Think-Realty-Magazine-September-October-2019

When partnerships are profitable in the flipping business RENOVATION ROCKSTAR Saving the planet without sacrificing returns BUSINESS FUNDAMENTALS

Why land is the overlooked gem in REI STRATEGY

FANNIE MAE'S CHRISSA PAGITSAS' MISSION TO DRIVE PROFITS AND SUSTAINABILITY Passion for Green

PAGE 12

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CONTENTS

INSIDE THIS ISSUE

THINK REALTY 8 News & Events

46 Look to Probate

Finding the best real estate leads for rehabbing homes. Sponsored content by Kristine Gentry, U.S. Probate Leads 48 To Regulate or Not? Regulations in the vacation rental industry raise the bar on short-term stays. by Elizabeth Maora Sickels 50 Become the Bank TM Sponsored content by Ray Urrutia, Pull the Trigger Enterprises 52 Cryptocurrency: A New Asset How this new way of moving money can smooth your real estate investing. by Steve Streetman 56 The 9 Laws of Renovating Apartments Being mindful in multifamily investing pays off. by Nathan Tabor 58 Four Focus Points Key resources to help new investors from being nervous. by Michael Zuber 61 Investing in Vacation Rental Properties Sponsored content by Ben Fertig, Constructive Loans 62 Land: The Real Resource Why lots are the overlooked gem in REI. by Joe Boston 65 Sponsored Content: Investor Review Education Edition DESIGN POINT 81 Renovation Rockstar A partnership can be worth thousands in the flipping business. by Editorial Staff 88 Trends in Design Designer tips include new and revisiting trends to spruce up any space. by Lorraine Beato MARKET & TRENDS 90 Local Market Monitor: Fine Again in Florida by Ingo Winzer 92 Spotlight on the Southeast: Atlanta and Nashville Investment potential still exists despite changing trends. by Joel Cone MINDSET 98 Sustainability in Real Estate Investing

Updates from around the industry. 10 Think Realty Benefits: Home Depot Pro Contractors and technicians can benefit with Home Depot Pro. INVESTOR STORIES 20 Presidents' Circle Featured investor: Aaron Norris 22 Veterans Buying America Air Force veteran built a multimillion-dollar real estate empire by following her instincts. by Jeff Edwards BUSINESS FUNDAMENTALS 24 A Good Start Getting started in REI — properly. by Bruce Kellogg 26 Portfolio Diversification The right property management company can help you succeed. Sponsored content by Stacy Brown, Real Property Management 28 Women as Resources In a field so well-suited for women, why are more not playing? by Monick Halm 30 Saving the Planet Without Sacrificing Real Estate Returns Sustainable materials can make or break your rehab budget. by Carole VanSickle Ellis 34 Ethics in Property Management The NARPM Code of Ethics celebrates 25 years. Sponsored content by Lisa G. Noon, National Association of Residential Property Managers ® (NARPM) 36 Appraisals and the MLS Leveraging opinions of value in real estate with the Multiple Listing Service. by Aaron Chapman and Marco Santarelli 38 The Lending Partnership Real estate investors are not consumers in the lending relationship. Sponsored content by Aaron Chapman, Security National Mortgage 43 5 Must-Have Investor Fundamentals Sponsored content by Jared Garfield, ROI Turnkey Properties STRATEGY 44 Smart Apartment Technology Get smart and improve operational inefficiencies, and more. by Demetrios Barnes

COVER FEATURE

PASSION FOR GREEN FANNIE MAE'S CHRISSA PAGITSAS' MISSION TO DRIVE PROFITS AND SUSTAINABILITY.

by Bobby Burch :: photos by Beth Caldwell

STRATEGY

DESIGN POINT

FUNDAMENTALS

MOBILE HOME INVESTING

INVITING SPACES

A LEGAL VIEW

HARD MONEY LOANS

Understanding market cycles to maintain and grow over time. by Eddie Wilson

Manufactured homes are America's smart solution.

Design inspiration to increase your ROI.

Tips from an attorney to protect your investment.

A look at this effective financing tool.

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PUBLISHER & CEO Eddie Wilson

FROM THE EDI TOR- IN-CHI EF

EDITOR-IN-CHIEF Kelli White

Invest in Tomorrow “Someone’s sitting in the shade today because someone planted a tree a long time ago.” –Warren Buffett

SALES MANAGER Rodney Halford RHalford@ThinkRealty.com 816-398-4111 x86122

FULFILLMENT COORDINATOR Blair Pierce

ART DIRECTOR Emily Bowers

Eddie Wilson talks about what sustainability means in relation to the market cycle, Joe Boston with Dallas REIG points out why vacant lots are the overlooked gem in REI, and real estate “investor goddess” Monick Halm encourages women to recognize themselves as resources. From design trends and cryptocurrency to rehabbing with sustainable materials and smart prop- erty technology, every article in this edition brings you intel so you can better invest in real estate, and in yourself . As the Think Realty team is gearing up for our event in Atlanta, we are also look- ing ahead to what 2020 might bring. We are invested in bringing you the best real estate education and inspiration through our con- tent and conferences — being your trusted real estate investing resource for today, and for tomorrow. I hope you enjoy this issue of Think Realty Magazine and I leave you, for now, by para- phrasing Warren Buffett: the best way to in- vest in yourself is to gain knowledge because the more you learn, the more you earn. •

ustainability. This buzzword has been making noise for

CONTRIBUTING WRITERS Demetrios Barnes Lorraine Beato Joe Boston Bobby Burch Aaron Chapman Joel Cone Jeff Edwards Carole VanSickle Ellis Monick Halm Michael Johnston Bruce Kellogg Marco Santarelli Elizabeth Maora Sickels Steve Streetman Nathan Tabor Ingo Winzer Michael Zuber

quite some time, and whether applied to our environment or to our investments, we hope it doesn’t quiet down. When I think of “resources and sustainability,” I think of how to

use what we have, and how to make it better for the long term. So, to you, savvy real estate investors, how can you utilize resources to grow within the real estate space, and beyond? And how can you rec- ognize which resources will lead you down a sustainable path? The content in this issue addresses these questions — and more. Our cover story features Chrissa Pagitsas, a VP with Fannie Mae, because she created a program that exemplifies sustainable lending solutions in what has become known as one of the most successful green financing programs ever: Fannie Mae’s Multifamily Green Initiative. Read about this revolution in lending and what it is doing for borrowers and the envi- ronment on page 12. Also in this issue, Think Realty’s CEO

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COVER PHOTOGRAPHY Beth Caldwell

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!

FOR ARTICLE REPRINTS :: Contact Jeremy Ellis at Reprint Pros, 949-702-5390. www.reprintpros.com. SUBSCRIPTIONS :: The annual subscription for Think Realty Magazine is $36.00 in the U.S. Order online at www.ThinkRealty.com or call 816-398-4085. Provide your full name, address and telephone number. DISCLAIMER :: Think Realty Magazine , its owners, contractors, distributors and their respective representatives do not provide tax, accounting, investment or legal advice and make no guarantee as to the effectiveness or success of any investment or tax strategies discussed herein. Please consult your own independent adviser as to any questions you have or decision you are contemplating. ABOUT THIS MAGAZINE :: ThinkRealtyMagazine isapublicationof AffinityRealEstateMediaLLC.Reproductionoruseofanyeditorial orgraphic,withoutpermission, isprohibited.Wearenotresponsible for thecontentofanypaidadvertisements.Forreprintrights; toob- tainadetailedstatementofourprivacypolicy;and forallsingle-copy requests,addresschangesandothersubscription inquiries:

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KELLI WHITE, EDITOR-IN-CHIEF

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THINK REALTY

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

Finalists Announced! Each year, Think Realty honors leaders in the industry who exemplify the best in real estate investing. These individuals are nominated by their peers and winners will be announced at Think Realty’s Atlanta event in September. Here are the 2019 finalists in each category:

If you consider yourself a real estate entrepreneur, this event is for you. Learn about tools, tips and resources, and how to manage your real estate business. Meanwhile, you will also connect with pros, exhibitors, and educators that will help you earn more return on your real estate investments. Space is limited and we expect to sell out! Think Realty Conference and Expo Returns to Atlanta IT’S THE BEST OPPORTUNITY TO INVEST IN YOURSELF!

Education • Gary Harper Sharper Business Solutions • W.J. Mencarow Paper Source Humanitarian • Greg and Kim Slaughter • Sherman Ragland • Joe and Shawn King The Revival Brothers Master Investor • Douglas Skipworth • Missy McCall Hammonds Linda's Legacy: Industry Impact This award is named in honor of Linda Liberatore, a champion of the REI industry who pioneered industry innovations and paved the way to success for the many investors she mentored along the way. This award goes to a real estate investor who exemplifies creativ- ity, integrity, and financial success and is changing or shaping the conversation about real estate and real estate investing. • Abhi Golhar • Eric Wohlwend Clear Sky Realty • Gary Beasley Roofstock Congratulations to all nominees and thank you to everyone who took time to nominate worthy candidates. Attend Think Realty’s Atlanta event to meet the nominees and hear the winners! Look for Think Realty Honors nominations to re-open sooner than ever to prepare for our 2020 awards!

Single-Family Investing • Mathew Owens OCG Properties • Jared Garfield ROI Turnkey Properties • Jason Engelman Freaky Fast Home Buyers • Max Keller and Glenn Stromberg Stromberg Investment Group Multifamily Investing • Bruce Petersen Blue Bonnet Asset Management • Neal Bawa Grocapitus Investments (MultifamilyU) Commercial Investing • Pamela J. Goodwin Goodwin Commercial • Jon Lee Outback Real Estate Investment Network Private Lending • Noble Capital • Paul Jackson Residential Capital Partners • Tom Meade Touchstone Capital Partners

RESIDENT EXPERTS

SPEAKERS

Brent Kesler The Money Multiplier Keynote Speaker John Cate Finance of America Commercial Speaker

Emmanuel Guarino Residential Assisted Living Academy Featured Speaker

Amy Ransdell Southeastern Home Team Featured Speaker

Sonia Booker

Abhi Golhar

Jared Garfield ROI Turnkey Properties Speaker

Kevin Ortner

Eddie Wilson

Capital Funding Summit Join Think Realty and Outback REIN as they part- ner to bring you the Capital Funding Summit, where you'll find answers to that all-important question: "Where can I find funding for my next deal?"

This two-day event will feature lessons on: • The 5 funding needs of a real estate investor • Raising private money • Obtaining unsecured business lines of credit

• Understanding how to use bridge loans • Understanding, fixing and optimizing your credit score • Creative financing to enhance deals And more!

Property Management • Elizabeth Maora Sickels • Real Property Management Real Estate Investing Services • Anthony Geraci Geraci Law Firm • Allen Shayanfekr Sharestates • Demetrios Barnes SmartRent

• Taking the fear out of hard money • Earnest money deposit funding

TO LEARN MORE ABOUT THESE EVENTS AND TO BUY TICKETS, VISIT THINKREALTY.COM/EVENTS

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COVER STORY

CHRISSA PAGITSAS

Fannie Mae's Chrissa Pagitsas’ mission to drive profits and sustainability. Passion for Green

BY BOBBY BURCH PHOTOS BY BETH CALDWELL

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Mortgage Association — launched its Green Financing Business first as an initiative in 2010 and issued its first Green Bonds in 2012. In essence, the challenge was how could Fannie Mae help transform an aging housing stock into better, more affordable and more environmentally sustainable homes for Americans? By retrofitting existing properties and building new green-certified proper- ties, Fannie Mae would help create new jobs, cut utility costs, reduce energy and water use, and cut green- house gas emissions. Thus, the company first set out to explore how financing for environmen- tally sustainable projects can support quality, affordable housing in the U.S., Pagitsas said. To learn more, Fannie

Yes, I'm a tree hugger - a tree hugger that sees value in profitable businesses. The two are not incompatible in mymind.

sultant to real estate companies, I knew we could do more,” she said. “[The program] had to be grounded in a mortgage that was easy to use and rigorous at the same time. It wasn’t going to be about green- washing, hand-waving and green paint. It was going to be a mort- gage that delivered a better quality property, a more environmentally sound property, and also a more affordable property.”

Mae established the first Green Rental Housing Task Force, which convened housing, energy efficiency, and mort- gage industry experts to discuss needs and a national strategy. With more than 15 years as an en- ergy and utilities executive, Pagitsas was ready to coalesce the collective knowledge into a meaningful pro- gram that made a difference. “Because of my background in the energy sector and as a con-

W hen Chrissa Pagit- sas first took on her executive leadership role at Fannie Mae in 2010, there was no existing road map to show how she should deliver on her mission: positive environmental and social outcomes through mortgage finance. “When I came on board there wasn’t the focus there is now on green finance,” said Pagitsas, Vice President of Enterprise Envi- ronmental, Social, Governance at Fannie Mae. “We knew that green finance would play a critical role in our support of the housing industry, but there was no blueprint with a specific design. We were working from scratch.” While challenging, the amorphous prompt was veiled good fortune. Ultimately, it afforded Pagitsas the creative latitude that enabled her to take a broader, benevolent tack. Pagitsas said she could step back and evaluate a mortgage product’s offerings, the people it would benefit, and the process to make it happen. “What I thought about when I first started this back in 2010 is how can we get what's called the “triple bottom line” out of a boring old mortgage,” Pagitsas said. “How do we get financial benefit and profitability? How do we get social

Chrissa Pagitsas brainstorming with Samantha Thompson (left) and Abou Bakayoko (right).

investor profits, societal improve- ments, and substantial environmen- tal benefits. But as with many lofty plans aspiring for bold goals, Pagitsas and her team at Fannie Mae would face a variety of challenges. They’d have to overcome not only market complacency and competition, but also the challenge of simplifying a convoluted package of benefits.

benefits with better quality housing that's more affordable for American renters? And how do we get envi- ronmental benefits as a result of energy and water efficiency?” The answers didn’t arrive over- night, Pagitsas said. But, eventually, they culminated into what’s widely regarded as one of the most suc- cessful green financing programs ever: Fannie Mae’s Multifamily Green Financing Business. Through year-end 2018, the program has financed more than 2,000 multifamily properties through $51.7 billion in green mort- gage-backed securities, spurring

AN IDEA TAKES ROOT Fannie Mae — a govern-

ment-sponsored enterprise also known as the Federal National

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The initial launch illuminated the challenge of presenting a program whose intricacies can be intimidat- ing and painful, Pagitsas said. “Nobody wants to get a root canal right?” she said. “But energy effi- ciency financing is pretty much akin to getting a root canal. Historically, it has been a separate process. It's standalone and it's different.” Pagitsas said she focused on three “Ps” to simplify the pitch: The product, the people, and the process. She made it a goal for her team and Fannie Mae’s network of 25 multi- family lenders to be able to describe the program in about 30 seconds, which helped simplify its value to borrowers. Pagitsas wanted to cre- ate a straightforward and attractive mortgage product that delivered val- ue to borrowers and to society while benefitting the environment. While the mindset shift was helpful, the program’s adoption by lenders and borrowers initially faced headwinds thanks to eco- nomic uncertainty amid the finan- cial crisis. “New products were not a top priority — it was about steering the ship soundly and safely,” Pagit- sas recalled. “New concepts were questioned.” To further illustrate her point to her team and Fannie Mae’s network of 25 multifamily lenders, Pagit- sas used an example: If a property owner were to install something like a new heating, ventilation, and air conditioning system for an apart- ment building, it can not only in- crease the value of a property, it can also reduce its operating expenses and credit risk. It also can help ten- ants by reducing their energy bills as well as aid the environment by curbing water use and greenhouse gas emissions that contribute to human-caused climate change.

Source: Fannie Mae Green Bond Impact Report: 2012-2018 (year-end)

When Pagitsas used that ap- proach, she said people began to buy into the idea. “When I explained it through that lens, the understanding started to grow,” Pagitsas said. “It’s not green paint. It’s actual capital that’s working to do something of value, which is creating better cash-flow- ing properties that reduce cost burdens on American families. By framing the benefits internally to colleagues through that lens, and then talking about it that way to our lenders, who hadn’t thought of this stuff before, they were able to see the value and sell it to borrowers.” BRANCHING OUT IN IMPACT It took several years for Fannie Mae’s Multifamily Green Financing Business to take root, according to the organization’s data. Between 2012 and 2015, Fannie Mae generat- ed only 4.7 percent — or $245 mil- lion — of its total securities issued

through year-end 2018. But thanks to Pagitsas and her team’s determination, Fannie Mae stayed the course with its two, green mortgage-backed-securities products. Green Rewards — of which Fannie Mae has issued a total of $42.4 billion in financing through 2018 — supports the transition of existing rental housing to a low-carbon economy through investment in energy and water efficiency retrofits and renewable energy generation. The Green Building Certification — of which Fannie Mae has issued a total $9.3 billion in financing through 2018 — may be newly con- structed or retrofitted housing if it meets specific criteria. mortgage backed securities and an additional $6.1 billion in green structured securities. Those whop- ping totals made Fannie Mae the largest green bond issuer in the world in 2017 and 2018, according Combined, Fannie Mae has issued $51.7 billion in green

Fannie Mae Headquarters

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I consider myself to be a horizontal thinker. I'm someone who thinks across different knowledge bases to connect the dots to create newproducts and bring new ideas to market.

to the Climate Bonds Initiative. The successes of the program have far exceeded Pagitsas’ expectations. “It is really fulfilling to see this work being realized,” Pagitsas said. “In 2016, I was thrilled to hit $3.6 billion. That was a high watermark for me. I couldn’t believe it when we hit nearly $28 billion in 2017. So here we are in 2019, and our numbers through the first quarter are more than $54 billion in green financing.” Perhaps equally impressive are the positive economic reverbera- tions from Fannie Mae’s Multifamily Green Financing Business. Newly constructed or retrofitted green multifamily buildings financed by Fannie Mae are estimated to have contributed $7.2 billion in workers' income, according to Fannie Mae’s Multifamily Green Bond Impact Report. They’ve added about $14.6 billion to the United States’ gross domestic product and supported or created 170,000 jobs to build or ret- rofit more than 550,000 apartment owners who made their proper- ties more efficient through green financing are projected to recoup their investment within six years on average. Tenants at these prop- erties are projected to see annual utility expenses cut by about 10 percent or $145 on average. Pagitsas — a mountain biker and former collegiate sailing captain — is also thrilled at the program’s stagger- ingly positive environmental impact, in addition to its business success. “Yes, I’m a tree hugger — a tree hugger that sees value in profitable businesses,” she said. “The two are not incompatible in my mind.” The projected environmental impacts from the $51.7 billion of Fannie Mae Green Bonds are esti- mated to have saved about 4.3 bil- units, Fannie Mae reported. Fannie Mae estimates that

lion kilo British thermal units (kBtu) of source energy each year. That’s enough energy to power about 1,454 homes for an entire month, accord- ing to data from the U.S. Energy Information Administration. In other savings, the program is projected to have cut about 5.9 billion gallons of water use annual- ly, which is equivalent to filling the 8.5 acre Bellagio Fountains in Las Vegas 269 times over, according to data from WaterSmart. It has also reduced greenhouse gas emissions by 287,000 metric tons, which is equivalent to driving nearly 61,000 passenger vehicles for one year, according to data from the Environmental Protection Agency. Such metrics have earned Fannie Mae more than a dozen national and international commendations rec- ognizing its multi-year commitment to creating environmentally sustain- able, healthier, and more affordable U.S. housing. Most recently, the

program was recognized at Cli- mate Bonds Initiative's Green Bond Pioneer Awards for its role as the largest green bond issuer world- wide and for instilling transparency to the growing market. Pagitsas also earned the CBI’s "Green Bond Champion" award in 2019 for her role in bringing struc- tural diversity and innovation to the market in 2018 through Fannie Mae's multifamily green mortgage finance program. While she loves to highlight the envi- ronmental and social benefits, Pagit- sas said the numbers also tell another compelling story of determination. “What this should tell people is that this isn’t a one-hit wonder,” she said. “If we had done $3.6 billion in financing and had never done another loan, then I hadn't built a simple, elegant, competitive product. What it's shown is that the product is attractive and that the process is simplified … It's really

about a new way of doing business.” What motivates her passion for this work? Pagitsas loves to help connect people and their expertise to make a difference and create new ideas. “I consider myself to be a horizon- tal thinker. I’m someone who thinks across different knowledge bases to connect the dots to create new prod- ucts and bring new ideas to market,” she said. But the deep-dive into one area of mortgage financing is a great thrill too. “We’ve got underwriters with 20 years of experience under- writing loans and they’ve seen it all. I enjoy sitting down with them, and because they know so much, I can say ‘What about this idea? … And they can throw things at it and make it better.” Looking ahead, Pagitsas is excited to grow the impact of Fannie Mae’s Multifamily Green Financing and help other real estate organizations make positive environmental impacts.

“The bottom line is that Fannie Mae's committed to this,” Pagitsas said. “We were the first ones to issue an agency green commercial mortgage-backed security back in 2012 and we've been leading the market ever since. With that leadership comes the opportunity to create new products, but also to share knowledge with others that are seeking to replicate what we've done. And I welcome the opportuni- ty to share with others.” Pagitsas said she’s encouraged to see not only her colleagues, but other industry leaders embrace environmentally sustainable financ- ing programs and a collaborative approach to achieve their goal. The real estate industry is unified around the idea that there is a hous- ing crisis in the United States, and we need solutions to it, she said. What’s more, Pagitsas said she’s

excited to see borrowers flock to Fannie Mae’s green financing options — thanks in part to their business advantages, but also for their socie- tal and environmental impact. “At the end of the day, Fannie Mae developed a better, faster, more attractive product that caught borrowers’ eyes. They voluntarily chose it. This isn’t government mandated. There are no quotas. This is all about market forces and thinking of new innovative ways to spur investment in better quality assets that result in affordable housing,” she said. •

Bobby Burch is the Founder of Bobby Burch Creative, a small business storytelling studio. Learn more at bobbyburchphotography.com and contact him at bobbyburchcreative@gmail.com.

Source: Fannie Mae Green Bond Impact Report: 2012-2018 (year-end)

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INVESTOR STORIES

PRESIDENTS' CIRCLE

“As a technology guy, most are surprised I’ve gone analogue over the past year. I spend far less time on the Internet and more on my Full Focus Planner. The planner is quar- terly and forces me to look at what I want to accomplish four times a year and monitor progress. Turning off notifications on my phone from apps and spending more time read- ing and thinking have made a huge improvement in my stress levels. It’s helped me be far more mindful.” What works best for Norris when it comes to goalsetting and achievement is the old-fashioned write-it-down method. He finished his MBA in 2009 and adopted Tony Robbins’ approach, which he said helped him clarify different types of goals and identify potential fears and roadblocks. “Never in my education jour- ney from high school to MBA had I learned this method of writing goals! What if I had learned that in high school? It felt amazing and I achieved more in a decade than I thought possible,” Norris said. Before 2019 is over, Norris plans to sit for his Florida broker’s exam and reach a number in his rental portfolio that he thought was sever- al years down the road. “Hitting goals early is always very rewarding,” Norris said. Norris understands how easy it can be to get overwhelmed in this industry because of the multitude of ways to participate. He shares this advice with those looking to enter the REI space: “I see a ton of analysis paraly- sis. Be very mindful of taking the skillset you have and applying it in a way that fits into your lifestyle and your personality. You’ll launch faster and easier that way. You can always grow, but it’s easier to start small and build,” he said. •

Q&Awith Aaron Norris

We asked Norris about life outside of real estate. Here are a few tidbits from this well-rounded investor:

Completely unrelated to REI, what is something you’ve done that you’re proud of? I have been in the arts since I was five years old. In college, I was an advertising major with a minor in music. I saw an ad on the wall for a conservatory in New York City. I auditioned and got accepted. I spent the majority of my 20s as a professional triple threat doing shows in NYC and around the globe. In my 25 years in show business, I never missed a gig. What do you do when you need inspiration or are striving for self-growth? I read a lot of books and binge on a ton of technology channels on YouTube. I study technology and apply it to the different businesses I am in to prepare for how it will change how we work and live. I also attend non-real estate events whenever possible in technology and robotics. Having a wider world view provides for interesting insights.

Aaron Norris (left) and father Bruce Norris (right).

Featured Investor: Aaron Norris WITH A BACKGROUND IN SHOWBUSINESS, THIS INVESTOR IS NOW A TRIPLE THREAT IN REAL ESTATE.

by Kelli White

What do you do to ease a bad day? To celebrate a great day?

ot many real estate investors can say they started their ca-

language to listening, you learn a lot about yourself and to communicate effectively with people,” Norris said. Now, as Vice President of The Norris Group, which specializes in California and Florida hard money lending, note investments, and real estate investor resources, Aaron is a national speaker and writer special- izing in topics like technology and its effects on real estate. He also hosts a weekly vlog, radio show, and podcast. Norris has also been directly involved in raising more than $2 million for local charities through events like "I Survived Real Estate" and Give BIG River- side County. But aside from all his to-dos, it’s working with people that inspires Norris to keep doing his best each day. “I love people. There’s nothing better than getting a letter from

someone who has worked with us over the past few decades telling us we’ve changed the trajectory of their family. Helping more Main Street investors succeed in finan- cial freedom gets me pumped,” Norris said. Clearly armed with a wealth of REI experience and a thirst for stay- ing busy, Norris, like any successful investor, had to endure his share of trial and error. He adapted to what worked and learned he is more con- servative than he might have once thought. His preferred REI niche? Buy and hold. “Coming from a family of flippers, I thought I had to be flipping a hun- dred deals a year for success. I’ve been slowly acquiring and upgrading a rental portfolio over the past de- cade from so-so inventory in Cali- fornia to new construction rentals

Whenever my mom had a really bad day, she always wanted a burger followed by some chocolate. I’ve adopted her method, which makes me think of her, so it makes me happy. I’m a bit of a foodie so I tend to celebrate with a great meal.

reer in real estate when they were in preschool. But Aaron Norris can. He began rehabbing houses with his dad before he could tie his own shoes. “My first memory of flipping was being armed with a vacuum suck- ing up roaches all afternoon after the carpet was ripped up from the house,” Norris said. And while some might consider this his first real job because it did eventually lead to his career as a real estate investor, his first paying job was a box boy at a local grocery store in California. Later, as a young adult, he waited tables in NYC. These experiences taught Norris customer service and the impor- tance of working with people. “I think everyone should have to be in a service career. From body

in Florida. I’ve learned I don’t like major rehabs and much prefer new homes that don’t have ticking rehab time bombs,” he said.

and prefab manufacturing espe- cially for the affordable housing issue. But, he does worry that the real estate industry is not tech-fo- cused enough. “I worry that we aren’t working together collectively to do what’s best for our industry and the con- sumer. Being protectionist won’t help our industry, it only makes us irrelevant faster,” he said. Norris is an avid goal-setter but, ironically, has found that limiting technology use has helped him achieve his goals.

TECHNOLOGY BLENDED WITH MINDFULNESS

In an industry as widespread and evolving as real estate investing, there are bound to be both exciting and concerning changes ahead. Norris, an avid “techy,” said he is excited about the future of con- struction with 3D-printed housing

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INVESTOR STORIES

VETERANS BUY AMERICA

recruiting offices. Standing outside surveying the various branches, her instincts told her to walk into the Air Force recruiting office. Despite having no such plans, she signed up for the Air Force that very day. The next four years took her from L.A. to Idaho and to Korea and beyond. She eventually came back to California where she served in the reserves before she took a job as a flight attendant. As fate would have it, she was working on 9-11, the monu- mental event that would usher a new season of life for Benaisha. PRAYER AND INSTINCTS After 9-11, Benaisha had the opportunity to return to active status and then took advantage of a small window that allowed her to transfer to the Department of Justice as a law enforcement officer back in L.A. This later became a role with the newly formed Department of Home- land Security where she served in multiple locations to include time undercover. The position required her to move regularly, in large part to her biannual promotions, where she then purchased a new home in each location and rented it out when she was forced to move again. Remarkably, Benaisha still had no interest in real estate though she was unknowingly building the foundation of her future real estate portfolio. Her last move took her to Dallas as she was told it would be the route to her next big promotion. Three years passed and the promo- tion never came. She prayed over what she was supposed to do and ultimately felt she was meant to get her real estate license. Within four months she had her license and nearly as soon as she was a newly minted agent, the phone inexplica- bly rang.

UNPRECEDENTED SUCCESS In 2015, an out-of- town, all-cash buyer was looking to purchase a home. The very first time Benaisha opened the door to show a house, she sold it. The buyer was im- pressed and was hungry for more. As she contin- ued to build relationships with real estate investors, Benaisha sold a remark- able 200 homes within her first year. The second year she sold 350 homes and 380 in the third year. Her instincts and prayers had apparently steered her correctly as her success was nearly unprecedented in the real estate industry. In 2018, she formed Bai- ley-Watson Real Estate with a friend. Bailey-Wat- son picked up agents in Dallas, Houston, Austin, Atlanta, L.A., Virginia,

This content is brought to you by Recon Realty and AndyWilliams

Veterans Buying America AIR FORCE VETERAN BUILT A MULTIMILLION-DOLLAR REAL ESTATE EMPIRE BY FOLLOWING HER INSTINCTS.

Louisiana, and New Jer- sey within the first year. Currently, Bailey-Watson is on track to close over $60 million in transactional sales in 2019 alone. After sitting down with fellow vet- eran and real estate thought leader Andy Williams, it didn’t take long for Andy to realize the world needed to hear her story. As the founder of Re- con Realty, Andy has been leading the Veterans Buy America initiative to teach veterans what is possible through the power of real estate. Few have displayed the power of that possibility better than Benaisha Poole-Watson. Benaisha took note of Andy’s success on his HGTV show and has visions for her own path into the media market. Veterans Buy

Benaisha Poole-Watson

by Jeff Edwards

America stands to highlight the suc- cess of Benaisha and other veterans to inspire others to follow. After all, as Andy regularly makes clear, “who better to own a piece of America than those who fought to defend it.” As veterans like Benaisha and Andy continue to buy up a larger piece of the American pie that is real estate, the future of the nation looks to be in good hands. •

stincts would tell her to get her real estate license, though she had never had any intention to step into the industry. Within a few years, she was the master and commander of her own multimillion-dollar real estate empire as she followed her instincts towards unprecedented success.

real estate nor life in the military had ever crossed her mind. That’s when a college professor pulled her aside and asked her what she wanted to do. For reasons she can’t remem- ber, she said she wanted to work for the IRS. The professor handed her a number and told her to call it in four years. While thinking she was hold- ing the golden ticket somehow, she had no idea what she was going to do until those four years were up. After hearing about a friend who was joining the Army, she impul- sively decided to drive to the service

hen it comes to success in the United States military, train-

ing is certainly imperative. However, some of the most inexplicable acts of gallantry displayed throughout the history of war have occurred when motivated individuals followed their instincts and took the initiative. The same can be said of those who have found success long after they set aside the uniform. When Benaisha Poole-Watson joined the United States Air Force, she did so on the first occasion she spoke with a re- cruiter. Nearly 20 years later, her in-

THE LONG AND WINDING ROAD TO REAL ESTATE SUCCESS

Jeff Edwards is a Marine veteran and contributing writer for Veterans Buy America. Find out more about the initiative and stories of transition at

Prior to 1996, Benaisha worked in L.A. while attending college. Neither

VeteransBuyAmerica.com.

22 | think realty magazine :: september / october 2019

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BUSINESS FUNDAMENTALS

GETTING STARTED

from a manager? Do the same for your financial commitment: a) Keep your securities investments, b) sell some investments in favor of real estate, c) refinance and borrow money to invest in real estate. Also consider your educational commit- ment and which options work best for you. You can go to meetups, purchase courses, take community college courses, attend workshops, and so on. Additionally, take an inventory of your strengths and “development needs” (i.e., weak- nesses), then plan to utilize the strengths, and address the needs. GROWING INTO MATURITY There are two elements for grow- ing into real estate maturity. One is experience, which is gained by transacting and owning properties. The second is education. Educa- tion must be ongoing because the market and the industry are always changing. Real estate investors of any level, but especially beginners, should take advantage of the fol- lowing educational opportunities:

Pay no attention to a course or program that costs more than $3,000 while still a “newbie.” You won’t get enough out of it at this stage. And you can learn a lot by not spending much in the be- ginning. The same with hiring a mentor — it may happen, once you know your needs. GETTING A REAL ESTATE LICENSE It’s not a bad idea to get your li- cense because it is educational and provides transacting experience, plus can help you earn commis- sions. The only drawback is that you must disclose your licensee status when transacting property for your own account. “ARMCHAIR INVESTING” Many “newbies” are eager to get started. Options like “turnkey” rentals or commercial and multi- family syndications (i.e., group in- vestments) are choices for passive investors. The problem, however, is dishonest and/or incompetent players in the industry, and it’s often hard to tell the good from the bad. Additionally, the syndication market has become highly compet- itive such that marginal deals are being put together to maintain deal volume. In these cases, consider hiring an expert to analyze the offering for you. •

A Good Start

markets, homeowners are still “underwater,” where they owe more than their property is worth. Some markets have increasing foreclosures. It is essential that new investors get an assessment of the market(s). PERSONAL PREPARATION The “newbie” investor needs to do a personal assessment as well. Ask what time commitment you are willing to make initially. Do you want to be “All in”? Do you pre- fer to invest part-time while still employed? Or do you want to write a check and read quarterly reports

1) Current books. Be cognizant of dated material.

2) Courses at local adult educa- tion centers and community colleges.

GETTING STARTED IN REAL ESTATE — PROPERLY.

by Bruce Kellogg

3) Speakers at meetups. Be cog- nizant of any biases.

prepared for the ebb and flow of economic cycles.

ECONOMY When strategic planning, a neces- sary first step is economic assess- ment. Consider your fiscal situation, then come up with a “postulated environment” for the future. The economic boom has lasted for a decade, and economists indicate it should not be expected to contin- ue much longer. Make sure you’re

good way to get started in any new endeavor, including real

4) Workshops and bootcamps.

estate, is to learn as much as you can: attend events, read the right materials, find a reputable mentor, and ask the right questions. But there are other factors to consid- er when starting as a real estate investor to ensure you start off on the right path.

Bruce Kellogg has been a Realtor ® and investor for 38 years. He has transacted about 800 properties in 12 California counties. These include 1-4 units, 5+

5) Courses from regional and national trainers.

REAL ESTATE MARKETS Housing markets vary across the country. Some are rising, turn- ing profits for homeowners and investors. Some are leveling off or beginning to decline. In some

6) Subscribe and read national real estate investing magazines.

apartments, offices, mixed-use buildings, land, lots, mobile homes, cabins, and churches. Reach him at brucekellogg10@gmail.com or (408) 489-0131.

24 | think realty magazine :: september / october 2019

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BUSINESS FUNDAMENTALS

PROPERTY MANAGEMENT

This content is brought to you by Real Property Management

Portfolio Diversification THE RIGHT PROPERTY MANAGEMENT COMPANY CAN HELP YOU SUCCEED.

portfolio if a market underper- forms or even goes into decline. A property’s value is inextricably tied to location, and so choosing differ- ent neighborhoods, cities, or even states or regions can mitigate the risk of investing too heavily in any one market. While location is key, another crit- ical factor in property values is de- mand. Different property types rent better in different areas, depending on population demographics, local economy, and available amenities. Choosing the right property for the right location—and then finding the right tenant for it — can maximize your rental income. To achieve a diversified real estate portfolio, successful inves- tors rely on a team of real estate professionals. From lenders to real

estate agents to quality proper- ty management services, smart investing requires that you have the right people on your side. Unlike the past, when the available options for property management services were often limited or unreliable, property management today has grown to offer a range of quality services, beneficial vendor relationships, and much more. The right property management company can help investors iden- tify potential properties for sale, assess current market value, set accurate rental rates, and provide all necessary maintenance and re- pairs. They will also manage tenant relations on your behalf, negotiate leases, and help maximize your rental income for each property. Real Property Management of-

fers nationwide locations owned by highly trained professionals. There is no need to find a different property management company for each new market; chances are, one of Real Property Manage- ment’s more than 300 locations is nearby. With in-depth knowledge of their local markets and reliable, standardized systems, Real Prop- erty Management can help real estate investors large and small realize a geographically diverse real estate portfolio. • Stacy Brown is the Operations Manager at Real Property Management, which is the largest residential property management franchise organization in North America, managing tens of thousands of properties for individuals, investors, and institutions throughout the country. Learn more at RealPropertyMgt.com or call 888.806.7088.

by Stacy Brown

erty management company, Char can realize stable rental income every month even though his proper- ties are thousands of miles away. Perhaps the most common diversification strategy used by residential real estate investors is geographical diversity. This is because residential investors tend to specialize in the type of proper- ty they know most about, such as single-family homes. Buying rental properties in diverse locations has the advantage of protecting your

cation strategy might include any or all these approaches. A diversified portfolio can take many forms. For example, a recent MarketWatch article shared the story of Leland Char, a product manager in San Francisco who would like to own property in his hometown but hates the inflated house prices. Instead of forgoing real estate in- vesting altogether, Char opted to buy several rental houses in Texas where prices are lower, and demand is strong. With the help of a local prop-

ll investing carries a certain amount of risk. But diver-

sification helps mitigate the risks that are specific to the industry or place. Portfolio diversification works by spreading your investment dollars across different markets, which may include geographical, asset class, or risk profile diversity. Common methods of diversification include buying property in different areas or of different types or balancing stable assets with value-added or opportu- nistic assets. A real estate diversifi-

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