TM
The Upside of Single-Family Rentals GOINGVERTICAL
How Creating Systems Can Help You Scale REALTYMATTERS
Best Comebacks: Markets Likely to Recover Post-Pandemic MARKETS & TRENDS
DesigningYour Real Estate Life HOW TO BE INVESTOR-SAVVY TO DESIGN THE LIFE YOU DESIRE PAGE 16
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CONTENTS
INSIDE THIS ISSUE
THINK REALTY 8 News & Events
INVESTOR STORIES 10 Presidents’ Circle
Featured Member: Andre Johnson
15 Investor Voices
ENGAGEMENT 25 Realty Matters: Designing Your Business
How creating systems can lead to a path of scale by Brian Wojcik
FUNDAMENTALS 30 3 Ways to Stay Profitable and Pandemic-Resistant Changes to lead your business beyond 2020 by Tom Olson 32 Designing Your Real Estate Investment Portfolio Achieving balance between risk and return by Daniela Andreevska 34 Sharper Tips: Employee Handbooks How to build positive workplace culture and employee loyalty by Gary & Susan Harper 35 Sponsored Content: Investor Review 54 How Seminars Add Doors STRATEGY 56 Talking Loudly: A Path to Higher Profits Building the right renovation strategy by Nathan Trunfio 59 Tiny Homes, Large Profits Small-sized solutions to housing issues bring big profitability for investors by Joseph Johnson 64 The Good and the Bad for Single-Family Rentals Post-Pandemic What financing fears and other stressors mean for the SFR market by Bruce McNeilage Hosting landlord seminars can potentially explode your portfolio by Mike Connolly
16
COVER FEATURE
THINK REALTY SUPPLIERS
28
12
SUCCESS STORY
ENGAGEMENT
REDESIGNED RENOVATION
EASY ANSWERS
When making design changes can lead to a better result
Tips to protect yourself — and your investments
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66 Recovering from Bad Investments
Understanding ratios, criteria, and credit for your next real estate loan by Michael Jordan
68 How Much House Can You Afford? What to do when a deal goes in the wrong direction by Aaron Chapman
72 Going Vertical: The Upside of SFR Don’t Let “New Normal” Slow You Down by Bruce McNeilage
DESIGN POINT 74 Show and Sell
Motivate buyers with simple staging tips that do the trick Featured Designer: Michele Van der Veen
MARKET & TRENDS 79 3 Ways to Play the Short-Term Rental Game Creating win-win situations for the short and long term by MeiLani Hock 82 Market Spotlight: Cape Coral and Fort Myers, FL A mid-sized market showing steady growth for buy and hold by Fred Heigold III 86 Battle Unpredictable Markets How real estate investors can handle any challenges of 2020 by Paul White 88 Best Comebacks Markets likely to recover post-pandemic by Ingo Winzer
Partnerships provide savings to savvy real estate investors
70
96
MINDSET 92 7 Steps to Financial Freedom
STRATEGY
MINDSET
Step One: Awareness and Desire by Gene Powers
CREATE YOUR OWN NOTE
YOUR HOUSE IS YOUR BRAND
94 Letting Go Without Losing Control Success is determined by what happens when you’re not at work by Gary Harper
Activating equity without a 1031 Exchange
The design of your properties reflects your business
thinkrealty . com | 5
PUBLISHER & CEO Eddie Wilson
EDITOR-IN-CHIEF Kelli White
SALES MANAGER Rodney Halford RHalford@ThinkRealty.com 816-398-4111 x86122
FULFILLMENT COORDINATOR Blair Pierce
DESIGNER David Allen Rodriguez
CONTRIBUTERS Daniela Andreevska
Lorraine Beato Aaron Chapman Mike Connolly Clint Coons Gary Harper Susan Harper Fred Heigold III MeiLani Hock
Joseph Johnson Michael Jordan Bruce McNeilage Tom Olson Gene Powers Steve Streetman Nathan Trunfio Michele Van der Veen
HEY! LET’S BE FRIENDS! GET SOCIAL. STAY CONNECTED.
Like, Follow & Share for the Latest Real Estate News, Trends and Insights from Think Realty
Eddie Wilson Ingo Winzer Brian Wojcik
Are you following Think Realty on social media? Things move pretty fast in real estate. Don’t miss out on the latest trends, tips, insights and news from your trusted resource for all things real estate investing! Follow. Like. Love. Share. Comment. You can do it all with Think Realty’s social media channels. Join the conversations in Think Realty social communities and connect with like-minded members who range from first-time to seasoned investors. Check out all of our social media channels and connect with us - and other investors - today!
COVER PHOTOGRAPHY Sherwin-Williams
Think Realty 12200 N. Ambassador Dr. Suite 301 (Office A) Kansas City, Missouri 64163 816-398-4130 ThinkRealty.com Copyright ©2020 Think Realty ABOUT THIS MAGAZINE :: Think Realty Magazine is a publication of Affinity Real Estate Media LLC. Reproduction or use of any editorial or graphic, without permission, is prohibited. We are not responsible for the content of any paid advertisements. For reprint rights; to ob- tain a detailed statement of our privacy policy; and for all single-copy requests, address changes and other subscription inquiries: SUBSCRIPTIONS :: The annual subscription for Think Realty Magazine is $36.00 in the U.S. Order online at www.ThinkRealty.com or call 816-398-4085. Provide your full name, address and telephone number. DISCLAIMER :: Think Realty Magazine , its owners, contractors, distributors and their respective representatives do not provide tax, accounting, investment or legal advice and make no guarantee as to the effectiveness or success of any investment or tax strategies discussed herein. Please consult your own independent adviser as to any questions you have or decision you are contemplating.
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6 | think realty magazine :: july 2020
FROM THE EDI TOR- IN-CHI EF
Your Life by Design
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dreams. Through the Think Realty Supplier Program, companies like Sherwin- Williams, Home Depot Pro, TaskEasy, and others pass services and savings on to Think Realty members. Read how on page 16. Also in this issue, Presidents’
hat do you want? Goal- seekers, entrepreneurs,
and driven individuals ask themselves this question and are always on the quest for the answer. Oftentimes, the answer changes along our journey. But that is one of the many blessings of life
Circle member Andre Johnson shares how he found what he wanted
and business – we have the power to make changes that suit our goals. We have the power to design the life we want. And what better way to do that, savvy investors, than through real estate? Whether you want to make more money, have more time, travel the world, manage a conglomerate, educate and inspire others, own thousands of properties, or help rebuild communities, real estate is one proven avenue to get you all of these things, and more. This issue is all about how design plays a role in the life we desire. Our cover story highlights Think Realty Suppliers and how discounts from these Think Realty partners can put more money in your pocket and can help you design properties that fulfill
through the power of REI. Read his story of transitioning from chemical engineer to “Deal Engineer” on page 10. And build-to-rent expert Bruce McNeilage addresses financing fears and the upside of the single-family rental market (page 64). Also, be sure to check out our new section called Going Vertical on page 72 where McNeilage gives insight on how not to let the “new normal” slow you down. That’s just a hint of what’s inside this issue of Think Realty Magazine . Think Realty is here to provide real estate education that can help you design the life you desire. So, what are you waiting for? Find out what you want and how you can get it by investing in real estate. •
Keep Going!
KELLI WHITE, EDITOR-IN-CHIEF
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THINK REALTY
NEWS & EVENTS
Think Realty's Core Focus is to be the trusted source in the Real Estate Investment Industry by providing products and services focused on serving the Real Estate Investor.
E ach year, think realty honors leaders in the industry who exemplify the best in real estate investing. Not only have the winners achieved great success in their own right, but they also demonstrate Think Realty’s mission of being trusted resources within the real estate investing industry. Know someone who fits this description? Think RealtyHonors Nominations Open!
Think Realty CEO, Eddie Wilson (left) with one of the 2019 Honors winners, Douglas Skipworth with CrestCore Realty.
NOMINATE THEMTODAY IN ONE OF FOUR CATEGORIES:
An investor excelling in the single-family sector, using any strategy related to single-family residential real estate. Single-Family Investing
An investor excelling in multifamily real estate including, but not limited to, new construction and development, community master-planning & development, apartments, condominiums, cohousing, duplexes and larger multiunit investments, and other multifamily communities. Multifamily Investing
Linda’s Legacy: Industry Impact Award
Real Estate Investing Services
Linda’s Legacy: Industry Impact Award is named in honor of Linda Liberatore, a champion of the REI industry who pioneered industry innovations and paved the way to success for the many investors she mentored. In tribute to Linda, this award goes to a real estate investor who exemplifies creativity, integrity, and financial success and is changing or shaping the conversation about real estate and real estate investing.
A company or association excelling in providing real estate-related services. This includes, but is not limited to, property management, private lending, real estate education, remodeling, contracting, investment management, software development, data management, web- based investing platforms, social media, and crowdfunding platforms and communities.
Nominations are open for the 2020 Think Realty Honors through July! Go to https://thinkrealty.com/honors and enter your picks! Winners will be announced in September.
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Think Realty Conference & Expo
I n 2019, the Think was the largest event to date. More than 500 real estate enthusi- asts walked the halls, mingling with fellow entrepreneurs and Realty Conference & Expo in Baltimore vendors then lined up in conference rooms to learn from speakers and Think Realty Resi- dent Experts.
Feedback from the event proved it was one of Think Realty’s best events ever. This year, our expos will look a bit different. Right along with you, we have been adapting and navigating new ways of getting things done. But one thing that has not changed is our commitment to bring quality real estate education to YOU! Participants of Think Realty events
will still walk away with a wealth of information that will help them operate their business and expand their real es- tate investment portfolios. Stay tuned for updates on how we plan to bring Think Realty educational events to you!
Go to thinkrealty.com for more information on our 2020 events and speakers.
To learn more about upcoming Think Realty events and to buy tickets, visit ThinkRealty.com/TR-Events.
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INVESTOR STORIES
PRESIDENTS' CIRCLE
Presidents’ Circle
Featured Member: Andre Johnson SUCCESS IS IN THE PROCESS FOR THIS REAL ESTATE ENTREPRENEUR
f you have attended a Think Realty event in Bal- timore, you have probably met Presidents’ Circle
I
member Andre Johnson, leader of Deal Mastery master- mind and Deals Meetup, an online, nationwide network- ing opportunity for investors to put together profitable deals. His expert-guided tour of wholesale/REO deals and rehab projects is a huge hit at the Think Realty Baltimore Conference. On the tour, Johnson shares expert strate- gies used to find great deals on and off market; how to structure win-win deals, and how to choose the best floor plan and designs to sell or rent your properties quickly for top dollar. This is just one opportunity Johnson thrives on because he gets to exercise one of his passions — sharing knowledge with others and helping them achieve success. Just as not all business owners are success, not all are apt to teach others who are walking a similar path. But that’s not the case for this “Deal Engineer.” Perhaps a natural-born mentor, Johnson always believed he would be a business owner one day. “When I graduated from college with my chemical engi- neering degree, I went straight into the industry working for Merck, a pharmaceutical company doing vaccine biologics research and development. At work, I would look around my office, my laboratory, and I noticed the guy in the cubicle next to me had been in the research lab for 10 years, and he was working from 8:00 a.m. to 8:00 p.m., and that’s what I was doing as a new hire. I thought to myself, “Do I really want to be doing the same thing for the next 10 years?” When staring down 12-hour days became too tiresome, Johnson started directing his eyes to different opportu- nities. As it goes, when looking for other paths, we often call upon a little help from our friends. Johnson’s friend- turned-mentor, the late Shawn Black, taught him the most valuable real estate investment lessons. But it didn’t happen overnight. “My friend Shawn was already investing and wanted me to partner with him to buy more properties. I told him, ‘Bring me deals. Then we will talk.’ He started bringing
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AFEWFAVORITES
me deal after deal. With my very analytical engineering background, I over-analyzed every one of them. It was
five-year-old Hyundai Excel with my own money. It was a life-changing experience that instilled goal-setting and work ethic in me that lives to this day,” Johnson said. For the first 15 years of his real
“I am a Law & Order SVU junkie. And, I can’t wait for Season 4 of Ozark (fingers crossed)!” TV SHOW
paralysis by analysis. I couldn’t get out of my own way. It took me 18 months to finally pull the trigger to do the first deal,” Johnson said. The partnership didn’t happen; instead, Johnson hired Shawn to be his mentor. Now, years later, Johnson’s preference when it comes to his REI business is help- ing others. He teaches his clients how to build marketing funnels to find deals. “I also enjoy the process of deal engi- neering and creative deal structuring to find win-win solutions for buyers and sellers,” he said. “The thrill of negotiating a deal will never get old. It serves a competitive drive I have. I prefer holds with creative financing.” He tells beginning investors to focus on the process of building a business and not solely focus on chasing deals. “The best thing to do is to leverage proven resources and systems of trusted partners and mentors to shorten the learn- ing curve to build your business. Success is in the process,” he said. Johnson’s own business success could stem from his first job, and the work ethic he gained from the process. “My first official job with a paycheck was at Carvel Ice Cream parlor. I was so proud of myself because I convinced the store manager to hire me at 14 years old. I need- ed a special work permit to get the job. My hourly rate was a whopping $2.85/hr. I had a two-year plan to save and buy a car when I turned 16. Two years later, I bought a
estate investing journey, Johnson’s pur- pose was family-driven, but as most suc- cessful business owners would say, their “WHY” evolves over time. “My WHY was to maintain control of my time so that I could be free to be around my kids as much as possible. Now that my kids are grown women, my why has shifted and it is now to help new and experienced in- vestors to start and grow their businesses.” Just as his WHY evolved, so has his investing strategy. With the goal to have diversified income streams leading to a scalable business, he has worked over the past few years to create multiple streams of income, specifically around software as opposed to information-only based ser- vices. But it’s not all work and no play for Andre Johnson. He makes time for inspira- tion and relaxation. “I find myself getting some of my best ideas on long walks with my thought part- ner and girlfriend Dawn. I think it is good to relax and recharge on long weekend getaways to reset and gain new perspec- tive on life and business. The Caribbean is always a favorite destination,” he said. Pictured below, the duo relax on their travels to Greece. And no matter his mood, “timewith friends always leads to good times and laughter.”
FOOD “Dessert! I choose pie over cake every day — and twice on Sundays and holidays! My guilty pleasure is Key Lime pie – Yum!”
90s hip-hop MUSIC
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INVESTOR STORIES
REDESIGN
ARedesigned Renovation WHEN MAKING DESIGN CHANGES CAN LEAD TO A BETTER RESULT
By Lorraine Beato
what it is they are doing. A few months ago, I was in the neighborhood of a fellow investor’s renovation project and I asked if I could swing by. The home had several issues that were not foresee- able, and I wanted to check on the progress since it had been gutted to the studs. Call me nosey, but this in- vestor is a friend of mine. I walked in with my husband who had also been tracking the progress all along. As we walked through this 1950s bun- galow to check out the new floorplan
and vaulted ceilings, my husband pointed out where the kitchen would be. I stood there looking around and said, “It can’t be, where are the kitchen cabinets going to go and the counters?” After several minutes contemplating the kitchen layout and placement, we found the architectur- al drawings with the floorplan. It was then that I saw they were planning to put the refrigerator and stove on the same wall and then create a small peninsula for the sink, and there was no area for a dishwasher. I called my
One of the things we do as inves- tors, especially seasoned investors is to build our team so that we can scale and leverage our time to grow our business. Building a power team is critical to our businesses and it takes time to do that. We spend time vetting the integral people in our real estate operations: trades people, general contractors, attor- neys, title companies, accountants, architects and so much more. How- ever, sometimes we have to take a minute to, at the very least, review
12 | think realty magazine :: july 2020
It is ultimately our responsibility to at least lay eyes onwhat is being done to make sure the projects stay on track.
was framed out. There would have been no wall for the bed because the other two walls had windows and the third wall was directly in front of the doorway and it wouldn’t leave any room for nightstands or a queen bed. I sketched changes showing the closet on the other smaller wall so when you walked into the bedroom you were not walking right into a bed. Had I not done this, the market- ability of the home when it went on the market would have been severely compromised. I walked the house, had my hus- band video the changes I proposed, and sent it to my friend with my hand-scribbled sketches. Fortunate- ly, the interior was only framed, and these were easy corrections. Had the renovation been further along, it would have been a larger change
order and more expensive to correct. I share this story to remind you that as investors, although we rely on our power teams, it is ultimately our responsibility to at least lay eyes on what is being done to make sure the projects stay on track. We need to have the final stamp of approval and pay attention to what our team is doing. Also, do not feel you can’t re- design original plans because often the little bit of extra time in reconfig - uration could lead to a lot of profit - ability and more selling points. •
LORRAINE BEATO
investor friend and told him I was holding the plans in my hand, and that it was critical that the kitchen be reconfigured because there was almost no counter space. I took inventory of the space and proceeded to sketch a new kitchen layout. I got rid of the laundry closet jut out that was in the way and had them make the laundry closet a linen closet, bringing a wall flush with what was the kitchen wall where the cabinets were. That added more than five extra feet of cabinet and counter space on the original wall and gave them the ability to make the penin- sula a bit longer as well. Then, the refrigerator moved to the opposite wall where there was a perfect niche for it, which created space for the sink as opposed to it being in the peninsula. These changes made the layout more functional while adding more storage space for the buyer. I also moved a wall that led to the backyard about three feet so that it was now in line with the wall that formed the side of the pantry and master bath. Doing this gave the home enough room to create a mud room/laundry room area which in turn created more storage where someone could add shelving above the washer and dryer. There’s now also the bonus of a linen closet that would have had the washer and dry- er, which would have been stackable. The flow of the master bedroom also didn’t make sense the way it
Lorraine Beato is a Realtor® inAtlanta, GA, specializing in single-family residen- tial homes, investment acquisitions, and upscale renovations. She is also a former appraiser. She can be reached at Lor- raineBeato@gmail.comandwww.LorraineBeato.com.
thinkrealty . com | 13
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14 | think realty magazine :: july 2020
INVESTOR STORIES
INVESTOR VOICES
I N V E S T O R V O I C E S : DesigningYourLife
“ How Have You Designed Your Life Through Real Estate? ”
“For 17 years, I was a school teacher. My curiosity for real estate sparked during those summers when I had time off from teaching. I began fix and flipping houses each summer just to earn a little income and to keep myself busy. Real estate has allowed us to go on vacations, to buy those things our regular income did not support. One summer I made more in real estate investments than I did in an entire year of teaching. It made me reassess what I was doing in my life and whether I was going to remain a teacher or do this full time. REI gave me the courage to quit my teaching position and jump in with both feet into real estate. I believe I have been able to ‘teach’ my kids and others more by doing real estate full time than being a full-time teacher. There are only so many things you can teach in a classroom. The life experiences and business sense you need to have as an Entrepreneur is not being taught and is much easier to learn when you are younger. Real estate investing has far exceeded the vision I had for my life. I was truly happy with REI being just a side gig for awhile until it surpassed my income for a whole year in such a short period of time. I now have the ability to have true freedom: to do what I want, when I want with whomever I want. I truly feel like I am living the American Dream. I have been able to build a company that can keep things going while I am enjoying true freedom.”
Susan Harper SHARPER BUSINESS SOLUTIONS
Real estate investing has far exceeded the vision I had for my life.
—Susan Harper, partner and business coach for Sharper Business Solutions.
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COVER STORY
THINK REALTY SUPPLIERS
W hy did you get in the game of real estate? More time, more money? Chances are your WHY includes those two things — and probably many other reasons too. Whether you’re a seasoned investor or someone searching for your first deal, the beauty of real estate holds true for all levels of investors: you can design the life you want if you make smart investments. One way to be smarter about your REI deals, is through your business operations and management. Knowing that sometimes it’s not what you make, it’s what you save that can put more profit in your portfolio, savvy real estate investors take advantage of any dis- count that could enhance their real estate deals. The Think Realty Supplier Program is one of many perks available to Think Realty members, and this pro- gram is one of the deals destined to save investors time and money. By partnering with companies that have a nationwide footprint and that offer quality products or services beneficial to real estate investors, Think Realty can pass savings on to its members. We are devoting this month’s cover story to our valued suppliers who provide real estate investors like you with exclusive discounts or benefits that in turn help grow your business and increase profitability. Read on to find out about these companies and what they offer that could help you do business more effectively, taking you down the path of a life YOU design. Only those who join Think Realty, including the FREE level of membership, are eligible to participate in the program. Visit thinkrealty.com and click on Discounts. DesigningYour Real Estate Life How to be investor-savvy to design the life you desire
16 | think realty magazine :: july 2020
Color and Quality at a Discount SHERWIN-WILLIAMS OFFERS COLORFUL SOLUTIONS TO SPRUCE UP YOUR INVESTMENT PROPERTIES
Think Realty Supplier Sherwin-Williams
Onyournext flip or rehab project, be confident in your color selections! Think Realty Supplier, Sherwin-Wil- liams, has been committed to support- ing homeowners and professionals with exceptional products and color expertise for more than 150 years. The company provides customers with resources to confidently choose colors, like their annual Colormix Forecast and for the past ten years, their Color of the Year. The 2020 Color of the year is Naval, a bold navy blue that has quickly be- come a “new neutral” according to Sue Wadden, Director of Color Marketing at Sherwin-Williams. “The use of color in interior design is changing—it’s not just about what a space looks like anymore, but the feelings a space can evoke.” Wadden explained that Sherwin-Wil- liams paints have smooth finishes and a more durable surface through an easy application process. Although that typically means a higher investment up front, property owners will save money down the road because they will avoid having to buy more coatings for repaints in the long run. In its long company history, the Sherwin-Williams brand has become synonymous with timelessness. “Sherwin-Williams has perfected paint qualities such as washability,
paint-and-primer-in-one solutions, and technologies that help reduce odors and moisture to provide maximum du- rability for our customers. These types of features can help make the painting process easier for professionals, be- cause we know quality paint starts with quality raw materials,” Wadden said. HOWTO PICK THE RIGHT COLOR With hundreds of choices, picking the right colors can be overwhelming. When it comes to choosing paint colors, you want to create a space in which homeowners can envision themselves living and that helps them feel at home. For the interior of a home, warm, neutral paint colors make a space feel more inviting while appealing to several different design styles. Wadden suggests Accessible Beige, a neutral choice with a gray undertone that works great with differing wood tones and open floor plans. Mindful Gray is a timeless warm, greenish gray that also suits a variety of spaces. “When choosing a color for your property, I always recommend playing with color online with tools like our Col- orSnap Visualizer, which can help test a color in the space before committing.
We recently added an augmented reali- ty feature to virtually paint the walls in a space as well,” Wadden said. When choosing exterior color pal- ettes, Wadden encourages property owners to keep in mind the architectur- al style of the home. “You can start by looking at the neighborhood to find inspiration and determine the direction of your color palette. Homeowners should consider their surroundings, too. If you have a beautiful backdrop of trees, consider colors that complement nature, such as navy or even black. If you live in a desert climate, dusty beiges and terra cottas may be a better choice for your environment,” she said.
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MORE THAN PAINT Sherwin-Williams offers more than just materials for walls. The company also offers durable flooring options like Vinyl Plank, which particularly suitable for investment properties. Vinyl plank has quickly gained popularity and has become a mainstay in the flooring industry, replacing carpet in many homes. Vinyl plank has come a long way since appearing in 1933. Today’s vinyl plank options are much higher quality than even what was available five years ago. Modern vinyl plank stands up to heavier traffic volumes and is easier to maintain than its predecessors. Additionally, water-resistant finishes are becoming more sophisticated, with many manufacturers now selling 100 percent waterproof vinyl plank. One of the biggest benefits of vinyl plank is its longevity — the average life of vinyl plank is 10 or more years. “This enables a better return on investment for property owners than many other flooring options and is why around half of the top real estate investment trusts in the country are installing vinyl plank at properties in varying scales. For homes that are frequently replacing carpet during resident turnover, vinyl plank is a good option,” said Justin Brazie, director of marketing-applicators and decorative products at Sherwin-Williams. Another significant benefit of vinyl plank is the variety of colors, finishes and textures, with many high-end styles offering the look and feel of stone, wood and ceramic tile. Currently, gray is the color of choice for many, with natural, wood-colored options not far behind. This product variety helps to provide an even better investment for property owners as occupants look for stylish, trendy options that also help to justify higher selling prices. •
Painting your front door is one of the easiest and quickest ways to boost your curb appeal since this project does not take a lot of planning or preparation. If you want your front door to stand out, consider Oceanside or Begonia. For a more classic and elegant look, try Color of the Year Na- val, or a true black, like Tricorn Black. COLOR TRENDS Homeowners and professionals are switching cool grays and whites for warmer neutrals and deep jewel tones that bring character and life into a space. Specifically, bold blues and greens are becoming more popular. “They are colors that come from nature, so they feel familiar and help anchor us as life pulls us in so many directions,” Wadden said. “In addition,
the Play palette from Sherwin-Williams 2020 Colormix Forecast is rooted in a fresh white with pops of pink like Eros Pink, accented with rich blues and golds like Oceanside and Auric. Using any one of these hues can add a sense of fun and brightness to your home, perfect for summer.” Think Realty featured the Play palette (pictured above) in the March issue earlier this year. For exceptional coverage and uni- form finish, property owners can check out the new Emerald Designer Edition Interior Latex paint. “Professionals can choose from an expansive selection of 200 new hues divided into five designer color collec - tions. Available in flat, satin and gloss sheens, Emerald Designer Edition is a great, high-performing choice with an exceptional finish,” Wadden said.
Think Realty members can save up to 50 percent off paint and receive wholesale pricing on flooring at Sherwin-Williams stores nationwide.
Cover photo colors: Cabinets and white walls: Spatial White SW 6259 • Pink Walls and trim: Breathless SW 6022 • Back Wall: Software SW 7074
18 | think realty magazine :: july 2020
THINKREALTY SUPPLIERS
COVER FEATURE
GrowYour Business Safely
RENOVATING AND MAINTAINING PROPERTIES THE RIGHT WAY
Think Realty Supplier Sunbelt Rentals
anting to grow your house-flip - ping business? Need to keep up
door surface maintenance rental fleet in the industry, with both commercial and residential cleaning and resto- ration equipment. Sunbelt is offering two free webi- nars in July exclusive to Think Realty members: Concrete 101 and Grow Your Business. Why you maywant to attend the Concrete 101 Webinar Gain professional insight on: • Concrete properties and surface profiles
most popular flooring options today. The skill sets needed are easily at- tainable with well-defined processes. Learn three new revenue streams: • Prepping concrete for a coating or topping • Polishing concrete • Maintaining polished concrete. Other Sunbelt Rentals programs and services that could help your real estate investing business include: SAFETY TRAINING Sunbelt aims to provide customers with the knowledge they need to keep their job sites safe. TOOL FLEX™ Rent and exchange qualifying tools and equipment as often as you want and in the quantity you need for one flat monthly fee. Think Realty members can save up to 20 percent on equipment rentals at Sunbelt. Visit thinkrealty.com to register for these exclusive, free webinars.
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to date with safety protocols? Want to enhance your properties with differ- ent flooring options? Think Realty Supplier Sunbelt Rentals can help with these tasks, and more. Sunbelt Rentals is one of the largest rental companies in North America. With 12 specialty divisions, Sunbelt Rentals offers a highly diver- sified product mix including general construction equipment, industrial tools, pumps, power generation, climate control & HVAC, shoring solutions, scaffolding, remediation & restoration equipment, and more. The company brings value to real estate investors who like to renovate properties for resale by offering a wide range of equipment and solu- tions without the financial concerns of ownership. For example, Sunbelt’s Flooring Solutions Specialty Division offers the single largest, indoor/out-
• Selecting equipment and tooling for all levels of con- crete grinding and polishing • Prepping for coatings • Concrete polishing
Why you maywant to attend the GrowYour BusinessWebinar
Polished concrete is one of the
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Strategies that Save PROTECTING YOUR BUSINESS, ONE ASSET AT A TIME
Think Realty Supplier Anderson Advisors
or real estate investors, the task of tax preparation may seem
Protection for Real Estate Investors,” Coons said he enjoys distilling com- plicated law and tax structures into simple terms for clients. Often, inves- tors are stressed for fear of overpaying in taxes or not reaping the return they deserve. Founded in 1993, Anderson Busi- ness Advisors is a business planning and consulting firm that focuses on asset protection for real estate investors and other enterprises. With offices in Las Vegas and Tacoma, Washington, Anderson has realized steady growth over the years thanks
not only to dedicated service but also its leadership’s diverse experience. If you’ve attended Think Realty events, you might have heard Coons speak on entity planning and tax strategies that can save real estate investors time and money. He is a valued Think Realty Resident Expert who is always willing to help others and teach them best practices for their business. • Think Realty members can reap strategic benefits through Anderson Advisors’ free Tax and Asset Protection Strategy Session – a $750 value! Learn more at andersonadvisors.com.
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even more daunting. When owning a handful of properties, operating several businesses, earning income from various states, and navigating ever-shifting regulations, taxes for investors can quickly get complex. But for Clint Coons, founding partner with Anderson Business Advisors, therein lies one of his greatest joys: Helping people navigate and succeed in the convoluted world of business planning and tax strategy. An attorney and author of “Asset
20 | think realty magazine :: july 2020
5/19/2020
We Power Pros to Achieve More
Since 1958, the professional contractors’ community has known The Home Depot Pro, formerly Barnett as an exceptional distributor of pro-grade plumbing, HVAC and electrical products. In the past 60 years, we have provided reliable and knowledgeable customer service and innovative business solutions. Becoming a part of The Home Depot® opened the door to even more benefits we can offer our professional contractors and service technicians.
• Special contractor pricing • Same day shipping and job-site delivery • In-store pickup and special orders • Advanced order tracking • Powerful web tools
Whether you are a one-truck business or a growing enterprise, we have solutions that will meet your needs.
Strength Beyond the Aisle
To maximize your spending power, we also offer a business line of credit to qualified contractors. For extra convenience, we provide a Home Depot ProPurchase card, linked to this credit line, to use while shopping in store. Tracking these purchases is easy and one account billing and payment on a consolidated invoice is unprecedented in the maintenance and supply industry.
Stay ahead of the competition by taking advantage of our national dedicated and knowledgeable team of Specialty Trades Sales Professionals focused on the wholesale relationship. Our team understands your business needs and can advise you on changing trends and regulations through industry insights and consultancy.
thinkrealty . com | 21
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Helping You Protect What You’ve Built
THINK REALTY SUPPLIER NREIG
C over your investment proper- ties with top carriers in any stage of occupancy (tenant-oc- cupied, vacant, rehab) across all 50 states. Think Realty Supplier National Real Estate Insurance Group (NREIG) has an un - matched program that allows you to insure all your properties on one schedule, with an online portal and helpful client service representative to help you add and delete properties as your portfolio changes. In 2020, NREIG expanded its In- surance Program to accommo- date for residential dwellings up to 20 units and provide new offerings for New Construction projects. NREIG is committed to guiding you through the insurance process and deliv- ering custom coverage options to meet your unique needs, whether you own one property or hundreds. Other coverages available with NREIG: • Earth Movement Coverage • Flood Coverage • Tenant Protector Plan (an alternative to Renters’ Insurance with additional protection for you, the landlord) • Landlord Rent Default Insurance • Cyber Liability Insurance
Ask forAssistance
TAKING YOUR BUSINESS TO THE VIRTUAL LEVEL
Think Realty Supplier REVA Global
utomate. Outsource. Scale. This business-building lingo is all
time trying on their own to find and hire the right virtual assistant. Pre-trained, dedicated, and custom placed virtual assistants can com- plete almost any task an in-office hire could complete by phone or computer. Commonly placed services are cold calling, follow up calling, following up on offers to sellers, skip tracing, list management, contractor bid sched- uling, tenant calls, contract-to-close coordination, social media marketing, content creation, property marketing, virtual networking, bookkeeping, and more. “We are excited to announce RE- VAGlobal’s sponsorship of the weekly spin on the traditional podcast called, Friday Coffee Break Unfiltered,” Ransdell said. The LIVE recorded podcast is host- ed by Lachance, Ransdell, and their friend and Mastermind Coach Patrick Precourt. They all share a passion for empowering entrepreneurs and real estate professionals and invite you to join the LIVE broadcast each Friday at 10 a.m. EST for “edgy and helpful entrepreneurial content.” • Think Realty members receive 50 percent off the REVAGlobal placement fee.
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the rage, but savvy investors do these things, usually with the help from vir- tual assistants. Think Realty Supplier REVAGlobal provides outsourcing solutions utilizing virtual assistants. Founded in 2016 by CEO Bob Lachance, REVAGlobal is currently the solution for many of the coun- try’s leading real estate brokers and agents, real estate investors, property management companies, real estate coaching programs, and real estate software providers. “The team here specializes in help- ing business owners identify opera- tional bottlenecks in their businesses as well as the areas in which they can automate and outsource freeing them to achieve scale, efficiency, and time-freedom,” said Amy Ransdell, CMO at REVAGlobal. Hiring Virtual Assistants means efficiency and savings for business owners. On average a virtual assis- tant will mean at a minimum 37-40 percent savings over the cost of an in-office hire. By working with REVA - Global’s unique placement process, business owners additionally save
Think Realty members receive a complimentary insurance proposal at NREIG.com/TR.
22 | think realty magazine :: july 2020
Effective and Efficient Maintenance EXTERIOR PROPERTY MAINTENANCE TO HELP YOU TAKE IT EASY
Think Realty Supplier TaskEasy
TaskEasy is the nationwide solution to ordering and managing lawn care for rental properties. With TaskEasy, you can order services and manage your entire rental portfolio online, in one convenient place. Founded in 2013 by CEO Ken Davis, TaskEasy was built to solve a long-standing problem: mowing the lawn. Ken, who was then managing a modest property portfolio, was strug- gling to maintain his properties curb appeal across multiple cities. He found himself spending countless hours vetting and managing contractors, and it was at this time he also realized that pricing was inconsistent and unfair to both him and the contractor. The entire landscaping services industry was plagued with inefficiencies. As an entrepreneur with several successful ventures under his belt, Ken was in a perfect position to solve this problem. He envisioned a service that would make purchasing lawn care as easy as shopping online. To provide fair and consistent pric- ing for both parties, TaskEasy devised a solution that utilized satellite image technology to measure actual proper- ty size. This method of aerial imagery helps TaskEasy establish fair pricing
across all markets and eliminates the need to physically visit the property to provide a bid. Contractors have since experienced fewer driving expenses, while property owners and managers have seen faster days-to-service and improved downtime as a result. As for managing multiple contrac- tors, TaskEasy’s revolutionary soft- ware makes it easy to maintain lawn care and yard maintenance through a single point of contact. TaskEasy’s robust ecosystem automates and audits exterior property maintenance services, manages exceptions, and provides reporting and accountability to clients. No more tracking down contractors, no more wasted resourc- es, no more sorting through photos to verify completion – just a simple solution to managing services for rental properties. Today TaskEasy provides relief to property managers and owners in more than 12,000 cities across the U.S. Through their fair market pricing, data-driven software, and network of more than 15,000 insured contractors, TaskEasy is the simple solution to maintaining rental properties. • Think Realty members receive up to 20 percent off exterior home maintenance services.
thinkrealty . com | 23
BUSINESS SAVINGS PROGRAM
10% off branded; 20% off private brand ink & toner core list. 20% to 55% off retail on cleaning & break room items.
SPECIAL PRICING ON PRINT AND COPY SERVICES $0.025 black and white copies $0.22 color copies 40% off finishing services
20% to 55% off item office supply core list.
Average 10% off retail on 200 technology core items.
Free next-day shipping on orders of $50 or more.
My Files and Brand Identity Access
Plus, 5%-10% off virtually all products at Office Depot OfficeMax. Just use your exclusive Think Realty Store Purchasing Card, shown at the right.
Get your Store Purchasing Card sent to your phone right now. Just text “ThinkRealtyCard" to 844-446-6358. To shop online, register at http://bit.ly/ThinkRealtyOD.
This Office Depot business savings program is administered by Excelerate America.
24 | think realty magazine :: july 2020
ENGAGEMENT
REALTY MATTERS
Designing Your Business
HOW CREATING SYSTEMS CAN LEAD TO A PATH OF SCALE
by Brian Wojcik
This also may explain the high ratio of investor turn- over; many new investors exit after only a few years in the business. The statistics are consistent and alarming: approximately 53 percent of small unit-count housing providers lose money according to IRS Schedule-E filing summaries, totaling $64 billion annually. Some may chal- lenge that statistic with the concept of phantom losses due to depreciation, interest deductions, etc. Differing opinions aside, a more specific loss classification is tell - ing. Nondeductible rental losses, which usually occur if there isn’t enough passive income to offset the total loss, over the last 10 years are roughly 1.6 million filings (ap - proximately 2.7 million rentals) to the tune of $18 billion ($6,700 each rental) annually. Those losses are typically indicative of something gone extremely wrong and are difficult to dispute. In other words, 15 percent of small- unit-count rentals have losses in a big way. Interestingly, as an aside, that number closely correlates to national delinquency levels for low-cost housing.
BUSINESS BY DESIGN
Evaluation of a real estate opportunity comes in two forms: • Use in search of a Site, or • Site in search of a Use
In other words, a business produces something and needs a suitable location; conversely, a location is available for a suitable business. A parallel approach and methodology can be conceived to assist potential real estate entrepre- neurs to evaluate if real estate is appropriate for them. This is the question often missed by most beginning investors.
thinkrealty . com | 25
THE QUESTION OFTEN MISSED BYMOST BEGINNING INVESTORS: DID YOU EVALUATE IF THIS REAL ESTATE OPPORTUNITY IS APPROPRIATE FOR YOU?
BUSINESS BYDESIGN ISA DEMAND FORWISDOM
Why do so many properties lose money? I have heard many stories, and even had a couple myself. Stories explain (or blame) circumstance. There will always be life circumstances. When we take responsibility, without explanation, something remarkable happens. We discov- er the real answer why! It reveals the error of our ways. The value of that wisdom is incalculable. And it’s eternal. When properly applied, the value compounds with time. For me, I failed to design my business. I never asked myself the right questions first, before doing. I didn’t even know which questions to ask myself. Like many, I read a book, got excited, and jumped in. I bought one investment property in Baltimore, and after I got married and bought a new home, I’d converted my first primary residence into a rental. Rent was coming in and everything was going right, until everything went wrong. Within 18 months, life circumstances changed dramat- ically. Without forewarning, my marriage was in jeopardy. And the real estate market had begun its downturn. The Great Recession impacted my renters, which I had to eventually evict. There was a period when I was carrying three mortgages; a divorce settlement forced the sale of one of the properties, and soon thereafter I found myself jobless weeks prior to the bubble bursting in late 2007. We all live lives filled with stories, and I could easily ex - plain why I lost money on those rentals. Yet I had learned the power of taking responsibility. After digging, I realized that I really didn’t know how to manage a rental, and I didn’t have a plan. Now jobless, I committed to learn how to properly manage a rental property. I started a manage- ment company, where I created processes and systems, and I truly began to understand risk management while I was getting my master’s degree in real estate.
BUSINESS BYDESIGN ISADEMAND FOR ANSWERS FIRST The management company provided opportunities to speak with many “accidental landlords” who had no choice but to rent their houses, requiring them to move because of circumstances. Most didn’t understand risk with financial consequence. And I had been successful in helping some people realize they did not want to rent their first residence, so selling would be a better option. They realized they would not be successful on their own managing a rental and were unwilling to relinquish control to a third-party management company. It was better for them to realize it first than it would have been for me to onboard them as a client. It was worth the immediate opportunity cost, rather than the time it would have taken to manage for them. I provided them with a self-survey exercise to help them discover if they have the wherewithal to be a rental housing provider, and whether it also fit with their financial plan and capacity. So back to the question often missed by most beginning investors: Did you evaluate if this real estate opportunity is appropriate for you?
26 | think realty magazine :: july 2020
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