March 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 3-21 March 2021 President’s Letter

1

Paid Advertising Rates

2

Vena Jones-Cox: The Guide to Wholesaling in 2021

3

Saturday Workshop: Build a 6Figure Wholesale Business

4

Welcome, New Members!

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Mike Butler: Rental application screening tips for smart landlords

6

Michelle Rawn: Courts Update

10

KREIA 2021 Elections preview 10 Government Affairs Links

10

Sharon Vornholt: Why isn’t your 14 marketing working?

Hampton Scurlock: What I learned by playing ‘CashFlow’

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KREIA Photos

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L.O.T.S. Recap: Frank Miller flips 21 a hoarder condo for $40k profit Eric Shadowens: Get a tax deduction for your home office

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National REIA News Briefs

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Calendar of Events

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Dear KREIA Members and Friends, Yay, yippee, heck yeah, ’bout time and hallelujah! These are just a few of my thoughts today while listening to optimistic predictions and news of vaccination statistics. The COVID pandemic may be headed for the rear-view mirror. And the U.S. and world economies come raging back as the world resumes where it left off just over Chris McCarty one year ago. Unemployment is falling, mask mandates are being lifted, and the business segments that were most adversely affected by the shutdowns are beginning to feel the optimism and changes in consumer behavior and spending.

The U.S. government printing presses are pumping additional trillions through quantitative easing and stimulus checks to individuals, corporations, cities and states, and anything else deemed to be in trouble. No one knows for certain, and it’s difficult to say, what the long-term challenges created by this government spending will be for the future, but this is the current U.S. monetary program.

Keep your fingers crossed that this program works long-term!

As real estate investors involved in all aspects of the market, we have mostly been immune to any pandemic-related financial fallout. Everything I hear and read says that for 2021 and 2022, real estate will continue to prosper: limited inventory, low interest rates and very high demand will continue to produce very positive outcomes for all investing venues. If you are on the sidelines, jump in and get started. If you need help, attend our events, reach out, participate, or raise your hand. KREIA is here to help, and we have many tools and resources available to help the membership succeed.

We have been advertising that the March 25th main meeting will hopefully be the last Zoom-only meeting as we begin to open up as a group to public gatherings Continued on Page 38

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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30 Days to $10K: How to Wholesale Houses in 2021 Vena Jones-Cox on what’s working in this low-inventory, high-demand market Everyone knows that wholesaling is the quickest and easiest way to put cash in your pocket in the real estate business.

The problem is, most people don’t actually understand what it really takes to do wholesale deals in today’s seller’s market.

Vena Jones-Cox does, because she wholesales a deal about every 12 days, and she’s been doing it for over two decades in hot markets and cold. She’ll share her in-thetrenches experience with us at our March 25th meeting.

Attend, and you’ll find out: • How wholesaling works today — it’s a very different business from what it was even a year ago — and what you need to do to get started right now • Which properties in which areas make for the most profitable, easiest-to-sell wholesale deals, and which you should avoid because they’re huge time-wasters • How to make the right offer — the one that will make you $7,000, $10,000, or more in cash in just a few days — every time • How to put a property “under contract” in a no-risk way that allows you to get out if you can’t sell the deal, literally without using any of your own money • How to get your cash up front, before the closing, and never have to buy a wholesale deal before you sell it!

There’s so much misinformation out there about what it takes to wholesale houses. The truth is, it’s a 5-step process.

You can’t skip any steps, and there’s no need to add any. And if you’ll just do them over and over again, those 5 steps will end with a check for $7,000-$10,000 in your pocket, over and over again.

If you’re not sure what the steps are, watch this video lesson from Vena: https://bit.ly/k2103vena Vena is famous for her no-B.S. teaching and her Vena Jones-Cox ability to simplify tough concepts so that even a brand-new investor can easily grasp them. Whether you’re a brand-new wholesaler or an experienced entrepreneur struggling to make more and better deals, you’ll learn something that will add to your bottom line. So bring a notepad, bring a friend, and get to this meeting — it will change your financial life forever!

Illustration by Nina Musgrave

Vena Jones-Cox has been a full-time real estate investor since 1989. “She’s bought and sold over 1,000 deals and has written the definitive home-study program on how to flip properties quickly and easily.” She’s the past president of the National Real Estate Investors Association and has appeared in Money Magazine, Reader’s Digest, Smart Money, and a host of other national publications. Vena is the Executive Director of Cincinnati REIA. Vena’s presentation starts at 7 p.m., but you'll want to log into the Zoom call earlier to also catch these features: 5 p.m. - 5:30 p.m., New Member Orientation: Want to know what KREIA can do for you? Jordan Pohn and Stacey Duvall will fill you in.

5:30 p.m. – 6 p.m., Early Meeting: Chris Wakild educates us on tax liens.

6 p.m. - 7 p.m., Announcements. In this hour you’ll hear the Legislative Update with attorney Michelle Rawn, along with some Advertiser Pitches and Property Pitches.

Register now for this meeting at kreia.com. It's free for active KREIA members and non-members alike! Got friends who are interested in real estate? Advise them to create a free-level KREIA account and attend this event.

Saturday Workshop: How to Build a 6-figure Wholesale Business Vena returns on March 27 to take us on a deeper dive! ► Register now for this workshop, discounted for active KREIA members, and read more about it on Page 4.

5:30 p.m. Early Meeting: Chris Wakild Looking for a safe and secure investment, one that pays about 12% interest? Attorney Chris Wakild gives us an overview of tax liens.

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!

Tonya Allen Mel Barker Amanda Brookshire Daniel Close Jenna Hammons Josh Hanes Joshua Hernandez David Ising Bruce Jackel Paul Logsdon Perry Long

Jeremy Morgan Lanisha Porter Mike Shugart Matthew Skrief Jeremy Smith Sean Stewart Harshil Swaminarayan Bill Tedrow Angie Tonini-Rogers Stephanie Wood

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 March 25.

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: How to Build a 6-Figure Wholesale Business The next 24 months are going to make — and break — a lot of wholesaling businesses.

On the one hand, if you know how to get off-marketing leads, and how to get help to deal with all those calls and deals, and how to work with the many institutional sellers who are going to have great deals to sell this year, you will KILL it…

And if you don’t, you’ll be no better off a year from now than you are right now.

In this 5-hour online bonus workshop, Vena Jones-Cox takes you to the next level in your wholesaling efforts, by peeling back the curtain and showing you the real from-thetrenches secrets of a 6-figure wholesaling business — that gets even BETTER in a buyer’s market.

In this 5-hour Zoom workshop you’ll discover: ● How to get away from the terrible marketing most real estate investors do and get your phone ringing off the hook with what you need most: motivated sellers ● The inside secrets of working with the kinds of sellers that other wholesalers can’t: banks and other institutions (who are about to have BUNCH of inventory) ● How to hire the help you need to handle the day-today work of a busy real estate business, cheaply and without renting office space ● Things to do and traps to avoid to get your next payday in the next 30 days ● Plus your questions and Vena’s answers Register now at kreia.com to join us for this info-packed, high-intensity online seminar. Be sure to register now so that you can get in with half-price early-bird pricing. ► Who: Vena Jones-Cox, national real estate speaker/trainer ► What: Next-Level Wholesaling Workshop ► When: Saturday, March 27th, 9 a.m. – 2 p.m. ► Where: The Internets! A Zoom call ► Cost: $97 for members, $147 for non-members; or earlybird pricing of $49 for members, $97 for non-members

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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Rental Application Screening Tips for Smart Landlords 7 stealthy double-knot SPY tips to cut through the B.S. in 15 minutes or less

By Mike Butler We live in a lawsuit-happy society that hates Mom & Pop investors, landlords, property managers and rental property owners.

This article is going to give you some neveror seldom-shared tips you can use to process your rental applications in 15 minutes or less.

But first, you must cover these well-known ground rules before we get into the stealth tips: ✓ FAIR HOUSING LAWS – Federal, State and Local – you must be in compliance. Violating these can be a federal crime with serious penalties and even prison time. Ignorance of the law is not your get-out-of-jail-free card. ✓ LANDLORD/TENANT LAW – make sure you grab the “REAL” Landlord/Tenant law for your state, city and county.

Be careful and do not just “Google it,” because you could end up with the pro-tenant, anti-landlord version created by the free attorneys for tenants. Get the real law from your state capital website. ✓ SPECIAL UNIQUE FORMS – Get more info, such as the EPA booklet if your rental unit was built before 1978, and read up on animals in your units. ✓ DOCUMENTATION – in today’s world, there are boatloads of free technologies you can use to document every step in processing your rental application – everything from Google Drive to EverNote to CRMs. ✓ YOUR RENTAL APPLICATION – make sure you include your qualifying criteria in writing, in the fine print. ✓ FAIR HOUSING LOGO – this little logo must be on every document in your real estate business that involves residential housing of any kind. Just go Google “Fair Housing Logo” and you can get it for free. (This includes your yard signs, business cards, flyers, websites, and on and on.) ✓ BASKIN ROBBINS “NEXT” SYSTEM – properly utilize your free technologies and odds are, you should be using an online fill-in-the-blank form that automatically emails to you when submitted. This email has your date/time stamp on it.

Use it just like Baskin Robbins does… Take a ticket, take a seat. To make it simple and safe for you regarding CYA, process one application at a time based on first submitted.

Do NOT take sneak peaks at those that come in later. The first application that meets your qualifying criteria? That person gets approved and rents your home. But what about the others who have already paid their application fee when an applicant in front of them gets approved? Call these applicants and let them know that the application before them qualified and was approved. Let them know you have

not started processing their application yet and give them a choice – offer to refund their app fee or pre-approve them for the next available home. ✓ UNAPPROVED APPLICATIONS – in Kentucky, you MUST Save ALL of your unapproved applications for 7 years. This might be a surprise to you as it was a surprise to me too, years ago.

Make sure you are in compliance on all of the items above. Okay, now let’s take a look at things that get overlooked many times.

CURRENT & PREVIOUS ADDRESS How long have they lived there? If their rental history shows short-term stays and/or Mom & Dad, not a good sign.

The next step is to go online to find out who owns the current and previous properties. Not perfect, but it might help verify who they say are the owners/managers.

Google their current address – take a look at Google’s street view and satellite view. Does their current address match the neighborhood of your rental unit they are applying for? The old saying “a picture paints a thousand words” is true. The satellite view might show five or six cars in the backyard, etc.

PHONE NUMBERS Many professional tenants will give you all kinds of fake phone numbers to baffle you with their B.S. This happens much more than you might imagine.

Take a look at all of the phone numbers on Page 1 of your rental application.

Use the online Reverse Phone Number lookup provided by the “White Pages” phone book. Many times you will find that the same phone number for owner/manager is again displayed in the Emergency Contact phone field and sometimes even more.

You will find many times where an applicant asks a friend or family member to play the role of the current landlord when applying for your rental. If your gut suspects this might be going on, do this to stop the fake B.S.: Call this so-called owner/manager and ask for them by their first name. Take a look.

“Is this Ralph? ... Yeah, Ralph, I’m calling about your home for rent.”

Ralph immediately responds, “I don’t have any house for rent.”

BINGO, bull’s-eye!

Ralph did promise your applicant to pretend to be their Continued on Page 28

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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Update on the Courts

By Michelle Rawn As you are aware, the CDC issued an eviction moratorium for evictions for nonpayment of rent currently extended through March 31, 2021. As of this writing, it hasn’t been extended. Also, the Supreme Court of Kentucky has mandated that the 30-day nonpayment of rent letters for those tenants and properties previously covered under the CARES Act will revert back to a 7-day letter effective April 1, 2021.

The CDC moratorium is nationwide but applies only to evictions for non-payment of rent where all adults on the leased premises have submitted a signed CDC Renter’s Declaration. Kentucky is still for the most part not permitting any questions to the tenants who have submitted the Declaration. The Kentucky courts are a little more flexible with us questioning tenants if the case has been continued more than once for the tenant to apply for rental assistance.

Floyd and Clark Counties in Indiana will permit questions to the tenants to prove they fall under the protection of the moratorium and have declared in a few cases the moratorium didn’t apply, entering judgment in favor of the landlord.

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. Please be sure to review all of the requirements of the rental assistance programs as most of them require the landlord to not evict the tenant for any reason for a set time period once the funds are received, and some also require you to provide a 30-day notice going forward for non-payment of rent instead of the standard 7-day notice.

As all of us know, things are still changing rapidly. Please feel free to reach out to me or to 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 R. Rawn, Rawn Law Firm, PLLC Tel: (502) 639-9396 / Fax: (502) 276-0607 Email: Michelle@rawnlawfirm.com

2021 KREIA Election It’s time again for KREIA elections. The Election Committee would like to inform you of the election procedure.

KREIA is run by a board of directors consisting of five officers (President, Vice President, Secretary, Treasurer and Treasurer Elect), twelve at-large board members, the immediate Past President and the Parliamentarian.

The officer positions serve for a one-year term. The atlarge board members serve for a two-year term, with six new members being elected each year. There are no term limits, and all incumbents may run for re-election if they so desire.

Nominations will be taken from the floor at the April and May meetings for the five officers and six at-large board positions this year. Nominations will be closed after the May meeting, and the election will be held at the June regular meeting. Those elected at the June meeting will be sworn in to take office at the July regular meeting.

If you would like to nominate someone or if you would like to run yourself, please contact me via email at Michelle@rawnlawfirm.com or announce the nomination from the floor at the April or May meeting.

All board members are required to participate on at least one committee. Several members are actively involved with more than one. In order for KREIA to be successful, all board members are required to be active members helping at all KREIA events.

These individuals will be running for officer positions: ● John Jones – President; Erik Hitzelberger – Vice President; Stacey Duvall – Secretary; Mike Grinnan – Treasurer; Wally Kallbreier – Treasurer Elect Running for the board are: ● Alexis Fentress, Ian Hooper, John Mays, Rue McFarland, Frank Miller, Greg Nalley, and Hampton Scurlock There is still plenty of time for you to throw your name in the hat. If you have any questions about the election or governing process of KREIA, please feel free to contact me.

– Michelle R. Rawn, Chairman of the Election Committee

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 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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Why Isn’t Your Marketing Working in Your Real Estate Investing Business?

By Sharon Vornholt If you’ve ever wondered why your marketing isn’t working in your real estate investing business, I have some insight for you today. First of all, I can tell you that you’re not alone. I hear all this all the time.

My first question is, what types of marketing are you doing on a regular basis?

The next question I ask has to do with your branding.

When I ask investors about their branding, I always get the same surprised look. Then that person usually says something like, “I’ll worry about branding when my marketing is on track.”

I have to tell you, that’s not how it works. Marketing and branding go hand in hand, and you need to be working on both things simultaneously. Think of it this way:

you need at least 3 to 5 marketing strategies or ways of getting leads.

Your strategies might include: • Direct mail • Your lead generation website • Texting or ringless voicemail along with your direct mail (layered marketing) • Networking • Searching online sites for off-market leads • Wholesalers • Pay-Per-Click • Or any one of a dozen other strategies

Then, Ask Yourself These Questions: • Do I have a written marketing plan that I implement consistently? If the answer is no, this is the first thing to do.

Marketing is how you get leads. Branding is what makes Create a written marketing plan for your business.

• What about my direct mail lists? Am I them choose YOU. targeting the right group of people? The most consistent direct mail campaigns Take a minute to think about that. won’t work without a highly targeted list.

You’ve just dropped a chunk of cash • When it comes to distressed sellers, sending out direct mail campaigns can I identify the group of motivated that are pretty much getting you sellers that needs my help the most? zero results. You might be wonder• Finally, what is it I should be doing that ing if there is something wrong with I’m not doing? (You know what that is.) your phone. After all, it isn’t ringing.

No judgment here, but you do have to Eventually, you have to face the fact be honest about this.

— Sharon Vornholt that your marketing just isn’t working. You’re not getting any leads in This is your starting point. Next, you want to take a look at the door, which means you’re not doing any deals. these things: So, how do you fix that problem?

• What’s the frequency of your direct mail marketing?

Are you consistent?

Why Your Marketing Isn’t Working • Do you set aside a couple of hours each month to work If your marketing isn’t working, it’s most likely due to one on your website? You should be doing this. of these things.

• Have you set a goal to create regular content, such as a You lack consistency or you don’t have a written marketweekly video? ing plan. The other reason is that you have completely • List everything you are doing whether it is daily, neglected to build brand awareness about your business. It’s not really about who you know – it’s who knows you. Who weekly, monthly, or some other frequency, such as will think of you when they have a property to sell? More on quarterly.

If you have big gaps in your frequency, I can almost that in a minute. promise you that’s one of the problems. Marketing cannot be a hit-or-miss thing. Consistency is one of the keys to First, Let’s Take a Look at What You’re Doing generating a steady stream of leads.

When you can’t answer the question around why your marketing isn’t working, the first step is to take a look at your current marketing strategies. What are you doing on a The Next Piece of the Puzzle: Your Brand It used to be that only the big companies had to worry a consistent basis? Consistency is the key, after all. You need Continued on Page 28 to pull out a sheet of paper and make a list. Remember that

“When your marketing isn’t working, your failure to build a strong brand is almost always part of the problem.”

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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What I Learned by Playing the ‘CashFlow Game’

By Hampton Scurlock great group to learn and exchange real estate investing KREIA has a CashFlow Game Night on the principles.

3rd Thursday of each month. The event is Misty “No Relation to” Hampton: Playing the game has free and there are new people who have taught me that you have to have confidence if you want to never played the game learning from have success. The first time I played I was reserved and people who have played many times. didn’t spend any money. I watched other players win big It is a great way to learn about real estate investing deals while I held on to my money. The second time I played without having to spend money, hire contractors, or pick up I was still reserved, but still won some deals. Next time, I a paint brush or hammer. The game comes from the plan to go big or go home. company of Robert Kiyosaki, the author of the book “Rich Dad, Poor Dad.” It simulates real life real estate investing in There is also a kid’s version of the game for ages 6 and many ways and is a fun way to learn how to invest. up. During the summer months we expand the Game Night In this game the object is to get out of the rat race by to include a table where kids or adults can play the simpler investing and having passive income exceed your expenses. version of the game. We look forward to seeing you at When you have done that, you will have achieved financial freedom, which is also many people’s goal in real life. The game presents realistic scenarios where you can invest in property, wholesale property, collect rental income and/or wait and sell the property at a huge profit when certain cards are flipped.

I’ve heard a few photo by bruce w. hinson players say it has www.obedientcamera.com taught them so much about life and invest- In CashFlow there are assets to accumulate, deals to buy or reject, and financial statements to fill out.

Hampton Scurlock & Alexis Fentress host Game Nights at Martin’s Bar-B-Que Joint. ing. Other players have told me it is a way to practice for investing in real life. I Game Night the third Thursday of each month and at other know I have learned and sharpened my investment skills by KREIA events. playing this game. Here is what others had to say: The regular version of CashFlow is played at every Game Night, while the kids’ version is played in June and July Joe “My name is” Earls: It mirrors real life and can help during the summer months. The cost is nothing, but the you practice investing in a safe and risk-free environment. experience could be invaluable.

Renee “Awesomesauce” Buster: I’m a big fan of visualization. I do believe it helped me build confidence (to buy my ● first investment property) and shifting my philosophy about debt and credit. Understanding “good debt” and leveraging Hampton Scurlock is a KREIA Board member, real estate debt. investor, mentor and father of two CashFlow for Kids Jeff “It’s arms day again” O’Bryan: Be patient. It’s a long players. He challenges you to beat him at the CashFlow game, not a sprint. Sit back and enjoy the people and things Game, and you cannot win if you are not there. It’s also just around you. Think things through and ask questions. fun to come and watch/learn if you don’t want to play. Heck, Wayne “Wonderkid” Weber: Leverage, due diligence, you may even get a fun nickname like some of the silly and options, ROI, NOI, all the basics. When I was there, it was a completely made-up ones above.

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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It’s not every day the KREIA crowd gets to quiz a building inspector while enjoying delicious barbecue.

March’s Lunch & Learn at Martin’s Bar-B-Que was packed!

photo by bruce w. hinson www.obedientcamera.com At right: Louisville building inspector Amanda Jessee was the guest speaker at Lunch & Learn, which was hosted by longtime investor Ed Gibson.

KREIA

Photos

Please help us with April’s issue!

Email some photos to

Below: KREIA member Mike Kroupa had several questions for Amanda.

KREIA advertiser Gavin Shook, foreground, of Louisville Insulation, listened to the back-andforth.

kreiaphotos@gmail.com

photo by bruce w. hinson www.obedientcamera.com

Below: Alexis Fentress wrote this about KREIA’s March Happy Hour on Facebook: “The only thing we talk about is real estate, and we did it until they kicked us out!”

photo by bruce w. hinson www.obedientcamera.com 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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Fern Creek Property: A Closer Look Frank Miller buys a hoarder condo sight-unseen and rehabs it

By Lauren Willoughby What can happen when you buy a property at the Master Commissioner’s Sale – without being able to walk through it beforehand to see what you’ve bought?

Sometimes, after you finally receive the keys and step inside, what you get is a musty hoarder’s paradise. So much stuff piled up that you can’t see the walls, and walking from room to room is a trip-and-fall safety hazard.

When you see all that stuff, your heart probably slinks up into your throat as you start running the math in your head, imagining all the dumpsters you’ll need.

But if you’re Frank Miller, buying and fixing problem properties is just another day at the office. And his cleanout budget for this particular hoarder property – the condo he purchased at auction? A fraction of what less experienced investors might have paid for cleanout: only $425.

If you saw Frank’s “before” walkthrough video, you’re probably saying, “No way!” right now. But it turns out, “Yes, way!” Frank knows a source who is sometimes willing to clean out hoarder houses for cheap.

It all depends on who you know – and on the stuff.

In the case of this Fern Creek condo, at 5515 Del Maria Way, the stuff happened to be good stuff. Clothes and other items with price tags still attached. Goods that could be flipped at a flea market.

Frank’s source is willing to take stuff off his hands providing it’s something he can sell from his booth at the Peddler’s Mall. One man’s trash is another man’s treasure. Win-win.

Frank said this would not have been a good project for a brand-new investor – too overwhelming. “Buying your property sight-unseen and not knowing what you're going to get, in the interior, can really cut into your profits,” he said. But he knows contractors ready to work on projects like these.

“The most important thing to be successful in this business is to build your team.... You have to have good contractors.”

What did Frank’s contractors do to the condo? The total fix-up cost was $27,334 – they did a lot. They laid luxury vinyl plank flooring throughout. Miscellaneous leaks were repaired. The bathrooms were kitted out with a new commode, vanity and faucet. The full bath got ceramic tile walls.

Granite countertops went into the kitchen. Cabinets were painted, with new hardware installed. Frank’s workers replaced all the interior doors. All-new windows went in.

Drywall and interior painting added up to $3,650. The electrician’s bill came to $1,775. It all looked amazing.

This L.O.T.S. event was both virtual and live. It was the first time in a year that KREIA members could attend a

Frank Miller, a KREIA past president, addressed investors at our first live L.O.T.S. event since February 2020. (Photo courtesy of Mike Fallot of MM Lending – and the free lunch too!)

L.O.T.S. event in person and claim their free lunch, courtesy of Platinum Sponsor MM Lending and its CEO, Mike Fallot.

Mike was on-site and helped stream the event to the Zoom attendees. Anchoring the Zoom call from the other end was Wendy Kays of MM Lending.

Look for the We’re going to keep this virtual/live video from plan going. Want to attend the March this L.O.T.S. event th 30 L.O.T.S. event live? Please sign up to be posted soon to soon at kreia.com, because the 25 our Videos page. slots will probably fill up fast.

And if your next rehab project turns out to be a hoarder house – think win-win. Maybe take a spin through the Peddler’s Mall and see if anyone would like some free inventory. You might just be sitting on some good stuff.

THE NUMBERS Purchase Price: $71,000 Fix-Up Costs: $27,334 Carrying/Miscellaneous Costs: $6,100 Closing/Miscellaneous Costs: $8,647 Estimated Sale Price: $154,900 Estimated Profit: $41,819 Why do we call it “L.O.T.S.”? Because we Learn On The Site!

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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Get a Tax Deduction for Working Regularly and Exclusively from Home

By Eric Shadowens, CPA with DMLO I was recently in a Zoom meeting with a client in Australia discussing business. Our casual conversation had to do with COVID19 and how he was dealing with the lockdown his state was experiencing. Residents could be outside 1 hour a day and only travel less than 5 miles from their house during the spike of cases in their area (imagine having those restrictions here in the United States). He mentioned how it was a bummer because he liked to regularly visit a butcher at a grocery just outside the travel restriction and used that butcher exclusively through the years. He was now forced to make his purchases from a butcher at a local grocery.

Our conversation got me to thinking about regular and exclusive use and the importance it may hold for real estate investors. Eligible real estate investors may take a business use of home deduction so long as they qualify.

The business use of home deduction allows business owners in a trade or business to expense costs related to their home such as real estate taxes, mortgage interest/ rent, insurance, utilities, depreciation, maintenance, etc., provided they use a space in their home regularly and exclusively for the purpose of their business.

To be eligible, the trade or business must also satisfy one of three additional requirements including: performing administrative and management work at home, performing the most important rental activities at home or meeting business visitors at the home office. I believe the business use of home deduction has been misunderstood by many taxpayers for a while now. There is a fear in some taxpayers that by taking the deduction it would increase their chance of being audited.

I’ll pause on getting too deep into this deduction explanation without first discussing a hurdle that taxpayers need to pass before they can even consider the steps to qualify for the deduction. It’s important to understand that not all real estate investors can take this deduction. First, investors needs to determine if their rental real estate activity rises to the level of a trade or business.

Are You a Trade or Business?

The rules to determine a trade or business are not well defined. Generally, if you regularly and continually conduct your rental real estate activity and your primary purpose is to earn a profit, then you may be a trade or business. There are several factors used by the IRS to assist with making this determination and include the number of rental properties you own, the time you or your managers spend

working with the properties, how long the lease is, whether it is commercial or residential, and confirming if you filed 1099s for any service you paid for.

The last factor is really important because real estate investors often fail to file 1099s, which could disqualify them from not only the business use of home deduction, but also the pass-through deduction (199a), the ability to use Section 179, and startup expenses.

You should document your reasoning for your belief your rental property is a trade or business. It will be helpful in the event you ever do get audited. Now that you’ve determined you’ve passed the trade or business hurdle, you can focus your attention back on the business use of home deduction.

Itemizing Deductions Is More Difficult The 2017 Tax Cuts and Jobs Act brought about sweeping changes to the way businesses and individuals are taxed. A few of those changes involved increasing the standard deduction as well as reducing the amount of property, state and local taxes that may be deducted on the Schedule A. Based on these changes, less than 10% of taxpayers are now able to itemize deductions on their personal returns. Without being able to itemize, many taxpayers no longer get a benefit for the interest or real estate taxes they pay on their personal residence.

Defining Your Home Office Space But for real estate investors who have a trade or business, they may still get a benefit for those expenses if they have a dedicated space in their home in which they run their business. Using your home office exclusively for your rental trade or business involves defining a space in your home – which may be a room or a corner in your basement, for example – that is dedicated to only your business. You would not want to have anything personal in the space. Your office space can’t just sit there, though. You need to perform work on a regular basis. You’ll do that by keeping your accounting books and records, billing tenants, scheduling tenant showings, storing rental signs, etc., in your home office.

Tax Savings Using Home Office Deduction You may ask what the fuss is all about in getting a deduction for using a home office? Imagine if you were single and your only source of income (which happens to be $100,000) came from your real estate business. If you do a good job tracking your home expenses mentioned earlier, you calculate $20,000 in total home expenses, including depreciation. Let’s say you’ve determined your office space Continued on Page 24

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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Eric Shadowens: Business Use of Home Deduction Continued from Page 22

I’ve heard of instances where a taxpayer is consulted by their tax advisor to just forgo the depreciation but take the other home expenses as a home office deduction. This is not is 400 square feet in your 2,000 square-foot home. That good advice as the law states that the home sale exclusion is results in a $4,000 expense deduction from your net based on the depreciation allowed or allowable. That means income, which would be a tax savings of $880 for a single you must reduce your exclusion by the depreciation individual in the 22% tax bracket. whether you took it as a deduction or not in prior years.

Generally, to calculate the Actual Expense method, you The goal of tax planning is to defer tax liability and kick would determine the total square footage of your home. the can down the road as long and far as possible before Next you would determine the square footage of your office having to pay. In some cases, taxpayers may not like the space. Be sure to take a picture of the office space as well as idea of having to pay tax on the depreciation recapture but documenting on paper how you calculated the square feet are not factoring in the tax savings they have had through for your office and home. Divide the square feet of your the years prior to selling their home by taking advantage of office by the total square feet of your home and you have the depreciation. the business use percentage of your home.

Through the year you’ll want to keep track of payments Document and Keep Good Records and invoices for home expenses such as those previously You may have read through other articles or social media mentioned. At the end of the year, you would multiply your posts I’ve had in the past and noticed I have a common total expenses by the business use percentage, and those theme regarding documentation and good record keeping. are the allowable expenses for your home.

My experience through the years regarding documentation and good record keeping is that if a taxpayer keeps good Maximize Auto Expenses Using Home Office Deduction records, they won’t have to worry about losing an audit to How many of you deduct auto expenses? If this were a the IRS. classroom, I would expect everyone in the room to be My belief is that every time a tax return is filed it is 100% raising their hands. How many use the standard mileage correct. It’s only when a return is audited that the percentrate and include travel from their home to their rental or age of correctness may decrease. What causes the deflip properties as business mileage? Again, if this were a crease? I believe poor record keeping as well as taking an classroom, I would expect a few hands would be raised. extremely aggressive stance on deductions. For example, do However, those raising their hands want to pay close you really think 45,000 business miles for a landlord owning attention here. Travel from your home to a business two properties within a 30-mile radius of their home is location is considered a commute. Therefore, it is personal believable for the auto expense deduction? travel and generally not includable as a business expense.

Therefore, if you have discussed the home office deducThe catch here is that if you have a home office, your tion with your tax advisor, understood how to qualify and travel from your home office to your rental or flip property properly document your reasoning, you won’t have a probwould be considered deductible as business travel. lem with taking this deduction and reducing your tax Therefore, you have increased your tax savings by liability. maximizing your deductions.

Tax Advisor Relationship Depreciation Is Allowed or Allowable There are rules to follow when taking tax deductions on Don’t forget to calculate the depreciation of your home. your return. Those rules are not always black and white, but This is very important because this is where I see mistakes if you and your tax advisor take the time up front to made by not only taxpayers, but their tax advisors as well. document your stance, you’ll have a much smoother ride if You may recall that you may exclude gain on the sale of you must endure an IRS audit. your personal residence up to $250,000 for an individual Generally, this is where your tax advisor earns his pay. If and $500,000 for a married couple. If you have taken you shop around tax advisors based on price, make sure you depreciation via the business use of home deduction, you’ll take into consideration the “advising” part of your need to factor that into your gain on home sale exclusion. relationship. Many taxpayers balk at a cost quoted by a tax For example, if you sold your personal residence at a gain advisor because they may only be considering the tax of $200,000 but had allowed depreciation through the years return, not realizing that there is much more to the from the home office deduction of $10,000, you’ll need to relationship than a tax return. Planning and advising is much reduce your gain exclusion by $10,000. In addition, the more important than the actual preparation of the return. $10,000 is taxed at ordinary gain up to 25%.

Continued on Page 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.

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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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Eric Shadowens: Business Use of Home Deduction Continued from Page 24 The Easy Calculation You’ve made it this far into the article (hopefully) and may decide the work to save $1,000 in taxes is more than you’re willing to accept and are thinking you’ll pass on the business use of home deduction. Don’t leave me yet. I’d like to introduce you to the Simplified Method. You calculate the Simplified Method by multiplying $5 to each square foot in your office up to 300 square feet. Therefore, you could have a maximum deduction of $1,500 to help reduce your real estate net income. It’s a much smaller savings, but a much easier calculation that you should take advantage of, assuming you qualify for the deduction to begin with.

Net Loss in Current Year Suspends Deduction to Future Also, please note that your home office deduction cannot cause your business to have a net loss. For example, if you have Schedule E net income of $1,400 prior to including the Simplified Method deduction of $1,500, you could only deduct $1,400 of the home office deduction. The remaining $100 loss is allowable but gets suspended to a future year when you have net income.

This may ring a bell for some of you reading this article.

You may have decided you didn’t want to pursue the home

office deduction because it didn’t create a loss. You may not have considered you still get to take advantage of the deduction, but in a future year. Each year you are unable to fully use the deduction, it gets suspended to future years and helps to reduce income at that time.

In Closing So the next time you’re out at a restaurant way across town and thinking about how crazy the COVID-19 restrictions have been here in the United States, think about my client down in Australia who spent several months being locked down in his home with his biggest decision to make each day being whether or not he would get out of bed.

Also, consider the business use of home deduction. It is likely one of the best deductions that most taxpayers do not take advantage of for the sole purpose of their fear of being audited. Follow the rules and cut your taxes!

Eric Shadowens is a Certified Public Accountant and Senior Tax Manager with DMLO CPAs (Deming Malone Livesay + Ostroff, dmlo.com). You can reach him by calling (502) 3262319 or emailing him at eshadowens@dmlo.com. You can also connect with him on social media: Twitter: @ericshad76cpa LinkedIn: linkedin.com/in/ericshadowens BiggerPockets: Biggerpockets.com/users/EricShadCPA

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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Mike Butler: Rental Application Screening Tips Continued from Page 6

Sharon Vornholt: Why Isn’t Your Marketing Working?

Continued from Page 14

landlord; however, he never expected this kind of question.

You and I both know, Ralph would always pitch an upcoming vacancy. ALWAYS.

lot about branding. The local heating and air-conditioning company could paint his company name on the truck, run a few local ads, give great customer service, and do just great.

That’s not true anymore. When your marketing isn’t working, your failure to build a strong brand is almost always part of the problem.

Whether or not you set out to build a national brand, the Internet allows you to be found by everyone no matter where you are located. That’s the magic of the Internet. In most cases, you will be the brand in your business, so building a strong personal brand is important and should be at the top of your “to-do” list.

Remember that all your marketing has to touch people in some way that makes them take action. Whether that is to call you, to fill out a form on your website, or take some other action.

Here’s another question. Once they have found you, what exactly is it that they will find? You need to be able to answer these 4 questions:

EMPLOYER Name and Phone Numbers – carefully review these to see if any suspicions surface. Google the name of the company and associated phone numbers to see if they match.

VEHICLES If you can, take a peek inside their car. Does it look like one of those hoarders on TV? This is one of your crystal balls to see what your rental unit will look like in 6 months or less.

TEETH My good friend Esther Lieby in Redding, Pa., takes a good look at her applicants’ teeth. She’s got a good point here. If they have clean, white, shiny teeth, odds are they are very good at their housekeeping. If their teeth are black and obviously not brushed and maintained properly, odds are they will be horrible at housekeeping.

SOCIAL MEDIA Be careful on this one. Social media reminds me of the 1970s when CB radios were popular. Social media is today’s CB radio. One could argue if your applicant puts photos and more on their own social media, then it is okay to go take a look at it. Here is my recommendation before you pull the trigger on searching their social media: Rule #1 – check with your real estate expert attorney about the do’s and don’ts on how you can use social media to help you process their rental application.

Step #2 – if your attorney approves a certain way to use it, insert that phrase into your qualifying criteria in the fine print on your rental application.

DOCUMENTS Finally, for any and all documents that you gather, make sure they are easy to read and not fuzzy or so small you can’t read them. Many times applicants will take a snippet from their cell phone and send it to you.

Please get 2 months of recent bank statements to help verify income and deposits, especially if the applicants are self-employed. Get paycheck stubs and valid photo IDs enlarged and in color.

Continued on Page 30

1. What makes you (and your business) special?

2. What differentiates you from your competitors?

3. Are you creating content that will help build your brand?

4. How have you branded yourself so that you are memorable at each touchpoint?

5. The big question is, why should they choose you? It’s imperative that you can clearly articulate this in your brand story.

Where Does Branding Matter?

It matters everywhere people have contact with you, whether that’s on your website, social media, on your marketing materials, or even in the way you present yourself when you’re networking. Your goal should be to build a consistent presence both online and offline.

● Sharon Vornholt is a local marketing expert with a national presence. Visit her site, LouisvilleGalsRealEstateBlog.com, to find years and years of articles with tips on wholesaling, marketing, branding, probate, and other real estate topics.

On her podcast, Sharon interviews well-known investors from all over the country.

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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Mike Butler: Rental Application Screening Tips Continued from Page 28 SEX OFFENDER REGISTRY Always check this. We never put a registered sex offender into an apartment community or in a SFH close to a park, playground, school, daycare, etc.

There’s so much more to include, but Lauren is clipping my wings on the length of this article.

Stay $afe!

“LIFE Does NOT Have a Rewind or Pause Button – Take Action Now!”

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.

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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National REIA Real Estate News Roundup ???

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2020 Housing Vacancy Survey Statistics

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 Do you love good housing data? If so, you’re in for a news and resources that Brad Beckett, NREIA’s Director of treat. The U.S. Census Bureau recently released its 2020 Education & Outreach, has compiled. For more news, visit Housing Vacancy Survey, which provides vacancy rates, realestateinvestingtoday.com homeownership rates and characteristics of units available th for occupancy for the United States, regions, states and the 75 largest metropolitan statistical areas. In addition, it As a Saint Patrick’s Day libation, the IRS announced that contains estimates of the total housing inventory and the federal income tax filing due date for individuals for the percent distributions of vacant for-rent and vacant for-sale2020 tax year will be extended from April 15, 2021, to May only units available.

17, 2021. The IRS said they will be providing formal guidance Read the full U.S. Census report: bit.ly/k2103census on the new date in the coming days.

Read the IRS news release: bit.ly/k2103taxday

IRS Moves Tax Day to May 17

CDC Eviction Moratorium Unconstitutional, Several Fed Courts Rule U.S. District Judge John Barker (Texas) said that the creation of such a moratorium criminalizes the use of state legal proceedings to vindicate property rights as well as the possibility that federal agencies could extend even further control over evictions.

Read National REIA’s roundup: bit.ly/k2103evictions

Illinois Program Pays Student Loans to Entice First-Time Home Buyers The State of Illinois established a new program that will pay up to $40k in student loan debt for first-time home buyers. According to The Real Deal Chicago, The Illinois Housing Development Authority’s $25 million SmartBuy fund could help potential buyers secure a mortgage by lowering their debt-to-income ratios.

Read the article at Real Deal Chicago: bit.ly/k2103student

America’s 10 Fastest-Growing Retirement Towns Realtor.com looked at metro areas where at least a quarter of the population was aged 60 and up. Then they looked at those with the largest increase in the number of new residents aged 55-plus moving in from 2014-19, as well as the biggest jump in seasonal and vacation homes over the same period. If you thought the towns would all be in Florida, you thought wrong! There’s one from Florida (Lakeland), but most of the rest of the Top 10 towns are scattered up and down the East coast. Sadly, Kentucky didn’t make the cut.

Read Realtor.com’s report: bit.ly/k2103retirement

Buyer Interest in Suburbs & Vacation Towns Soars During Pandemic

Remote workers seeking space for home offices and a simpler lifestyle are searching for homes in places like Lake Tahoe, Santa Cruz and Cape Cod. Meanwhile, a lot of big cities like New York City are cooling down.

Read the RedFin report: bit.ly/k2103vacation

Meth House Makeover Pete Youngs (aka Mr. Rehab) describes the steps that should be taken in remediating houses that have tested positive for the presence of methamphetamine.

Read Pete’s report: bit.ly/k2103meth

Household Debt Hits New High According to data from the NY Fed (illustrated in a chart

by Statista), U.S. household debt climbed to a record high of $14.6 trillion at the end of 2020, with mortgage going above $10 trillion for the first time. They say this was driven mainly by a record volume of mortgage originations, with households taking advantage of historically low rates to refinance.

View the chart: bit.ly/k2103debt

Overall Rents See Signs of Recovery According to the latest Yardi Matrix Multifamily Report, the average U.S. multifamily rents in February increased $3 to $1,399. Yardi says this is the ninth consecutive month where overall rents have either increased or remained flat, pointing to signs of recovery. However, on a year-over-year basis, rents declined by 0.1%.

Read the report: bit.ly/k2103yardi Continued on Page 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.

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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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National REIA News Briefs Continued from Page 34

Senate Confirms Marcia Fudge as HUD Secretary A former Congresswoman from NE Ohio, Marcia Fudge was confirmed during the second week of March by the U.S. Senate to lead the U.S. Department of Housing and Urban Development. According to The Hill, she will be the first woman to hold the position since 1979.

Read the full report: bit.ly/k2103hud

Emergency Rental Assistance – How to Apply State by State Details are still emerging about how to apply for assistance under the Emergency Rental Assistance Program. The federal government made $25 billion available to assist households that are unable to pay rent and utilities due to the COVID-19 pandemic. The National Council of State Housing Agencies (NCSHA) recently put together an interactive map showing how to apply and/or how the funds are being administered in each state.

View the map: bit.ly/k2103assistance

Zombie Foreclosures Represent 1 in every 14k Homes ATTOM Data says zombie foreclosures are just a minuscule portion of the nation’s 99 million residential properties. In addition, they report that the states with the biggest increases from Q4 2020 in zombie properties, among those with at least 100 properties in pre-foreclosure in Q1 2021, included: Arkansas (up 63%), Texas (up 62%), Minnesota (up 32%), Massachusetts (up 24%) and Missouri (up 20%).

Read the report: bit.ly/k2103zombie

New Home Sales Up 19.3% YearOver-Year The U.S. Government is reporting that sales of new singlefamily houses in January, 2021 were at a seasonally adjusted annual rate of 923k which is 4.3% higher than December’s revised rate and is 19.3% higher than one year ago. The median sales price of new houses sold in January was $346.400 with an average sales price of $408,800. There were an estimated 307k new houses for sale at the end of December representing a 4-month supply at the current sales rate.

Read the U.S. Census PDF report: bit.ly/k2103sales

Jobs in Construction Drop By 61k in February According to recent data from the Associated General Contractors of America, construction employment decreased by 61k jobs in February, with the sector’s unemployment rate soaring to 9.6% amid severe winter weather and continuing weakness in new nonresidential projects. However, residential construction employment (comprising residential building and specialty trade contractors) dropped only by 200 jobs in February with the sector’s employment remaining slightly higher than from a year ago.

Read the report: bit.ly/k2103construction

NMHC Says 80.4% of Apartment Households Paid Rent by March 6th This figure is 4.1% lower than those who paid rent through March 6, 2020, and higher than the 79.2% that paid

by February 6th, 2021. The data comes from the NMHC’s Rent Payment Tracker, which uses data from 11.4 million professionally managed apartment units across the country – representing a wide variety of market-rate rental properties that can vary by size, type and average rental price.

Read the report: bit.ly/k2103apartment

Which States’ Real Estate Markets are Doing the Best and Worst?

A recent report from Bankrate.com says that before the Coronavirus-induced recession, states like Utah were already “on fire.” But residents from high-tax states emigrating have added fuel to that fire. Utah, Montana, Nebraska, Idaho and Indiana are hotter than ever.

Read the report: bit.ly/k2103bestworst Chris McCarty: President’s Letter Continued from Page 1 for all main monthly meetings. On April 22nd we will hold an in-person main meeting at Woodhaven Country Club – the first time in 14 months. Live attendance will be limited to 100 people. We will also livestream the meeting via Zoom. Stay tuned for info on how to attend.

Remember that there are multiple KREIA gatherings throughout the month also, so just check KREIA.com, your emails or the Facebook Group – we’ll have the list and locations of the happenings for you.

Chris McCarty KREIA President

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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Presorted First Class Mail U.S. Postage Paid Louisville, Ky Permit No.1402

PO Box 91225 Louisville, KY 40291 Return Service Requested

THE Local Resource for Landlords, Rehabbers & Wholesalers Meeting the 4th Thursday of every month (except November & December) 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

The Guide to Wholesaling in 2021 Vena Jones-Cox, a national real estate trainer and speaker known for her no-BS teaching style, pays us a visit this month to show how wholesalers are finding deals in this highdemand, low-inventory market – and pulling in big bucks doing it! March 25, 5-9 p.m. ► Early Meeting: Chris Wakild talks tax liens. ❖ March 27th — 9 a.m.-2 p.m. Saturday Workshop (Virtual).

Want to learn how to build a 6-figure wholesaling business?

Looking for things to do and traps to avoid to get your next payday in the next 30 days! Register now at kreia.com ❖ March 30th — noon-1 p.m. L.O.T.S. event. We visit Jonathan Fletcher’s rehab project in the Wilder Park neighborhood. To be held live and in person (with strict limits) and via Zoom call.

Members only. Watch for your email invitation.

❖ April 1st — 5 p.m.-7 p.m. KREIA Happy Hour. Networking at Martin’s Bar-B-Que Joint (East End). Everyone invited.

Hampton Scurlock and Alexis Fentress host. Bring a mask. ❖ April 6th — Noon-1:30 p.m. Lunch & Learn. Meet up for education and networking. Members only. You buy your own lunch. Ed Gibson hosts. Speaker info will be emailed to you. ❖ April 15th — 6 p.m.-8 p.m. KREIA Game Night: CashFlow.

Want to get out of the Rat Race? Play the CashFlow board game with other investors pursuing financial freedom.

Everyone invited. Hampton Scurlock and Alexis Fentress host.

Main Meeting Preview Here’s what’s coming in the months ahead: • April 22: Rehabbing for Big Profits (with local panelists) • May 27: Foundations of Finance with Erik Hitzelberger • June 24: Local & National Trends

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