November 2018 KREIA Newsletter

Providing Education, Resources & Networking Since 1978 Kentucky’s premier investment club for landlords, rehabbers and wholesalers Meeting the 4th Thursday of every month (except November & December) KREIA.COM • facebook.com/groups/kreiaky • twitter.com/reiaky

Monthly Newsletter for KREIA Members

Vol 11-18 November 2018 President’s Letter

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KREIA Members!

Paid Advertising Rates

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HOLIDAY PARTY! Celebrate KREIA’s 40th Anniversary!

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Welcome, New Members!

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What to Do in Downtime? We ask investors how they spend their time in downtime as the holiday season kicks off

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I hope you were able to attend last month’s meeting on creating major cash flow with short-term rentals, because our local experts gave a ton of great information and tips on how to get started, how to manage them properly, and all the caveats to avoid when jumping into that market! It was a packed room with lots of good quesEric George tions, and we are planning to follow it up with more education on AirBnb and short-term rentals in 2019 with two or three Saturday workshops!

Stay tuned for more details to come!

Mike Butler: ’Tis the season to make tax time a breeze

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Ed Melton Award: 2018 recipient 8 to be announced at the meeting KREIA Photos

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L.O.T.S. Recap: Chris McCarty rehabs to hold in Shively

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John Archer: Think cyber 22 security – do you leave your keys in the ignition?

Member Spotlight: Tyler Lamb

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This month we get together to celebrate KREIA’s 40th Anniversary and our annual holiday party November 15th at Woodhaven Country Club! This will be another sold-out event, and this year we’re featuring world-famous entertainer/magician Ronn Winter! Ronn’s stage show is 100% interactive! Using random audience members from start to finish, he provides a completely mind-blowing mentalism show like you’ve never experienced! We will also have the presentation for the Ed Melton Award, a raffle for a couple of big-screen LED smart TV’s to benefit the Home of the Innocents, and FREE appetizers and drinks for KREIA members. Make sure you pre-register early to secure your seat!

Lastly, if you haven’t picked up your copy of the all-new KREIA Members Directory & Resource Guide, make sure you get yours at the party. We’ve had a lot of great feedback on it so far and hope it truly is a valuable resource to you as a real estate investor!

See you at the meeting!

Eric George KREIA President

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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.

Your KREIA Leaders

President Eric George

Vice President Tamara West

Advertise With KREIA

Secretary Erik Hitzelberger

Treasurer Mike Treasurer-Elect Grinnan CPA Wally Kallbreier

Board of Directors

Put your message in front of the most active rehabbers, landlords and wholesalers in the state! KREIA offers five membership levels for businesses. Go to KREIA.com and join at one of these annual advertising levels to get your ad in every issue of KREIA's newsletter and be invited to make ad pitches at meetings:

Business Card Membership . . . . . . . . $199 Includes your business-card-sized ad. Admission at monthly meetings remains $20.

Premium Levels: These four advertising levels include your ½-page ad in each issue!

Rue McFarland

George Foree

Dennis Erhard

John Jones

Lauren Willoughby

Darin O'Neil

Mike Fallot

Hampton Scurlock

Mike Butler

Chris McCarty

Greg Nalley

Clay Smith

Parliamen- Past Pres. tarian Michelle Frank Rawn Miller

Get involved with KREIA. You can help with the monthly meetings, L.O.T.S. program, this newsletter, Saturday workshops, Government Affairs roundups, marketing, the KREIA website & more. Work shoulderto-shoulder with active investors! Ask for someone to direct you as you check in at the front desk at monthly meetings.

KREIA's newsletter is published monthly and serves to educate you and to remind you of upcoming monthly meetings.

About KREIA: The Kentuckiana Real Estate Investors Association is a nonprofit organization focused on education, networking and resources for today's investor. 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.

Group discounts are available.

Contact us at News@KREIA.com if you want to: Advertise on KREIA.com • Sponsor a monthly meeting Sponsor a L.O.T.S. program • Sponsor Saturday Workshops

Bronze Membership . . . . . . . . . . . . . $499 Includes free admission to monthly meetings for one person.

Silver Membership . . . . . . . . . . . . . . $699 Includes free admission to monthly meetings for two people.

Gold Membership . . . . . . . . . . . . . . . $999 Includes free admission to monthly meetings for two people and gives you a skirted table in the vendors area.

Platinum Membership . . . . . . . . . . $4,995 Includes everything the Gold level offers, plus extra promotion from KREIA. You'll be our designated events sponsor, and we will promote you accordingly!

New ½-page advertising levels and pricing are in effect for new member signups and upon renewal for current advertisers.

Questions? Catch up with KREIA Sponsor/ Advertiser Chair Dennis Erhard at the meetings. Or email support@KREIA.com.

Join KREIA Joining KREIA is easy: Go to KREIA.com and click the "JOIN" option on the menu.

The cost to join as an individual member remains at $125 per year, with a charge of $20 at the door for monthly meetings.

Click JOIN at KREIA.com to find out about all the benefits of membership for both individuals and businesses. Too many to list here!

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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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HOLIDAY PARTY

A MAGICAL CELEBRATION OF 40 YEARS OF REAL ESTATE INVESTING & NETWORKING

WHEN: November 15, Thursday before Thanksgiving. 5:30 p.m.

WHERE: Woodhaven Country Club WHAT: Magic/Mentalist show! Appetizers!

Prizes (big-screen TVs)! Networking!

COST: Free to KREIA members! Guest cost $30.

YES … It’s KREIA’s 40th Anniversary!

WINTER IS COMING…

Magician Ronn Winter Headlines Event Ronn Winter is one of the most sought-after magicians and mentalists in the nation. Based out of Charlotte, North Carolina, Winter has entertained from coast to coast and overseas. He’s given a TEDx Talk on using body language and facial expressions to “read minds.” He’s also spoken at sales meetings on that subject and on using the power of influence to boost sales and help close deals.

Get Your Directory Here

Our 40th Anniversary Holiday Party is brought to you by KREIA Platinum Sponsor MM Lending and Frank Miller's Believe Investment Group. MM Lending offers fast, competitive fix-and-flip loans, and has been serving KREIA members for 14 years. Believe Investment Group has pledged to donate 10% of its net profits to KREIA each year to help plan the holiday party and cover expenses.

If you haven’t picked up your copy of The new Member Directory & Resource Guide, you’ll have another chance on the night of the party. Ask at the front desk on your way in.

Special Door Prize for Pre-Paid Registrations!

Active Members: $20 • Guests: $30 • Former Members: $30 Register now at kreia.com. Receipt emailed for your records.

Time flies when you’re having fun, making money and improving neighborhoods! We want to celebrate our longtime members, and we need your help. Do you have photos from KREIA events back in the day?

Or of KREIA members? We’d love to see them! If you have photos or anecdotes to share – if you want to type up a note on what KREIA has meant to you over the years – please visit our form at bit.ly/kreia40th, or send email to kreia.updates@gmail.com. We plan to add your contributions to our slideshow.

PRE-PAY NOW!

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 KREIA Members!

Eric Allgeier Tamara Fischer Quinton Hale Jon Harris Carrye Jones Annie Karaba

Kelly Lennon Tanner Parkes Jeff Perius Ronald Rufing Raleigh Williams Lonnie Williams

What Do Investors Do During Downtime?

As we’re moving into winter, downtime for some, we thought it’d be interesting to get perspectives on how different investors approach a slow season. What strategies will they use as they turn the corner into 2019? What do they recommend to others?

We posed this question to several longtime investors at recent KREIA events or contacted them via email: What do you do in downtime in support of your business when you can’t do what you normally do?

Here are their answers.

Dennis Erhard: We review our rental portfolio for expiration dates. We try to review with tenants six months before their lease is going to expire and find a way to move them into a new lease to keep them from moving out.

Eric George: When do you stop? Just because it gets cold doesn’t mean I stop doing anything. I may not take on as many projects in the winter, because they’re not going to sell as quickly as in spring or summer.

December and November are good times to lay out your goals – 6-month, 12-month, 3-year goals. Christina and I are going to be spending some time in the next 60 days doing that for our businesses and trying to nail down some marketing plans and figure out different stuff we want to do operationally. Do we need to change some systems?

Even if you don’t have as many houses or deals to look at, I’m sure there are things you can do to work on your business instead of in your business. Look at it from a higher level. What things can we improve systems-wise, efficiencywise? Most people have a running list of to-do tasks that just pile up. With my other business that I have it usually picks up in the winter, so it fills some of my time doing thermal imaging and home energy audits.

I kind of enjoy some of the downtime. Summer and spring are usually crazy-busy and stressful. Once it all slows down, I want to relax and take some time for more forward thinking.

Tamara West: I use the downtime to rehab my investments or my house. Black Friday is a great time to stock up on materials and fixtures.

Mike Fallot: If you’re a rehabber looking for funding, you want to get your financial house in order. Which means: make sure your tax returns are filed; check your credit; your portfolio – if you have a rent roll, get your rent roll up to date; have your plan put together for what you want to do in the next year – if you’re going to buy rentals, if you’re going to flip, what your strategy is, when you’re going to buy them, how you’re going to pay for them.

Continued on Page 18

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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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’Tis the Season Now to Make Tax Time a Breeze!

By Mike Butler Can you believe it? Another year almost wrapped up and gone! Time to carefully review your performace to date on this year’s goals and jot down some notes on preparing for your next year‘s goals, both in your business and in life.

Remember, Success is the Journey and it is not at the end of your journey.

Here’s a simple guide to help you on how you can Keep Your Finger on the Pulse of Your Business throughout every year and at the same time make your tax time a breeze.

Does this sound familiar: every year you’ve got the timeeating headache of gathering up all of your HUD 1 closing statements, receipts, 1098s, 1099s, bank statements, spreadsheets and who knows what else, piling them up in a wheelbarrow to deliver to your CPA at tax time? I feel your pain as I experienced the same thing when I got started.

Now imagine just pushing a couple buttons and sending everything to your CPA in one simple email. Wow, talk about a time saver and money saver, having everything organized properly. Your CPA will love you and your tax preparation bill will be slashed big time as you have made your files braindead simple for your CPA. Things you can do right now and during the holiday season before December 31st. (As far as your bookkeeping goes, I recommend QuickBooks Pro because it can handle absolutely everything you can imagine in your real estate business.)

1. Real Estate PURCHASED This Year: make sure you have properly entered your HUD 1 Settlement Statement into QB and then scan and attach ALL documents involved in your closing. This includes the HUD 1, deed, title insurance policy, contract, and all docs. Scan all of them and attach to this property’s account inside QB. 2. Real Estate SOLD This Year: make sure you have properly entered your HUD 1 Settlement Statement into QB and then scan and attach ALL documents involved in your closing. This includes the HUD 1, contract, and all docs. Scan all of them and attach to this property’s account inside QB. 3. RECEIPTS & Contracts: Today, QB allows you to attach files to your accounts. Here’s what I do. For invoices, receipts, etc., either scan it or use a free cell phone app called OFFICE LENS to take a PDF photo of your receipts.

Then simply attach to the proper account or vendor. NO MORE PAPER! And your CPA will love you even more! You can also attach audio files, photos, and more.

4. Independent Contractors & 1099s. QB labels these folks as VENDORS. Review your list of vendors and make sure you have their SSN and complete mailing address. You need this to send 1099s. Any person you have paid more than $600 in the tax year, you are required to send them a 1099.

This feature in QB makes it super simple. You will do this

AFTER December 31, but you can prepare now. Print to a PDF file and mail to vendor and attach to this vendor’s account in QB. 5. Have You Loaned Money and Charged Interest? If yes, then you will be required to send your borrower(s) a 1098 showing interest paid this tax year. This too is done after December 31, but you can prepare now. Always print to PDF and attach to the account for your borrower in QB. 6. REVIEW Your Reports Now: QB allows you to run all kinds of simple and complicated reports. I prefer simple reports. Run these reports now and review carefully. a. PROFIT & LOSS Report by Property: s-l-o-w down, put on your business hat and take a very close look at this report. Make sure there are no numbers in the column titled Unclassified Transactions. If you see some, double click on each to flag them to correct property and/or entity. Also, take a close look at your Capitalized Improvements/Expenses on each property as your CPA must have these dollar amounts and what they were for so they can capitalize them in your tax return. b. PROFIT & LOSS Report by Month: review carefully and make adjustments. c. BALANCE SHEET Report comparing this year to last year: this powerful reports shows what you own and what you owe. (You NEVER enter Market Value in QB. Market Value gets entered in your Personal Financial Statement, not in QB.) In reviewing this report, you will carefully look for properties you have purchased this year, properties you have sold this year, money you have borrowed this year, money have loaned this year, and more.

7. Schedule a REVIEW Appointment with CPA: this will give you some insight on where you are now for tax time. For example, if you are going to have to pay income tax, your CPA might recommend you to pay ALL of your January bills before December 31st. If you have a closing scheduled in December, perhaps bumping it to January 2nd might lower your income tax bill for this year. Additionally, if you have room to add more income this year without increasing your income tax, simply do the reverse... postpone and pay all December bills on January 2nd, etc.

Self-Directed ROTH IRA: Now is the time to take a good look at your self-directed ROTH IRAs, Health Savings Account, your kids’ college funds, etc. FYI, make sure you have a self-directed Roth IRA for you, your spouse, your kids, your grandkids, etc. These give you Tax-Free Profit & Income for Life™. You can purchase investment property and loan money with your self-directed Roth IRA accounts.

Contined on Page 22

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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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Announcing the 2018 Ed Melton Award This year’s recipient will be named at the Holiday Party

By Henry Schildknecht Many longtime members of KREIA had the privilege of knowing Ed Melton, Sr. Ed was, without a doubt, the greatest recruiter in the history of KREIA. Every person who Ed came in contact with regarding a real estate matter was told of the merits of the Kentuckiana Real Estate Investors Association and was encouraged to join. Ed was an active member of the KREIA board on which he served for years. He was also a dedicated mentor to many novice investors and enjoyed passing on his experience and wisdom.

I had the privilege to serve as Ed’s attorney for many years. It was a unique learning experience for me to Ed Melton close Ed’s purchases and observe firsthand his methods of ensuring a true win-win situation for all parties involved in each transaction.

After Ed’s death in 1998, the Board of Directors established an award to be given in his name. The board set the following criteria to be used in selecting the recipient: 1. Contribution to membership education; 2. Development of fellowship; 3. Active recruitment of KREIA members; and 4. Active participation in the real estate industry.

The following individuals have previously received this award: 1998 Mark Lechner 1999 Rue McFarland 2000 Chris McCarty 2001 Hank Schildknecht 2002 Chris Dischinger 2003 Rosetta Melton 2004 Joe Hampton 2005 Mike Butler 2006 Jim Gardner 2007 George Foree

2008 Alan Johnson 2009 Dick Vreeland 2010 Connie Horsey 2011 Noble Roberts 2012 Jay Long 2013 Gene Dyson 2014 Mark Hass 2015 Dan Jones 2016 Dennis Erhard 2017 Katie Crotzer

As you can see from reviewing the above-named recipients of the award, each has been very active in KREIA and has greatly contributed to its success. On October 17, the prior recipients of the Ed Melton Award met for our annual dinner reunion. The purpose of the gathering was to discuss our times in KREIA and pay tribute to Ed Melton, and to select the person who will be honored this year.

Every recipient has taken his or her mission very seriously in selecting a deserving KREIA member to receive the 2018 award given in Ed’s memory. This will be the 21st year that the award has been presented. It is one of the highlights of the year, and we look forward to honoring this year’s recipient at the November meeting.

Past Ed Melton Award recipients, left to right: Mark Hass, George Foree, Dennis Erhard, Hank Schildknecht, Jim Gardner, Dan Jones, Connie Horsey, Jay Long, Rue McFarland, Mike Butler, Chris McCarty & Gene Dyson.

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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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Do You Want Your Business Card to Appear Here? Join as a Business Card Member for only $199/year, and see your ad in a year's worth of KREIA newsletter issues!

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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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photo by bruce w. hinson www.obedientcamera.com October’s Short-Term Rentals (Airbnb) meeting claimed the second-largest turnout of the year. Yes, it was standing-room only for much of the presentation.

photo by bruce w. hinson www.obedientcamera.com Short-term rental panelists (left to right) James Wallace, Mary Conrad, Cliff Hayden, Jay Bowman and Jonathan Klunk described their experiences using Airbnb and VRBO.

photo by bruce w. hinson www.obedientcamera.com photo by bruce w. hinson www.obedientcamera.com KREIA Past President Frank Miller announced an event he was holding at the Omni Hotel.

KREIA

Photos

The KREIA crowd absorbed tips from the panel on how to register short-term rental units and stay legal with the city.

See more photos in KREIA's private Facebook group.

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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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Shively L.O.T.S. Homes: A Closer Look Chris McCarty rehabs to hold in fixing up rental

“The house isn’t for sale. If somebody wanted to buy it, I don’t know what I would do,” KREIA Past President Chris McCarty said.

Chris isn’t here to flip the Shively house in question – he’s here to keep holding. And the reason for the rehab is that the house had worn out. “It needed everything,” starting with repair of a failed sewer line and failing plumbing and electric. He expected the 2018 rehab, which includes adding a bathroom to the basement, to total $30,500, and that it would take The 3-bedroom house at 4021 Cheviot was built in the ’50s. (Photos by Lauren Willoughby) another month to be rent-ready.

The brick house has been in Chris’ portfolio since 1997, Chris said he tries to make his houses as bullet-proof as when he paid $59,000 to make it a rental. He confessed he possible, and he likes to use the same materials and paint may have overpaid a bit – “I didn’t necessarily know what I colors. For cabinets, his choice is Kitchen Kompact. “I could was doing in those days” – but said that for 252 consecutive buy all the cabinets for this kitchen for $1,200 or $1,300 and months he has collected rent on the house totaling $201,000. they’ll probably last just as well as $3,000 cabinets for my He said previous renovations totaled $14,500 (for new purposes,” he said. “I like Kitchen Kompact. They’ve been windows, roof and HVAC). making the same cabinets for as long as I can remember. If “I will rent this house all day long for $1,050,” Chris said of somebody tears up one, you can just go get the exact same his post-rehab plans. “It’s a good sweet spot for this house model again and replace it.” and the demographic.”

As for paint, the walls are always the same beige. “When The South End is his sweet spot in general. “I really like the the house turns over, we already know what color paint South End – it just seems to make sense,” he said, adding that goes on the wall,” he said. “We can touch it up and don’t he does also own rental property in the East End. “If I am have to remember what paint we put in.” correct that this house is worth $140,000, it’s not a great Speaking of turnover, that’s something Chris goes to ROI at $1,050 a month. great lengths to minimize. “Turnovers are the enemy of real But if you were to take estate investing,” he said. “We pretty much require everythis house and move it body to sign a three-year lease.” to Hikes Point, it might Chris said he uses Mike Butler’s TenantFinder service to be worth $180,000, screen and place tenants in his rentals, and then he takes but it would only rent the reins back to manage the tenants himself. for $1,200 or $1,300 to get the same type of THE NUMBERS Bath add/remodel: $3,000 tenant that I want.

New sewer line: $4,000 Drywall & paint: $4,500 That’s why I like this House cleanout: $1,000 Waterproof basement: $2,000 part of town.” He said Electric upgrade: $2,000 Ceramic tile: $1,500 he likes the 40272 and New garage door: $500 40216 ZIP codes.

Basement framing: $1,000 Misc. labor, materials: $5,000 “I don’t think there Cabinets/granite: $3,000 will ever be a shortage Hardwood refinish: $3,000 Total 2018 Renovation: $30,500 of people who will Chris McCarty and Margaret Reed are the want to rent this Why do we call it “L.O.T.S.”? Because we Learn On The Site! hard-money lenders behind Flippin’ Loan. house.”

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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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What Do Investors Do During Downtime?

Continued from Page 4 The market is changing: Be ready for it. We’ve got inflation again in the marketplace, which we haven’t had for well over 10 years, and so that changes the dynamics of real estate investing a lot. Repairs cost more, labor costs more, wages are going up at different rates. It creates a little havoc in the marketplace. If you look back to the early ’80s, you’ll see exactly what happened back then. So, maybe a little more of that coming on this year. A lot of the investors in the market now have not experienced the inflation part of it.

Wendy Kays: I think I’ll wait until after the first of the year to find a rehab property, so if I find that right property, it’ll be ready when the market picks up around March or so in springtime. So that I’m not sitting and holding a property.

Ed Gibson: I look for deals in the winter time, November and December, when nobody else is out there looking. I like to buy properties when snow is on the ground. I typically buy in January and February when houses are at a lower price.

I also get ready for taxes: You’ve got to know how much you’re going to pay. I don’t spend my money in the last quarter, because I need to know how much I’m going to pay in taxes in the first quarter. When I’ve had a really big year, like I’ve had this year, I have to have reserves for taxes. That puts me back buying in January and February. Sometime in December I’ll know almost to the penny how much my taxes are going to be.

Everybody is different. Some people are going to buy houses before the end of the year because of taxes, because they made a couple hundred grand and need to unload cash.

George Foree: I research my neighborhoods, especially the neighborhoods that I farm every day. I want to see who is buying and who has been buying over the years. I keep an inventory and get a buyer’s list. I look at the transaction information in every Sunday’s paper and go on land records and see what deeds have been recorded. I also look at the Commissioner’s Sale – they’ve got the whole year’s report on there. You can go back and see who’s buying in what area and how many houses the bank took back.

Erik Hitzelberger: I recommend that you dedicate some period of time every year to educating yourself. Figure out what it is that you want next. What I usually do this time of year, October and November, is set goals for next year.

Part of those goals includes education. Whatever our goals are for the next year, what are we going to need to do to support those goals? A lot of the time, the answer is in education. Reading is great, but when I really want to know something, I go out and find someone who knows how to do it and get them to teach me. Whether it’s marketing, wholesaling or rehabbing, there are people out there who know how to do it and are more than willing to teach you.

Yes, you pay them, but it’s an investment in yourself, your business and your future.

Tom Scott: I really don’t have any downtime, but I’d say I would be looking for other investment property and seeing how I could better manage the property that I do have now.

Sharon Vornholt: I use this time from November until the end of January to create goals and really plan what I want the next year to look like. Those might be income goals, big projects like the rebranding I’ve been working on behind the scenes, and it should always include how you intend to grow personally. What seminars will you attend that will make you grow and force you to step outside of your comfort zone?

This is what I know for sure: If you’re spending all your time inside your comfort zone, it’s a big mistake. You simply cannot grow personally or in business if you do that. You’ve got to get uncomfortable.

Once I have created my annual goals, I like working from the principles in the book “The 12 Week Year” by Brian Moran. I will decide what my focus is in the first quarter and go to work on those activities that will move me closer to my big goals. As the year goes on, I work quarter by quarter.

Doing this has helped me tremendously. I no longer look up in October and say, “What the heck happened to this year?” I highly recommend that you read this book and implement those principles in your own business planning.

Mike Butler: First of all, it’s another eye-opener when this happens every year (another year gone by lightning-fast).

1. FAMILY: My real estate investing sole purpose was to provide for family, giving us true financial freedom.

Therefore, always maximize every opportunity you have to spend time with your family and loved ones during the holiday season. This includes your own crazy “Cousin-Eddy.”

2. OPPORTUNITY: ’Tis the season when 98% of other investors pert near come to a screeching halt in their business. November and December are traditionally my two biggest months for buying.

3. EDUCATION: Review this past year’s education events and plan for next year’s now.

4. REVIEW and POLISH: Carefully review your numbers and systems used in your real estate business. Pay close attention to things you can control and make adjustments now. Perhaps increase your rental income by implementing a proven system, whack your expenses by checking out if you can lower your insurance costs, advertising, marketing, etc.

See what needs help. It’s time to take the 30,000-foot view of your business and your life. Get current on tax strategies, privacy, asset protection, and tax-free profit and income for life! This is time to devote to your “quadrant 2” stuff – important but not urgent.

5. TAKE ACTION: After a careful review, including your performance in achieving last year’s goals, it’s time to give some serious thought on creating next year’s goals for your business and your life! Go to Google Calendar and break down next year’s goals by creating baby steps on where you should be for every month next year.

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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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TECH CORNER

Cyber Security: Do you leave your keys in the ignition?

By John Archer The White House gave a statistic a few months ago that U.S. businesses have lost over $100 billion in the past couple of years to cyber attacks. That is a pretty staggering amount of money lost. In your terms, a lot of refurbished houses that didn’t get flipped.

Most people find the idea of security pretty boring until something happens to them. We all know better than to leave our car keys in the ignition, but if you don’t secure your computer, it’s the same idea. For at least the last 10 years, I have seen a lot of concern from small business owners about exposure concerning what they are doing on the Internet and vulnerability to cybercriminal tricks.

Every year I go through a refresher course on cybersecurity to get recertified to do work for government accounts. And it is amazing how creative the criminal element can be to access our government’s protected data. I am no Edward Snowden, but I have been involved heavily with cybersecurity issues. Our government spends over $10 billion a year on cybersecurity, and people still find ways to test the fences looking for holes. What can you do?

When I had a computer shop in Hikes Point, it was literally a daily occurrence for someone to bring in a system for virus and malware removal. The stories of how people had been fleeced were incredible. Some lost money into the thousands, had their bank accounts drained, identity stolen or files locked for ransom.

As a professional IT person who has seen the problems of cybersecurity attacks both here and globally, I would like to suggest you have a qualified IT professional evaluate your office systems and personal computers for vulnerability.

Here is a partial list of 7 items to check, but there are no guarantees: 1) Your wireless connection and password. If you have a business office environment, you should have a separate internal and guest wireless connection. Strangers coming into the office cannot have access to your network. PERIOD. 2) Your internal office computers and server containing payroll, sales and other sensitive information should be in a secure, limited-access room.

3) Your modem/router should be behind a firewall/VPN appliance from Sonicwall, Cisco or Zyxel.

4) Your wireless passwords should change no less often than 3 months or whenever an associate leaves the business.

5) A VPN on your computer browser (Chrome, Edge, Firefox, Explorer) is very important to mask your computer’s IP address and location point. Good choices for this service are ExpressVPN or NordVPN.

6) Also, a great paid antivirus program.

This is debatable to so many of you, but I like Malwarebytes and BitDefender.

7) The biggest source for malware is email. A good spam filter will stop infections before they reach your email Inbox. I suggest SpamBully for standalone computers and phones. I use AppRiver for corporate environments running Exchange.

PCS is available to help get you set up properly and secure your environment so you can safely use the Internet. If I can be of service, I can be reached at (502) 458-1241, or john@premiumpcs.com.

Happy Safe Holidays! ’Tis the Season Now to Make Tax Time a Breeze Continued from Page 6 In summary, Books... Are you 100% confident in your numbers, reports and books? Or do you simply rely on your bank to do your books, using new-fangled downloadable transactions? Or do you have a bookkeeper who does it all for you and gives you a monthly report of some sort? If so, do you really understand 100% what these reports mean?

Are you capturing every red cent you spend in your real estate business? The quarters you feed to parking meters?

Bridge tolls? Business lunches, suppers, and coffees? KREIA membership dues, registration fees to attend training events? (Education expenses for your business) Odds are, you are already paying your bills and making your bank deposits. Imagine doing it faster, easier, AND having your books done behind the scenes as you pay bills and make bank deposits using QuickBooks PRO®!

This system allows you to see your cash flow report by month, year, last year, by property, by entity, and more PLUS you get to push a button to see your Rehab Report to track in real time how much you have spent so far.

KREIA Members get a discount on The Only Complete System for Real Estate Investors using QuickBooks Pro®. Get all of the details and more at QuickBooksForInvestors.com Please send me an email at Mike@MikeButler.com to get your KREIA member 50% discount.

Wishing You And Your Family A Wonderful And Safe Holiday Season!

FREE Investor Training Webinars every Tuesday at 12 noon www.MikeButler.com

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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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key company that offers all aspects of repairs and rehab in one spot. Also, there are many things I feel I can offer as well in terms of business, work ethic and job completion.

Year You Began Investing: 2018 No. of Properties/Units You Own: 1

Tyler Lamb City You Grew Up In: Borden Occupation: General contractor a turn-key company for all repair and rehab needs.

Hobbies: I enjoy spending time with my family - traveling, camping and being on the water, taking cruises, and spontaneous adventures.

Joined KREIA In: 2018 Why Did You Join KREIA? I joined KREIA for the educational aspect and networking. My company is a turn-

Your Real Estate Investing Preferences: I'm just getting into investing and not sure which path I'm taking. So far it has been fixer uppers in single family homes that I have been flipping. Currently have one investment property that is leased commercially. I would love to gain personal rental investment properties and see that as a near future option.

What Your Experience Has Taught You: Planning and budgeting is important, but be prepared for the unexpected.

Your Top 3 TIPS for Investors: 1. Research 2. Do not neglect proper and timely maintenance of your properties 3. Don't overlook areas and properties just because it doesn't fit into YOUR personal taste.

Email: tyler.lamb@tgappropertyservices.com Phone: (812) 989-0718 Company Name: TGAP Property Services

Copyright MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 MMXVIII Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (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 91225 Louisville, KY 40291 Return Service Requested

THE Local Resource for Landlords, Rehabbers & Wholesalers Meeting the 4th Thursday of every month (except November & December) at Woodhaven Country Club, 7200 Woodhaven Road, Louisville, KY 40291 KREIA.COM • twitter.com/reiaky • instagram.com/reiaky • youtube.com/KreiaDotCom facebook.com/reiaky (public) • facebook.com/groups/kreiaky (private)

UPCOMING EVENTS

Holiday Party It’s time to celebrate! There will be food, prizes and entertainment at our year-ender! You can look forward to being amazed by Ronn Winter, magician and mentalist. The event is free for KREIA members!

Thursday, Nov. 15, 5:30 p.m.  December 6 — 5 p.m.-7 p.m. KREIA Happy Hour. Networking at a local restaurant. Check your email. Members only.  December 12 — 11:45 a.m.-1:30 p.m. KREIA Indiana SubGroup Luncheon Meeting. Meets the 2nd Wednesday each month at Tucker’s Restaurant in New Albany.

 December 20 — 6 p.m.-7:30 p.m. KREIA Game Night: CashFlow. Want to get out of the Rat Race? Play CashFlow with other investors pursuing financial freedom.

2019 Meeting Topics Are you ready for your next year in investing? Here’s our tentative lineup for the first part of the year: • January 24: Tech in Real Estate Investing • February 28: Taxes • March 28: TBA • April 25: Rehabbing • May 23: Marketing & Wholesaling Got a great idea for a meeting topic? Text KREIA VP/Program Director Tamara West at (502) 819-2211.

PRE-Pay Now at KREIA.com to Qualify for a Big Door Prize Drawing!