Heartland Investment Partners - January 2020

STARS & STRIPES

HEARTLAND INVESTMENT COMPANIES

JANUARY 2020

DARINGARMAN.COM 319-350-5378

AND HOW YOU CAN HELP MAKE HEARTLAND BETTER MY QUEST FOR CONSTANT SELF-IMPROVEMENT

I like to get a head start on my New Year’s resolutions. While some people wait until Jan. 1 to sit down and take a hard look at the year ahead, I started my research back in November, running the numbers to figure out where Heartland Investment Partners excelled in 2019 and also where we developed weak spots. The holidays are our slow season (people suddenly get more interested in Santa than investments, though I can’t imagine why), so every year I start calculating pretty much as soon as we tidy up the Thanksgiving leftovers. When I’m making my assessment, I always look at three areas: 1. OUR FINANCES This is where I figure out how much money we made this year — both as a company and for our investors — and set next year’s targets accordingly. 2. OUR CUSTOMER SERVICE Here, I ask myself questions like, “Are we providing a great experience for our clients and investors?” Have we improved our service over the course of the year?” And, “Which areas could we continue working on?” 3. MY PERSONAL GROWTH Finally, I try to honestly evaluate where I am in life. I look at everything from my weight, health, fitness, and my relationships with my wife and kids. Then I ask myself, “Can I do better?” In all three categories, no matter how fantastically the year has gone, the answer to the question “Can I do better?” is always “Yes!” Whether the results are good, bad, excellent, or ugly, I always resolve to improve them. A big part of my two-month assessment period involves asking for feedback from my clients and investment partners. If you noticed me asking a few extra questions last time we talked, that’s why! I don’t send out a survey, but I do try to solicit your honest views and recommendations when we get together to talk properties.

“NO MATTER HOW FANTASTICALLY THE YEAR HAS GONE, THE ANSWER TO THE QUESTION ‘CAN I DO BETTER?’ IS ALWAYS ‘YES!’”

In the past, this practice has led to some really valuable insights. For example, I recently had a few investment partners approach me and ask that I make some updates to Heartland’s website so they could see not only the big picture on all of our investments, but also details on each individual property. Their goal was to compare and contrast metrics like occupancy and rent price. When my team and I realized people wanted to dig deeper into each property, we jumped right into making those changes. We want our website to be as user-friendly as possible, and we’ll never get there without feedback from you, the users! Speaking of feedback, if you have thoughts on how we can improve our service, I’d love to hear them. You can reach me with suggestions or advice at darin.garman@gmail.com or by calling 319-350-5378. Who knows, your suggestions could become my resolutions! –Darin Garman

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SOCIAL SECURITY IN 2020

KNOWWHAT’S CHANGING

TAXES How much your benefits are taxed depends on your household income levels. For example, 50% of your benefits will be taxed if you make between $25,000–$34,000 individually or $32,000–$44,000 for married couples. If you’re above that income bracket, then 85% of your benefits will be taxable.

HAPPENINGS AT HEARTLAND If you’re in the appropriate age bracket, Social Security may play a major role in your finances. So, it’s important to know how Social Security will be changing in 2020. TRUST FUND Unless Congress takes some drastic actions in the coming months, the current excess trust fund revenue will be depleted by the year 2034. If that happens, Social Security will only be able to pay 79% of the promised benefits from ongoing payroll taxes. You may need to think about what your financial plan would be like with 21% less income. RETIREMENT AGE If you haven’t reached retirement yet, this one is important to consider. If you were born after 1959, the full retirement age is now 67 for you. You’ll still be able to start taking some benefits at age 62, but they’ll be at reduced monthly payments. COST OF LIVING Low inflation means that Social Security benefits will only see a minor cost of living increase. This year, it’s expected to be around 1.6%. It’s not major, but if you’re living off Social Security alone, every penny is important. MAXIMUM BENEFITS Those near the top of the Social Security income scale in 2019 will see an increase in their maximum payout in 2020. The maximum payout for an individual will be capped at $2,861 per month. That translates to $34,332 per year, so consider how that may impact your finances. If you’re considering investing in the heartland, now’s the time to jump into the game. We’ve seen high activity across all property categories in recent months, but two categories stand out as particularly desirable, commanding more investor interest and higher prices: small 4–6-unit apartment complexes, and large complexes of 70 units or more. Our team saw consistently high sale prices for small 4–6-unit apartments in 2019 — in some cases, they were record-breaking! We attribute the price jump to low interest rates, a large influx of owner-occupants, and the flexible financing terms offered by local banks and credit unions. In most cases, these properties sell even before they hit the market . The same is true of large 70-plus-unit complexes, which aren’t staying on the market long if they make it there at all. The investor demand for these properties is fueled by low interest rates, companies aiming to complete their acquisition targets by the end of the fourth quarter, and out-of-state investors finding the heartland an attractive place to own predictable, competitively priced apartment communities that outstrip the offerings in more urban locations.

INVESTOR DEMAND PEAKS FOR APARTMENTS ACROSS SIZE SPECTRUM

range as well. Just recently, we sold two apartment complexes (one 63 units and the other 42 units) before they made it to the market. Still, overall, properties in this size range are taking a bit longer to sell than their smaller and larger counterparts. Looking forward to 2020, Darin sees demand in all of these categories following the same upward trajectory, which means if you’re a property owner considering selling, 2020 might just be the perfect time to get the price you deserve. To keep up with the market and get the

THIS 4 UNIT RECENTLY WENT UNDER CONTRACT AT A RECORD PRICE!

THIS 300+ UNIT PROPERTY RECENTLY SOLD FOR $60,000+ PER UNIT WITH MULTIPLE BUYERS COMPETING TO PURCHASE.

first bite at opportunities to invest or own multifamily properties in 2020, email him today at darin.garman@gmail.com and ask for a spot on our Priority Investor List.

Does this mean the desirability of apartment communities with 10–60 units is dead or slow? Hardly. In fact, we’re seeing vigorous activity in that

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SUDOKU

EAGLES, EAGLES, AND EAGLES, OH MY! I WA LIFE

IOWANS SPEND JANUARY CELEBRATING THE BALD EAGLE

Though you might not immediately associate bald eagles with Iowa, in the winter months the majestic birds fill the Hawkeye state. According to Travel Iowa, the local bald eagle population soars from 500 to 3,000 birds every year in mid-December as they wing their way south from Canada, Wisconsin, and Minnesota to hunt. There’s nothing quite like seeing a group of bald eagles clustered in a tree or gliding overhead (Darin and his wife once saw a group of eight eagles sharing one tree and have counted as many as 14 flying by on a single road trip!), so it’s no surprise that Iowans have embraced the bald eagle migration with enthusiasm. Years ago, festivals dedicated to the birds started popping up along the Mississippi, drawing in crowds of locals and tourists alike. January kicks off a spate of eagle events, including the Clinton Bald Eagle Watch, Quad Cities Bald Eagle Days, Keokuk Bald Eagle Appreciation Days, Eagles & Ivories Ragtime Weekend in Muscatine, and Bald Eagle Appreciation Days at Effigy Mounds National Monument. The events include teams of naturalists sharing fun bald eagle facts, free spotting scopes, live bird shows, ragtime concerts timed with eagle viewing, and much more. If you can’t make it to one of those fantastic eagle-focused events, Bellevue, Iowa, is a great spot to visit to see eagles anytime between December and March. The town became a hub of eagle activity thanks to a dam that stops up the Mississippi River, creating a perfect watery hunting ground. On any given winter weekend, visitors can see people standing near the water with binoculars held to their eyes, watching the birds. Of course, Iowa isn’t the only state that’s home to bald eagles. The birds can be found in every U.S. state except Hawaii, and odds are you’ve seen one yourself! If you regularly see bald eagles and have photographs to share, we’d love to see them. Send your snapshots to darin. garman@gmail.com, and we’ll print our favorite in next month’s newsletter!

APARTMENT SALES AND SUCCESS

32 UNITS – INVESTMENT MADE!

4 UNITS—2 BDM FOR SALE NOW!!

9 - 24 UNITS FOR SALE DOWNTOWN CEDAR RAPIDS

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

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HEARTLAND INVESTMENT COMPANIES Darin Garman: Heartland’s Most Trusted Multi-Family Investment Advisor 2505 Silver Oak Trail Marion, IA 52302 DarinGarman.com 319-350-5378

PRST STD US POSTAGE PAID BOISE, ID PERMIT 411

INSIDE

Page 1 What Can We Do to Improve Your Experience?

Page 2 Changes to Social Security in 2020 A Look at the Hottest Apartment Sizes on the Market Page 3 Eagles, Eagles, and Eagles, Oh My!

Page 4 Are New Year’s Resolutions a Waste of Time?

AND SET ALTERNATIVE GOALS FOR THE NEW YEAR THROW AWAY YOUR RESOLUTIONS At the start of each new year, about half of all Americans set at least one New Year’s resolution, a promise to themselves that they will thrive in the coming year. Unfortunately, research from YouGov Omnibus, an international market research firm, found that only 1 in 5 Americans stuck to their resolutions. The fallibility of New Year’s resolutions is why few successful CEOs or leaders bother making them. Around this time of year, plenty of articles pop up with hot takes like, “Don’t set New Year’s resolutions; make goals instead!” Unfortunately, if you haven’t been making goals already, you’ve likely been setting yourself up for failure. Setting goals, achieving them, and making new ones should be a habit all year long, not just something you do on Jan. 1. The start of a new year is still a great time to reflect and strategize, but rather than fall on an old cliche, take a page from two of the most successful people in business. For decades, entrepreneur and best-selling author Tim Ferriss made New Year’s resolutions every year. Then, he developed a better strategy. “I have found ‘past year reviews’ (PYR) more informed, valuable, and actionable than half-blindly looking forward with broad resolutions,” Ferriss said in a 2018 blog post. At the start of each year, Ferriss spends an hour going through his calendar from the past 12 months and making a note of every person, activity, or commitment that sparked the strongest emotions, both positive and REFLECT ON 2019 WITH TIM FERRISS.

negative. The most positive events get rescheduled immediately for the new year. Meanwhile, the negative ones get put on a “Not-To-Do List” and hung up where Ferriss can see them. PICK A WORD OF THE YEAR WITH MELINDA GATES. “I do believe in starting the new year with new resolve,” says Melinda Gates, co-founder of the Bill & Melinda Gates Foundation, “but instead of adopting a resolution, I choose a word of the year — a word that encapsulates my aspirations for the 12 months ahead.” Gates says that words like “spacious” or “grace” have helped her center herself and serve as a reminder about what she really wants to focus on. In 2019, Gates chose the word “shine,” stating that, “It’s a reminder for all of us to turn on the lights inside of us, lift each other up, and shine together.”

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