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Vol 13-09

President’s Letter page 1

Sept Meeting Investing & Evaluating Self Storage Master Trainer: Scott Meyers page 3

5:30 Pre-Meeting

KREIA’s New Mentor Program

LOTS Program 7218 Brownsboro Rd- 40241

Welcome New Members! Page 7

Saturday Workshop!

Monthly Newsletter for KREIA Members

President’s Message HELLO ALL, Wow! The months just keep passing by. Each day seems to go faster the older I get. Then comes the pause…. No worries. I learned how to get rich slow at my local REIA. By far its been the best $99 a year I’ve spent on my Dennis Erhard education!! Come and learn other investors SECRETS and SYSTEMS. Most will share! They did with me. All YOU have to do is ask!!!! Brand New KREIA Mentor Program!! Never Seen before!! 24-7 access to the New and improved mentors program. Local Education (mostly) from investors you know. Can’t make it on Saturday, “No Problem” Johnny has a soccer game or recital! “No Worries” you can sign up and watch from the comfort of your home or office. This is just another New and Improved feature from your KREIA leaders.  How do you find your deals?  Where do you get your money from?  How do you screen your Tenants?  Where do you find your contractors?  What’s the fastest way to sell a home?  What part of town do you buy homes in? This month, our featured speaker is Scott Meyers. Have you ever imagined having a couple hundred tenants only they don’t live there? Sounds kind of cool. Tenants drop off their stuff and then leave. Scott will teach us the secrets to Self-Storage Success! Find’em, fix’em, fund’em.

Self Storage Investing Scott Meyers

See Ya There!

Only $19 for Members

Dennis Erhard

Page 5

Quote of the month “Markets always Change, as soon as there is a down turn, CLEANLINESS becomes a major Value” - Donald Trump

Copyright MMXIII Kentuckiana Real Estate Investors Association • P.O. Box 17592 • Louisville, KY• (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.


KREIA Newsletter

President Dennis Erhard

Vice President Frank Miller

Secretary Treasurer Treasurer Elect Chris McCarty Mike Grinnan CPA Fred Helm

Board of Directors

Mike Butler

Tamara West

George Foree

Duffy Ford

Eric George

Dan Jones

Jean Hall

Aru Tarr

Mark Hass

Fred Butler

Rue McFarland

Wally Kallbreier

published monthly and serves both as a newsletter and a reminder notice of your upcoming monthly meeting. KREIA is a member only association focused on education, networking, and resources for today’s investor and to educate real estate investors from the basics to the complex. We are an excellent choice for all levels of investors. Whether you are just starting out in real estate investing, or are working on your hundredth deal, KREIA can help you learn more, earn more, and have more fun doing it. To Subscribe to the KREIA Newsletter is simple and easy. Go to KREIA.com and join the Kentuckiana Real Estate Investors Association. Group Discounts are available. To Advertise in the KREIA Newsletter To Advertise on KREIA.com To Sponsor A Monthly Meeting To Sponsor A LOTS Program Please contact News@KREIA.com

KREIA Sponsorships Diamond: Full Page Ad + Table + PreMeeting Speaker Only $995 or $99 mo. Gold: Half Page Ad + Table + PreMeeting Speaker Only $499

Silver: ¼ Page Ad Only $299 Parliamentarian Hank Schildknecht

Past President Connie Horsey

Your KREIA Leaders are involved and chair several committees to make KREIA happen every month for you and your fellow KREIA Members. Get involved with KREIA. You can help with the monthly meetings, L.O.T.S. Program, this newsletter, Saturday Workshops, Government Affairs, Social, Annual Picnic, Marketing, the new KREIA website and more PLUS You Get EXTRA KREIA Points for everything you do! Get phone and emails of all KREIA members with the new KREIA Online Member Directory. Reach out and tell them they are doing a great job! (It makes them do more for KREIA!)

Business Card : Ad Only $149 Event Sponsor: Meeting, LOTS,

Saturday Seminars, and more! -----------------------------------------------------

Place Your Ad Now at KREIA.com --------------------------------------------”KREIA Advertising is by far, hands down, the absolute best advertising dollar ever spent for Borders & Borders!”

Harry Borders, B&B Attorneys

Copyright MMXIII Kentuckiana Real Estate Investors Association•PO17592 • Louisville, KY• (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

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Featured Speaker

Acquiring And Renovating Older Facilities A Hot Investment Strategy For Today’s Economy By Scott Meyers The ongoing recession and the subsequent lack of development capital has created a shift in strategy by both Self Storage Developers and investors. There has been a great deal of activity in the market for those willing to buy Class C facilities, and create value through renovation and repositioning. Class C Self Storage Facilities are generally defined as older properties in need of repair or updating, often first generation, single-level sites that may be unfenced, and typically lack in security features and amenities commonly found in Class B or Class A Properties. They may also possess a less desirable unit max and orientation with regard to door operation, upper levels, and lack of temperature control. They may also suffer from having poor access and limited visibility and subsequently, rental rates are lower than Class A or Class B Properties. This may not sound so appealing to the masses, but don’t discount the potential for the savvy investor who is willing to put forth the effort in turning these ugly ducklings into beautiful, competitive, swans. Many investors have made a small fortune focusing solely on Class C Facilities and improving them to the point of being a solid, Class B contender in the marketplace. And it’s not as tough as one may think. Though the leap from a Class B property to a Class A property is difficult, you'll find that the jump from a Class C property to a Class B property is not nearly as daunting or as capital intensive. Which leads us to the question of how to go about finding these diamonds in the rough? Uncovering these gems is no more difficult than finding a good piece of undeveloped land, and in many cases it’s quite a bit easier. First, there are a number of these facilities listed with Commercial real estate brokers, Self Storage brokers, business brokers, and on commercial and self storage websites. You can also get a comprehensive listing of all facilities in a given market by purchasing directly from the numerous list brokers who have the names and addresses of all the facilities and their owners in a geographic area. You may also begin the process with a mailing campaign, or just by cold calling the facilities in person or by phone after “Googling” all the facilities in your targeted market(s) for acquisition. And contrary to popular belief, banks are ready and willing to make loans on Self Storage Facilities as our industry has generally enjoyed the lowest loan default rate of all commercial real estate asset classes dating back to the 1970’s. Most notably, the Community Banks, Credit Unions, and Savings & Loans that are located in the communities in which the facilities are located. And due to the strong performance in the Self Storage sector, many investors are being welcomed with open arms when presenting a loan request for their Self Storage projects, and are receiving very favorable rates and terms, along with the additional rehab capital and deferred Copyright MMXIII Kentuckiana Real Estate Investors Association•PO17592 • Louisville, KY• (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

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payments to boot! Since the lending institutions have increasingly moved away from making “speculative” loans on development projects in favor of making loans on income producing assets with a historical track record of measurable performance, it has paved the way for investors with a solid business plan and thorough due diligence to acquire funding for Class C Facilities from the local lenders where these facilities are found. When thinking of ways to upgrade Class C Facilities to a Class B facility, remember that the changes that you put in don't necessarily have to be major. The obvious place to start is with Curb appeal. What are the colors compared to the newer facilities in the area? Are all of the buildings weathered to the point where the roof, walls, and doors have all faded to 1 shade of “gray” or “tan”? A color change by one of the many industry vendors specializing in this area can do wonders for the appearance of your new acquisition. Similarly, the addition of a new sign, with color coded flags, banners, and other attention grabbing marketing media will draw their eyeballs to your new paint job and raise awareness of the changes you have made. The next point to consider, which has the most impact on forcing the appreciation and value of the facility, resides with any vacant land on the site. The smart investor will immediately assess the highest and best use of any vacant land at the site or any adjacent land that may be available for purchase. Depending upon the market, once you’ve improved the look of the facility and made some management improvements, you should be rewarded with higher occupancy and the possibility of constructing additional buildings/units at the site. Oh, and Don’t forget to look at the existing boat/RV lot as the return on constructing additional buildings on that land generally outweighs the ROI of leasing out parking spaces. And if you’ve run out of room, contact the neighbors to assess whether there may be an opportunity to purchase additional land/buildings for future expansion. This is probably the greatest way to increase the value of your facility while simultaneously “scratching your development itch”. Now it’s time to turn our attention to the multiple amenities that can be added to upgrade your facility. Adding a small retail center to your site is probably the simplest and least costly way to improve the bottom line, and provide value to your customers. Next, you may want to consider whether it’s feasible to offer truck rental services through a 3rd party provider or by purchasing or leasing your own truck and offering it to your clients for free or at a reduced rate. Can you add a pack & Ship Center, Bill Boards, Vending Machines, a Business Center, perhaps temperature control units, propane cylinder exchange, Records Storage or any combination of the dozens of amenities that are available in our industry to add to your facility? Class C Facilities will vary by site and by market, so you need to perform some research into the feasibility of adding each amenity, but the increase in income and the return on investment may be surprisingly rewarding. And last but certainly not least, is to adopt the latest technology to round out your renovations and repositioning. Security remains at the top of our customers list when choosing a facility and advances in technology have made it affordable to provide state of the art surveillance systems with wireless cameras and large screen monitors for a fraction of the price we paid in the recent past. What to do with that apartment? Renovate it and turn it into a business center outfitted with wi-fi and a few workstations for your small business clients that need a place to come out of the elements to plan their day or send a few emails. And of course, the addition of a CRM platform that incorporates the newest software and a kiosk should be considered in each and every location. However, success in your newly repositioned site cannot occur without developing and executing a detailed marketing plan. This can be carried out with the aid of the multiple technology partners to automate and capture your prospects is critical to competing with your well -heeled class A competitors. Paying close attention to these 2 critical areas will determine your success in both improving cash flow while simultaneously increasing the value and forcing the appreciation of the asset. Furthermore, it never ceases to amaze me that when occupancy is low, and traffic is down, some operators decide to actually decrease their marketing efforts; the very thing that brings customers in the door! The most successful operators I have encountered use their marketing plan to guide their daily activities. It has specific daily tasks that all center around the daily, weekly, and monthly goals laid out by the organization. Results are usually measured on a monthly basis and then compared to the prior month’s activity to gauge the success of the most recent campaign. And of course none of this can be attained without the efforts of a well trained and motivated facility manager. The laws for success in the Self-Storage industry are always changing and buying Class C Facilities has quickly become a very viable addition to a successful investing stategy – especially in this time where development has slowed to a crawl. The merits of this strategy have proven to be very profitable to many operators who have chosen this path rather than focusing solely on development. And being one of those investors myself, this author couldn’t agree more. Scott Meyers is the President and Owner of Indianapolis Based Self Storage Profits, Inc. He is also a national speaker and trainer in the field of Self Storage Investing through his education company. Copyright MMXIII Kentuckiana Real Estate Investors Association•PO17592 • Louisville, KY• (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

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INVESTING & EVALUATING

DOORS OPEN 8:30AM CLASS 9AM-12:30PM

SATURDAY, SEPT 28TH WILDWOOD COUNTRY CLUB 5000 BARDSTOWN RD. LOUISVILLE, KY 40291

http://kreiasaturdayscottmeyers.eventbrite.com/ Copyright MMXIII Kentuckiana Real Estate Investors Association•PO17592 • Louisville, KY• (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

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Government Affairs Update By Rue McFarland From Greater Louisville Association or Realtors August 16th, 2013

Louisville Metro Government 1. The Louisville Metro Council, as mentioned in previous reports, introduced an ordinance in the fall of 2012 dealing with registration requirements for vacant and abandoned properties. GLAR was approached by the sponsor of the bill and the Mayor’s office to discuss expanding this registration to other properties that are vacant and abandoned. GLAR leadership met with Mr. Schreck and relayed concerns with the ordinance as written and gave feedback on the whole issue of vacant and abandoned properties from GLAR members’ perspectives. The outcome of the meeting was that some members of GLA R were going to go through the ordinance in detail to highlight areas of concern and get back with Mr. Schreck in July. This meeting is still current ly being scheduled. 2. Louisville Mayor Greg Fischer will hold his second VAPSTAT, Vacant & Abandoned Property Statistics, meeting this week on August 27th at 5:00 PM at the Louisville Free Public Library. 3. The Louisville Metro Council continues to review the Land Development Code revisions brought to them by the Land Development Code Taskforce. GLAR is actively participating in the various subcommittees dealing with design review process, fair and affordable housing and others. The first set of proposed revisions has been passed by the Metro Council. The second set of proposed revisions is still being finalized by the full committee and will continue throughout the summer. GLAR continues to actively participate and follow these revisions. This process will continue throughout the year. 4. The Kentucky Department for Environmental Protection (KDEP) is seeking help in preparation of draft regulations as a result of House Bill (HB) 465 of the 2012 legislative session, now codified as KRS 224.1-415. Although the statute provides a strong backbone for helping those seeking to redevelop brownfield properties, the KDEP has drafted regulations in the hopes of providing a more clearly defined process and to minimize uncertainties in redeveloping properties that are contaminated or suspected of being contaminated. GLAR’s input will be used to help ensure that the regulations, if promulgated, will achieve the desired outcome. In 2011, KDEP worked with legislators and GLAR to introduce HB 465. Among benefits of HB 465 are maximizing taxable value, reusing existing infrastructure and resources, reducing use of green space for commercial or industrial uses, safely managing contamination on vacant or underutilized properties and preventing environmental problems from becoming worse through neglect. The bill, which is now KRS 224.1-415, mostly pertains to liability under KRS 224.1-400 and 405 (hazardous substances and non-UST petroleum), but also clarifies programmatic boundaries between non-UST petroleum and the underground storage tank program. Consistent with the bona-fide prospective purchaser defense, KRS 224.1-415 offers that buyers who have performed conforming due diligence are not required to characterize or correct the effects of releases under KRS 224.1-400 and 405. It also seeks to include buyers who may have done due diligence prior to ownership but already own the property. For UST sites, it clarifies that completing the requirements of the UST program will not leave a party subject to follow-up demands under KRS 224.1-400 and 405. In short, the changes made welcome good citizens with no history of involvement at the site to come and make beneficial and safe reuse of the site and not incur liability for characterization or cleanup. The vetting will be conducted in two meetings at 300 Fair Oaks Lane in Frankfort. The first meeting, which focused on delivery of the regulations, was on August 14, 2013 and was attended by GLAR representatives. KDEP collected some input during this meeting; however the primary focus was on explaining the package Copyright MMXIII Kentuckiana Real Estate Investors Association•PO17592 • Louisville, KY• (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

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Welcome NEW Members! Edwin Evers

Jerilyn Phippeny

Jim Kelley

Lonny Powell

George Lucas

Walter Jett

Karentrius Karentrius

Rick Wardlow, Joe Gribbins, Allee Harmon, Bill Dollinger, Frank Miller Call 502-489-5515

http://wardlowauc.com

3 Day LIVE Landlord Training Boot Camp Oct 11-13, 2013 Louisville, KY KREIA Discount - Call 502-896-2595

Copyright MMXIII Kentuckiana Real Estate Investors Association•PO17592 • Louisville, KY• (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

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Copyright MMXIII Kentuckiana Real Estate Investors Association•PO17592 • Louisville, KY• (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

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Copyright MMXIII Kentuckiana Real Estate Investors Association•PO17592 • Louisville, KY• (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

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PO Box 17592 Louisville, KY 40217 Return Service Requested

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KREIA’s Monthly Meeting! Thursday Sept 26th

NVESTING

VALUATING ELF TORAGE

Scott Meyers Pre-Pay Online with Express Pay PRE-Meeting: Introduction and Sign Ups for KREIA’s Brand

New “Mentor Program”


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