Heartland Investment Partners - January 2021

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HEARTLAND INVESTMEN T COMPANIES STARS

JANUARY 2021

AN.COM

DARINGARM 319-350-5378

THE INVESTMENT EXPERIENCE THAT STILL GIVES ME NIGHTMARES

(AND HOW I SURVIVED IT)

“Darin?” he said, “You’ve gotta get over here right away. I can’t explain what’s going on. Just get here.”

Raise your hand if you’ve gotten at least 10 emails from businesses this month either recapping 2020 or sharing their goals for the new year. I could raise both of my hands (and a foot, too), so I thought I’d bring you something different. Instead of sharing my highlight reel, I’m going to pretend it’s Halloween and tell you about the strangest, most haunting experience I’ve had as a real estate investor. This story starts in 1992. I was first getting into real estate, and my goal was to buy and “flip” foreclosed properties just like the guys on the “get rich in real estate” TV commercials. After weeks of searching, I finally found the perfect house in foreclosure. It was valued at $85,000, and the folks who owned it only owed $30,000 on their mortgage. I called the owner’s number and a woman picked up. When I asked why the home was in foreclosure, she said that she was disabled and her husband didn’t earn enough to pay the bills. I took a tour of the house, and after some back-and-forth, I agreed to buy it for $55,000. Over the next few weeks, I met with that lady four or five times. She told me her husband was a truck driver who was always on the road, so I never spoke with him. When I needed his signature on a document, I would drop it off overnight, he’d sign it in the wee hours, and I’d pick it up in the morning. It was a little unusual, but that’s the investment business for you. Then, things started getting weird. Days before we closed on the property, the woman disappeared. It was a total communications blackout. I tried frantically to get in touch with her for weeks and got nowhere. Finally, the property went to sheriff’s sale, where I managed to snag it for just $38,000 — an even better deal! I was relieved the place was finally mine and the problematic owners were gone. To keep things moving, I sent a local maintenance guy, Dave, over to check out the house. I told him that he could walk around outside and even go in if the door was unlocked. A half-hour later, my phone rang. It was Dave.

Uh-oh. I sped over to the property, and Dave met me on the front lawn to drop this bombshell: “Someone is living in your house!”

When Dave had peeked through the window, he’d seen furniture and curtains still in place and pictures on the walls. Then, he’d spotted a man asleep on the couch. He knocked on the window and the guy came to the front door, looking confused. Dave introduced himself and asked if he was the former owner.

“What do you mean former owner?” the man replied. “I still own this place!”

When Dave tried to explain, the guy went ballistic on him, so that’s when he called me. The two of us knocked on the door, and the man answered screaming that his sons were on their way to show us what was what. Minutes later, a big camouflage pickup rolled into the driveway. Three big fellas piled out and started throwing four-letter words at us! My heart was in my throat. Somehow, Dave and I got everyone to calm down, and that’s when the truth came out. It turns out that the man was the truck-driving husband, and his wife (who wasn’t disabled after all) had sold the house right out from under him. She was blowing all of their money at casinos and decided to sell the house to pay her debts. She’d forged all of his signatures, then dropped off the map when she had a nervous breakdown and ended up in the hospital. Ultimately, the baffled husband agreed to move out by the end of the month, but the whole ordeal was the stuff of nightmares. I can’t imagine what it would feel like to be taking a nap one day and wake up to the news that my house wasn’t mine. I still feel awful about it, and when people say 2020 was bad, I just think, “It had nothing on 1992!”

–Darin Garman

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RITABLE

LES FOR CHA ONS IN 2020

NEW TAX RU CONTRIBUTI

DON’T FORGET THE CARES ACT’S SPECIAL BONUS!

Many people tackled deep-cleaning projects while spending more time at home last year. If your cleaning spree ended in donating items to a local charity, or if you donated funds to help local organizations supporting pandemic relief, you can look forward to some tax breaks! To feel confident in claiming them, here’s what you need to know about filing your 2020 taxes, including some unique additions from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

And the standard deduction for heads of household in 2019 was $18,350 and it’s $18,650 in 2020.

DEDUCTIBLE CONTRIBUTIONS If you choose to itemize your deductions, almost any gift to a qualified charitable organization can be deducted against your taxable income. It’s very important to keep records of all your contributions. According to the IRS, when donating items to a local charity like the Red Cross or Goodwill, the deductible value equals the fair market value of your items. If you made cash donations in 2020, there is a special rule to be aware of: Donations to public charities are now 100% deductible instead of 60%. However, this doesn’t apply to private foundations. AN ADDITIONAL CHARITABLE DEDUCTION If you choose to take the standard deduction rather than itemize deductions on your 2020 tax return, you may qualify for a new dedication courtesy of the CARES Act. If you donated to a qualified charity before Jan. 1, 2021, you can deduct up to $300 for single filers, or $600 per married couple. The CARES Act can save you hundreds of dollars on your 2020 tax return. Use this guide to navigate the upcoming tax season. Happy filing!

ITEMIZED VS. STANDARD DEDUCTIONS When filing your taxes, you’ll need to first decide whether you want to itemize your deductions or take the standard deduction set by the IRS. Even those who cannot claim other tax credits or breaks qualify for the standard deduction. However, if you do have qualifying deductions and they add up to more than the standard deduction, it’s smarter to itemize your deductions. Take note that the standard deduction was increased in 2020 because of the CARES Act. In 2019, the standard deduction for a single person was $12,200; in 2020, it’s $12,400. For those who are married and filing jointly, the standard deduction was $24,400 in 2019 and $24,800 in 2020.

ESOLUTIONS !

VESTMENT R

P ON YOUR IN

DON’T GIVE U

OUGH IN 202 1

FOLLOW THR

O HELP YOU

Big Idea No. 6: Find your motivation. For the most part, investors are self-motivated, but it never hurts to seek extra help. Seek out fellow investors here at Heartland who can hold you accountable, hand out feedback, and give you an atta-boy when you need it. Big Idea No. 7: It’s not too late to re-group! If you feel your resolve slipping, block out 30 minutes, bolt the door, turn off your phone, and regroup. Review your investment resolutions, choose those that mean the most, and apply the ideas above. Big Idea No. 8: Make better use of your time. Pressure, stress, and bad time management will ruin your resolve. To keep your resolutions on track, you need to stop procrastinating for good. Your finances depend on it — especially in this economy! –Darin Garman

8 BIG IDEAS T

Big Idea No. 3: Only go for resolutions where your resolve is real. Only you can decide what matters to you. Don’t bother with lip service or faux resolutions made to appease others. Being honest with yourself is a prerequisite for investment success. Big Idea No. 4: Remember, investment requires resources. Whether you’re dipping your toe in the water with a 36-unit apartment property or investing in a much larger building, you need to do your research and gather resources. If you don’t, you’re setting yourself up to fail. Big Idea No. 5: Aim to make daily progress. Do you remember the Bill Murray movie “What About Bob?” and how the psychologist in it recommends “baby steps”? That’s a good approach to investing. Create a timeline for your objective and break it down into a daily to-do list.

Do you already feel your New Year’s resolve slipping?

If so, it’s not too late to turn things around! With these eight big ideas, you can rescue your resolutions and achieve your investment goals. Big Idea No. 1: Give yourself the time you need. If you resolve to spend a half hour every day working on an investment project, something’s gotta give to make that happen! Try finding other activities you can trim down by 10 or 15 minutes and put that time toward investing. Big Idea No. 2: Let your investment priorities govern your schedule, not vice versa. When it comes to investing, you’re the boss, not a worker bee! Don’t let interruptions distract you from your work. Instead, wrest control away from others and emphasize your priorities — it’s your financial future at stake!

2 DARINGARMAN.COM

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I WA LIFE

SUDOKU

WANT TO LEARN TO LEVITATE?

PLAN A TRIP TO MAHARISHI VEDIC CITY, IOWA

When you were a child, did you dream about flying? Did you imagine you were a superhero or a bird? Flight is a common fantasy, and it’s one of the promises that draws people to Fairfield, Iowa, to study the teachings of Maharishi Mahesh Yogi. Fairfield is a hub for Transcendental Meditation, a technique pioneered by Maharishi. The Indian guru believed in living in alignment with the Natural Law and using science and education to bring about world peace. He also specialized in “yogic flying,” which NPR calls “a practice that he claimed would infuse practitioners with the power to levitate.” For decades, people from all over the country traveled to Iowa to learn these techniques at the Maharishi School. Today, the Maharishi School is still operating in Fairfield flanked by two massive golden domes for group meditation. But it’s not the center of transcendental meditation in the area anymore. In 2001, Maharishi’s followers incorporated their community as its very own town 4 miles from the city. Maharishi Vedic City calls itself “a model of ideal city life” and a “lighthouse of peace.” The 1,300 people who live there are dedicated to the guru’s teachings. They have their own schools, health centers, and spas, and even design their buildings according to scripture. As the city website explains, every building is meant “to promote health, happiness, and good fortune.” They all face east and feature a dedicated “silent space” and golden roof ornaments. A group of peacekeepers in the city practices yogic flying in hopes of uniting the national consciousness and banishing negativity from American soil. This might all sound a bit crazy, but Maharishi’s teachings have had a massive reach. Before he died in 2008, Maharishi served as a guru to the Beatles, the Beach Boys, and thousands of devotees around the world. In 2019, Oprah named Maharishi Vedic City “America’s Most Unusual Town.” To learn more about what life is like inside of Iowa’s Transcendental Meditation communities, check out Claire Hoffman’s memoir “Greetings From Utopia Park: Surviving a Transcendent Childhood.” Hoffman grew up in Fairfield in the ‘80s and ‘90s, saw her mother “fly,” and spent more than 2,000 hours of her young life meditating before leaving the community behind.

SALES AND SUCCES S

APARTMENT

FULLY OCCUPIED 5 UNITS! 15%+ RETURN

144 UNITS! PARTNERSHIP INVESTMENT!

CLOSED! INDIVIDUAL INVESTMENT MADE!

CLOSED! $2M+ INVESTMENT MADE! DON’ MISS OUT ON THESE IN 2021!

12-PLEX AVAILABLE! EXCELLENT LOCATION! FULLY OCCUPIED! ONE- AND TWO-BEDROOM UNITS

CONTACT DARIN TODAY AT 319-350-5378 FOR MORE INFORMATION ON THESE LISTINGS!

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HEARTLAND INVESTMENT COMPANIES

PRST STD US POSTAGE PAID BOISE, ID PERMIT 411

Darin Garman: Heartland’s Most Trusted Multi-Family Investment Advisor 2505 Silver Oak Trail Marion, IA 52302 DarinGarman.com 319-350-5378 INSIDE Page 1 Darin’s Best Investment Horror Story Page 2 How to Deduct Charitable Contributions on Your 2020 Taxes Don’t Give Up on Your Investment Resolutions! Page 3 Learn to Levitate in Small-Town Iowa Apartment Sales and Success Page 4 Business Budgeting for 2021

This is the time of year when businesses would usually be looking at their budget and planning for the coming year. But COVID-19 has made the future entirely unpredictable, which makes properly planning your budget difficult. But all is not lost — there are some basic budgeting tactics you can implement to face 2021 with confidence. YOU CAN STILL PLAN AROUND UNPREDICTABILITY BUSINESS BUDGETING FOR 2021

CREATE A FORECAST

new expenses you may have in response to 2020, like staffing changes and Paycheck Protection Program loans. Take stock of what’s new and different for your business this year and include it in your budget plan.

If you’re not entirely confident in your ability to forecast sales for 2021, you’re not alone. But you do still have options. If 2020 went great, perhaps try setting your sights up 10% from last year. If you want to play it safe, keep your forecast on par with 2020. If even that doesn’t feel reliable, then jump back to 2019 and use it as a base for creating your budget. You can ramp up 10% or 20% from there. Don’t just forecast this year blindly — use data from a point you can rely on and plan accordingly from there.

REMEMBER THE ESSENTIALS

Even though last year was a wild ride, you can’t throw all your best practices out the window. Certain budget-forward thinking will always be essential, no matter where your business has landed. If sales are strong, drive profits while you can to build your reserves. Modify your products or services to align with customer behavior. Keep your accounts receivable clean. Don’t use credit cards to finance your business. Pay close attention to your balance sheet to keep a handle on debt. Cultivate an ongoing relationship with your banker. If you find a reliable baseline, are willing to be flexible and realistic, and if you can recalibrate your plans on the go, you can budget your way to a much better year.

KNOW WHAT TO INCLUDE

Your budget needs to have flexible sales goals and realistic expense plans this year. Many businesses are having to change their marketing focus and invest differently, so you have to be willing to adapt your budget too. As you set sales goals, be aware of your margins and get flexible with the way you’re achieving them if you want to improve them. Also take into account