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 08-20 August 2020 President’s Letter
1
Paid Advertising Rates
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Foundations of Finance: Put your plan into action with Erik Hitzelberger
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Welcome, New Members!
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Mike Butler: Prepare for Fair Housing ‘Secret Shoppers’
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Michelle Rawn: Courts update
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Government Affairs Update
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Nina Musgrave: Homeownership 14 rates increase, vary by ethnicity KREIA Photos
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L.O.T.S. Recap: Wendy Kays converts Beechmont duplex to single-family home
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Eric Shadowens: Do you qualify 22 as a Real Estate Professional?
Calendar of Events
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Dear KREIA Members and Friends, I wrote last month in my President’s Letter that U.S. home prices according to the U.S. Census have appreciated annually at the rate of 6.564% since 1963. The U.S. medium income has increased at about half this rate as traditional single-family home ownership has continued to be less affordable for a big part of our population, despite government and Chris McCarty private sector initiatives to improve affordability. Nothing about housing costs ever seems to decrease, and instead we see a steady incline in prices, making the American dream ever more illusive. In recent years we have seen some demographic shifts and reversals of housing trends with many moving back to the cities. There’s been a change in demand from buyers, who are seeking access to less expensive housing stock. Older city neighborhoods are looking more attractive as they are being gentrified and transformed. A check of Internet real estate transaction statistics for last month in Louisville, according to Zillow, indicated the median price for a single-family home was $178,807. (Half the sales were above that figure and half below.) The average sale price last month in Louisville, as defined by total dollar amount of sales divided by total number sold, was $261,321. For the same period, the average rent in Louisville was $1,038/month and represents a 3.95% average increase over last year. Average real estate appreciation in Louisville over the past 10 years has been 23.5%. When I started buying single-family homes as rentals many years ago, most of my investments were directed at the older areas of Louisville at a time when many people were moving to the suburbs. Many of the houses I bought were based on the traditional formulas of cash-on-cash return on investment – I used those calculations to guide my decisions, determining risk and reward. The traditional motivation of owning real estate, in addition to the cash flow, is the debt amortization paydown by the residents along with the additional benefit of appreciation. Before any of that could be considered, the deal first had to cash flow and Continued on Page 4
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.