Creative R E A L E S TAT E Not-SoSimple Remodel Read Gloria Weinblatt's Success Story PAGE 2
Deal of the Month PAGE 2 Success Story PAGE 2 February Main Meeting: Residential Assisted Living Care Homes PAGE 3 Typical Renovations for a Residential Assisted Living Home PAGE 4 Follow the Money in Residential Assisted Living PAGE 5 Contract of the Month PAGE 5
Market Update PAGE 6 December Meeting Recap PAGE 8
New Members PAGE 10 January Meeting PAGE 12
Minnesota Real Estate Investors Association | www.MnREIA.com
January 2019 | 1
DEAL of the
MONTH Submit you’re before and after pictures and a description of the project. All valid entries will receive $50 REIA Bucks and one lucky winner every month will win a $50 Home Depot Gift Card. Entries can be of current deals or past projects. Submit your entries to amckinnon@ therealestatehouse.net.
Not-So-Simple Remodel Gloria Weinblatt
In the beginning, we bought a 1,800-sq.-ft. condo as our MN home. This condo needed a kitchen remodel as no work had been done in that room for 30 years, we were told. We hired Profile Builders to redo our kitchen. We promptly left for Texas for the winter and stayed in touch with the contractor regularly through Face Time and Skype. Thank goodness we were “out of the state.” Every photo or phone call was a crisis! This project ran like a TV show: Tear-down, find disaster that costs more money than budgeted, then new estimates, more time, and finally the completion was perfect. Problem: It took longer than 30 minutes — as on TV. Our goals were to install a new floor, raise the ceiling and add lots of storage space. The first disaster was that Profile Builders found that there were 2 levels of kitchen flooring that needed to be removed and a whole new sub floor had to be added in order to raise the new floor to the same level as adjacent dining room floor. Not complicated work; just more time and more money. Next, the drop down ceiling tiles were removed only to find another ceiling above. The second plasterboard ceiling had to be removed and then Profile Builders found a third ceiling with popcorn plaster on it that we concluded also had to be removed. When we reached the top of the ceilings, we learned from the Minneapolis building inspector that a cement barrier was nec-
2 | January 2019
essary as this was a condo. None of this was difficult work; it just cost more time and more money. Along the way we realized that our appliances needed replacing. Again, not difficult work; just lots more time and lots more money. This was to be a 6-week to 8-week project. However, it took 3 months. Often it was the various inspectors who held up the progress. Original budget: $10,000 Additional Items: 2 floors: $1,500 3 ceilings: $2,900 Appliances: $3,000 _____________ Final cost: $17,400 Projected time: 2 months Actual time: 3 1/2 months
Conclusion: We are happy with the end results. Profile Builders gets our highest recommendation for quality work and responsiveness.
Minnesota Real Estate Investors Association | www.MnREIA.com
HOW TO TURN ONE SINGLE FAMILY HOUSE INTO A
Residential Assisted Living Care Home with Gene Guarino
Learn step-by-step how to capitalize on this remarkable opportunity. You will learn how to generate mega-cash flow, how to get twice the fair market rent with long-term, low-impact tenants and how to get a secure ROI.
9 A.M. TO 2 P.M. SATURDAY, FEBRUARY 9, 2019 Best Western Plus — North Metro Event Center 1000 Gramsie Rd. • Shoreview, MN 55126
Gene Guarino is President of Residential Assisted Living Academy in Phoenix, AZ and has over 30 years experience in real estate investing and business. Today, Gene is focused on just one thing… investing in the mega-trend of senior assisted housing. Having trained tens of thousands of investor / entrepreneurs over the past 25 years, he now specializes in helping others take advantage of this mega-trend opportunity.
Senior housing is the best opportunity for the next 20 years in real estate investing.
With 77,000,000 baby boomers, this is an unstoppable tsunami of opportunity for you and your portfolio.
You will learn how to step-bystep capitalize on this mega-trend opportunity. You will discover how to generate substantial cash flow, how to get twice the fair market rent with long-term, low-impact tenants and how to get a secure ROI.
Here are the facts: • 10,000 people a DAY are turning 65 • 4,000 people a DAY are turning 85 • 70% of these people will need assisted living accommodations for an average of 3 years.
In this session, Gene Guarino will show you step-by-step: • How to turn a Single Family Home into a cash flow machine • How to rent your home and get TWICE the fair market rent • How to operate the business (if you want to) AND still collect the rent • How to NET $5,000-$15,000 per month from each house • How to do it with or without your own money.
EARLY BIRD SPECIAL PRICING Up To 2/5/2019 Members: $39, Non-Members: $59 2/6/2019 to 2/7/2019 Members: $49, Non-Members: $69 2/8/2019 to 2/8/2019 Members: $59, Non-Members: $79 Regular Price Members: $79, Non-Members: $99
VISIT MNREIA.COM TO REGISTER.
Minnesota Real Estate Investors Association | www.MnREIA.com
January 2019 | 3
© ADOBE STOCK
Typical Renovations for a Residential Assisted Living Home The size of the home, the number of bedrooms and bathrooms and the layout are all major considerations when it comes to choosing a home for Residential Assisted Living. In general, bigger is better. More bedrooms and bathrooms means more revenue. Private rooms bring higher income then shared rooms. Private bathrooms can generate an additional $500 to $1,000 a month in additional revenue. Interior space can be reconfigured to create additional bedrooms. Adding bathrooms is significantly harder and more costly though. BUT adding bathrooms will create additional revenue that will typically pay for themselves in less than 1 year. Converting a large bathroom into 2 smaller ones is an alternative. Converting under-utilized rooms into bedrooms is typical as well. Consider converting garage space and porches into revenue generating bedrooms and bathrooms as well. Always use licensed contractors and get the proper permits when doing this type of work. If required you may need to install a 4 | January 2019
fire suppression system in the home. This can cost $10,000 to $25,000 depending on many factors. Installing a smoke detection system that is monitored by an outside service may be required as well. That is $1,500 to $3,000 to install and $30-$50 a month to monitor. If these types of improvements and costs “scare you” at this point, I understand but you have to look at the cost to benefit ratio. If you invest $30,000 in these renovations and it allows you to make $10,000 per month in net revenue, how long is the “payback” period? Just 3 months. That is simple math and answers the question, “is it worth the effort?” If you add an additional $30,000 in improvements that allows you to generate an additional $5,000 a month, would that be a good investment? Many real estate investors will remodel a kitchen or add a pool or an addition or a deck, that could cost more then that and would only generate a fraction of the revenue that a Residential Assisted Living Home would generate. The most common improvements to a
home address the safety of the residents. Grab bars installed in the shower and around the toilet are common. If you are 85 years old, it’s harder to get up and to keep your balance. They are not expensive and they are pretty easy to install. Consider widening the doors as well. It doesn’t need to be every door, focus on the doors they will be using the most. 36 inches wide is great. If a senior has a walker or a wheelchair, that’s a real plus. If you can’t widen the door way consider an offset hinge. For $15 gets the door out of the doorway about inch. An inch doesn’t sound like a lot, but if you’re a senior and using a walker or wheelchair, that inch is going to save your knuckles. Smooth floors means less of a trip hazard. Carpet is softer but it also increases the potential for a fall because seniors may not lift their feet when they walk and they can actually increase the risk of a fall. Good smooth surfaces to consider include: hard wood, tile, linoleum and vinyl. To learn more visit: www. RALAcademy.com.
Minnesota Real Estate Investors Association | www.MnREIA.com
FOLLOW THE MONEY
in Residential Assisted Living By Gene Guarino
How much can I make? That is a common question I get when people come to the Academy to learn about Residential Assisted Living. There are 2 directions that you can go. • Own the Real Estate and rent it to an operator • Own the Real Estate AND operate the Residential Assisted Living business as well. If you own the home and lease it to an operator, you can get up to twice the fair market rent. As a real estate investor, that’s going to change your positive cash flow from a few hundred dollars to potentially a few thousand dollars a month.
© ADOBE STOCK
See FOLLOW, Page 10
ANOTHER PERK FOR OUR MNREIA MEMBERS
CONTRACT OF THE MONTH Free for MEMBERS ONLY at our main
monthly meetings
Minnesota Real Estate Investors Association | www.MnREIA.com
January 2019 | 5
Make Sure You’re Getting the
HOME DEPOT PROXTRA BENEFIT that You Deserve!
Due to recent back-end changes with Home Depot’s ProXtra account, members are reminded that they must log into their ProXtra account to make sure they have entered the agreement code as well as ensuring they’ve added their preferred credit cards. For new accounts, Home Depot will send members a “Welcome to Home Depot ProXtra” email along with a link to access their account. The agreement code is vitally important as this allows Home Depot to track purchases for rebate determination. Please direct any questions to MnREIA’s Executive Director, Anna McKinnon at 763-432-2809 or Anna@MnREIA.com. Remember, MnREIA members receive a 2% rebate on all Home Depot purchases, 20% off interior & exterior paints and primers and 15% off on in-store purchases of exclusive Hampton Bay cabinets (excludes Designer Series). With savings like these, it pays to be a member of National REIA! If you are not a MnREIA member and would like to become a member, please visit www.MnREIA.com.
Market Update
Median Sales Price
Market Update Market Update
Median Sales Price Median Sales Price
MARKET UPDATE
Median Sales Price
SEPTEMBER
Median Sales Price: ▼
Median Sales Price: ▼
Pending Sales: ▼
Pending Sales: ▼
Decreased from $268,000 in August to $262,000 in Decreased from 5,705 in August to 4,762 in Septem Sales Price: ▼ Decreased from $268,000 in August to $262,000 in Pending Sales: ▼Decreased from 5,705 in August to 4,762 in September September September ed from $268,000 in August to $262,000 in Decreased from 5,705 in August to 4,762 in September Closed Sales: ▼ Closed Sales: ▼ ber New Listings: ▼ Decreased from 6,678 in August to 5,087 in Septem New Listings: ▼ Decreased from 6,678 in August to 5,087 in September Closed Sales: ▼ Decreased from 7,823 in August to 6,857 in September Decreased from 7,823 in August to 6,857 in September tings: ▼ Decreased from 6,678 in August to 5,087 in September ed from 7,823 in August to 6,857 in September Month’s Supply of Inventory: Month’s Supply of Inventory: ▼ ▼
Decreased from 2.6 months in August to 2.5 months in September Decreased from 2.6 months in August to 2.5 months in September s Supply of Inventory: ▼
ed from 2.6 months in August to 2.5 months in September 6 | January 2019
Minnesota Real Estate Investors Association | www.MnREIA.com
Upgrade from your FREE professional website to a Premium Website! Upgrade from your FREE professional Upgrade from your FREE professional Upgrade from your FREE professional website to a Premium Website! website to a Premium Website! website to a Premium Website! Premium websites include: • All 6 Pre-Built Pages Premium websites include: All Aspects of Home Remodeling and Repairs (same as on the free sites) mium websites include: websites include: • Create an Unlimited number of Call your local Experienced Handyman • All 6 Pre-Built Pages Custom Pages •Pre-Built Pages All 6 Pre-Built Pages Jim McKinnon (612) 590-0830 (same as on the free sites) • Repair Estimate Worksheet Jim.McKinnon@hotmail.com (same as on the free sites) • Create an Unlimited number of e as on the free sites) • Including a Mobile Version
• Create an Unlimited number of Custom Pages te an Unlimited number of o• Scope Of Work (Auto Generated) Custom Pages Repair Estimate Worksheet om Pages • Single Family Property Analyzer •ir Estimate Worksheet Repair Estimate Worksheet • Including a Mobile Version o Mortgage Calculator •ding a Mobile Version Including a Mobile Version o Scope Of Work (Auto Generated) o• Amortization Schedule o Scope Of Work (Auto Generated) Single Family Property Analyzer o Scope Of Work (Auto Generated) o Offer Generator •e Family Property Analyzer Single Family Property Analyzer o Mortgage Calculator • Co-Market Other Peoples Properties o Mortgage Calculator o Amortization Schedule o Mortgage Calculator o Amortization Schedule o Offer Generator o Amortization Schedule o Offer Generator • Co-Market Other Peoples Properties o Offer Generator • Co-Market Other Peoples Properties Market Other Peoples Properties
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Minnesota Real Estate Investors Association | www.MnREIA.com
January 2019 | 7
Member Alex Cordoba telling us all about one of his success stories and how MnREIA has helped him!
Joe Pepka received an award for Outstanding Leadership!
Glenn Williams receives an award for Outstanding Leadership!
Beautiful shot of Executive Director of MnREIA, Anna McKinnon!
President of MnREIA Mike Jacka talking about how much Executive Director has helped MnREIA and he then presented her a plaque for being an exceptional Leader! Member Patti Slatosky posing with President of MnREIA, Mike Jacka – Jackie won a Lifetime MnREIA membership!
One of the donation boxes FULL of toys! Thank you everyone who donated!
Member Adam Hardy telling us all about one of his success stories!
MnREIA volunteer Ma Vang & member Paul Paulson networking!
DECEMBER MEETING RECAP Thank you to everyone who came to our annual Toys for Tots Holiday party! We received over $1,000 in toys and over $500 in cash! We hope you all enjoyed networking, the food and drinks, playing bingo, and winning prizes! We truly appreciate everyone who donated and there is going to be a lot of happy Children because of YOU! 8 | January 2019
The MnREIA crew and the Marines that came to our Toys for Tots event!
Minnesota Real Estate Investors Association | www.MnREIA.com
President of MnREIA Mike Jacka and Tech Support staff Darryl Frieburg hugging as he got an award for his very own well deserved plaque for being an allstar employee!
Ma Vang won the Volunteer of the year award! Posing with the President of MnREIA, Mike Jacka and the Executive Director, Anna Mckinnon.
We had lots of WONDERFUL giveaways at our Toys for Tots event!
Having a great time!
Lots of our members we’re really in the holiday spirit!
Members Erin & Juan Paredes.
Vendor Fran Jones talking with member’s about her services!
More smiles and good conversations.
Minnesota Real Estate Investors Association | www.MnREIA.com
Mr. Cleveland and Michelle Wallin enjoying some food and each other’s company
Members Sherri & Duane Lahn posing for the camera.
January 2019 | 9
CONGRATULATIONS TO THE NEWEST
MnREIA MEMBERS! Bretta Alexander
Casey Johnston
Louis DeMedici
Trevor Michel
Stacey Watje
Eric Vigil
Eric Reinhart
Troy Dukart
Elizabeth Nelson
Channon Miner
Dylan Beckwith
Joseph Scuderi
Tom Walters
Matt Knutson
Mai Lee Vang
Bryan Morgan
Mai Xiong
Karen Hopp
Martin Dekker
Reine Kassulker
Choua Lee
Waqas Azam
Karen Bennett
John Meyers
Mayde Yang
MEME OF THE MONTH
NOVEMBER 2018
10 | January 2019
FOLLOW, Continued from Page 5 Significantly different. In addition, your tenant will want a longer lease. 3, 5 or even 10 years. They will not want to lose their lease. Typically they will also be a lower impact tenant that will take care of the property better then the average tenant. They are generating income and they will want the home to be kept up and well maintained to generate that If you have income. You may be asking, why would the right be willing to pay you up to location and someone twice the fair market rent for your the home is home? Simply put, they will be making the “right” a huge profit, so it works for them. Location is the key. If you have home for the right location and the home is the operating this “right” home for operating this business, business, then then it is a win-win situation. Many people can’t or choose not to buy the it is a win-win location they operate their business situation. in. Not everyone is a savvy real estate investor. Zoning is one of the first considerations. Many people are surprised when they discover that this can be done in a residential neighborhood even with an HOA. Knowing the best locations and then knowing the terms and the questions to ask are critical. Without that knowledge you will most likely make costly mistakes and get a simple response of “you can’t do that” from the town or city that your property is in. Knowledge is key. The amount of rent you charge will depend on many factors including: what improvements are you willing to do, what are you willing to allow the tenant to do, length of the lease, rent concessions etc. How much profit can the operator of the home make? The national average for a private room in an assisted living facility is $3,600 per month per person. If your home is licensed for 10 residents, that is $36,000 in potential gross income. If the expenses and the debt service $26,000, you are netting $10,000 a month in profit. If you focus on a “nicer” home you can charge higher then average rent. The expenses are virtually the same with just the potential increase in the debt service. If your debt service increases by $3,000 a month and you can generate an additional $10,000 to $20,000 a month, that’s pretty simple math. If you’re interested in learning more about the Residential Assisted Living opportunities, check out our website at www. RALAcademy.com Minnesota Real Estate Investors Association | www.MnREIA.com
MESSAGE from
MIKE JACKA KIM BURKE
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Minnesota Real Estate Investors Association | www.MnREIA.com
January 2019 | 11
Minnesota Real Estate Investors Association, Inc. 7040 Lakeland Ave. N #200 Brooklyn Park MN 55428 (763) 432 2809
N E T WO R K I N G ~ T R A I N I N G ~ E D U CAT I O N
JANUARY MEETING: Make Offers Like a Pro
with Mike Jacka
CALENDAR OF EVENTS: JANUARY
If you’re not making offers, you’re not buying houses. You now have the tools to help you do just that, Make Offers Like a Pro. Mike will show you how to quickly and accurately estimate repairs, analyze a property and make offers that get accepted.
6-9 p.m. Tuesday, January 2 Banquets of Minnesota 6310 Highway 65 NE Fridley, MN 554322018 12 | December
Minnesota Real Estate Investors Association | www.MnREIA.com