DECEMBER 2019 THINKREALTY.COM
Is a Crash Coming? The Economic Truth No One Will Tell You MARKET & TRENDS
Choosing a Partner: What to Know About
Joint Venture Agreements
ROBERT KIYOSAKI TALKS EDUCATION, JOBS, AND MONEY — AND WHY ALMOST ALL OF IT IS FAKE The Real Deal
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TABLE OF CONTENTS
INSIDE THIS ISSUE
THINK REALTY 8 News & Events
STRATEGY 61 Take Careful Aim
Before pulling the trigger on your next investment property, begin with the end in mind. by Jared Garfield, ROI Turnkey Properties
Updates from around the industry.
THE REALDEAL ROBERT KIYOSAKI talks education, jobs, and money — and why almost all of it is fake.
BUSINESS FUNDAMENTALS 24 Before You Buy How to pick the best bank for your mortgage. by Maylis de Lacoste 27 Mobile Homes Make Millionaires Expect excessive growth in manufactured homes over the next five years. by Chimene Van Gundy 29 Become the Bank™ Understanding the non-performing note business can lead to a road of wealth. by Ray Urrutia, Pull the Trigger Enterprises 30 Flipping Houses in Your Spare Time?
63 Playing into the Wind
Safe assessments and conservative plans keep savvy investors in the game. by Paul Jackson, Residential Capital Partners
by Kelli White :: photos by The Rich Dad Company
64 Lead Generation: Sellers
Five inexpensive sources to find your next investment. by Bruce Kellogg
71 Digital Marketing
Three ways to supercharge your real estate investment business. by Kendall Krawchuk, Fund That Flip
If you think house flipping is part-time work, you will lose before you even start. by Charles Sells, PIP Group
73 Paying it Forward How giving back can get you greater returns. Content provided by Groundfloor
33 IMN Supplement
MARKET & TRENDS 74 Is a Crash Coming? The truth about the economy that no one will tell you. by Tom Olson
Single Family Rental Forum West
STRATEGY 53 When Automation Meets Human Touch
Don’t let your CRM lose your qualified leads. by Robert Syfert, Investor PO
80 Local Market Monitor: Making it Again Manufacturing towns that could produce investor profits. by Ingo Winzer
55 Possibility for Prosperity
Housing boom in the exurbs offers investors new opportunities. by Stacy Brown, Real Property Management
MARKET & TRENDS
MINDSET 82 Flip the Switch
YOU WANT A PARTNER?
MANHATTAN: AT A CROSSROADS A look at multifamily real estate trends in this trendy metro.
PRESIDENTS' CIRCLE Featured Member: Aaron Chapman
HOARDING AND PROPERTY MANAGEMENT How hoarding affects your investment properties and how to make the best of it.
56 Evaluating the Numbers
Moving from real estate agent to real estate investor is a matter of mindset. by Lorraine Beato
Nullifying Einstein’s 8th Wonder of the World: Compound Interest. by Aaron Chapman, Security National Mortgage
What you need to know about joint venture agreements.
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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
Reflect and Renew
FULFILLMENT COORDINATOR Blair Pierce
ART DIRECTOR Emily Bowers
t’s that time of year when, if you’re like me, you’re setting goals for the year ahead. The act of setting goals is a unique process as it forces us to reflect on our past while also foreseeing — or at least imagining — our future.
with real estate and finance phe- nom Robert Kiyosaki. This famed author of Rich Dad Poor Dad has a new book coming called The Ravens , that happens to be about predicting the markets. Read about his thoughts on real estate, wealth building, and what else he has planned in the coming year. Also in this issue, learn about partner- ships, prospecting, and what Presidents’ Circle member Tom Olson shares about his economic outlook. For Think Realty, our goals are to contin- ue to provide great content and educational opportunities as well as to make a major impact in Washington D.C. on issues facing real estate investors. Think Realty is proud to provide a voice for investors with the goal to effect positive change in an already ever-changing industry. Thank you for reading Think Realty’s Housing News Report . Here’s to a success- ful 2020! •
CONTRIBUTING WRITERS Lorraine Beato Stacy Brown Aaron Chapman Jared Garfield Chimene Van Gundy Kendall Krawchuk Maylis de Lacoste W.J. Mencarow Tom Olson Nicole Seidner Charles Sells Robert Syfert Ray Urrutia Nancy Wallace-Laabs Ingo Winzer Paul Jackson Bruce Kellogg
Reflecting on 2019, one thing that might have surprised all of us is that the market has sustained much longer than expected. There are still high levels of demand in most markets across the country. We are truly in a remarkable market cycle. Looking forward to 2020, we need to focus on being able to adapt as the market adjusts, which it certainly will. Also, while setting goals for the com- ing year, we need to consider being more diverse in our deals. So many modes of investment have been great for the past few years, and if we are going to continue to be aggressive, then we also need to be diverse. For this month’s cover story, we talked
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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!
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:
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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 Conference and Expo Returns to Baltimore EXPERIENCE FIRSTHAND WHAT THINK REALTY HAS TO OFFER.
2019 was a year of changes for Think Realty, resulting in even more valuable content and educational events for our members! Here are some highlights from Think Realty’s year: AYear in Review
Day on the Hill In April, Think Realty launched an initiative to start a meaningful dialogue with legislators in a one-day event called Think Realty’s Day on the Hill. The goal was to inform legislators on the real estate investment industry, how it functions, and how investors can help solve issues in affordable housing and
New Editor-in-Chief Former college instructor, published author, and experienced magazine editor, Kelli White, joined the Think Realty team in February
S aturday features the acclaimed Think Realty Expo with exhibits open from 8:30 a.m. – 5:00 p.m. There will be more than 40 exhibitors with vari-
A New Think Group Think Realty launched the new Presidents’ Circle in 2019. Perks for Presidents’ Circle members include one-day events packed with expert strategy sessions; widespread exposure opportunities; VIP attendance at AAPL and Think Realty events; discounts; and much more! Visit www.presidentcircle.com for more information and read about this month’s featured member, Aaron Chapman on page 18. We Love Webinars! In summer 2019, Think Realty announced the addition of live Webinars to our platform! These 45-minute sessions provide the opportunity to engage with experts in direct Q/A. Outside of our events, Think Realty Webinars are your best opportunity to talk shop with professionals at the pinnacle of their fields — right from the comfort of your own computer. and has enjoyed her role of overseeing a publication that not only educates but inspires its readers so they are better equipped to reach their goals of real estate investment success. “I have enjoyed meeting and speaking with many of Think Realty’s qualified contributors, sharing valuable content with our members, and most of all, I’ve enjoyed being inspired right along with them.” – Kelli White
more. A team of investors and Think Realty associates visited multiple policy makers in a roundtable forum. The conversation was well received, and members left encouraged for further conversations. So encouraged in fact, that Think Realty has planned its second visit to Capitol Hill in March 2020! Stay tuned for more news about this exciting initiative!
ous tools and services focused on helping you achieve your goals as a real estate entrepreneur. Saturday will also feature keynote presentations, educational ses- sions, and a local market panel. Sunday our Think Realty Resident Experts will deliver educational sessions on topics including wealth build- ing, establishing your business and brand, residential investing, risk management, and commercial investing. Attendees can also sign up for educational workshops hosted by some of Think Realty's valued partners.
"I truly enjoyed Think Realty's Atlanta Expo in September. It was my 3rd Think Realty expo and each year it gets better and better. For me, the best day of the event is Sunday morning with the Resident Experts. I find so much value in how to expand and grow my business. Saturday, I use as networking and to hear the local experts in the market. This expo – whether in Atlanta or Baltimore - is the best educational experience for real estate investors and realtors." EBONI KILLIAN Real estate agent and investor in Marietta, GA
Blow Out in Baltimore Also in April, the Think Realty Conference and Expo in Baltimore was packed with education, excitement, and eager investors! The event had record-breaking attendance of more than 500 real estate investors of all levels who left more inspired than ever to take their business to the next level. Think Realty Podcast New to the platform in late spring 2019, Think Realty Podcasts have been a huge hit. You can catch these insightful broadcasts twice a week. Whether you watch the video or listen to the audio, our podcasts deliver even more of the hard-hitting real estate investment insights you expect from Think Realty. Our phenomenal host, Presidents’ Circle Member, and Resident Expert, Abhi Golhar, is one of the most dynamic personalities in the industry. He interviews investors from all corners of the REI space. Visit https://thinkrealty.com/podcast/ to learn what these investors are sharing!
Brent Kesler The Money Multiplier Keynote Speaker
Look for more speakers to be announced in the January issue of Think Realty magazine!
To learn more about upcoming Think Realty events and to buy tickets, visit ThinkRealty.com/TR-Events.
We can’t wait to share more of what’s in store for 2020!
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CONNECTWITH PEOPLE, INSIGHTS, ANDPROFITS Think Realty Events – A Hub of REI Advantages Think Realty is one of the fastest-growing platforms for REI tools, resources and discounts in the country. Get in touch with everything Think Realty has to offer at one – or more – of our four events nationwide!
Mar. 21-22 BWI Airport Marriott
Meet exhibitors offering REI tools, products and services.
Attend sessions on the latest market insights and innovations.
Learn from Think Realty Resident Experts on topics like Wealth Building, Business and Brand, Risk Management, and more!
Sept. 18-19 InterContinental Buckhead
Sign up for a FREE Think Realty Account and take 20% off your ticket price, or become a Premium Member to go to all Think Realty events FREE! Register now at ThinkRealty.com.
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Robert Kiyosaki on education, retirement, and money — and why so much of it is fake. REAL DEAL The
BY KELLI WHITE PHOTOS BY THE RICH DAD COMPANY
W hen real estate mogul and finance guru Rob- ert Kiyosaki took a real estate course in the early 1970s, he had a feeling it was what he was destined to do — to be an entrepreneur. Known for his unconventional teachings on finance and his passion for real estate, the best-selling author knows a good deal when he sees one and he is sticking with what works. The real estate class cost $300, which was quite a high sum in the early 1970s for a military pilot making $800 a month. Kiyosaki, a Marine Corps and Vietnam Veteran, bought his first real estate
property in 1973 when he was stationed in Hawaii. Now, he owns more than 7,000 properties — from residential and commercial to hotels — and they all bring cashflow. Armed with a passion for learning and shar- ing his views, no matter how nonconformist they might seem, Kiyosaki, author of Rich Dad Poor Dad and more than a dozen other texts on money management, investing, and financial freedom, said he was a terrible student. But for him, doing poorly in school transferred to becoming a lifelong learner in his own way.
"ONE OF THE
BIGGEST LIESWE HEAR IS YOUNEED MONEY TO MAKE MONEY.”
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“I flunked out of school,” he said. “But I study con- stantly. I love learning. I was not good at school, but I kept learning when so many others didn’t.” He joked that he learned everything he knows from playing Monopoly. “I like schools where I can DO some- thing,” he said. So, it’s no wonder why pilot school and the military worked well for him. His point of view is that ‘old’ advice — go to college, get a good job, save money, get out of debt, invest for the long term, and diversify — has become obso- lete advice in today’s fast-paced Information Age. His philosophies and messages challenge the status quo and his teachings encourage people to take initiative to become financially educated and play an active role in investing for the future. Kiyosaki’s most recent book is titled FAKE — Fake Money, Fake Teachers, Fake Assets in which Kiyosaki dispels many of the societal teachings that, in his view, have not worked and are not entirely true. “ FAKE is about how fake our money is, and you can’t pass off fake money without fake teachers. There are so many people my age (Baby Boomers) who have nothing. And so many Millennials are also in serious trouble due to student loans. Banks and Wall Street are fake. To me Rich Dad, Poor Dad was high school, and FAKE is col- lege. I’m essentially saying the same message,” he said. Kiyosaki shares his messages about financial edu- cation via his Rich Dad brand platform in books and myriad outlets including videos, radio, apps, and board games. His CASHFLOW games teach people of all ages about investing, managing assets and liabilities, and building wealth. The Rich Dad brand celebrated its 20th anniversary in 2017, and 2020 is proving to be a big year for Kiyosa- ki as he has three projects in the works. The next book scheduled to release is called The Ravens , which he co-authored with James Rickards. “A raven is a bird of prophecy. My co-writer Rickards and I are always calling market terms. The book is about how you can see the future and predict markets,” he said.
Robert Kiyosaki on Failure… “I’ve lost hundreds of millions of dollars, but it was the best thing that ever happened to me because I got smarter and came back. You learn by falling, but our schools punish those who fall down. Sometimes I win and sometimes I lose millions, but a real winner is one who gets inspired losing. The average person avoids losing, so they never win. How can you win if you’re afraid of losing?” On Job Security… “People pay a high price for job security. In prison it’s called maximum security. I visited a prison in Australia and saw their version of the worst punishment. It was being locked in a room and I thought that’s where most employees are. They’re in maximum security. It’s the worst punishment in the world. And unfortunately, that’s what most kids come out of school looking for.” On Taxes… “How do I make millions and not pay taxes? Invest in real estate! But, you have to understand the tax laws. Tax laws hurt small businesses and those with 401ks. I love passive income that is taxed at zero.”
“AREAL WINNER GETS INSPIRED BY LOSING.”
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He is also working on a doc- umentary called The Future of Money and Who Stole My Pen- sion , a book about Baby Boomers with little or no retirement. “The average 401k for retiring Baby Boomers is only $75,000 total,” Kiyosaki said. “As long as you’re an employee with a 401k, you’re toast. I was destined to be an entrepreneur and invest in real estate, and I believe the world needs more entrepreneurs who will create jobs.” Kiyosaki has been heralded as having a gift for simplifying com- plex concepts related to money, investing, finance, and eco- nomics. His core principles and messages like “Your house is not an asset” and “savers are losers” have ignited a firestorm of crit- icism and ridicule, only to have played out on the world econom- ic stage in prophetic ways. He said the reason he chooses to invest in real estate is be- cause it’s about debt. “The more debt I use, the THE REAL DEALS ARE IN REAL ESTATE
“With real estate, you can always locate your own deal and be in control of your properties. I don’t sell — only rent. If you find a good deal, why would you sell it? I’m not the most popular person on Wall Street, but I just do what I talk about. When you invest in real estate, you’re in shadow banking; you’re out of sight. You operate by a different set of rules using private equity and private credit.” “Debt is tax-free money and my cashflow is tax free. Why would I invest in anything else? When I say I pay no taxes and make millions, people go crazy because they’re in the stock mar- ket not shadow banking. I make the deals and control my deals because it’s private investing. I can’t do that with mutual funds and stocks.” With perspectives on money and investing that often con- tradict conventional wisdom, Kiyosaki has earned an interna- tional reputation for irreverent straight talk and has become an outspoken advocate for financial and real estate education. He said, “Why would you want
A Brief Query with Robert Kiyosaki
What are you reading right now?
A New Earth by Eckhart Tolle and Can't Hurt Me: Master Your Mind and Defy the Odds by Navy Seal David Goggins.
What is your favorite book you’ve written? Why A Students Work for C Students . I was a terrible student, but I love to learn. I just didn’t want to learn what they were teaching and how they were teaching it. Now, A students work for me!
What do you do for fun? Make money! Life really can be like Monopoly. It’s only a game!
a job and pay taxes? Why would you want to save money when the government is printing money? Why would you save money when interest rates are approaching zero? Why invest in the stock market when it’s rigged against you? I don’t talk about things I do not do. You won’t hear me talk about praying because I don’t do that. I’d rather go look for a deal.” •
less tax I pay and the higher returns I make. I love real estate, but you have to educate yourself. If you’re not going to invest in education, you might as well stay in the stock market. One of the biggest lies we hear is you need money to make money,” Kiyosaki said. He further explained why he prefers to be an “inside investor.”
Be sure to check out the Think Realty Podcast featuring Robert Kiyosaki, which aired in October 2019.
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shed tears. I felt at an all-time low. My wife was having health issues at the time, the gas light shone empty, and we needed diapers for our son. I drove away broken.” When his debit card was declined at the gas station, he scrounged the parking lot for enough change to buy two gallons of gas and used a coupon for free diapers. It was then that chance intervened. A former co-worker was in that same store and invited Chapman to dinner to discuss an opportunity in the mort- gage industry. Chapman was hesi- tant but knew he was good with cus- tomers from his experience at the heavy equipment company, so he took that chance. In 1997, he started as a telemarketer and worked dou- ble jobs for the first year, sleeping only four hours a night. “It was a lot of hell, but I stuck with it. I thought about going back to running heavy equipment because it was easier. But I didn’t want to go backwards,” he said. A lot of prayer, meditation, and
three years later, Chapman was offered a position where, after a lot of work, he ended up running the company’s first satellite branch and building a team of a dozen people. “We were bringing in enormous numbers,” he said. “And, I got cocky.” Then the crash came — 2008. “My biggest personal downfall (being too cocky) came at the same time of the market crash,” Chap- man recalled. But it was a different crash that affected him the most.
On August 8, 2008, Chapman was in a motorcycle accident that forced him to start over, personally and professionally. He lost his memory and was wheelchair-bound. A lack of memory makes it hard to do business, so he adapted. He carried a notepad wherever he went and got good at details. A loss of leg function makes marathon running and mountain climbing, things he had done before the accident, nearly impossible — Nearly.
Aaron Chapman (left) speaks on the Lending Panel at the Think Realty Conference & Expo in Atlanta.
Aaron Chapman Security National Mortgage
FeaturedMember: Aaron Chapman ONCE DOWN BUT NEVER OUT, THIS RESILIENT INVESTOR LOOKS TO ATTAIN WORLD-CLASS IN EVERYTHING.
4 WORTHY READS
Not a reader until 2015, Aaron Chapman said The Goal: A Process of Ongoing Improvement by Eliyahu Goldratt changed his life and started his reading venture. Now, reading is part of his morning routine, which starts before dawn every day. Here are four other influential texts on Chapman’s best books list:
by Kelli White
he phrase “what doesn’t kill you makes you stronger” ap-
loan originators in the nation. His parents co-owned a cattle ranch where Chapman worked during his high school years; then, he gained experience as a welder on oil fields in Wyoming, operated heavy equipment, and eventually returned to working with his dad in mines in northern New Mexico. “That was awesome. It was one of the best jobs I ever had,” he said.
The opportunity was brief, howev- er, as the job shut down and the lesser-experienced Chapman was let go. By that time, though, he had built an impressive resumé, which can often be a downfall. “Overqualified. I heard that word a lot,” Chapman said, recalling his time searching for work. “I even in- terviewed for a $10.00 per hour truck driver position and was shot down. I
plies, literally, to Presidents’ Circle member, real estate investor, and mortgage lender Aaron Chapman. Chapman’s journey thus far has been one of perseverance, adapta- tion, and down-right hard work. A son of a miner, Chapman has worn many hats before be- coming one of the top licensed
Breaking the Habit of Being Yourself by Joe Dispenza
Wisdom of Success by Napoleon Hill
Master Key System by Charles F. Haanel
Outwitting the Devil by Napoleon Hill
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From Serious to Fun with Aaron Chapman
“When you adapt to a problem, it’s not a problem any- more. I didn’t stop working to improve my condition, and I got my memory back. I worked hard and eventually got my body back too.” When he regained enough strength, Chapman was able to climb mountains again. But this time, for a different purpose. He joined the Pinal County Sheriff’s Office rescue unit, saving people in life-threatening situations in the Superstition Mountains in Arizona. “I wanted to use what was available to me to help others,” he said. The accident happened on 8/8/08; yet eight remains Chapman’s lucky number. “Eight was always my lucky number, but it evolved to mean more than luck. I believe my life would have been further devastated had I not had that accident. I was given a divine gift of accelerated education that liter- ally kicked me off the wrong path and threw me down, violently, on a new path. It helped me learn to deal with choices.” Chapman said.
This reverent real estate investor and lender contin- ued building his career in the mortgage and finance industry. Now, he originates more than 700 loans each year and while he has experienced many challenges in his life — and in the market — the challenge of influ- encing people to change their consumer mindset to a business mindset is what excites him the most. And yet, what inspires Chapman — working with people — is the very thing that concerns him. “Humans are the apex predator. This industry is riddled with people who prey on others, who put others at risk. And, that is what concerns me about this industry,” he said. Chapman owns properties in five states, investing in buy-and-hold, rental and commercial properties as well as land and syndications. He offers this advice for newer investors: “Understand what you want your result to be and work backwards to achieve it. Find a good team to work with, analyze every decision with precision, and never think there’s not more to do.” •
who inspire me — like the Presidents’ Circle, or fly-fishing with an investor group.
What is your WHY? Both personal and professional.
In business — if I’m not doing this, someone else is. I can control my motives, but I can’t control the rest of the world. In my personal life — I want to show my kids that no matter how tough or dark it gets, no matter how many open wounds you have, it’s possible to keep moving.” What are your goals for 2020? To build a flawless system. To take a great team to an exceptional business. To drive my brand to where it’s never been.
What is your happy place? My cabin in Missouri. That place is sacred to me.
Do you have a guilty pleasure? I’m not even guilty about it! Hunting. And wheeling in my jeep. I would hunt and disappear in the hills every day if I could.
Favorite food? Steak, as rare as it will go.
What do you do when you’re in a rut? I surround myself with people of influence, people
On the rocks or neat? NO ROCKS. It just ruins it.
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• Have a timeline and give that timeline to the resident.
• Consider offering cleaning services to help a resident get started — services that the resident can accept and under- stands will be deducted from their deposit. • Give a method to ensure a permanent solution to the problem. If these steps cannot be main- tained by the resident, after the reasonable amount of time, you’re on your way to an eviction. Always seek proper legal counsel if you’re considering evicting a hoarder. What starts as a collection of stuff can turn into a serious head- ache for you and those around you. The “collection” could lead from clutter to a dangerous amount of filth, a smell that perforates walls, a bug or pest infestation, or even mold that you won’t be able to find until the resident is out. While they may not be showing much care to the walls around them, you do. Try to show a little care towards your resident and it can go a long way. • • Find out who will remove the trash/treasure.
Hoarding and PropertyManagement
• Person has a need to ‘save’ items, regardless of their value and has difficulty parting with them.
smell, the structural damage, and the pest infestations, but they’re seeing treasure.
HOWCAN YOU DEAL WITH HOARDING? Patience works wonders in a hoarding situation. Because com- pulsive hoarding is in the DSM and protected by the ADA, you have to offer reasonable accommoda- tions. Luckily, the main reasonable accommodation here is something that just requires a bit of empathy and time. In 2010, Rutland Court Owners, Inc., v. Taylor, made it clear that a property manager must give reasonable accommodations to a hoarding resident. In 2005, Douglas v. Kriegsfeld Corporation decided that the prop- erty manager had given enough rea- sonable accommodations (time and aid with cleaning) and could swiftly evict the resident as they pleased. People with hoarding issues have a problem saying goodbye to things. They want to hold on to something they see as precious. You might see the danger, the
WHAT’S THE PROCESS WHEN DEALING WITH HOARDERS? As long as you’re reasonable, you’ve done your job. Reasonable accommodations are generally the way to go, for both you and your residents. You never know how many hoarders you’ll come across, or types of disability and how often. The ideal objective is giving the hoarding resident a reasonable amount of time to literally clean up their act. Document your expect- ed time frame, and why you’re giving them these expectations. Document their lease violations as crowded doorways are a fire hazard and life-threatening in case of emergency. Mold growth and pest infestation can lead to serious (and expensive!) property damage. Be reasonable but firm.
HOW HOARDING AFFECTS YOUR INVESTMENT PROPERTIES AND HOW TO MAKE THE BEST OF IT.
by Nicole Seidner, NARPM ®
oarding is more than a sim- ple, nasty habit, or childlike
tected by the ADA, once you have a hoarding situation with a resident, you must take the long way around to deal with it.
referred to as the DSM, used to help diagnose and define mental disorders) as: • The number of items greatly compromises quality of life. Living areas and their use are impaired, social life and occu- pational life is not functioning. • If there is an area clean of clut- ter, it is due to outward inter- vention from authorities, hired cleaners, or family members. • The perceived hoarding is not because of a different medical condition, such as depression, brain injury, etc.
refusal to let go. Hoarding can lead to a dangerous, unstable home. It’s also protected by the Americans with Disabilities Act as are disorders like PTSD, C-PTSD, depression, and anxiety. Compul- sive hoarding is an issue of mental health, and while it can lead to many physical, structural issues to your rental property, it must be handled with care and empathy. Anyone can suffer from compul- sive hoarding. There is no grand statistic to help you pick a hoarder from any sort of crowd; children as young as thirteen can start hoard- ing. Because this condition is pro-
WHAT IS HOARDING? A hoarder is very different from a collector. With collections, there’s often a process of what is collected, where it goes, and why it’s there. Collectors choose things with a sense of pride and accomplishment, and follow up with displaying their items on shelves, well cared for in their chosen space inside the home. Hoarding Disorder is defined by The Diagnostic and Statistical Man- ual of Mental Disorders (commonly
Nicole Seidner is a property man- agement copywriter with a degree in writing from Savannah College of Art and Design with a focus in creative
nonfiction. Members of the National Association of Residential Property Managers® (NARPM) receive information like this article every month through its news magazine, Residential Resource. To join or learn more, visit NARPM.org/join.
• Have specific expectations — standards of health and hygiene for each place.
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RUN A FINANCE CHECK Before you even start shopping for a lender, you need to run a final check on your finances and fix them if required. This means you should pull your credit report from any of the credit reporting bureaus. If your credit score meets the required standard, then you are good to go! Otherwise, check for errors and fix them as soon as possi- ble. If you fall into the latter category, below are some things you can do to increase your credit score as soon as possible: • Pay off your debt and keep credit card balance low. • Don’t open unnec- essary credit cards and if you have any unused credit card, don’t close them. • Manage your credit card responsibly and check your credit report often to know when you are off track. • Pay your bills on time.
the different loan options available. You can either visit a third-party mortgage advisor or read on your own. Either way, you should learn about different institutions avail- able, their purpose of existence, and the types of loan they offer. Also, check the terms attached to each type of loan and the rates they offer. VISIT THE APPROPRIATE PERSONNEL Visiting an industry expert—a mortgage advisor—in the bank you choose can save you a lot of stress and guide you on your decision. Discuss rates, terms, type of mort- gages, services offered, processes, and other questions you have con- cerning the lending process. Apart from saving you the stress, you should be enlightened and know more about the industry (which can be of use later). Your financial institution’s mortgage advisor should be welcoming and ready to help you secure the loan. COMPARE LENDERS, RATES AND OTHER FEES Now that you’ve done your re- search and know what you need, and what you can get, it’s time to shop around for the best mortgage lender. You may ask friends, family, neighbors and even independent mortgage advisors for recommen- dations. Doing this will not only help you fish out bad options, but it could also help reduce your ex- penses throughout the closing and the course of the loan. However, never settle for a lend- er because a close friend recom- mended them, or you feel they are the best. Get multiple offers and choose the most preferred ones.
Compare their rates, closing costs, origination fees, and other ex- penses. Conversely, getting offers from different lenders could give you negotiating power and greater understanding about the industry.
ASK QUESTIONS AND READ THE FINE PRINT
You’ve now received recommen- dations and offers from different lenders; now it’s time to make the final decision. Narrow your choice to the best lenders, but never stop there. In making your final selec- tion, you need to ask questions. Interact with the lending institution you chose.
• What are the fees associated with the loans?
• What are the requirements to qualify for a loan?
• How do I qualify for preapproval letter?
• How do you communicate with your clients?
Remember, a low offer does not make a lender the best. So, read between lines, ask questions, and follow your gut. •
Before You Buy HOW TO PICK THE BEST BANK FOR YOUR MORTGAGE.
Maylis de Lacoste manages all investor relations and media/communication at Lafayette Lending, which offers fix- and-flip funding solutions nationwide
for single family, multi and new construction properties. Founded in 2016, Lafayette Lending has an experienced teamwith more than 10 years of industry knowledge. They offer the most competi- tive interest rates and origination points, as well as exceptional communication and fast closings. Led by Thibault Adrien, the team has been recognized for excellence in lending by organizations such as Inc. 5000, American Association of Private Lend- ers, and Forbes Real Estate Council.
LEARN THE MORTGAGE LANDSCAPE The financial industry is a very complex field and can be difficult for nonprofessionals to understand the terms. So, after running checks on your credit history, learn more about the mortgage landscape and
by Maylis de Lacoste
fter finding your next preferred project, you need to secure
so. You are in it for the long term — you will have to pay a mortgage for the next 15, 20 or 30 years. So, be careful because your choice today
could determine what will happen in the future. Here are five easy steps you can follow to pick the best finan- cial institution for your investment:
financing. Financing is just as import- ant as buying a property, if not more
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Mobile Homes Make Millionaires
EXPECT EXCESSIVE GROWTH IN MANUFACTURED HOMES OVER THE NEXT FIVE YEARS.
by Chimene Van Gundy, Mobile Home Millions
trend we have discussed numerous times is gaining
marily been based upon consumer confidence, which comes back to a lack of education out there for consumers to realize just how much times have changed. This is where investing in this product is so profitable, there simply aren’t as many investors as there could be. There is increased availability of attractive home loans for site-built homes and this can also hamper the enthusiasm behind manufactured homes. The U.S. holds the greatest share of the revenue generated from manufactured housing sales. Canada holds a less substantial share, as it has seen a decline in overall construction spending recently. Additionally, the slowdown in installation rates precludes a struggle for Canadian growth within the industry and a lagging recovery period through 2024. Alternatively, within the U.S. there are a significant number of manu- facturers of these houses and their service providers who simultane- ously occupy important positions in the global and local markets.
These North American manu- factured housing key players have strategies in place to track market trends, capture niche segments and spot potential new segments. Their teams keep a vigilant eye toward revolutionizing the industry and increasing the footprint of the man- ufactured housing industry, given the chance they need to provide the solution they were made for. The fervor, enthusiasm, and general know-how is there, but the question really is, "Are you ready to invest in a recession-proof market and recession proof your portfolio?" •
not only momentum, but attention. If you have followed Mobile Home Millions at all, you certainly can understand how this surge in accep- tance and appreciation (both finan- cially and publicly) is noteworthy. These prefabricated houses simply are not what they once were and offer far more than other options to would-be homeowners who want to break free from the rent cycle. It is great to see how this method of real estate investing is finally getting the appreciation it deserves. There are a few primary factors propelling the insistence with which these houses are increasing in popularity. One is the aware- ness being brought to the growing homeless population and the utter lack of affordable housing. The other is the material upgrades of- fered in manufactured homes, their locations, and the type of people making them their homes. The naysayers of the manufac- tured housing market have pri-
Chimene Van Gundy is known as the "The Mobile Home Millionaire" and “Queen of Mobile Homes” because she has fixed, flipped, and wholesaled more than 450 units to date all in 4 ½ years and in 11
states. She currently owns 30 mobile home parks. She has taken her business international as well rehabbing mobile homes in Ireland except they are called “Holiday homes”. Chimene is on a mission to preserve the “last frontier of affordable housing for the US” fromWallstreet hedge funds and is currently teaching others how to use these “little boxes that spit out cash” to change their lives and live the life of their dreams through her mobile home millions platform.
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MEMBERSHIP MEANS SOMETHING. Join the oldest national association representing the private lending industry as a viable alternative for borrowing and investing. As a member, you’ll gain prestige through our:
Become The Bank ™ UNDERSTANDING THE NON-PERFORMING NOTE BUSINESS CAN LEAD TO A ROAD OF WEALTH.
CODE OF ETHICS
by Ray Urrutia, Pull the Trigger Enterprises
Where do I start? Whether you are a veteran real estate investor or new in real estate, take a course on non-performing notes. If you do not have a business entity, create one then create a five-year business plan outlining the above. Then start with sourcing an NPN from a local bank. The non-performing note business is a hedge against market trends, and there will always be non-performing notes. Once you build your business over the long term, you will establish a consis- tent income. The non-performing note business is not for everyone just like rehab- bing is also not for everyone. As I have noted, Pull the Trigger teaches 19 disciplines in real estate and how to apply each discipline when it is applicable. The well-rounded real estate investor will win every time. For example, Investor A only understands one model of investing, viewed a property that didn’t fit their model and walked away, but Inves- tor B understands more disciplines,
his article series was designed to provide an understanding
looked at the same property, created the deal, and made money. Each property you view as an investor has many exits. Knowledge is POWER. The nucleus of real estate investing is non-performing notes and Become the Bank™ is the road to wealth. The non-performing note in- dustry is the ability to manage the investing process. It takes time, due diligence, and building rela- tionships. It requires note sources, capital, servicers, attorneys, and a trustworthy team. The imple- mentation of the Model of 10 ™ as discussed in prior articles is the post side of the note purchase, now the ROI begins. • Ray Urrutia, Pull the Trigger Enterprises. Ray Urrutia is the founder President-CEO of Pull the Trigger Enter- prises, Author of Pull the Trigger “Critical Thinking Skills for Real Estate Investors”. He has been in business for 40 plus years, Sales and Marketing, Technology and Networking are his areas of strengths coupledwith problem solving. He has been in Real Estate for the last 20 years, started his own REI.
of the opportunity of “Become the Bank.” The next step in the non-per- forming note process is execution! You have the education, now it’s time to apply what you learned. The surface has just been scratched as there are a lot of details in buying Non-Performing Notes:
JOIN TODAY! AAPLONLINE.COM 913.888.1250
• Sourcing and evaluating
• Creating your individual model of buying
• Determining model to implement once you buy
• Developing strategic plan with consumer
• Selecting a servicer
• Knowing the value you are looking for and area you want to focus on The question you may have is:
NOTE: Ray Urrutia is not a lawyer or accountant.
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you want, but invest where it makes sense.”That could not be a more perfect way of saying it. You hear about great markets in Dallas or Atlanta and might find yourself fortunate enough to live in those areas. You want to flip in this area, but realize institu- tional money dominates these markets —institutional markets that require far lower returns on their investments than you do. To be successful, you are going to need to get out of your com- fort zone and most likely, out of your backyard. • Charles Sells began his career investing in tax liens at the age of 23. Like many of us, he was enticed by the simplicity and profitability often conveyed in pop- ular coaching programs and weekend workshops. However, experience taught him that success required more than a simple snap of the fingers. So, at 26, Charles kicked the pitchmen to the curb and started his own business, helping investors discov- er realistic profits investing in distressed real estate. The model was simple: use his growing knowl- edge, integrity and tenacity to help others grow alongside him, in experience and in profits. One investor at a time, Charles has built a reputable business helping individuals invest passively in everything from tax liens to the ever-so-popular fix-and-flip. Fast-forward 20 years and The PIP Group has transacted hundreds of millions of dollars in distressed real estate investments on behalf of nearly 1,000 investors worldwide. Charles and his team at The PIP Group have taken the stress out of investing in distressed real estate, by enabling investors to have their individual investments re- main in their name and their control, retaining 100% ownership, with Charles and The PIP Group team at the helm to make certain those investments remain profitable.
Flipping Homes in Your Spare Time? IF YOU THINK HOUSE FLIPPING IS PART-TIME WORK, YOU WILL LOSE BEFORE YOU EVEN START.
involved in the very strategy for which they claim expertise. Even more shocking than the exorbitant price tag on many of these pro- grams is the fact that people are actually willing to pay it! I heard an advertisement on the radio the other day and it went something like this: “Using my formula, I can teach you how to flip homes in your spare time.” Anyone believing they can — or should — flip homes in their spare time has already lost money, before they even set foot in that workshop. This is not some hobby you engage in from time to time. Successful- ly flipping houses is a full-time endeavor. My wife, my staff and I commonly pick up a nail gun, or make a trip to pick up windows, or drywall to keep crews on time and on budget. The profit in flipping houses is not in what you do to the property, but rather your acquisition cost and how quickly can you turn it back onto the market for a retail sale.
You not only need to buy right, you also need to have sufficient cash reserves to cover even more than what you think the repairs are going to cost. Those unforeseen repairs might be a surprise cost to most – and a highly unpleasant one at that, but the prepared profes- sional understands they represent an expected expenditure and have accounted for those long before making a purchase. As long as you can accept the fact that nothing in life comes easy and you are not going to do this in your spare time, then there are sub- stantial profits to be made flipping houses in any market cycle. Note: I said, “any market cy- cle,” not any market. My point is there are opportunities in booming times, or recessionary times. My good friend and fellow Think Realty Master Investor winner, Marco Santarelli, has trademarked the perfect term for this business: “live where
by Charles Sells, PIP Group
always say in my presenta- tions that flipping houses is
The examples in this article are the expected, rather than the extreme. At the time of writing this piece, I don’t recall where I obtained the data (I believe the numbers came from the IRS), but in 2018 some 19,000 first-time investors attempted their first flip. Of those, only 13 percent actually made a profit. According to another study in April 2019, 21 percent of those investors made a profit of less than 10 percent, which means that after carry costs such as insurance, tax- es and resale commissions, those
deals likely lost money, too. So why such popularity if so many are losing money? Like any other get-rich-quick scheme, the popularity is in the pitch, rather than the reality. The famous playwright George Bernard Shaw said, “Those who can, do; those who can't, teach.” That statement could not ring any truer than it does in our industry. The number of coaches, gurus, mentors and workshops out there is staggering. And a large num- ber of them aren’t even actively
not as easy, glamorous or rou- tine as today’s “reality” TV shows make it look. The truth is that this increasingly popular investment strategy can be downright scary! I have been involved in buying, rehabbing and reselling homes for 21 years now, long before this strategy had a catchy name like “flipping houses.” So, I have seen and experienced enough to know what is usual to encounter — and what is the exception to the rule.
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