DESIGN
Bring the Party to the Island
OPERATIONS
Cut Taxes With Short-Term Rentals
FUNDING
Big Builds Mean More Scrutiny
INVESTOR REVIEW
Distressed Inventory Outpaces Buyers WITH MORE AUCTION VOLUME TO (FINALLY) CHOOSE FROM, WHY ARE SOME BUYERS TAPPING THE BRAKES?
SEP-OCT 2025 $ 5 .95 US :: $ 6 .95 CAN
Resident Expert Workshops + Virtual Roundtables + Interviews + Event Tickets + Event Replays Your Community Spotlight + Think Realty Magazine + Ad Discounts + Savings Program Podcasts + Webinars + REI Articles + Resident Expert Video Courses + Templates + eBooks Calculators + Checklists + Glossaries + Design Guides + Industry Newsletters Everything a savvy real estate investor needs. Now in Think Realty +
thinkrealty.com/join/plus
SUBSCRIBE NOW
2 | think realty magazine :: september - october 2025
PUBLISHER & CEO Eddie Wilson MANAGING EDITOR Carmen Fields
FULFILLMENT COORDINATOR Blair Pierce
DESIGNER Kat Hungerford
CONTRIBUTORS Brian Augsberger Daren Blomquist Aaron Chapman Cornerstone Licensing Services CV3 Financial Services Dominion Financial Services Sean Graham
Tom Hallock Taylor Miller
HEY! LET’S BE FRIENDS! GET SOCIAL. STAY CONNECTED. Like, Follow & Share for the Latest Real Estate News, Trends and Insights from Think Realty 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.
Real Property Management Gaylene Rogers Lonergan Jeff Roth Jim Tannehill Michele Van Der Veen
SUBSCRIPTIONS :: The annual subscription for Think Realty Magazine is $39.99 in the U.S. Order online at www.Think- Realty.com or call 816-398-4130. Provide your full name, address and telephone number. DISCLAIMER :: Think Realty Magazine, its owners, con- tractors, 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 :: Think Realty Magazine is a publication of Affinity Real Estate Media LLC. Reproduc- tion or use of any editorial or graphic, without permission, is prohibited. We are not responsible for the content of any paid advertisements. For reprint rights; to obtain a detailed state- ment of our privacy policy; and for all single-copy requests, address changes and other subscription inquiries:
CHECK OUT OUR SOCIAL MEDIA AND CONNECT WITH US - AND OTHER INVESTORS - TODAY!
Think Realty 1118 N Conistor Ln Ste B Box 509 Liberty, MO 64048 816-398-4130 ThinkRealty.com Copyright ©2025 Think Realty
@WETHINKREALTY
thinkrealty.com | 3
NOV. 10-11 2025 | LAS VEGAS
2 DAYS 50+ SPEAKERS 70+ VENDORS 800+ ATTENDEES
Join us for the 16 th year as we bring together owner- operators, executives, and decision-makers for the industry’s premier education and networking conference. AAPL Certification Courses | VIP Nightclub Reception Networking Breakfasts | 15+ Sessions & Panels Private Lender Roundtables | Packed Vendor Hall Networking Reception | After Party
AAPLCONFERENCE.COM
4 | think realty magazine :: september - october 2025
Letter From The Editor
Move With the Market A s we move into the second half of 2025, the real estate investing landscape is evolving and accelerating in ways that demand our attention. Market conditions are being shaped by three converging forces: persistent interest rate volatility, shifting migration patterns, and rapid advances in technology that are rewriting the rules of property analysis and deal-making. Sound familiar? Some of these forces are becoming what appear to be a norm, stressing the importance of utilizing resources at the ready to assist in making sound investing decisions. Investors are finding opportunities in places that were once overlooked—secondary and tertiary markets where affordability, infrastructure growth, and quality of life are driving demand. At the same time, emerging asset classes like build-to-rent communities, mixed-use redevelopments, and sustainable housing are attracting capital as investors seek both resilience and long-term appreciation. Pay special attention to foreclosure trends and be sure to read our cover story on page 32 to gain insight into how these trends are potential opportunities for investors and lenders. Technology is no longer just a tool—it’s becoming the competitive edge. As I have mentioned before, if you are not incorporating it into your business and decision-making practices, you are getting left behind. AI-driven market modeling, predictive analytics, and blockchain-driven systems are eliminating transaction bottlenecks, improving accuracy, and opening the door to more creative capital strategies. Who doesn’t want faster access to funding or more efficient deal processes? Investors who win in this environment will be the ones who balance these innovations with time-tested fundamentals. The second half of the year will be defined by adaptability. As always, there is money to be made in any cycle of real estate. Whether you’re diversifying into new markets, restructuring your financing, or integrating new tools into your workflow, the key is to stay nimble, informed, and ready to move when opportunity knocks. Follow industry trends, not just in your backyard, but in other areas to see what could potentially be on the horizon. Here’s to navigating the months ahead with clarity, confidence, and an eye toward sustainable growth. To your investing!
CARMEN FIELDS MANAGING EDITOR
thinkrealty.com | 5
Inside This Issue
FEATURE PAGE 32 Distressed Inventory Outpaces Buyers WITH MORE AUCTION VOLUME TO (FINALLY) CHOOSE FROM, WHY ARE SOME BUYERS TAPPING THE BRAKES?
DAREN BLOMQUIST
6 | think realty magazine :: september - october 2025
C O N T E N T S
DESIGN
MARKET TRENDS There Are No Market Gurus Anyone selling you certainty is selling you something else too. Aaron Chapman PAGE 38
PAGE 60
Bring the Party to the Island Kitchens are the heart of a home for both design and function. Even in small spaces, this centerpiece should meet all needs. Michele Van Der Veen PAGE 8 Win Tenants Before They Walk In From solar lights to fenced yards, these smart exterior upgrades can make renters fall in love right from the curb. Real Property Management PAGE 14
INVESTOR REVIEW
We’re Chips All In Meet the Private Lender Invested in Your Success CV3 Financial Services PAGE 39
PAGE 28
OPERATIONS
Big Builds Mean More Scrutiny Lenders are still writing checks, but only for projects that pass today’s tougher tests. Taylor Miller PAGE 44 Skip the Down Payment to Flip Faster Rehab Financial Group covers 100% of purchase and rehab costs so you can scale your portfolio without draining your cash. Brian Augsberger PAGE 46
Cut Taxes With Short-Term Rentals Don’t forget to account for these savings when determining your ROI for different holding strategies. Jeff Roth PAGE 18 Find Your Next Deal for Far Below Market Value Foreclosure properties offer larger margins, but be mindful of the risks. Gaylene Rogers Lonergan PAGE 24 Market Shifts Mean Momentum Turn uncertainty into advantage with the right systems. Jim Tannehill PAGE 26
Are You Really Exempt? Licensing mistakes can sink you fast. Cornerstone Licensing Services PAGE 50
PAGE 38
Refi or Ride It Out? DSCR rates may be about to
move in your favor. Dominion Financial Services PAGE 56
100% Bonus Depreciation Is Here to Stay Congress just made a massive tax break permanent. Sean Graham PAGE 28
Renters Rush in as BTR Homes Beat Buying
With affordability fading and mobility prized, more Americans are renting homes they once aspired to own. Tom Hallock
PAGE 60
thinkrealty.com | 7
Design
Bring the Party to the Island KITCHENS ARE THE HEART OF A HOME FOR BOTH DESIGN AND FUNCTION. EVEN IN SMALL SPACES, THIS CENTERPIECE SHOULD MEET ALL NEEDS.
MICHELE VAN DER VEEN
8 | think realty magazine :: september - october 2025
New kitchens were designed with class, elegance, and function—right in the heart of the home—transforming the kitchen island from something that was associated with “dirty work” into something that is beautiful and inviting.”
K itchens are the gathering place of the home. It’s no wonder, then, that kitchen islands have become the “must have” for most homebuyers. Although kitchens are still a place where work takes place, they have become the “social hub” of the house, a place where homeowners want to enjoy time with family and friends. Kitchen islands undoubtedly provide more workspace and storage at the same time they function as an extra serving area. Not all kitchens can accommodate a full- size kitchen island, but there are at least a dozen island styles in various sizes that enhance the way kitchen space is used. A HISTORY LESSSON Before we delve into the styles available, let’s step back for a moment and consider how kitchens were 100 years ago. They were hidden in the back of the house, away from the parlor and dining room
where guests entered the home. Kitchens back then had firewood stoves that also doubled as a furnace for heating. They were dark, loud, and smelly rooms. The countertops were covered with dirty pots, pans, and dishes because that’s where all the preparation work was performed. You ask, “Did they have kitchen islands back then?”
The answer is yes!
A hundred years ago, kitchen islands were just long wooden tables where mostly servants worked while preparing food. People back then were not just hanging around the kitchen with a glass of wine in their hand, as they do today. There were no gas stoves, no dishwashers, no modern appliances. Help, or servants, did most of the cooking, at least in the bigger homes. That is until about the 1930s when a gentleman by the name of Frank Lloyd Wright came along.
thinkrealty.com | 9
Frank Lloyd Wright’s initial goal was to design homes that could run without live-in help. He wanted to gear these homes more to the middle class. Wright designed his houses with a more open floor plan, which allowed the living and dining areas to flow into one another. This entirely pushed the kitchen to the forefront of the home, making it where whoever was cooking could be a part of all the action in the home. This is where the “kitchen island” first came into play in home design. Gone were the days when a long, dirty, wooden table sufficed for food prep. New kitchens were designed with class, elegance, and function—right in the heart of the home—transforming the kitchen island from something that was associated with “dirty work” into something that is beautiful and inviting. Fast forward to today, where kitchens are the place in the home where everyone wants to gather while the cook does their thing. It’s where the kids want to eat a snack while doing their homework. It’s where people want to enjoy their morning coffee or have a midnight snack. It is where every party seems to start these days—with a spread of appetizers on the kitchen island. KITCHEN ISLAND STYLES With at least a dozen styles of kitchen islands to choose from, one is sure to suit your design. WORKTABLE KITCHEN ISLANDS. If large kitchen islands look like a no-go for your next project, think about using a worktable. Worktables take you back in time to older style kitchens. But a worktable can be a good choice if your kitchen does not have the square footage to add a full-blown kitchen island. It
10 | think realty magazine :: september - october 2025
in the right part of the kitchen where more surface is needed for a particular task. These islands have a farmhouse or industrial look to them and are often made from wood. TWO-TIERED KITCHEN ISLANDS. These islands are very European-looking and can give any kitchen a sophisticated look. These islands, often made from iron or steel, usually have a marble top along with a lower shelf.
will add a lot of charm and character to a smaller kitchen. Kitchen carts often offer not only a work surface but also extra storage. Again, adding a couple of bar stools to it will allow family and friends to gather in the kitchen. FLOATING KITCHEN ISLAND. These islands are also on the smaller side, allowing them to be moved around the room. Because they are mobile, they provide more work surface
should be at least taller, say countertop height, to make it functional. A worktable will have a smaller footprint, which will better suit a smaller kitchen. And by adding a couple of bar stools, you’ll achieve what a modern kitchen island is all about—which is functioning as the social hub for the home. KITCHEN CARTS. Another fun way to create a kitchen island is to use a kitchen cart with wheels. It is functional and
thinkrealty.com | 11
BAR-STYLE KITCHEN ISLANDS. The biggest benefit you’ll get from this style of island is the leg room under the countertop. This is for homes where more dining room area is needed for eating in. ROUND KITCHEN ISLANDS. If you’re looking for a softer, more feminine design for a kitchen, try a rounded kitchen island. Unique to say the least, these kitchens will wow any buyer. They are great for traffic flow in instances where getting around the island may be an issue. This option is perhaps the most expensive because it will require expensive stone cutting for the countertop slab. DOUBLE KITCHEN ISLANDS. For that ultimate kitchen, where more is better, go with a double island. When your buyer was born to cook, designing a kitchen around two islands is the ultimate design. Talk about a wow factor! Double islands allow for two dishwashers, two sinks, loads of workspace and tons of storage. WATERFALL KITCHEN ISLANDS. Waterfall style islands are often found in more expensive high-end kitchens. They provide a sleeker feel, making them a good choice for a modern look. They are also more expensive because more stone is needed to create the overall look. Without a doubt, kitchen islands are the way to go in any new kitchen design. They add so much to the overall workspace and storage and offer a great look to any new kitchen. Today, most buyers expect some kind of island in kitchens. Thanks to the help of some gifted architects, the kitchen space has been transformed from simply a functional space to a place of beauty as well.
Finding the perfect style and size island is sure to enhance your next project. Adding a kitchen island could be the one thing needed to inspire and encourage more buyers to take a harder look at your project for their next home. Any kitchen project that focuses on creating a social hub feel that is welcoming and inviting is sure to wow any homebuyer.
GALLEY KITCHEN ISLANDS. Not really known for having a large amount of surface on which to work, galley kitchens can benefit from the addition of an island. A galley kitchen is long, and it can get tiresome for someone to have to walk back and forth the length of the kitchen during the preparation of food. Adding an island to this style of kitchen cuts most of the walking and reins in the length of the workspace. DOUBLE-TIERED KITCHEN ISLAND. You have to love a kitchen island that feels like a bar. These islands are great if you are trying to capitalize on using the kitchen to create a social hub. Just looking at an island like this makes you want to pull up a bar stool and sit down to have a chat with the cook. Plus, the raised tier hides where work is being done, allowing you to walk away from your mess to entertain without feeling like everyone can see it. FULLY FUNCTIONAL KITCHEN ISLAND. This is the island for you if you think bigger is better. A fully functional island is for larger homes where you really need to make a statement. These islands always give any kitchen a wow factor. They also exude a more designer and expensive feel. Yes, they do cost the most of the kitchen islands discussed! KITCHEN CABINET ISLANDS. Maybe the most common kitchen islands are designed out of kitchen cabinets. These both satisfy the need for more storage and the need for more workspace. This option can often cost less for the size you’re getting since you can build it out of ready-made cabinets.
MICHELE VAN DER VEEN
Michele Van Der Veen is the host of Good Day segments, including Flip It, Decorate Like a Designer, and Stage to Sell. She started her career in real estate investment more than 30 years ago. A published author, Van Der Veen has been recognized and featured in international magazines for her unique approach to interior design. Acquiring a formal education from the Interior Designers Institute of California, her experience stems from building custom homes to flipping more than 100 homes and working in commercial real estate development alongside her father at a young age. Not afraid to push the limit on her designs and investments, Van Der Veen will often be heard reassuring her team about her decisions by saying “Don’t worry, we are the comps!”
For more on Van Der Veen’s work or to contact her, visit iHeartHomescorp.com.
12 | think realty magazine :: september - october 2025
100% Acquisition 100% Rehab No Appraisal Option for no upfront points Close in as little as 48 hours Available Nationwide For Fix & Flip Loans DOMINION FINANCIAL 100% FINANCING Now Offering:
Call (410) 883-8493 To Get Pre-Approved
Scan For More Information
Holding? Check out our Long-Term Rental Loans with a DSCR Price-Beat Guarantee.
thinkrealty.com | 13
Dominion Financial Services, LLC | NMLS# 898795 | 32 South St, Baltimore, MD 21202 | DominionFinancialServices.com
Design
SPONSORED CONTENT Win Tenants Before They Walk In FROM SOLAR LIGHTS TO FENCED YARDS, THESE SMART EXTERIOR UPGRADES CAN MAKE RENTERS FALL IN LOVE RIGHT FROM THE CURB.
REAL PROPERTY MANAGEMENT
W hen it comes to attracting high-quality tenants, first impressions are everything. Your marketing plays a big part in these impressions, but the place it really starts is with your rental property’s exterior. An inviting property exterior doesn’t just look nice; it tells potential renters
CLEAN LANDSCAPING It may sound basic, but a clean, attractive yard is one of the easiest ways to boost curb appeal. In fact, you don’t even need professional landscaping to ensure your property’s yard is making a big impact. All you really need are some thoughtful landscaping choices. For example, a neatly trimmed lawn, tidy flower beds, and pruned bushes
you own a single-family home or a multiunit building, investing in key exterior features can help increase rental applications and increase your rental’s value.
Of course, not all property upgrades offer the same payoff. To maximize your investment, here are our top exterior upgrades to make your property more attractive to quality renters.
you care about your property as well as their comfort. So, whether
14 | think realty magazine :: september - october 2025
go a long way toward making your property feel cared for and inviting. To make your life easier, consider low-maintenance options like mulch beds, native plants, and drought- tolerant shrubs. They look great, and they’re also easy for tenants to care for. That is something today’s renters really appreciate. OUTDOOR LIGHTING: STYLE MEETS SECURITY As a rule, good exterior lighting serves two essential purposes: safety and enhanced appeal. On the safety side of things, strategically placed lights around your property’s exterior can illuminate walkways, entryways, and patios for enhanced security. The right placement of exterior lighting can also attract renters by showcasing the beauty of your property at night. When adding outdoor lighting, focus on smart, energy-efficient options. Solar path lights, motion-sensor flood lights, and stylish porch sconces are all good choices for a rental property. These options can help you reduce energy costs while still reaping the benefits good lighting has to offer. PRIVATE OUTDOOR SPACES One of the key features today’s renters look for in a rental home is outdoor space where they can relax and entertain. Remote workers may value a change of scenery, and families and pet owners tend to value safe, enclosed outdoor spaces. Whether it’s a fenced backyard, cozy patio, or even a small balcony, a lovely private outdoor area adds major appeal
to any rental property. If space is limited, consider making small upgrades. Even elements like a small seating area or planter boxes on a porch or balcony can make your rental feel more like home.
storage solutions to your renters can justify charging a higher rental price.
PET-FRIENDLY FEATURES Pet ownership among renters is on the rise. In fact, a recent survey reported as many as 90% of renters have at least one pet. Given this statistic, it makes sense that many renters are looking for homes that accommodate their furry friends. To attract this demographic, consider adding or highlighting features that would appeal to pet owners, such as a fenced yard, pet waste stations, or nearby parks that would be great for daily walks. Pet-friendly properties tend to attract more applicants and often secure longer-term tenants, so adding these touches can be a smart move. SMALL CHANGES, BIG RETURNS Boosting your property’s curb appeal doesn’t have to mean a full (and costly) renovation. Simple, strategic improvements to your property’s exteriors can dramatically increase the property’s appeal and help you attract and retain quality tenants. Want help choosing the best exterior upgrades for your rental property? Contact your local Real Property Management office today! Our experts can help you pinpoint what tenants in your area are looking for and help you make smart, cost-effective improvements.
UPDATED EXTERIOR PAINT AND SIDING
Turning our focus to the home itself, never underestimate the power of a fresh coat of exterior paint. A neatly maintained exterior with clean siding (or stucco, if you’re in the Southwest) signals to renters that the property is cared for and up to date. It’s not just about aesthetic appeal (although that is important, too!). Maintaining paint and siding helps protect your property’s structure from weather and wear, making regular maintenance a win-win investment. For best results, choose neutral or modern colors that appeal to a broad range of renters. PARKING AND STORAGE Another key concern for many renters is whether they can safely park a vehicle on or near the property. If your rental property doesn’t already have an attached driveway or garage, consider other ways to add the convenience of secure parking. For example, providing options like off-street parking, a carport, or a nearby garage can be a major advantage, especially in suburban and urban markets where space is limited. Similarly, extra outdoor storage is more than convenience—it could make your property really stand out. Even simple options like a shed or bike rack could be the difference for a renter. Another key benefit is that offering parking and
thinkrealty.com | 15
The real estate market is ever evolving. Many of us witnessed the fix and flip market boom with 50%+ profit peaks. While fix and flips still return a decent profit, many investors are finding it difficult to pencil out a deal that makes sense. As inventory remains competitive and acquisition prices continue to rise, investors are shifting into Ground Up Construction—but that doesn’t come without it’s own set of complexities... For builders, a successful project is one completed on time and within budget, but that is no easy feat these days. There is a magnitude of overruns with large projects often surpassing their budgets and experiencing schedule delays – pushing budgets up and timelines back. So, what do you do when your construction project doesn’t go according to plan? Let’s dive into your financing options that can help get you back on track and over that finish line. GETTING YOUR CONSTRUCTION PROJECT ACROSS THE FINISH LINE
While that used to be a more common option, the construction lending landscape has shifted significantly. Those that do still operate in this space have tightened their rules. Most of them no longer offer construction loan extensions and those that do charge hefty fees. For a builder or developer operating within already tight margins, these fees can throw the entire project into jeopardy. For example, a mere 1% extension fee on a $3 million construction loan would cost you $30,000 out of pocket. A CONSTRUCTION COMPLETION LOAN: THE SUPERIOR SOLUTION A construction completion loan is, in essence, a rate-and-term refinance based on the higher appraised value and can include a construction credit line for builders who need more funds. In addition to that, any loan costs associated with the refinance can be rolled into your new loan, so you’re not paying any costs out of pocket, helping your overall liquidity. This provides developers/builders with three valuable outcomes: 1. The ability to pay off a maturing construction loan. 2. More time to complete construction and sell the property without sacrificing quality. 3. The ability to use the funds from a construction credit line to see the remainder of the project through.
THE BASICS: WHAT ARE CONSTRUCTION LOANS?
Construction loans are short-term, interest- only loans that fund the building of a home. Whether it’s a tear-down or ground-up project, many lenders offer short-term construction loans, often at a high rate due to the increased risk. Since these loans tend to have shorter terms, typically for a period of 12 to 18 months, developers have very little wiggle room for unexpected issues or delays during the building process. Time and costs are the two essential components of every ground-up construction project that are always interrelated. The right financing solution can make all the difference in getting your construction over the finish line without sacrificing quality and/or profits. If your loan is reaching maturity and/or you’re going over budget, here are a couple of different routes developers take: 1. Rush to complete the project on time and compromise on quality. 2. Request an extension (for a fee), but not all lenders allow it. 3. Refinance to pay off the loan, extend loan terms, and get more funds to complete the project. THE LENDER EXTENSION TRAP You may be thinking: “Can’t I just extend the loan if it runs over the timeline?”
WHO IS ELIGIBLE FOR A COMPLETION LOAN? When structuring financing for mid-construction properties, lenders need to determine borrower qualifications and project viability. You must have a good credit rating, a satisfactory level of experience in new builds, and a property at the mid-construction stage. Lenders that offer construction completion loans will consider projects that are roughly 75% complete and satisfy three main criteria: 1. Weathertight: Foundation, framing, roof, doors, windows installed, and siding complete. 2. Systems Ready: Rough plumbing, electrical and HVAC complete. 3. Clean Slate: No mechanic’s liens present. FINDING THE RIGHT LENDER FOR CONSTRUCTION COMPLETION FINANCING It’s important to do your research, as not all lenders offer construction completion financing. Your goal is to find a lender experienced in construction loans because they understand the complexities of these types of projects. This financing solution is a great tool for builders who are approaching the finish line on one of their builds—giving them more time and capital to complete their projects and collect their profit instead of being dragged down by cost overruns or fees from their maturing loan. At CV3 Financial, we understand your needs, whether you are building a rental, flipping a home, or looking to consolidate your portfolio into a single loan. CV3’s Construction Completion Financing is here to help you get your project across the finish line!
(844) 721-3733 | www.CV3financial.com/think-realty
NMLS ID #2478266. For more licensing information visit https://nmlsconsumeraccess.org. Loans made or arranged pursuant to California Finance Lenders Law License 60DBO-183355. AZ Mortgage Banker License #1047792, FL Mortgage Banker License #MLD2457, Idaho MBL-2082478266, MN license #MN-MO-2478266, NV Mortgage Company License #5858, OR Mortgage License #2478266, UT Mortgage Entity License #13576219, VT CLL – 2478266. This is not a commitment to lend. All offers of credit are subject to due diligence, underwriting and approval. Not all borrowers will qualify and not all borrowers that qualify will receive the lowest rate or best terms. Actual rates and terms depend on a variety of factors and restrictions may apply. CV3 Financial Services, LLC reserves the right to amend rates and guidelines without notice.
Operations
SPONSORED CONTENT Cut Taxes With Short-Term Rentals DON’T FORGET TO ACCOUNT FOR THESE SAVINGS WHEN DETERMINING YOUR ROI FOR DIFFERENT HOLDING STRATEGIES.
JEFF ROTH
I t is difficult to find deals that markets are saturated with rentals, which puts downward pressure on occupancy and rents, forcing property owners and managers to offer incentives to attract tenants. This situation even cashflow or offer a decent ROI in many markets. In addition, some
affects some short-term rental (STR) markets. An investor must be educated and work with an experienced team to navigate these changing markets. One solution is to look out-of-state for opportunities. For example, Michigan, where we serve clients, has many markets that offer cash flow, rent growth,
and appreciation. And Michigan has many inland lakes and the longest freshwater coastline of any state. Only California has more registered boats than Michigan. It is a domestically popular travel destination and attracts many international travelers as well. Given this, Michigan is a strong market
18 | think realty magazine :: september - october 2025
The avoidance of taxes is the only intellectual pursuit that still carries any reward.” —John Maynard Keynes
to partner with a statewide short- term rental management company. This company manages properties in the markets where our clients are looking and can validate, in real time, what they’re experiencing with the properties they manage as well as the current regulatory environment. In general, you want a property on water, near other draws like a downtown area, hospital, business center, trails, nature areas, beaches, and all-season sports and festivals. Larger properties also do better because extended families can stay together. Pools, hot tubs, and gaming areas also add to property demand and occupancy. When we are considering a property, our short-term rental property manager can tell us if they like the property, if the market is saturated with other STRs, the average daily rate, the average occupancy rate, average monthly and yearly revenue, how to add value and revenue, and insight into the regulatory environment, if any.
These tax breaks are important to anyone with a job or business, especially high-income earners.
BEST USE OF A PROPERTY It is hard to beat the returns short-term rentals provide in a healthy short-term rental market. A student rental or group home might come close, depending on the area. In Ann Arbor, Michigan, for example, some investment properties use both student and short-term rentals to achieve cash flow in what is traditionally a tough market to achieve cash flow with a long-term rental. It is important to note that not all short-term rentals are profitable. You must have the right team to identify a profitable location and property, avoid regulatory issues and stay compliant, and use a property manager that maximizes revenue, occupancy, and property value. FIND WINNERS Tools like AirDNA can help you analyze a property and market, but we like
for short-term rentals near the coasts and on many of the inland lakes, and in college towns and city centers. Short-term rentals provide more cash flow than long-term rentals, and they offer something else that long-term rentals can’t: a reduction in W-2 or active income taxes.
thinkrealty.com | 19
BUY WELL Once we have identified a property in a market that looks favorable for STRs, we then have to do our due diligence. Our goal is to provide multiples in value to our client through the price and terms we negotiate, the team, and the level of experience and services we provide compared to our compensation. Basically, our goal is five to 10 times the value we provide compared to our compensation. The first order of business is to research fair market value looking at recent sold comparable sales and comparing that to the asking price. We want to see the asking price is at or below fair market value. Starting with an asking price that is too high makes it difficult for our buyers to get a good deal, and it may be better to find a more reasonable or motivated seller. We do not advise our clients to engage in multiple offer situations; someone will lose because they will make an emotional decision. Instead, our initial offer is always below asking price and below market value. The goal is to find a motivated seller. To do this, you make a verbal offer to gauge their level of motivation. If the seller agrees to your lower initial offer, then you know it is worth writing up, and your client is likely to get a good deal. When writing our offers in Michigan, we include that earnest money is due after satisfactory inspection, so our clients’ money is not tied up longer than it needs to be. It is easier to move on to the next deal if it doesn’t work out. We give ourselves 10 days to have the property inspected. Often we write offers on properties we have not seen in person but have vetted carefully.
20 | think realty magazine :: september - october 2025
Once under contract, we schedule our inspector for the end of the 10 days and we pre-inspect the property and the area. We also determine whether we need other specific inspectors for the foundation, roof, mechanical and electrical systems, drain, or well and septic. If so, we schedule them during the inspection period. We can also move on from a property quickly if it does not pass pre-inspection, saving everyone valuable time. The goal of the inspection is obviously to do a thorough job and to learn what we are dealing with. It also allows us to negotiate a second price reduction for anything we find. Many times, we can get two price
reductions for our clients and a great deal for them to be able to start their STR business. A few tips on buying well: FURNISHINGS. If furnished
already, ask for the furnishings to be included at no cost. Sellers commonly accept this request. NEIGHBORS. Always talk to the neighbors to get a feel for the area. Find out whether other STRs are operating nearby and whether neighbors are accepting of the situation. You can also learn what property management practices to avoid to keep neighbor relations good. PRIMARY RESIDENCE? Check whether the property was a primary residence or bought a while ago. Either situation or both will have the property taxes “pop up” on you in Michigan, and you must factor that into your all-in mortgage payment. LOCAL GOVERNMENT OUTREACH. Verify whether STRs are allowed in the area by talking to the local governing
... Our initial offer is always below asking price and below market value. The goal is to find a motivated seller. To do this, you make a verbal offer to gauge their level of motivation.”
thinkrealty.com | 21
authority. You’ll discover, for example, whether you must buy an existing STR because they are not allowing new ones, STRs are not allowed at all, there are rules for starting new STRs, or there are no rules or regulations at all. TAX SAVINGS Investing in STRs is a powerful way to reduce your W-2, 1099, or other active or business income. Many people are not aware of this, and we help educate our clients and provide them with referrals to other professionals to help them maximize their tax savings. Basically, the IRS considers a short-term rental a form of active business if you document 500 hours of what they call “material participation” of your time actively helping run the STR. Then, the normal real estate depreciation can be used to reduce your active income taxes. There are two other ways to reduce your taxes: BONUS DEPRECIATION. Bonus depreciation is a way to write off the cost of certain parts of a short-term rental in the first year it is brought into service. Basically, the cost of anything that can be depreciated faster like furniture, landscaping, hot tubs, flooring, fixtures, etc. can be written off in the first year. For property acquired on or after January 20, 2025, the bonus was set to be 20%, but with the passage of recent tax legislation, investors may take 100% of the cost of the above-mentioned items in the first year of service. Note: The previous rate still applies for property acquired before January 20, 2025. COST SEGREGATION. Another strategy STR investors take advantage of involves
a cost segregation study. This is a process where a study is performed on a property to break it into its component parts, accelerating the depreciation and pulling forward tax savings. This can be done on any property, not just an STR. Short-term rentals can be a powerful way to reduce your active income taxes. Not everyone knows this or how to. We have the team to do it at a high level. MAXIMIZE PROFITS Obviously, before a property is purchased, all due diligence should be completed to ensure the property will be profitable as a short-term rental and the price should have been negotiated down. The key to maximizing profits, however, is effective property management and excellent reviews. Property managers are an underrated part of your real estate investing team, but that is where the money is made, especially with short-term rentals. You have a few options with property management: You can manage it yourself, hire a property manager, or use a co-host. Whichever option you choose, you want to maximize revenue and property value and reduce costs. Some of the ways to maximize profit are: SUPER-HOST/CO-HOST. Use a Super- Host property manager or co-host—or become one yourself. This—along with solid reviews—will help your property rank higher on searches in your area. USE DYNAMIC PRICING. Tools exist to help you manage pricing across all platforms; basically, you want to factor peak season and when there are local events or festivals nearby that would support higher pricing.
OFFER ADDITIONAL SERVICES. Rent boats or jet skis. Offer event planning services. Offer massage or spa experiences. BOTTOM LINE Markets are changing. Investing in short-term rentals can help you achieve cash flow in areas where it is difficult to find cash-flowing properties—and they can help you powerfully reduce your W-2 or active income taxes. Buying a short-term rental well is critical. Not all STRs are profitable. Having an experienced team to make sure the property is profitable and the area not saturated with other STRs is key. You want a team that will do the due diligence on the property and negotiate the price down. Managing your property well, getting excellent reviews, and offering extra services is the way to maximize STR profits. To Your Success!
JEFF ROTH
Jeff Roth is the founder of Arbor Advising in Ann Arbor, Michigan. Arbor Advising is a real estate consultancy passionate about helping clients invest, buy, and sell in Michigan. You can contact Jeff at jeff@arboradvising. com, or www.arboradvising.com, or subscribe to the weekly newsletter at www.arboradvising.com/subscribe.
22 | think realty magazine :: september - october 2025
Unlock Property Equity Without Refinancing With Our New 2nd Mortgage Rental Program
Program Highlights: • Fixed Rate Closed End Second Mortgages up to 85% CLTV
• 1.1x Minimum DSCR • 680+ Credit Score • $30K-$500K Loan Amounts • 1-4 Single-Family Homes, Condos, Townhomes, PUD Properties, Mixed Used Properties
844-712-2020 | TempleViewCap.Com TEMPLE VIEW CAPITAL FUNDING, LP™ 2016 is licensed (i) by the Financial Division of the California Department of Business Oversight as a California Finance Lender and Broker under DBO license #60DBO-73498, (ii) by the Department of Financial Institutions of Arizona as a Arizona Mortgage Banker under License # BK-1004278, (iii) in Minnesota as a Residential Mortgage Originator under License #MN-MO-1835832, (iv) maintains its Residential First Mortgage Notification status in Utah through the Utah Department of Financial Institutions, (v) by the Division of Financial Regulation of Oregon as an Oregon Mortgage Lender under License # ML-5871 and (vi) by the Nevada Division of Mortgage Lending as a Mortgage Company Licensee* under License # 5168. *It should be noted that in the state of Nevada some of Temple View Capital Funding, LP’s services may not be available to Nevada customers.
with financing for real estate investment properties.
MORE: Financing available in 44 states FASTER: Close in days with our Fast Track feature* EASIER: Draws in 24 hours, DIY from your phone*
www.civicfs.com FIX AND FLIP CONSTRUCTION
RENTAL LOANS
STABILIZED BRIDGE
thinkrealty.com | 23
Operations
Find Your Next Deal for Far Below Market Value FORECLOSURE PROPERTIES OFFER LARGER MARGINS, BUT BE MINDFUL OF THE RISKS.
GAYLENE ROGERS LONERGAN
W hether you’re a homebuyer or real estate investor, foreclosure properties offer you the opportunity to purchase real estate at below-market prices. You can potentially save thousands of dollars, and this process often provides immediate equity and excellent investment potential. However, you’ll need to navigate complex legal issues (that vary significantly from state to state), understand unique risks, and move quickly when opportunities arise. Sound potentially rewarding? BIG PICTURE Foreclosure occurs when a homeowner defaults on their mortgage, and the lender takes legal action to recover the
loan balance. The foreclosure process varies by state, with some requiring court supervision (judicial foreclosure) and others allowing lenders to proceed without court involvement (nonjudicial foreclosure). After completing the legal process, these properties are sold at public auction or through real estate listings, often at prices that are significantly below market value. BENEFITS TO HOMEBUYERS Foreclosure offers a homebuyer several options. As mentioned, you can save money on the purchase because you may be able to purchase a home at 70-80% of the market value, creating immediate equity. There is also less competition from traditional buyers who choose to avoid foreclosure due to its complexity. And, you
may gain access to neighborhoods that could otherwise be outside your budget.
BENEFITS FOR REAL ESTATE INVESTORS
Likewise, real estate investors stand to reap potential benefits. For example, you may be able to achieve 20-30% annual returns by purchasing foreclosed properties. Consider also that buying foreclosed properties may help you build a portfolio more quickly. Finally, you have the option to flip properties for immediate ROI or hold them for rental income. CONSIDER THE RISKS TITLE ISSUES. Foreclosure properties can come with clouded titles, unpaid liens, or
24 | think realty magazine :: september - october 2025
Research your target state’s specific requirements before pursuing any foreclosure opportunity. Foreclosure properties can provide excellent opportunities for both homebuyers seeking affordable housing and real estate investors seeking to build wealth. The key is understanding that foreclosures are not traditional real estate transactions. You are dealing with motivated sellers (banks), shorter timelines, cash requirements, and unique legal challenges. Success requires preparation, professional guidance, and realistic expectations about both the opportunities and risks involved. If you’re looking for below-market real estate opportunities, foreclosure properties may be worth serious consideration.
ownership disputes. You could lose your entire investment if you don’t properly investigate title issues beforehand. BUYER BEWARE. All purchases through foreclosure are as-is. Any sale is at the buyer’s own risk. PROPERTY CONDITIONS. You may encounter surprises related to the property conditions. Some buyers have discovered foundation problems, environmental hazards, or major system failures after closing. RECLAIM POSSIBILITY. Many states give former owners from 30 days to several years to reclaim their property after a foreclosure. This creates uncertainty about when you truly own the property. EVICTION ISSUES. You may own the property after a foreclosure, but how do you move people out? Properties that still have occupants could require expensive eviction proceedings. ALTERNATE FINANCING. Many foreclosure auctions require cash or hard money loans, eliminating traditional mortgage options. DO YOUR DUE DILIGENCE To safeguard against the risk, follow a due diligence process that protects you. If possible, buy title insurance. The additional premium for the enhanced coverage protects your investment. Check all potential liens against the property. Property tax liens typically survive foreclosure and become your responsibility. HOA liens, contractor liens, and judgment liens can also transfer to you, the new owner. Review the property records and examine foreclosure documents
carefully. Defects in the foreclosure process can make the sale invalid. Although you can’t inspect the interior, visit the property multiple times to assess obvious issues. And remember, you must have cash to pay at the sale. In general, red flags include properties with extensive liens beyond the foreclosing mortgage, homes involved in ongoing litigation or bankruptcy proceedings, and
properties with unclear title issues or ownership disputes
SEEK QUALIFIED ADVICE Surround yourself with a team of qualified professionals to protect your interests, including attorneys, a title company, inspectors, and real estate agents. An experienced real estate attorney can review documents, identify potential issues, and guide you through the process. The cost is minimal compared to potential losses. A title company with experience in foreclosure transactions is important because they will understand the unique challenges involved. Property inspectors and contractors can quickly assess properties and provide accurate repair estimates. Experienced real estate agents who are knowledgeable in foreclosures and have valuable market insights can guide you through the purchase process. Foreclosure laws vary dramatically by state. Redemption periods range from zero days in some states to several years in others. Auction procedures, lien survival rules, and homestead protections all differ significantly.
GAYLENE ROGERS LONERGAN
Gaylene Rogers Lonergan founded The Lonergan Law Firm, P.L.L.C., a real estate law and banking law practice and real estate closing office, headquartered in Dallas, Texas in 2000. She has been serving clients throughout Texas since then. Lonergan has more than 40 years’ experience dealing with virtually every aspect of commercial and residential real estate law, banking, and title transactions. Lonergan holds an MBA from Texas Tech University and graduated cum laude from the Texas Tech University School of Law.
thinkrealty.com | 25
Operations
Market Shifts Mean Momentum TURN UNCERTAINTY INTO ADVANTAGE WITH THE RIGHT SYSTEMS.
JIM TANNEHILL
I f you’ve been in the real estate seen booms inflate confidence and downturns reveal what’s been held together with duct tape and denial. But what separates you from the investors who fold when things shift? It’s not access to capital. It’s not even a killer lead funnel. It’s whether you’re building your business like an empire—one designed to outlive market trends, not chase them. game long enough, you’ve learned how to ride the waves. You’ve Right now, the winds are changing. If you don’t adjust your sails operationally, strategically, and culturally, you’ll be left wondering why your business feels stuck even when the deals keep flowing.
Let’s break down what’s shifting and how you need to adapt.
You need to start treating your real estate business like a business. That means getting obsessive about process, clarity in team roles, and tracking real data (not gut feelings) across your projects. What’s your average cycle time per flip? How long does it take to move from lead to lease? What does it cost you to manage a property in-house versus third-party? If you can’t answer those questions cleanly, your empire isn’t built yet.
1. OPERATIONS ARE THE NEW APPRECIATION
For years, investors have relied on the market to do the heavy lifting. You bought right, rode the appreciation wave, and sold or refinanced with equity gains doing most of the work. But those days are tapering off. In a high-rate, tight-spread environment, sloppy back-end systems get exposed. If you’re growing but your margins are shrinking, it’s not always the deal that’s the problem. It’s how your business is run.
2. LEADERSHIP ISN’T OPTIONAL ANYMORE
If you’re running a team, even a small one, you’re leading—whether you mean to or not. When the market gets weird,
26 | think realty magazine :: september - october 2025
your people start looking at you for more than answers. They’re watching how you move. They’re looking for consistency. Your leadership style will either unlock their potential or cap your entire business. This market is exposing leaders who were really just high-performing technicians. You might be great at acquisitions or brilliant on spreadsheets, but if you can’t create a culture where your team knows where you’re going, why it matters, and how their role fits into the mission, you’ll struggle to scale. The solution isn’t more hustle. It’s clarity. People don’t burn out because of work. They burn out because of confusion. If your team is worn thin or operating reactively, it’s not a motivation problem. It’s a leadership gap.
message and sticking to it. A confused prospect won’t convert. A confused contractor won’t show up. And a confused investor won’t wire the funds. 4. THE RIGHT PEOPLE ARE YOUR ONLY REAL MOAT You’re not going to out-tech the hedge funds. You’re not going to underbid the rookies who haven’t learned the hard lessons yet. Your advantage is in your people and how well they’re aligned to your mission and your systems. Right now, the labor pool in real estate is shifting. Good people are leaving bad companies. They’re looking for clarity, purpose, and stability. If you’re still treating hiring like a gut feeling or throwing people into roles without structure, you’re going to waste time and burn money. Instead, build a culture where roles are clear, training is real, and performance is tracked. People want to win. They just need to know what game they’re playing. And if you’re not sure how to hire the right people for your stage of growth, don’t default to cloning yourself. You don’t need another you. You need someone who complements your gaps and fits the system, not your personality. 5. SCALE ISN’T THE GOAL— SUSTAINABILITY IS It’s easy to get swept up in the language of scale. More units, more flips, more acquisitions. But chasing scale without operational depth is like building a high-rise on sand. The goal isn’t just to grow. It’s to build something that lasts. That means investing in back-end structure before you hit your next growth spurt. That means reviewing
your metrics weekly, not when something breaks. That means documenting standard processes so the business isn’t dependent on your memory or inbox. Ask yourself: If I took a month off, would my business grow, coast, or collapse? If it’s not growing without you, it’s not a business. It’s a job with overhead. FINAL THOUGHT This market is separating real investors from real operators. The industry is full of noise, but you don’t need more information. You need better execution. When you build your real estate business like an empire—structured, sustainable, and led with clarity—you’re not just reacting to trends. You’re setting them. So, stop chasing the wave. Build the boat. Then go out and lead.
3. YOUR SALES ENGINE NEEDS A TUNEUP
Let’s talk sales. Not just closing the deal, but attracting and converting the right people in every part of your business. That includes acquisitions, funding, tenant placement, and even hiring. The truth is, buyers are slower to move. Lenders are more risk averse. Contractors have options. In this climate, your messaging matters more than ever. Are you communicating in a way that earns trust quickly, or are you still throwing out generic value props that sound like everyone else? People don’t respond to noise. They respond to relevance. Whether you’re pitching a private lender or trying to bring on a site manager, you need to speak to the real pain they’re feeling and show that your business is structured to solve it. That starts with crafting one clear
JIM TANNEHILL
Jim Tannehill has been an entrepreneur for more than 10 years. He is Empire Certified, Trainual Certified and an expert in LucidCharts. A business coach, Tannehill has consulted with more than 100 companies in many different industries and verticals. As chief operating officer of Empire Operating Systems, Tannehill oversees the complete operating picture for the company and ensures that all Empire clients are moving forward in the Five Phases of Business.
thinkrealty.com | 27
Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64Made with FlippingBook Online newsletter