April 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 4-21 April 2021 President’s Letter

1

Paid Advertising Rates

2

Rehabbing for Investors: Allwomen panel shows how to flip

3

Saturday Workshop: Systems of 4 Rehabbing Welcome, New Members!

4

Mike Butler: Timesaving tools

6

Michelle Rawn: Courts Update

10

KREIA 2021 Elections preview 10 Government Affairs Links

10

Stacey Duvall: Where are all the 14 houses?

Hampton Scurlock: A ‘snow day’ 16 for your IRA contributions KREIA Photos

20

L.O.T.S. Recap: First-time flipper 21 tackles Wilder Park house Eric Shadowens: Why keeping good records can save you

Dear KREIA Members and Friends, We’ve all heard that it is possible to have too much of a good thing.

Perhaps we can say this about today’s real estate market, with its rising prices, rising rents, and very low inventory of existing homes.

The other side of this market’s coin is a shortage of labor, a skyrocketing cost of building materials, and a lack of land and lots for Chris McCarty new construction. Combine all these factors and you get affordable housing that is ever-more unaffordable.

Certainly these are positive factors for the KREIA members who already own real estate, a validation of owning rental property as a means to accumulate wealth.

Among the conversations I have with KREIA members each month, rising costs and shrinking inventory are concerns that are driving the dialogue about how to prosper – how to find and structure affordable deal opportunities.

Add to all this a resurgence of interest in investing: More and more new people are just getting started in the real estate game. For them, KREIA is here as a beacon. It provides resources for the many new investors hungry for the information we provide. KREIA’s mission is to provide training and mentoring to members new and old.

If you are currently a successful investor and have been at this for a while, reaping the current real estate rewards, I hope my letter this month is validation of your years of effort following the basic principles of real estate investing.

If you are one of the many new KREIA members who we, as an organization, are trying to help, take heed and soak up the great content in your hands with the newsletter and the many other benefits KREIA has to offer each month.

Continued on Page 4

22

Nina Musgrave: Blockchain tech- 26 nology finds a home in real estate National REIA News Briefs

34

Calendar of Events

40

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.

2

House Flipping Secrets Revealed: Live and In-Person!

KREIA’s all-women rehabbers panel shows how to succeed in today’s market Do you want the real scoop on how to rehab a house?

Not the rushed and airbrushed soundbites you see on those house-flipping TV shows. Do you want the real deal?

We’re back at Woodhaven, and we’re talking: • How to find suitable properties to rehab • How to get funding • How to estimate repairs and write a scope of work • How to find contractors • How to choose finishes that suit your rehab goal (Is the house a rental, or is it a retail flip?)

• What to do to make your flips sell for top dollar • And more! All geared to our Kentuckiana market At April’s main meeting on April 22nd, KREIA is bringing you a panel of experienced local rehabbers to walk you through process of finding and rehabbing houses. And then at the follow-up Saturday workshop, on April 24th, they’ll dig deeper, describing the systems they use.

Stacey Duvall, Wendy Kays and Jacqueline Smith are headlining both the Thursday main meeting and also the Saturday workshop. This is our first all-women rehabbers panel! Stacey and Jacqueline have active projects in development right now. Wendy is in between projects but, as a lender, she stays in constant contact with rehabbers.

Wendy and Jacqueline have had their rehabs featured in KREIA’s Learning On The Site events, and Stacey Duvall’s current project is the focus of our April 27th L.O.T.S. event.

All this is to say, they know their stuff!

Because all three are active in real estate on a daily basis, they can tell you what’s going on in the market for rehabbers right now.

If you’re new to real estate and want to find out how to get started in rehabbing, this group of experts will show you. And if you’re an experienced investor, these meetings are for you too! Find out what other successful rehabbers are doing in this crazy current market.

Our April 22nd main meeting is going to be a combo live/ virtual event. Woodhaven Country Club is restricting us to 100 people due to COVID concerns. So, if you’re planning to attend in person, please register now at kreia.com to lock in your spot. The attendance fee is the usual $20 for members.

Instead of a buffet, servers will bring you your plated dinner. This first live meeting is limited to active members only.

Not ready to risk a big public event yet? We hear you, and we’ve got you covered: We’ll also be livestreaming KREIA’s whole Thursday main meeting over a Zoom call, free for active members and only $10 for non-members.

It’ll be good to see folks back at Woodhaven!

Illustration by Nina Musgrave Meet Stacey Duvall Stacey Duvall is the Principal Broker of Stacey Duvall Real Estate, a concierge real estate brokerage, and has been a licensed agent for over 20 years. She and her husband, Ron, are active investors who LOVE the BRRRR process, and they own rental properties and several Airbnbs. Stacey is the proud mom of Nick, who is serving in the U.S. Army.

Meet Wendy Kays Wendy Kays is the Vice President of Operations at MM Lending, where she manages the loan process from start to finish. She works with customers, title companies, appraisers, and sellers to ensure loans close on time. She also oversees the loan draw process, coordinates inspections, and makes sure rehabber customers get their loan funds quickly.

Meet Jacqueline Smith Last year Jacqueline Smith sold her first retail flip. Now she and her husband, Mat, have completed four flips. She has hit the ground running!

She’s just started working as the Project Manager for Freedom Property Group, handling up to 10 rehab properties at a time. She was featured recently on the BiggerPockets Real Estate Rookie Podcast (episode 43).

Saturday Workshop Our panelists return to lead a deeper dive into rehabbing. ► Register now for this workshop, discounted for active KREIA members, at kreia.com. Read more about it on Page 4.

5:30 p.m. Early Meeting: Rob Bergeron Looking for an opportunity to source or move off-market assignable contracts? Rob is here to help with The Louisville Network. Learn how to find and submit 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.

3

Welcome, New KREIA Members!

Shannon Ballard Joslin Britt Erica Crask Jason Crask Jason Cross Dcoryia Cunningham Tanya Dasilva Ameshia Elliott Kahlia Evans Sharon Gazawaybell Bridgette Johnson

Robert Kyser Angel Miller Akil Mody Andrew Parker Yisel Pupo Tami Sallade David Scharf Noah Sparks Janice G Teague Montubua Vasser-Smith Elena Willis

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 livestreaming, you can tune into our Zoom call to hear from Jordan Pohn and Stacey Duvall. The next orientation is scheduled for April 22.

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: Rehabbing Systems for Investors If you would like to follow our panelists on a more focused look into the nuts and bolts of profitable rehabbing, register now for April 24th’s workshop. It will be live and in-person!

Stacey Duvall, Wendy Kays and Jacqueline Smith are returning to show you lots more about how they turn distressed properties into houses that bring multiple offers. Or into cash-flowing rental properties.

We’re still looking for a suitable venue, but here’s what we can tell you about the workshop. You will: ● Find out about systems you can use to make the rehabbing process faster & more efficient – and scalable ● Follow along as Jacqueline Smith video documents a recent house walkthrough, estimating repair costs ● Receive handouts and cheat sheets you can use to help you plan your own rehab ● Get your questions answered and make new contacts ● Get a free lunch!

And if you sign up by our early-bird deadline (April 22nd by midnight), you can attend at half-price! Register at kreia.com ► When: April 24th, 9 a.m. – 2 p.m. ► Where: TBD. Watch the website and your email ► Cost: $97 for members, $147 for non-members; or earlybird pricing of $47 for members, $97 for non-members Chris McCarty: President’s Letter Continued from Page 1

KREIA membership entitles you to attend several meetings and networking opportunities each month. It also offers you a newsletter and the website, which offers great content.

You’ll find videos of past meetings and seminars there. KREIA is committed to your success and dedicated to providing training and mentoring.

If you are daunted with how to get started or what to do first, dig in and don’t give up. It may take some trial and error, but KREIA can help with your success if you will commit to taking the first step of involving yourself with the monthly meetings and using the resources available to each member.

KREIA’s officers and board of directors are committed to your prosperity and encourage your active participation. If you need something specific, please reach out to me directly and I will help.

To you investing success!

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.

4

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.

5

Timesavers & Moneymakers: Tools for Your Business Check out these apps and websites

By Mike Butler We have come a long way from the caveman days of investing in real estate.

Back then, as Rue McFarland says, they used hammer, chisel and stone tablets as their iPads, and two cans and a string for phone, faxes, and emails.

Here is your buffet or smorgasbord of timesavers and moneymakers for your real estate business. Most of these tools are free, and some do cost a few coins, but they are well worth it. I use them in my business too. Please understand, this is in no way the “bible” of recommended sources because technology keeps updating every month.

Tools for All Investors (New, intermediate, and oldtimers) Forbes Magazine listed the #1 and #2 must-have tools for today’s real estate investor: 1. DealMachine.com – WOW! Imagine driving down a street and seeing a house that looks neglected.

Using your cell phone, take a photo of the house and in about 2 to 3 seconds you will have a boatload of info about it: Owner name, address, date purchased, tax assessment and so much more. All included in one low monthly fee of $59 per month.

You can add enhancements for a small fee – like sending a postcard with the photo of the ugly house to the owner, and you get to put your own text on the postcard! There’s too much to list here. Grab your free 7-day trial using promo code mbutler and I will put $10 into your account to purchase those additional enhancements. (Yes, I do get a few coins as a reseller, and you can do the same too!)

2. Investor Carrot Website: You can get your own Carrot website for free. It will cost you $69 per month to purchase one on their website. I struck a deal with the owner, Trevor Mauch, and you can get your own Carrot website for free by joining my Gold Membership, which includes access to video replays of the weekly Power Lunch series. KREIA members can try it for $1 dollar for 30 days, and then it is only $49 monthly. Try it now at MikeButler.com/join

And check out these tools: Google Voice: This freebie is a must. You must have a Gmail address (Google account) to use this one. If you are

thinking, “I don’t want Big Brother watching over me or my data,” it is too late. They already got you.

Get started by going to voice.google.com. Follow the simple instructions to set it up properly. Make sure you click the button to “Get Your Own Google Voice Number.” Now you have a separate, unique number you can use for any purpose you want – for residents, sellers, buyers, family, etc.

When this first came out about 15 years or so ago, I created about 20 Gmail accounts so I could have a unique, separate phone number for each of the emails. Here’s what you can do with it: create your own greeting and receive voicemail that auto-transcribes to text – and also get the text of transcribed phone calls emailed to you. And much more.

Picture this: just like opening your email account and seeing all of your emails in a list, Google Voice does the same for your phone calls. Open your Google Voice page and you will see all of the calls made to your Google Voice number, along with transcribed text if they left a voicemail. You can edit and add a note, text them, or call them back – and it keeps everything organized for you!

TIP: Suppose you have a vacant rental or a property for sale – you could put your Google Voice number on your yard sign and when prospects call, they will hear your recorded message telling them whatever you want and directing them to your website and more. It is powerful for personal use too. Selling a car? Use it for church events, bowling leagues, non-profits, and much more.

MightyText.net: A special thanks to Tamara West, who shared this with me several years ago. I absolutely love this one and I use it every day.

Just like Google Voice has a page showing you a list of all the calls made to your number, MightyText does the same with all of your inbound and outbound text messages, plus it emails all of them to you! You can also text directly from your email page. They have a free version and a Pro version ($79/year). Thanks, Tamara, for sharing!

Google Drive and Google tools: too many to describe here, but I use Google Drive for my off-site storage in the cloud. Here are some of the programs you get for free with a Google account – Google Docs, Google Sheets, Google Drawings, presentations and too much to list here. You get 15Gb for free with your Gmail account, and you can purchase more storage for pennies.

IFTTT.com: “If This, Then That” is a power tool allowing you to create your own automations. For example, you could Continued on Page 36

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.

6

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

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

✓ Residential &

Practicing in Kentucky

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

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.

7

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.

8

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

Mobile

Fax

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

FREE ESTIMATES

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

9

Update on the Courts

By Michelle Rawn As you are aware, the CDC has issued an eviction moratorium for evictions for nonpayment of rent, which is currently extended through June 30, 2021. The CDC moratorium is nationwide, but only applies to evictions for non-payment of rent where all adults on the leased premises have submitted a signed CDC Renter’s Declaration.

Kentucky, in most cases, will not permit any questions to the tenants who have submitted the Declaration. Floyd and Clark Counties in Indiana will permit questions to tenants to prove they fall under the protection of the moratorium and have declared in a few cases the moratorium did not apply and entered 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.

Obtaining an eviction judgment has become more difficult in all situations. Hopefully, things will be able to go back to a more normal court environment. As all of us know, things are still changing rapidly. Please feel free to reach out to me or John Benz 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.

Officers serve for a one-year term. The at-large 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. 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: ● Donnie Adkins, Marcus Britton, Will Chandler, Mary Conrad, Eric Feller, Alexis Fentress, Ian Hooper, John Mays, Rue McFarland, Frank Miller, Greg Nalley, Hampton Scurlock, Jacqueline Smith, Steven Staub, Erin Wegrzyn, and Komeneci “Neech” Yates.

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.

10

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.

11

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.

12

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.

13

Why Our Housing Supply Falls Short of Demand

By Stacey Duvall 1,041.

That’s how many residential homes are for sale on the MLS this morning (April 7, 2021).

So, where are all the houses?

In a balanced market – meaning that there are plenty of buyers and plenty of sellers to keep up with supply and demand – there are between 5,000 and 6,000 properties for sale on the Multiple Listing Service.

So to say that we are in a housing shortage crisis is an understatement. We all are painfully aware of the brutal competition in the retail market as a buyer. And the competition for off-market properties is just as brutal.

But why is that? Why do we not have enough houses to meet the demand?

There are several reasons.

Back in the recession of 2007, builders were building spec homes as fast as they could, and banks were liberally lending money to builders to build on spec because the economy had been really great for many years. Consumers were spending A LOT of money on real estate. Lenders were offering “No doc loans,” the kind where borrowers didn’t have to provide any documents to get a loan. (YIKES!) Lenders just went by your credit score, and if your score was high enough, you could borrow just about any amount you wanted to. (Yikes, again!)

Then, the recession hit. If you have not watched the movie “The Big Short,” it explains what happened to cause all that mess.

On second thought, if you haven’t watched it, don’t. It will just make you mad.

During the recession, a lot of builders went belly-up. They were sitting on too many spec homes, and lenders pulled waaaaaay back on lending to buyers. The bankrupt builders reopened as remodelers, doing room additions and finishing basements. But they were building very few new homes, i.e., adding new homes to our planet.

New construction permits plummeted from the years 2007 to 2014.

Meanwhile, our society is living longer thanks to medical advancements. And there’s immigration. And consumers are moving to Louisville because our cost of living is super affordable compared to other areas of the country. And as the divorce rate climbs, couples who shared a home as a married couple now need two homes for two singles. So, we need more homes, but few new homes have been built for many years. See the problem?

Have you noticed all the new apartment complexes that are being built around Louisville? Wonder why? It’s because we are running out of land. It’s more profitable for developers, builders and owners to build multi-family than to build single-family. And home ownership is becoming out of reach for some consumers due to rapid appreciation, especially in entry-level homes.

Developers are building a product for what they see as the future of our housing needs. It reminds me of the Wayne Gretsky quote: “I don’t skate where the puck is, I skate to where the puck is going.”

Now, add in the factor of rapid increase of costs of building materials. As builders are trying to over-correct now, they are faced with a shortage of skilled laborers and also expensive costs of materials. If you’ve tried to buy treated lumber recently, you know what I mean. This is another reason why builders can’t build entry-level homes – there’s not enough profit in them.

None of us have a crystal ball to know how this is all going to shake out. Some gurus are saying to stockpile cash and wait for the next bubble to burst and then scoop up bargains. Other gurus are advising to buy as much as you can now and lock in interest rates that are hovering around 3%. I’m doing a little bit of both. What I do know is that real estate is the wisest, safest and most solid investment on the planet. So I am going to continue to buy sensible real estate, regardless of what all the gurus say.

If you are addicted to real estate like I am, you have found your tribe with KREIA. I invite each of you to get involved with KREIA and ask how you can contribute to our organization. Volunteer for committees, ask how you can help others, attend the workshops and show up to L.O.T.S. and Happy Hours events. Call any of us on KREIA’s board and ask how you can help grow our club. Volunteer and be among all of us who love to talk about real estate. Ask questions and then listen. The more awesome people you surround yourself with, the more you will learn and grow your business.

Stacey Duvall is the Principal Broker of Stacey Duvall Real Estate, a concierge, client-centered real estate brokerage in Louisville, Ky. She has been a licensed real estate agent for over 20 years. Stacey is on KREIA’s Board of Directors, and she is running for the office of Secretary in the upcoming elections. She and her husband, Ron, are active real estate investors who LOVE the BRRRR process, and they own rental properties and several Airbnbs located in the Highlands neighborhood. Stacey is the proud mom of Nick, who is serving in the U.S. Army.

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.

14

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.

15

A ‘Snow Day’ in April? How Your IRA can benefit

By Hampton Scurlock There is only so much time in a day – we have all heard that before. Well, that is usually true for a day, week, month, or year. But the IRS has extended the year for certain tax filing deadlines and, more importantly, the deadline to set up and/or contribute to your Roth and/or traditional IRA for 2020.

You get an extra month and two days to contribute to an IRA because the IRS has extended the deadline from the usual April 15th until May 17th of 2021.

If you have ever overslept or forgotten a work or school assignment and then been saved because of a snow day cancellation, this is similar. You could have contributed by the normal deadline, but you didn’t. Now you can join all those people who turn things in on time, or follow the rules, and still contribute because the IRS changed the deadline.

Procrastinators and forgetful folks everywhere should be rejoicing, but you still need to act fast and remember to contribute before May 17th to have your contributions count towards 2020 taxes/contributions.

Also, you can contribute for 2021 at this time too if you desire. The contribution limits are $6,000 per person per year (or $7,000 for those aged 50 or older) for 2020 and 2021. If someone was eligible and wanted to, or was able, they could contribute $12,000 to their IRA before May 17th ($6,000 for each year). Or, more experienced Americans (age 50 or older) could contribute $14,000 total.

There can be income restrictions and eligibility issues, so do your own research or consult paid professionals.

Equity Trust Company is a National REIA sponsor and offers a discount for establishing an IRA. Just let them know you are a KREIA member when you set up your account.

Real estate attorney Harry Borders recommends Patrick Rice’s book to investors wanting to learn about IRA investing. KREIA President Chris McCarty recommends the Sorensen book.

They are not the only self-directed custodian around, but they are widely used by KREIA members. Equity Trust’s website is trustetc.com, or you can call them at 855-2334382 and press 2 to open an account. Make sure to say you are a KREIA member and ask for the discount.

Local banks, brokerage firms and financial advisors may be able to help you open an IRA as well. But you typically need a self-directed custodian in order to use your IRA to buy real estate, buy tax liens, offer loans, or pursue other strategies often used by KREIA members.

Hampton Scurlock is a KREIA board member/author/ mentor who lives, eats, breathes, and dreams about real estate. He is always looking for deals on houses and always buying.

Equity Trust’s website (trustetc.com): Many KREIA members use Equity Trust as their IRA custodian. Via National REIA, Equity Trust offers KREIA members a discount.

The preceding is not tax, legal, investment, fashion or any other type of advice. Consult a licensed/paid/ experienced professional on all such matters. Refer to IRS publication 590 for IRA rules and guidelines or if you want to be lulled into a deep sleep. Information is hopefully accurate at the time of publication but may be subject to change or further extensions in the deadline. I am not paid for this article and receive no compensation by being on KREIA’s Board of Directors, but KREIA is supposed to receive a small incentive for each member who signs up for an account with Equity Trust and uses the KREIA discount.

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.

16

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.

17

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.

18

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.

19

photo by bruce w. hinson www.obedientcamera.com Lunch & Learn host Ed Gibson, above, addressed the crowd as Tim Bingham of TGAP Property Services prepared to speak at the April 6th event. At right, John Wohrle of TGAP answered questions while attendees, below, digested tasty barbecue. What does “TGAP” stand for? “Two Guys and A Pickup”! This KREIA sponsor has grown a lot since its first days in business.

photo by bruce w. hinson www.obedientcamera.com

KREIA

Photos

Please help us with May’s issue!

Email some photos to

kreiaphotos@gmail.com Alexis Fentress’ selfie, below left, shows that KREIA members truly put the “happy” in April’s Happy Hour. Family and friends are welcome at our social events! Investor Jim Young brought his daughter, Chloe.

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.

20

Wilder Park Flip House: A Closer Look Jonathan Fletcher tackles his first-ever house rehab project During a time last year when Jonathan Fletcher’s software consulting business faced a temporary lull, his thoughts turned to real estate.

He’d been interested in investing for a while – he’d been listening to BiggerPockets and found his way to KREIA from there – and decided to take the leap. It was a good time to attempt his first rehab project.

Some research led to a prospect in Wilder Park, a 1,226 square-foot house with 3 bedrooms and 1 bath. “I found this on the MLS, and it was cheap,” he said. Previous offers had fallen through due to financing issues, so he found a lender to fund the purchase and rehab.

Jonathan admitted his initial rehab estimates were low – as they often are for first-time rehabbers. He discovered that the house had unJonathan Fletcher outside his flip house, 111 E. Adair St. “I’m becoming emotionexpected and expensive issues: There were ally attached to it,” he said. That’s OK – we all do it! (Photo by Alexis Fentress) leaks, holes in the floor and other problems.

At the March 30th L.O.T.S. event, Jonathan described the doors and trim, replaced the flooring, did roof work and house’s challenges and his first time dealing with contractors replaced the windows. He also upgraded the landscaping.

– he said he should have gotten more competitive bids and The house fronts on the Watterson Expressway on Adair ordered materials more quickly – but he was upbeat about Street. “Mine’s the blue house,” he tells people. “I keep saythe process and had praise for the contractors he used. ing ‘mine’ – I’m becoming emotionally attached to it.” With The cost of the rehab leaves Jonathan with razor-thin the trees he has planted at the front of the yard, future margins, meaning he’ll have to flip the house instead of owners will enjoy a stand of greenery blocking traffic views. refinancing it into a rental.

“I’ve got quite a bit of money into it, and it’s actually “We started with the bathroom, and that set the tone,” pretty nice,” he said of the house. The Look for the he joked. “I couldn’t leave the rest of the house in shambles interior is stunning. video from this L.O.T.S. event with that bathroom.” It is The house is going to hit the marto be posted soon to an attractive bathroom ket soon after some touch-ups – and our Videos page. with its tiled, walk-in raise property values in Wilder Park. shower!

“I expect to break even,” Jonathan said. “I’ll get to pay And the kitchen is just everything back. And I’ll come out no worse off. It’s a free as lovely with its granite education, as opposed to an expensive education.” counters, steel appliances With knowledge and experience under his belt, he’s and tiled backsplash. already got his eye on his next project – not a single house “Why wouldn’t I put in but a package of them. Through networking he’s found an granite, if laminate was investor who wants to sell off some houses. going to look worse and Thank you for inviting us into your flip house, Jonathan! cost more?” (NonstandTHE NUMBERS ard dimensions meant Planned List Price: $153,900 Purchase Price: $60,000 custom laminate would Total Fix-Up Cost: $57,000 Est. Gross Profit: $16,900 be more expensive.) (not taking closing costs into Holding Cost: $20,000 As part of the total consideration) All-in Cost: $137,000 Jonathan first addressed the virtual $57,000 rehab, Jonathan KREIA crowd over Zoom, with Alexis also had the house reWhy do we call it “L.O.T.S.”? Because we Learn On The Site!

Fentress facilitating from the site. wired, added all new Copyright MMXX Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

21

Keeping Good Records Saves You From Paying Extra Miles

By Eric Shadowens, CPA with DMLO Would you enjoy paying extra for something if you knew you could have bought it for less? As I drive through town passing gas stations, I make mental notes of which one is least expensive. At the grocery store I watch the checkout line monitor comparing the price scanned to the one listed on the shelf, occasionally catching a few discrepancies.

I was not always good at this. I can recall once leasing a vehicle and paying a little extra up front to get additional mileage per the two-year term. When the time came to turn the vehicle back over to the dealer, I was astonished to find out I owed additional money for extra miles I had put on the vehicle. The salesperson had taken my signed contract and scribbled my initials in the area that acknowledged I was waiving the opportunity to purchase more miles at the time of the lease. Unfortunately, I never got my copy of the contract that day. The dealer had a malfunctioning printer and promised to send my copy in the mail. They never sent it, and I never followed up.

That hard lesson comes to mind when I think about keeping business records. It’s always wise to have backup documentation in the event you need it someday. It’s one of the common topics I discuss with clients during a planning meeting. Records can come in all shapes and sizes as well as many formats. You may have a settlement statement from the purchase of a building sitting in your filing cabinet or you might thumb through your desk drawer and find some recent meal receipts you kept from a business meeting. Either one of these may have been scanned and saved somewhere on the cloud or in your accounting software as an attachment to the associated transaction.

can be used to identify and isolate for analysis the various sources of your income. Some businesses receive income from typical sales, but also have other income not common to their daily routine. The records help keep track of the various streams. Or you may have multiple rental properties and need to identify the correct property for allocating income or expenses. With careful categorizations in your records, you can view an income statement broken down per property basis; this detail will help you easily discern how each property is performing.

Nowhere are records more important than in the acquisition or disposition of real estate. You may have purchased a building several years ago and are now looking to sell it. The sale brings up a question of the total gain or loss. Reviewing the settlement statement will confirm the original cost that should have been recorded at the time of purchase. Further, sometimes a business determines that a cost segregation will help accelerate expenses. Having a settlement statement or the AIA documents from the purchase of the building will be critical to help the cost segregation company identify shorter life assets.

Congress introduced the CARES Act during the COVID-19 pandemic. The Paycheck Protection Program was part of the CARES Act and allowed small businesses to seek loans from the Small Business Administration. As part of the program, a loan forgiveness component allowed borrowers to request loan forgiveness on the portion of qualified expenses spent during the initial 8-week or 24-week period of their loan.

Borrowers were required to submit records such as payroll details and cancelled checks of rent, utilities and interest payments in order to receive loan forgiveness. Imagine missing out on having a $200,000 loan forgiven because you were unable to provide support.

Why you should keep records Good records are more than just backup for an IRS audit you may have to endure someday. But in that event, they certainly may save your business from having an expense disallowed. During an audit a common target will be the meals and entertainment expense account. Auditors will look for unreasonable expenses and question them.

Additionally, good records provide an opportunity to trace events that occurred in the past. It’s not uncommon for a business owner to lose a large sum of money due to employee theft. The owner with good records will be able to trace transactions and prove that he is the victim of a business crime.

Good records help you monitor the progress of your business and create financial data for you to analyze. They

Records you should keep Purchases, sales, travel, transportation, entertainment, gifts and capital assets are all items that produce supporting documents. Banks, PayPal, Venmo, QuickBooks or other vendor sources are helpful in providing the supporting documents. A good rule of thumb is to review your financial statements and have support for every balance sheet account so that you can easily trace the balance at the end of the year back to source documents.

A bank reconciliation should be performed monthly.

Support for the reconciled balance would be the month-end bank statement, including copies of any checks and deposits.

In addition, there may be A/R and A/P invoices included as part of the support.

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.

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.

23

Eric Shadowens: Keeping Good Records Can Save You Continued from Page 22 Deducting a business meal generally requires support in the form of a receipt for any meal exceeding $75. In addition, the recorded transaction should include a description of the business purpose discussed along with the participants involved. Costs under $75 should still be recorded in a log or have a description provided in the memo section of your accounting transaction to provide support. This is often overlooked and can cause grief during an audit when the agent requests support for the meal.

Save any support for the purchase of an asset. Largeticket items such as vehicles, buildings, machinery, furniture, etc., may be sold in the future and/or will require deprecation once placed in service. Having a copy of the invoice, settlement statement or purchase agreement is helpful to have handy at the time of purchase and sale.

defer the gain. In that situation, the basis of the new property becomes the same as the basis of the old property.

Therefore, you should keep all documents from the old property until you dispose of the new one.

There are occasions where an insurance company or creditor may require you to keep a document for a longer time period than the IRS requires. Therefore, you should make sure there are no non-tax reasons to keep the document before discarding it.

Where you should keep your records I can recall several years ago – long before the Internet – when a local news investigator trying to prove a point climbed into dumpsters of local financial institutions to obtain records containing personal information of their customers. And Mother Nature can wreak havoc in an area and records can be lost from flooding or from being blown away.

Technology has provided a much easier way to store records. Accounting software allows users to attach How long you should keep records You don’t necessarily have to be a packrat when it comes records to actual transactions that can be to saving documents. It’s a good idea to have a process in stored on a local place so that you can purge documents on a regular basis. server or on the Keeping records around could also become a problem due cloud. You can also to hackers trying to gain access to them. Therefore, plan use the tried-andhow you will store your documents safely and how often true method of cabiyou will destroy old ones.

There is a time period you can use as a guide to help with net storage. I can think back to days this decision. The IRS provides the following statute of when my work limitations which applies to tax returns: created rows upon rows of cabinets. The 1.

Keep records for 3 years if situations (4), (5), and (6) (pixabay.com) best advice for where you below do not apply to you.

2.

Keep records for 3 years from the date you filed your should store your records is to make sure they are safeguarded properly. original return or 2 years from the date you paid the Business owners have plenty to worry about when tax, whichever is later, if you file a claim for credit or running a business. Sometimes the mundane part of the refund after you file your return. business, such as keeping records, can go overlooked 3.

Keep records for 7 years if you file a claim for a loss because it seems to be more hassle than benefit. Do you from worthless securities or bad debt deduction. take the call from your A+ customer to discuss delivering 4.

Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the more product, or spend the time with your records? It’s an easy decision, but opting for the former could cause the gross income shown on your return. latter to come back and bite you in the rear someday if 5.

Keep records indefinitely if you do not file a return. ignored. It’s all about making money. And saving it too.

6.

Keep records indefinitely if you file a fraudulent return.

Eric Shadowens is a Certified Public Accountant and Senior 7.

Keep employment tax records for at least 4 years Tax Manager with DMLO CPAs (Deming Malone Livesay + after the date that the tax becomes due or is paid, Ostroff, dmlo.com). You can reach him by calling (502) 326whichever is later.

2319 or emailing him at eshadowens@dmlo.com. You can also connect with him on social media: Also, it’s a good idea to keep records indefinitely from Twitter: @ericshad76cpa the purchase of property. It can be purged once you dispose LinkedIn: linkedin.com/in/ericshadowens of the property, but there is an exception. You may have BiggerPockets: Biggerpockets.com/users/EricShadCPA exchanged the property with a new like-kind property to Copyright MMXX Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

24

Do You Want Your Business Card to Appear Here? Join KREIA as a Business Card Advertiser for only $199/year and see your ad in a year's worth of KREIA newsletter issues!

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.

25

Blockchain & Real Estate: A Match Made in Heaven Companies and municipalities find benefits in adopting new technologies

By Nina Musgrave Imagine a world without typos in the Jefferson Co. Deed Room. Blockchain technology makes that possible. It is already being used in a variety of industries across the world, real estate included.

Blockchain transactions can make purchasing property more efficient, secure and transparent. They can remove the paper-based, manual process and take less time. While blockchain is relatively new, it isn’t going anywhere.

The first blockchain real estate transaction in the U.S. was recorded in 2018 on the Ethereum blockchain. South Burlington, Vermont, was selected by Propy, a disrupter in real estate tech, to be a pilot site for creating blockchain property deeds. They split the city’s current recording structure into four levels, and Propy’s involvement with title registry was adjusted at each level. This first residential title transfer was the lowest involvement. Propy also recorded the first commercial deed transfer on the blockchain in July 2018.

Arizona’s first blockchain deed was recorded in 2018.

Internationally, Sweden and the UAE are excellent examples of countries using blockchain smart contracts to reduce costs and add value to citizens and taxpayers. Vermont,

Arizona, Sweden and the UAE all had buy-in from their elected and appointed leaders. They understand the importance of innovation and wrote laws and ordinances accordingly.

There are other ways to use blockchain smart contracts to simplify and/or expand real estate transactions. Mortgage companies are exploring new systems in lending, where the entire process will live in one digital document.

Real estate investing companies use tokenization to let investors buy or sell a fractional interest in an asset. Smart contracts make this painless, fast and tidy. Platforms are being developed for homeowners to rent out their house in exchange for cryptocurrencies, not just Bitcoin.

Speaking of cryptocurrency — yes, you can buy a house with Bitcoin! You can obtain a mortgage secured by your crypto investments. You can even use cryptocurrency as escrow funds in some locations.

Information shared via blockchain smart contracts is considered more secure and resistant to alterations. I hope our local government adds it as a tool to eliminate errors, save money, and to build trust among our communities.

Nina Musgrave is a past KREIA board member. She is passionate about real estate, technology, and potato chips.

Most platforms: @onlyonenina

Copyright MMXX Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

26

Copyright 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.

27

QUOTABLE QUOTE

“Buy on the fringe and wait. Buy land near a growing city! Buy real estate when other people want to sell. Hold what you buy!”

– John Jacob Astor

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.

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.

29

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.

30

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.

31

National REIA Real Estate News Roundup ???

How to Find a Bank for a PPP Round 2 Loan by May 31

National REIA, of which KREIA is a chapter, reports on issues affecting real estate investors and also links to stories of st interest from other organizations. Here is a sampling of recent Were you planning to tap into the small business news and resources that Brad Beckett, NREIA’s Director of Paycheck Protection Program, which provides loans to help Education & Outreach, has compiled. For more news, visit businesses keep their workforce employed during the realestateinvestingtoday.com COVID-19 crisis? Good news. The U.S. House has voted to change the deadline from March 31 to May 31. To apply, you’ll need to go through a bank or lender. If your bank is not set up to make PPP loans, check out a map tool from the Small Business Administration to help match you to a The Wall Street Journal (reposted on Realtor.com) recently lender. wrote about how so-called “big firms” are crowding out the Use the SBA map tool: bit.ly/k2104ppp market for houses and in the process, driving up prices. They report that it runs the gamut from individuals with smart phones and a few thousand bucks to pensions and privateequity firms with billions. Yield-chasing investors are snapping According to new data from Redfin, buyers who locked up single-family houses to rent out or flip. In fact, in suburban in mortgage rates for second home purchases shot up by a Houston, instead of bidding wars for just one home, the record 128% year-over-year in March – marking the 10th entire subdivision was sold. “You now have permanent capital competing with a young couple trying to buy a house,” straight month of 80%-plus annual growth. Redfin says that the intense demand for vacation homes is a symbol of an real estate consultant John Burns was quoted. ongoing uneven economic recovery in the U.S., with some Read the article: bit.ly/k2104bigfirms Americans being able to afford second homes and many others unable to afford their first.

Read the report at RedFin: bit.ly/k2104secondhomes

Big Firms are Crowding the Market For Houses and Driving Up Prices

Pandemic-Driven Demand for 2nd Homes Soars

Best Counties for Buying SingleFamily Rentals

According to data from ATTOM’s Q1 2021 Single Family Rental Market report, “The single-family home rental business is less profitable this year compared to last year across most of country, with yields on the average deals decreasing….” However, “returns on single-family rentals still generally remain strong and there are pockets, especially in the Midwest, where yields top 10 percent.”

Read the report & see the map: bit.ly/k2104attom

Millennials Continue to Dominate Home-Buying Market According to the National Association of Realtor’s 2021 Home Buyers and Sellers Generational Trends report, millennials continue to make up the largest share of homebuyers coming in at 37%. In fact, millennials have been the largest share of buyers since NAR’s 2014 report.

Read the full report: bit.ly/k2104millennials

Foreclosure Activity Sees An Uptick In February 2021 According to ATTOM Data’s latest U.S. Foreclosure Market Report, there were a total of 11,281 properties with foreclosure filings (default notices, scheduled auctions or bank repossessions) across the nation. This figure is up 16% from January but down 77% from one year ago. The Highest foreclosure rates were in Utah, Delaware, and Florida.

Read the report: bit.ly/k2104foreclosures

NMHC Says 79.8% of Apartment Households Paid Rent by April 6th The National Multifamily Housing Council (NMHC) says that 79.8% of apartment households made a full or partial rent payment by April 6th, 2021. This figure is 1.8% higher than those who paid rent through April 6, 2020. The data comes from the NMHC’s Rent Payment Tracker, which uses data from 11.6 million professionally managed apartment units across the country.

Read the report: bit.ly/k2104rent

Copyright MMXX Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

32

Copyright 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.

33

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.

34

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.

35

Mike Butler: Timesavers & Moneymakers Continued from Page 6

National REIA News Briefs Continued from Page 32

create a “recipe” that sends you an email daily of all the homes for sale in certain Zip codes.

Evernote and Slack: Many investors use these to help stay organized in their business. From buying, pending deals, rehabs, tenants, and more. I have spent a little time with them, but it really hurts my head to learn a new system.

Loom.com is the new kid on the block. It lets you make videos on the fly from your desktop, laptop, smartphone, iPad and more! You can record your screen or use the camera to record with audio. For the free version you get to record unlimited videos with a maximum length of 5 minutes. If you want to do longer videos, it costs some coins. I use the free version and it works great. How could you use this? Perhaps to show a contractor something you want fixed. Remember, you can have your team members get the free version so they can show you stuff.

Google Duo is fairly new. If you are used to “FaceTime” on iPhones, Google Duo does the same thing, and you can use it on both Android phones and on iPhones! Not only great for your business, but it is awesome for family too!

InvestorBooksPro.com System with Tenant Tracking: America’s only Complete System for Real Estate using QuickBooks Pro Desktop®. It’s one simple system to quickly and properly handle absolutely everything in your real estate business! It was created by an investor for investors. KREIA members can save 50% now using this coupon code: kreia2021 There are dozens and dozens more free tools out there, and I just ran out of space here. This short list does not begin to touch all of the free apps available for your smartphone. Enjoy!

To your continued $uccess,

Reminder: Tax Day Now May 17th

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.

Last month the IRS announced that the federal income tax filing due date for individuals for the 2020 tax year will be extended from April 15, 2021, to May 17, 2021.

Read the IRS news release: bit.ly/k2103taxday

Who Americans Spend Their Time With, by Age Time is the one finite resource that we closely guard and often carefully choose how we spend it. An interactive infographic from the Visual Capitalist takes a look at who Americans exactly spend their time with and for how long: with family, with partner, with friends, with coworkers, and time spent alone.

See the chart: bit.ly/k2104time

NAHB Publishes ‘What Home Buyers Really Want’ for 2021 The NAHB recently released their annual report that they say sheds light on the housing preferences of the typical home buyer as well as how those preferences change over time, and how they may vary based on demographic factors.

Topping the “essential, must-have” lists for home buyers in 2021 are laundry rooms, ceiling fans, and having a full bath on the home’s main level.

Read the report PDF: bit.ly/k2104want

Couple Buys Dream Home, Then Seller Refuses to Move Out A couple in California who cash-purchased their dream home suddenly got a rude awakening when the seller refused to leave, citing the coronavirus eviction moratorium. According to FoxBusiness, it has been over a year and the couple still cannot gain possession of the property.

Read and watch the video: bit.ly/k2104dreamhome

CFPB Wants to Prevent Foreclosures Until the End of the Year A new rule proposed by the Consumer Financial Protection Bureau (CFPB) seeks to prevent a wave of foreclosures as some pandemic protections for homeowners are set to expire. The CFPB says 1.7 million borrowers could be at risk of foreclosure when the forbearance program ends in September. The rule will need final approval. Stay tuned.

Read the CNBC story: bit.ly/k2104consumer 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.

36

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.

37

National REIA News Briefs Continued from Page 36

So, Barndominiums Are a Thing?

Yes, we have seen a lot of news about the tiny house phenomenon and stories about repurposing shipping containers into swimming pools. Now comes the “barndominium” – basically a converted home made from a pole barn or industrial building.

See the possibilities at Realtor.com: bit.ly/k2104barndo

Will You Be Ready When the Eviction Moratorium Ends?

On a recent episode of the Rent Perfect Podcast, David Pickron says the current tenant/landlord climate feels like a good old-fashioned game of musical chairs. As housing providers anticipate the end of the CDC’s eviction moratorium, it’s critical for landlords to know and prepare for what’s next. Pickron and his guest discuss the three types of current tenants and how to work with each distinct group to protect your asset and your bottom line.

Listen to the podcast: bit.ly/k2104podcast

Top Destination Cities for Renters

We love stories about where people are moving. It’s great “intel” and offers a snapshot for investors looking for that next market. A recent report from The U.S. government is reporting that total construction spending in February was at a seasonally adjusted annual rate STORAGECafé show that 21% of renters moving out of big cities of $1,516.9 billion, which is 0.8% below January’s revised relocated to the suburbs, but big cities like Los Angeles, New estimate. However, February’s figure was 5.3% higher than York and Chicago still top the list of “Top 100 Cities for Inone year ago. Residential construction was at a seasonally bound Renter Migration.” Louisville comes in at No. 29 – adjusted annual rate of $717.9 billion in February, which is and we were beat by Indianapolis and Nashville. Grrr!

0.2% lower than January’s revised estimate.

Read the report: bit.ly/k2104destination Read the report: bit.ly/k2104construction

Construction Spending Down 0.8% in February

Copyright MMXX Kentuckiana Real Estate Investors Association • P.O. Box 91225 • Louisville, KY• 40291 (502) 509-2216 www.KREIA.com DISCLAIMER: KREIA does NOT pre-qualify, evaluate, endorse, guarantee or warranty any particular deal, service, company, or person. The Kentuckiana Real Estate Investors Association recommends you perform your own due diligence & seek appropriate legal, accounting, or other professional advice before making any investment. KREIA is a Member of National Real Estate Investors Association.

38

Copyright 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.

39

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) at Woodhaven Country Club, 7200 Woodhaven Road, Louisville, KY 40291 KREIA.COM • twitter.com/reiaky • instagram.com/reiaky • youtube.com/reiaky facebook.com/reiaky (public) • facebook.com/groups/kreiaky (private)

UPCOMING EVENTS

Rehabbing for Investors KREIA’s first all-women rehabbers panel – Stacey Duvall, Wendy Kays and Jacqueline Smith – will take us through the steps of turning a distressed property into a topdollar retail flip – or into a cash-flowing rental. We’re back live at Woodhaven! And we’re also live-streaming for folks who’d prefer to stay at home. April 22, 5-9 p.m. ► Early Meeting: Rob Bergeron of The Louisville Network ❖ April 24th — 9 a.m.-2 p.m. Saturday Workshop: Rehabbing Systems for Investors. Get your early-bird discount! ❖ April 27th — noon-1 p.m. L.O.T.S. event. We visit Stacey Duvall’s current rehab project. Members only. Lunch provided! ❖ May 4th — Noon-1:30 p.m. Lunch & Learn. Meet up for education and networking. Members only. You buy your own lunch. Ed Gibson hosts. Sharon Vornholt is the guest speaker.

❖ May 11th — Noon-1 p.m. Tool Tip Tuesday. Tamara West hosts a virtual Zoom call where she demonstrates software and resources. Members only. ❖ May 13th — 5 p.m.-7 p.m. KREIA Happy Hour. Networking event is at Woodhaven this month, right before KREIA’s board meeting. Meet your board members! Everyone invited. ❖ May 20th — 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: • May 27: Foundations of Finance with Erik Hitzelberger • June 24: Local & National Trends • July 22: TBD (Shark Tank or BRRRR)

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