March 2020 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 03-20 March 2020 President’s Letter

1

Paid Advertising Rates

2

Jordan Pohn: In the Age of the Coronavirus … Now what?

3

Welcome, New Members

4

New Member Orientation

4

National REIA News Roundup

4

Mike Butler: How will coronavirus 6 affect us as real estate investors?

Legal Corner: Michelle Rawn on 10 courthouse shutdowns Erik Hitzelberger: Don’t panic… 14 just focus Nina Musgrave: Ways you can organize during downtime

18

KREIA Photos

20

L.O.T.S. Recap: Bryan Gillespie 21 rehabs PRP hoarder house Perks: Home Depot’s rewards 24 program offers discounts, benefits Government Affairs Links

24

Tech Tools: Lauren Willoughby looks at collaboration solutions

26

Dear KREIA Members and Friends, In the event you may have missed the KREIA email sent to the extended list, due to the current health threat, the board has decided to cancel the March main meeting and all associated KREIA recurring events, including L.O.T.S. and Game Night, for the remainder of March. We will continue to monitor developments and hope everyone’s world is back on track for the April meeting. We promise to keep you updated with any other changes. Chris McCarty Less than three weeks ago, I was meeting with a group of bankers and we were all marveling at the pace and strength in the economy with all sectors raging toward new highs. We specifically discussed the unlikeliness that anything foreseeable for the short term could interrupt this seemingly unstoppable momentum. Today, however, there is much uncertainty before us, and no one can predict for sure what the short-term future will be. I read and watch the news for any hint of likely outcome, but it remains difficult to predict when we will get back to any normality. What was once just a faraway land’s bad news or not-to-be-worried-about circumstance is now in our back yard as the world shrinks.

Not only our country and individual communities, but the entire world is in this together as our scientists and leaders across the globe work to control the spread and find a solution. I don’t know how long any of this will take to resolve, but I am certain that it is temporary, and I personally intend to follow instructions and use all the best practices for safety. People still have to work, raise their families, be productive and plan for the future, and a virus cannot stop this. This particular crisis is unique, but it is not all that different from other challenges America has worked through, conquered and prospered in spite of.

Until this month, KREIA has had a meeting on the fourth Thursday of the month for almost 40 years. In lieu of a physical meeting this month, my suggestion for all members is to recognize that the KREIA network is solidly in place and here to help. Keep learning, and participate in your own education by reaching out to membership with other means besides the physical gatherings.

Chris McCarty KREIA President

Member Spotlight: Craig Pfeffer 34

Copyright MMXIX 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 Chris McCarty

Advertise With KREIA

Secretary Erik Hitzelberger

Vice President John Jones

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 is $20.

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

Rue McFarland

George Foree

Dennis Erhard

Frank Miller

Lauren Willoughby

Greg Nalley

Hampton Scurlock

Katie Crotzer

Rob Bergeron

Rick Littrell

Christopher Jaquith

Jordan Pohn

ParliamenPast tarian Michelle President Rawn Eric George

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 shoulder-to-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 support@KREIA.com if you: Want to advertise on KREIA.com • Need help • Have a question

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 . . . . . . . . Reserved Includes extra promotion. There can be only one advertiser at this level. Our current Platinum Sponsor, MM Lending, holds exclusive renewal rights until 2021.

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. Tell all your investing friends.

The cost to join as an individual member is $125 per year, with a door fee of $20 at our monthly meetings (which covers the buffet meal and rent on the hall).

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 MMXX 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.

2

In the Age of the Coronavirus … Now What?

By Jordan Pohn When I left the board meeting on Thursday, March 12th, our fearless leader took a vote on whether the monthly member meeting should be cancelled. The vote passed unanimously.

It was the sentiment of most that, in just the last 24 hours, things became “real.” The NBA had cancelled its season and its first player had contracted “The Virus.”

Schools were being closed, and I started hearing a term over and over that I was not familiar with – social distancing. That was followed up with someone “elbow-bumping” as an alternative to the traditional handshake. Things were changing rapidly.

Now, let’s discuss the repercussions to both the overall economy, and more specifically to those involved in and around the real estate market.

Due mostly to this virus, the capital markets (stocks and bonds) had an unprecedented, historic week. The Dow Jones dropped more than 2,000 points (twice) and the 10year Treasury note rate fell to 0.53% (we will get to the importance of this rate in a second).

To put that in perspective, the Dow had never dropped 2,000 points and the 10-year Treasury rate had NEVER fallen below 1.0%. You might think, no big deal, just a half a percent on the 10-year. I’ll use an analogy to emphasize the significance of this. If your dream truck is a Ford Raptor, but you don’t have $60K, I bet you would reconsider if it now cost $30K. It’s a huge deal.

OK, that’s great information, but how does that affect me as a real estate investor?

If you think that these markets work independently, without crossover, you are mistaken. In addition, the more you know about how outside forces affect the real estate market, the better investor you will be.

No one can project the duration and effect of The Virus; however, as mentioned above, the 10-year Treasury rate, which is directly correlated to mortgage rates, is at historic lows. This means two things. First, if you are a landlord, you may be able to lower your monthly mortgage outlay significantly. Second, with lower rates, homes are more affordable for potential buyers. This is good news for investors trying to sell a home.

For those of us old enough to remember, this is far different from the financial crisis of 2008 that greatly affected everyone in the real estate market. The issues and factors behind that crash do not exist today.

First, there was no liquidity in 2008. Banks were unable to make loans to boost the economy. Today there is plenty of liquidity and the banks have healthy balance sheets. The

Jordan Pohn spoke about the economy, the Dow Jones plunge, and the coronavirus at our March Lunch & Learn meeting. Watch for video from his presentation to be posted in our Facebook private group, along with an announcement about how to catch up with more KREIA event videos – including from the Leap Day retreat.

government is doing everything in its power to ensure this is the case. First, they lowered the federal funds rate, which in turn lowered commercial short-term rates. Second, they are buying Treasury bonds, which also suppresses interest rates.

Another cause of the financial crises and recession of 2008 was due to the type of loans that were being approved by the lending institutions. For those of you not old enough to remember that, get ready to be shocked. There was a loan program called SISA. It stood for Stated Income, Stated Asset.

Yes, it is exactly what it sounds like.

You did not have to prove your income through W-2’s or tax returns – you just wrote it down on your application.

Assets, same thing. This led to people getting approved for loans they couldn’t afford. (There was never a debt ratio problem to keep this in check.)

Another type of loan was a 125% LTV. Yes, if your house was appraised at $100K, you could get a loan for $125K. The thought process was that houses would keep appreciating at a rapid pace, and that you would eventually have equity. It seems insane now to think these loans were a good idea.

Well, the house of cards could only last so long – houses stopped appreciating, people couldn’t afford their loans, foreclosures ramped up and well… the perfect storm led to some dark days. The spigots on these loans turned off in 2008 and have not returned. THIS IS NOT 2008!

If there is one thing that I learned from 2008 (yes, I’m one of the old guys), it’s that there is one thing everyone in this room can do to limit your risk as an investor – DO NOT overleverage!

Continued on Page 36

Copyright MMXX 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.

3

Welcome, New KREIA Members!

Nike Aniyikaiye George Athanasakes Delicia Brown Ron Burns John & Stephanie Callen Adam Caperton Cheryl Casper Ryan Clontz Pablo Diaz John Duncan Jonathan Fletcher

David Fultz Cary Gant Lori Henson Jim Karibo Eva Kaufman Charles R Kaufman Jr Glenn Koenig Cindy Mccarty Maria Mondino Wes Noe Jasmine Presley Chris Robinson

Andrew Schachtner Justine Scheuher Dale Sellers Rachel Smith Stephen Sorg Scott Spence Michael Thompson Nan Upton Phillip Yon Shelly Young Melissa Zink

Member Orientation During Monthly Meeting There will be a monthly presentation of the benefits of joining KREIA at every monthly meeting. The presentation will be given from 6:15 p.m. to 6:45 p.m. in the early meeting room at Woodhaven Country Club.

If you bring new investors to a KREIA meeting, please point them toward the orientation so that they can learn about KREIA and get their questions answered.

National REIA Real Estate News Roundup National REIA, of which KREIA is a chapter, reports on issues affecting real estate investors and also links to stories of interest from other organizations. Here is a sampling of recent news and resources that Brad Beckett, NREIA’s Director of Education & Outreach, has compiled. For more news, visit realestateinvestingtoday.com

Coronavirus Looms Heavy Over the Housing Market It is pretty apparent that the current situation our country is experiencing with the Coronavirus will affect the housing market. A recent Wall Street Journal said the lowest mortgage rates on record are colliding with the prospect of an economic downturn and will ultimately set the stage for an unpredictable housing market this spring.

Read the full story: bit.ly/k2003_viruslooms

Home Flipping at 8-Year High While Returns are at 8-Year Low According to ATTOM Data’s year-end 2019 U.S. Home Flipping Report, over 245K single-family homes and condos were flipped in 2019, up 2% from 2018 – the highest point since 2006. In addition, they report that while flipping itself was at an 8-year high, the profit margins continued dropping to an 8-year low themselves at $62,900.

Read the full story: bit.ly/k2003_flipping

Yardi Says Coronavirus Likely to Cause Technical Recession According to the latest Yardi Matrix, rents increased 3.2% in February on a year-over-year basis, matching January’s growth rate, as demand for multifamily has yet to feel any major impacts from the Coronavirus outbreak. However, they caution that the Coronavirus is likely to cause a technical recession.

Download PDF: bit.ly/k2003_yardi (free signup required)

Funniest Thing a Tenant Did to Me Have you ever noticed that the very funniest stories that we have to tell were not in the least bit funny at the time the events occurred? It seems that only the detached perspective that comes with the passage of time can mysteriously transform the horrible to the hilarious.

Read the full story: bit.ly/k2003_funniest Continued on Page 30 Copyright MMXX 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.

4

Some of KREIA’s national sponsors via National REIA. For the full list, and info on discounts, visit nationalreia.org/benefits

Copyright MMXX 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.

5

How Will Coronavirus Affect Us as Investors?

By Mike Butler Fifteen years ago, my life coach told me hundreds of times to stop asking “WHY?” and to replace the question with, “What Did You Learn?” This was my game changer to get my life back on track, or at least I thought so.

Let’s try this on our current situation in the world with this Coronavirus Zombie Apocalypse mindset.

Beavis and Butthead “I need TP for my Corona-BungHole” is now happening in our country. Toilet paper?

Really? Zombie Apocalypse is here.

Did you know some folks are withdrawing all of their cash from their bank accounts? Yup, there is a stampede of this happening. Just ask a person who works at a bank or credit union.

Even crazier is that hospitals, medical facilities, operating rooms and nursing homes have to lock up masks, respirators, gloves and more because they are getting stolen. And I am sure you have family members and friends who are experiencing similar weird and unique activity.

March Madness CANCELED. Thunder Over Louisville and the Derby Festival are giving serious consideration to rescheduling the Derby to sometime later in 2020. Too many things to list here as far as cancellations of events – conferences, March’s KREIA meeting and much more. California just closed all restaurants and bars. Is Louisville next?

Even our Mayor Fischer just announced he was exposed to the virus and is “self-quarantining” himself.

You might try to convince yourself this does not affect you. This will affect all of us.

On top of all of this, most of the medical equipment and supplies are made in China. U.S.A. has shut down anything and everything coming from China, and it’s really sad to see politicians blaming each other instead of getting all hands on deck to fix it FAST for all Americans.

What’s a poor old real estate investor to do? In addition to doing what you were taught as a kid, to wash your hands thoroughly after visiting the bathroom. This should be the norm and not the extreme.

First up, America needs to take a big “chill pill.” If you are fairly healthy, you’re probably good to go. People have survived this virus. If your parents are elderly and have some health issues, let’s focus on keeping them safe and remove them from these opportunities to get exposed to this virus.

What Should You Expect for Your Business? ✓ Our Court System has shut down for 3 weeks. Evictions postponed while creating a huge backlog to catch up when they start the court system back up. This will affect

you for months down the road and not just the next 3 weeks.

Courthouse auctions will back up, along with civil and criminal cases. ✓ You Will Have Trouble Filling Your Vacant Units! Why? How? What percent of your rental applicants have had goodpaying jobs and now their income has crashed to almost zero? ✓ Your Tenants and Great Tenants Will Have Issues Staying Current on their rent due to a big downturn in our local economy. Plan now for it. Unfortunately, most do not have an emergency or rainy-day fund and live paycheck to paycheck.  Mark Cuban is paying all 700 of the Dallas Mavericks stadium workers, ushers, ticket takers, etc., for a full month to help these folks in this unique situation.  I’m not recommending you give all of your tenants free rent; however, you’d better be prepared for this. It’s not “if it happens” but it’s a “when it happens.”  What can you do? What will you do? Great Tenants hitting the wall… evict them in this market? Heck no, court system closed for 3 weeks and the folks who will be looking for homes to rent will likely be victims of this crazy economic shutdown too.  Schools are closed, and many parents perceive schools as a daycare and a free lunch to feed their kids. What will these parents do? Not go to work because they have no daycare?  FYI, wouldn’t you be better off with your great tenant to work out something, anything, to keep them on board?

We have NEVER seen anything like this in our country since perhaps the Great Depression and a short period after September 11. EXAMPLE, perhaps a great tenant’s rent is $1,000 and you get the dreaded phone call: “I’m not working and can’t pay rent.” Here’s a couple of options to consider: ● Ask them how much they can pay. Perhaps their answer is that $500 is all they can pay now. ● Wouldn’t you rather get $500 a month now, avoid legal costs and another vacancy in this crazy market?

Absolutely! ● But, Mike, what about the rent not paid? Great question… What could you, would you do? You could have a huge heart and forgive it, or you could set up some kind of simple payment plan for them to catch up once this mess is over. ✓ Please Do NOT try to convince yourself that this will not affect you, because it will. Plan now so you don’t get blindsided. ✓ FEDERAL RESERVE just lowered the interest rate to ZERO PERCENT! Chew on this one. Time to buy after it Continued on Page 32

Copyright MMXX 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.

6

ATTORNEYS AT LAW Representing real estate investors, mortgage companies, banks, builders and buyers since the early 1970s with…

✓ Title Insurance Commercial Closings ✓ Contract Prep & Review ✓ Title Searches ✓ Powers of Attorney ✓ 1031 Exchanges ✓ Business Formation ✓ Investor Guidance ✓ Wills & Probate

✓ Residential &

Practicing in Kentucky and Indiana

920 Dupont Road, Louisville, KY 40207 bordersandborders.com • (502) 894-9200 THIS IS AN ADVERTISEMENT

Copyright MMXX 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.

7

Copyright MMXX 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.

8

PRO-TECH FLOORING Floor Refinishing Specialist Hardwood Floors Installed Floor Repairs • Poly Recoating Dry Foam Carpet Cleaning Insured Member Office

Mobile

Fax

966-9300 500-8775 961-5730 David Williams, Contractor

FREE ESTIMATES

Do You Want Your Business Card to Appear in KREIA’s Newsletter? Become a Business Card Member for only $199/year and see your ad in a year’s worth of issues! You can upgrade to a business membership at any time.

9

LEGAL CORNER

3. Reasonable attempts shall be made to reschedule all criminal trials, subject to a defendant’s right to a speedy trial.

4. With the exception of emergency matters and hearings statutorily required to be held, small claims, eviction, juvenile, probate, traffic, and guardianship cases shall be continued.

5. Courtroom attendance shall be limited to attorneys, parties, and

By Michelle Rawn necessary witnesses.

6. A case involving an attorney or party who is ill or in a high-risk Everyone, category shall be rescheduled.

As I’m sure most of you have now heard, 7.

Judges shall issue summonses in lieu of bench warrants or the Kentucky Supreme Court has issued an notices of failure to appear.

Order and Amended Order regarding the 8. All show cause dockets for payment of fines and court costs shutting down of non-emergency hearings scheduled within this timeframe shall be continued for 60 days. in Kentucky from March 16 through April 10 due to the 9. The 20-day preliminary hearing requirement for out-of-custody coronavirus (COVID-19). defendants under RCr 3.10 is waived during the effective dates of this This means all eviction cases will be continued to April 13 Order.

10. Jurors who are ill, caring for someone who is ill, or in a highor later. The Jefferson County courthouses will remain open risk category shall have their jury service postponed to a later date. with limited accessibility. This means, your new eviction 11. New juror orientations shall be suspended. cases can still be filed and court dates obtained after April 12. Existing jury panels may be extended at the discretion of the 10. We strongly recommend that you continue to move court, forward with filing these cases as you would in your 13. Attorneys are encouraged to use e-Filing.

14. Drop boxes should be used for conventionally filed documents standard course of business. if available.

The court has not decided if it will create additional dock15. Signage shall be posted at all public entry points advising ets to help with the backlog caused by this 4-week furlough. individuals not to enter the building if they have: If you wait to file until after the court returns to its normal a. In the previous 14 days, visited China, Iran, South Korea, any function, then your court dates could be the end of May or European countries, or any other high-risk countries identified by the the beginning of June for non-payment of March rent.

CDC; I will try to keep KREIA updated as things progress by b. Resided with or been in close contact with someone who has been in any of those countries within the previous 14 days; making posts on the KREIA Facebook group. c. Traveled domestically within the United States where Following is the Supreme Court Amended Order in its COVID-19 has sustained widespread community transmission; entirety. Thank you. d. Been asked to self-quarantine by any doctor, hospital, or health agency; e. Been diagnosed with or have had contact with anyone who Supreme Court of Kentucky has been diagnosed with COVID- 19; or 2020-09 f. A fever, cough or shortness of breath.

AMENDED ORDER 16. Individuals attempting to enter in violation of these protocols IN RE: KENTUCKY COURT OF JUSTICE RESPONSE shall be denied entrance by a bailiff or court security officer.

TO COVID-19 EMERGENCY 17. Bailiffs shall discourage congregating outside courtroom doors and encourage social distancing inside the courtroom.

On March 6, 2020, Governor Beshear entered Executive Order 18. Individuals with legitimate court business who are ill, caring for 2020-215 and declared a State of Emergency in response to the novel coronavirus (COVID-19) emergency in the Commonwealth. In light of someone who is ill or in a high-risk category are advised to stay home and request a continuance by calling the local Office of Circuit Court this measure and to protect the health and safety of court employees, Clerk. elected officials, and the general public, and under Section 116 of the Nothing in this Order shall preclude the chief district and chief Constitution and Supreme Court Rule 1.010, the Supreme Court circuit judges from implementing additional local restrictions as hereby ORDERS the following measures to be implemented from needed. This Order shall be effective from March 16, 2020, to April Monday, March 16, to Friday, April 10, 2020: 10, 2020, or until further Order of this Court.

1. With the exception of emergency and time-sensitive matters, Entered this 13th day of March 2020. including but not limited to, domestic violence hearings, emergency custody hearings, evidentiary hearings in criminal cases, in-custody arraignments, in-custody preliminary hearings under RCr 3.10, incustody bond motions, and in-custody probation violation hearings, all in-person appearances for civil and criminal dockets shall be canceled.

All sitting; all concur.

Judges are encouraged to use telephonic or video technology for all necessary hearings, including arraignments and mental-health To view the court’s original PDF file, which we’ve posted on hearings.

Courthouse Shutdowns Affect Eviction Hearings

2. All civil trials, hearings, and motions shall be postponed and rescheduled for a later date. Any civil trial or hearing currently in progress shall be continued or completed at the discretion of the presiding judge.

kreia.com, visit bit.ly/k2003_courtresponse Attorney Michelle Rawn, also KREIA’s Parliamentarian, can be reached at michelle@rawnlawfirm.com or (502) 416-0150.

Copyright MMXX 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.

10

Copyright MMXX 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.

11

Copyright MMXX 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.

12

Copyright MMXX 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.

13

Surviving the Chaos: Don’t Panic … Just Focus

By Erik Hitzelberger As the coronavirus, oil trade war and associated economic impacts ripple across the country, the good, the bad and the ugly of investing in stocks, bonds and other paper assets are on full display. In a word… volatility. The S&P 500 moved 2,000 points or more three different times during the second week of March as speculators ruled the day. Evidence supports the claim that the wild ride could continue for some time. Real estate, on the other hand, remains a good (consistent) investment.

Income (Wholesaling/Rehabbing) Warren Buffett said, “You never know who’s swimming naked until the tide goes out.” This isn’t a dramatic event (yet), but it’s also not the time to be taking unnecessary risks. Wholesalers should recognize that fear will drive some buyers from the market. Rehabbers can’t rely on a highly appreciating market that allows them to keep pushing comps higher. Also, as Jordan Pohn mentioned during March’s Lunch and Learn, supply issues may delay project completions. Focus on fundamentals and know your numbers.

Wealth-Building (Buy and Hold) On a broad level, predicted home sales have been adjusted from 6M to 5.5M nationwide. This is still 3-4% growth over last year. This moderate increase will slow appreciation rates to a reasonable pace.

Louisville has the lowest level of inventory we’ve seen in at least 15 years. Any increase in supply (even as a result of a demand decrease) is welcome. A healthy (neutral) real estate market is defined as one that has 6 months of inventory. We currently have 1.7 months overall and less than 1 month of inventory for single-family homes under $200,000. Tripling the existing inventory would still leave us in a seller’s market. Those of you who invest for wealthbuilding in A-B neighborhoods should still expect appreciation this year albeit at a more moderate pace.

Opportunities Mortgage Rates have crept up slightly after hitting an alltime low last week. Now is a great time to consider refinancing. This can increase your margins and/or allow you to pull a little cash out. Either can give you a cushion over the next several months.

For those looking for new investments, don’t put off buying in hopes of a downturn. This is not 2008. COVID-19, the oil trade war, excessive corporate debt and supply problems will have some effect on the local and national economy, but every indication is that the effects will be short-lived. Locking up an investment with good returns that support your goals is more important to your long-term success than trying to time the market.

In summary, remember that what we focus on determines how we feel. You have a choice whether to pay Income (Buy and Hold) attention to the things you can’t control or to spend time Surveys have repeatedly shown 60-70% of Americans thinking about the things you can. From a business and have less than $1,000 in savings. Event cancellations, supply investing perspective, you can be sure to safeguard yourself chain interruptions and general malaise will cause reduced from risks, you can choose to be guided by fundamentals, working hours, furloughs and potentially layoffs across a and you can choose to make strategic investments that broad spectrum of industries. Some of your residents will support your financial goals. Wouldn’t that feel much better experience hardships and have difficulty paying rent. You than giving into fear? need to be cognizant that your rental payments may be reduced or delayed.

Erik Hitzelberger serves as Secretary on KREIA’s board and is That being said, good residents are worthy of being given a former KREIA Vice President. He is a principal in Freedom an opportunity to recover. Every situation is unique. Some Property Group, a turnkey company that rehabs houses and of you have residents who have been with you for years. sells them to passive investors, taking care of property They have paid you tens of thousands of dollars. The cost of management. You can contact him at (502) 921-3989 or evicting them and the resulting turnover/vacancy would far Erik@fpg-ky.com. exceed a temporary rent reduction, one-time forgiveness or structured payment plan. Remember that you have a QUOTABLE QUOTE plethora of options. Besides, Eviction Court is closed until “Where focus goes, energy flows.... What April 16th.

Increase your reserve funds, keep the lines of you focus on, you feel.” communication with your residents open and think – Tony Robbins strategically if any issues arise.

Copyright MMXX 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.

14

Copyright MMXX 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.

15

Copyright MMXX 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.

16

Copyright MMXX 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.

17

Take the Opportunity to Organize During Downtime A productive to-do list for real estate investors

By Nina Musgrave As I write, our world is quickly changing due to the pandemic of COVID-19. Yesterday (March 15th), the CDC recommended that for the next 8 weeks, in-person events that consist of 50 people or more be cancelled throughout the United States! The Federal Reserve slashed interest rates to a range of 0-0.25 percent.

We are in uncertain times, for sure. The governor suggested Kentucky schools close for two weeks, and telecommuting has been encouraged, even mandated in some areas. March Madness will be played in fan-free arenas; the date of the Kentucky Derby is being discussed; and remaining KREIA events for this month were cancelled.

It’s eerily quiet on the streets, and supply trucks carrying toilet paper are greeted in unprecedented ways. We’ve been asked to self-contain, practice social distancing and wash our hands. Repeatedly. All this to say: We still don’t know how the virus will affect us. Huge upsets in our daily lives have already occurred, and more are coming.

What can we do during the pandemic, during our efforts to #flattenthecurve and stop the spread? In a brainstorm, I compiled a list of at-home options and tasks related to real estate investing. I hope they spark inspiration and action during the days, weeks and months ahead.

ORGANIZE • Organize your computer. Delete old files and downloads, and organize your PC’s desktop and folders • Organize your physical workspace • Organize your filing cabinets, drawers and property folders • Organize desk drawers, supplies, shelves, or closets • Organize your email inbox. Set filters if needed DIGITIZE • Digitize your papers and receipts. Scan them in, maybe go paperless • Digitize all of the business cards lying around • Digitize your passwords • Back up your hard drive • Digitize documents for e-signatures • Verify your phones and tablets are backing up data • Clean up your contacts list • Digitize property information, including warranties and serial numbers (mycentriq.com) UPDATE • Update any social media profiles • Update all online company information • Update email signatures

• Update who you follow and adjust accordingly • Update remaining plans and goals for 2020 CREATE • Create the systems and standard operating procedures you’ve had floating around in your head • Create new content for social media or your website • Create a marketing plan • Create a new materials list for your next remodel project LEARN • Learn new software or an app • Learn a new way to look at the numbers of your business.

Where can you improve?

• Learn how to relax.

• Learn how to listen.

REVIEW • Review your calendar for the upcoming months and know that you will have some open spots!

• Review goals from the beginning of the year • Review final numbers from past projects. Where they as profitable as planned?

• Review your utility bills and insurance policies • Review where you spend your time and where distractions come from • Review your rent rates with the competition • For some of us — review what you own!

DISCOVER • Discover media you’re not familiar with, such as audiobooks, Pandora or Overdrive • Discover latest trends on paint colors • Discover recent legislation on tenant law • Discover upcoming industry events and thought leaders • Discover a list of popular REI books and read them • Discover videos of past KREIA meetings online and watch them WRITE • Write your Councilperson and other elected officials – tell them what’s on your mind • Write thank-you and follow-up messages • Write templates for future projects • Write your fellow KREIA members to check in on them • Write reviews for companies you’ve worked with • Write a self-evaluation • Write a 30-day challenge No matter where this takes us, continue to: Dream big.

Breathe deep. Connect often.

Copyright MMXX 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.

18

Copyright MMXX 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.

19

photo by bruce w. hinson www.obedientcamera.com

photo by bruce w. hinson www.obedientcamera.com

Above: During February’s main meeting, CPA Mike Grinnan, at left, described changes in the tax code for this year’s filing season. Did you miss his presentation?

Catch the audio replay in KREIA’s private Facebook group. At right: Another delicious spread on the buffet.

KREIA

Photos

See more photos in KREIA's private Facebook group.

At Left: While you’re networking, be sure to make the rounds of the vendor tables. You might strike a deal! Ian Hooper, Re/Max agent seated at right, chats with investors.

photo by bruce w. hinson www.obedientcamera.com

photo by bruce w. hinson www.obedientcamera.com

Below: Merrill Lynch’s Tyler Speer, at left, headlined the early meeting on capital management. At right, Pete Christianson learns that if you make eye contact with the photographer, you’re probably gonna get your picture taken.

photo by bruce w. hinson www.obedientcamera.com

Copyright MMXX 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.

20

Pleasure Ridge Park L.O.T.S. Home: A Closer Look Bryan Gillespie buys a hoarder house at auction and makes it shine

By Lauren Willoughby “If you could imagine, every single room in this house was full from floor to ceiling with stuff,” Bryan Gillespie said of the house he bought about six months ago at the Commissioner’s Sale. “Let’s just use the word ‘stuff.’

You had a walkway, just enough for your body to get through.”

But a house cram-packed full of “stuff” wasn’t the most pressing problem. “The biggest issue on this house was it still had a gentleman living in it,” Bryan said. And the previous owner was in no hurry to Bryan Gillespie rehabbed this house at 6344 Doe Run Road with the help of funding from leave – or to leave his possessions KREIA sponsor MM Lending. (Photos by Lauren Willoughby) behind. lay them off, they’re gone,” he said. “I’ll take on a house like Bryan is a rehabber and also an agent with his new brokerage, Great Space Realty. His original plan with this house this just to make sure I have the next one in the pipeline.”

His crew turned the house in about three months – after was to wear another hat – to act as a wholesaler and sell it to other investors as a quick flip. He said he brought poten- having to wait the first three months to get the occupant tial buyers with him on his first look inside the house, where out. Bryan devised a plan to get the man moved. “Otherwise, the house would still be sitting full of ... stuff,” he said. they were met with the previous owner and his … stuff.

“From my other business, I’m a car guy, so I had a big enBecause of the shape the house was in, Bryan said he didn’t have much luck with a quick sale. His would-be buyers closed trailer.” With that and Bryan’s dually, the crew was able to move everything without having to rent U-Hauls. bailed after seeing the interior and what was contained The house’s bones are good, Bryan said, and his crew there. “I ended up keeping it and doing it myself.” went to work fleshing them out with attractive finishes.

The good news is that he looks to make a They laid new flooring and carpet, hung new doors, and they updated the kitchen and two bathrooms, finishing a baseprofit of more than ment bath that had been roughed in. The result is a roomy, $24,000 on this one. inviting house that is clean and filled with light. You’d never Also, though he kept this house for himself, guess it had been a hoarder house. Awesome job, guys! he didn’t have to do the Bryan ran the numbers for us twice: if he were to flip the work himself. “I have a house or keep it as a buy-and-hold (with purchase, rehab crew of three that work and holding/closing costs staying the same). At the time of for me full-time, reno- the L.O.T.S. event, he said there still about two weeks’ worth vating the houses that I of work left to do, and his plan was to flip it. do,” Bryan said. “I sub IF KEPT AS A RENTAL out what they can’t do.” THE NUMBERS IF FLIPPED Monthly…

Tricky rehabs like this Purchase Price: $89,500 Rent Payment: $1,200 one don’t scare him, Rehab Costs: $37,645 and he likes to keep his Holding & Closing Costs: $8,000 Mortgage Payment: $640 Taxes: $134 crew occupied. “What Realtor Commissions: $10,140 L.O.T.S. host Bryan Gillespie: “I’ve been I’ve found is, when you Estimated Selling Price: $169,900 Insurance: $80 investing for about 18 years. I’m origiPotential Profit: $339 have a good crew, you Potential Profit: $24,615 nally from Chicago. My family, we have want to keep them over 300 doors in Chicago. So I grew Why do we call it “L.O.T.S.”? Because we Learn On The Site! busy, because if you up doing apartments and rentals.”

Copyright MMXX 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.

21

Copyright MMXX 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.

22

Do You Have a Product or Service to Offer Kentuckiana Investors? Become a Business Card Member for only $199/year and see your ad in a year's worth of issues! You can upgrade to Business Card at any time.

23

Home Depot Rewards Program Benefits KREIA Members Who doesn’t like cash back? As a KREIA member, you can get cash back from Home Depot on your purchases of rehab materials and tools.

If you spend more than $5,000 semiannually at Home Depot, you'll get a 2% annual rebate. And that’s not counting all the other discounts you get there as a KREIA member. Through our affiliation with National REIA, we get access to Home Depot’s Pro XTRA plan.

As a KREIA member signed up for Pro XTRA, here's some of what you can look forward to: • 20% off paint products (interior paint, exterior, primer) • Volume pricing if your order is $1,500 or more. (Average savings through volume pricing is more than 10%, depending on products and quantity. Visit your local Pro Desk for more details on volume pricing.)

• Access to an exclusive appliance and cabinet program!

• Up to an 11% rebate price match program for competitors’ pricing.

Are you getting everything out of your KREIA membership that you are entitled to? Think of all the money you pour into rehabs. Wouldn't you like more of it to flow back to you? If you sign up for the Home Depot Pro XTRA program, it will.

Your savings from Home Depot each year could pay back the cost of your annual KREIA membership several times over, and then some!

But first you need to register: Call 866-333-3551 or visit homedepot.com/ProLoyalty During registration you can associate the forms of payment you use – credit cards, debit cards, checking accounts – so that the payments you make at checkout will apply to your savings and rebates.

Visit bit.ly/k2003_homedepot for Home Depot’s update on their response to COVID-19. Remember, you can order materials online for delivery to your site (may cost extra).

GOVERNMENT AFFAIRS LINKS State Government Roundup Kentucky Realtors Legislative Updates. Read weekly updates on bills in play in Frankfort at the Kentucky Realtors’ site: bit.ly/KYR_LEGU

•

Local Government Roundup Louisville Metro Government: Get a summary of local affairs (and state) by the Greater Louisville Association of Realtors (GLAR): bit.ly/LRGAU

Copyright MMXX 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.

24

Copyright MMXX 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.

25

Tech Tools for Collaborating & Conferencing Online

By Lauren Willoughby By now everyone knows the drill: To “flatten the curve” on the novel coronavirus, we need to avoid crowds, selfisolate, and wash our hands. But we also need to work.

How do we work when a big part of what we do requires meeting with others?

Technology to the rescue. Your PC, devices and software tools won’t replace every real-world task, but they can connect you with others in powerful ways. Let’s explore some options, especially ones available for free or that offer a free tier of use. ► Slack: It’s a web service designed to replace email within a team. Are you frustrated trying to track down emails and figure out who said what when? Are you tired of seeing quoted text from earlier emails over and over?

Slack circumvents email bloat, and all the cool kids use it.

Slack is designed around channels, and you can turn each project your group is working on into a channel. Then invite only the people who work on that project to your channel. Are you on a committee? Create a channel for it.

Got something to say? Post a message. The channel screen looks like a scrolling collection of date-sorted text messages. It’s an elegantly simple way to communicate.

Channel members can get notifications when new posts are added. And they can send private, direct messages to anyone on the team. They can share files, and they can contribute on the go using iOS and Android apps.

There’s a free level that could work very well for small teams. And there are paid levels of Slack, starting at $6.67 per month per user, that add features such as screen sharing and video calls for up to 15 team members. Pick it up at slack.com. ► Microsoft Teams: It’s an online collaboration and communication tool that’s especially suited for people who work in the Microsoft ecosystem and are fans of Excel and Word. It’s also Microsoft’s answer to Slack, but it kicks in a lot more power in its free version. For one thing, you can have up to 300 people in a team (with unlimited participants in the paid version).

As with Slack, you get chat-style messaging in channels, and you can upload files. Each user gets 2Gb of storage, and the team in general gets 10Gb. You get free audio and video calls – for one-to-one communication or for communicating with the whole team.

If you use Word, Excel and PowerPoint, good news – they’re supported. I was going to test online editing, but instead I got an error message when I tried to upload an Excel spreadsheet. It looks like everyone else in the world

who’s self-isolating decided to try Teams at the same time.

Reports are circulating that Teams is down and that Microsoft is working on the issue. At least I got to test out the message feature! By the time you read this, everything will probably be back up and running.

As with Slack, you can use the browser-based version of Teams or download the app (for Windows, Mac, iOS and Android). The app version adds whiteboard and screen sharing features.

Extra features in the paid version of Microsoft Teams include scheduled meetings, recording of meetings, and phone calls and audio/video conferencing. Paid versions range from $5 to $20 per user per month. Check it out at teams.microsoft.com/start ► Skype: It was one of the earliest Voice Over IP (VOIP) solutions, debuting in 2003, and it’s still going strong. You can use it for simple audio calling to talk with one person, or you can talk with up to 50 people at a time. You can also use it for group video calls, but Skype is cagey about saying how many participants are supported in video chat.

After you create a free Skype account, you’re ready to use it with other Skype users around the globe. If you want to dial out to landline or cell numbers, you’ll need to pay up – but it’s very inexpensive. Want your own Skype phone number? That’ll cost extra too. Otherwise, free, free, free!

Get more info at skype.com ► Zoom: It’s a “video-first communications platform.” Use it on your computer, smartphone or tablet to take part in group video calls – with extras such as chat, active speaker view (the video feed of whoever’s loudest takes over the main part of the screen), host controls, screen sharing, whiteboarding, local recording to video file, and more.

I know of at least two real estate mentors in KREIA – Sharon Vornholt and Mike Butler – who use Zoom as online classrooms for training their students.

Zoom is free if you’re hosting 100 or fewer participants, though a 40-minute limit is set on group meetings. Paid versions, starting at $14.99/month/host, remove time limits and allow more users. Get the scoop at zoom.us

There are so many more collaboration/communication solutions out there! Exploring the Googleverse, for exampple, could keep you busy for months. There are also tools like GoToMeeting, Trello, BaseCamp, Zoho, Asana and Podio – which is a favorite of many real estate investors.

What solutions do you use to stay connected in our current hands-off world? Tell us in our poll in KREIA’s private Facebook group.

Copyright MMXX 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.

26

Copyright MMXX 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.

27

Copyright MMXX 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.

28

Copyright MMXX 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.

29

National REIA Real Estate News Roundups Continued from Page 4

Total Household Debt Increased by $193 billion in Q4 2019 According to a recent report from the Federal Reserve Bank of New York’s Center for Microeconomic Data, total household debt increased by $193 billion (1.4%) to $14.15 trillion in the fourth quarter of 2019 – marking 22 consecutive quarters of increases. The proportion of credit-card debt that was in serious delinquency increased 5.32% – the highest in 8 years.

Read the full story: bit.ly/k2003_debt

The Easiest and the Hardest Cities to Buy a Home With record tight inventories all over across the country, Realtor.com reminds us that few markets are immune. However, they did take a look at a look at the numbers across the board and pinpointed the places they say are “easiest” to buy a home as well as those locations where it is pretty hard.

Read the full story: bit.ly/k2003_easiest

January: Foreclosure Activity Up 13%

Homeownership Rates by Age We saw last month that during the final quarter of 2019, the homeownership rate increased to 65.1%, the highest level in 7 years. A recent “chart of the week” from the Mortgage Bankers Association took a deeper dive into the numbers to break out the homeownership rate by age. They find that older homeowners are staying put longer.

Download the PDF report: bit.ly/k2003_homeownership

Red State vs. Blue State Housing Markets in 2020 We have seen several posts about where people are moving here in America. If you look at that data through a political lens (it is an election year, after all) and see them as Red (Republican) and Blue (Democratic) states, an interesting picture emerges.

Read the full story: bit.ly/k2003_redvsblue

Remodeling Magazine’s 2020 Cost vs. Value Report Remodeling Magazine recently released its 33rd annual Cost vs. Value report comparing 22 remodeling projects and upgrades with the value they retain when the property is sold in 101 U.S. housing markets.

Read the full story: bit.ly/k2003_remodeling

According to ATTOM Data’s most recent Foreclosure Market Trends Report, there were just over 60K properties with foreclosure filings across America in January. This figure was 13% higher than December and 7% higher than one year For the most part, compared to homeowners insurance, ago. Sixteen states posted year-over-year increases in forerenters insurance is relatively inexpensive. However, as the closure starts. In addition, Attom says bank repossessions folks over at howmuch.net point out, the rates can saw a nationwide uptick. drastically vary across in different parts of the country.

Read the full story: bit.ly/k2003_foreclosure Read the full story: bit.ly/k2003_insurance

Average Cost of Renters Insurance

Housing Shortage Tracker We’ve read a lot about how the lack of inventory has contributed to the rising costs of housing nationwide. With that issue in mind, the National Association of Realtors put together an interactive graphic highlighting the issue by showing areas of country where housing is in short supply and where it is plentiful.

View the infographic: bit.ly/k2003_shortage

How to Stage Your Flip to Sell According to the National Association of Realtors, 71% of sellers’ agents believe a well-staged environment increases the dollar value buyers are willing to offer. While staging your house isn’t guaranteed to get you more money, it’s an important marketing tool that can help you compete at the right price and sell faster.

Read the full story: bit.ly/k2003_stage

LOCAL NEWS UPDATES

Evictions Suspended in Louisville The Jefferson County Sheriff’s Office is suspending evictions for the “foreseeable future,” spokesman Lt. Col. Carl Yates said Tuesday, March 16.

Read The Courier-Journal story: bit.ly/k2003_evictions

Kentucky Derby Set for September 5 It’s a historic change in what’s already a historic time for our nation. The Kentucky Oaks and Derby will be moved to Labor Day weekend due to the coronavirus pandemic.

Read the full story: Read the WHAS 11 story: bit.ly/k2003_derby

Copyright MMXX 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.

30

Copyright MMXX 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.

31

Mike Butler: How Will Coronavirus Affect Investors?

Continued from Page 6

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!

trickles down? Refinance your investment properties. Home buyers can buy more house – prices will creep up. Not next week but in a month or two. Get ready and plan now. ✓ If you are selling properties to first-time homebuyers right now, odds are, processing those loans, especially the government-backed loans, will probably double in processing time. (Prepare for the worst, hope for the best.) ✓ If you loan money – get ready! Odds are you will see your borrowers begging for some short-term mercy. Lenders are not immune, and just imagine the big financial institutions and all of the homeowners who will be affected. ✓ Finally, perhaps one of the biggest things affecting real estate investors is materials and supplies. This will affect all of us. Investors, flippers, rehabbers, contractors, service providers and more. At this time, where are most of your materials and supplies manufactured? Ugh, … China. Connect the dots. Not only the materials and supplies we need, but health industry, retail stores, manufacturers, and the list goes on and on.

Our Federal, state and local governments cannot push a button and fix this yesterday. They have no previous track record on dealing with such a health crisis.

Bottom line, please take care of your family members and loved ones. If real estate has been good to you, this is a great opportunity to give back and to help those folks whose lives and routine have been turned upside down with no solution in sight.

Let’s tell all of our first responders, police, fire, EMS, military – and all of our dedicated health industry employees and professionals who are going above and beyond to help folks in this never-seen-before crisis – “Thank You for All You Do!” All of us are truly blessed living in the U.S.A.!

To Your Continued $uccess!

P.S. Sign Up for Your FREE Investor Training Every Tuesday at 12 noon: MikeButler.com/PowerLunch Mike Butler is a KREIA Past President, a recipient of the Ed Melton Award, a property manager, a high-volume landlord, a principal in Tenant Finder Service, a retired Louisville undercover police detective, the author of the best-selling real estate book “Landlording on Autopilot,” and a national speaker and mentor on landlording and creative real estate investing. Contact him via his website, MikeButler.com.

Copyright MMXX 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.

32

Copyright MMXX 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.

33

Craig Pfeffer, D.C. ► Email: Craigpfeffer@twc.com ► Cell phone: (502) 593-6622 ► Your company name: Home Buyers of Louisville, LLC, “Pfeffer the Flipper” ► Where did you grow up? Louisville ► What high school did you attend? Jeffersontown High School ► Which college did you attend? University of Kentucky, Logan College ► Tell us about yourself: I’m a Christian guy with 2 wonderful kids. I have a daughter who is 24 years old and a NICU nurse at Nortons downtown. She has just started her online courses at Campbellsville College to become a nurse practitioner. My son is in his senior year at Kentucky Wesleyan College in Owensboro. After graduation he plans on getting his masters and then getting a job as a strength @ conditioning coach in a D1 or D2 college. Neither of my kids have interest in real estate, so I’m still working on them! LOL. ► Current or previous occupation? I was a Chiropractic Physician in my own practice in Jeffersontown for 23 years. Retired in 2008 at 48 years old. Although financially independent, I was way too young to quit working and decided to go into real estate investing full time because I’ve always had a passion for real estate. I acquired several single family homes during my career as a Chiropractor and hired a property management company to manage them so I could put all my focus and energy into treating patients. I paid off all my rental properties within one year of retiring from practice. Then I took over the management of my rental properties and began learning the business of flipping houses. And that’s what I’ve been doing the past 12 years. I love the real estate business because it’s challenging and offers freedom. However, it doesn’t take a genius to do it. If I can do it, you can also.

Continued on Page 36 Copyright MMXX 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.

34

Copyright MMXX 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.

35

In the Age of the Coronavirus … Now What?

Continued from Page 3

Member Spotlight: Craig Pfeffer Continued from Page 34

This means do not borrow as much money as the bank will give you. Hold off on buying that 5th and 6th property until we know how things are going to shake out.

Flippers, make sure you have enough cash to cover extra carrying costs. This will provide protection if you are unable to sell a house as quickly as you had thought. Many investors that ran into trouble in 2008 were overleveraged. They had 20 houses all leveraged to the hilt. When things went bad, they didn’t have enough cash to withstand the storm. As the old adage goes, Cash is King!

Let’s not forget who we are and where we live. On Friday, March 13th, President Trump issued a National Emergency (which enables the government to take further action if needed). In his speech he had some of the most important businesspeople on the planet standing behind him (WalMart, CVS, Target). The private sector was physically and metaphorically standing behind our nation, willing to assist.

We will get through this.

► Passions and hobbies: Enjoy watching sports such as football, basketball, rugby (which I played for several years), UFC, etc. Also enjoy road biking, lifting weights, cardio exercise, hiking, camping and traveling. I especially like the ocean where I go boating, snorkeling and occasionally deep sea fishing. ► What year did you join KREIA? 2008 ► Why did you join KREIA? To meet other investors for networking opportunities. KREIA has been great for helping me meet wholesalers, find houses and find reliable contractors. Another huge benefit is the many close friends I’ve met in the club who will likely be forever friends of mine. ► Who referred you to KREIA? Longtime member Joe Hampton, who was a patient of mine. ► How did you get into investing? Started buying single family rental houses after I began my practice. ► What year did you start investing? 1987 ► Your real estate investing preferences: Rehabbing fixer-uppers. High end residential & commercial/office properties. ► What kinds of deals are you looking for now? Flip houses only (I have enough rentals). I buy single family houses (no condos or patio homes) in Louisville (excluding downtown and west end), Crestwood, Lagrange and Pee Wee Valley. ► Lessons you have learned? If you’re new to real estate investing, find a mentor if possible. This will help speed up the learning curve. But don’t spend a lot of money on consultants. I know people that have spent several thousand dollars and have never done a deal.

Also find a niche that you are interested in. Just because your friend or family member wants you to be a note buyer or flipper doesn’t mean you should be. There are MANY different areas of real estate that you can choose from. Find one that fits your passion and talents. And once you succeed in real estate, start giving back. I tithe to my church and give to several charities. Generosity goes a long way in life. God has truly blessed me in my life and I hope that in some way I can bless others. Thank you to KREIA for donating several thousand dollars to Home of the Innocents each year! ► What are your top 3 tips for investors? #1. Do what you have a passion for. #2. Don’t just do real estate for the money, do it so that you can help others (and the money will follow). #3. Have integrity at the top of your list (treat others as you would like to be treated and don’t get greedy. Make it a WIN WIN for everyone).

Jordan Pohn is a principal in the fix-and-flip lending company SurePoint Equity, a KREIA advertiser. He is also KREIA’s newest board member.

Copyright MMXX 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.

36

Copyright MMXX 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.

37

Copyright MMXX 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.

38

Copyright MMXX 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.

39

PO Box 91225 Louisville, KY 40291 Return Service Requested

Presorted First Class Mail U.S. Postage Paid Louisville, Ky Permit No.1498

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/reiaky facebook.com/reiaky (public) • facebook.com/groups/kreiaky (private)

UPCOMING EVENTS

Our March Main Meeting Is Canceled Due to Concerns Over Novel Coronavirus

❖ April 8 — 11:45 a.m.-1:30 p.m. KREIA Indiana Sub-Group Luncheon Meeting. Meet up and network with Hoosier investors in New Albany. You buy your own lunch. Brian The March 26th main meeting, "Secrets Revealed: How to Haeseley chairs.

Make Money Flipping Houses," featuring KREIA Past President ❖ April 16— 6 p.m-8 p.m. KREIA Game Night: CashFlow.

Frank Miller, has been canceled, but look for Frank to return and Want to get out of the Rat Race? Play the CashFlow board present on this topic on a future date. game with other investors pursuing financial freedom and Even though KREIA members aren’t meeting up at Woodyou’ll find out how. Everyone is invited. Hampton Scurlock haven this month, they’re doing lots of business and networking hosts at Bearno’s in Plainview. over in our Private Facebook Group. Join us, why don’t you?

Assuming the quarantine period ends soon, here’s what Main Meeting Calendar we’ve got planned for April: Here’s what’s coming in the next few months: ❖ April 2 — 5 p.m.-7 p.m. KREIA Happy Hour. Networking at • April 23: Wholesaling and Marketing with Kristina Spells Bearno’s in Planview. Everyone is invited. Jeff OBryan hosts.

• May 28: Airbnb (tentative) ❖ April 7— Noon-1:30 p.m. Lunch & Learn. Meet up for • June 25: Shark Tank (tentative) education and networking. Members only. You buy your own lunch. Check your email for the location. Ed Gibson hosts.

We look forward to seeing you at our April main meeting!