Creative R E A L E S TAT E Home Repair Projects See Faith Crump's Success Story PAGE 2
Deal of the Month PAGE 2
Arcana Offers Investors Unique, Intelligently Designed Insurance Coverage PAGE 4 Avoiding Time Wasters PAGE 5
Market Update PAGE 6 June MnREIA Trivia PAGE 7
June Meeting Recap PAGE 8
Pooling Money from Private Lenders PAGE 9 New Members PAGE 10 Message from Mike PAGE 11
July Main Meeting Info PAGE 12
Minnesota Real Estate Investors Association | www.MnREIA.com
July 2019 | 1
DEAL of the
MONTH Submit you’re before and a er 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 Gi Card. Entries can be of current deals or past projects. Submit your entries to amckinnon@ therealestatehouse.net.
AFTER
AFTER
Home Repair Projects Faith Crump
1. 9914 Humboldt Avenue, Bloomington, MN
2 | July 2019
BEFORE: 3 BR, 1.5 BA Living Room, Dining room and kitchen, 1,184 sq. ft with poor landscaping. AFTER: 3 BR, 1.5 BA, Living Room, Dining Room, newly remodeled Kitchen, 2 Bonus rooms, Family Room in Basement, and beautiful landscape. Added 2 private rooms, remodeled the Kitchen completely by replacing Cabinets, flooring, sink and fixtures, replaced Appliances and added Dishwasher. Replaced roof and HVAC. Sealed basement walls and finished 450 sq ft. basement space; and tiled ½ bathroom. Replaced some windows and French door for dining room. Repaired cracked driveway and planted perennials around the house for curb appeal. Total Square foot after repairs and improvement is 1,794 sq. ft. Sold on January 4, 2016.
Minnesota Real Estate Investors Association | www.MnREIA.com
AFTER
AFTER
2. 7418 Derby Lane, Shakopee, MN BEFORE: 2 BR, 2.5 BA, 1388 Sq. ft. with 2 car attached garage. Bought this property on November 18, 2016 Listing Agent’s Remarks: Home needs work but has potential. Be prepared with a ash light. A lot of pet damage. Cigarette smoke damage. Floor coverings are damaged. Home sold as is. Seller will not be removing anything. AFTER: 3BR, 2.5 BA, 1,388 sq ft with 2 car attached garage. After repair, we put this property back in the market on December 21,2016. Repair all damaged walls, painted the whole house, replaced bathroom fixtures, tiled the dining room area, replaced all carpets and meticulously clean the home.
3. 627 Hopkins Avenue, Michigan BEFORE: 3 BR, 1 BA, 1 Car attached garage and 1 car port, 1,050 sq. ft. WORK UNDERWAY: Adding more square footage of 1,200 sq. ft. This house would have 4 BR, 3 BA, Open concept Kitchen with Center Island, Master suite with walk in closet and master bath, family room with a fireplace and 2 car garage.
Minnesota Real Estate Investors Association | www.MnREIA.com
July 2019 | 3
Arcana Offers Investors Unique, Intelligently Designed Insurance Coverage Ask any investor and they’ll tell you they have a lot on their plates – not to mention an eye on the horizon looking for that next deal. Insurance should be one of the last things investors have to worry about especially when it comes to good coverage and quality customer service. Arcana knows this and understands it well. That is why they offer unique, intelligently designed insurance coverage for today’s real estate investors. Because, as they say, “you’ve got bigger things to worry about.” Through their exclusive partnership with National REIA, Arcana Insurance Services, LP is offering NREIA members multiple insurance products specifically designed for Investors and their tenants.
4 | July 2019
Features include no Underwriting or inspections, 24/7 desktop and smartphone Certificate delivery system, outstanding Claims Management service, the best time-tested cash flow Insurance products available in the insurance market, and a very knowledgeable and courteous staff to take care of your insurance needs. What more could you ask for? The difference is Arcana views itself not as a commodity but a committed business partner. They view relationships as a mutual journey versus an annual
contractual arrangement. They understand that National REIA revolves around these three words, Promote, Protect and Educate. Arcana believes in PROMOTING their insurance clients through joint long-term planning and the investment of capital to enhance their client’s position in their respective markets. Their customized insurance programs PROTECT your investment capital and real estate collateral. They strongly believe in EDUCATING their insureds through various media outlets and onsite presentations and discussions on the insurance topics of the day to make you better informed.
Minnesota Real Estate Investors Association | www.MnREIA.com
Avoiding Time Wasters By Alan Cowgill
Be cautious
As you get into the real estate business and begin to hone your skills as you spend a considerable amount of time and money on boot camps, education and home study systems, you’re going to realize that there’s a lot of people are a wannabes, who are willing to work as hard as you do. A lot of people will be curious about what you’re doing. They will all wish and dream that they can do what you’re doing. They are going to ask you to help them. The truth is that only some of these folks are going to be very successful. And in the future, you can become great friends, who help each other and grow together. This is what happened to me, the man who was kind enough to mentor me early on in my career. We became really good friends and that was a real blessing for me. It was a real leg up for me in this business. Still, not all people will be able to help you and it is the other people that I must caution you about. I have had people come to me with an interest and I have spent a lot of time with them. In particular, I remember my brother, who is a doctor, had a patient that claimed to be very, very, very interested in what I do. The guy was not successful financially and said he wanted to change his life. That’s when my brother asked me if I could spend some time with him and teach him what I know. Well, as a favor to my brother, I devoted a whole day to this person. I drove him around to all my properties and talked to him about the rehabs and about buying properties. I even bought him lunch. It ate up a day of my time and I really didn’t have that time to give away.
about who you spend your time with. If you’re a good person, you’ll want to help other folks make money too, but you will find they will eat up all of your moneymaking time. After all, as the old saying goes, time is money. I really needed to be spending my time running my business and growing my business, but out of respect and love for my brother, I spent a whole day with this guy. I also spent time on the telephone with him and he came back one more time and we spent a couple of hours together. Even though I gave him tons of useful money-making information, he never did anything with it. I gave him an education, an education that I spent thousands of dollars on. I gave him great information and I gave it to him in a nutshell and still it was useless to him. I learned that there are some folks out there who will eat up your time and never do anything about it. It is fear-based. They are too afraid to take that step. How do you tell between the people who are motivated and the people who are not? When I was young, I found a mentor and I went out and did something with the information that was given to me. Not everyone will
Minnesota Real Estate Investors Association | www.MnREIA.com
do the same. Others will eat up your time and never improve their own lives. Still, I have a lot of pride in the people that I have helped to become successful, but they didn’t help me to grow my business. I don’t know how you tell the difference between people who will help themselves and people who will not. I am just pointing out that you need to be cautious about who you spend your time with. If you’re a good person, you’ll want to help other folks make money too, but you will find they will eat up all of your money-making time. This has happened to me half a dozen times. Looking back, I realize that helping these people so intimately was not a practical use of my time. I don’t do that kind of thing anymore. The other thing that you may be doing is creating your own competitors in the market you’re trying to make money in. If you teach someone who really wants to be in the business how to be successful, they could end up growing an enormous business and a force to reckon with. That means that you will have groomed and educated your competitors. You spent money on your education; they should too. These people will take the knowledge you paid for and they will take it for free. And ultimately, they will be able to use it against you as a competitor in the same business. You might want to think about this before you agree to help someone out. It could be something you’ll want to avoid in the future. Alan Cowgill is a speaker, author, and real estate entrepreneur. His step-bystep system “Private Lending Made Easy” teaches others to find private lenders. July 2019 | 5
MARKET UPDATE
Market Update Market Update Market Update Market Update Median Sales Price Median Sales Price Median Sales Price Median Sales Price Median Sales Price APRIL
Median Sales Price: Median Sales Price: Pending Sales: ▲ Pending Sales: ▲ Pending Sales: ▲ Median Sales Price: Pending Sales: ▲ ▲ ▲ ▲ Median Sales Price: ▲ Increased to $281,000 in April from $275,000 in March Increased to 5,698 in April from 4,611 in March Increased to $281,000 in April from $275,000 in March Increased to 5,698 in April from 4,611 in March Increased to $281,000 in April from $275,000 in March Increased to 5,698 in April from 4,611 in March Increased to $281,000 in April from $275,000 in March Increased to 5,698 in April from 4,611 in March New Listings: Closed Sales: ▲ New Listings: Closed Sales: ▲ New Listings: ▲ Closed Sales: ▲ New Listings: Closed Sales: ▲ ▲ ▲▲ Increased to 7,679 in April from 6,209 in March Increased to 4,364 in April from 3,713 in March Increased to 7,679 in April from 6,209 in March Increased to 4,364 in April from 3,713 in March Increased to 7,679 in April from 6,209 in March Increased to 4,364 in April from 3,713 in March Increased to 7,679 in April from 6,209 in March Increased to 4,364 in April from 3,713 in March Month’s Supply of Inventory: Month’s Supply of Inventory: ▲▲ ▲ Month’s Supply of Inventory: Month’s Supply of Inventory: ▲ Increased to 2.0 months in April from 1.9 months in March Increased to 2.0 months in April from 1.9 months in March Increased to 2.0 months in April from 1.9 months in March Increased to 2.0 months in April from 1.9 months in March
Your partner for 1031 exchange services. Financial Security | Expertise | Responsiveness
Joe Vesey Business Development Manager O: 612.305.2021 C: 612.413.8073
All Aspects of Home Remodeling and Repairs Call your local Experienced Handyman
MEME OF THE MONTH
©2019 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Jim McKinnon (612) 590-0830 Jim.McKinnon@hotmail.com
You deserve powerful, affordable legal protection.
Unexpected legal questions arise every day, and with LegalShield on your side, you’ll always have access to experienced attorneys for advice on an unlimited number of legal issues, so you can worry less and live more. Join over 1.4 million members and protect yourself today with LegalShield.
To contact an Independent Associate: Nikki Swanson 763-245-3791 nikkiswanson@legalshieldassociate.com www.legalshield.com/hub/nikkiswanson This is a general overview of our legal plan and/or identity theft plan coverage for illustration purposes only. See a plan contract for your state of residence for complete terms, coverage, amounts, conditions and exclusions.
6 | July 2019
Minnesota Real Estate Investors Association | www.MnREIA.com
June
Trivia
Answers on page 11 1. The best time to decide to do a 1031 exchange is: A) After the closing of the Relinquished Property has been completed. B) At the time of the closing of the Relinquished Property, but before the closing has been completed. C) Well in advance of the closing of the Relinquished Property. D) Anytime, even after both the Relinquished Property and Replacement Property have closed. 2. In a 1031 exchange the “Sale” of the Relinquished Property takes place: A) When the seller/exchangor signs a standard Purchase and Sale Agreement contracting to sell the Relinquished Property. B) When the benefits and burdens of ownership shift to the purchaser at the closing of the Relinquished Property. C) When the deed to the Relinquished Property is recorded in the real estate
class A motorhome-diesel pusher. B) Real property in the USA for real property in Mexico. C) An apartment building for a single-family rental property. D) An airplane used for business purposes and an ocean going yacht used for business purposes.
records of the county where the Relinquished Property is located. 3. You cannot do a 1031 exchange on: A) Farm animals held as breeding stock. B) Collectibles, such as a stamp collection, guns and artwork held for investment purposes. C) Stock in a company. D) Foreign real property for other foreign real property. 4. Your qualified intermediary or third-party administrator that facilitates your exchange may be: A) Your mother, who is not employed by you. B) Your real estate agent that works for you. C) Your attorney that works for you. D) An unrelated, neutral third party who is not beholden to you.
6. In a delayed 1031 exchange, the time limit to identify potential replacement properties is: A) Six months. B) Two to four years from the date of your most recent property value assessment. C) 45 days from the day after the closing of the first Relinquished Property. D) The filing deadline for your federal tax return, including any extensions.
5. Like-Kind in a 1031 exchange means: A) Real property, such as an apartment building and personal property, such as a smooth and powerful driving recreational vehicle (RV)
Congrats to this month's WINNER Thomas Morehouse
Maximize Your 1031 Exchange Maximize Your 1031 Exchange • Real Property
• Real Property
• Reverse Exchanges
• Reverse Exchanges
• Construction Build-to-Suit • Construction Build-to-Suit Call Jeff Peterson Peterson 612.643.1031
Call Jeff cpec1031.com 612.643.1031 cpec1031.com
1998 – 2018 C E L E B R AT I N G
20
1998 – 2018 C E L E B R AT I N G
20 YEARS IN BUSINESS
YEARS IN BUSINESS
Minnesota Real Estate Investors Association | www.MnREIA.com
July 2019 | 7
Our beginner’s luncheon was FULL last month! Ma Vang and John Danial talked about funding your deals! Pre-register for our next beginner’s luncheon by going to www.MnREIA.com!
Do the trivia at our main meetings & spin the wheel to win prizes.
Speaker Jeff Peterson speaking on 1031 Exchanges! Members le feeling confident and ready to go with their 1031 Exchanges!
JUNE MEETING RECAP Thank you to everyone who came to our last Main Monthly Meeting with Jeff Peterson on 1031 Exchanges! The weather wasn’t the best with the crazy storm, but props to those of you who showed up anyway! Rain or shine! If you didn’t make it or even you did and you just want a recap, remember that a perk to being a member of MnREIA is that you can listen to the audio online! Also, a big thank you to Courtney Paal Photography for taking the pictures at our meeting! We hope to see you at our next main meeting on Tuesday, July 2nd.
We were lucky to have our RMG mastermind group friends a ending our meeting!
Executive Director of MnREIA Anna McKinnon, Administrative Assistant Heather Lindahl and Website Designer Jennifer Tso posting at the MnREIA banner!
Check out that crowd! Woo! Rain or shiners!
8 | July 2019
Minnesota Real Estate Investors Association | www.MnREIA.com
© ADOBE STOCK By Alan Cowgill
When you pool money from private lenders, you’re putting funds together from two or more different private lenders on the same promissory note. Securities laws and regulations vary from state to state and the Federal SEC has its own set of laws and regulations. All states have a filing that allows for pooling private lenders’ money in running your real-estate investment business. This filing also allows advertising. You will need to file paperwork with your state and provide a disclosure document to your potential private lenders. You should use or form a new business entity which could be an S-corporation, C-corporation or an LLC. Some states have different filings available depending upon whether you have a corporation or an LLC, and LLC’s are sometimes treated as partnerships. Most states won’t allow you to pool money when you’re operating as a sole proprietorship or DBA. You should use one of your state’s filings that allow for pooling money. These filings require you to fill out
Pooling Money from Private Lenders
paperwork, informing the state regulator about your business and what you’re doing. It usually requires you to disclose information to your potential private lenders, which is for your benefit as well as your private lenders’ benefit. You’ll pay a fee to your state regulator when you file your paperwork. One of the things I’ve taught my students and continue to stress is that you shouldn’t be pooling money from private lenders unless you make sure you’re in compliance with SEC Regulations. In order to be in compliance with your home state’s securities laws, you’ll need to find the proper exemption, filing or registration option and comply with its requirements. The following is some general information on staying in compliance with your state’s requirements. When you use an exemption to bring in private lenders, you are making an offer and sale of a security. It’s important to understand that an offer to sell is usually
Minnesota Real Estate Investors Association | www.MnREIA.com
treated the same as a sale when it comes to securities compliance. Two key concepts to understand when you sell securities are that there are exempt securities and there are exempt transactions. Whether you’re selling stock, equities, borrowing money, or debt, these are treated as securities. An exempt security usually means a security issued by a governmental agency or authority. An exempt transaction refers to the sale of a security not issued by a government agency that has been given an exemption under state law (or federal law) because of the nature of the security and how it’s sold. Some states may offer you more than one choice, so you’ll want to evaluate those choices. As a final important note, don’t go this alone. At this level you need the guidance of a competent SEC attorney. Alan Cowgill is a speaker, author, and real estate entrepreneur. His step-bystep system “Private Lending Made Easy” teaches others to find private lenders. July 2019 | 9
ANOTHER PERK FOR OUR MNREIA MEMBERS
NEW QUARTERLY DRAWING
Member Tom Filzen won a 12-person tent! We will be doing a random drawing each quarter for members who a ended all of the main monthly meetings prior in that quarter!
CONTRACT OF THE MONTH Free for MEMBERS ONLY at our main
monthly meetings
CONGRATULATIONS to the NEWEST MnREIA MEMBERS! Helene Douville Phil Pillera Trevor Baumgartner Steen Jacobsen John Munsell Chameng Moua Laley Moua
Lamonta Denson Kitty Johnson Christine Taylor Janel York Xee Yang Ta Yang Der Thao
Shane Jensen John Gutmanis Lourdes Cordova Zina Gutmanis Jason Vang Jordon Jeandron Vadim Mosneguta
Need a Commercial Real Estate Loan?
Experience a commercial real estate loan tailored to businesses like yours. Fixed rates up to 15 years Amortizations up to 25 years Offering custom business solutions: ● Business loans to finance long-term investment real estate ● Interest-only terms for new construction or renovation projects ● Flexible terms and creative options based on each unique need ● Borrowing in an LLC, corporation or individual owner names 10 | July 2019
Shane Stanton Tong Vang Tadios Mekonnen Karen Douglas Ross Ping Justin Melby Laurie Amos
Erika Taylor T. Jean Killen Stephen Edwards Abubakar Osman Yesenia Garza Lee Hollatz Austin Monahan
J ake J ohnson
VP B USINESS B ANKER
L ake a rea B ank 14602 E vErton AvE n H ugo , Mn 55038
C: 612-247-7112
JJohnson @ LakeareaBank . Com
www.lakeareabank.com
Minnesota Real Estate Investors Association | www.MnREIA.com
MESSAGE from
MIKE JACKA
KIM BURKE
Fear #2) Poor Credit
Mortgage Planner
NMLS# 1029555
LOOKING TO BUILD YOUR RENTAL PORTFOLIO? KIM BURKE WOULD BE HONORED TO EARN YOUR BUSINESS!
You don’t have good credit? That’s OK. You don’t need it. Obviously having good credit makes it easier to get financing, but you can still do real estate with poor credit, it will just take more time and you will have to work a little harder. You can start off wholesaling which requires no credit. Maybe you can find a seller that is willing to care back a mortgage or sell on a contract for deed. Or even find a credit partner to get the financing while you work on rebuilding your credit. There are many ways to do real estate without using your own credit, or even your own money. All you need is motivation and the drive to figure it out.
Since 2016, Kim has helped people finance: 250+ Investment Properties 100+ Renovation Projects 130+ Rental Properties Purchased By Millenials $42,000,000 Funded To Investors $104,000,000 Financed
CONTACT KIM TODAY!
800 Washington Ave. N. Suite 901 - Minneapolis, MN 55401
TRIVIA ANSWERS
1﹒ C 2﹒ B
3﹒ C 4﹒ D
5﹒ C 6﹒ C
(651) 800-1501 KimBurke@Leader1.com mymortgagewithKim.com
LeaderOne Financial Corporation is Regulated by the Minnesota Department of Commerce, License # MN-MO-12007. Corporate Headquarters: 11020 King Street, Suite 390; Overland Park, KS 66210, NMLS ID #12007 http://www.nmlsconsumeraccess.org. Toll Free (800) 270-3416. This advertisement does not constitute a loan approval or a loan commitment. Loan approval and/or loan commitment is subject to final underwriting review and approval.
Minnesota Real Estate Investors Association | www.MnREIA.com
July 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
Private Money Made Easy with Alan Cowgill Could you use an unlimited supply of money to do all the residential and commercial deals you can find? Alan will show you these crucial 5 steps to success, so that you can find all the private money you need: • Build credibility • Generate leads • Secure private lenders • Buy/sell property • Payday
6-9 p.m. Tuesday, July 2 Banquets of Minnesota 6310 Highway 65 NE Fridley, MN 55432
CALENDAR OF EVENTS JULY