OCTOBER/NOVEMBER 2019 THINKREALTY.COM
Cryptocurrency: Crossing boundaries to ease REI STRATEGY
Contemporary content marketing to build your brand BUSINESS FUNDAMENTALS
JEFFREY TESCH PUTS CUSTOMERS FIRST TO GROW RCN CAPITAL Rooted in Service
$5.95U.S. ::$6.95CAN OCT/NOV2019
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TABLE OF CONTENTS
INSIDE THIS ISSUE
THINK REALTY 8 News & Events
STRATEGY 49 Become the Bank™
How non-performing notes can lead you on the road to wealth. Sponsored content by Ray Urrutia, Pull the Trigger Enterprises 51 Money with Meaning New fund and technology make note investing easy for everyone. Sponsored content by Money with Meaning Fund 52 Mobile Home Millions Understanding your seller and buyer in mobile home investments. Sponsored content by Chimene Van Gundy, Mobile Home Millions 54 1031 Exchanges, Opportunity Zones & Self-Directed Retirement Accounts Opportunities, Not Flashy Substitutes Sponsored content by Jared Garfield, ROI Turnkey Properties 62 International Vacation Rentals How being a booking agent can result in triple the earnings with little legwork. by Nick Veira 66 Analysis Paralysis Are you stuck in the pursuit of your next investment property? Sponsored content by Stacy Brown, Real Property Management MARKET & TRENDS 72 Take Me to Kansas City This Midwest metropolis, and Think Realty’s home base, is thriving with opportunity. by Nathan Brooks Why self-directed investors have the best of both worlds. by Carole VanSickle Ellis 59 Strike Gold with Proven
Updates from around the industry.
10 Making Your Tasks Easier
Streamlining exterior maintenance for real estate investors. Content provided by TaskEasy 19 Focusing on Millennials for Real Estate Investors Sponsored content by Walnut Street Finance
INVESTOR STORIES 20 Presidents' Circle Featured Investor: Kevin Kim by Kelli White 22 Veterans Buy America
Marine Captain Juan Cristales turned a $400 investment into millions. by Jeff Edwards
BUSINESS FUNDAMENTALS 25 Evaluating the Numbers Cash on cash returns in real estate investing. Sponsored content by Aaron Chapman, Security National Mortgage 26 Building Your Brand
ON THE COVER
Jeffrey Tesch puts customers first to grow RCN Capital.
Rooted in Service
Contemporary content marketing styles you might not be using to the fullest. by Abhi Golhar 28 Managing the Business Risks of Animals
by Bobby Burch | Photos by Rob Kavaler
Pets and assistance animals add liability to your business. Sponsored content by John Bradford, National Association of Residential Property Managers ® (NARPM) 30 12 Myths of Real Estate Note Investing Dispelling falsities in this noteworthy niche of REI. by W.J. Mencarow SPONSORED SUPPLEMENT 33 Information Management Network Middle-Market Multifamily Forum (Midwest)
MARKET & TRENDS
HEALTHY RETURNS How regional service models are affecting real estate.
FOREIGN-MARKET INVESTING Investing overseas is a valuable strategy but might not be for the faint at heart.
CRYPTOCURRENCY: INHERENTLY INTERNATIONAL
DESIGN GUIDE: CRAFTSMAN KITCHEN Featured Designer: Michele Van Der Veen
74 Vacant Housing
A currency that crosses boundaries and eases real estate investing.
Markets with the most zombie foreclosures in the third quarter of 2019. by Joel Cone
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PUBLISHER & CEO Eddie Wilson
EDITOR-IN-CHIEF Kelli White
FROM THE CEO
SALES MANAGER Rodney Halford RHalford@ThinkRealty.com 816-398-4111 x86122
Preparation Brings Opportunity
FULFILLMENT COORDINATOR Blair Pierce
ART DIRECTOR Emily Bowers
CONTRIBUTING WRITERS Nathan Brooks Bobby Burch Joel Cone Jeff Edwards Carole VanSickle Ellis Abhi Golhar W.J. Mencarow Steve Streetman Michele Van Der Veen Nicholas Veira Ingo Winzer
lthough 2019 is not over yet, it’s close enough to be pre- paring for year-end — especially for real estate investors. As I prepare for the end of this fiscal year, I am talking with my CPA to make the most of tax strategies. As investors, we need to consider
You’ll also find in this issue a wealth of information on invest-
ing strategies, some geared toward international markets. Overseas investing might seem overwhelming to consider, and it can be for sure. But investing in foreign properties doesn’t have to be too foreign to you. It’s all about preparation. The Think Realty team is delighted to be partnering with Outback REIN for the Capital Funding Summit in Las Vegas in No- vember. If you’ve ever asked yourself where you can find funding for your next deal, then this is the event for you! I hope to see many of you there. As we are wrapping up the year at Think Realty, we are enthusiastically planning for 2020 and some great opportunities ahead! •
HEY! LET’S BE FRIENDS! GET SOCIAL. STAY CONNECTED.
COVER PHOTOGRAPHY Rob Kavaler
annual tax strategies and at the same time be considering our 2020 investment strate- gies based on the current market cycle. It’s a busy, yet exciting time! You might notice this edition of Think Realty’s Housing News Report features a cover different from past issues. We got the chance to speak with Jeffrey Tesch, CEO of RCN Capital about his journey from franchi- see to lender, and customer service was the common thread guiding him along the way.
Like, Follow & Share for the Latest Real Estate News, Trends and Insights from Think Realty
FOR ARTICLE REPRINTS :: Contact Jeremy Ellis at Reprint Pros, 949-702-5390. www.reprintpros.com. 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. ABOUT THIS MAGAZINE :: ThinkRealtyMagazine isapublicationof AffinityRealEstateMediaLLC.Reproductionoruseofanyeditorial orgraphic,withoutpermission, isprohibited.Wearenotresponsible for thecontentofanypaidadvertisements.Forreprintrights; toob- tainadetailedstatementofourprivacypolicy;and forallsingle-copy requests,addresschangesandothersubscription inquiries:
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!
EDDIE WILSON, CHIEF EXECUTIVE OFFICER
Think Realty 7505 Tiffany Springs Parkway, Suite 100 Kansas City, Missouri 64153 816-398-4130 ThinkRealty.com Copyright ©2019 Think Realty
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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.
NEWS & EVENTS
Think Realty & Outback REIN's Capital Funding Summit EVERYTHING YOU NEED TO KNOW ABOUT FUNDING.
Congratulations to the 2019 Think Realty Honors Winners!
Education Gary Harper | Sharper Business Solutions Gary works with investors across the country teaching them processes and systems to grow their business. He has created a group that is based in giving and helping others.
Single-Family Investing Glenn Stromberg | Stromberg Investment Group After decades working in the real estate market, Glenn Stromberg realized that the misconceptions surround- ing "mobile" homes kept most investors and hedge funds out of that niche market. Glenn has completed thousands of mobile home deals, but his passion is to share his legacy and knowledge to help others. Multifamily Investing Bruce Petersen | Blue Bonnet Assets "The Apt-Guy," Bruce began mentoring others in the syndication, acquisition, operation, and disposition of multiple apartment complexes in 2014. Bruce’s passion is providing passive streams of income to investors by improving apartment complexes and creating commu- nities that residents love to call home. Master Investors Douglas Skipworth & Dan Butler | CrestCore Realty CrestCore real estate brokerage and property manage- ment manages 2,500 properties in Memphis, TN for 500 real estate investors. Linda's Legacy: Industry Impact Abhi Golhar Abhi’s passion is to truly create conversation and ener- gy around real estate investing. He can speak to multi- ple aspects of the REI business and is willing to answer questions and have conversations with all levels of investors. His honesty about his success and mistakes along the way make him a rare find. Linda was one of those people who lit up a room and could talk about elevating the industry at length and Abhi shares many of her characteristics. Humanitarians of the Year Joe & Shawn King | The Revival Brothers The King brothers’ investment company has a mission to help and revitalize blighted neighborhoods and keep people in their homes.
Join Think Realty and Outback REIN as they partner to bring you the Capital Funding Summit, November 5-6, 2019, at the Westin Lake in Las Vegas . You'll find answers to that all-important question: "Where can I find funding for my next deal?"
This two-day event will feature lessons on:
Commercial Investing Jon Lee | Outback REIN
• The 5 funding needs of a real estate investor • Raising private money • Obtaining unsecured business lines of credit • Taking the fear out of hard money • Earnest money deposit funding • Understanding how to use bridge loans • Understanding, fixing and optimizing your credit score • Creative financing to enhance deals • And more!
Jon believes in 'investing in man and land, in that order.' He and his land team acquire large acreage and conceptualize how to develop the land for highest and best use with maximum profit, resulting in unique business opportunities, not the traditional subdivision
or housing development. Private Lending Noble Capital
Noble Capital provides various options for investors to create and manage wealth through real estate. The continued growth of the Texas real estate market has necessitated the rehabilitation of distressed housing and the construction of new homes to accommodate the growing population. For more than 16 years, Noble Captial’s lending arm, Streamline Funding, has been working behind the scenes to put these opportunities in reach for real estate investors in Texas. With 300 locations across U.S. and Canada, the Real Property Management franchise organization is the larg- est property management organization in North America. Real Estate Investing Services Geraci LLP Geraci is the largest firm in the country that helps peo- ple of wealth deploy capital to investors. Property Management Real Property Management
You'll also rub shoulders with lenders, REI service providers and more than 200 attendees in a large exhibit hall with unlimited networking opportunities.
Chris Naugle The Money Multiplier Keynote Speaker Chris Naugle is a nationally recognized entrepreneur. Using his 16 years of high-level experience in finance, he has successfully bought, renovated and sold hundreds of properties. Through his passion and success in real estate, Chris became co-founder and CEO of FlipOut Academy, a real estate education company that coaches its students how to get results and create passive income through real estate.
Jon Lee Outback REIN Speaker
Coach Collard Outback REIN Speaker Coach Collard is founder and
Jon Lee is a full-time investor, investment coach, and partner in the Outback Real Estate Investment Network. He practices the philosophy of "investing in man and land...in that order!" within the Outback because of his deep belief that creating long-lasting and influential relationships is of paramount importance in the success of business.
partner of the Outback Real Estate Investment Network. He travels and speaks internationally on real estate, and hosts events for real estate professionals. His mission is to fundamentally change thinking in real estate and his passion is to empower people to create even more profits and to maximize their bottom line.
TO LEARN MORE ABOUT THIS EVENT AND TO BUY TICKETS, VISIT THINKREALTY.COM/EVENTS
Look for the 2020 Think Realty Honors Nominations to open in January!
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TaskEasy delivers automated yard care to single-family rental institutions, commercial property portfolios, and individual homeowners and renters through intuitive software and innovative technology. TaskEasy clients don’t have to work with multiple vendors and waste time on managing communication requests, service tracking and performance, and complicated invoicing because everything is done online through one point of contact and powerful online software. Making Your Tasks Easier STREAMLINING EXTERIOR MAINTENANCE FOR REAL ESTATE INVESTORS.
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ince launching in 2013, TaskEasy has grown from a
model has become a key to the company’s success with national single-family rental institutions that manage thousands of proper- ties across the country. TaskEasy has also created a custom service frequency schedule for each U.S. region based on the USDA’s plant hardiness zones and their own data. The local climate, vegetation, grass types, and other yard care trends are all taken into consideration so each property in care of TaskEasy is serviced exactly when it’s needed — no more, no less. The homegrown software devel- oped by TaskEasy caters to both vacant and occupied single-family properties. The yard care packag- es for businesses include account management, automatic billing and invoicing, and service performance quality check from the TaskEasy Quality Assurance team that will ensure each service is performed to the client’s expectations.
Since its inception, TaskEasy has mowed lawns and serviced yards in over 12,000 cities and across all 50 states. The company’s portfolio consists of 800,000 serviced prop- erties nationwide, and its network of more than 12,000 screened and vetted vendors is the nation’s larg- est. TaskEasy works together with landscaping businesses in each area, supporting local industry with hundreds of thousands of services performed to date. •
10-member crew working out of a basement to a 300-person team with headquarters in Salt Lake City and three international support offices. These teams specialize in connecting thousands of lawn care professionals with customers ranging from individ- ual homeowners to the largest home rental institutions in the country. By bringing automation and tech- nology to the traditionally outdated and lagging industry, TaskEasy became a game-changer. TaskEasy was the first to introduce an aerial satellite tool that removed the need for a physical visit to deliver an estimate by calculating square footage of the property. More importantly, the company’s unique formula establishes fair market pricing for yard care services in statistical metropolitan areas in all 50 U.S. states. The automatically calculated labor and service pricing
Think Realty members can take advantage of these benefits and more through the Think Realty Supplier Program. Think Realty partners with companies like TaskEasy to bring discounts to Think Realty members. Learn more about savings available to Think Realty members at ThinkRealty.com/ supplier-discounts.
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Jeffrey Tesch Puts Customers First to Grow RCN Capital SERVICE Rooted in
BY BOBBY BURCH PHOTOS BY ROB KAVALER
ROOTS RUN DEEP HERE, AND NO MATTERWHERE THE ECONOMIC VOLATILITYTAKES US, WE'RE GOING TO MOVE FORWARD TO BE A SUBSTANTIAL AND PROFITABLE FORCE MOVING FORWARD.”
JEFFREYTESCH CEO, RCN CAPITAL
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T hough his roots might be far from residential and commercial financing, RCN Capital CEO Jeffrey Tesch’s first foray into real estate investing opened his eyes to a world of opportunity. In the 1990s, while Tesch oper- ated several Subway restaurant franchises, he sought hard-money lenders to fuel his first real estate deals. On several occasions, Tesch encountered less-than-scrupulous lenders that soured his experience. Not only did the lenders inflict various fees to simply discuss a loan, Tesch said communication was poor, the delays were long, the terms often shifted, and the total cost at the signing table was more than what was first promised. “It took days without hearing anything, sometimes a week, and then if you're lucky, you’d get a commitment letter,” Tesch recalled. “And the commitment letter may or may not hold up at closing — it’s the bait and switch commitment to get you to the table. They’d say ‘Well, unfortunately, this came in a little higher because the treasury market is fluctuating.’ They’d use any excuse to change the terms at closing. That was real- ly the experience I always had with hard-money lenders.” While less than ideal, the lacklus- ter lending experience ultimately proved to be an invaluable spring- board into Tesch’s current venture, RCN Capital. With more than 20 years of prioritizing meticulous cus- tomer service at his Subway fran- chises, Tesch contemplated how he could create a lending organization that stood by its word and provided lessors a quality experience. It didn’t take long for Tesch to realize that his firm could differ- entiate itself through integrity and strong customer service. And thus
I had no formal training in commercial lending at all. But I did knowwhat my experiences were with hard money as a real estate investor and I did knowhow I could take the lessons learned from running the Subways from a consumer perspective and put those best practices into building out a commercial lending platform that, at the end of the day, was servicing the consumer…My roots are in consumer service."
A NEWFRONTIER Based in South Windsor,
in 2010, with his lending expe- riences fresh in his mind, Tesch launched RCN Capital. “When I exited the Subway busi- ness and entered the commercial lending business, I took all of that knowledge that I had from the Subway brand regarding consumer service and I brought it with me to build out RCN Capital,” he said. “From what I learned about cus- tomer service back in my restau- rant days, I knew exactly how not to treat customers when starting in the lending industry.” Without professional lending ex- perience, Tesch leaned on what he knew best — customer service. “I had no formal training in com- mercial lending at all,” Tesch said. “But I did know what my experienc- es were with hard money as a real estate investor and I did know how I could take the lessons learned from running the Subways from a consumer perspective and put those best practices into building out a commercial lending platform that, at the end of the day, was servicing the consumer. … My roots are in consumer service.”
Conn., RCN Capital now provides time-sensitive, bridge financing to real estate investors to fund their non-owner occupied residential and commercial properties. It also offers bridge loans and provides real estate-backed lines of credit. Over the years, RCN Capital has grown to employ 70 people, under- write thousands of loans ranging from $50,000 to $2.5 million and originate more than $1 billion throughout the United States. In addition to its priority of customer service, Tesch said RCN Capital quickly grew thanks in part to its timing. Coming out of the Great Reces- sion, Tesch said that RCN Capital focused on taking what was then known as hard-money lending and elevating that to become a commer- cialized lending product. It specifi- cally serviced real estate investors that were buying distressed assets and foreclosures, helping investors return the properties to occupancy status and put them on the market. “We certainly wanted to build a
share is in part thanks to Tesch’s perspective on how to earn and keep customers’ business. Tesch said he often shares that perspec- tive with his team via an analogy. “I often say to the team when we're doing team meetings, ‘You folks are selling gasoline out there and when you're driving down the road, the gas station that you're going to pull into is the one that's clean, bright, and the one you're going to get the best experience at because the price is all just about the same,” he said. “I look at it the same exact way here at RCN Cap- ital. It's a commoditized product, and the only way we win is with our staff really being engaged with our customers. I believe we're winning because of the level of customer service that we're giving to our consumers.”
business that was going to profes- sionalize a segment of the lending world that was seedy and often not a pleasure to deal with,” Tesch said. “But, more importantly, we saw a tremendous opportunity to grow a business that was bringing value to neighborhoods that often had an eyesore. And the only way that eye- sore was going to be cured was if an investor came in and was willing to take a risk. … At the end of the day, we wanted to make a profit, but we wanted to build something that we were really proud of.” That approach paid dividends. Through 2016, Tesch said that RCN Capital doubled its portfolio every year and continued adding staff to meet the swelling demand. As the volume of customers seeking to revamp foreclosures declined, RCN Capital evolved to
serve a more diverse customer base. The company began to help investors seeking not only to fix- and-flip homes, but also renovate and acquire long-term rental homes and multi-unit buildings. The company’s 30-year, long-term loan program has been particularly popular, Tesch added. “We're having such a great year because we entered the 30-year rental market, or the 30-year single-family, one-to-four non-owner-occupied rent- al loan space,” he said. “We entered it in a big way at the beginning of 2018, and for us it took a good six months for our team to get a handle on it. We have a lot of loan officers who needed to get comfortable with it. … In the beginning of 2019, our team was so well versed in it that we were capturing market share left and right.” That success in capturing market
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Tesch also attributes the com- pany’s growth to his experienced team. RCN Capital was methodical in the additions it made to its team thanks to a piece of valuable advice Tesch received early on. “My mentor said, ‘When you’re making your new hires, make sure they are smarter than you are,’” Tesch said. “If you hire right and you make them part of your team, they will elevate your company and they will make everybody look better. Never fall into the trap of hiring people that aren't on your level because you're afraid it would be something more than you. That was the best piece of advice I ever got, and we continue to do that today.” he’s excited to be rolling out more avenues for customers to connect with the company. While he will always love human interactions with customers, Tesch said RCN is now working to build out a system in which a customer could conduct an entire transaction online. “We're going to continue to develop that portal as more folks are wanting to interact through an electronic means,” he said. “We’ll always be a consumer-friendly, pick-up-the-phone-and-speak-to- us company. But we've really gotten serious over the past two years about being able to interact with a consumer so that they hardly need to speak to us if they don't want to.” When looking at broader trends in real estate, Tesch said that he’s often asked when the United States will encounter its next recession. In general, Tesch said he believes that the single-family housing market in the United States is dramatically underbuilt at the moment. While some markets are exceptions, Tesch said that most are underbuilt, which has caused a steep rise in the aver- age transaction price over the last WATCHING THE MARKET For RCN Capital, Tesch said
eventually occurs, Tesch is com- forted in knowing that his firm’s foundations are solid. “I believe that if you build a com- pany with really sound values and roots that it will have the ability to weather any storm,” he said. “That's how we set RCN Capital up for long-term success. … The roots run deep here, and no matter where the economic volatility takes us, we're going to move forward to be a substantial and profitable force moving forward.” Asked what advice he might offer real estate investors, Tesch said that due diligence is imperative. RCN Capital is keen to coach its customers with their specific deals as to maximize their success, he said, including on how to approach a rehab project. "Make sure to get a licensed
appraiser to value the property to get an opinion on what the price is today. Then, when you’re filling out your pro forma or scope of work for the rehab, make sure to be as spe- cific and deliberate with the repair list as possible," Tesch said. “The reason you want all these details is that when an appraiser goes to look at what your compa- rables are in the neighborhood, you will have a much better idea of whether or not you are on point for improvements, whether you're un- der-improving it or over-improving it for your specific geographic area,” he said. “That's super important be- cause you never want to be the most expensive house on the street.” Tesch is a firm believer that his customers’ growth and development will fuel RCN Capital’s future. It’s why he takes great pride in coaching
customers and pairing them up with an account executive that will be with them throughout the business relationship to address questions, concerns or ideas. Tesch acknowledges there’s a lot of noise and competition in the lending space, but rarely are there lenders that ensure customers have all the tools possible for success with the projects they’re undertak- ing. That’s ultimately what puts RCN Capital ahead of competitors. “At the end of the day, how RCN wins time and again is that level of service,” he said. “To me, that’s really how things should be.” •
Bobby Burch is the Founder of Bobby Burch Creative, a small business storytelling studio. Learn more at bobbyburchphotography. com and contact him at
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five years and the continued reha- bilitation of existing properties. “I don’t see a slowdown of any sort in the demand for single-fam- ily housing for at least the next 24 months,” he said. “Rental housing also continues to be in demand, and a lot of that is driven by folks want- ing to live closer to urban centers
and not live such far distances from their workplaces. We expect that, without any major event like an in- ternational crisis or oil hitting $200 a barrel, that business will continue to grow on a very brisk pace.” Regardless, Tesch knows that the market can’t continue at its breakneck pace forever. When that
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This content is brought to you byWalnut Street Finance
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illennials make up the largest group of homebuyers, ac-
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ENTICING MILLENNIALS TO PURCHASE REHAB HOMES Millennials are a different breed of homebuyer. They are less likely to pur- chase a home that requires DIY work. Fix-and-flip investors meet this need, as well as consider amenities and designs that cater to this generation. A few home features that stand out to the Millennials are ener- gy-efficient appliances, solar pan- els, and open floor plans. It’s also no surprise that this age group is extremely tech-savvy. Flipping houses that are capable of incor- porating smart in-home technology is a bonus, from smart plugs to having good WiFi reception. THE MILLENNIAL OPPORTUNITY By using the advantages of the buy-fix-sell model to meet the needs of the Millennial market – affordable housing in urban areas with enticing features – real estate investors have a growing opportunity to capture Millennial home buying power. •
cording to a National Association of Realtors report, but so far their home ownership is at a lower rate than their parents and grandparents. However, this may be changing. A study from Chase Home Lending reported that 52 percent of first-time Millennial homebuyers are ready to make that purchase. “They are starting to realize the importance of homeownership,” Sean Grzebin, head of consumer lending at Chase Home Lending, told CNBC in May. For rehab investors, the Millenni- al buying power should come as a welcome prospect to offer renovated homes that can meet the desires of this age group - including affordable price points in urban areas with dis- tinct features. At the current pace, Millennials are projected to outnumber Baby Boom- ers this year. Pew Research estimates that Millennials will account for 73 million people in the U.S. and Baby Boomers will number 72 million. Millennial households - consisting of individuals 22 to 37 years old - are earning more than ever with a median income of $69,000 according to a Pew Research Center analysis. This makes it even more important for builders and fix and flippers to create products that appeal to this group of buyers. WHY THE FOCUS ON MILLENNIALS?
Typically, based on median prices, fix-and-flip investors have had an ad- vantage over their counterparts who build new construction homes. The median sale price for a fix- and-flip, according to Mashvisor was $215,000 through the first quarter of 2019. The national me- dian home sale price is $259,600 as of March, according to NAR. This nearly $45,000 difference is a sizeable advantage. In an effort to tap into the Millennial market, builders are creating small- er, more affordable homes to attract this demographic. According to a July Forbes article: “Most builders are adding homes with lower square footages in order to make sure they have something that is affordable to this group.” MILLENNIALS HAPPIEST IN CITIES With Millennials known as an “ur- ban generation”, they want to live, work, and play in walkable, exciting areas. The recent article “No urban malaise for Millennials”, published in the journal Regional Studies, shows Millennials are happiest living in a city. There are limited new home con- struction options in cities, which gives an advantage to rehab in- vestors. Purchasing existing older urban homes to rehab and sell to Millennials is a real opportunity.
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transactions, he is among an elite class of private real estate lenders that has consistently delivered high-quality returns to partners and investors. A native of Fairfax, VA, Bobby earned a Bachelor of Science degree in Economics with Honors from George Mason University and a Master of Business Administration fromVirginia Tech. He serves on the AmericanAssociation of Private Lenders' Ethics Advisory Committee.
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Q&Awith Kevin Kim
Do you have a guilty pleasure? A lot of them! (He laughed.)
Right now, my favorite hobby is also my guilty
pleasure. Nobody expects a guy like me to bake, and to bake bread at that. If you could go back and change any aspect of your life, which would it be? I would have decided to study abroad during college. Who has impacted your career the most? My mother. She has pushed me my entire life and is still teaching me the importance of passion, the value of hard work, and the importance of humility. These values have been the cornerstones of my career. What books have impacted you both professionally and personally? The Four Disciplines of Execution by Sean Covey. I’ve read it three times! And, Leaders Ask Great Questions by John Maxwell. My initial instinct is to fix things. This book taught me to ask questions and find out what’s really going on. If you could have one wish, what would it be? More wishes.
Kevin Kim finds fun in every opportunity. Pictured here with team members at the Opportunity Zone Expo.
Kevin Kim Geraci Law Firm
“She is almost two and having her has changed my life,” he said. So much so, that when Kim has a bad day, his typical default method of eas- ing his sorrows is to play with Abigail. “She’s really into Moana right now, so we watch that. A lot,” he said. That sounds like an uplifting rem- edy to a bad day. So, what does Kim do to celebrate a good day? “I cheer and congratulate ev- eryone involved in a win and then enjoy a little downtime with some co-workers. It’s all family here at Geraci,” Kim said. As an attorney in the REI space, Kim would like to see changes in the industry. “Laws need consistency. There are inefficiencies in regulations,” Kim said. “The rules of real estate investing have been a challenge. Too often, laws are drafted in a hurry and we should rethink how we are regulating real estate.” •
projects, and Qualified Opportunity Funds. He is also the lead instruc- tor for the American Association of Private Lender’s Certified Fund Manager Courses, teaching hun- dreds of mortgage fund managers throughout the United States on securities regulations, fund design, and fund compliance. Originally a third-generation banker, Kim decided to go to law school after his father and grand- father advised him to gain more education and stability. “Even though I started in bank- ing, I kind of always knew I would be a lawyer,” he said. “I gravitated toward theoretical classes and have a passion for writing, advocat- ing, and understanding business deals. I like to understand the why of things.” Understanding the “why of things” has made Kim great at what he does. But his WHY is his daughter Abigail.
FeaturedMember: Kevin Kim FROM VIDEO GAMES TO TOY TIME WITH HIS TODDLER, THIS REI ATTORNEY KNOWS HOW TO HAVE FUN.
A Few Favorites: VACATION: Honeymoon in maui BANDS: Kendrick Lamar & Green Day HOBBY: Baking sourdough bread DRINK: Bourbon (off the clock)
by Kelli White
evin Kim, often referred to as the most Korean, Kore-
Corporate Attorney by EB-5 Inves- tors Magazine as well as Rising Star Super Lawyer in 2019. Kim focuses his practice on private placements and other alternative investments for private lenders, real estate developers, and other real estate entrepreneurs. He said about 20-30 percent of his clients are flippers and developers. “When someone needs to raise
money as a developer, as a lend- er, or a real estate professional, I draw up the private placement documents and advise clients how to go to market and raise money,” he said. Kim has advised and prepared hundreds of securities offerings in- cluding mortgage funds, structured debt offerings, real estate syndica- tions, crowdfunding offerings, EB-5
an-American you’ll ever find (his own brother is even shocked Kevin was born in the Midwest), is an experienced corporate and securi- ties attorney with Geraci Law Firm in California. And while a bit of a jokester, Kim’s accolades are noth- ing to laugh at. He has earned a spot as a Top 25
20 | think realty housing news report :: october / november 2019
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VETERANS BUY AMERICA
acquire and move over $10 million in real estate this year alone, Captain Juan Cristales embodies the power and potential of what is possible when Veterans Buy America. BORN TO LEAD Cristales’ first eight years in the United States Marine Corps were benign to say the least. It consisted of four years serving in supply and then four years attending the Uni- versity of Houston while pursuing his commission. However, that would all change. When Cristales received his commission in 2005, the world was a very different place than when he first enlisted. Due to the pace of war, infantry officers were in high-de- mand and the Marines were looking for a few good leaders to lead a few good men in combat.
Without hesitation, Cristales vol- unteered for the infantry. By 2006, he was serving as an infantry officer in Iraq leading Marines with 2nd Battalion 2nd Marines in combat during the height of the insurgency. Deploying again in 2008 and 2011, Iraq seemed to become a second home for the young officer. Yet, Ma- rines needed leadership as if their lives depended on it, and Cristales wasn’t one to let them down. BUILDING A PLAN FOR THE FUTURE With an eye on the future and what that would mean for his family, Juan made a fateful $400 invest- ment that would secure the future of his new family. In 2011, Cristales paid $400 for an online course that showed him the power and pos- sibility of rental properties. Realizing an opportunity to replace his wife’s income so that she could stay at home with their two children, he set out to purchase six rental homes. The homes then gen- erated enough positive cash flow for his wife to spend more time with their children while Cristales, yet again, set off for the Middle East.
fixing and flipping properties. His first acquisition was in late 2015 and by 2018, he was flipping over 30 houses a year. Through his companies Local House Buyers, Inc. and Relentless Acquisitions, Cristales has moved millions in real estate. VETERANS BUYAMERICA Cristales met real estate thought leader and fellow Marine veteran, Andy Williams. Andy has taken up the mission to show his fel- low veterans just what is possible when Veterans Buy America. “Who better to own a piece of America than those who fought to defend it” is the mantra that guides Andy’s mission. Far beyond just a veteran’s employment initiative, Veterans Buy America is about veterans building real transformational wealth. Most veterans join the military with little more than the clothes on their backs. If they properly plan their ventures into real estate, they will permanently alter the course of their future. In just four short years full of opportunity and a few lessons learned the hard way, Cristales’ story represents the full power and potential afforded to veterans in real estate. From 2005 to 2015, Juan spent more time fighting on foreign real estate than he did at home. Now, he gets to own a piece of home and lead his family into a peaceful future. •
This content is brought to you by Recon Realty and AndyWilliams
Veterans BuyAmerica MARINE CAPTAIN JUAN CRISTALES TURNED A $400 INVESTMENT INTO MILLIONS.
by Jeff Edwards
ike most men who joined the Marine Corps during the rel-
atively peaceful 90s, Juan Cristales couldn’t have envisioned the hard- ships and sacrifices that awaited him. Cristales originally enlisted in 1996, and the Marine Corps rec- ognized his leadership potential and selected him for the Marine Enlisted Commissioning Education Program. Receiving his commission at the height of the GWOT conflicts, Cristales volunteered for the infan- try knowing where that would place him. Fast forward to 2015 after a decade of deployments, and Cris- tales found himself ready to retire as a Captain. Fortunately for Cris- tales, a mere $400 investment in a real estate class years prior set the stage for a retirement and transition plan that Cristales could never have envisioned for himself. On track to
He deployed again in 2013 to Afghanistan and after an opportunity to retire early in 2015, Cristales finally knew he had had enough of war. Supporting his family was now his singular mission and that $400 investment was about to pay off in a big way. With three sons to lead into the future, he knew he need- ed a bigger plan. Cristales was ready to try his hand at
Jeff Edwards is a Marine veteran and contributing writer for Veterans Buy America. Find out more about the initiative and stories of transition at
Juan Cristales (on the right) with fellow Marine.
Juan Cristales at Title Co.
22 | think realty housing news report :: october / november 2019
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This content is brought to you by Security National Mortgage
REAL ESTATE RETURNS
Evaluating the Numbers
CASH ON CASH RETURNS IN REAL ESTATE INVESTING.
by Aaron Chapman
am a very simple person and use basic principles in all
informational purposes only, contains the opinion of the author, not neces- sarily the opinion of SecurityNational Mortgage Company, and should not be construed as lending advice. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet LTV requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines, and are sub- ject to change without notice based on applicant’s eligibility and market con- ditions. Refinancing an existing loan may result in total finance charges being higher over life of loan. Reduc- tion in payments may reflect longer loan term. Terms of the loan may be subject to payment of points and fees by the applicant. Equal Housing Lend- er. SecurityNational Mortgage Com- pany Inc. NMLS# 3116. Any amounts, figures, payments or loan terms stated are based on continually changing markets, rates, loan programs and borrower specific qualifications, and subject to change without notice. See loan officers featured for a personal consultation and accurate pricing. The above information is the sole intellectual property of the author. Any distribution without written consent of the owner is strictly prohibited © .
spent? The $5,500.00 went to ser- vices, but the $20,990.00 went from a liquid account to a non-liquid asset. It is still theirs, just not in a place they can readily convert into a boat. With regular rent coming in and regular payments to the loan being serviced, the $20,990.00 becomes $104,950.00 as the initial lien is diminished by income from the tenant. That is an $83,960.00 gain just on the amortizing of the loan. Divide that by 30 years you get an average of $2,798.66 per year which is equal to 13.33% of the initial 20% added to that $20,990.00 every year until you reach $104,950.00 total. So, let’s shelf that part of the return and turn our attention to the money that was actually spent — the $5,500.00. Using the $396.97 per month, it is possible to recover the spent $5,500.00 in 13.85 months. At that point, an investor has broken even. Since 30 years is equivalent to 360 months and the first 13.85 was used to recover the spent funds, 346.15 months are open opportunity for cashflow. Receiving $396.97 per month for 346.15 months will yield $137,447.16 in income. Add that to the $83,960.00, and the actual dollar gains are $221,407.16. That is all without factoring in rent raises, tax benefits, appreciation or paying payments with future dollars effect- ed by inflation! I know what you’re thinking…What about maintenance and vacancy? Watch for the Novem- ber/December issue of Think Realty Magazine for the answer! •
facets of life and business. Wanting to find a more elementary way to evaluate I started looking at the very basic numbers on a potential invest- ment property purchase. I believe the 30-year fixed loan to be the greatest asset in a transaction (watch for December for this explanation), so I figured no simpler instrument to start with. Let’s apply some straight- forward math and see if this makes sense to more than just me. We will start with the following assumptions as a baseline (based on a loan I am presently working on for an investor in Kansas City with Bridge Turnkey Investments): • $104,950.00 acquisition price • $20,990.00 initial investment (20%) • $83,960.00 loan • 1% rent to value ratio = $1,049.00 (actual rent is higher) • $5,500 in approximate settlement (title fees, lender fees, taxes, insurance, inspections, appraisal, etc. actual expenses are lower) • 8% property management fees • 568.11 PITI (based on locked rate of 4.75% and 5.003 APR) • $396.97 per month cashflow NOT counting maintenance and vacancy Looking at this example, I will ask many investors how much money they spent at closing. Often the sum of $26,490.00 is the provided answer. I beg to differ…Is the $20,990.00 really
Aaron Chapman has been in the fi- nance industry since 1997. His clientele ranges from first-time home buyers to those investing in multiple properties for long-term cashflow. He is presently ranked #14 in an industry of more than 300,000 licensed loan originators.
DISCLAIMER: This article is for
24 | think realty housing news report :: october / november 2019
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BUILDING YOUR BRAND
are usually better targeted to your audience, and engagement rates are higher. There are many tools online where you can uncover po- tential partners that suit your brand identity and offer the best ability to create a win-win partnership. LIVE VIDEO Video has been an important part of marketing for a while, but less attention has been focused on live video. The major social platforms have embraced live streaming, with content creators able to develop quick videos that aren't as contrived or crafted. Consumers like the abili- ty to watch live content, ask ques- tions, and interact with people. For a business, any live event, product launch, or even an interesting day in the office could provide an opportu- nity to interact with followers. WEBINARS Webinars are not a new concept, but they still work exceptionally well. There is some work required to cre- ate a quality webinar, meaning that many businesses will avoid the has- sle. If you can create a webinar that consumers find valuable, you can develop an evergreen content mar- keting funnel that builds long-term loyalty. Webinars give you time and space to communicate substantially, so use the medium to reach people on different levels. You can introduce yourself and your business, build rapport, teach some useful knowl- edge that draws viewers in, and then promote your product or service.
your own podcast takes only min- utes and can put you in a league of your own depending on content, in- cluding but not limited to interviews with industry experts, case studies, and, most importantly, your shining personality. The key to remember here is, use your talents and com- municate your content in such a way that allows for maximum relatability with your audience and offers them a specific call to action at the end of every episode. Here’s a quick framework on how you can create a podcast and get it running right away: Step 1: BuyYour Equipment It doesn’t have to be expensive; it just needs to get you 90 percent of the way there. A quick search on Amazon for a microphone, headphones, and editing software should run you less than $150. Step 2: Podcast Details and Outline This is where you’ll brainstorm the name of your podcast, your audience, and create a sample outline. Gone are the days of hour-long interviews. Keep it short, sweet, and to the point. Step 3: Upload Now that you’ve created your first podcast, upload it to all your favorite platforms! There are many services out there, but the pros use Libsyn.
good FAQ page can be used within content marketing campaigns to reach curious people in the niche. It is common for people to ask questions when tracking down information, often using a voice assistant and Google. Creating a quality FAQ page can ensure you rank for many of these queries, providing
valuable help to searchers. You can use a tool like An-
swerThe- Public to find the questions being asked, and then craft insightful answers that will appeal to Google and to your visitors.
Content marketing is not going away, so it is important to use it to grow your real estate business. Quality content will usually be the first introduction to a business, and the sales process becomes easier when you have made a good first impression. The type of content you use, though, will determine the re- sults you get. Adding these content styles to your existing marketing plan will ensure your marketing stays fresh and reaches the people who might not respond to tradition- al advertising. •
Building Your Brand
CONTEMPORARY CONTENT MARKETING STYLES YOU MIGHT NOT BE USING TO THE FULLEST.
by Abhi Golhar
with standard advertising. Influenc- ers already have an engaged audi- ence, allowing brands to generate social proof from a collaboration. Influencer marketing, though, has become very competitive, with en- gagement rates often proving low for popular influencers. An excellent way around the problem is to work with several mi- cro-influencers. These influencers might have fewer followers, but they
ontent marketing contin- ues to evolve, with different
being ignored by many brands. So, what types of content should you be working on right now to build your real estate business?
styles falling in and out of fash- ion. A modern business needs to be willing to adapt and find new channels of promotion. As branding and marketing messages can be altered to suit a particular style, you never need to feel limited in your output. There are, however, some content marketing styles that are working well right now but are
FAQ PAGES AND VOICE SEARCH
An FAQ page is often additional support to prospects and buyers. Common questions that people have before and after buying can be answered succinctly. However, a
PODCAST INTERVIEWS Being heard in an audio format is an incredible method to gain more exposure and traction. Setting up
Influencer marketing lets busi- nesses reach target audiences on social media, but it avoids many of the issues that consumers have
Abhi Golhar is a full-time real estate investor, Think Realty Resident Expert and host of the Think Realty Podcast. Connect with Abhi at BookWithAbhi.com.
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