Your Gateway to Investment Success
And more reasons why you need to attend the tradeshow!
DO YOU WANT TO GIVE RENT OUT FREE?
Learn about the new law that could mean trouble for landlords
THE IMPORTANCE OF CASH RESERVES
Why you need this to help your future self WIN $500 CASH
We are thrilled to bring you this edition packed with exciting updates and valuable insights for your investing journey The highlight of this month is the highly anticipated REIA Expo and Tradeshow This event is an unparalleled opportunity to connect with a diverse range of vendors, build your dream team, and gain new knowledge to elevate your investing business.
Stay connected with updates on our growing community, member achievements, and upcoming networking opportunities At Milwaukee REIA, our mission is to support you every step of the way Our newsletter is packed with the knowledge and connections you need to thrive in your investing business Dive in, explore the benefits, and let's grow together.
Happy reading, and we look forward to seeing you at the Expo!
5 Reasons You Need To Attend
The 2024 REIA Expo + Tradeshow
Every year, the Milwaukee REIA Expo + Tradeshow draws a crowd. It is the place for real estate investors to meet and network with vendors you need to succeed in real estate investing. Whether it’s financing, property management, or renovation services, our vendors have you covered!
But - what makes this year different? And, more importantly, why should you spend Tuesday, July 9th with the Milwaukee REIA?
Learn something new at our mini-seminars - We have an exciting lineup with various topics led by industry experts Our lineup of speakers brings a wealth of experience and knowledge to the table, ensuring that each seminar is packed with valuable insights and actionable takeaways. Whether you're looking to fine-tune your existing approach or explore innovative techniques to enhance your investment portfolio, our seminars provide the perfect opportunity to expand your expertise and stay ahead of the curve in today's dynamic real estate market
1 Network with 40 + vendors in just 2 hours - We are bringing in over 40 industry professionals that are essential to your real estate investing business. If you are just starting out and building your team, you will find vendors that can help you get started and success. On the flip side, if you already have a team but need a refresh, our vendors are here to help!
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2 Enjoy cocktails with the vendors - Cap off your day of exploration and learning with our exclusive post-tradeshow cocktail hour! Unwind in a relaxed atmosphere and mingle with fellow vendors and investors in a laid-back setting. This is your chance to deepen connections, exchange ideas, and forge partnerships in a more intimate environment.
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Network with other real estate investors - Not only do we pack the room with vendors, there will be 150+ like minded real estate investors also in the room This event is perfect to learn what other investors are doing in their business, and how they are working with the vendors in the room to excel in their investing business.
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Win $500 Cash + other raffle items - Every attendee will have the chance to walk away with some amazing prizes provided by the vendors Some of these prizes include: Hard Money giveaway, Discounts on Real Estate Mentoring, Signed memorabilia, and $500 in cold, hard, CASH!
This event is FREE and open to the public, so bring your friends and business partners. This will be an evening of meaningful connections, lessons learned, and hopefully a few prizes in your pocket by the end of the night
Make sure you pre-register to skip the line!
NEW: Bus Tour - Buying Edition!
Are you ready to transform your real estate investing knowledge into actionable success? Join us on July 20, 2024, for an exclusive event that combines expert tips and tricks with hands-on property visits only with Milwaukee REIA’s Bus Tour: Buying Edition!
Why Attend? Early Bird Pricing
Expert-Led Insights: Learn from seasoned real estate investors who have successfully navigated the market Our experts will share invaluable tips on how to effectively communicate with sellers and negotiate the best deals 1.
Practical Experience: This tour is not just about theory Visit actual properties and witness the strategies you ’ ve learned in action. Understand the intricacies of evaluating properties and making informed purchasing decisions.
Closing the Deal: Gain a comprehensive understanding of the entire buying process From initial conversation to closing the deal, our experts will guide you through every step, ensuring you have the confidence and knowledge to succeed
Networking Opportunities: Connect with fellow investors and industry professionals. Build a network of contacts that can support and enhance your real estate investing journey.
Interactive Learning: Engage in interactive sessions with real-world scenarios. Participate in discussions, ask questions, and receive personalized advice from our experts tailored to your investment goals
Wisconsin Court of Appeals case of Koble v. Marquardt Is Now Law
BY: TRISAN R. PETTIT, ESQ VIA RENTAL PROPERTY ASSOCIATION
This is a long blog post, and I apologize in advance, but I sincerely hope that you take the time to read it all the way until the end as it is very important that Wisconsin landlords know what they will be facing. This may be one of the biggest, if not the biggest, issues facing landlords in the last 30 years that I have been a practicing attorney, representing many of you.
Koble Investments v Marquardt (“Koble”) is a District III Wisconsin Court of Appeals case from Marathon County which has now been published and therefore is now the law in the State of Wisconsin. When a Court of Appeals case is published it becomes precedent for all courts that are lower than the Court of Appeals, which means all the state circuit courts in every county in Wisconsin.
The holding in Koble is that if a landlord has a void rental agreement (i.e., the rental agreement contains one of the “10 Deadly Sins” as set forth in Wis Stat § 704 44 the remedy for the rental agreement being void and unenforceable is the complete disgorgement of all rent previously paid by the tenant to the landlord Stated another way, if a landlord has a provision in its rental agreement, which includes any rental documents as they are incorporated into the rental agreement, that violate any of the “10 Deadly Sins,” the landlord must return all rent that it received from the tenant during the tenant’s entire tenancy. Essentially, because of something that may not even have been intentional by the landlord, the tenant will get to live in the landlord’s rental property for free for the tenant’s entire tenancy, even if the tenant was not damaged because of the prohibited language in the rental agreement.
While the landlord in the Koble has petitioned the Supreme Court of Wisconsin to accept and hear this case, the Wisconsin Supreme Court only accepts a limited number of cases each year and is not obligated to take the Koble case.
Additionally, the landlord in Koble failed to raise the argument that under Wisconsin law if a landlord’s lease is determined to be void, it automatically defaults to a month-to-month tenancy per Wis Stat § 704.01(2), and thus still requires the tenant to pay rent. How did the landlord fail to raise such an obvious argument? I do not know the answer for certain, but my assumption is that the attorney that represented the landlord was unfortunately not familiar with Wisconsin Landlord-Tenant law.
In May of 2023, in an unpublished District III Wisconsin Court of Appeals case also out of Marathon County entitled Henchey and Blakely v Wausau Landmark Corp (“Henchey”) the landlord also failed to raise the argument that a void lease defaults to a month-to-month tenancy and that rent still must be paid In Henchey, the Wisconsin Court of Appeals from District III also said the sole remedy for having an illegal provision in a lease was the return all rent paid by the tenant during the entire tenancy, thus allowing the tenant to live for free In Henchey, the tenant was not even a current tenant of the landlord at the time of the lawsuit. The tenant had moved out of the rental property two (2) years earlier before choosing to sue the landlord for the return of its rent Again, just like in Koble, the tenant was not damaged because of the prohibited provision included in the lease. In Henchey, the Court of Appeals analogized the inclusion of prohibited language in the lease to an auto repair shop failing to obtain prior authority from the customer to make the repair and failing to provide an estimate of the cost of the repair to the customer prior to commencing work on the customer’s car
Additionally, the landlord in Koble also allegedly failed to sufficiently develop its argument against the remedy of returning all rent received during the entire tenancy back to the tenant. The landlord also failed to advise the court that such a holding would decimate a large part of the residential rental industry in Wisconsin.
Since the above arguments were either not raised or allegedly not sufficiently developed by the landlord in Koble, those arguments are essentially waived and cannot be raised by the landlord before the Wisconsin Supreme Court.
Thus, the burden falls on the various landlord groups throughout the state, such as the Rental Property Association of Wisconsin, Inc (“RPA”) to take action and make these arguments to the Wisconsin Supreme Court by filing an amicus (“friends of the court”) brief requesting that the Wisconsin Supreme Court accept the Koble case. This is necessary so that the Supreme Court of Wisconsin can prevent an unjust outcome because the applicable law in Wisconsin was ignored.
The publication of Koble is detrimental to all Wisconsin landlords because tenants now have an even greater reason to argue that all rental leases that they have ever entered into with a landlord or property management company are void and contrary to Wis Stat § 704 44 Tenants have nothing to lose in making such an argument. If they prevail, they receive a windfall and have been able to live for free. And if they lose, their case is just dismissed and there is no penalty to the tenant
In the Koble case, the landlord failed to include the required domestic violence notice provisions as required per Wis. Stat. § 704.14. Further, the lease also contained language that allowed the landlord to terminate the tenancy of a tenant for a crime committed in relation to the rental property The inclusion of such language coupled with the failure to include the domestic violence language is a clear violation of the 10th Deadly Sin (Wis Stat § 704 44(10))
But the arguments that tenants have been making since Henchey in May of 2023, have not been as clear. In fact, some of the arguments being made stretch both the imagination and common sense.
Arguments are being made that if a landlord’s lease states that a “tenant can be evicted if they engage in criminal activity on the premises” that it violates the 9th Deadly Sin (Wis. Stat. § 704.44(9)).
Wis. Stat. § 704.44(9) says that a lease will be void if it “Allows the landlord to terminate the tenancy of a tenant based solely on the commission of a crime in or on the rental property if the tenant, or someone who lawfully resides with the tenant, is a victim, as defined in 950.02(4), of that crime.”
Where in the following language -- “tenant can be evicted if they engage in criminal activity on the premises” -- does is say that the landlord can evict a tenant if they are a victim of a crime? Nowhere. It does not state that anywhere and thus it is not a violation of the 9th Deadly Sin But it is being argued that the above language violates the 9th Deadly Sin unless you also include the following phrase: “unless the tenant, or someone who lawfully resides with the tenant, is a victim, as defined in Wis Stat § 950.02(4), of that crime.”
So, with the publication of Koble, I anticipate that landlords will see even more tenants trying to attack their leases arguing that they are void Wisconsin landlords must ensure they are using rental documents that do not violate any of the 10 Deadly Sins. If you are using the rental documents that I draft that are sold at Wisconsin Legal Blank (“WLB”), you must use the most current version of both the Residential Rental Agreement, Rules and Regulations, Nonstandard Rental Provisions, and the other rental forms that I draft
WLB provides you with a list of the most current rental documents This is necessary to protect yourself It doesn’t mean that tenants won’t still try to attack them. They will. They most definitely will. They will continue to attack them as long as there is the possibility for them to obtain that windfall and live for free.
The Koble case could completely wipe out small to mid-size landlords in Wisconsin. If many tenants living in a large rental complex come together to sue a larger landlord seeking reimbursement of all rent paid or if all tenants renting from a large landlord with multiple rental properties in the state, join in a class action lawsuit against that larger landlord seeking the return of all their rent, that landlord could go out of business as well.
If landlords are forced to file bankruptcy and/or give up their rentals, who is prepared to take over their roles? Is the government ready to step in and be a landlord? We need only look so far as the Housing Authority of the City of Milwaukee (“HACM”) to see that the government is not the answer Who then?
A final note, if you happen to be on the wrong end of one of these lawsuits and the tenant is arguing that your rental documents are void and unenforceable and that you must return all of their rent payments and let them live for free, make sure that you contact the Rental Property Association of Wisconsin, Inc. (RPA) or your local landlord association. Let them know of your situation so they can help.
Additionally if you have been sued make sure that you retain an attorney that understands and is
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TECHTOOLTALK
Wednesday August 7 6:00 pm - 7:00 pm
National Benefit of the Month
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The Importance of Cash Reserves
BY: JEFFERY WATSON
Recently, I spoke to a group of real estate investors about buying properties using a creative financing method Some of the questions asked reminded me how crucial it is that real estate investors have cash reserves to deal with the unexpected. I consider cash reserves to be “Murphy’s Law repellant” (anything that can go wrong will go wrong). Those who have cash reserves won’t be nearly as stressed as those who have no cash reserves
I will admit that I have found myself, at times, in both situations. I had a devastating casualty event occur at a commercial property Thankfully, at that time, I was sitting on $50,000 in cash which made it a whole lot easier to handle. I’ve also found myself, however, as the broke rehabber trying to squeeze out another $1,000 line of credit from Home Depot to finish a rehab that was already losing money Let me tell you, having cash reserves is far better
Some of you may say, “But Jeff, inflation is going to eat away at the purchasing power of that money ” I realize that, but I’m not talking about having large amounts of cash I’m talking about having cash reserves of maybe 10-15% of your active investment portfolio. This is especially important if you are engaged in the business of private lending. You need to have cash reserves of maybe 10% to back up the outstanding loans in case one of them goes bad
Does the money have to be sitting in a savings account making little to no interest? No, but you should be able to put the money into a demand account, such as a money market account, and make close to 5% on it. You might want to put that reserve money into something else that can quickly be made liquid. My reserves are not all in cash, but they can be turned into cash in three business days or less Having those reserves has allowed me to sleep much better at night and be prepared to take advantage of a good opportunity when it shows up.
Let me tell you a story about a man who had cash reserves at the right time that enabled him to seize a good opportunity. In the Old Testament book of Ruth, we read about a mighty man of wealth named Boaz. In the final chapter, we see that Boaz, who had recently sold his harvested barley and wheat, had the cash necessary to buy back a piece of valuable, income-producing real estate. In so doing, he secured a bride for himself, and his future heirs would inherit the land he had bought back for an extended family member. Boaz was able to take advantage of an important opportunity at a critical time because he had the necessary cash on hand
Cash reserves are a good safety net for handling things when they go wrong, and they will. It’s also a wonderful tool to use when good opportunities must be acted upon quickly