Issuu

SP EC IA L FOC U S : MI L ITARY VET ERANS IN REAL ESTATE

F U NDING ST RAT EGIES IN

REGIONAL SPOTL IGHT:

AN EVOLV ING M ARKET

M AC ON, GEORGIA

A B U S I N E S S P U B L I C AT I O N F O R R E A L E S TAT E I N V E S TO R S NOVEMBER 2020

KE YSTONE ASSET M ANAGEMENT M A K ING A H A BIT OF B E ST PR ACTIC E

REI INK I

REI INK

A Subsidiary of

CUSTOM BRIDGE LOAN SOLUTIONS

DOCUMENT REVIEW

CREDIT REVIEW

POST CLOSE REVIEW

At Resolute, we have developed process management tasking and a streamlined system that provides our customers maximum efficiency. Our in-house built system seamlessly integrates with API feeds into other LOS systems - specifically designed with our clients in mind.

To learn more, visit www.resoluteds.com or call us at 801.803.9550 Resolute Diligence Solutions 6546 North Landmark Drive Suite E | Park City UT 84098 I I N OV E M B E R 2 0 2 0

SingleSource provides a nationwide suite of solutions to assist with Resoluteâ€™s Bridge Loan Services:

TITLE AND CLOSING VALUATIONS SERVICES FIELD SERVICES DOCUMENT MANAGEMENT

WHAT’ S INSIDE A S S E T M A N AG E M E N T

A S S E T M A N AG E M E N T

FUNDING

ACQUISITION

NOW IS THE

WA NT TO

FUNDING

AND ASSET

TIME TO

SUCCEED W ITH

STR ATEGIES IN

M ANAGE ME NT

W INTERIZE REO

RE AL ESTATE

A N E VOLV ING

STR ATEGIES

PROPERTIES

INVESTMENTS IN

M ARKET

TODAY ’ S CLIM ATE?

FOR BULK SFR PORTFOLIOS

PROFILE

REGIONAL SPOTLIGHT

KEYSTONE ASSET MANAGEMENT

MACON, GEORGI A

M I L I TA RY

S I N G L E - FA M I LY

FROM THERE TO HERE

HOW MILITARY

VETER A N

RECL A IMED

A LWAYS

LE ADERSHIP

PROFILES

WOOD —IN

LOOKING FOR

SKILL S TR ANSL ATE TO CI V ILI AN

OR OUT ?

WAYS TO RE INVENT

CARE ERS

REI INK 1

REI INK

PUBLISHER’S LETTER

This issue of REI INK In honor of Veterans Day, military veterans who have

transitioned into the civilian sector, specifically, the real

estate investment industry. I have always wanted to

honor our military veterans in previous publications

Publisher & CEO

how skills and leadership

demographics are illustri-

ous. According to the Council on Foreign Relations,

less than one-half of one

per cent of the U.S. population serves in the military. And, as of 2018, there are

20.3 million living veterans

ductory story discussing

learned in the military are directly transferable to

the civilian world. And the profile stories collaborate that thesis. Matt spent thirty-one years in the

Army (both as an enlisted

soldier and an officer) and culminated his career as

an instructor at the United

States Army Command and

never able to convince the

II. It is indeed a special and

It is very commonplace to

I think you will be quite

As always, continue to be

veterans we profiled. Most

And please visit our website

“powers to be” to do so.

pay tribute to other spe-

cific groups of people who have achieved success

in the industry, but you

would be hard-pressed to find another publication honoring our veterans.

Why are veterans special? Outside of the obvious

ROBERT RAKOWSKI

select group of people.

surprised regarding the likely, you have inter-

acted with these people and never knew about

their military service. A humble group indeed.

And a special thank you to LTC Matt Croslin, US Army

WRITERS

EDITORIAL BOARD

Matthew Croslin, Carole VanSickle Ellis, Tanice Myers, Andrew Oliverson, Kendra Rommel, Russell Schmidt, Bryan Smith, Nicole Stilley, Don Wenner

Kelly Brooks | Property Masters

Bill Deegan | Heartland Income Properties

part of this magazine may be reproduced

Publisher & CEO

SUZANNE ANDRESEN Chief Revenue Officer

Robert Greenberg | DLP Real Estate Capital

2 N OV E M B E R 2 0 2 0

doms and rights, putting

going back to World War

that I worked for but was

RA KOWS KI

(RET) who wrote the intro-

country before self, etc., the

we are spotlighting six

RO BE RT

reasons such as fighting in wars, protecting our free-

is EXTRA SPECIAL.

General Staff College.

safe and Happy Investing!

for all our great stories and a library of virtual venue

webinars. Be sure and visit

the REI Referral Network as

well. Membership is compli-

mentary until March 1, 2021. Thanks to all!

visit REI-INK.com/subscribe or email robert@rei-ink.com. Annual subscriptions are $59.95; single-issue copies are $6.95. The views and opinions expressed in this magazine are not necessarily those of Choice Publishing LLC or the publisher. The articles are intended for general information only and are not intended to provide specific recommendations or advice. Be sure to consult your attorney, accountant

Erica LaCentra | RCN Capital

in writing from the publisher.

Jennifer Stoops | Park Avenue Properties

REI INK is a monthly publication of Choice

when considering a new strategy or

Mike Tedesco | Appraisal Nation

Publishing LLC. To subscribe or to order

idea. We are not responsible for the

single copies, please call (816) 623-0762,

content of any paid advertising.

and other relevant business professionals

Which Lender Checks All the Boxes vide y Pro e h T oint Do ated P r c i d e fo A D ntact of Co r Deals? u A l l Yo

A re T h e y Co m m i t t e d t o t h e H i g h e s t L ev e l of C u s t o m e r S e r v i c e?

Able Are They ast, er F to Deliv ent e Conv ni ? Options Funding

I t ’s N o M y s t e r y T h a t i t ’s RC N C a p i t a l ! By Pairing You With a Dedicated & Knowledgeable Point of Contact, We’ll Never Leave You Guessing Who You Should Call to Fund Your Next Deal. RCN CAPITAL, LLC IS LICENSED AS A CALIFORNIA FINANCE LENDER UNDER DEPARTMENT OF BUSINESS OVERSIGHT LICENSE NUMBER 60DBO-46258. ARIZONA MORTGAGE BANKER LICENSE BK-0932325. OREGON MORTGAGE LENDING LICENSE: ML-5571; NMLS COMPANY ID: 1045656.

REI INK 3

VISIT RCNCAPITAL.COM

EMAIL INFO@RCNCAPITAL.COM

CALL 860.432.5858

REI INK

A S S E T M A N AG E M E N T

ACQUISITION AND ASSET MANAGEMENT STRATEGIES FOR BULK SFR PORTFOLIOS The maturing of the SFR asset class BY R U S S E L L S C H M I D T

he Single Family Rental industry

continues to mature into a standalone subsector of the commercial real

estate space. As the space gets more crowded and

competitive, SFR investors will need to adapt and

develop advanced acquisition and asset manage-

ment strategies compared to the previous “buy

everything and figure out

operations later” strategy. Early movers such as

Invitation Homes and

4 N OV E M B E R 2 0 2 0

as housing values steadily

offer. Simultaneously,

rebounded over the fol-

the rapid growth of SFR-

lowing years. Today’s SFR landscape is shifting into the next phase, as the initial entrants that (correctly) bet on a sharp and quick rebound in values are now being joined by new capital willing to acquire at elevated price levels, sometimes even matching ‘market’ prices, to satisfy their yield and capital deployment requirements.

American Homes 4 Rent

The original SFR opera-

specific debt lenders and tech-smart service providers have made it easier for new investors of any size to gain exposure to the asset class. Couple this with record-low mortgage rates, strong home buying demand from owner-occupants, and an already-constrained supply of houses, and the result is a strong downward pressure on cap rates and a lack of deals appealing to investors.

were able to amass large

tors successfully demon-

M OV I N G F O RWA R D

portfolios of SFR’s at

strated that capital can be

What does this mean for

steep discounts beginning

deployed into the space at

in 2012 due to a mas-

institutional-quality scale

sive supply of distressed

and efficiency, bringing in

properties. Homes were

other institutional inves-

repaired and turned into

tors eager to match the

cash flowing assets and

strong historical proven

investors saw huge gains

returns the space can

SFR operators going forward? Those who bought 5+ years ago were able to acquire at such significant discounts that any operational inefficiencies had little effect in their total

returns; asset appreciation

has been so significant that marginal differences in

collected rent or reduced operating expenses were

dwarfed by approximately 300% increases in asset value. But as the SFR

industry transitions from being a simple trade on

undervalued assets into

a long term buy-and-hold investment, investors

looking to acquire today

don’t have the same luxury of buying anything and

letting appreciation cover up potential flaws in their acquisition and management systems. New and

more nuanced strategies must be implemented in

order to succeed in today’s more crowded and competitive SFR landscape.

A common school of

to consistently increase

thought among mom-

rents, not only to continue

and-pop landlords is that aggressively pushing rents leads to vacancies and costly turns, so therefore it’s financially smarter (and less of a hassle) to simply not increase rents and keep tenants for as long as possible. However, issues arise when after several years of no rent increases, landlords then attempt to increase rents now that they are 20% or 30% below market levels. The probability of having a tenant accept such a steep increase is slim, so the landlord is faced with either accepting a vacancy (which they were trying to avoid in the first place) or keeping the tenant and continuing to lag mar-

As one example, there is

ket rents at a significant

menting consistent rent

institutional operators have

more attention on impleincreases, even if nominal.

discount. In contrast, large explicitly stated their intent

growing cash flows but also to instill an expectation that rent increases are a normal and regular event. AC Q U I S I T IO N CHANNELS

From an acquisitions standpoint, the state of the housing market has made it significantly more difficult to acquire properties with attractive yields on the MLS, especially in scale. Institutional investors have responded to this by looking elsewhere for volume. These new acquisition channels require new ways of thinking when it comes to stabilization and asset management strategies. One increasingly promi-

these deals offer immediate scale and pricing typically below market, they also present challenges of their own compared with MLS acquisitions. Unlike the acquisition of a multifamily building with 100 relatively homogeneous units, bulk SFR portfolios typically have a wide range of assets in different neighborhoods and with different styles and finishes. Owners usually aren’t interested in only selling a portion of their portfolios, so the buyer must be equipped to repair, stabilize, and manage the entire bulk even if some or most of the assets don’t fit within their typical management or buy-box strategy.

nent acquisition channel is

As bulk acquisitions

sourcing off-market port-

become a more important

folios directly from mom-

piece of the SFR space, it is

and-pop landlords. While

important that buyers can REI INK 5

REI INK

AN S SNEO TU MNACNEAG M EENMTE SN T

optimize different strate-

result in a more optimized

quality rental homes in

equity through a refi-

gies within one bulk rather

approach:

neighborhoods where

nance a few years after

than the singular viewpoint

C lass A:

applied to MLS transactions. Implementing a multi-faceted acquisition and asset management strategy will result in more efficient management and

Definition: Higher end homes all located in

gentrifying neighborhoods with low existing cap rates

greater total returns.

Strategy: Continued

VA RY I N G S T R AT E G I E S

rate compression

As an example, assume a

likely means that it will

portfolio of SFRs evenly distributed between Class A, B, and C. Rather than applying a single strategy for repairs (e.g. granite countertops in all units) and asset management (e.g. aggressively increase rents in order to maximize pro forma NOI prior to a sale to an investor in 5 years), applying several

appreciation / cap

become too expensive for an investor to acquire

the rate of appreciation is unlikely to significantly outpace NOI growth, resulting in the asset remaining an attractive target for another investor

placed on maximizing occupancy until value has appreciated enough for a sale.

different strategies across

C lass B:

the different buckets can

Definition: Institutional

investor can view different tranches of a bulk portfo-

a more competitive bid

NOI growth prior to selling as a package to another investor

Definition: Lower end

so focus can instead be

of the various ways an SFR

towards maximizing

a rental asset with focus

likely exit will be to an

maximizing NOI growth,

gies are just an example

lio. This type of nuanced

Class C:

emphasis is needed on

These simplified strate-

Strategy: Optimize as

in the future, so the owner-occupant. Less

acquisition.

assets and/or outside of the typical institutional buy box Strategy: Optimize as a

long term buy-and-hold by completing structural repairs (roofs, mechanicals, etc.) and focusing on improving actual net cash flows. Recapture

approach will result in and an optimized asset management strategy compared to the investor that maintains a one-sizefits-all approach. As the SFR asset class matures into an important subsector of the commercial real estate landscape, operators must develop these types of new approaches to acquisition and management strategies in order to stay competitive in an increasingly crowded market.

Russell Schmidt is a Founding Partner of Benson Residential, an investment and advisory firm specializing in the single-family rental sector. Previously, Russell worked for Amherst Residential as an original member of their off-market acquisitions group. In this role Russell helped build out a team dedicated to sourcing bulk portfolios directly from mom-and-pop SFR landlords. During this period Russell sourced approximately 500 deals totaling over 15,000 homes and $2.2Bn in value. Along with his three cofounders at Benson Residential, Russell is now utilizing his relationships and experience in direct off-market SFR acquisitions to provide sourcing and acquisition advisory services for institutional capital partners looking to enter or expand into the SFR space. Russell holds a B.S. in Business Administration with Special Attainments in Commerce from Washington & Lee University.

6 N OV E M B E R 2 0 2 0

DEFAULT SERVICES:

PREPARING

FOR 2O21 In today’s environment, there are many unknowns and a lot of speculation around what 2021 has in store for our industry. NTC is staying one-step ahead and is prepared to assist by continuing to expand and improve our default services. We will be ready for whatever turn the mortgage industry takes. Call us to discuss how we can help you.

- TITLE POLICY CORRECTIVE, RETRIEVAL OR REPLACEMENT - DOCUMENT RETRIEVAL/COUNTY RESEARCH - CURRENT OWNER SEARCH - ASSIGNMENT VERIFICATION REPORT (AVR) - CHAIN OF TITLE BINDER FOR NOTES AND ENDORSEMENTS - ASSIGNMENTS OF MORTGAGES

CALL FOR MORE INFO

800.346.9152 x310

REI INK

A S S E T M A N AG E M E N T

NOW IS THE TIME TO WINTERIZE REO PROPERTIES Expert advice to get ready for winter BY A N D R E W O L I V E R S O N

he enormous demand

before cold weather sets

removed and disposed

for rental housing and

in, properties should be

of offsite in an

the scarce supply of new

spruced up in the early fall

appropriate manner.

properties has created

and winterized soon after.

white-hot conditions for

Winterization should be

F lowerbeds, driveways

those with inventories of

thorough enough to main-

well-kept, salable assets.

tain the property in good

But cold weather comes to

order from early October

even the hottest markets

until the end of March or

and as winter approaches,

longer, depending on the

it is wise to take actions

local weather and tem-

now to keep those proper-

peratures.

ties ready for the sunnier days ahead. The timing is critical as acting now to winterize assets is the best way to avoid having an otherwise valuable home fall into disrepair. There are several steps to take when preparing a vacant property for the winter. Ideally, to ensure the protection of assets from the seasonal elements and to help identify

8 N OV E M B E R 2 0 2 0

In addition to identifying and addressing any urgent interior maintenance issues, a decent fall spruce-up should include a focus on exterior conditions: R emove all exterior debris. Perform a final lawn cut and remove all grass clippings, leaves, limbs and debris from the property.

and address any poten-

L eaves, pine needles

tial maintenance issues

and twigs should be

and sidewalks should be edged. R emove all weeds and saplings from flowerbeds and around shrubs and fence lines. Weed-wack around the house, fences, and trees, and remove dead vines from fences, latticework, etc. R emove all fallen limbs and excessive leaves from the roof. C lean out gutters and remove all holiday lights. If there is a gutter guard, replace it after cleaning out the gutters. P rune branches from trees and shrubs that encroach on entryways, walkways, or sidewalks

and trim at least four

temperature within the

I f the property was

contributed to distortions

to six inches from the

home should be set at

winterized prior to

in the real estate market.

a reasonable tempera-

your adding it to your

In our industry weâ€™ve seen

house or roof. With the property looking

ture to prevent interior

well-kept on the outside

freezing (usually above

and in good working

50 degrees).

order on the inside, listing brokers should turn their attention to winterization and consider some of these best practices:

I f the property requires significant plumbing repairs or when a boiler is involved, a general contractor, licensed plumber or an accred-

inventory, it should be re-winterized to ensure that every step has been taken properly. I f the property is frozen when it comes into inventory, obtain bids to thaw the pipes prior to winterizing.

glutted real estate markets suddenly heat up and clear in a matter of weeks. But until conditions improve, the market for real estate will continue to experience extraordinary market-to-market fluctuations. Taking basic tried-and-true winterization steps will

E lectrical and heating

ited entity with the

The year 2020 has been

services should be

professional expertise

a roller coaster for all of

up and running and

should complete the

us. The pandemic and

bring a level of certainty

must remain on. The

winterization.

the responses to it have

into uncertain times.

protect homes well into the cold winter months and

Andrew Oliverson is vice president of REO at Radian Real Estate Management, a division of the Real Estate Services division at Radian (NYSE: RDN). His more than 17 yearsâ€™ experience in REO

Asset Management began in 2003 at Fairbanks Capital and has continued to his current position. Prior to his work in REO, Oliverson originated mortgages and worked in loss mitigation and

collection departments. Oliverson is a seasoned manager with expertise in the transitioning, on

boarding, team building, KPI development and performance delivery for new and existing clients. His experience extends to all aspects of the REO process including Eviction, Title, Valuation,

Preservation, Repairs, Marketing and Closing. Oliverson received a B.S. degree in Economics at the University of Utah and currently holds an active Utah Broker License

REI INK 9

REI INK

FUNDING

WANT TO SUCCEED WITH REAL ESTATE INVESTMENTS IN TODAY’S CLIMATE? Control your access to capital. BY D O N W E N N E R

ncertainty haunts the

We have not seen anything

fearful when others are

real estate market

like the COVID-19 pan-

greedy and greedy only

demic before. We do not

when others are fearful.”

know where it is leading.

Well, people are fearful

today. According to Redfin data, the median home sale price jumped 13% from September 2019 to September 2020. However, investors remain concerned that the economic damage caused by the COVID-19 pandemic will eventually spill over into the housing industry. One does not have to look too far for warning signs. A simple Google search will lead you to articles about an ‘overheated, bubbly market’. Additional articles discuss the divide occurring in the market, with rural and suburban single-family homes rising

10 N OV E M B E R 2 0 2 0

And this has made Wall Street and independent investors hesitant and even fearful when it comes to the housing market. How should you respond? The best thing an investor can do is focus on what they can control. Opportunities are out there in this market, and

right now. So, the opportunity for real estate investment is now. However, this does not mean investors should get aggressive. Stay conservative while making sure to jump on opportunities. Given the nature of this pandemic, you may have to adjust where you invest to best

investors can continue to

capitalize on opportunities.

grow during these uncer-

For instance, low hous-

tain times. Specifically, what needs to be done is to take control of your access to capital. G E T P R E - Q UA L I F I E D S O YO U C A N B E G R E E DY W H E N O T H E R S ARE FEARFUL

ing supply continues to drive home prices up. As of August 2020, the monthly supply of houses dipped to 4.0 according to Federal Reserve research. This means it would only take four months to sell all

while multi-family and com-

We have all heard the

the homes currently listed

mercial real estate decline.

Warren Buffet quote: “Be

for sale.

Knowing this, investors

must prepare capital well

With tightening borrower

a source of capital and

may discover through their

in advance. Get pre-qual-

requirements and more

establish a solid relation-

ified as soon as possible.

conservative underwrit-

ship with that lender.

Investors cannot take

ing, loans are taking lon-

advantage of a good deal

ger to process. Investors

if they do not have the

need to be 100% sure they

capital ready.

have the cash on hand to

investors who help provide

What investors must do

complete the deal.

more inventory stand to

is partner with a real

In this market, the early

and how important it is

estate lender before

bird gets the worm if they

to have a capital partner.

To take advantage of such

doing market research

have the cash on hand.

However, financing during

opportunities, investors

and going after deals.

The first step is to find

these uncertain times can

analysis that better returns can be achieved through new home construction projects or fix-and-flip projects. There is a demand for more inventory. The

gain the most.

B E C O N S E RVAT I V E WHEN MAKING A S S U M P T IO N S

Investors know that there are opportunities out there

R E I I N K 11

REI INK

FUNDING

HO M E F L IPPI NG PROFI T T RENDS

GROSS PROFIT

GROSS ROI

$80K

60%

$60K

45%

$40K

30%

$20K

15%

Q1 20 Q3 00 20 Q1 00 20 Q3 01 20 01 Q1 20 Q3 02 20 Q 1 02 20 Q3 03 20 Q 1 03 20 Q3 04 20 Q1 04 20 Q3 05 20 Q1 05 20 Q3 06 20 Q 1 06 20 Q3 07 20 07 Q1 20 Q3 08 20 Q1 08 20 Q3 09 20 Q1 09 20 Q3 10 20 Q 1 10 20 Q3 11 20 11 Q1 20 Q3 12 20 Q1 12 20 Q3 13 20 Q1 13 20 Q3 1 4 20 Q1 14 20 Q3 15 20 Q1 15 20 Q3 16 20 Q1 16 20 Q3 17 20 17 Q1 20 Q3 18 20 Q1 18 20 Q 3 19 20 19 Q1 20 20

Source: Attom Data Solutions

be difficult. Real estate

investors must respond

increases the likelihood

lendersâ€™ capital is tied to

investors need to be

and prepare accordingly.

that the deal will be

Wall Street. If you work

conservative when making

Also, investors must be

successful. It could even

with one of those lenders,

turn out much better than

you do not have full con-

projected.

trol over when and how

K N OW W H E R E YO U R L E N D E R G E T S C A P I TA L

For example, before the

assumptions and should plan for the following: L onger

processing times H igher rates Higher reserve requirements

R educed leverage Lenders have taken these precautions to mitigate risks. For example, on a deal today, a loan may

conservative with more than loan terms. Any deal analysis should be conservative as well. In 2020, lenders have reduced as-is and after-repair-values by 5-15%, which is why fix-and-flip investors should calculate this into their deal analysis. Also, plan for higher cap rates, higher delinquencies, lower occupancy, and less

Observing the success of fix-and-flip investors, Wall Street has entered the private lending game over the past decade. They have done so by providing lines of credit to lenders. Wall Streetâ€™s involvement has also led to the secu-

you can access capital. Coronavirus pandemic, private lenders had been originating loans and selling them to Wall Street at a 2-3% premium. Given the current risks, Wall Street will not pay that premium anymore. As a result, these lenders have

take a few weeks lon-

rent growth.

ger to process, require

By taking a conservative

6-12 months of future

approach to penciling out

payments, and have an

deals, investors insulate

Why does this matter to

ing funds. This has left

interest rate that is 0.5%

and protect themselves

real estate entrepreneurs?

many real estate investors

higher. Borrowers and

from external risks. This

It matters because many

stranded and unable to

1 2 N OV E M B E R 2 0 2 0

ritization of private real estate loans.

had to stop or greatly reduce their lending since Wall Street is not provid-

SINGLE-FAMILY RENTAL SOLUTIONS

SINGLE FAMILY RENTAL SOLUTIONS YIELD BOTTOM LINE RESULTS

Altisource’s single-family rental (SFR) suite of solutions helps you to research, bid and close your real estate investments all with a single-vendor.

Scale your rental investments using our robust nationwide RentRange® rental data solutions to more accurately assess trends and predict values at property

PROVEN RESULTS

216K+ Real Estate Properties have been marketed and sold using the Hubzu platform

and portfolio levels

Leverage Hubzu®, our industry leading online real estate marketing platform for easy and transparent residential property auctions for acquisitions and dispositions

Standardize your closing process nationally with our vertically integrated Premium Title™ and Springhouse® Valuation services

100M Properties in RentRange nationwide property database*

50% National Solution

Custom Reports

Advanced Modeling

Same Day Disbursement

Premium Title and settlement savings with bulk SFR compared to single transactions

CONTACT Lora J. Helt at lora.helt@altisource.com to learn how Altisosurce’s comprehensive SFR suite of solutions can help elevate your investment portfolio.

191111

REI INK

FUNDING

capitalize on opportu-

Second, set specific,

nities. Always know how

measurable, achievable,

your lender is funded. If your lender works with Wall Street, market swings can directly impact your

realistic, and timely goals (S.M.A.R.T. goals). This ensures accountability and establishes clear

ability to access financing.

expectations.

That takes the investor out

Third, know your real

of the driver’s seat. BUILD THE R I G H T C U LT U R E

To continue growing a real estate business during the pandemic, investors not only need full control over their capital, but also a strategy for using it correctly. That relies on having the right team culture. First, investors need a team with a vision. Be realistic, but also aim big. You cannot get anywhere unless you have big dreams.

estate KPIs. Without knowing their numbers, investors cannot make good business decisions. Finally, avoid common pitfalls in real estate investing. In addition to making certain you have adequate capital on hand, always: S tay consistent. Scaling your real estate invest-

ment business requires doing the right things repeatedly. A lways perform due

Get people in the

greedy only when others

how investors mitigate

The current real estate

right positions. This is

internal risks and eliminate waste.

market may have many investors worried, but

Focus on where you

great opportunities are

Hedgehog Principle.

environment, investors

excel. Remember the

out there. To win in this

You are more likely to

must take control of their

succeed by focusing your efforts on where your passion and expertise are. With the right culture, investors are in a much better position to handle capital correctly. That is crucial for success and

access to capital. Control hinges on finding the right capital partner, getting pre-qualified, using a conservative approach to deals, and having a good internal culture and quality processes in place within your organization.

growth in this market.

Now is not the time to

SEIZE THE OPPORTUNITIES WHILE OTHERS ARE ON THE SIDELINES

act! With the right capital

diligence. This is how

Let’s return to Buffett’s

bad deals and deploy

others are greedy and

smart investors avoid

are fearful.”

sit and wait. It is time to and the right team, investors can get ahead of the game.

quote: “Be fearful when

their capital effectively.

Don Wenner is the founder and CEO of DLP Real Estate Capital, a multi-faceted company that leads and inspires the building of wealth and prosperity through the execution of innovative real estate solutions. Don is highly experienced in all facets of housing as well as in scaling high growth

entrepreneurial companies through utilization of the DLP Elite Execution System, for which DLP has

been ranked in the Inc. 5000 fastest growing companies in the US for a remarkable 7 consecutive years. Additionally, he is ranked by The Wall Street Journal as one of the Top 15 Real Estate professionals in the country, including #1 in all of PA and NJ for the past 5 years in a row.

1 4 N OV E M B E R 2 0 2 0

Achieve Strategic Goals and Realize Greater Efficiencies Lenders, owners, and investment groups trust ServiceLink’s Nationwide Single Family Rental Services: • Centralized Title and Close Services • Property Inspections • Auction Services • Valuations

Ready to meet and exceed your investment objectives? Contact ServiceLink today to learn more about our services. svclnk.com/investors | SFRTeam@svclnk.com

R E I I N K 15

REI INK

FUNDING

FUNDING STRATEGIES IN AN EVOLVING MARKET Expert tips for developing your correct financial structure BY K E N D R A R O M M E L

ince the COVID-19 pandemic began,

there has been an odd sense that we have been operating in some sort of time warp. Anything that happened before March feels like years ago, yet the fact that itâ€™s October seems almost surreal. Nothing exemplifies this feeling more than the roller coaster ride of the real estate market. The uncertainty created obstacles and accelerated the velocity of change, challenging investors, contractors, lenders and related businesses to address and adapt to a myriad of challenges and obstacles. Remarkably, even amidst the uncertainty, a health care crisis did not become a housing market crisis and the real estate market has

16 N OV E M B E R 2 0 2 0

continued to be strong.

etc. that are known to

Thriving as a real estate

be syndicators or funds,

investor, broker, or lender, today requires a sound and stable financing strategy. Having a consistent, reliable capital partner is perhaps the most important element to building a solid business model. This may evolve over timeâ€” from your start in business to becoming an experienced pro. Regardless of your strategy, there are a myriad of capital or financing options available to you. Here are some tips for developing your correct financing structure. T YPES OF FINANCE

and (2) Institutional private money lenders, sometimes called hard money lenders, who have their own capital as well as institutional capital partners, such as banks and Wall Street investment firms. A notable difference with private money is the fact that they base risk on the asset, rather than on the individualâ€™s personal borrowing strength. This makes the loan process considerably faster and easier than conventional lending. Conventional Lenders. Banks, credit unions

Private lenders. There

and mortgage lenders

lenders: (1) Individuals

tors who have strong

such as friends, family,

individual borrowing

accredited investors,

strength. Interest rates

are two types of private

are common for inves-

predetermined terms,

Wall Street buyers froze.

such as type of assets,

This forced many lend-

terms, pricing, and LTVs.

ers into a compromised

This line enables lend-

position of which they

ers to fund less on their

had to stop originating

company balance sheet.

or funding deals.

SELECTING A C A P I TA L PA R T N E R

Circumstances such as the recent pandemic clearly illustrated the absolute imperative of with conventional lend-

a commission in the

ers are at historic lows.

form of points on the

However, LTVs are lower

loan, which are paid at

and down payment

closing.

requirements are higher

R eal estate partner-

than private money programs. Qualifying for a bank loan on an investment property can be onerous, difficult and time consuming. Additionally, banks typically have a maximum exposure limit for the borrower which limits the amount of properties they can finance.

ships, Joint Ventures (JVs) or Equity par-

ticipants. These are

individuals or companies included in the participation of any one deal, (usually as a limited partnership or as a passive partner to the primary). It is standard for a prospective partner to want to review

conducting due diligence when choosing to align with a capital partner. It is important not to think merely in transactional termsâ€”getting a good deal on one propertyâ€” but rather focusing objectively on who will be your best capital partner as you grow and change through market shifts, both forecasted and unexpected. C apacity and Access to

warehouse lines lev-

brokers work to find you

W arehouse Banks/

their loans at a premium

able. For this, they take

ker, or lender. They need to have a broad perspective and know how to deal with fluctuations in the market, handle challenging or creative scenarios, and understand what makes a mutually beneficial deal. The industry has been feast or famine over the past decade and those who have weathered the ups and downs can bring that expertise to bear for your benefit.

is to focus on rates.

intended exit strategy.

all the options avail-

is a sales associate, bro-

many lenders had their

the pandemic shutdown,

own money. Instead, the right lender from

experienceâ€”whether it

Options. One of the

M ortgage brokers.

They do not lend their

simply no substitute for

Capital. At the onset of

the investment strategy, summary, pro-forma and

E xperience. There is

eraged and they were reliant on institutional capital partners buying

biggest rookie mistakes Keep your focus on the entire financing structure. This will ensure you do not miss crucial details in achieving the

Bank Lines. These are

to remain profitable.

highest ROI possible.

banks that extend a line

Overnight, warehouse

When evaluating a cred-

of credit to lenders at

lines and institutional/

ible finance partner, R E I I N K 17

REI INK

FUNDING

they should strive to

maintaining the highest

to generate attractive

times when the greatest

understand each unique

margins or returns:

returns. Demand for

opportunities are born.

strategy and exit plan to enable them to provide the best loan options to meet their clientsâ€™ individual needs and goals. True capital partners are problem solvers. C ommunication. Clear communication and transparency are vital for building a successful relationship with anyone, especially your capital partner.

F ix and Flip. When you

rental properties is high

have to be able to move

to benefit from both

find a good deal, you

quickly to acquire it. It is important that you have the neighborhood value

Bridge-to-Conventional

range, the bottom and highest comps. Also, know what types of finishes or appeal warrants the high versus low end of that market. In todayâ€™s market, investors are optimistic that they can

It is critical that financing

whether it is through simple cosmetic updates

align with the specific

or more complex ones.

investment opportunity.

R ehab Financing. When you finance your rehab,

not one-size-fits-all. Each

this portion of the loan

sponsor or property likely

is typically held in a

will have a different strat-

control fund & issued in

egy and disposition plan. Therefore, be clear on your intention with the asset(s) so you can determine

well as long-term property appreciation.

reap returns quickly,

Financing solutions are

monthly cash flow as

supported data verifying

F U N DI N G S T R AT E G I E S

strategies and guidelines

which enables investors

draws as a reimbursement when the work is completed. This is a great option to preserve

Financing. Oftentimes a short-term private

money loan will give you time to either improve

themselves to be in the best possible liquidity position to exploit these opportunities will be poised for the greatest business growth.

conventional loan. C ross-Collateralization. For investors with multiple properties, you can leverage the collateral of all the assets into one private money loan, enabling you to execute on a new opportunity. C A P I TA L C O N S I D E R AT IO N S

The real estate market is

exit strategy in advance,

opportunity.

It is natural to be appre-

including timelines, will

V alue Add and Hold.

hensive in our current

Real estate, as an asset

climate. It is often in the

class, has continued

most uncomfortable of

1 8 N OV E M B E R 2 0 2 0

space. Investors preparing

refinance into a cheaper

out what the future holds.

financing solution while

to come back into this

cash flow required to

be ready for the next

help you find the right

up, so expect more capital

the property or to

anxiously trying to figure

objectives. Having a clear

has begun opening back

generate the monthly-

your liquid position and

the short and long-term

For lenders, Wall Street

Kendra Rommel,

Sales Manager-The

Rommel Team, CIVIC Financial Services. With 23 years of

experience providing financing solutions for real estate

investors, Kendra

has funded well over $200M dollars since

joining the company in 2016. For more information, visit

TheRommelTeam.com

R E I I N K 19

R IN E IV E S T OIRNP VR EO S TFO I LRE P R O F I L E ISN KN S O R E D C O N T E N T PO

Tanice & Paul Myers Tanice and Paul Myers began their HomeVestors careers in February 2018. They bought their first franchise in the Seattle area, called Fobes Hill, LLC. After that, they bought a second franchise in Crawfordsville, Indiana called Northern Point and own thirty rental properties in that area. Tanice was born in California, the daughter of a United States Army combat soldier, Pete Hjellen, who served during the Vietnam War. At two years of age the family moved to Anchorage, Alaska where she is considering buying another HomeVestors franchise. Tanice worked at Microsoft for over ten years and as she said, “Microsoft will always have a special place in my heart, and I will cherish my memories forever. And I am so very thankful for everything that Microsoft has provided me over the last 10 years.” She also felt very empowered the day she resigned in December of 2018. Tanice gave up a W-2 income and great benefits so she

Tanice and Paul have turned their

Tanice is the Chairperson. There are

passions for family, technology, and

fourteen HomeVestors regions nation-

real estate into a thriving operation.

wide, and HomeVestors welcomes feed-

Not only do they currently own two

back from “the field”. This feedback

franchises, and looking at a third, but

allows HomeVestors to adjust their

they are also building their own portfolio with five rental properties in the

training and marketing programs.

Seattle area and thirty in Indiana. They

Owning a real estate business is life

attribute HomeVestors with their port-

changing and naturally comes with

folio expansion. HomeVestors provides

risks. At HomeVestors, their priority

training, networking opportunities,

is to limit those risks through

mentorship, and financing.

training, tools, mentorship, leads,

Tanice and Paul are also Development

and financing resources.

Agents in Washington state, helping new

For any questions, Tanice can be reached

HomeVestors franchisee, he worked as

franchisees and providing mentorship.

at Tanice.Myers@homevestors.com

a real estate broker, general contractor,

HomeVestors also formed the Fran-

and Paul can be reached at

and investment specialist.

chise Advisory Council (FAC) of which

Paul.Myers@homevestors.com

could join her husband in their new real estate business. She loves being in control and wanted to spend more time with her family and “have time to play.” Paul, on the other hand, had worked with real estate investors for the last fifteen years. Prior to becoming a

2 0 N OV E M B E R 2 0 2 0

Ready to make

Real Money buying houses? Real Deals

When you’re part of HomeVestors®, America’s #1 Home Buyer, motivated sellers can come directly

to you before the MLS for the off-market purchase of their houses. You can buy faster and deeper for

HOMEVESTOR Real Opportunity greater potential profit.

Our proven process, exclusive resources and decades of expertise help you build your business.

Access to our exclusive financing portal means you can act faster and with lower interest rates than most other hard-money lenders.

Real Growth

The full power of our multi-media advertising and marketing is in your hands – control your marketing spend and how fast your business grows.

Be The Next Real Deal In Real Estate. Only HomeVestors offers you the powerful brand, experienced personal support and marketing muscle to grow your independent business faster. Real deals can

help you establish a career in professional real estate investing. Contact us today.

855-530-9049 homevestorsfranchise.com R E I I N K 21

Each franchise office is independently owned and operated.

REI INK

PROFILE

MAKING A HABIT OF BEST PRACTICE Keystone Asset Management Finds Solutions in Every Real Estate Scenario. BY CA R O L E VA N S IC K L E E L L I S

2 2 N OV E M B E R 2 0 2 0

eystone Asset

valuation to REO asset

been on the path to big

preservation to prop-

Management has

things from its very inception. Founded in 1995 in

Philadelphia, Pennsylvania, Keystone started out,

as CEO Ryan Hennessy describes it, as “a real

estate company in ‘Philly’

handling distressed bankowned assets for lenders including Fannie Mae,

Freddie Mac, HUD, and

various financial institu-

tions.” Keystone is a family company; Hennessy’s

mother, Jane Hennessy,

and a then-partner realized in the mid-1990s that there was a need in the market

for an asset management company specializing in distressed assets and

REO (real estate owned) properties. Soon, busi-

ness was booming, and

the two added a valuation

unit to handle broker price opinions and other facets

of valuation. “By 1997, they had a national platform,” Hennessy said proudly.

From there, the company continued to grow and

expand to meet investor needs. Today, Keystone offers a vast range of

services from property

management to property erty tax consulting and insurance. “There are

so many things that go

into a successful plan for each asset in a portfolio. As investors encounter

diverse scenarios across their portfolio, we can

help them formulate best practices, commonsense

solutions, asset protection

strategies, and even brand protection and building

processes,” explained Jim Jacquelin, the company’s Director of Operations.

The company combines decades of experience

and deep-dive economic

analytics to create custom

management strategies for

large real estate portfolios. “Effective, profitable asset

variety of fields including field services, performance and execution and an economic arm. This combination approach has served the company well, particularly since the end of the Great Recession when institutional investors entered the housing market in full force and began dealing with the kaleidoscopic and intricate details of single-family residential real estate. As the face of institutional investing and high-volume portfolio owners has changed over the past decade, Keystone has evolved to keep up with the changing and diverse needs of these major real estate players. FITTING ALL THE PIECES TOGETHER

management requires

Because Keystone is a

and evaluation of assets,

to clients with vast geo-

Our service and quality

portfolios, nearly every

adapt to our asset owners

corporate structure is

and analytically to meet needs,” Hennessy said.

array of experts in a wide

apparent today, has been serving Keystone clients well for decades. “We know that markets are cyclical, and certain types of investor behavior in certain sectors are also predictable. Combining those two facets of knowledge gives us a head start on the rest of the field when it comes to adjusting asset strategy,” Hennessy said. By working closely with clients to identify what type of investment strategies are most comfortable for them and what types of assets they want to leverage, the company can create the best position for each asset in the portfolio. For example, when a new “file” or asset enters the process, occupancy is the first piece of the equation. This is particularly

constant monitoring

national company catering

strategies, and analytics.

graphic spread in their

remain the same, but we

service sector within the

to reprioritize strategically

equipped to identify bellwether signs of a changing

that go into working on a

their specific goals and

economy and respond

property with a tenant to

appropriately. However,

create a positive outcome

Keystone employs a vast

Hennessy said, that

for everyone involved,”

positioning, while starkly

said Jacquelin. “Even if

important at present when the COVID-19 pandemic creates unusual issues with tenancy, leasing, rent payments, and evictions. “There are a lot of factors

REI INK 23

REI INK

PROFILE

and 2021, the latter type

and, ideally, each asset

may have an innate advan-

will have a unique strategy

tage over the former due to rising competition in the single-family marketplace.

RYAN HENNESSEY

to aggregate critical data

“Institutional players tend

decisioning: geography, in the property, there are certain liabilities we protect against like securing the property against the elements, preventing break-ins and squatting, and preventing anyone from getting hurt while on the property.” Even before COVID-19, each state and local government had different rules, laws, and codes for these issues. Failing to address the logistical “fine print” could be catastrophic from both a legal and financial standpoint, particularly for high-volume investors

Thanks to Keystone’s extensive work with high-volume portfolios and owners with a diverse set of goals, Hennessy has been able to

occupancy, valuation and intangibles—title, HOA, taxes. Ultimately, correctly aggregating data on these inputs paint a true picture on management philosophy and optimal disposition paths,” Hennessy

identify certain investing

added.

characteristics and types

“If you are the type to

of investor over the years. Embracing certain strategic tendencies can position any investor, regardless of the volume of properties they currently own, in a prime position to emerge from the current economic downturn better off than they went in.

strategically acquire a specific type of property, then you should take a close look at your ‘buy boxes’ to see how they are affecting your longterm goals right now,” Hennessy said. “It might make sense to stretch the box or diversify a little

who might be particularly

“You must know who you

bit.” On the other hand,

attractive targets for litiga-

are as a real estate investor

most institutional inves-

tion and bad publicity. “We

and be flexible,” Hennessy

tors tend to be acquirers

have to handle all of those

said. “Does your strategy

first and strategize sec-

angles before we dive into

dictate your portfolio or,

ond, mainly because they

figuring out what strategy

through pool acquisition,

tend to acquire in bulk.

will be the best fit for that

does your portfolio dictate

In this case, the portfolio

property,” Jacquelin said.

your strategy?” In 2020

itself will dictate strategy

2 4 N OV E M B E R 2 0 2 0

the interests of the new owner from every angle.

four core inputs on asset GETTING IN THE B E S T P O S I T IO N F O R 2 02 0 A N D 2 02 1

that asset while protecting

“We have a unique ability points surrounding the

there is no one residing

that makes the most of

to look at things at a much larger perspective. When they buy, they get a ‘mixed bag’ of assets that need to be evaluated,” Hennessy said. Keystone’s curation of those properties on a granular level is the key to understanding how the asset manager serves its clients. “While it’s imperative from a liability standpoint to have a process to pay property taxes, and the homeowners’ association, prevent code violations and address safety issues, managers must approach this with a proceeds perspective to ensure that the asset holds adequate value or potential to incur carrying costs that come with longer holding times,” he added. M A N AG I N G M A R K E T A N A LYS I S O N A M IC R O L E V E L

If an investor is going to “go big” in real estate but also bring in the kind of

KEYSTONE PROFILE “micro-level management”

that big servicing shops

Hennessy and Jacquelin

and private equity firms

describe as essential to

are buying, investing

effective asset management, that investor is going to require some data analysis along the way. While Jacquelin and Hennessy both have teams in place for this, they also look to regional, trusted parties for insight into national and local trends. Stephanie Mclane, who serves as the CEO of AREMCO, Inc., a real estate management

in improvements and holding their real estate assets,” Mclane said. Historically, these institutional investors have preferred to liquidate large REO portfolios; most investors will be familiar with the phrase “banks do not want to own homes” from educational materials dating from the mid-2000s onward. However, Mclane said, that preference has

company specializing in

been changing.

mortgage default ser-

“The institutional inves-

vices, including property preservation, is one such resource. Property preservation is a prime industry where identifying early signs of shifting consumer preferences and industry trends are key to forecast and projections because it is literally the business dealing with the aftermath of buyer and seller behaviors. Mclane’s work in field services and the REO market has enabled her to observe current market evolutions up close. “One of the major trends we are seeing in 2020 is

tors are holding those REO assets and turning them into rentals. In the past, you expected the REO market to boom after a downturn or crisis. This time, a lot of those packages that would have been sold off are being set up as rental properties,” she said.

Founded: 1995 Awards: Philadelphia Business Journal’s Top 25 Businesses

Diversity Pledge:

Keystone’s corporate diversity statement includes a pledge to promote “the inclusion and utilization of minority, women, disadvantaged, and small-business enterprises (MWDSBEs), as well as veteran-owned businesses and ser vice-disabled veteranowned businesses.

Technology:

Keystone uses a proprietar y operating platform to provide an integrated, secure platform for all users to manage diverse workflow with situational flexibility. The company continues to invest in its web-based technology to create an absolute record of ser vices and workflow within a portfolio.

AREMCO PROFILE Founded: 2018 About Us:

AREMCO was founded by mortgage default industr y and real estate experts with over 50 years combined experience to partner with the industr y to engage in providing solutions to our clients to complement their grow th and future success.

Our Pledge:

gage defaults and corona-

Our customers are our partners. We conscientiously work with them to achieve the highest quality results.

virus-related moratoriums

Technology:

The ongoing wave of mort-

will likely compound this trend. Although most analysts agree there will not be a “foreclosure tsunami” like the nation experienced

AREMCO uses a data-driven operating platform with integrated application technology to assist clients with preser vation, inspec tion and various default ser vicing needs, creating unparalleled optics and vantage points for clients and their portfolio. REI INK 25

REI INK

PROFILE

LOOKING AT RISK FROM EVERY ANGLE

during the housing crisis of the mid-2000s thanks to the massive amount of

home equity that has built hen an investor acquires a distressed asset, there are usually unavoidable risks that come with that process. For example, in

up in the market, housing acquisitions are likely to

many states you cannot enter an inhabited property prior to acquisi-

trend toward bulk-buying

concluded, the investor must figure out how to work with everyone still

that go into delinquency

tion even if the property comes with a tenant. Once the transaction has

when those properties

associated with the property—possibly lien holders and residents—to

or foreclosure are finally

put the investment in a position to generate the best results possible. That is where Keystone comes in, CEO Ryan Hennessy explained.

“You’re responsible for a lot of things when you acquire any asset.

There might be tax delinquencies or title issues. You may know there is

upside but be unable to get inside to determine just how you will access that upside. In some cases, you may have to go through an extensive

eviction timeline. Every one of those risk factors adds uncertainty to the equation,” he said.

Hennessy said that for Keystone clients, who tend to operate on a

massive scale, there is a point at which the risk outweighs reward on

individual properties, and they opt to sell. Interestingly, that can be the best time for an individual investor to step into the process and acquire the property because, he explained, individual investors tend to have different types of connections and flexibility to ameliorate risks that institutional investors cannot leverage.

“An individual investor can often chip away at different costs and risks that institutional investors would incur if they kept the property,”

Hennessy said. “We figure out when it makes sense to ‘roll the dice’ and when someone else would be better suited to do that.”

The same process that Keystone analysts apply when they evaluate indi-

vidual assets can be applied to market evaluations as well. Institutional investors get “stuck” in their markets sometimes because the gamble

associated with moving into a new market, acquiring new contacts, and

released in 2021 or beyond. “There are a lot more properties in default right now than there have been in the recent past. The amount of properties that are officially in default or in foreclosure nationwide could skyrocket when the moratoriums lift,” Mclane said. She noted that the issue is not just with owneroccupied properties but also tenant-occupied and vacant properties that are not going through the traditional delinquency and foreclosure processes due to COVID-related issues such as court closures and or mandated holds related to the pandemic. “Those

creating new, customized strategies is just too great. “You can know

properties are the ones

already active and still not be able to make the leap,” Hennessy said.

maintenance and man-

into these markets and help them leverage technology and resources to

that are not getting it. The

a market is attractive and comparable to the market in which you are

most likely to need proper

“Sometimes investors just need partners like Keystone to go with them

agement right now and

build a near replica of their operations in the original market.”

investors who ultimately

2 6 N OV E M B E R 2 0 2 0

acquire them need a plan

around these issues by

for how they will bring

looking for markets that

them back.” Mclane also discussed the facts behind what many in the media are describing as an “urban exodus” response to COVID-19 restrictions and lockdowns. “We are seeing populations exit certain areas of the country because they no longer have to go to work in a physical office every day and folks have the freedom to work from home from any location,” she said. “That is affecting the cost of labor that institutional investors pay for property preservation because there is a lot

are stable, and individual investors can do the same. However, the definition of “stable” has expanded of this year. Economies that are likely to remain stable and pandemic-resistant may showcase indicators like a strong military presence in the local economy with the associated federally-budgeted payrolls, commercial properties with paying tenants in place, and industries active in essential services or that can keep employees both safe and employed while there is still risk of COVID-

of competition from the

19 infection.

retail home-renovation

“A lot of people do not

sector right now compounding the issues with rising costs of materials.”

JIM JAC Q U EL I N

and changed since March

know that a great indicator about the stability of a local economy is whether

retail stores and restau-

that we can still examine

rants still operating? If you

a group of assets and

start seeing those shops shut down, something is making the market unsta-

refine a strategy to fit each one—all while protecting the client’s interests.” This

ble,” Mclane said.

frees up investors to focus

R E A L E S TAT E S T R AT E G I S T S AT H E A R T

erties and assets for their

At the end of the day,

vice to help convert those

Hennessy said, Keystone

on acquiring more propportfolios, relying on the asset management serproperties, which are often

exists to help clients make

distressed, into productive,

the most of their assets.

functional investments.

“We are really real estate

“We offer diverse per-

strategists at heart,” he explained. “We have the ability to execute on

Mclane said institutional

or not mom-and-pop busi-

multiple levels but remain

investors are working

nesses are open. Are the

enough of a boutique firm

spective on your portfolio,” Hennessy concluded. “We’re always looking for that optimal path for each piece of real estate.”

Carole VanSickle Ellis is the chief operations officer for the Self Directed Investor Society. She is the featured writer for REI INK and

also provides written content for other select publications, including Huffington Post and Motley Fool’s Millionacres. Ellis is the former editor of UGA Research magazine, a sought-after keynote speaker and host of the popular 9-minute real estate podcast, REI.Today. You can reach her at Carole@rei-ink.com.

R E I I N K 27

REI INK

REGIONAL SPOTLIGHT

MACON, GEORGIA Despite COVID-19, the “Heart of Georgia” Market is Holding Strong.

BY CA R O L E VA N S IC K L E E L L I S

acon, Georgia, sits squarely in the geographic center of the state, a location that earned the city its nick-

name, “The Heart of Georgia.” And while the Georgia’s “heart” may have been historically overshadowed by its capital, Atlanta (“Hotlanta”), real estate in Macon has taken an unprecedented turn skyward in 2020 thanks in large part to a pandemic-resistant economy and the housing affordability that the entire southeastern state is known for. Although local real estate professionals in the area were initially taken by surprise when the market recovered and skyrocketed in the wake of March 2020’s near-national lockdowns, they reported that by Fall 2020 the Macon market was showing an unprecedented level of competition. “2020 has been a crazy year,” said mortgage loan officer Kacy Discher. “This is the first time I can ever remember Macon having bidding wars,” she added. The last documented evidence of this trend in Macon was around 2006. Low interest rates combined with relative affordability, proximity to drivable outdoor recreation destinations, and an emerging COVID-driven surge into the single-family housing market have driven Macon home prices upward while sending active housing inventory downward.

2 8 N OV E M B E R 2 0 2 0

REI INK 29

REI INK

REGIONAL SPOTLIGHT

this year, indicate unem-

Georgia Department of

I think you are going to

ployment as of September

Labor commissioner Mark

see us get back to where

2020 was hovering around

Butler cited businesses’

we were back in February

6 percent, below both the

increased preparedness

national average and rates

for COVID-19 going into

in harder-hit cities of simi-

the fall as a positive sign

out affecting other states

lar sizes. In fact, according

that Middle Georgia,

in the wake of the corona-

to the Georgia Department

including the Macon-Bibb

virus pandemic.

of Labor, Macon’s unem-

County area, would likely

THE PERFECT L O C AT I O N T O W I N HOMEBUYERS’ HEARTS

In fact, Macon’s employ-

ployment rate is only

have an advantage in the

about 1.6 percent higher

post-pandemic recovery.

Prior to the emergence of

certainly not as positive

this fall than it was at the

“As long as economic

States, Macon was already

as they were in January of

same time last year.

conditions stay the same,

“ticking the boxes” for

Georgia’s history of investor and business friendly policies have somewhat insulated the state and

its major metro areas, of

which Macon is one, from

much of the economic fall-

ment metrics, while

BREAKING DOWN THE COVID CONTROVERSY IN AN INVESTORFRIENDLY STATE

at historical lows,” he predicted at the end of September 2020.

COVID-19 in the United

eorgia has long been a favorite location for real estate investors thanks to investor and busi-

ness friendly policies on rent practices and evictions

and business-friendly tax policies. These policies are

designed specifically to keep Georgia “on your mind” when you are thinking of starting a business, delving

into new construction and development, or building up your portfolio of investment properties. However, as

the COVID-19 pandemic continues to affect absolutely every angle of our lives up to and including where and how we live in our own homes, real estate investors find themselves subject to federal mandates and

policies they never expected to deal with firsthand in the southeastern market.

The greatest of these, of course, is the wide-reaching eviction moratorium established by the U.S. Centers for Disease Control and Prevention (CDC) at the

end of this past summer. Georgia, like many other

investor-friendly states, has permitted some ongoing

evictions for illegal activities, destruction of property, and non-COVID-related lease violations. However,

3 0 N OV E M B E R 2 0 2 0

many homeowners,

of Warner Robins just 10

between April and August

rise, particularly for what

business owners, and

miles away, home values

2020, Zillow analysts now

many investors refer to

major employers. With

in the area had been rising

predict home prices will

as “bread-and-butter”

three colleges ranked

steadily since 2012, gain-

rise another 4.5 percent.

properties that appeal to

Like most other mar-

first-time homebuyers and

kets across the country,

renters who value sin-

Macon’s available housing

gle-family housing. With

inventory has fallen dra-

Georgia tied for seventh

matically, with available

place in the nation for the

19 pandemic, however,

inventory down nearly 40

lowest unemployment

and education, and the

things in Macon shifted

percent compared to this

rates in the country and

close proximity of Robins

and the market heated up.

time a year ago. Demand

Middle Georgia’s unem-

Air Force Base in the city

Based on market activity

is likely to continue to

ployment even lower than

in WalletHub’s “Best Colleges in Georgia” list for 2020, employment

ing nearly 5 percent in 2019 and projected (prior to COVID) to gain another

options in a variety of

2-3 percent in 2020.

recession-resistant sectors

In the wake of the COVID-

like healthcare, insurance,

because many municipal courts have remained closed

Georgia Legal Services Program, noted there are many

state, eviction cases are backed up along with other

process, help the investors who own the properties as

past official economic “reopening dates” across the hearings and proceedings.

programs available to help tenants pay rent and, in the well. Macon investors may benefit from familiarizing

In Macon-Bibb County, the courts began hearing

themselves with local assistance options so that they

White-Colbert reported that many landlords in the area

“Because the process moves so quickly, tenants who

get the cases on record, and those cases are now being

rental assistance provider before they are served

30 days like in other civil lawsuits.” White-Colbert said

Real estate investors holding or acquiring rental

cases again at the end of August. Local judge Pamela

can direct struggling tenants in the right direction.

continued to file evictions during earlier moratoriums to

need rental assistance really need to contact their

heard. “It’s a quick process,” she noted. “It’s not the

notice,” Reif explained.

that many local landlords are working with tenants to

keep them in their homes. If a tenant in Georgia loses

an eviction case under the current pandemic guidelines, they will have at least three days’ notice and seven days to move out. This is among the fastest timelines in the

country. “I always advocate paying your rent before you pay anything else,” White-Colbert said.

Local tenant advocate Susan Reif, who serves as

director of the Eviction Prevention Project at the

properties in Macon, Georgia should be prepared to acquire and hold those properties at least until the

end of 2020 if there is a tenant living in the property. Investment properties in some degree of distress

are emerging as one of the few “bargain” options for investors in today’s real estate market. Be sure you

are familiar with all aspects of the property, including rental history and local pandemic policy as well as national guidelines, before making a purchase.

R E I I N K 31

REI INK

REGIONAL SPOTLIGHT

MACON

CURRE N T ASSISTEDL I VI N G STATS

ith 24 RAL’s in the Macon market, the investment opportunity for assisted living in an underserved market is clear now and in the future.

$3,484

2,079

AVERAGE MONTHLY COST, ASSISTED LIVING PRIVATE ROOM

WILL LIKELY NEED ASSISTED LIVING IN THEIR LIFETIME

owns Spherion Staffing

the Greater Macon

and is helping fill this type

Chamber of Commerce,

of position. He added that the temporary employees will have the opportunity to potentially gain fulltime employment at the companies for which he is hiring. Chalmers noted that local businesses are already in “holiday shopping” mode thanks to coronavirus, which has forced many businesses to shift their focus from brick-and-mor-

13,864

153

POPULATION OVER THE AGE OF 75

ASSISTED LIVING BEDS THAT EXIST TODAY

area is sustaining the local

local retail sector is tenta-

economy and attracting

tively back in hiring mode,

new residents both to buy and rent. The municipal governments in Macon and Bibb County are working hard to make sure those new residents have the types of housing options they need,

with one local employment agency specifically courting out-of-work and furloughed restaurant, hospitality, and retail workers to fill around 1,000 positions at local companies. Many of these positions

issuing nearly double the

will be considered “light

number of home-building

warehouse jobs,” said

permits in 2020 than were

Michael Chalmers, who

3 2 N OV E M B E R 2 0 2 0

local Urban Development Authority and Visit Macon to “unify businesses and residents committed to slowing the spread of COVID-19 while supporting the local economy.” Through that initiative, local businesses were able to formulate a clear

retail. This has necessi-

consumers feel safe and

tated an employment shift

continue to patronize local

as well, with more workers being necessary to handle

this business pretty heavissued in 2019. Even the

Management Agency, the

plan of action to help

ping. “Normally, we do

that, the job market in the

Macon-Bibb Emergency

tar operations to online

pulling, packing, and ship-

Info provided by ALFamily.com

Macon-Bibb County, the

ily in the fourth quarter because of the Christmas season, but we have been seeing upticks…since May,” Chalmers told The Macon Telegraph at the end of September. The city also has its own initiative to keep local businesses open and residents safe and employed. In September, local economic develop-

establishments. More than 90 businesses signed up for the campaign, Josh Rogers, director of NewTown Macon, reported mid-September. Local business owners say the initiative is working. “[Customers] feel safe to come here. They feel safe to eat at our restaurants and shop in our stores,” said the owner of a local brewery and restaurant. T IC K I N G T H E B OX E S F O R P O S T- PA N D E M IC R E A L E S TAT E

ment agency NewTown

Given its middle-Georgia

Macon partnered with

location, Macon is primed

to attract first-time,

“Homebuyers are looking

post-pandemic homebuy-

for more room and a more

ers and new residents par-

family-friendly environ-

ticipating in the emerging

ment than they can access

“urban exodus” that has

in an urban area,” Sharga

accelerated as COVID-19 continues to affect working conditions, living situations, and schooling into the fall. “The pandemic seems to have accelerated a trend we were already starting to see, which was a migration from urban renter to suburban homeowner,” said Rick Sharga, executive vice president of marketing at RealtyTrac. “There is a very strong level of demand for housing in suburban areas.” With Macon’s proximity to Georgia’s capital city of Atlanta (about a one-hour drive) and its vastly more affordable housing market (median home price in Macon is considered in the “affordable” range for about 88 percent of potential buyers in the market), the city has much to offer to households who want more room in which to live, work, and

explained. Macon’s proximity to the Georgia coast also gives the market an edge. Macon residents are a mere three-hour drive from the Georgia coast, meeting yet another postCOVID buyer preference that a property be four hours’ drive (or less) from an attractive outdoor recreation option. According to a report published in July by Fortune magazine, the combination of “reasonably priced real estate,” relatively relaxed virus-related mandates, and relatively close access to both urban centers and vacation destinations is an intoxicating one. Macon offers all these benefits along with a job market that is recovering faster than most states’ job markets. THE COLLEGE MARKET CONUNDRUM

potentially remote school

Of course, no investor

in 2020 and beyond.

can look at the Macon

NEW CONSTRUCTION COULD SIGNAL A REAL ESTATE “TAKEOFF” IN 2021

s consumer demand for single-family homes holds strong toward the end of 2020, many markets are feeling the pinch as limited inventory drives home values skyward. In Macon, Georgia, developers are ready to meet that demand with new single-family developments in 2021. Many are building with real estate investors in mind rather than retail buyers as rising material and labor costs send some new-home prices out of reach for would-be homeowners. If retail buyers cannot make the purchase, developers believe those would-be buyers will choose to rent in attractive, affordable markets like Macon rather than look elsewhere. “There are a lot of jobs being created. You’ve got affordably priced homes,” explained local broker Alex Vento, who reported seeing rising numbers of investors entering his local market. “It’s a good thing because they see we are a value, and I think the market is just primed to take off,” he said. “This area is poised to really experience good things here in the near future.” Employers like Amazon, Geico, the local universities and colleges, and neighboring Robins Air Force Base (which has a federal payroll exceeding $1.8 billion) all are currently bringing new jobs to the area and sustaining existing payrolls. Even the hospitality sector is showing signs of life, with a new boutique hotel project that had stalled early this spring now back on track thanks to a $23 million bond deal with the county. The renovation on the property alone is expected to create more than 200 construction jobs and at least 80 permanent jobs. Local developers are also optimistically constructing several luxury senior communities in the area that will open in Summer 2021. REI INK 33

REI INK

REGIONAL SPOTLIGHT

market with its five col-

an active Georgia agent

Thanksgiving and many

to be demand for this type

leges and universities

and works with out-of-

courses remain online.

of property.

and fail to consider the

state investors who want

student-housing angle of

to acquire properties in

the equation. Historically,

emerging markets around

college markets have

the state. “However, with

been notoriously popular

all the students leaving

with investors thanks to

and the months of vacan-

the economic insulation

cies we might be dealing

that comes from having

with, I put those invest-

a guaranteed renting

ments on hold.”

population and year-

Wesleyan provost Melody Blake noted the school is limiting the amount of time students must spend in the classroom, with most classes equipped with virtual systems that

INVESTOR AT T E N T I O N I S S H I F T I N G T O M AC O N

If you have been watching the Middle Georgia market but not yet made your move, you might find

will permit students to

yourself in the middle of

attend class remotely. She

a lot of other investors

Beato’s concerns echo

said every classroom has

looking in the area as 2020

those of many investors

a camera that “moves to

progresses. According to

who historically would

the sound of the speaker”

a report from ATTOM Data

have jumped into the stu-

to enable quarantining

Solutions, more than half

dent-housing rental market

students to engage in

of the total sales in Macon

in Macon. At present,

discussions via Zoom,

during the first half of 2020

the University System of

and warned, “every plan

were all-cash. With some

Georgia is in the process

that we make might and

of the highest potential

of bringing students back

probably will change.”

annual gross rental yields

“I had been keeping an

to campuses across the

This feeling of uncer-

early in 2020 and a solid

eye on the Macon market

state, and Mercer, Georgia

tainty has many investors

employment base to

in 2019 because I was

College and Wesleyan

leaning toward the more

keep renters in place, the

interested in acquiring

College have all instituted

predictable sector of

“Heart of Georgia” is likely

some rentals close to

at least some on-campus

single-family residential

to remain in many real

Mercer University,” said

learning. However, the aca-

housing simply because

estate investors’ hearts

Atlanta-area investor

demic term has been short-

there is no question that

(and portfolios) in 2020

Lorraine Beato, who is also

ened and will end after

there is and will continue

and beyond.

round, recession-resistant employment. However, the pandemic has knocked these pleasant academic investment “bubbles” for a loop as many students left campus last spring and have yet to return.

Carole VanSickle Ellis is the chief operations officer for the Self Directed Investor Society. She is the featured writer for REI INK and

3 4 N OV E M B E R 2 0 2 0

MACON AT A GL ANCE Current 3bd SFR Rent

3bd SFR - 5-year Rent Change

$900

Rent vs Income

3Bd Avg Rent

8.0%

5 -Y E A R R E N TA L P R IC E A P P R E C I AT IO N

The Macon, GA MSA is

3-bedroom SFR average

with nearly 230,000 resi-

dents. Current 3-bedroom single-family rental (SFR) prices average $1,065

for the MSA. High-rent

areas in Forsyth down to Roberta range between

$950 to $1,150. The least expensive areas (white)

in Macon are quite low,

from $800 to $900. The remainder of the light

red areas of rental prices trend between $900 and $1,050.

In the last five years,

rental prices over the

Macon MSA have increased a moderate 18.3%, ranking the metro 115th place

for five-year rental price

appreciation. Rental price increases have increased the most in West Oak,

Forsyth and Jeffersonville

near 18% (dark green). The sage green areas have a

moderate five-year increase of 10% to 15%. Nearly half

of the remaining zips in the MSA (white) have only mild rental price appreciation under 10%.

Rent vs Income 18.0%

3-BEDROOM S I N G L E - FA M I LY R E N TA L P R IC E S

a small to midsize metro

Gross Rental Yields by Zipcode

5yr Rent Price Increase $1,150

STAT I STIC S, A NA LYS I S & G R A P H IC S CO U RT E SY OF R E NT R A NG E

18.00%

40.00%

Avg Gross Rental Yield 8.0%

15.0%

R E N T-T O -I N C O M E

YIELDS

The 3-bedroom SFR rentvs-income ratio in the MSA is a moderate 30.5%, only slightly below the national average of 32%. Working class families near central Macon, Jeffersonville and Roberta have low household incomes between $25,000 to $35,000—leading to some of the highest rent-vs-income ratios in the metro at 32% to 45%. Light-blue areas around Forsyth and Gray have affordable rent-to-incomes between 22% to 25% due to higher household incomes ranging from $50,000 to $55,000. White colored areas coincide with lowest R/I near 20%, thanks to highest area incomes over $60,000.

Median SFR home prices

are approaching $160,000, gaining 22% in the last

five years. Gross Rental Yields (GRY), excluding

expenses, across the top

200 U.S. markets average 8.7%. The weighted

average GRY in the Macon MSA is one of the top in

the country at 13.6%. The high yields are sustained by low home prices and relatively high rents.

REI INK 35

REI INK

M I L I TA RY

HOW MILITARY LEADERSHIP SKILLS TRANSLATE TO CIVILIAN CAREERS BY M AT T H E W C R O S L I N

o military leadership

at the various levels of

tions with better results.

skills translate to the

civilian organizations.

The business environ-

civilian world? Military leadership education and experience are highly regarded as of form of learning to lead organizations. This education and experience can carry over to the business world

The military leader brings focused leadership education along with practical leadership experience to the civilian market. The military leader is also typically adept at adjusting leadership styles to match the environment. The biggest hurdle for the former military leader is likely adapting to the culture

LEADERSHIP IS UNDERSTANDING PEOPLE AND IN VOLVING THEM TO HELP YOU DO A JOB. THAT TAKES ALL OF THE GOOD CHARACTERISTICS, LIKE INTEGRITY, DEDICATION OF PURPOSE , SELFLESSNESS, KNOWLEDGE , SKILL , IMPLACABILIT Y, AS WELL

and norms of their new civilian organization. The pace and work attitude can vary from that experienced in the military. Professional military leadership education combined with the practical experience gained from

AS DETERMINATION NOT TO

various assignments leads

ACCEPT FAILURE .

former military leaders

ADMIR AL ARLEIGH A . BURKE , Naval Le a d e r s h i p : Vo i c e s o f E x p e ri e n c e (19 87 )

3 6 N OV E M B E R 2 0 2 0

to become better trained business leaders. They

ment does have unique challenges that military leadership will not directly prepare a leader to overcome. However, leadership education combined with experience will better prepare any leader to achieve success. The military expends a great deal of time and resources focused specifically on creating better leaders. Military leaders are put through a range of positions and opportunities to further develop abilities through the application of the leadership training. The ongoing leadership education and subsequent rotation through leadership positions are inherent to the military leadership

are equipped to handle a

model. Leaders can and

greater variety of situa-

should be grown.

Military and civilian lead-

leadership education

management through a

ership are somewhat sim-

both before employment

variety of positions during

ilar, and each can benefit

and after normal work

their career. This applies

from the other. Normally,

hours, especially at lower

to careers that only span

business benefits from

levels of business man-

one enlistment all the

those who are or have

agement. The military

way to 20 plus years.

been military leaders, but

encourages the pursuit of

How many in business

sometimes it goes the

additional civilian edu-

ever achieve more than

other way. Leadership is

cation, and often subsi-

one or two levels of expe-

fundamentally leadership,

dizes the cost of pursuing

rience in a corporation?

regardless of military,

higher education through

Most business leaders do

business, or any other

various benefits.

not achieve more than a

Another aspect of lead-

few levels on the corpo-

organization.

no direct international experience. The business world has much to benefit from a military leader in terms of leadership training and education, experience under fire, international experience, and the variety of positions that the military leader undertakes. The military also can benefit from those

The military focuses a

ership is the practical

rate ladder.

great deal on leadership

application of leadership

Another benefit that a

education. This is proba-

lessons or on the job train-

military leader may bring

bly the biggest up-front

ing. Military leaders are

is they typically have at

difference between how

always engaged in leader-

least some, and often a

the military grows lead-

ship, most often 24 hours

great deal of, international

ers versus the corporate

a day, 7 days a week.

experience. Many military

world. In the business

Military leaders get to

leaders also have experi-

world, less corporate time

apply the leadership man-

ence working with busi-

is spent on educating

agement skills all through-

nesses in other countries

leaders. It is more up to

out their careers, in ever

as a part of their duties.

the individual to pursue

increasing levels of the

This experience, even if

education. Business

organization from the very

limited, is more than the

leaders are expected to

junior to the most senior.

average business school

spend personal time and

The military leader expe-

graduate obtains. Many

are repeatedly given the

expense in obtaining

riences multiple levels of

leaders in business have

chance to lead and to

who have left the military for the corporate world and returned. Leadership education and experience is valuable, no matter where it is obtained. While not an absolute requirement to be a great leader, experience is essential to make sound leadership decisions. The military provides nonstop experience as leaders

R E I I N K 37

REI INK

M I L I TA RY

both succeed and fail. It

military leader has not

ily experience. Those who

market. This is one reason

is from these experiences

only “learned” how to

hire leaders for businesses

the military professional is

that the military leader

be a leader, he/she has

can advance his leader-

applied that learning to

ship past what is taught in the classroom. Military leaders are exposed to concepts such as vision, mission statement, and objectives. Implementing and executing strategy and monitoring and evaluating the performance of the organization are also fundamental. Military leadership education and experience is in a state of constant evolvement since the beginning of military leadership. Business leadership is also evolving and being developed. Most will

a multitude of leadership situations and gained valuable experience in return. When a business school graduate applies for the same position as a former military leader, experience is no question. Some authors that study and write about leadership and management have argued that military leadership is in fact a desirable trait for business managers and leaders. Military leaders are sought after by corporations for the qualities and experience that they possess. Business school gradu-

agree that leadership is

ates also possess varying

leadership, no matter

degrees of leadership

where it is learned. The

training but not necessar-

and corporations must look at the individual and not merely the fact that they were a military leader or just a business school graduate. What traits does the candidate possess that the organization finds valuable. The chances are high that the former military leader will succeed and provide benefit to the civilian organization. There have been and will continue to be successful business leaders with zero experience in the military. The military has even borrowed from business in teaching leadership. The military leader is a valuable source of talent for business. The basic leadership lessons taught in

sought by corporations. Yes, military leadership skills do translate to the civilian work force. Leadership is leadership and experience is experience and military leaders bring both to the table. While there will likely need to be a shift in mindset due to the differences in work culture, a former military leader will succeed. Give veterans a serious look when you are looking to hire. From junior leaders with just a few years in the military to senior leaders with a decade or three, they will bring education and experience to your organization that meet

the military are transferra-

or exceed those of their

ble to the civilian business

civilian peers.

R. Matthew Croslin is a retired Lieutenant Colonel with a focus as a petroleum officer. He spent 31 years in the United States Army in all three components. He began his military career by enlisting in the Oklahoma Army National Guard and later getting commissioned as a 2nd

Lieutenant, transferred to the US Army Reserve, and then spent the next 23 years on active duty

ending his career at Fort Leavenworth, KS and the US Army Command and General Staff College

as a staff instructor and team leader. He has a bachelor’s degree from the University of Oklahoma

and a Master’s degree in Management from Webster’s University.

3 8 N OV E M B E R 2 0 2 0

Intelligent Maintenance

60 BENSON %

Less time spent coordinating maintenance

Increase in resident satisfaction

Efficiency • Visibility • Profitability It’s time for you to:

Call volumes have been seen to drop up to 75%

46%

Property Meld is a maintenance hub designed for property managers who want to deliver amazing maintenance at a low cost. Our solution is here to help you provide an all-around better maintenance experience for you, your residents and your investors.

• quit wasting time on mundane tasks • get resident satisfaction to the right side of the curve • correct maintenance visibility issues

of residents say maintenance was a factor in deciding to renew their lease.

• stop letting maintenance negatively impact your bottom line • shed the process that is limiting your growth

www.PropertyMeld.com

REI INK 39

REI INK

VETER AN PROFILE

DAVID YOUNG Director of Business Development | RCN Capital

y name is David

Young, and I am

as Fire Direction Officer,

quickly adjusted, or was

Platoon Leader, Squadron

currently the Director of

forced into adjusting, to

Business Development for

life as a plebe at West

RCN Capital. RCN Capital

Point. There were certainly

is a direct private lender in

challenging moments.

the non-owner-occupied

West Point was a great

residential space. M I L I TA RY B E G I N N I N G S

I graduated from the United States Military Academy at West Point in 1997 and served approximately seven years on active duty as an officer in the U.S. Army. My military career started officially with Beast Barracks as a plebe

experience that helped me in many ways. I truly cherished every moment playing Division 1 baseball and excelling in my primary major of Economics and my secondary area of focus of Systems Engineering. There were so many outstanding men and women I met and worked with, to

took the drive to old West Point on the Hudson River in New York. After saying

There were several inspiring people I worked with and for during this time, but a few leadership lessons and patterns stood out. Two of those are integrity and leading by example. I led groups of soldiers ranging from as few as 5-7 troops to groups that exceeded 300 solunder my charge were

My time on active duty

game, my parents and I

I N S P I R AT IO N A L LEADERSHIP

sors and staff, but also my

shortly after high school

ing in a football All Star

Battery Commander.

diers. Many of the soldiers

in June of 1993. Very

Massachusetts and play-

Fire Support Officer, and

include not just the profesfellow cadets.

graduation in Central

4 0 N OV E M B E R 2 0 2 0

goodbye to my parents, I

included two stops at Fort Sill in Oklahoma and a lengthy stay of about four years at Fort Carson in Colorado. I was an officer in the Field Artillery and held positions such

several years older than me and more experienced in terms of time served. Regardless, the effectiveness of leading by example and integrity always stood out. Soldiers responded to leaders that demonstrated the ability and willingness

to accomplish the very

revenue streams for the

same tasks asked of them

company while also man-

either individually or as a

aging our Correspondent

member of a team. Integrity was always crucial and something that West Point helped me internalize as a professional. Soldiers deserved the truth and were much more effective when leaders were honest not only in laying out the landscape and tasks at hand, but also in delivering coaching, guidance, and instruction

channel to ensure clients are performing to their capabilities and desires. ness from scratch requires

SAME TASKS ASKED OF THEM .

rigorous hard work and determination, and my milhelps in that area. Ensuring client and company success after bringing in new business also requires extensive follow through,

“making a sale” or handling

These qualities are still

a new partner, integrity

indirectly via RCN Capital. I started with the company in 2014 and put together a boutique lending business serving another target market. In 2018 we shifted some of our focus and I took over Business Development for the company. My current role requires extensive prospecting and

DAV I D YO U N G

itary background certainly

T H E T R A N S I T IO N

Estate industry somewhat

THE ABILITY AND WILLINGNESS TO ACCOMPLISH THE VERY

that was frank and honest.

I got my start in the Real

LEADERS THAT DEMONSTRATED

Self-generating new busi-

commitment, and per-

vastly significant to this day.

SOLDIERS RESPONDED TO

sistence. However, while

and leading by example are always part of the equation. Partners on our lending platform expect and deserve honest and realistic feedback and input on what we can and can’t do, and they also deserve to know what is expected of them in order to make the business relationship a success. I use these traits every single day working in this industry.

arts and culture. You can find me at the gym, riding all over Boston on my bike with my daughter in tow, or at a place like the Institute of Contemporary Art or music venue. At all times, thoughts and ideas are circulating regarding investments. My main areas of emphasis focus on non-traditional spaces such as crypto, early stage, scarce assets and collectibles, and digital assets such as websites. The future appears quite bright for residential real estate, private lending, and RCN Capital. It is my intent to continue to help lead RCN to the forefront

interaction with potential

On a personal note, my

and existing clients and

main interests beyond

partners. One could look

time with family, center

at it as securing future

sibility for the company as

on investing, fitness, and

we progress.

of the industry and take on higher levels of respon-

REI INK 41

REI INK

VETER AN PROFILE

TIM LOBNER Executive Vice President of Operations | Invitation Homes

im Lobner carries

many lessons from

his days as a naval officer into his current role as executive vice president, Operations Support, at Invitation Homes. One lesson he relies on often is to “collapse to the essential,” meaning that with all that goes on around a person on a daily basis—both planned and unplanned— it’s important to narrow one’s focus to the few things that really matter. Tim graduated from the United States Naval Academy in 1999 and commissioned as an officer. During his six years as a nuclear submarine officer in the United States Navy, Tim says he found that events that unfolded on a mission were not always predictable or controllable—and the same holds true in business. “But with

4 2 N OV E M B E R 2 0 2 0

well-trained personnel that do the little things right at every opportunity,” Tim

says, “a leader and their

team are well-positioned to react to the surprises that come up simply because they have the bandwidth

to focus on the challenge

instead of having to exert too much effort on performing the basics.”

T E A M S T H AT S O LV E THE PROBLEM ONCE

Today, Tim’s focus is

squarely on leading Invi-

tation Homes’ rehab, turn, and maintenance (RTM);

procurement; and vehicle fleet operations. He and his team of more than

500 associates conduct

all the activities required to maintain the compa-

ny’s portfolio of 80,000

and prepare 20,000+ homes for occupancy. This massive effort of what Tim calls “the big green RTM machine” is successful because he and his team have developed and implemented scalable national programs based on documented policies, processes, and procedures. “Whether in the military or in business, each person has an important role to play toward the success of the team,” Tim says. “And having a documented, consistent way of conducting operations ensures that everyone on the team knows what to expect, when to act, and how everyone’s role creates value for the team and its customers.”

single family homes.

One lesson Tim brought

to 500,000+ service

tary is to solve problems

Each year, they respond

from his time in the mili-

requests from residents

once. “On a submarine,

DLP AD

REI INK 43

REI INK

VETER AN PROFILE

you don’t have the lux-

business is to assess the

many times,” he says. “You

leadership style. “What

ury of solving problems

need for adjusting their

need to get things right

works in the military

the root cause of an issue

to the private sector,” he

the first time. Identifying

doesn’t translate perfectly

and solving the problem

says. “I’ve learned that

approach at Invitation

the private sector requires

team deliver an excepcompany’s residents.

once is key.” Using this

successful leadership in

school and pursuing a

sense strategically but also

career in real estate.”

felt more purposeful.”

Upon his exit from the

That sense of purpose,

Navy in 2005 as a Lieutenant (O-3), Tim received his Master of Business Administration (MBA) from the University of Chicago

serving our country, yet I

audience to develop

2006 when he took a job

career in real estate in as senior associate with

THOUGHTFUL LEADERSHIP

talent and deliver results.” A SMOOTH TR ANSITION

pany. In his six years at

Tim counts one of his

Tim’s love for real estate

Trammell Crow, he also

the Navy. As he tells it, he

role, supporting acqui-

Connecticut, finishing

efforts across industrial,

when he received orders

While he feels blessed to

calm at times when others might become unrav-

eled and, in turn, created an environment where

our crew could remain

focused on performing

our jobs despite very real distractions surround-

ing us,” remembers Tim.

“And the direct advice he once shared with me has stuck with me for nearly

two decades – ‘never get mad without a plan.’

Tim acknowledges that one major opportunity for veterans transition-

ing from the military into 4 4 N OV E M B E R 2 0 2 0

moments. “I am incred-

Tim began his formal

cation styles to a broader

“He remained remarkably

led to one of his proudest

leadership and communi-

tional experience for the

on his leadership style.

and real estate career,

ibly proud of my time

an ability to tailor your

having a major influence

spanning Tim’s military

Booth School of Business.

Homes helps Tim and his

submariner skippers as

which is a common thread

Trammell Crow Com-

began while he was still in

served in a development

was stationed in Groton,

sition and development

Submarine Officer School

retail and office assets.

to report to a subma-

rine based in San Diego, California. Rent in San Diego was high, so he

decided to buy a town-

house and offered to rent a room to his best friend.

have had the opportunity to work with Trammell Crow, Tim counts the most rewarding experience of his career as taking a chance with Invitation Homes. “In 2012, I left a job I enjoyed

“My light bulb moment

with a great company to

the rent I collected cov-

with Invitation Homes, an

mortgage and that I was

time,” he says. “I was drawn

money to build equity,”

spirit of the company’s

goal of going to business

am equally proud of our team’s efforts at Invitation Homes which culminated in our 2017 initial public offering on the New York Stock Exchange,” he explains. “It was an achievement that our leadership team had been working toward for several years and served to validate our business model.” As Tim looks to the future, he sees continued opportunity to drive further operational efficiencies into Invitation Homes’ service delivery model and to expand upon the industry-leading “leasing lifestyle” that the

was when I realized that

pursue an opportunity

ered roughly 75% of my

unknown company at the

able to use someone else’s

to the entrepreneurial

he says. “After that I set a

founders and to a business

focus, process, and team

model that not only made

appreciation to his work.

company provides to its residents. Wherever the journey takes Tim, he will continue to bring the valuable lessons of

E E R F TIL

UN 21 0 2 . 1 . 3

CONNECTING AGENTS & BROKERS WITH NATIONAL INVESTORS & SERVICE PROVIDERS SHARING LOCAL MARKET INTEL

WEEKLY REGIONAL SNAPSHOTS PROVIDE NATIONAL INVESTORS WITH LOCAL INTEL. Broadcast in the REI-INK weekly newletter. Enroll for free at rei-ink.com.

CONNECT. PARTNER. EXPLORE.

Membership Benefits include: Suppor t national acquisition and disposition initiatives with local real estate professionals Capture local market intel beneficial for por t folio analysis Expand your business par tnerships with our Ser vice Providers

rei-referralnetwork.com 207.443.3314

suppor ting the evolving nature of Real Estate Investing Collaborate with industr y colleagues, while building a national Real Estate Investor Referral Net work

REI INK 45

REI INK

VETER AN PROFILE

SCOTT KELLY President | CONREX

entered military ser-

helps you make better

strengthen you; physically,

vice immediately

decisions.

intellectually, spiritually,

following high school graduation having watched too many John Wayne movies. Little did I realize that path would take me on an incredible journey not only of personal growth but being a part of some of the most secretive missions in our nationâ€™s history.

4 6 N OV E M B E R 2 0 2 0

Seeing yourself is difficult and seeing your organization is even more difficult. As leaders, we should be purposeful about doing both. There is no better opportunity to become self-aware than in attending a selection and assessment course for Army special operations. The

emotionally. We should be constant learners. As a leader, testing and strengthening your team can be even more important. Shared hardships bind men and you need to capitalize on the opportunities that present themselves to do just that. Combat is historically the central crucible for

At the beginning, how-

experience was invaluable

ever, I was just a private,

for me with everything you

which is a great place to

could ask for; complete

start! No matter what level

ambiguity, extreme physi-

of responsibility you are

cal and mental stress, and

given in an organization,

a humbling collection of

the ability to understand

the most talented people

and empathize with those

in the world! While I do

at every rung of the ladder

not tend to wish that expe-

is invaluable. Listen to

rience on anyone, I do

them, connect with them,

encourage leaders to do

feel their struggles; it

hard things. Put yourself

helps you really know the

in uncomfortable situa-

sports coach, knowing

company which ultimately,

tions that test you and

when to achieve optimal

forging deep connections among soldiers and I experienced plenty, having deployed nearly a dozen times for operations and intelligence activities, alongside some of the finest Americans I know. With demanding and focused preparation, teams will rise to meet â€˜game timeâ€™. Like any

performance can be more art than science and requires constant awareness of your people and the battlefield environment. TIME FOR A CHANGE

After 20+ years in the

PUT YOURSELF IN UNCOMFORTABLE SITUATIONS THAT TEST YOU AND STRENGTHEN YOU; PHYSICALLY, INTELLECTUALLY, SPIRITUALLY, EMOTIONALLY. S C O T T K E L LY

requires a tailored touch to people and organizations whether executing clandestine raids or buying, renovating, and renting single family homes! The most compelling commonality between

military, I knew that I did

leading a real estate

not want to do anything related to national security

a collective group. This

company and leading a military unit is purpose.

spent time reading and

the requisite skills for

speaking with people to

such a profession; shoot-

improve my knowledge of

ing, parachuting, diving,

the industry’s vernacular.

grappling, etc. They have

Additionally, because of

nerves of steel, unending

leaders provide this!

the structure of Conrex,

courage, and the ability to

capital raising, REIT

think clearly and deeply

While my military career

structures, financing and

under incredible duress;

investor engagement are

the proverbial, ‘PhDs

essential functions to our

that can win a bar fight’!

organization’s success

Unfortunately for them,

and, as expected, areas of

I was but a pale shadow

weakness for me. So, while

of these men and their

I take various courses to

tremendous competence

improve my competency,

and experience. I was

I will never have the

grateful, however, to be

expertise of many others.

told early on by one of the

a smooth transition from

Fortunately, the military

most seasoned of these

the military, though, as to

is full of situations for

warriors, “you are not here

be expected, there were

leaders where you are

to be one of them, but to

several points of struggle

not the expert!

lead them.”

that had to be managed.

During my career, I was

The ROI for leadership

Hopefully, my military

Real Estate, like the Army,

given the responsibility to

is facilitating optimized

experience from the Army

has an encyclopedia of

lead the finest comman-

performance from individ-

will serve Conrex well

acronyms and essentially,

dos in the world. They

uals and achieving expo-

as we continue to scale

its own language, so I

are absolute masters of

nential performance from

across the country!

and about one-year out from retirement, a good friend gave me the opportunity to consult for his firm which did Single Family Rentals. I got hooked and two weeks after my last day in uniform, the company had me come in and start running operations. It was a wonderful move for me and my family to Charleston, SC where we already had a solid church that we loved and a good group of very close friends. It made for

All individuals and therefore all organizations need a raison d’etre and great

was rewarding and challenging, my personal purpose remains the same, Soli Deo Gloria! This purpose has made the transition from soldier to corporate leader generally seamless and serves me in all aspects of my life as husband, father, friend. I am very fortunate to be in a sector of the real estate market experiencing tremendous growth with still lots of runway ahead.

R E I I N K 47

REI INK

VETER AN PROFILE

JOHN MORRISSEY Senior Vice President-Operations | CFSI Loan Management

served in the United

that culminated with my

States Army from

promotion to Corporal

July 14, 1992 until April 9, 2000. My first permanent duty station in the Army was at Fort Stewart, Georgia as a Congressional Clerk. This position really set the tone for my military experience.

and the position of NonCommissioned Officer In Charge of Personnel Actions. I was personally responsible for two junior enlisted personnel, and the running of an office

I was deployed in support of Operation Joint Endeavor (Bosnia) and was in Croatia (considered a combat zone) in January-March 1996. I was part of a group tasked with keeping track of all Army personnel assigned

The “Congressionals”

that processed 300+

Office received inqui-

requests from soldiers

to that theater.

ries from members of

assigned to Mannheim. I

Congress on behalf of their

had to not only manage

Finally, I was stationed at

constituents assigned to

the office and ensure

the various units on Fort

the Officer Management

all requests were pro-

Section. There I was

cessed in accordance with

tasked with assisting 5

military regulations, but

senior officers in the

also ensure my soldiers

task of Commissioned

were proficient in all of

Officer assignments

their military occupational

throughout Fort Lewis.

specialty skills, physical

This position was pre-

fitness, and common skills

viously filled by a Staff

After Fort Stewart, I

(land navigation, weapons

Sergeant (E6). I was a

was then stationed in

proficiency). Their success

Corporal (E4) and was rec-

Mannheim, Germany. I had

or failure was attributed to

ognized personally by the

several positions there

my leadership skills.

General for my efforts.

Stewart. These were typically complaints against soldier’s commands. This job taught me how to research military regulations and how to interpret those regulations.

4 8 N OV E M B E R 2 0 2 0

(a rare rank in the Army)

C O M B AT A N D B E YO N D

Fort Lewis, Washington in

SI N G L E FAM I LY R EN T AL I N V ES TM E NT A N D AD VI SOR Y For Single Family Rental investors or asset managers looking to s ell, refinance, or enter the space

BENSON AD

Benson Residential is an investment and advisory firm focused on connecting institutional capital with the Single Family Rental space. Using our proprietary technology and deep connections within the industry, we provide our clients with exclusive off-market bulk opportunities as well as end-to-end underwriting , transaction management, debt financing and disposition services. Since 2019 our partners have transacted on over $200mm of SFR assets and built a wide network of local partners across the country. REI INK 49

Info@Bensonresi.com | Bensonresi.com

REI INK

VETER AN PROFILE

M I L I TA RY L E S S O N S LEARNED

they will never forget.

getting paid by the Army).

then Vice President of

Leadership is JOB ONE

When I was in Croatia,

I lasted two weeks before

Fund Control. Several

the Officer in charge of

I was looking for a job.

years later I helped start

our group (a Captain)

Having no mission was

decided that he wanted

not working out for me. I

to go back to Hungary

started applying for jobs

(our main duty station in

in earnest and went in

the theater). On our way

for an interview with a

next level.

to Croatia, we were part

Construction Loan Risk

of a large military con-

Mitigation company in

Currently I am the

voy that was protected

their Customer Service

by armored vehicles. We

Department. I would

had also been issued live

love to say I was hired

ammunition in case of an

because of my incredi-

ambush. Going back to

ble interview skills, but

Hungary we were not part

the real reason was the

of a convoy and we had no

managers conducting the

deliver top quality, accu-

ammunition. I do not think

interview felt that I would

rate products in a timely

I ever let the accelerator

show up to work based on

manner. I have three VP

off the floor, except at

my military experience.

level direct reports that

stop signs the entire trip.

I stayed in the Customer

I manage, and I handle

We ran into a few bands

Service Department for

major escalations from

of armed civilians, but just

about a year, then went

raced past them and they

on to the Fund Control

thankfully did not fire at

Department. After about

for Non-Commissioned Officers in the Army. Once I became a Corporal, I had to step up to leading soldiers by example and by direct action. I learned that everyone needs to be led differently. What works with one person, does not help someone else. I use those lessons every day when leading my employees at CFSI. Discipline is the first, middle and last thing everyone learns in the Army. The Army definition of discipline is doing what is right, even in the absence of direct orders. Operationally, I learned how to manage workflow, meet deadlines, motivate people, attention to detail, making sure the work product is right, understandable, and

us. We made it back to the Hungarian air base where we were assigned. It was the scariest several hours I

six months in Fund Control, I was given the opportunity to interview for the open Supervisor of

CFSI Loan Management with the goal of taking Construction Loan Risk Mitigation services to the

Senior Vice President for Operations at CFSI. We provide Construction Loan Risk Mitigation Services to lenders across the United States. It is my job to ensure that we

our lender clients. I am also the senior manager on site at our production office in Greenwood Village, Colorado so I deal with personnel, IT, and building issues as needed. I report directly

had ever had in the Army!

Project Review/Contractor

lessons, experiences, and

T H E T R A N S I T IO N

knowledge are used daily

got the job and used all

My enlistment was set to

my military leadership

end in April 2000. I moved

experience to turn that

and services.

Everyone who has ever

to Colorado and planned

department around. I went

All this because my

served in the military has

on taking a couple months

on to be promoted to AVP

company thought I would

at least one experience

off (on leave I was still

of the same department,

show up for work!

concise. All these military

in my business career.

5 0 N OV E M B E R 2 0 2 0

Acceptance position. I

to our President and work in partnership with him in creating new products

R E I I N K 51

REI INK

VETER AN PROFILE

TRENT FERRIS SVP Auction Events | Auction.com

nspired by my uncle,

is such a bigger topic,

(Operational Advisory

Calvin “Cal” Ferris,

however. It comes down

Group) Command and

who flew 200 types of

to perseverance, adapt-

aircrafts, I enlisted in

Control Systems plan-

ability, acceptance of

the United States Marine

other ideas, and working

ning for future conflicts

Corps in June 1985.

towards a common goal.

Originally, I enlisted as an E-1 and rose to E-5, and I was then commissioned as an Officer of Marines attaining my final rank at retirement in 2005 from the Corps as a Major. During my tenure with the Marine Corps, I had some truly diverse positions, both during peacetime as well as wartime. And in each position, the two things I learned most was the importance of mission accomplishment

held was as an Aviation Ordnanceman. In fact, I was the first U.S.

required in an officer’s career, I was also a Recruiting Station Operations Officer, Executive Officer and

Marine selected as the

on a second recruiting

Ordnanceman of the Year.

tour, the Western Region

I also served as an Air

Operations Officer.

Traffic Control Detachment Commander and led a team of Marines focused on training and readiness for remote ATC operations. As a Facility Watch Officer for ATC Deployment I served in Support of Operation Restore Hope in

After my recruiting tour, I became the Air Traffic Control Facility Officer at MCAS Miramar and served as the COMCABWEST Operations Officer for Airfield Inspection and Licensure as a dual role.

Somalia, Mogadishu.

All military veterans have

defined mission and the

SENIOR POSITIONS

occurred during their

right people around you

Later, I was selected as

careers. Mine was par-

to succeed. And, this

a team Member for OAG

ticipating in Operation

and troop welfare. One must always have a clearly

5 2 N OV E M B E R 2 0 2 0

One of the positions I

and events. As is often

memorable events that

Restore Hope. Operation

there we were, staring

I recall going in to meet

auctions within the

Restore Hope was a com-

down a mounted machine

with Walter and the CEO,

applicable compliance

bat mission.

gun in the back of some

Jeff Frieden, and within 5

standards. However,

tribe’s Nissan pick-up.

minutes, based largely off

That was really my, “I’m

beyond that we are a sales

Walter’s recommendation

not in Kansas anymore, am

team. My goals with the

and Jeff ’s faith in the work

company are to expand

ethic of U. S. Marines, I

our technology resources

had an offer.

and grow our overall

I also recall that the next

presence as the nation’s

“I’M NOT IN K ANSAS ANYMORE”

Leaving the U.S. for the first time to an unknown part of the world, Somalia, only a few weeks from Christmas, was quite memorable. As one of the senior officers, I was responsible for the well-being of 39 fellow Marines and most of the

I?!” moment. The Rules Of Engagement at the time did not allow any action and as we approached the embassy compound, the technical turned off the main road and we went our own way.

deployment equipment.

BEGINNING WITH AU C T IO N .C O M

Delays in Dover, Delaware,

When I retired in 2005 as

coupled with landings in several other countries enroute and then landing at Mogadishu in the early hours was dynamic. What made it more dynamic was that later

a Major, I went looking for a job that could utilize my military lessons and

55 minutes were spent with Jeff telling Walter how I would not be workauction side of the com-

Finally, in real estate,

pany at the time. My first year with the Company we conducted 18 auctions; we did 15,500 auctions last year; and in total over 85,000 auctions in my

at Auction.com largely

I am currently the SVP

that morning, less than

Skrzynski.

72 hours after leaving my

Walter told me to go

data-driven, customerfocused resources.

skills. I obtained my start

military peers, Walter

tion company through

ing for him, but on the

time with the Company.

on the faith of one of my

leading foreclosure auc-

of Live Auctions. I lead a team of approximately 400 associate members with

there are multiple aspects of a process in flight at any one time. My ATC background really helps me understand how to prioritize and manage multiple tasks while never losing site of the goal. And while being deployed to such far away distant places such as Okinawa,

the goal of bringing buy-

Saudi Arabia, Bahrain, and

ers and sellers together

Kuwait, I realized that the

through the auction

lifestyle we have in the

any other position. As it

sales model pioneered

United States is something

turned out, Walter, who

by Jeff Frieden and Rob

that I will always appreci-

had retired nearly a year

Freidman, our original

ate. It is from these past

earlier, had been in a key

founders. Foundationally,

events that I passionately

position at the original

I have the responsibility

believe that our country,

We were in the basic,

company that eventually

to ensure that all my team

the U.S.A., is the best

un-armored Humvee and

founded Auction.com.

members are executing

place to live.

family at home, I was in a Humvee with several other Marines headed to the former U.S. Embassy compound when a “Technical” vehicle pulled in front of us.

see him after my retirement before I accepted

REI INK 53

REI INK

VETER AN PROFILE

TED STUDDARD Business to Business Operations Manager | The Home Depot Renovations Services Team

hirty-six hours after

was commissioned as a

he was responsible for

graduating from high

Second Lieutenant.

leading and training 750

school, Ted Studdard was on his way to boot camp at the Marine Corps Recruit Depot at Parris Island, South Carolina. Little did he know that he was starting a journey that would

service, he led an artillery platoon in combat and was the Commanding Officer of Battery F, 2nd Battalion, 11th Marines, 1st Marine Division. During 2000-01,

span four decades, touch

Ted attended the Marine

five continents, encom-

Corps Command and Staff

pass two wars, and even-

College with an academic

tually end up as a leader

focus on operational level

at The Home Depot.

planning and the theory

THE MARINE JOURNEY BEGINS

there, he also earned a

Ted began his military career in 1984 as a Private. Soon after he was approached to attend the Marine Corps Officer Candidate School. After receiving his BBA in Management from the University of Georgia in 1988, he went to Officer Candidate School and 5 4 N OV E M B E R 2 0 2 0

During his initial years of

and nature of war. While masterâ€™s degree in military studies. After a tour as the Commanding Officer of Recruiting Station Nashville, Ted was

Marines and Sailors who executed missions ranging from combat operations in Iraq and Afghanistan to post tsunami Humanitarian Operations in Southern Asia. He was also responsible for negotiating the terms and expansion of US Marine Artillery training in Japan with the Government of Japan. During this tour he conducted multiple international media engagements and press conferences representing the US Marine Corps. S E N I O R O F F IC E R A S S IG N M E N T S

selected to be the

Returning to the US, Ted

Commanding Officer of

attended the National

the 3rd Battalion, 12th

War College in 2006 -07.

Marines, 3rd Marine

There, the focus was on

Division in Okinawa,

national strategy and

Japan. While in command,

strategic planning. He

was selected as a student delegate to the French Centre des Hates Etudes Militaries Colloquium in Paris, France to discuss the role of culture in conflict. He also had the opportunity to travel to Botswana and Zambia

LITTLE DID I KNOW THAT I WAS STARTING A JOURNEY THAT WOULD SPAN FOUR DECADES, TOUCH FIVE CONTINENTS, AND ENCOMPASS TWO WARS.

also obtained a Master of Science degree in National Security Strategy during the school year. After the National War College, he was assigned to the Joint Staff in the Pentagon serving in the National Military Command Center. As the Section Head for Current Operations (Afghanistan and Pakistan), he was leading operational planning teams and developing the associated strategic plans,

and then became the

transitioned to a second

Operations Officer for the

career with The Home

1st Marine Expeditionary Force (FWD). He was responsible for planning and directing the daily combat operations in Southwest Afghanistan for a 20,000-person international force. Selected to Command the 8th Marine Corps District, Colonel Studdard returned to the US where he was accountable for over 6,300 Marines and civilians covering a ten-

Depot, a company whose values aligned with his own. He has held positions of increasing responsibility in field operations, corporate leadership training, talent acquisition and staffing, and business to business operations. These roles gave “civilian” Ted a unique perspective on optimizing human capital in Corporate America. Ted’s second role at the Home Depot was teaching leadership at Home

and international military,

A NEW SECOND JOURNEY

better to teach leader-

civilian, and political lead-

After suffering a heart

Corps Colonel? After that

rating with senior national

ers about ongoing operations and future plans. Next, Colonel Studdard

Services Team. Ted Studdard has had the tremendous fortune of appearing as a featured

speaking to a variety of

state area.

which included collabo-

Depot’s Renovations

and podcasts, as well as

Saharan Africa Strategic were not enough, Ted

Manager for The Home

guest on national TV, radio,

T E D S T U D DA R D

as a member of a SubStudies Team. If that

to Business Operations

attack, Ted faced new challenges—retiring and charting a new path.

Depot University. Who ship than a retired Marine he became the Divisional Staffing Manager, Western

audiences about individual and organizational leadership ranging from junior leaders to executives. Also, he has educated business leaders and their HR partners about the value veterans bring to the civilian workforce and how to best incorporate them into Corporate America. Based on his lessons learned and experiences, he also published his first book, Depot to Depot. Much more than a leadership primer, the book provides a great illustration of the transformation that veterans must make as they begin their personal journey from the service back into civilian life. It also highlights the huge reservoir of human capital that can

Division - Merchandising

be leveraged by Corporate

was assigned as the

Post retirement from

Execution Team (MET), and

America to reinforce our

Deputy Operations Officer

the Marine Corps, he

he is currently the Business

national economy. REI INK 55

REI INK

S I N G L E - FA M I LY

RECL AIMED WOOD— IN OR OUT? BY N IC O L E S T I L L E Y

And I really love it. I often

Aging will also bring out

ask myself, what is your

all the beautiful natural

using reclaimed wood is

decoration personality?

colors in the wood. And

on its way OUT and has

How would you bring

reclaimed wood is strong

warmth and that “cozy”

and durable which is why

feeling into your home?

it is so highly sought after.

Imagine bringing rus-

Reclaimed wood in a

lot of sources will tell you, the trend of

been for a while. As someone who is actively “house hunting” in extreme North Georgia, I have seen reclaimed or repurposed wood being used for a slew of different things.

tic charm to any room instantly! It is that easy. I love a good challenge and I consider myself crafty. It gives me a great sense of pride that I can take on most projects when it comes to using reclaimed wood. And what’s better than old wood that can be repurposed? Bringing used timber into any home is more work according to some, but the character it adds is not only unique, but

5 6 N OV E M B E R 2 0 2 0

home is a sign of quality. It can also be matched to just about any choice of décor you chose. If you ever decide to sell your home, this will give prospective buyers valuable assurances. It is also environmentally friendly. It represents a tree that has been cut down, but the new life you will be breathing back into it, will be worth it. Here are some great ways to incorporate reclaimed

it cannot be mimicked.

wood inside of any home.

Literally every piece has

Adding an accent wall in

its own special feature.

a bathroom, living area

The older the wood, the

or bedroom can dramat-

better, as it has had time

ically add dimension and

to really show its true self.

personality.

There are also a variety

In the end, the possibili-

cohesive look through-

of ways to use reclaimed

ties are endless. The sky is

out each room, whether

wood in a kitchen such as adding a one-of-akind statement piece countertop, to create that â€œbutcherblockâ€? feel. Another method is creating an island that catches attention immediately or unique cabinetry that no one else can find

the limit when it comes to the versatility of reclaimed wood. From ceilings, floors, countertops, shelving, and framingâ€Ś all the way to coffee tables, headboards, and horizontal or vertical accent walls. Another great facet about

it is small or big. That is important. The first impression of family or friends coming into your home is priceless. It is even more priceless when a potential buyer comes into your home. This trend

reclaimed wood is being

is not going anywhere,

able to create a more

anytime soon.

Nicole Stilley has been with Property Masters for 8 years, and during this time has worked herself

up through the ranks. Now, as one of the Property Masters Regional Account Directors, she provides support and oversees a team of seven on day to day operations. Nicole prides herself and her team on quality and customer service.

R E I I N K 57

REI INK

FROM THERE TO HERE

ALWAYS LOOKING FOR WAYS TO REINVENT BY B RYA N S M I T H

remember it like it was

yesterday. My business

partner and I were in the

process of closing a con-

struction loan to continue

developing a 19-acre retail center in Arizona. It was

2008 and the financial and real estate collapse of the

Great Recession was upon

us. Capital dried up immediately, deals fell through and panic ensued. What followed were years of

struggle for most in real estate as the subprime

crisis led to the bursting of the housing bubble.

trust focused on SFR, was

opportunity that resulted

solidified shortly after this

from the bursting of the housing bubble, but he also understood the need to move forward quickly and boldly to achieve the goal of creating a new paradigm in residential real estate. He realized that the key would be in execution, and that the real challenge would revolve around scale and building an operational platform to efficiently manage assets spread across the nation. Wayneâ€™s vision to institu-

house-hunting trip, and I joined this exciting new start-up in September 2011. Today, AH4R has built, acquired, renovated, leased and now manages a portfolio of 53,000 high quality single-family homes throughout the U.S. After high school, I went to UCLA to study Business Economics and subsequently earned my MBA. U C L A T O R E A L WO R L D

Upon graduation, I started

I had worked in the real

tionalize this historically

graduating from business

would change SFR forever.

acquisitions for an owner/

Vegas in March of 2011, I

T H E S TA R T

and commercial proper-

met with Wayne Hughes,

As part of our Las Vegas

ties in California. Here I

the founder of Public Stor-

meeting, I drove them

age, and two members of

all over the city, scout-

his executive teamâ€”Mar-

ing properties, evaluat-

vin Lotz and David Singe-

ing neighborhoods and

lyn. They wanted to look

discussing the model.

at houses and evaluate the

The idea for American

potential of single-family

Homes 4 Rent (AH4R), a

rentals. Wayne not only

real estate investment

estate industry since

school in 2002. In Las

5 8 N OV E M B E R 2 0 2 0

recognized the great

mom-and-pop industry

my career in real estate manager of multifamily

applied what I had learned in business school to real world deals including underwriting, fundraising and management. Most importantly, I was taught how to look for value opportunities.

After a few other opportu-

BEGINNING WITH AH4R

capital to fuel and manage

nities I came across a com-

From my early discussions

this exceptional growth.

our maintenance and turn

could see that we were

A B E T T E R WAY O F DOING BUSINESS

realized that we could

concept of the institu-

We created a technology-

and I was hooked. I joined

our current and prospec-

began selecting markets

their entire rental experi-

acquisition platform. Over

proprietary Let Yourself

expanded its footprint

ogy, prospective renters

pany that controlled the apartment leasing market of West Los Angeles. Their subscription-based model

with Wayne Hughes, I

about to pioneer the new tional SFR owner/operator,

driven platform that allows

AH4R in acquisitions and

tive residents to manage

and building out our

ence online. Through our

the first year, the company

In mobile leasing technol-

difficulty in renting an

across the country.

can drive to a home, tour

apartment. While this

We pioneered the use

leveraged the digital marketplace to connect landlords and renters, creating a convenient and efficient leasing experience. I then relocated to Las Vegas, where I experienced firsthand the

experience was awful, renting a single-family home was even worse. The creative entrepreneur in me longed to design a rental experience with the customer in mindâ€”where technology was even more broadly implemented to eliminate inefficiencies and create a vastly improved customer experience.

of directed technology solutions to remove

friction from the touring and leasing process. At

each step of the property lifecycle, we developed

and deployed new tools to

the property, apply, get approved and sign a lease in a matter of hours. After move-in, residents can pay rent, request maintenance and communicate with their property managers seamlessly online.

create a significant advan-

One of our latest innova-

tors, while we efficiently

area of inefficiency in the

attracted the necessary

nance. Initially, we utilized

tage over our competi-

tions focuses on another

scaled up operations and

industry: home mainte-

third-party vendors for all work. However, we soon apply technology here as well. So, we established a national maintenance team and developed a logistics system to manage their work orders, schedules, and routes. The result is a more effective and cost-efficient way to serve our residents. Our strategy stems from an unrelenting focus on the resident that has shaped our modern operating platform and continues to deliver solutions that are changing the industry. Very few companies have mastered scale, complexity and geography in such a short time. I am proud to be a part of AH4R and the reinvention of the SFR industry over the last nine years.

Bryan Smith is the Chief Operating Officer of American Homes 4 Rent, an internally managed REIT,

focused on acquiring, developing, renovating, leasing and operating attractive, single-family homes as rental properties. As of June 30, 2020, they owned 53,000 single-family properties in selected submarkets in 22 states. Previously, Smith was an Executive Vice President and President of

Property Management for the company after serving as its the Senior Vice President of Acquisitions in 2011 to 2012. Smith earned a B.A. in Business Economics from the University of California,

Los Angeles, an M.B.A. from the UCLA Anderson School of Management and is a Certified Public Accountant (inactive) in California.

REI INK 59

REI INK

I N D U S T RY DATA

NORTHEASTERN HOUSING MARKETS REMAIN MOST AT RISK OF EC ONOM IC IMPACT FROM CORONAVIRUS PANDEMIC

TTOM Data Solutions released its third-quarter

scattered across five southern states—Florida,

2020 Special Report spotlighting county-level

Louisiana, North Carolina, Texas, and Virginia.

housing markets around the United States that are vulnerable to the impact of the Coronavirus pandemic. The report shows that pockets of the Northeast and Mid-Atlantic regions were most at risk in the third quarter—with clusters in the New York City, Baltimore, Philadelphia and Washington, D.C. areas—while the West and now Midwest are less vulnerable. The report reveals that Connecticut, New York, New Jersey, Pennsylvania, Maryland, and Delaware had 32 of the 50 counties most vulnerable to the economic impact of the pandemic in the third quarter. They included five suburban counties in the New York City metropolitan area, four around Washington, D.C., four around Philadelphia, PA, four around Baltimore, MD, and seven of Connecticut’s eight counties. The only four western counties among the top 50 were in northern California and Hawaii, while Illinois had the only six in the Midwest. Another eight were loosely

Third quarter trends generally continued from those found in the first and second quarters of 2020, but with different concentrations around several major metropolitan areas. The number of counties among the top 50 most at-risk was down from 11 to five in the New York City area, and from eight to three in the Chicago, IL, area, but up from two to four in the Baltimore region. Markets are considered more or less at risk based on the percentage of homes currently facing possible foreclosure, the portion of homes with mortgage balances that exceed the estimated property value, and the percentage of local wages required to pay for major home ownership expenses. The conclusions are drawn from an analysis of the most recent home affordability index, equity and foreclosure reports prepared by ATTOM. Rankings are based on a combination of those three categories in 487 counties around the United States with sufficient data to analyze. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the three ranks. The findings come as the national housing market has largely staved off the effect of the virus pandemic. While home values have dipped in some areas of the nation, counties generally have seen prices rise 7 percent to 15 percent since the third quarter of 2019. But the market remains exposed due to high unemployment and other damage that has spread through the United States economy as the virus has surged throughout the country this year.

6 0 N OV E M B E R 2 0 2 0

A BUSINESS PUBLICATION FOR REAL ESTATE INVESTORS

“”

V E RY C L AS T O P S H SY E LF LOOK , FEEL & RE AD - SCOT T ROLL ER, VENDO R SURF

Taking a deep dive into the entire inves tment life c ycle from acquisition to disposition, rather than jus t a single s tage, REI INK is the mos t comprehensive real es tate inves tment publication on the market. It covers all t ypes of real es tate $59.95/year rei-ink.com/subscribe

inves tment s, ranging from single-family residences, to multi-family dwellings to commercial proper ties. R E I I N K 61

REI INK

I N D U S T RY DATA

“The U.S. housing market continues to show remarkable

County (Eureka), CA; Butte County (Chico), CA; Shasta

resilience during a time of widespread economic trou-

County (Redding), CA, and Hawaii County, HI.

ble and high unemployment stemming from the virus

Florida also had three counties in the top 50: Charlotte

pandemic. But amid continued price gains, pockets around the country face greater risk of a fall, especially in and around the Northeast,” said Todd Teta, chief product officer with ATTOM Data Solutions. “There is much uncertainty ahead, especially if another virus wave hits. We will continue to closely monitor home prices and sale patterns to see if, how and where the pandemic starts rattling local markets.” MOST VULNER ABLE COUNTIES C L U S T E R E D A R O U N D N E W YO R K C I T Y; B A LT I M O R E ; P H I L A D E L P H I A ; WA S H I N G T O N , D.C . A N D C H IC AG O.

Twenty of the 50 U.S. counties most at-risk in the third quarter of 2020 from housing-market troubles connected to the pandemic (among the 487 counties with sufficient data) were in the metropolitan statistical areas around New York, NY; Philadelphia, PA; Baltimore, MD; Washington, D.C., and Chicago, IL. They included five in the New York City suburbs (Bergen, Essex, Passaic and Sussex counties in New Jersey, along with Orange County, NY) and four around Philadelphia (Burlington, Camden and Gloucester counties in New Jersey, plus Bucks County, PA). Another four counties found most at risk are in the Baltimore metro area: Anne Arundel, Baltimore, Carroll, and Howard counties. The three around Chicago are Lake, McHenry, and Will counties.

County (outside Fort Myers), Flagler County (outside Daytona Beach) and Highlands County (Sebring). H I G H E R L E V E L S O F U N A F F O R DA B L E H O U S I N G , U N D E RWAT E R M O R T GAG E S A N D F O R E C L O S U R E AC T I V I T Y I N M O S T-AT- R I S K C O U N T I E S

Major home ownership costs (mortgage, property taxes and insurance) consumed more than 30 percent of average local wages in 35 of the 50 counties that were most vulnerable to market problems connected to the virus pandemic in the third quarter of 2020. The highest percentages were in Bergen County, NJ (outside New York City) (51 percent of the average local wage required for major ownership costs); Passaic County, NJ (outside New York City) (50 percent); Comal County, TX (outside San Antonio) (48 percent); Carroll County, MD (outside Baltimore) (46 percent); and Hawaii County, HI (46 percent). Among all counties in the report, major expenses on the median-priced home typically consumed 32 percent of the average local wage. At least 15 percent of mortgages were underwater in the second quarter of 2020 (the latest data available on owners owing more than their properties are worth) in 37 of the 50 most at-risk counties. Nationwide, 13 percent of mortgages fell into that category. Those with the highest underwater rates were Cumberland County (Vineland), NJ (34 percent); Saint Clair County, IL (outside St. Louis, MO) (33 percent); Lackawanna

Seven of Connecticut’s eight counties also are in the

County (Scranton), PA (31 percent); Monroe County,

top 50, including Fairfield, Litchfield, Middlesex, New

PA (outside Wilkes-Barre) (30 percent) and Madison

Haven, New London, Tolland, and Windham counties.

County, IL (outside St. Louis, MO) (29 percent).

The only western counties among the top 50 most at

More than one in 2,500 residential properties faced

risk from problems connected to the Coronavirus

a foreclosure action in the second quarter of 2020

outbreak in the third quarter of 2020 were Humboldt

(the latest available data) in 36 of the 50 most at-risk

6 2 N OV E M B E R 2 0 2 0

counties. Nationwide, about one in 4,449 homes were

County, MA (outside Boston); Hennepin County

in that position. (Foreclosure actions have dropped

(Minneapolis), MN; Fairfax County, VA (outside

about 80 percent this year amid a foreclosure moratorium on banks taking back properties from homeowners behind on their mortgages.) Those with

Washington, DC); Mecklenburg County (Charlotte), NC, and Wake County (Raleigh), NC.

(outside New Orleans) (one in 755 properties facing

L OW E R L E V E L S O F U N A F F O R DA B L E H O U S I N G , U N D E RWAT E R M O R T GAG E S A N D F O R E C L O S U R E AC T I V I T Y I N L E S S -V U L N E R A B L E C O U N T I E S

possible foreclosure); Tazewell County, IL (outside

Major home ownership costs (mortgage, property

the highest rates were in Saint Tammany Parish, LA

Peoria) (one in 816); Madison County, IL (outside St. Louis, MO) (one in 875); Saint Clair County, IL (outside St. Louis, MO) (one in 1,007) and Kent County (Dover), DE (one in 1,069). “While it’s unlikely that we’ll see a return to the historically high levels of foreclosure activity we saw during the Great Recession, it’s a near-certainty that the number of defaults will increase once the foreclosure moratoria have been lifted, and the CARES Act

taxes and insurance) consumed less than 30 percent of average local wages in 28 of the 50 counties that were least at-risk from market problems connected to the virus pandemic in the third quarter of 2020. The lowest percentages were in Winnebago County (Oshkosh), WI (20 percent of the average local wage required for major ownership costs); Marion County (Indianapolis), IN (20 percent); Macomb County, MI (outside Detroit) (21 percent); Saint Clair County, MI (outside Detroit) (21

forbearance program expires,” said Rick Sharga,

percent) and Benton County (Rogers), AR (21 percent).

executive vice president of RealtyTrac, an ATTOM

At least 15 percent of mortgages were underwater

Data Solutions company. “It’s also likely that foreclosures will be concentrated in markets where there’s a dual-trigger—for example, stubbornly high unemployment rates, and homeowners who are underwater on their loans.” C O U N T I E S L E A S T AT- R I S K C O N C E N T R AT E D I N C O L O R A D O, I N DI A N A , M I S S O U R I , TEX AS, AND WISCONSIN

Twenty-five of the 50 least-vulnerable counties from among the 487 included in the third-quarter report were in Colorado, Indiana, Missouri, Texas, and Wisconsin. The largest populated counties included Tarrant County (Fort Worth), TX; Travis County (Austin), TX; Marion County (Indianapolis), IN; Denver County, CO, and Arapahoe County, CO (outside Denver).

in the second quarter of 2020 (with owners owing more than their properties are worth) in only one of the 50 least at-risk counties. Those with the lowest rates were Chittenden County (Burlington), VT (3 percent); Washington County, WI (outside Milwaukee) (4 percent); Travis County (Austin), TX (5 percent); Multnomah County (Portland), OR (5 percent) and Boulder County, CO (5 percent). More than one in 2,500 residential properties faced a foreclosure action in the second quarter of 2020 in none of the 50 least at-risk counties. Those with low foreclosure rates included Davidson County (Nashville), TN (one in 50,975 properties facing possible foreclosure); Sheboygan County, WI (one in 50,939); Potter County (Amarillo), TX (one in 49,656);

Others among the 50 least at-risk counties with a

Suffolk County (Boston), MA (one in 47,605) and

population of at least 500,000 included Middlesex

Washoe County (Reno), NV (one in 38,791). REI INK 63

www.keystonebest.com 890 Forty Foot Road, Suite 110 Lansdale, PA 19446

REI INK

Ryan Hennessy | Chief Executive Officer C: 215.206.9545 | D: 267.308.9256 rhennessy@keystonebest.com

Innovative Solutions, Optimized Execution

Why Keystone

Multi-Channel Workflows

We partner with our clients to enhance the management and execution of real estate needs, delivering superior services that optimize performance and drive results. Our tenure as real estate experts is the keystone of our innovative, leadership, & results-driven culture that allows us to harness our advantages to create tangible results.

Ability to develop customized operating procedures that drive execution without attachment to linear models

Situation Flexibility

Ability to adapt to diverse and evolving market conditions while maintaining best-in-class performance

Compliance / Infrastructure

Ability to deliver efficient solutions based on execution while maintaining real estate and industry compliance

Asset Management

Valuation

Technology

Portfolio-centric approach that generates paralleled REO execution, leveraging scalability, strategy analytics & workflow flexibility

Diverse suite of reports designed to capture true market value based on a stronger analysis of asset & surrounding market conditions

Superior technological architecture with dynamic dashboard interfacing to create unique & efficient user experiences

A History of Innovation 6 4 N OV E M B E R 2 0 2 0

Keystone is a certified Womenâ€™s Business Enterprise, small business, and SSAE compliant firm. With our 23+ years of operation and over $130 billion in real estate valued and managed, we are able to continuously address industry shortfalls by aligning proactive identification with innovative resolution.

Let our expertise add value for you.

AD PROPERTY MASTERS—WE’RE HERE FORYOU

Since 1996, Property Masters has offered renovation services with a difference to clients through the US. Though we’re all about value, what we value most is your success, your relationship, and your trust. Whether your property is residential or commercial, our promise is the same: we’re going to treat your investment the way we would treat our own.

“ We ’ v e w o r k e d w i t h P r o p e r t y Masters for years. The industry keeps changing, and Property Masters has the flexibility to change right along with it.”

BANK OWNED // PRIVATE EQUITY // INVESTMENT SINGLE FAMILY // MULTIFAMILY VALUATIONS Whatever your real estate asset is, Property Masters adds value. In the past two decades, we’ve seen and done it all. Our experience translates into added value for you.

INVESTING INYOUR INVESTMENT Adding value to investment properties requires more than just manpower. You need impeccable quality, reliable service, and a partner with a proven track record. We help our clients prepare their properties (or assets) for an expedient sale at a maximum return.

Nicole Stilley Regional Account Director 877.253.3445 nicole.stilley@propertymasters.com

Heather Hoyt Regional Account Director 866.854.0330 heather.hoyt@propertymasters.com

Main: 866.200.0110 REI INK 65 www.propertymastersres.com

TURNKEY SOLUTIONS REI INK

from The Home Depot

The Home Depotâ€™s Renovation Services provides a complete range of turnkey repair solutions for mortgage servicers, asset managers, property investors and financial institutions.

TURNKEY, SCALABLE RENOVATION SERVICES

COMPETITIVE PRICING

DEDICATED PROJECT MANAGEMENT

AFTER

BEFORE

WIDE PRODUCT SELECTION

THDRenovations@homedepot.com

6 6 N OV E M B E INSTITUTIONS R 2020 | INVESTORS | SERVICERS | PROPERTY MANAGERS FINANCIAL