January 2021 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 1-21 January 2021 President’s Letter

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Paid Advertising Rates

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Plan for Success: Chart your road map to real estate wealth

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Welcome, New Members!

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Saturday Workshop: Road Map to Real Estate Wealth

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2021 KREIA Member Directory: Please verify your contact info & fill out the Yellow Pages form

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Mike Butler: Beware of Fair Housing ‘Secret Shoppers’

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Michelle Rawn: New Protected Class/Fair Housing Ordinance

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Michelle Rawn: Courts Update

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Government Affairs Links

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Hampton Scurlock: How NOT to Wholesale a House

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Ed Melton Award: 2020’s recipi- 16 ent is announced, plus Q&A KREIA Photos

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L.O.T.S. Year in Review: Plus, Q&A with the hosts

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Calendar of Events

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Dear KREIA Members and Friends, Happy New Year! As we happily slam the door on a crazy and challenging 2020, I think of the New Year with fresh goals, promises and aspirations. And I wish each of you great success in 2021. I’ve always welcomed the new year with new offerings and the opportunity to start fresh. We cast aside old habits and gain new clarity of purpose that fresh beginnings can offer. By this time, I hope you have made commitments for this year’s Chris McCarty investment strategies and are moving toward certain implementation.

The real estate market remains stellar, and the expectation is that this will continue: Low interest rates, low inventory and high demand continue to influence the market as more buyers compete for fewer homes, driving up prices. Older neighborhoods offer greater value – new home construction has not been able to meet demand and is more expensive. This is a continuation of everything we saw last year, and nothing on the horizon looks to threaten real estate investing and price appreciation.

The KREIA membership is as strong as ever. And despite all the challenges of 2020, our membership is growing and hungry for training, networking, and sharing knowledge of all things real estate. The KREIA board is working on a schedule of new training sessions covering the basics and “how to” best practices that have always appealed to our members. We’ll be sharing with you the fundamentals of real estate prosperity. Don’t miss out on any opportunities to excel in this market, and stay tuned for ways KREIA can help.

We understand that there is a networking vacuum created by the temporary suspension of the physical monthly meetings at Woodhaven. For the time being, I encourage you to get or stay involved through kreia.com and all of the virtual KREIA tools.

If this is not enough, board members and I invite you to contact us for assistance or to answer your questions. Find us in the member directory or through kreia.com.

Remember also that KREIA’s Facebook Group is a great resource for questions and general information. Use the search tool at the top for your queries. Now more than ever, keep tabs on our email messages and KREIA.com website updates for news and information about the status of KREIA events.

Chris McCarty KREIA President

Copyright MMXXI 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

Rob Bergeron

Christopher Jaquith

Jordan Pohn

Stacey Duvall

Alexis Fentress

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 MMXXI 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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Complete Your Action Plan for 2021

Our January 28th virtual meeting will help you set goals for financial freedom

Last year’s “Road Map to Real Estate Wealth” meeting was such a hit that we decided to do it again. And if we could pick any element of 2020 to repeat, it should be this.

The rest of 2020 can.… Well, it knows what it can do.

This month at KREIA we want to help you take stock, refine your plan, and set goals to get there. Whether you’re new to real estate or have been around the block a few times (maybe having rehabbed a few of the houses on that block), come join our Zoom call on January 28th. We’ll get you pointed toward financial freedom and eventual wealth.

We’re inviting back three veteran investors to help you set yourself up for success.

Erik Hitzelberger: REI Basics A systems-driven rehabber and landlord, Erik Hitzelberger will kick things off Thursday night with a discussion of why real estate makes sense for wealth building. Erik is going to help you figure out where you are on your individual road map to wealth and evaluate strategies to get you there.

Holding rental property is vital to achieving real wealth, but what roles do wholesaling and rehabbing play? How passive or active an investor do you want to be? How much wealth do you need or want? Figuring out these things will help you define your goals, and Erik will offer insight.

Erik currently serves as Secretary on KREIA’s board and is a principal in the turnkey rental company Freedom Property Group, which rehabs dozens of houses a year.

Mike Fallot: Getting Started As a local lender who funds rehabbers on their house flip deals – and their rehab-andrefi-into-rentals deals (the BRRRR method) – Mike Fallot is a wealth of knowledge.

Mike has helped longtime investors rehab many, many houses, and he’s helped new investors conquer that first flip. If you’re wondering how to arrange funding for your real estate endeavors, pay close attention during his segment. He’ll walk you through the steps of what is required to get funding to buy and rehab the deal.

Working with rehabbers over the years through his company, MM Lending, Mike is uniquely positioned to offer tips and information on best practices.

Harry Borders: Build Your Business You probably know Harry Borders as one of the most prolific closing attorneys in the area. He also helps new investors create entities suited for real estate businesses. Should

Illustration by Nina Musgrave

you work out of an LLC, an S-Corp? Harry will help you figure out what’s best for your niche. He’ll also describe who you need to have on your real estate team.

The Panelists Closing out the night will be a panel of four relatively new investors who are making it happen. With their first steps into investing still fresh in their minds, they will share tips they wish someone had told them when they were starting: • Jacob Michal – he’s an up-and-coming wholesaler • Cameron DeGeorge – he’s returning this year to give us more tips on wholesaling • Jacqueline Smith – she’s a hands-on rehabber • Joanna Dennis – she’s a landlord and Airbnb superhost The Meeting Agenda Log on to the Jan. 28 Zoom call by 5 p.m. for a Member Orientation with Jordan Pohn and Stacey Duvall. Log on by 5:30 for the early meeting with Rebecka Taasaas. After that there will be announcements, a legislative update with Michelle Rawn, Property Pitches and Advertiser Pitches. The main presentation kicks off at about 7 p.m.

The Saturday Workshop Thursday night’s main meeting is going to be jam-packed with must-know info for investors of all levels. But there’s so much more to teach! So on Jan. 30th, we’re inviting all speakers and panelists back for a 6-hour immersive workshop with more instruction and much more time for Q&A. ► Turn the page for more info on Saturday’s workshop.

5:30 p.m. Early Meeting: Security Systems Rebecka Taasaas of America's Choice Security Service will show how security monitoring works to help you protect your investment property.

Copyright MMXXI 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!

Adonna Bass Wickliffe Kristin Beverly Ben Biery Nicole Brasher Logan Brougher Larry Carlson Kelly Cullop Jim Dersch Martha Diebold Dominqiue Garmon Zach Gaubert Christopher Gehman

Davon Hall Monica Haywood Joseph Hill Angela Hite Logan Jaffe Shannon Gauthier Marissa Jumper Ron Kiefer Kevin McKenna Matthew Medley Jordan Moorhead John Nolte

Kelly Orr Aja Sherman Jenohn Smith Dana Spencer Donald Thomas II Eric True Harry Vinegar Karen Whelan

KREIA’s New Member Orientation There will be a short presentation of the benefits of joining KREIA at every regular monthly main meeting.

While we’re virtual, tune into our Zoom call at 5 p.m. to hear from Jordan Pohn and Stacey Duvall. The next orientation is scheduled for January 28.

Online Presentation: You can view a recent presentation by Jordan and Stacey by visiting the Intro to KREIA page at kreia.com (About/Intro to KREIA on the menu).

On the Member Benefits page (Join/Member Benefits), you’ll learn how to secure your discounts and bonuses.

Saturday Workshop: Road Map to Real Estate Wealth When you fail to plan, you plan to fail. Don’t fail! Attend our Saturday Workshop and refine your investing road map.

The three speakers and four panelists from Thursday’s meeting return to peel back the onion on Jan. 30th, having time to answer all your questions. Our plan is that by the end of the day, you’ll have set your goals to move forward.

In this virtual workshop you’ll get hours of real estate education from active, local investors, at a bargain price. And thanks to Zoom’s online conferencing software, you can attend from the comfort of your own home.

If you plan to attend, please register at kreia.com by Jan. 27 to take advantage of early-bird pricing, a savings of $30.

After the early-bird cutoff, the cost to attend is $79 for members and $179 for non-members. This online virtual workshop runs from 9 a.m. to 4 p.m. on Saturday, January 30th.

Please Help Us Finish the 2021 KREIA Member Directory We’re in the home stretch of preparing this year’s KREIA Member Directory, but we need some help. Could you: ► Verify that your contact information is correct? ► Fill out a quick Yellow Pages form?

Here’s how to verify your contact information: 1. Log into your account at kreia.com 2. Go to your Dashboard (My Account/My Dashboard) 3. Scroll down until you see “My Profile Information” 4. Check to see if the values for First Name, Last Name, Email, Company (optional), 1st Phone and 2nd Phone (optional) are accurate – and are what you would like other investors to use in order to contact you.

If any of these values need changing, scroll down and click the Edit button to make the fields editable, make your corrections, then click the Save button.

The values above will be included in the directory’s Member Roster unless you take the step of opting out.

If you choose to opt out, here’s how: In the Dashboard, scroll until you see the menu option called “About Me,” and select it. At the “About Me” page, scroll down to the bottom and click the Edit button. Now scroll back up and UNcheck the “Allow Members to Find Me” option. Then go back to the bottom and click the Save button. That’s it, you’ve opted out.

Here’s how to fill out our Yellow Pages Google Form. Go to http://bit.ly/kreiayellowpages and follow the prompts.

If you have a business or side gig that helps other investors, a Yellow Pages listing is free advertising for you. You can also use it to let wholesalers know you’re looking for deals.

Directories will be mailed out to members in February.

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

Copyright MMXXI 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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Guilty Until Proven Innocent!

Beware of Fair Housing Police — ‘Secret Shoppers’ — setting you up to fail

By Mike Butler This is all Kilroy recalls about what happened. A few days We have already had two of them visit letter, Kilroy was served with legal papers of some sort our office this week, and we have received charging him with violating federal Fair Housing law. at least three phone calls from these secret Kilroy dropped his jaw big time and was devastated. He shoppers for the Fair Housing Police. called his attorney and somehow he ended up calling me.

Let me share with you some of the sneaky Kilroy explained his story in detail and repeatedly kept asking tactics these secret shoppers use to bait you me how he violated federal Fair Housing law. into violating Fair Housing laws.

CHECK THIS OUT: Remember the crippled lady struggling For starters, there are all kinds of agencies that claim they with her walker? That was all a big act to test Kilroy. What are part of the Fair Housing Police or enforcement. There are was his Fair Housing violation? Kilroy did not offer to show this crippled lady the vacant apartment on the 2nd floor. federal agencies like HUD, which has an enforcement Absolutely Insane! All the agencies that claim to be a part division. Then there are state agencies that claim they are part of the enforcement arm of Fair Housing. Then there are of the enforcement arm of Fair Housing are government employees. They MUST get results to justify their existence. many local agencies that claim they are part of the If they do not get results, their budget would get cut, and enforcement arm of Fair Housing. Ugggh! they would lose a number of their employees.

What is a poor landlord/property manager to do?

To justify their existence and keep their jobs, they get TRUE STORY: just a few years ago, one of our local very creative and come up with ideas and role-playing investors fell victim to one of their sneaky tactics and was scenarios where the typical landlord or property manager found guilty of violating Fair Housing laws. When it happened, this investor called me about what had happened will fail. This is so wrong! to him, explaining in detail. This investor had Kilroy entered into some kind of plea a 24-unit apartment building with 12 units agreement and had to pay a $10,000 fine You need to carefully on the ground floor and 12 on the 2nd floor. for his violation. review and memorize So why didn’t he challenge this in court?

This investor was a one-man show and the Fair Housing Because he could not. They had a video he did everything from collecting rent, pickand audio recording of everything Kilroy ing up trash, cutting grass, shoveling snow, laws on what you can said. SLAM DUNK! Guilty! doing repairs, showing vacant units and and cannot say, do, So what is the lesson learned here? processing rental applications. He worked write, or have on your Within the last 18 months or so, there there every day and had a great relationship with all his residents. This building was his rental application and have been many changes and updates to residential housing laws and Fair Housing. pride and joy! He had owned it for over 15 website.

You need to carefully review and memyears, and it was paid for!

So, here is what happened. Let’s call this orize the Fair Housing laws on what you investor “Kilroy.” He had three vacant units pert near ready can and cannot say, do, write, or have on your rental appto rent. A lady pulled into his parking out and struggled lication and website. exiting her car, trying to get her walker set up. This lady Also remember that if you have any staff, vendors or made painful faces, moaned and groaned, and was having a handymen that you allow to hand out rental applications — this will make you sick — whatever these folks say to hard time trying to walk using her walker. prospective applicants is the same as if it’s coming out of Kilroy did not recognize this car or the lady as one of his your mouth! Training, Training, and TESTING and TESTING. residents, so he walked over and asked how he could help If you have staff answering phones, pitching properties, her. This lady, leaning all over her walker in pain, asked etc., I highly recommend you create your own “Secret Kilroy if he had any apartments for rent. Kilroy said, “Yes, I Shopper” to test your staff. Write out the script in a do,” and proceeded to unlock the door on the two groundnotebook and have your secret shopper read those floor vacant units for the lady to view. questions word for word to test your staff. ALWAYS RECORD Kilroy, seeing how the lady was all crippled up and in so these phone calls so you have evidence to support any much pain, assumed she would NEVER consider renting his apartment on the 2nd floor because she would have to use action you take. the stairs. Kilroy was using common sense and trying to be This is not limited to rental property. All of this applies to very nice to the lady.

Continued on Page 32 Copyright MMXXI 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 MMXXI 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 MMXXI 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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New Protected Class/ Fair Housing Ordinance

By Michelle Rawn As you are aware the Louisville Metro Council passed Ordinance No. 146, Series 2019, on November 19, 2020. Mayor Fischer signed this ordinance into law on December 9, 2020. All of the new protected classes immediately went into effect, except “Lawful Source of Income,” which will go into effect on March 1, 2021. The new protected classes are as follows: ● Conviction History ● Homeless Status ● Lawful Source of Income ● Prior Military Service This ordinance does not intend, and shall not be construed, to require a housing provider to give preference to anyone or to rent to an unqualified tenant. In addition, this ordinance shall not be construed to limit a housing provider’s ability to choose the most qualified and appropriate candidate from among applicants for housing.

This means you have to let them apply, but they do not receive preferential treatment. All applicants must still qualify by your regular standards.

There are several exceptions to conviction history. Make sure you read them and ask your attorney if you have any questions. You can no longer state you will not rent to someone who has a felony or misdemeanor conviction.

Effective March 1, 2021, landlords and property management companies will no longer be able to advertise that they do not accept Section 8 tenants/vouchers. Even if you believe the property will not pass a Section 8 inspection, you still have to let them apply. Even if your rental amount is higher than the Section 8 voucher, you still have to let them apply. The Section 8 voucher must be included with the applicant’s monthly income. It will count the same as a paycheck, retirement, Social Security, etc.

I know everyone is concerned about this new ordinance but remember that if you process all applicants the same, you still have the right to choose the most qualified applicant. Just make sure you are treating everyone exactly the same. Get a checklist in place and follow it the same with every applicant.

Please feel free to reach out to me or John in my office if you have any questions. I hope you and your families are staying safe and healthy.

Michelle R. Rawn Rawn Law Firm, PLLC Tel: (502) 639-9396 / Fax: (502) 276-0607 Email: Michelle@rawnlawfirm.com

Courts Update As you are aware the CDC issued an eviction moratorium for evictions for non-payment of rent currently extended through January 31, 2021. As our new president is already discussing extending this through March 31, 2021, and possibly halting all evictions and foreclosures through September 30, 2021, I believe this moratorium will be extended again.

This moratorium is nationwide, but only applies to evictions for non-payment of rent where all adults on the lease submitted a signed CDC Renter’s Declaration.

Kentucky is still for the most part not permitting us to question the tenants who have submitted the Declaration.

Floyd and Clark Counties in Indiana will permit questions to the tenants to prove they fall under the protection of the moratorium.

Evictions for non-rental lease violations (unauthorized occupants, disturbing the quiet use and enjoyment of the neighbors, etc.) and non-renewals/lease terminations are not affected by the CDC eviction moratorium and currently can move forward as usual. The moratorium did not cancel or suspend rental payments, but basically guarantees that a tenant cannot be evicted for non-payment of rent.

While this moratorium is in place, if your tenants reach out to you to accept payment from a rental assistance program or want to try and work out a payment arrangement, you will want to think strongly about this before saying no. These rental assistance programs might be your only chance to receive payment for at least part of the rent owed while the moratorium is in place.

As all of us know, things are still changing rapidly. Please feel free to reach out to me or John in my office to see if there have been any more developments or updates. I hope you and your families are staying safe and healthy.

— Michelle Rawn ► Join Michelle on Feb. 27 for a free, four-hour workshop that’s focused on succeeding with Section 8.

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

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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 MMXXI 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 MMXXI 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 MMXXI 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 MMXXI 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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How NOT to Wholesale a House

By Hampton Scurlock As an investor, I often respond to ads or properties/deals listed for sale by wholesalers. I wanted to share a recent experience with you as an example of what not to do if you are trying to wholesale a house.

I contacted a wholesaler about a “great deal on a house” that they advertised. Before I called them, I noticed that: ● They did not list the address or price or even ZIP code (unfortunately that is a common practice with wholesalers). ● They did not have interior pictures. ● They did not list an After Repair Value (ARV) or provide comparable sales (comps) or a list of repairs needed/repair estimate for the property or even say if it is move-in ready or needs rehab. ● They did not list approximate square footage or a bedroom and bathroom count.

I decided to call anyway and get more information on this “great deal.” The wholesaler did not answer the call, but she did eventually call back. When she called, I asked for more information on the “great deal” property.

She said it has 2 or 3 bedrooms and asked me when I wanted to see it. I explained I needed an address and price first (and preferably pictures as well as repairs needed).

She only reluctantly gave comparable sales (comps) after I asked a couple of times, and it turns out that the comps were from a realtor on houses that were in tip-top shape and much bigger and probably much nicer than the property she was talking about, but she still wouldn’t tell me what area the house was in.

I asked repeatedly for an address and price, and she wanted me to schedule an appointment to see the property first. I informed her that I look at a lot of properties and need the address to run my own comps and check on the floodplain and other information.

I then informed her that if the price was too high or the property wasn’t what I was looking for, then I wouldn’t waste her (or my) time looking at it. She seemed a little upset that I wanted this information and that I was so blunt.

Finally, after trying for several minutes, she finally gave me an address to the property but would not give me an asking price. I told her I need a price to evaluate if the house is even worth seeing.

Continued on Page 32

Copyright MMXXI 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 MMXXI 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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Revealing the 2020 Ed Melton Award Winner Harry Borders named latest recipient at KREIA’s Virtual Holiday Party Congratulations to Harry Borders, the 2020 recipient of the Ed Melton Award, the recognition given annually at our November meeting to a KREIA member who has contributed to the growth and success of our real estate organization.

Harry is the 23rd person to have received this prestigious award, which was established in 1998. The award was created in memory of Ed Melton, who was a great advocate of KREIA and an encourager of its members, especially those just starting out in real estate investing.

KREIA’s board set the following criteria for selecting the recipient: 1. Contribution to membership education Harry Borders taught a crowd of investors about asset protection during a 2. Development of fellowship KREIA retreat last year. He was assisted by paralegal Renee Buster, right.

3. Active recruitment of KREIA members Gosh, I can’t even recall. I’ve been going to KREIA since 4. Active participation in the real estate industry the Masterson days.

What led you to get started with investing?

Harry is very passionate about real estate and goes above MANY years ago, I met a gentleman named Warren and beyond meeting all of the qualifications to receive this Jackel in a closing. I asked him when he was moving to his honor. new house. He said, “I’m not moving in — it’s a rental Harry spends hours educating investors in classes and house.” That was literally the first time it ever occurred to networking events throughout the year. As a real estate me that people bought houses to rent them out for money! attorney with Borders & Borders, Harry stays on top of the I saw Warren a few weeks later and he was buying another ever-changing rules and regulations that affect real estate, and he is always thinking of unique, out-of-the-box ideas to rental house. And the light bulb went off... if Warren does this, I bet others do as well. Maybe my office could focus on help investors succeed. representing investors in the future! That led to my love of Harry has more than 20 years of real estate experience real estate investing. And after watching all the other — with wholesaling, flips, buy-and-hold and Airbnbs. He investors making money, I eventually decided it made sense lives and breathes real estate.

— This introduction comes from Michelle Rawn for me to do the same thing. So, I fired my stockbroker and and notes written by the late Hank Schildknecht started buying real estate. BEST financial decision I could’ve ever made!

Ed Melton was known for his win-win-win transactions.

Q&A With Harry Borders What is a win-win-win deal for you?

For me, a win-win-win comes in the form of KREIA. There Please tell us about yourself!

I’m 29 years old and I’ve been doing closings for 29 years. is such a HUGE ABUNDANCE mentality with the members.

Everyone bends over backward to help the next person Weird math, I know, but it’s true! I have 4 kids and 3 step wanting to learn. That’s how I learned... from Chris, Mike, kids and an amazing partner/soon-to-be wife, Jill Pawlicki.

Wayne, Hank, Joe, George, Dennis, John, Frank, Mark, Katie, What are your hobbies? What do you do for fun?

Rue, Joe, etc. etc. etc. And I absolutely LOVE meeting new Woodworking, cooking, and traveling. Jill and I go every year to Central America to build houses for families in need. folks and giving them some free info on how to do this thing Many KREIA members have joined us over the years! We’re called real estate investing.

You’ve said people shouldn’t get in line behind you at going again next year! Join us!!!

Home Depot. Why is that?

How did you find out about KREIA and when did you Continued on Page 24 join?

Copyright MMXXI 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 MMXXI 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 Above: Lunch & Learn host Ed Gibson stepped up and did double duty as the guest speaker as well as host at the January 12th event. They put us in the “big room” at Martin’s Bar-B-Que. At Left: Ed, a longtime real estate investor, answered questions from the room and talked about keeping your rentals at a safe debt coverage ratio. Watch KREIA’s Videos page for the replay of this event, coming soon.

KREIA

Photos

photo by bruce w. hinson www.obedientcamera.com

photo by alexis fentress

Please help us with February’s issue! Email some photos to

kreiaphotos@gmail.com

Above: KREIA Past President Frank Miller and son Blake helped host our virtual Holiday Party.

At Left: KREIA members turned out for the first Happy Hour of the year on a chilly January 7th.

Copyright MMXXI 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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2020 L.O.T.S. Updates

Review of Project Outcomes

L.O.T.S. – or Learning on the Site – is one of the biggest benefits of being a KREIA member! We get to see projects in action, under construction, before the owner implements her exit strategy. In 2020, we had a variety of opportunities to see experienced investors turn their projects into masterpieces – even if we saw them virtually, via Zoom call.

If you would like to submit your project to be considered for a L.O.T.S. event, please write cocoordinator Michelle Rawn (michelle@rawnlawfirm.com). Remember, we notify members about L.O.T.S. events via email, so make sure you are subscribed. L.O.T.S. events happen the Tuesday following the main meetings and begin at noon.

– Nina Musgrave

ADDRESS ZIP PURCHASE EST. ARV LIST PRICE SALES PRICE L.O.T.S. DATE 1027 Beecher St. 40215 $ 17,000 1/28/2020 Airbnb Rental 6344 Doe Run Road 40216 $ 89,500 $169,900 $174,000 $175,000 3/3/2020 9104 Lakeridge Dr. 40272 $ 113,000 $235,000 $235,000 $235,000 6/2/2020 905 S. 47th St. 40211 $ 52,116 $245,000 $248,000 $215,000 6/30/2020 4571 S. 2nd St. 40214 $ 95,000 $200,000 $199,000 $200,000 7/28/2020 6712 Arbor Creek Dr. 40228 $ 115,000 $44,055 $155,000 $156,000 9/1/2020 316 A Vest Road (Henryville, IN) 47126 $ 70,000 $ 152,000 $152,900 9/29/2020 2623 Allston Ave. 40210 $ 76,000 $ 148,000 $148,000 $148,000 10/27/2020

HOSTS Barrett Goff Bryan Gillespie John Jones Dr. Madeline Hicks* Wendy Kays Joe Worth & Grace Guo Jacqueline Smith Donnie Adkins

* Dr. Madeline Hicks had a preapproved buyer at her listing price, but a low appraisal killed that sale.

Due to the pandemic, we missed out on holding L.O.T.S. events following our March and April main meetings. All the L.O.T.S. events that followed we conducted virtually as Zoom calls. The best part about going virtual is that you can take a tour of these rehab house projects via video. To see the videos, KREIA members can log in at kreia.com and visit the Members Only/Videos page.

For all these L.O.T.S. events, with the exception of the September 1st event when we had technical difficulties, you can also refer back to your monthly newsletters to read recaps of the rehab project and see the hosts’ numbers.

If you can’t find your newsletters, or if you’re a new member who hasn’t received any newsletters in the mail yet, you can read these back issues of the newsletters online by visiting the Members Only/Meeting Archive page.

Here’s a guide for where you’ll find the L.O.T.S. articles: ● Barrett Goff hosting at 1027 Beecher St. – Page 20 of the February 2020 issue. ● Bryan Gillespie hosting at 6344 Doe Run Road – Page 21 of the March 2020 issue. ● John Jones hosting at 9104 Lakeridge Dr. – Page 19 of the July 2020 issue. ● Dr. Madeline Hicks hosting at 905 S. 47th St. – Page 19 of the July 2020 issue. ● Wendy Kays hosting at 4571 S. 2nd St. – Page 19 of the August 2020 issue. ● Jacqueline Smith hosting at 316A Vest Road – Page 19 of the October 2020 issue. ● Donnie Adkins hosting at 2623 Allston Ave. – Page 19 of the November 2020 issue.

This year we also asked our L.O.T.S. hosts some followup questions. Read on for their responses.

► DID YOU STAY WITHIN YOUR BUDGET, TIMEFRAME AND SCHEDULE? Bryan Gillespie: I probably went about $5,000 or $6,000 over budget. It took a month longer than anticipated, because we were trying to coordinate with other subs and working around their time.

John Jones: Yes, this was one of the better rehabs that was on plan and budget.

Dr. Madeline Hicks: Our original timeframe was to be complete in four months. This was possible. But when the first contractor was nearing this date, he slowed up on the project and was eventually replaced with another contractor who finished the project. He was fitting us in and delayed the project further.

We actually finished in seven months. This was not bad for a house that was in such poor shape when we started.

We believe that the house had been vacant for about eight years. It was a major rehab and had been a home for a racoon family.

We went over budget by about $5,000. This included adding a garage and some additional plumbing and miscellaneous odds and ends that the first contractor did not complete.

Wendy Kays: The timeframe of the rehab took longer than expected. The biggest issue was getting inspections done by Louisville Metro in a timely manner. There were also some issues with materials being on backorder.

Jacqueline Smith: Budget, yes. Timeframe took us around a month or two longer than we originally thought – only because we did all the work, and my husband was working full-time then.

Donnie Adkins: Yes, this project was under budget and on time.

Continued on Page 22

Copyright MMXXI 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 MMXXI 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 MMXXI 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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them. We knew that we did not have a good comp on the street. But we thought that much-improved appraisals in nearby communities would help us. They actually hurt us.

Wendy Kays: I would have done more research on the ► DID YOU USE THE EXIT STRATEGY YOU ORIGINALLY neighborhood and the rental units next door. I wouldn’t do INTENDED? another flip with a multi-unit next door. Had it remained a Bryan Gillespie: Yes, I ended up selling the house. rental, it would have been fine.

John Jones: No, I originally was going to hold this Jacqueline Smith: Probably a lot of the same. We property. After making the drive several times I decided not to hold a property so far away. COVID influenced this needed to do most of the work ourselves on our first couple of flips. That way on our next couple we can move decision as well. faster and hire out things that took us forever! Like Dr. Madeline Hicks: We planned to sell to a singlepainting. family homeowner. We did that.

Donnie Adkins: Honestly, this was a stress-free flip, more Wendy Kays: We did end up flipping the property as so because it started out as a rental. I wouldn’t change planned but did have a backup plan of renting the anything about this home. property if it didn’t sell quickly due to COVID and the winter months. However, it went under contract quickly.

Jacqueline Smith: Yes. We purchased it to be flipped. ► WHAT WAS THE BIGGEST LESSON YOU LEARNED IN WORKING ON THIS PROJECT? We were happy the market kept increasing in our area Bryan Gillespie: To communicate with the owners and from when we originally purchased. Our plan was to list work with them on a foreclosure. To understand the at $119k, and we ended up going with $147k. So, a big situation they’re in instead of just showing up from the difference! court and saying, “I’m going to evict you.” Work together Donnie Adkins: No, my initial strategy was to use this home as a rental. It’s located in a great neighborhood, full and help each other out.

John Jones: This project reconfirmed that the less we of homeowners, and my rent projection was high. Because have to do on a property the better the profit margin and we purchased it correctly, we had the opportunity to do schedule. some nice updates, such as tile in the bathroom, LVP Dr. Madeline Hicks: If you do not have great comps on throughout, additional bedroom in the full basement, and your street or, sometimes, your block, you are very likely we updated the half-bath to a full bath. not to get as much as you would like. I am still trying to ► WHAT, IF ANYTHING, WOULD YOU DO DIFFERENTLY IF figure out the contractor issues. Wish I had a great answer to that. I really need someone that I can trust to do what YOU WERE STARTING WORK TODAY ON THIS HOUSE? Bryan Gillespie: My biggest challenge was that there they say and who will follow the contract unless there is a was still someone living in the house. The gentleman had change order.

Wendy Kays: Stick to the areas you know best. lost his job. How we worked together on that was that I Jacqueline Smith: Definitely what is worth hiring out helped him move. The only thing that I might have done differently, had I known of the extra two months it would and not. Going through and doing it ourselves helped us see how little/much time a certain job took us compared to take to move him into a new home, is I might have chosen a house that was vacant instead of occupied. But what it would be hiring out.

Donnie Adkins: My biggest and constant lesson is giving in the end it worked out. He was happy. In the end I myself enough time for mistakes and COVID. Ordering would do it again. windows took double the amount of time, wood was superJohn Jones: Nothing. Again, this was a rare one that expensive, and contractors could pick and choose projects. I went very well and stayed on plan the whole way. now give myself a one- to three-month window on flips: It Dr. Madeline Hicks: I would have used another helps keep my anxiety low. We also have two trusted teams contractor. I would not have allowed an appraisal for that can do work for me at an awesome price. purchase until the house was completely finished, so it would look its best. The house was undervalued by appraisal. It was listed for $248,000. I got a contract for ► WHAT PROJECTS ARE YOU WORKING ON NOW? Bryan Gillespie: I actually have two more houses I’m in $248,000. My buyer was approved for more than that. the process of renovating. I’m going to add them to my The appraisal killed the sales price.

We ended up selling for $215,000... a disappointment portfolio and keep them as rentals.

John Jones: We have a duplex on 3rd St., a triplex in for my company and for the neighborhood. Many homeowners on the street are wanting to borrow money Clifton, a SFH near the Zoo and a SFH near U of L. We Continued on Page 26 to rehab their houses. Such a low appraisal will hurt 2020 L.O.T.S. Year in Review: Q&A Continued from Page 19

Copyright MMXXI 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 MMXXI 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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arrest him. These sellers really just want to sell. It’ll be OK.” Local attorney leaves and comes back to finish signing. Well, there’s a uniformed St. Matthews police officer waiting for him. He walks across the parking lot and the police officer Oh, don’t get me started... so many folks don’t handle walks up to him and, when I say she frisked him, I mean she their entity finances correctly. If you ever get behind me at Home Depot, you’ll see how to do it correctly. AND you’ll be frisked every single inch of him. He finishes signing and thanks me for embarrassing him in front of everyone. mad you’re standing behind me!

Whatever! It was wild. I never knew a human being could How has COVID-19 affected your rentals and Airbnbs? scream as loud as this dude screamed in that closing.

Traditional rents have held up For all the brand-new investors out there, can you tell just fine, with just a few excepthem whether or not they need to create a business entity tions. Short-term rentals... our before they start doing deals? calendar for 2020 was REALLY As soon as you own real estate and either rent it out or strong... until COVID hit. Then we fix it up, you need an LLC. I tell all my client friends, “Come got beat up pretty badly. But our see me every single December so we can see what you did 2021 calendar is already better the last year, what you think you’ll do the next year, and than the 2020 calendar so we’re we’ll together figure out if we need to put another piece of excited about 2021! the Asset Protection Puzzle together or not.”

Do you think COVID-19 has Does a “new investor done good” story come to mind? damaged Louisville’s Airbnb TONS of them... just look around. There are so many new market? folks doing amazingly well! Heck, look at the KREIA Harry joined the Holiday So many short-term rentals Party Zoom call from his leadership team. SOOO many young, excited, successful have been converted to longphone mid-broadcast to new faces. It’s just awesome! term leases as a result of the accept the award.

What are the biggest mistakes you see new investors pandemic. I expect some to making most, and how can they prevent them? come back, but certainly not all. It felt to me that we were MY biggest mistakes ALL stem from me thinking I knew saturated with short-term rentals. It doesn’t feel that way more than I did. We don’t live on an isolated island. Today, I any longer. literally never buy a property without consulting with In the past you’ve said you offer KREIA members and someone wiser than me. new investors your forms for free. Do you still do that?

What’s your best piece of advice for new investors?

My dad taught me on Day #1 at the office... if you worry Ask questions. Read books (I literally read Landlording on about the money, you’ll always worry about the money. If Autopilot every single year). Join KREIA. REALLY join KREIA. you worry about the client, you’ll never worry about the Participate. Educate. Learn. HAVE FUN! Who you spend time money. I never charge for forms of any type, and I am a collector of real estate forms! I never charge for a sit-down with tells a bunch about your priorities. Successful people hang out with successful people. visit with new folks interested in jumping in. I never charge What question did we not ask that you’d most like to for phone calls. It’s just the way my Dad taught me. And, so answer? far, I haven’t missed a meal or a mortgage payment in 29 Harry, do you know any good lawyer jokes? Well, yes, years! Thanks, Dad! yes, I do.

What is your typical day like at Borders & Borders?

A guy walks into a bar and yells, “All Lawyers are Scum 1/3 doing closings. 1/3 answering emails. 1/3 returning Bags.” He takes a drink and calms down. Then he yells out calls. We do “happy law,” so I LOVE coming to work and again, “All Lawyers are Scum Bags.” helping people succeed!

He does this several more times until another guy down How has COVID-19 changed your typical day-to-day?

I HATE it. I’m a hugger. It kills me to not show affection to the bar walks up to him and says, “Hey, buddy, I gotta tell you, I don’t appreciate you saying such things.” the people I care about. But, as the Buddha said, “This too The guy says, “Oh, I’m sorry, are you a lawyer?” shall pass.”

To which the other guy says, “NO, I’m a SCUM BAG!” :0) The weirdest thing you’ve seen happen at a closing?

Anything you’d like to add?

I could write a book of stories! Weirdest one? Local I cannot tell you how honored I am to be named the Ed attorney is buying a property. He is beyond mad that I Melton winner this year. Ed was an incredible human being. charged him for a title exam (albeit at a discounted price).

And I look on in amazement at the other winners. All I can He screams and shouts and smashes a chair to pieces.

Literally. As I invite him to leave, in walks two off-duty police say is WOW, thank you all for the amazing award! I’m beyond touched to have received it! officers coming to arrest him. I told them, “Please don’t Harry Borders Named Ed Melton Award Recipient Continued from Page 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.

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Copyright MMXXI 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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2020 L.O.T.S. Year in Review: Q&A Continued from Page 22 plan to hold them all but may retail the one near the Zoo if the market stays as strong. We just picked up a house on S. Shelby that we may wholesale.

Dr. Madeline Hicks: I have taken a break during the uptick of COVID here. I hope to be back in the spring.

Wendy Kays: Looking for the next project :) Jacqueline Smith: Right now we have two flips going.

One of them we have contracted everything out, and the other we’ve been doing a mixture of both. We are trying to grow this year, so we are utilizing private money as much as possible.

Donnie Adkins: We recently ventured into the bar and restaurant industry. We are the proud owners of one of Louisville’s oldest African American bar and restaurants.

With this new adventure comes an opportunity to purchase distressed property around in the neighborhood. Over the last 30 days, we’ve already purchased two homes – one is ready for rent and the other is currently under rehab. ► WHAT ADVICE WOULD YOU GIVE A NEW INVESTOR LOOKING TO FLIP A HOUSE? Bryan Gillespie: I had a client who was a first-time investor and they were renovating a house to build a rental portfolio. We converted it from a 2- bedroom into a 3bedroom to increase profits on the rental. New investors should look for opportunities to increase value.

John Jones: Know your costs. That has been our biggest issue this past year. Prices increased even before COVID, and we are reworking our repair costs for estimates.

Dr. Madeline Hicks: Get as much mentoring as you can.

Learn your neighborhood. Start with a small project. Pick your property carefully. Don’t be so eager to start that you take the first project that you are able to get.

Have your contractor do an inspection below the subfloor if your house is on a crawl space. Have another investor weigh in on your choice of property if you can.

Wendy Kays: Have your contractor(s) lined up in advance of purchasing your property and make sure your rehab scope is solid.

Jacqueline Smith: Don’t be afraid to use private funding or partner up with someone. Our L.O.T.S. house (1st flip) we had a friend that wanted to partner with us and he paid for the purchase price and we did all the rehab. It was a great way for us to get started, and we split the profits 50/50.

Donnie Adkins: Each home is an opportunity to create value for a family and the neighborhood. With each house flip and rental, we do our part to fight blight in our community.

Copyright MMXXI 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 MMXXI 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 MMXXI 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 MMXXI 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 MMXXI 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 MMXXI 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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Hampton Scurlock: How NOT to Wholesale a House Continued from Page 14

Mike Butler: Beware of ‘Secret Shoppers’ Continued from Page 6

It turned out she didn’t even have a contract on the house and was just seeing if she could “help the seller and find a buyer.” She finally told me what the seller’s asking price was and that they were firm on their price and also that she had to add her fee to the price.

The house was overpriced – actually, it was priced more than twice as much as a similar house I had just purchased a block away less than a month ago.

I told her I was not interested and did not want to see the property. She seemed offended that I didn’t want to see the house and she told me my numbers were wrong. I told her where to find the information on the PVA but didn’t argue with her and politely kept the conversation going.

I asked her how she could expect to sell this “great deal” if she is not providing any information to potential buyers and did not even have a contract on the property. She did not have an answer and the conversation concluded quickly.

There are so many ways to wholesale a house, but this interaction certainly reminded me that there are many things that you shouldn’t do. Here are some of the don’ts of wholesaling:

buying, selling, financing, renting and more – all residential properties. Commercial properties are exempt.

My good friend and attorney Harry Borders just told me he has already had two local investors who violated Fair Housing with these secret shoppers.

Keep Your Nose Clean. Prepare properly and look for me and Harry to do a LIVE training on how to protect yourself from these sneaky tactics.

Stay Safe,

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, and the author of the bestselling real estate book “Landlording on Autopilot,” now available in its 2nd edition.

● Don’t inflate comps or use houses that are a lot bigger or have more bedrooms/bathrooms than the house you are wholesaling. I see this too often. ● Don’t underestimate repair estimates (or tell buyers it just needs paint and carpet when it needs a full rehab). ● Don’t forget to think about your end buyer. They need to buy the property at a significant discount or they will just buy a different property. Also, they are the one taking the risk and spending their money and are purchasing this house to make a profit. ● Don’t waste your or other people’s time or overprice your deals. ● Don’t put a house under contract that you can’t buy yourself or cannot get the contract sold before the contract expires. Think about the sellers. ● Don’t get upset or argue if your buyer has different numbers than you (comps, repairs, etc.). ● Don’t be afraid to ask for help. There are many KREIA members who can help you with wholesaling or analyzing a potential wholesale deal.

Hampton Scurlock is an investor and KREIA board member who loves real estate and is always looking for deals on properties. Join Hampton at the KREIA Happy Hour and Game Night events on the 1st and 3rd Thursdays of each month. He is happy to help KREIA members learn about wholesaling and evaluating deals.

Copyright MMXXI 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 MMXXI 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 MMXXI 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 MMXXI 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

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THE Local Resource for Landlords, Rehabbers & Wholesalers Meeting the 4th Thursday of every month (except November & December) virtually while COVID-19 restrictions are in force.

KREIA.COM • twitter.com/reiaky • instagram.com/reiaky • youtube.com/reiaky facebook.com/reiaky (public) • facebook.com/groups/kreiaky (private)

UPCOMING EVENTS

Road Map to Real Estate Wealth

❖ Feb. 9th — Noon-1:30 p.m. Lunch & Learn. Meet up for Are you meeting your goals and benchmarks in your real estate education and networking. Members only. You buy your own lunch. Ed Gibson hosts. Speaker info will be emailed to you. investing plan? Or maybe you need to create that plan in the first place? Come to KREIA’s virtual meeting and nail down those Please bring a mask and observe all COVID-19 rules. action items! Speakers include Erik Hitzelberger, Mike Fallot and ❖ Feb. 18th — 6 p.m.-8 p.m. KREIA Game Night: CashFlow.

Want to get out of the Rat Race? Play the CashFlow board Harry Borders. Jan. 28, 5-9 p.m. ➢ Early Meeting: Rebecka Taasaas explains security monitoring game with other investors pursuing financial freedom. ❖ Jan. 30th — 9 a.m.-4 p.m. Saturday Workshop (Virtual). The Everyone invited. Hampton Scurlock and Alexis Fentress host.

Held at Martin’s Bar-B-Que Joint (East End). Bring a mask. three speakers and four panelists from Thursday night’s main meeting return and roll up their sleeves. Early-bird pricing!

Main Meeting Calendar ❖ Feb. 2nd — noon-1 p.m. Virtual L.O.T.S. event. We visit Here’s what’s coming in the months ahead: another member’s active house rehab project via Zoom call.

• February 25: Tax Update with Mike Grinnan Members only. Watch for your email invitation. th • March 25: Wholesaling with Vena Jones-Cox ❖ Feb. 4 — 5 p.m.-7 p.m. KREIA Happy Hour. Networking at Martin’s Bar-B-Que Joint (East End). Everyone invited. Hampton • April 22: Rehabbing for Big Profits • May 27: Foundations of Finance with Erik Hitzelberger Scurlock and Alexis Fentress host. Please bring a mask.

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