed IRA’s

Using Other People's Money

Nick Sidoti

Donna Bauer

Larry Goins

• Over 30 Vendors • Networking Opportunities

Lifeonaire

Shaun McCloskey

Edwin Kelly

REI Automation Brittany Calloway

Chris McClatchey

Sponsored By: Noel Selewski Agency, Inc.

NOTE BUYING – THE FASTEST, EASIEST, SAFEST WAY TO MAKE HUGE PROFITS IN REAL ESTATE Thursday, February 22 - 9:00 a.m. - 5:00 p.m. • River Overlook E-F

DONNA BAUER

As the founder and president of NoteBuyer, Inc., her strategies on note buying and short sales have had tremendous results for investors.

Donna packaged her system into a comprehensive and exiting course, the noteBuyer’s master guide, which she now uses as a way to share her success on buying real estate notes and discounted mortgages with the world. Learn how Donna’s tactics can help you take your real estate investment to the next level!

Donna Bauer is nationally known as the original NoteBuyer™ and has personally mentored hundreds of individuals to achieve their own financial and personal independence through mortgage investing. Donna is considered by many to be the foremost authority on note buying. As the mother of 4 boys, she was the typical soccer mom. In search of a vehicle that would offer her financial security without sacrificing cherished time with her children, Donna realized that discounted notes and mortgages was the answer. Utilizing over 10 years of experience in real estate investing and working right off her dining room table, Donna founded The NoteBuyer, Inc., which is now one of the most successful private investment firms in the country that specializes in the purchase of notes and mortgages.

THE POWER OF ZERO – LEARN HOW TO DO REAL ESTATE WITH OTHER PEOPLE’S MONEY Thursday, February 22 - 2:00 a.m. - 5:00 p.m. • River Overlook E-F

8 N ATION AL SPE A K ER S

CHRIS MCCLATCHEY

Chris McClatchey is a successful entrepreneur and nationally recognized speaker. Are you lacking the cash to get into real estate investment or need more cash to do more? Chris teaches everyone--from the beginner to the highly seasoned investor--how to maintain wealth through real estate investments. His “Power of Zero” technique, with which he was able to buy 80 rental units valued at over $5 million, with no money down is something you won’t want to miss out on! Chris believes that everyone has the power to be a successful real estate investor. He helps people discover the “Why” and “How” in order to help them manage their money and time and to “get out of their job and into their life.”

Chris McClatchey is a nationally recognized speaker who prides himself on the ability to "Educate highly qualified individuals on how to build multi-million dollar real estate portfolios using creative financing techniques, private lenders, partnerships, and retirement accounts." He owns several Real Estate Investment Companies and a Real Estate Brokerage in Brevard County. Chris is both a licensed Attorney and a licensed Realtor in the state of Florida. Chris has been a Real Estate Investor and a licensed Attorney since 1997. As an Attorney, he practiced Corporate and Insurance Litigation for the first five (5) years of his practice while residing in Ohio. Having moved to Florida in 2003, he became a licensed Attorney in Florida as well as a licensed Realtor.

FILTHY RICHES THROUGH REAL ESTATE – MAKING HUGE PROFITS FROM MOTIVATED SELLERS Friday, February 23 - 10:10 a.m. - 12:10 p.m. • River Overlook E-F

In this real estate course, Larry Goins will teach you how you can buy a $5,000 house that no one else wants and turn that into a successful money maker, earning more than the average investor makes on a home worth twice that! Think it’s impossible? Let Larry show you how to avoid missing out on opportunities other investors pass by and how to turn those opportunities into big profits!

LARRY GOINS

Larry has been investing in Real Estate for over 20 years. Larry is an active real estate investor and travels the US speaking and training audiences at conventions, expos and Real Estate Investment Associations on his strategies for buying 10-15 properties per month without ever leaving his office. Between speaking engagements and mentoring other Investors, he oversees the daily operations of Investors Rehab, Inc. Investors Rehab, Inc. is a real estate investment company that buys and wholesales 10-15 properties per month to other investors.

MULTI-FAMILY REAL ESTATE INVESTMENT FOR WEALTH – HOW TO INCREASE YOUR WEALTH EXPONENTIALLY WITH APARTMENTS/MULTI-FAMILY PROPERTIES Friday, February 23 - 1:10 p.m. - 3:10 p.m. • River Overlook E-F

ANTHONY CHARA

This is a hot topic in West Michigan! Learn the how’s and why’s of buying and investing in apartments and multi-family properties with Anthony Chara. Anthony will let you in on the secrets of why buying and investing in apartments and multi-family units can be a big money maker in today’s market. Learn how you can increase your net worth and build a successful portfolio with this informative course.

Anthony Chara is founder of $uccess Classes and President of Apartment Mentors LLC. Anthony’s specialty as an international speaker and educator is teaching regular people how to successfully invest in Apartment Buildings. He’ll show you why apartments/multi-units make sense in today’s market, how to buy with no money down and how not to get screwed by a selle

POWER OF SELF-DIRECTED IRA’S – TAKE CONTROL AND UNLOCK THE UNLIMITED POWER OF REAL ESTATE INVESTING WITH IRA’S. Friday, February 23 - 3:30 a.m. - 5:30 p.m. • River Overlook E-F

EDWIN KELLY

Have you heard that real estate investors can save huge on income taxes by using a self-directed IRA? Want to learn how to increase the value of your retirement plan several times over using real estate? Edwin Kelly has more than 25 years of financial experience and is one of the nation’s top experts on Self Directed Retirement accounts. In this course, Edwin will discuss what the average person can do to take charge of their finances and stop worrying about the future. He will also go over little-known investment strategies that may help you retire sooner than you expected as well as legal secrets to growing wealth tax-free. After this course, you will be able to rest easy knowing the secrets to saving for a comfortable retirement!

Edwin Kelly is America’s leading expert on Self Directed Retirement accounts and self-directed investment strategies. He has more than 24 years of experience in the Financial Services Industry. He worked for such notable companies like UBS and BISYS. Edwin is a Founder and currently serves as CEO of Specialized IRA Services. During his career, Edwin has also helped set up a Self-Directed IRA provider and grow it from 2 employees with approximately 300 accounts to 15 employees with approximately 3000 accounts. Edwin has helped one Self Directed IRA Custodian to become the largest in the industry. In 7 years, he grew the company from 97 employees to 300 employees, increased the Assets Under Custody from $2 Billion to $12 billion, and participated in the successful acquisition of 3 competitors.

REI AUTOMATION – HOW TO SET UP A VIRTUAL REAL ESTATE AUTOMATION SYSTEM Saturday, February 24 - 10:10 a.m. - 12:10 p.m. • River Overlook E-F

BRITTANY CALLOWAY

Brittany will take you step by step on how to create a smart and duplicable system of your very own that will become a money making machine! Brittany will teach you what REI Automation is, how to set up your own system, how to implement the system over multiple levels of automation, and where to find real motivational sellers online. After this course, you will have the know-how and confidence to begin setting up and using your system immediately!

Investing in real estate since 2015, Brittany has scaled up what other REI automation systems teach and made it her own. Here REI business has exploded and she is now investing in 4 states with a team of virtual assistants. She's raised millions in private money and invested millions and her business is BOOMING.

INCREASING CASH FLOW FROM RENTALS – HOW TO GET 2 OR 3 TIMES MORE RENT AND MUCH BETTER TENANTS WITHOUT SECTION 8 Saturday, February 24 - 1:10 a.m. - 3:10 p.m. • River Overlook E-F

NICK SIDOTI

Want to know how to increase cash flow from your existing rentals or how to implement new rental strategies to increase profits? Nick is your man. Featured in Kiplinger’s Personal Finance magazine, Nick has been investing in real estate since 1979. He has continued to buy real estate each and every year since. He specializes in residential rental properties, including single family homes, special needs housing and multi-family dwellings. His presentation will include various strategies, secrets and techniques for explosive rental growth, including renting to special populations.

Nick Sidoti™ AKA “DR CASHFLOW™” has been investing since 1979 and the national expert on student and special needs rentals. He has lectured to thousands at real estate conventions across the country since 1981. He is an award-winning columnist for his column, “DR. CASHFLOW™", which is featured monthly in some of the most widely circulated real estate investor publications in the nation.

Nick has been profiled and featured in the KIPLINGER FINANCE MAGAZINE for his innovative ideas on increasing cash flow with Special Needs Housing™.

LIFEONAIRE CHANGE YOUR LIFE…LEARN HOW TO DO REAL ESTATE WITHOUT GIVING UP YOUR LIFE AND WITHOUT DEBT Saturday, February 24 - 3:30 p.m. - 5:30 p.m. • River Overlook E-F

SHAUN MCCLOSKEY

“Everyone says they want to be a millionaire, but what they really want is LIFE!” In this exciting course, Shaun McCloskey will share his strategy Lifeoniaire and show you how his processes and techniques radically shifted everything for him for the better. You will leave this course with a new perspective on what it means to be successful and prosperous, and you’ll be challenged to a new path – a very specific path you can actually follow, involving four very critical “stages” of personal and business growth.

Shaun will help provide the finishing touch by showing you how to implement all you’ve learned during the conference in a sane way to make you “life rich.” Shaun McCloskey is a seasoned real estate investor, author and coach based in St. Louis, MO. that has used real estate as an investment strategy and educational tool to change thousands of lives across the United States. He is the author of several real estate investing courses and is widely known for his expertise in the fields of pre-foreclosure and short sales.

THURSDAY, FEBRUARY 22, 2018 8:00 a.m. Registration Opens River Overlook Area (Near Escalators) 9:00 a.m. – 12:00 p.m. Note Buying–The Fastest, Easiest, Safest Way to Make Huge Profits in Real Estate, Donna Bauer, National Speaker, River Overlook E-F 12:00 p.m. – 1:30 p.m. Lunch & Visit Exhibitors! (Food consessions available near escalators).

1:30 p.m. – 2:00 p.m. RPOA Annual Meeting, River Overlook E-F 2:00 p.m. – 5:00 p.m. The Power of Zero, Chris McClatchey, National Speaker River Overlook E-F

FRIDAY, FEBRUARY 23, 2018 7:30 a.m. Registration Opens River Overlook Area (Near Escalators) 8:00 a.m. – 5:30 p.m. Exposition Open Check out the offerings of over 30 exhibitors.

8:00 a.m. – 8:50 a.m. Breakout Sessions: Fair Housing : Service, Assistance & Support Animals, Liz Keegan, River Overlook E-F

•

Real Estate Investment & Landlording Idea a Minute (Audience Participation) River Overlook C-D

•

Using Air B&Bs as an Investment Strategy (Expert Panel) River Overlook A-B

•

Grand Rapids Lead Grant Program & Rental Rehab Loans, Doug Stek Chase Board Room

Liz, Director of Education & Outreach, Fair Housing Center of West Michigan, will provide the latest rules, guidelines and regulations regarding service, assistance and support animals and explain what rental property owners and managers must do (and not do) to comply with Federal, State and Local laws.

Come prepared to hear and share the best strategies other investors have used over the past year and their ideas for 2018.

Learn from investors in the know and actively engaging in investment in short-term rentals. Find out what is working—and what doesn’t and where you can’t do short-term rentals.

Doug, Housing Rehabilitation Supervisor, Community Development Department, City of Grand Rapids will give an overview of the grant and loan programs available to investors in the City of Grand Rapids. Learn how you can get up to $14,000 per unit of free money.

9:10 a.m. – 10:00 a.m. Paul Isley, Economics Professor GVSU, Economic Forecast, River Overlook E-F

Join us for one of the most popular breakouts of the conference! Paul will provide a review of where our economy is now and where it is headed into 2018 and beyond with a perspective on real estate.

10:10 a.m. – 12:10 p.m. Filthy Riches and HUD, Larry Goins, National Speaker River Overlook E-F 12:10 p.m. - 1:10 p.m. Lunch & Visit Exhibitors! (Food consessions available near escalators).

12:10 p.m. – 1:10 p.m. Deal Room & Lunch River Overlook A-B

Bring your lunch with you and share deals you have or ones you’re looking for.

1:10 p.m. – 3:10 p.m. How to Increase Your Wealth Exponentially with Apartments/Multi-Family Properties, Anthony Chara, National Speaker River Overlook E-F 3:10 p.m. – 3:30 p.m. Take a Break with Exhibitors & Sponsors!

3:30 p.m. – 5:30 p.m. Take Control…Unlock Unlimited Buying Power with Self-Directed IRAs, Edwin Kelly, National Speaker River Overlook E-F

SATURDAY, FEBRUARY 24, 2018 7:30 a.m. – Registration Opens River Overlook Area (Near Escalators) 8:00 a.m. – 5:30 p.m. Exposition Open Check out the offerings of over 30 exhibitors.

8:00 a.m. – 8:50 a.m. Breakout Sessions: •

Don’t Do What I Did (Audience Participation) River Overlook C-D

•

Seller Financing (Expert Panel) River Overlook A-B

•

Investing Outside of Your Area (Expert Panel) River Overlook E-F

•

Home Depot RPOA Rebate ProX Program, Home Depot Rep. Chase Board Room

Experts and attendees share their horror stories and newest and greatest ideas regarding real estate investment and landlording. Come prepared with your own to share!

Learn how others are using seller financing to do more deals and how to put more deals together using other people’s money.

Finding deals in West Michigan has become more difficult. Learn how other investors are doing deals outside of Michigan.

Learn how your RPOA membership can tap you into every day savings with Home Depot and earn 2% rebates—in addition to special deals on appliances, paint, cabinets and more.

9:10 a.m. – 10:00 p.m. Kristin Turkelson, Grand Rapids Real Estate Development 2018 River Overlook E-F

Learn about all the newest developments in the city of Grand Rapids from Kristin Turkelson, Director, City of Grand Rapids Planning Department.

10:10 a.m. – 12:10 p.m. REI Automation, Britanny Calloway, National Speaker River Overlook E-F 12:10 p.m. - 1:10 p.m. Lunch & Visit Exhibitors! (Food consessions available near escalators).

12:10 p.m. – 1:10 p.m. Deal Room & Lunch River Overlook A-B

Bring your lunch with you and share deals you have or ones you’re looking for.

1:10 p.m. – 3:10 p.m. Increasing Cash Flow from Rentals, Nick Sidoti, National Speaker River Overlook E-F 3:10 p.m. – 3:30 p.m. Take a Break with Exhibitors & Sponsors!

3:30 p.m. – 5:30 p.m. Lifeonaire, Shaun McCloskey, National Speaker River Overlook E-F * As of November 10, 2017. The schedule is subject to change.

FULL SCHE DULE

•

SPONSORS & EXHIBITORS CONFERENCE UNDERWRITER:

PLATINUM SPONSORS:

Noel Selewski Agency, Inc.

GOLD SPONSORS:

SILVER SPONSORS:

Columbo’s Floors to Go Compass Realty Services Culver CPA Group Green Property Management Indoor Climate Solutions Sherwin-Williams Shield Insurance Agency

B2B Capital Funding LLC Compass Leasing Services Michigan Lawn Service & Snow Inc Merchantile Bank Modernistic Cleaning & Restoration RK Property Management Rockfinch Realty Simple Home Management Westshore Property Management

EXHIBITORS: Bath Fitter Champion Home Exteriors Equity Trust Feel Good Inc. Get The Lead Out Grant & Healthy Homes Coalition Habitat for Humanity The Home Depot Kent County Housing Commission

LAST BIDrealestate.com Law Offices of David Carrier Michigan Agency for Energy (LARA) National Real Estate Investors Association Republic Services United Bank United Properties of West Michigan West Michigan REI Club Williams Distributing

PUBLIC SERVICE TABLES: Grand Rapids Green Space Lead Safe and Kent Co Health Dept

Michigan Agency for Energy

WHERE LANDLORDS GO FOR SUCCESS

NATIONAL SPEAKER HIGHLIGHT

NOTE BUYING:

The Fastest, Easiest, Safest Way to Make Huge Profits in Real Estate

by Donna Bauer Are you looking for the fastest, easiest, safest way to make money in today’s real estate market? Then you need to learn about notes! Notes are the number one way to quickly make huge cash profits in real estate, even if you don’t have your own cash or credit to get started.

In most cases, you never even own the property, which really makes for a fast, easy, safe way to profit in this marketplace.

Many people are buying defaulted bank loans at very steep discounts, either as a backdoor to acquiring the property or in order to restructure the note into a very high yielding, passive investment. You can use the nonperforming note (NPN) as leverage to get the property, either by negotiating “Cash for Keys” or by foreclosing on the property. Even with the time and expense of foreclosing, since you are buying the defaulted notes at very steep discounts, there are still fantastic profits to be made.

If you are looking for a passive investment, then you may want to focus on restructuring NPNs to allow the homeowner to stay in the property. Many people use this as a ministry to help distressed homeowners. Even though the homeowner is paying only a nominal interest rate, you can make super high, double-digit returns because of originally buying the note at such a steep discount.

A great deal of people are using seller financing to buy and sell properties very quickly, without the hassles of dealing with bank financing. This creates a phenomenal opportunity for both experienced investors and newbies alike to ease into this exciting real estate market without the hassles of owning the actual property.

cash--and it doesn’t even have to be your cash! It’s very easy to cash out the note holder using other people’s money. And best of all, you can build in a nice profit for yourself—all without using your own cash or credit and without ever owning a piece of property.

Without a doubt, note buying is one of the most versatile strategies available in real estate today. If you aren’t taking advantage of the great opportunities in notes, you are missing out on the fastest, easiest, safest way to make amazing profits in this market place.

Donna will be presenting at 9:00 a.m., Thursday, February 22, 2018 at the Michigan FREE Landlord & Real Estate Investor Conference & Expo at DeVos Place, River Overlook Area, Downtown Grand Rapids.

Donna Bauer is nationally known as the original NoteBuyer™ and has personally mentored hundreds of individuals to achieve their own financial and personal independence through mortgage investing. Donna is considered by many to be the foremost authority on note buying. As the mother of 4 boys, she was the typical soccer mom. In search of a vehicle that would offer her financial security without sacrificing cherished time with her children, Donna realized that discounted notes and mortgages was the answer. Utilizing over 10 years of experience in real estate investing and working right off her dining room table, Donna founded The NoteBuyer, Inc., which is now one of the most successful private investment firms in the country that specializes in the purchase of notes and mortgages.

For one reason or another, people who have carried back seller-financed notes change their minds and decide they don’t want to wait for their money. Tremendous profits can be made by buying out their position and giving them

January / February / March 2018 MICHIGAN LANDLORD 23

RENTAL PROPERTY OWNERS ASSOCIATION

NATIONAL SPEAKER HIGHLIGHT

REAL ESTATE HYPNOSIS:

Diagnosing the 3 Biggest Lies of Real Estate Investing

by Chris McClatchey hyp·no·sis (hp-nss) n. pl. hyp·no·ses (-sz) 1. AN ARTIFICIALLY INDUCED ALTERED STATE OF CONSCIOUSNESS. Real Estate Hypnosis is the artificial induction of believing the “rules” of real estate don’t change. That well established principles of real estate must be followed or you risk failure. Real Estate Hypnosis is an industry wide belief that success can only come by doing what other successful investors have done in the past. In other words, Real Estate Hypnosis is teaching all investors to do the same thing. It’s setting forth artificial guidelines that must be followed and, therefore, we as investors lose the very essence of what makes investing in real estate so great. Creativity!

Throughout the course of history the people that are remembered are the people that did things differently. They bucked the trend. They did things society or industries told them couldn’t be done. They sang songs and played music the “public” didn’t approve of. In other words, they diagnosed the hypnosis society was imposing upon them and did things their way, despite the potential backlash.

Do you often wonder why you haven’t done a real estate deal. Do you want to do more deals? Are you frustrated because there is so much competition with other investors? How would you like to find deals other investors don’t know about? If you answered “yes” to any of these questions, you have to get rid of your Real Estate Hypnosis and start doing things differently.

Don’t know where to start? Well, let’s start from the beginning. Have you heard other investors tell these “Lies”? 1) “You make money when you buy”; 2) “You need money to make money”; 3) It’s all in the numbers.

Let’s dismantle these Lies.

Lie #1: “You make money when you buy” – I can’t tell you how often I hear this outdated cliché. When I first started investing, every “guru” I heard was teaching techniques on how to get the seller down on his price. “Beat the Seller Up”, “Low Ball the Seller” and/or “Make the Seller give you their price first”. They even teach the “Offer Formula”. You know the one where they tell you to offer the seller 65% of the ARV (after repair value) minus the repairs. I hate this formula and I hated “beating up” the sellers on their asking price. Frankly, the reason most of you aren’t doing more deals is because

24

WHERE LANDLORDS GO FOR HELP

you are following this archaic formula.

Truth #1: “Price is irrelevant” – What if I told you that you could pay full asking price and still be massively profitable. What if I told you that you could offer MORE than asking price and still be massively profitable. Most people look at price and the single most important item when deciding to buy or sell a home. I could care less about the price. I want the seller focused on the price, so that I can focus on what I want. Terms!

Lie #2: “You need money to make money” – This is the most powerful hypnotic lie for most investors. For most of my students this is the biggest barrier they need to break down. This is the single most powerful belief preventing your success. I know.

I believed it for a very long time myself. I thought, if I don’t have money to invest, how am I going to buy a house or rental property. However, I am living proof that you don’t need money to make money. I had no money when I first started. When I say no money, I mean no money. In fact, my very first deal I didn’t have the $4,000.00 in closing costs needed to close the deal. I took out a cash advance credit card loan to pay for it. Yet today, I am a well-established millionaire. You can be too. You just have to disregard the belief that you need money to invest.

Truth #2: “The money is the easy part” - I tell all my students “If the deal is good enough, the money will find you.” It’s true.

There is so much money out there. Just because you don’t have money, doesn’t mean the guy next you doesn’t either. In fact, most of my students are amazed at how quickly the money comes to them when they send it out. You see, if you are analyzing your deals the right way, if you are writing your offers the right way and the deal works, the money is the easy part. I know that may be hard for some of you to believe, but I want you to really work on believing that that money will find you--once you have a good deal.

Lie #3: “It’s all in the numbers” – Don’t miss read this! The numbers are very important. If your numbers are off, you can turn a good deal into a bad deal very quickly. The reason this is a real estate lie, is because “experts” teach you to: a) Find Leads; b) analyze the numbers; and c) write your offers. Again, these 3 steps are important steps; however, they are missing the biggest piece--the communication piece. How are we negotiating? How are we overcoming the seller’s objections?

How are we getting them to a “yes” state? The numbers are important. Yet, if you are focusing on the numbers, it’s the reasons you are not doing more deals.

Truth #3: “Communication is the key to success” - Every word you use. Every phrase you speak has an impact. That impact can be negative or positive. The words you use, the way you dress, how you hold your body language and the tone of your voice, will determine how many deals you do. You see, seller’s want you to be the expert. They want you to be their problem solver. They called you to help them. To be the expert, you have to act like an expert. This may be challenging for someone who is new to the business or may not have a lot of experience. That is why we teach you how to walk, talk and dress. You need to know how to write contracts that deflect objections. You need to know the words that bypass the conscious filters.

You need to know how to develop rapport with a seller simply by mirroring their body movement and language patterns. If you do these things, you will be a master communicator and master communicators are the investors doing the most deals.

Want to learn more about doing real estate with no money and how to over the top three real estate investment lies? Join me at the RPOA’s annual conference in Grand Rapids on February 22.

Chris will be presenting at 2:00 p.m., Thursday, February 22, 2018 at the Michigan FREE Landlord & Real Estate Investor Conference & Expo at DeVos Place, River Overlook Area, Downtown Grand Rapids.

Chris McClatchey is a nationally recognized speaker who prides himself on the ability to "Educate highly qualified individuals on how to build multi-million dollar real estate portfolios using creative financing techniques, private lenders, partnerships, and retirement accounts." He owns several Real Estate Investment Companies and a Real Estate Brokerage in Brevard County. Chris is both a licensed Attorney and a licensed Realtor in the state of Florida. Chris has been a Real Estate Investor and a licensed Attorney since 1997. As an Attorney, he practiced Corporate and Insurance Litigation for the first five (5) years of his practice while residing in Ohio. Having moved to Florida in 2003, he became a licensed Attorney in Florida as well as a licensed Realtor. His law practice shifted to the area of Real Estate and he continues his practice today.

RENTAL PROPERTY OWNERS ASSOCIATION

NATIONAL SPEAKER HIGHLIGHT

Where Do You Find Great Deals on Apartments?

by Anthony Chara

I get this question a lot, especially, during or just after a presentation showing an apartment complex illustrating a ‘cash on cash’ return in excess of 20%.

If you went to a Commercial Broker and told them you were looking for properties with a 20% COCR, they’d do one of two things: 1) they’d tell you they would buy the property themselves if they ever found one with a 20% COCR or 2) they’d hang up on you because they’d think your expectations are unrealistic.

You probably won’t find an apartment community advertised with a 20% COCR. Just like the broker said, if it fell into their lap, they’d buy it. However, you can increase your chances of finding some great deals by doing a few things differently.

First off, there’s no big secret in ‘finding’ Apartment communities for sale. Start by using the same vehicles most investors use. For instance, you can search through Loopnet.com or go to any of the major or regional Commercial Brokerage web sites such as Marcus & Millichap (MarcusMillichap.com), CB Richard Ellis (CBRE. com) or Sperry Van Ness (SVN.com) just to name a few.

There are many many more out there. You can also peruse local newspapers in the market you’re interested in. Remember that not all papers are created equal. Some newspapers will advertise commercial properties in the business section, not the classifieds. Another paper no one thinks about is the Wall Street Journal. They have both national and local properties advertised for sale.

Another way to find Apartments for sale is to ask property managers or commercial financiers that work in the area you’re looking to purchase in. Often times, they know owners who are looking for another property and have to

26

sell their first one to move on or they know someone who’s just ready to retire.

These are just a few of the sources I use. More are given in my workshops and boot camps. The key to getting great Apartment deals may start with the information above, but it ends with the information below.

Like I stated already, there’s no big secret in finding Apartment communities for sale. The key is to find a great deal, and here’s how I do it. The first thing I decide upon is a market in which I want to purchase. I may determine the market based on economic factors such as job growth or an expanding economy in that area. I may decide upon the market just because it’s a place I’d like to visit on a regular basis. The next step is to interview at least 3-4 good commercial brokers in that market and create a longlasting, mutually beneficial relationship with at least one or two of them.

Here’s what I do and how I use my research. Preferably, I want to find a commercial broker that has a CCIM designation. CCIM stands for Certified Commercial Investment Member. Most CCIM’s will list this designation in their internet and newspaper ads. CCIM’s have gone thru extensive training on commercial property, plus, they must have a proven track record of closed deals or consultations showing extensive commercial knowledge and they must pass a comprehensive examination. I consider a CCIM equivalent to a PHD. (By the way, you can also find CCIM’s at www.CCIM.com too.) It’s estimated that only 6% of the roughly 125,000 commercial brokers out there have a CCIM designation.

Once I find 5-6 brokers in a given market, with or without the CCIM designation, I call them to introduce myself. I ask them about the market conditions, recent sales in the

WHERE LANDLORDS GO FOR SUCCESS

area and their own experience as a commercial broker.

It’s amazing how much information you can get when you ask the right questions. You also get a pretty good feel for the person about whether or not you see yourself having a long-term relationship with them.

Once I have a good feel for 3-4 of the agents I’ve spoken with, I give them the criteria I’m searching for in a Apartment community. My criteria will include number of units, unit mix, minimum Cap Rate, price range, the quality of the complex (A, B or C) and area of the city. I may even mention that I’m looking for the owner to do some or all of the financing. I follow up my phone conversations by emailing or faxing my contact information and criteria to the brokers. Then, I phone or email the brokers every 1-2 weeks to stay in contact with them. Since the brokers know exactly what I’m looking for it makes it easier for them to find something that fits my criteria.

The ones that bring me deals--I take care of. Obviously, they get their commission, but it’s the extra little things I do that I believe makes a difference such as sending them a restaurant gift card to take their spouse or significant other out for a night on the town at my expense or maybe tickets to a local sporting event or bottle of wine. That way I am always in the front of their mind anytime a good deal comes across their desk.

a much greater chance at turning an average deal into a great deal. A 10% COC return into a 20% COC return. That relationship just helped you double your cash flow. How much is that worth to you?

I look forward to seeing at the Michigan Landlord & Real Estate Investor Conference & Expo in Grand Rapids on February 23. Together, we’ll explore much more when it comes to investing in Apartment communities.

Anthony will be presenting at 1:10 p.m., Friday, February 23, 2018 at the Michigan FREE Landlord & Real Estate Investor Conference & Expo at DeVos Place, River Overlook Area, Downtown Grand Rapids. Anthony Chara is founder of $uccess Classes and President of Apartment Mentors LLC. Anthony’s specialty as an international speaker and educator is teaching regular people how to successfully invest in Apartment Buildings. He’ll show you why apartments/multi-units make sense in today’s market, how to buy with no money down and how not to get screwed by a seller!

You’ve probably heard the term ‘Pocket Listing’. Well, I want to be a ‘Pocket Client’. When the broker gets a new listing, I want to be one of the few clients they call first, sometimes before they even release the details to other brokers in their own office. And that’s the key to finding great deals.

If you think about it, everyone out there has access to the same sources for deals, but it’s the people who have nurtured and cultivated their relationship with the broker that reaps the bumper crop! They will even tend to go to bat for you with the seller if you’re looking to do something other than just put down a traditional 20%-25%. They will be in your corner helping you explain to the seller why it would be better financially for them to carry-back some or the entire purchase price then to just sell the property outright and make you bring in new financing.

Even in the commercial world, it’s about relationships.

Once you have those relationships established you have

www.westshorepropertymanagement.com

616-885-0132

January / February / March 2018 MICHIGAN LANDLORD 27

Upcoming Seminars & Events

RENTAL PROPERTY OWNERS ASSOCIATION

CE = CERTIFIED COURSE FOR REAL ESTATE CONTINUING EDUCATION PHP = PROFESSIONAL HOUSING PROVIDER CREDIT

HELPING REAL ESTATE INVESTORS BECOME MORE SUCCESSFUL January 25 @ 6:00 pm - 8:00 pm

ADVANCED TAX STRATEGIES 2 Hours CE Credit for Licensed Real Estate Professionals 2 Hours Credit for RPOA PHP

Bonus: Real estate professionals can earn up to 2 CE credits during the conference.

Duane Culver, CPA & Investor, discusses the insights and techniques needed to reduce and potentially eliminate real estate investment taxes.

March 1 @ 6:00 pm - 8:00 pm

January 30 @ 10:00 am - 1:00 pm

2 Hours CE Credit for Licensed Real Estate Professionals 2 Hours Credit for RPOA PHP

FORECLOSURES & HUD BUYING & SELLING 3 Hours CE Credit for Licensed Real Estate Professionals 3 Hours Credit for RPOA PHP Class includes current HUD changes and updates as well as: •

About HUD homes—FAQs

•

Bidding and submitting offers

•

Sales contracts

•

Special programs & incentives

•

Broker registration process

•

Questions & answers

BASIC BUYING AND SELLING RENTAL PROPERTIES AND ACQUISITION STRATEGIES

Buying and selling residential rental and investment real estate can be very profitable—if done correctly. However, there are many pitfalls and problems that can arise in real estate transactions.

Learn the correct way to handle real estate deals and how to avoid complications and difficulties while saving money in the process and improving your return on investment.

Join Tom Koetsier, experienced buy and hold real estate investor and broker, as he eliminates the mystery from purchasing rental and real estate investment property. Through his class you will learn how to keep it legal and profitable as you negotiate inspections, title work, transfer taxes, and other important real estate transaction nuances.

January 30 @ 6:00 pm - 9:00 pm

UNDERSTANDING & APPEALING YOUR PROPERTY TAXES

March 6 @ 6:00 pm - 8:00 pm

3 Hours CE Credit for Licensed Real Estate Professionals 3 Hours Credit for RPOA PHP Tom Koetsier, real estate broker and investor, will share his extensive knowledge on the process of appealing tax assessments.

His course will provide hands-on examples of how to complete the process successfully. Tom has successfully appealed dozens of property tax assessments.

February 22 - February 24

2018 MICHIGAN LANDLORD & REAL ESTATE INVESTOR CONFERENCE & EXPO Join us for three days for our Real Estate Investor & Landlord Conference & Expo with national real estate investor and landlord experts. Featuring national speakers, breakout sessions packed full of current and wealth building strategies and techniques! The event attracts over 1,000 attendees for education, inspiration, motivation and networking. Over 40 exhibitors are also on hand for the event. And, don’t forget—it’s FREE!

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HOME INSPECTIONS – SAVE $1,000’S BY KNOWING WHAT TO LOOK FOR 2 Hours CE Credit for Licensed Real Estate Professionals 2 Hours Credit for RPOA PHP Missing common and not so common problems associated with a property can kill an otherwise perfectly good deal and, perhaps, cost you or your clients thousands of dollars. Avoid a bad case of heartburn. Learn what to look for and how serious the problems are—or not. Find out what you should be negotiating with the seller in order to make the deal worth your while. Taught by home inspectors with over 23 years of experience, this class is great for investors and licensed real estate salespersons and brokers. This course teaches what you need to know to look smarter and more professional. It’s a must for making better buying decisions.

March 15 @ 10:00 am - 12:00 pm

PEST MANAGEMENT 2 Hours CE Credit for Licensed Real Estate Professionals 2 Hours Credit for RPOA PHP

REI Happy Hour Meetup

RPOA Women's REI Meetup

4nd Monday of the Month at 5 p.m.

Harmony Hall 401 Stocking Ave NW, Grand Rapids, MI

Once a month at 5:30 p.m.

See our meetup group on www.meetup.com for updated information

! s u n i Jo

! s u n i o J

REAL ESTATE INVESTORS (REI) FRIDAY MORNING BREAKFAST ROUNDTABLE Held every Friday, 8–9 a.m.

Cheshire Grill / 2162 Plainfield NE, Grand Rapids, MI

West Michigan REI Club Meetup WHERE LANDLORDS GO FOR SUCCESS 2nd Monday of the Month at 6 p.m.

Buffalo Wild Wings Grill and Bar 2720 44th St. SW, Wyoming, MI

REGISTER BY CALLING 800.701.7762 OR EMAIL CONTACTRPOA@RPOAONLINE.ORG A simple, common sense, family- and earth-friendly way to get rid of pests in your home. Healthy Homes Coalition of West MI will be teaching you how to handle pest management.

Upcoming EPA RRP Courses

Join Tom Koetsier, experienced buy and hold real estate investor and broker, as he eliminates the mystery from purchasing rental and real estate investment property. Through his class you will learn how to keep it legal and profitable as you negotiate inspections, title work, transfer taxes, and other important real estate transaction nuances.

EPA RRP CERTIFICATION TRAINING

March 22 @ 10:00 am - 12:00 pm

EVICTIONS MADE SIMPLE 2 Hours CE Credit for Licensed Real Estate Professionals 2 Hours Credit for RPOA PHP Learn how to deal with the number one problem facing landlords: how to evict a non-paying or otherwise problem tenant. Knowing how to do an eviction before you ever have to do one is critical to understanding when and how to begin one and why you should.

There are several steps necessary to carry out an eviction and, if skipped, can result in lost money and time.

February 28, 2018 • 8:00 a.m. to 5:00 p.m.

8 Hours CE Credit for MI Licensed Real Estate Professionals & Builders Earn EPA RRP Renovator Certifications Not knowing how to work in a lead-safe manner can expose your rental business to liability. The EPA now requires all landlords to use lead-safe work practices and be certified under the new RRP rules. Ed Wenz, Certified Lead Safe Work Practices Trainer, licensed contractor and Landlord, will teach lead-safe work practices in a comprehensive session. Seating limited to only 12 participants! Don’t wait to register. $215 Members/ $235 Non-members

March 1, 2018 • 8:00 a.m. to 12:00 p.m.

EPA RRP REFRESHER COURSE This course teaches rental property owners, contractors and other paid professionals how to work safely in housing with lead-based paint and comply with EPA’s Renovation, Repair, and Painting (RRP) Rule, and HUD’s Lead Safe Housing Rule. If you have a current RRP Certification, look at your expiration date. If you took the RRP class 5 years ago, you are due for recertification. Sign up before your expiration date to maintain your eligibility for this class. Those who wait until or after the expiration date will be required to take the 8 hour class instead of the 4 hour class. $168 Members/ $188 Non-members

March 28 • 8:00 a.m. to 5:00 p.m.

EPA RRP CERTIFICATION TRAINING David H. Bigelow RPOA Member

Bus: 616-453-5368 Cell: 616-822-4710

March 31• 8:00 a.m. to 12:00 p.m.

EPA RRP REFRESHER COURSE

Grand Rapids Carpet & Furniture Cleaners since 1944 We use

RPOA members receive a 25% Discount

All events are held at the RPOA office unless otherwise noted.

Cost: $35 Gold/Silver/Affiliate members, $45 non-members unless otherwise noted.

January / February / March 2018 MICHIGAN LANDLORD 29

RENTAL PROPERTY OWNERS ASSOCIATION

NATIONAL SPEAKER HIGHLIGHT

What is a Self-Directed IRA and How Do You Know if You Have One?

by Edwin Kelly If you are serious about creating consistent, predictable, secure wealth for today and tomorrow it’s imperative you know the difference. Failure to understand the difference between what I call a “plain vanilla IRA” and a “truly self-directed IRA” can mean the difference between failure and success, poor or rich, slave or free. (I’m only slightly exaggerating here).

What is a self-directed IRA or self-directed retirement account?

It is an IRA where the IRA provider empowers you, the client, to invest in anything allowed by law, without additional restrictions on investments.

More on that in just a minute.

There is a lot of confusion on this issue. Where does the confusion begin? It begins with traditional financial institutions that offer IRA’s. If you call your local bank or brokerage and ask if your IRA is self-directed they will say something to the effect, “Yes! You have a self-directed IRA. We might make recommendations and give you advice but you can self-direct your own account as well.” Unfortunately, that explanation doesn’t answer the question. The problem is further exacerbated by respected media outlets like Wikipedia.

Again, this only touches on one important aspect of what makes an IRA self-directed, allowing you to make investment decisions. So what’s the difference between a “plain vanilla” IRA and a truly self-directed IRA? 1.

The Plain Vanilla IRA. Most IRA’s and retirement accounts fall into this category. A plain vanilla IRA is held by a traditional financial institution and restricts the account holder (you) to invest in commissionable or fee based only investments like stocks, bonds, mutual funds, CD’s, ETF’s and annuities. When they tell you that you have a self-directed IRA what they mean is you can only buy from their list of commission and fee based approved investment products. Approved by who? The financial institution charging the fees and commissions.

2.

The “Truly” Self-Directed IRA. This is what we like to call “specialized IRA services” and it allows you to invest in all these options plus allows you to invest in virtually anything the IRS allows. With a self-directed IRA you are empowered to make your own decisions, invest in what you know and understand--all while receiving the incredible tax benefits IRA’s offer. Common investments we see clients make at our firm, Specialized IRA, are things like real estate, tax liens, FOREX, notes, mortgages and trust deeds.

To use a metaphor, think of it this way. Instead of being limited to a plain vanilla ice cream cone a self-directed IRA is like getting all the flavors of ice cream to choose from plus you can add all the sprinkles, toppings, whipped cream and cherries that you want!

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What makes a self-directed IRA a self-directed IRA? The custodian. That is to say, your IRA custodian cannot liberalize the rules set forth by the IRS but they are allowed to restrict them. The custodian creates the policies and procedures (within the IRS and DOL guidelines) on what they will allow clients to invest it. Firms are permitted to set these parameters and in the case of plain vanilla IRA’s handcuff account holders (you) to commission based products. In short, it’s the company that holds your IRA that makes it self-directed.

In fact, Motley Fool understands this distinction and they wrote about it on their website.

Getting the right custodian is just the start. I’ll be in Grand Rapids, Michigan on February 23 to give you the low down on all things selfdirected IRA. I’ll go over little-known investment strategies that may help you retire sooner than you expected as well as legal secrets to growing wealth tax-free

Edwin will be presenting at 3:30 p.m., Friday, February 23, 2018 at the Michigan FREE Landlord & Real Estate Investor Conference & Expo at DeVos Place, River Overlook Area, Downtown Grand Rapids. Edwin Kelly is America’s leading expert on Self Directed Retirement accounts and selfdirected investment strategies. He has more than 24 years of experience in the Financial Services Industry. He worked for such notable companies like UBS and BISYS. Edwin is a Founder and currently serves as CEO of Specialized IRA Services. During his career, Edwin has also helped set up a Self-Directed IRA provider and grow it from 2 employees with approximately 300 accounts to 15 employees with approximately 3000 accounts. Edwin has helped one Self Directed IRA Custodian to become the largest in the industry.

In 7 years, he grew the company from 97 employees to 300 employees, increased the Assets Under Custody from $2 Billion to $12 billion, and participated in the successful acquisition of 3 competitors.

WHERE LANDLORDS GO FOR SUCCESS

January / February / March 2018 MICHIGAN LANDLORD 31

RENTAL PROPERTY OWNERS ASSOCIATION

NATIONAL SPEAKER HIGHLIGHT

Where to Find Filthy Riches Homes

by Larry Goins

I have spent years perfecting my real estate strategies.

And, I’ve finally nailed it. I’ve figured out how to make more money on a run down $5,000 – $10,000 house no one else wants than most investors make on a $100,000 house! Almost every market has run down properties that can be locked down for just a few thousand dollars. Even a seller’s market has distressed properties that no one wants.

That’s right…you can pick up a great deal on a $5,000 – $10,000 house and sell it for 3-6 times what you paid for it with no buyer’s list. (More about the model I use later.)

But where are the properties that I target to generate so much personal income?

It might be difficult to find the owner of a vacant house.

Most counties have tax records online so anybody can look up a homeowner with the correct address to plug in.

In fact, you may just find someone willing in the local tax department to steer you in the right direction, particularly if a home’s taxes are in arrears. Or, you might be able to solicit information from a neighbor, either personally, or through their information via county records and people finder sites.

The houses in this program are low-income, distressed properties that no one else wants--not the “dog with fleas” homes. These properties will need some work before moving in; they just aren’t going to be in too bad of shape.

The idea here is you want fixer uppers--not blower uppers.

Something that is either livable or close to livable.

One “last resort” method that I learned a while back that can be used: take your own “for sale” sign and plunk it on the lawn with your name and number on it. Invariably, the message will get back to the homeowner who will call you to find out why you put a sign in their yard. This is kind of sneaky, but it works. And hey, no harm done.

These homes might have been on the market for a while for real estate agents, but they are very attainable at a cheap price and, with the right approach, can be amazing money making ventures. And, the best part is you can buy them at 20-40% of the list price.

If you do have the homeowner’s name, you can contact a credit reporting agency and buy a “credit header.”

These look like credit reports on a person--minus their actual credit information--which contains all their contact information, including current phone numbers. To find a qualifying credit agency, just Google credit header.

Of course, there are lots of other ways to nail down vacant houses.

So, with all the houses out there that might fit the criteria of what I call a “Filthy Riches” house, where does a potential investor begin? Some of the most profitable and fastest ways to locate these houses are below.

Vacant houses: We’ve all seen them, the “It’s a Wonderful Life” types of homes—you know, the one George Bailey likes to throw rocks at. You see tall grass, maybe a window is broken or a shutter has fallen off. You know the kind of house that some people might make fun of…but for the right person, it’s everything they’ve wanted and a huge money maker for you.

In a typical deal, the property owner might have inherited the house from a relative or bought the house as a rental

32

property but is tired of being a landlord. Or the last tenant skipped town and the property owner hasn’t been able to generate the funds to fix the house up to re-rent it due to local rental code requirements.

Realtors: Many properties can be found directly through real estate agents. Before contacting one, you might want to look through their website or realtor.com for properties under $30,000. From here, you can contact the Realtor and use a script and projected offer that I’ll discuss in my Filthy Riches course being presented at the Michigan FREE Landlord & Real Estate Investor Conference on February 23, 2018 in Grand Rapids. Even if they don’t have anything readily available, you can always ask them to put you on a notification list if they get more properties under $30,000.

WHERE WHERE LANDLORDS LANDLORDS GO FOR GO FOR SUCCESS HELP

So, why would Realtors be willing to work with you if they’re only getting a 6% commission on a house listed for $30,000 that you pick up for $10,000? That would only be $300, right? Wrong. Many listing agreements have a minimum commission, which research has shown can be around $1,500 per property.

REO Realtor: A third option is to locate and utilize a local REO (real estate owned) Realtor. An REO Realtor is a person who works directly with banks or asset managers who have foreclosed on a property.

Call one of these Realtors and ask them to pull up a report for you that use these words: REO, Bank Owned, corporate owned, Seller Addendum Required or Foreclosure. These lists will have the coordinating listing agents that worked on these properties. From there, you have a new list of Realtors that work with banks and asset managers who traditionally work with these types of properties.

Bank Owned REOs: You might also be able to find properties on bank’s REO websites. This is a great way to look for properties that are listed before a Realtor has a chance to list it on the MLS or their own website or Realtor.com.

If you’re looking to get a jump on the competition, this is a great avenue to explore because you can find properties before other investors have even seen them.

Free Classified Sites: You can use sites such as Craigslist to search for properties or to list your own ad to get homeowners to contact you. If you’re looking for property, be sure to use search criteria such as “handyman special”, “fixer upper”, “cheap”, “cash”, etc.

Houses for Sale Sites: These are similar to classified sites, although they are tailored specifically to real estate transactions, both selling and buying. Sites such as propbot. com are classified sites but are real estate specific.

realestate.ebay.com and use similar keyword searches as you would for a classified ad. Additionally, if you bid and buy a house through eBay, make sure you get a general warranty deed or special warranty deed. If they are offering a quit claim deed, it may be because there are back taxes or code enforcement issues involved. Regardless, title insurance will help verify that there are no back taxes.

Auctions: Look for local auction companies and make sure you are on their regular mailing or email list. Also, search websites such as auction.com for properties. Attending live auctions can also help you build your buyer list. I understand that Auction.com will also be at the conference in Grand Rapids.

Code Enforcement: Local code enforcement officers can tell you what properties may have code violations against them.

They may not be able to get a hold of the owners or the owner may not have the ability to fix the code issues. Some code enforcement officers may be hesitant to provide this information to you, but these records are public information.

A Few Other Sources: Other sources of property information are property management companies (who work with low end property rentals and might know who wants to get out of the business), hard money lenders (who make rehab loans and may have to foreclose on a property for nonpayment), bird dogs (someone who house hunts for you) and “for rent” signs. Often landlords may be willing to sell their properties.

These are some great areas to look if you want to focus on the fastest, best and easiest ways to find properties in order to start making money as soon as possible. See you in Grand Rapids!

eBay: You can find some great deals on eBay although you might have to do a little weeding through the ads. Go to

Larry will be speaking at 10:10 a.m., Friday, February 23, 2018 at the Michigan FREE Landlord & Real Estate Investor Conference & Expo at DeVos Place, River Overlook Area, Downtown Grand Rapids. Larry has been investing in Real Estate for over 20 years. Larry is an active real estate investor and travels the US speaking and training audiences at conventions, expos and Real Estate Investment Associations on his strategies for buying 10-15 properties per month without ever leaving his office. Between speaking engagements and mentoring other Investors, he oversees the daily operations of Investors Rehab, Inc. Investors Rehab, Inc. is a real estate investment company that buys and wholesales 10-15 properties per month to other investors.

January / February / March 2018 MICHIGAN LANDLORD 33

RENTAL PROPERTY OWNERS ASSOCIATION

How the Tax Cuts & Jobs Act Impacts Real-Estate Investors

by Duane Culver, CPA

The years 2018 to 2025 will see lower tax rates and higher tax deductions for many individuals and corporations under the Tax Cuts & Jobs Act. Some of the tax changes begin before 2018, on September 28th, 2017, and others extend indefinitely beyond 2025, but many aspects of this law only apply to these 8 years. Even so, Congress has a pattern of extending tax provisions one or two years at a time, and I expect we will see many of these provisions extended, rather than expired after 2025.

Of the many aspects of this law, I think the facets that impact for real estate investors the most are those related to depreciation of certain real property, and the new Code Section 199A, Qualified Business Income Deduction.

In brief, the Qualified Business Income Deduction allows taxpayers to deduct 20% of their business income before they calculate their income tax for tax years 2018 to 2025. This tax break for business owners is intended to include real-estate businesses, but there are some uncertainties. Secondly, the changes to depreciation allows certain nonresidential improvements, formerly depreciated over a 39-year period, to be deducted 100% in the first year, or taken over 15 years. At the time this article is written, there are uncertainties about some of these provisions as well.

Qualified Business Income Deduction. It starts quite simple: A taxpayer other than a corporation, shall be allowed a deduction of 20% of the taxpayer’s qualified business income. The details, however, like much of the tax law, make calculating the deduction very complex. First, identify what is Qualified Business Income (QBI).

Entities Included The phrase “all taxpayers otherthan a corporation” covers most business structures including: sole proprietorships, partnerships, S-corporations, LLCs (not taxed as a corporation), trusts and estates, REITs, qualified cooperatives, and tiered pass-throughs (LLCs that own other LLCs).

Income Included. QBI is generally business profits and losses, specifically defined as items of income, gain, deduction, and loss to the extent they are effectively connected with the conduct of a trade or business within the US and included in the taxpayer’s taxable income. Not included in QBI are short-term and long-term capital gains and losses, dividends, interest income (not allocable to a trade or business), wages paid to the taxpayer by the business, guaranteed payments to a partner, qualified REIT dividends or publicly traded partnership income.

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Income from Rents. Often a reference in the Internal Revenue Code (Code) to a ‘trade or business’ does not include rental real estate activities which are treated differently from other businesses in certain respects. This code section does not define a ‘trade or business’, causing some uncertainty for the treatment of real estate income. However, there is good reason to believe income from real estate activity is intended to be included in QBI because of specific provisions added to the bill late in the negotiations which will allow business models with low (or no) wages paid and high investment in assets, to qualify for the deduction.

Calculation. Generally, if taxable income (before taking into account this deduction) is below $157,500, or for joint filers, $315,000, the QBI deduction is 20% of the combined (include all businesses) QBI OR 20% of taxable income (adjusted to not include capital gains or losses), whichever is less.

When taxable income is above $157,500, or for joint filers, $315,000, two additional limitations apply. First, the QBI does not include income from specified service trades or businesses; and second, the QBI deduction is limited to the greater of 50% of wages paid by the trade or business, or 25% of wages paid plus 2.5% of qualified property. These additional limitations are phased in for taxable incomes between $157,500 and $207,500, or for joint filers, between $315,000 and $415,000.

Specified Service Businesses. When taxable income is over these threshold amounts, no QBI deduction is allowed for a trade or business that involves the performance of services in the fields of accounting, actuarial science, athletics, brokerage services, consulting, financial services, health, law, or the performing arts; or that involves investing and investment management, trading, or dealing in securities, partnership interests, or commodities; or whose principle asset is the reputation or skill of one or more of its employees or owners.

This last part is concerning because of the very broad nature of the reference. In time will we discover how broad this will be interpreted and applied. Notably missing from the list are the services of architects and engineers which are included in lists of service professionals in other parts of the Code. This is likely because they are directly involved in building things, and this code section 199A replaces code section 199, sometimes referred to as the manufacturing deduction, which allowed a 9% deduction of income from building or manufacturing in the U.S.

WHERE LANDLORDS GO FOR SUCCESS

Qualified Property. Qualified Property is depreciable tangible property used in a qualified trade or business to produce business income, in use at the end of the tax year. To be qualified, the property must be in the depreciable life of the property under MACRS, or if later, 10 years after acquisition.

Most depreciable real estate currently in service, has a life of 27.5 years if residential, or 39 years if non-residential.

The 2.5% is applied to the unadjusted basis (or cost) of the qualified property, without adjustments for depreciation deductions. Note that land is not depreciable, so the basis allocated to land is not included in this calculation. This is the provision mentioned earlier that was added late in the process which I believe, is intended to make it possible for real-estate businesses to qualify for the QBI deduction. Many real estate businesses don’t have employees, and without this provision, when their income is over the threshold amount, they could not qualify for the deduction. With the provision, even without any wages, they can use 2.5% of their qualified property to qualify toward the 20% QBI Deduction.

In review, the QBI deduction, when taxable income is over the threshold amounts, does not include income from specified service trades or businesses, and is limited to the lesser of 20% of taxable income (without capital gains or losses) or 20% of combined QBI. QBI is 20% of business profits and losses, limited to the greater of 50% of wages paid, or 25% of wages plus 2.5% of qualified property.

Note that the threshold is based on taxable income, rather than adjusted gross income (AGI), which is the reference point commonly referred to for most thresholds in the tax code. Taxable income is the amount after deducting personal exemptions and either itemized deductions or standard deduction. It is also important to note that the QBI deduction does not reduce AGI. Depreciating Real Estate. There are three specific changes to depreciation I find appropriate to mention in this article.

The first change applies to non-residential real estate, which generally has a life of 39 years. Beginning in 2018, certain improvements will qualify for a 15-year life, and have the potential to be deducted in full in the first year it is placed in service.

In recent years, there have been three classes of real-property which qualified for a 15-year life and were eligible for bonus depreciation and Section 179 deductions. The three classes of property were leasehold improvement property, retail improvement property, and restaurant property. For 2018 and later years, all three of these have been eliminated, and a new 15-year ‘qualified improvement property’ class of property should apply. I say ‘should’ because when the lawmakers removed a proposed definition for a 10-year property class, they overlooked replacing it with the 15-year property class.

A technical correction is needed to create this 15-year class and without it, all qualified improvement property placed in service after December 31, 2017, is 39-year property. I fully expect this oversight will be corrected, so I assume in this article that the 15-year class was created as defined in the Conference Report.

Qualified Improvement Property. Qualified Improvement Property will include any improvement to the interior portion of a building which is nonresidential real property, and which is placed in service after the building is first placed in service by the taxpayer, and after December 31, 2017. It specifically does not include enlargements, elevators, or the internal structural framework of the building. These improvements are assigned a depreciable class life of 15 years and are eligible for bonus depreciation (and potentially section 179 if used in a trade or business).

Bonus depreciation is the opportunity to take a portion (50% in most of 2017) of the cost (or basis) of an asset as a depreciation deduction in the first year the qualified property was placed in service. The remaining portion of the basis is then depreciated over the class life of the asset, beginning the same year. The ‘bonus’ is a first-year deduction, but it reduces the depreciation deduction in future years. Under the Tax Cuts and Jobs Act, bonus depreciation is increased to 100% in the first year for property acquired and placed in service after September 27, 2017 and before January 1, 2023. Prior to September 28th, 2017, only new property acquired qualified for the bonus treatment, but on and after that date, both new and used property qualifies. Qualified property includes most personal property with a class life of 20 years or less, which, beginning in 2018, 15-year Qualified Improvement Property.

Generally, this includes most assets except 27.5-year and 39-year real estate. Owners of residential real-estate benefit because this provides tax relief for purchases of appliances, flooring, cabinets and other fixtures.

Section 179 deduction allows a deduction of the full cost of tangible personal property used in a trade or business in the year placed into service. This is not a deduction allowed for investment activities, which means the deduction is unavailable for most rental real-estate activities. Additionally, because the property must be tangible personal property, generally real property does not qualify. However, beginning in 2018, Qualified Improvement Property qualifies, as well as roofs, HVAC, fire protection and alarm systems, and security systems, when part of non-residential real property improvements used in a trade or business. The 2017 limit of $510,000 has been raised to $1 million for 2018. Another limitation to this deduction is that it cannot create or increase a loss. If the amount claimed is more than the business profit, the portion in excess of the business profit is carried forward to a future year. Other limitations also apply.

There are many additional provisions of the Tax Cuts and Jobs Act, but these provide some significant tax relief to business owners in general, and real-estate investors specifically for 8 years. A multi-year assessment of the tax impact of a decision or strategy in important to optimize a tax plan.

About the author: Duane Culver, CPA, MST is President of Culver CPA Group in Grand Rapids, Michigan.

www.culvercpagroup.com

January / February / March 2018 MICHIGAN LANDLORD 35

RENTAL PROPERTY OWNERS ASSOCIATION

CHECK OUT THE RPOA MEETUP GROUPS! For more information go here: www.meetup.com

“

Over 100,000 listeners in Michigan, all 50 States and throughout the world.

Looking to connect with like-minded investors? Want to meet others in the business? Just looking for a good time? Then…join us every 4th Monday of the month from 5:00 p.m. to 7:00 p.m. for our monthly social networking.

Whether you’re looking to invest, already own, buy and hold investments, wholesale, flip or doing some other type of investment, it’s always worthwhile to interact with others in the business. See you there! Join our meetup group at https://www.meetup.com/Real-Estate-InvestorHappy-Hour-Grand-Rapids/

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“

Each week we discuss topics, tips and techniques designed to make you a more confident and successful rental property owner and real estate investor.

Interviewees include buy and hold investors, flippers, wholesalers, property managers, brokers, legal advisors, insurance providers, mortgage brokers— you name it; we’re talking to some of the top names in the real estate investing business in Michigan.

Our host is Brian Hamrick from Hamrick Investment Group. Brian is a successful multi-unit and apartment investor with over 450 units in Grand Rapids, Wyoming and Lansing, Michigan.

WHERE LANDLORDS GO FOR HELP

Procedures & Prices

Ad-o-Grams

PLEASE FOLLOW THE PROCEDURES BELOW WHEN REQUESTING DECISION REPORTS FROM THE RPOA:

APPLIANCE SALE

RPOA & REI DECISION REPORT REQUEST

• When possible, please use the RPOA Decision Report Request

Form and fax it to the RPOA office at 616-454-6163 OR send us an e-mail with the same information to: contactrpoa@rpoaonline.org.

(DO NOT fax applications to us.)

• You must have the following minimum information to run a report: • First and last name of prospective tenant(s).

• Current address of the prospective tenant, including street with number, city, state and zip code.

• Social Security Number.

• Date of Birth • Your RPOA member #, name of membership, and an indication on how you would like the completed reports handled, i.e. faxed back to you (if so, provide the fax number), or you will call the office for the report, or you will pick up the report in person.

• WAIT AT LEAST THREE (3) HOURS before contacting the RPOA office for your reports. Though we can sometimes get reports done quicker, there are many things out of our control that can interfere with this process, including but not limited to credit reporting agency computer problems.

• Contact us for your decision report results promptly. For reasons of confidentiality we shred all reports after 3 days.

Refrigerators, ranges, washers & dryers.

Nice selection, all guaranteed, and delivery service. Modern Appliance, 809 College NE, 616-456-7039.

CARPET CLEANING RPOA members receive 25% discount. Premium carpet care at affordable prices. Call for free estimates! RPOA member Dave Bigelow at 616-822-4710 or Grand Rapids Carpet and Furniture Cleaners at 616-453-5368.

FOR SALE Seventeen (17) apartments and 2 houses complex, totally upgraded, and located in West Michigan Resort Area near Lake Michigan.

Phone 616-842-0004. Website: w w w. grandhavennorthshoreapartments.com.

OTHER GUIDELINES FOR DECISION REPORTS: • You cannot run a decision report on yourself.

• You can only run a decision report on another family member if you are doing a business transaction with that person that is related to real estate or rental property.

• You cannot run a decision report for another business person, real estate agent or landlord. Your credit reporting privileges through RPOA extend only to your personal business.

• You can only run a decision report for a legitimate business transaction where credit is required. These transactions include owner financed real estate, leasing, collections and land contracts.

• You must follow all the rules and regulations of the Federal Fair Credit Reporting Act. A copy of this Act is available at the RPOA. • You must give a person denied housing or financing because of information contained in a credit report a notice to that effect. Examples of notices that you can use and what needs to be included in the notice can be found in the RPOA office; or log on to the RPOA website (www.rpoaonline.org) and go to Tenant Screening.

REPORT PRICES (AS OF JANUARY 2017) Single: $18.50 Double: $30.50 Criminal Background Report, additional charge.

(616) 532-3626 or (888) 821-8846 Gerritsappliances.com

October / November / December 2017 MICHIGAN LANDLORD 37

RENTAL PROPERTY OWNERS ASSOCIATION

BOARD OF DIRECTORS President: Tom Koetsier (616) 550-4447 Email: tkoetsier@grar.com President Elect: Brian Hamrick (616) 975-9770 E-mail: brian@higinvestor.com Secretary & Past President: Mark Troy (616) 452-4200 E-mail: mtroy@compass101.com Treasurer: Russ VandenToorn (616) 965-2300 1459 Michigan St. NE • Grand Rapids, MI 49503 Phone:

(616) 454-3385 • Fax: (616) 454-6163

E-mail:

contactrpoa@rpoaonline.org

Web Sites:

www.rpoaonline.org

www.MIrentalguide.com

www.tenanthistorywebsite.org

Office Hours:

Monday - Friday 9:00 AM - 5:00 PM

The Rental Property Owners Association is a nonprofit business association whose mission is to support and facilitate its members’ success in real estate investment and management.

Steve DeKoster (616) 776-0572 Ryan Hansen (616) 891-4328 David Hill (616) 254-8417 Chad Hovermale (616) 890-2550 Allison Koetsier (616) 633-9445 Brandon Krieg (616) 606-3390 James Loftus (616) 889-0488 Sharon Olson (616)498-4896 John Potter (616) 957-1294 Mark VanderHyde (616) 301-0999 Justin Workman (616) 318-6400

E-mail: russ@rentupm.com

E-mail: sdeko@aol.com E-mail: ryan@indoorclimatesolutions.net E-mail: dhill@kreisenderle.com E-mail: hovermac@gmail.com E-mail: akoetsier@compass101.com E-mail: info@thehoneybeehomes.com E-mail: loftja@gmail.com E-mail: smolson4@live.com E-mail: jpotter@grar.com E-mail: mark@grmetroplumbing.com E-mail: worknitproperties@gmail.com

RPOA STAFF: (616) 454-3385 Clay Powell, Director E-mail: clayp@rpoaonline.org Ava Grover

E-mail: avag@rpoaonline.org

Heather VandenBos E-mail: heatherv@rpoaonline.org Rachel Wood

E-mail: rachelw@rpoaonline.org

Angela Weston

E-mail: rpoaoutreach@rpoaonline.org

MAGAZINE EDITOR Clay Powell (616) 454-3385 E-mail: clayp@rpoaonline.org

MAGAZINE DESIGN & LAYOUT Rachel Wood

E-mail: rachelw@rpoaonline.org

AD SALES Kathy Bartnick (616) 318-3503

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E-mail: kvallie@aol.com

WHERE LANDLORDS GO FOR SUCCESS

What makes

United Properties your best choice in full-service property management?

We’ll let the numbers speak for themselves.

502 units managed

$4.2 Mill rent collected

: 616.965.2300 : info@rentupm.com : 1348 Front Ave NW Grand Rapids MI 49504

2,521 tenants screened

www.rentupm.com January / February / March 2018 MICHIGAN LANDLORD 39

MICHIGAN

LANDLORD THE PUBLICATION OF THE RENTAL PROPERTY OWNERS ASSOCIATION 1459 MICHIGAN STREET NE, GRAND RAPIDS, MI 49503 PHONE: 616.454.3385 FAX: 616.454.6163 CHANGE SERVICE REQUESTED

PRSRT STD U.S. Postage PAID

Grand Rapids, MI 49503

Permit No. 553