ABOUT TURNKEY INVESTING
3 THINGS YOU MUST DO AT EVERY REIA MEETING
5 CRUCIALTIPS
18 OF REAL ESTATE’S BIGGEST MOVERS AND SHAKERS: THINK REALTY HONORS FINALISTS
RETURN ON RENTALS “NO LIMITS” INVESTING RELIES ON CLARITY, FOCUS, AND THE RIGHT EQUATION PAGE 20 Real Estate, Not Rocket Science:
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TABLE OF CONTENTS
INSIDE THIS ISSUE
THINKING REALTY 8 Where We’re Thinking Realty
REAL ESTATE & RETIREMENT 83 The 401(k) Mistake that Could Easily Cost You $30,000 A costly, common retirement account error exposed. by Mike Ventry 84 Investing in Corporate Housing: Monetizing the 30-Day Stay The American dream is evolving, and your retirement investing can benefit. by Kimberly Smith MARKET BREAKDOWNS 86 Think Realty’s Guidebook to Turnkey Rental Real Estate The comprehensive truth about turnkey investors and “having it all”. by Carole VanSickle Ellis 90 Market Spotlight: Kansas City, Missouri KCMO’s personality suits real estate perfectly. by Carole VanSickle Ellis INDUSTRYVOICES 100 Why I Moved to Pheonix to Invest in Real Estate An industry veteran explains his move to the Silicon Desert. by John Trautman 104 Double Down & Play to Win: A Call for Rental Housing Innovation An open letter to HUD Secretary Ben Carson. by Brian Wojcik 120 3 Steps to Learning Your Investment Manager’s True Identity Full disclosure of internet illusions vs. the real deal. by Charles Sells
Find us at our national conferences, expos, and partnered events all over the country this year and next. Exclusive event coverage, sneak-peeks, and a first look at our 2018 dates and locations. 10 Think Realty Honors Finalists Learn about the Think Realty Honors finalists in each category, then find out how to meet them in person. COACHES CORNER 28 Fostering Entrepreneurial Spirit and Community 30 Think Realty Course Reviews Think Realty’s latest courses on commercial real estate, market research, and investment criteria. 32 Please Help Me! I’m Stuck How to invest when you’re just not ready. by Sonia Booker UP CLOSE & PERSONAL 62 One-on-One with the Atlanta Housing Authority Think Realty Coaches provide support across the spectrum. by Carmen Inman
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ON THE COVER
GETTING THE NUMBERS RIGHT: (left to right) Dallas Hall and Garrett Fuller know if your turnkey equation is solid, you can invest in any location, from any location.
REAL ESTATE, NOTROCKET SCIENCE
by Carole VanSickle Ellis :: photos by Javier Olivero
One of the largest housing authorities in the country peels back the curtain. with Karen Young INVESTOR SPOTLIGHT 64 Breathing Life Into Communities
96
Good returns coincide with a feeling of family. with Capital City REIA
MARKETING
FINAL THOUGHTS
BY THE NUMBERS
INDUSTRY VOICES
INVESTOR REVIEW
EFFECTIVE EVENT NETWORKING 3 things you must do at every REIA meeting.
DAILY ACTION FOR PERSONAL SUCCESS Zig Ziglar’s daughter shares her plan.
RUNNING THE NUMBERS ON VACATION RENTALS How to keep your AirBnB dream from keeping you awake at night.
2017 HOUSING POLICY HIGHLIGHTS A brief overview of HUD activity this year.
66 Paving His Own Way at 19
67 Pathways to Smart Investing in Atlanta, Georgia Think Realty’s pro guide to the Atlanta Conference & Expo - October 14-15.
Real estate investing has already changed this up & comer’s life. with Jordan Dooley
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FROM THE EDI TOR- IN-CHI EF
PUBLISHER R. Michael Wrenn
The Building Blocks of Community
PRESIDENT, AFFINITY WORLDWIDE Eddie Wilson | EWilson@AffinityWorldwide.com
EDITOR-IN-CHIEF Carole VanSickle Ellis CEllis@ThinkRealty.com
VICE PRESIDENT OF MEDIA SALES Rodney Halford RHalford@ThinkRealty.com 816-398-4111 x86122
impact or, if I may quote another coach here, your “wealth legacy.” Read on. You’ll encounter practical strategies to build community and increase your bottom line. You’ll find examples of astronomically successful in- vestors who have taken the idea of communi- ty-building very literally, providing financial support for the hardest-hit members of populations around the globe, creating educational platforms in innova- tive venues, and forging creative support systems for other investors in every demographic and geographic location. They are serving, building community, and building wealth all at the same time. While real estate is arguably (easily) the best route to wealth both short- and long-term, it is also the best route to lasting impact wherever your heart and your passions lie. Real estate investors feel this at a gut level; when we invest successfully, we inherently benefit our communities. The common denominators in every instance are clear: real estate and community. At Think Realty, we are honored to be part of an industry that values the concept of community at its most basic level and offers every member of the investing community a true chance to live a life full of purpose by their own definition and on their own terms. •
t will certainly be stating the ob- vious to say real estate investors
I
love land. Naturally we do! Physical property, the dirt under our feet and the structures we build on it, is the linch- pin of real estate investing. Whether you buy-and-hold, fix-and-flip, turnkey, landlord, invest in mortgage notes, creatively finance, or make hard-money loans, the land is the heart of the busi- ness, and real estate is the heart of our community. And so, we talk about it. The one thing every one of us seems to love almost as much as real estate in- vesting itself, from the greenest “newbie” to the most seasoned industry veteran, is discussing real estate. We quote, we meme, and (be honest) sometimes we boast a little when we tweet. Notably, however, at the end of the story, the final line is never “The End” but rather, “And then…” Our obsession with real estate is the first essential build- ing block of our community, and it’s the reason that real estate investing is, as one of our Think Realty coaches loves to say, “a team sport.” In this issue, we feature our Think Realty Honors 2017 award finalists, so you’ll see dozens of examples of how truly immersing yourself in the real estate in- vesting community yields huge returns both in terms of your bottom line and in terms of your lasting
CONTENT DIRECTOR CariAnn Steward CSteward@ThinkRealty.com
ASSISTANT EDITOR Heather Elwing
DESIGN CONSULTANTS Rivet | www.WeAreRivet.com
GRAPHIC DESIGNER Emily Bowers
FOR ARTICLE REPRINTS :: Contact Jeremy Ellis at Reprint Pros, 949-702-5390. www.reprintpros.com. SUBSCRIPTIONS :: The annual subscription for Think Realty Magazine is $28.95 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: CONTRIBUTING WRITERS Donna Behrens, Sonia Booker, Jan Britt, Kathy Fettke, Carmen Inman, Lindsay Johnson, Yulia Kozhevnikova, Linda Liberatore, Julie Ziglar Norman, Kevin Ortner, Charles Sells, Kimberly Smith, BreAnn Stephenson, Abby Tillman, John Trautman, Mike Ventry, Eddie Wilson and Brian Wojcik INVESTOR REVIEW: The American Association of Private Lenders, Brad Sumrok, GreenZone Properties, Net Worth Realty and RentFax COVER PHOTOGRAPHY Javier Olivero
LEARN TO SET INVESTMENT CRITERIA WITH SONIA BOOKER
WHAT'S NEW AT THINKREALTY.COM
Sonia Booker, a Think Realty coach and expert real estate investor, shares her knowledge with Think Realty members in her new video course, Investment Criteria . If you want an investment plan that fits your personal budget, lifestyle, and goals, Booker’s new course will show you the way by helping you determine how much you should invest in a property, based on the area’s rental rates and the formula she personally applies to help make decisions.
Learn more today on page 30 or at ThinkRealty.com.
Think Realty 7509 Tiffany Springs Parkway, Suite 200 Kansas City, Missouri 64153 816-398-4130 ThinkRealty.com Copyright ©2017 Think Realty
CAROLE J. VANSICKLE ELLIS, EDITOR-IN-CHIEF
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THINKING REALTY
EVENT COVERAGE
Looking Back: WhereWeWere Thinking Realty in the Past 12 Months
hink Realty started 2017 off with a partnered group event in San Diego, California, where we joined forces with the San Diego Investment Club. The conference featured local and national speakers who covered timely topics including diversi- fication, economic predictions, property insurance insights, and how to leverage real estate investing strategies for solid returns in a variety of ways, including flipping, whole- saling, rehabbing, and renting, both turnkey and otherwise. Bruce Norris, founder of real estate investment firmThe Norris Group, kicked off the day with an inspirational presentation on “The 10 Most Important Days in Your Real Estate Career.” The day closed with local real estate sensation Ken- dall Stock of Sage Investing LLC with “How to Find All the Money You’ll Ever Need to Invest in Real Estate.” In April, Think Realty headed to Dallas, Texas, for its National Conference & Expo themed “Enterprising Minds.” Think Realty debuted the first four members of a powerful new coaching team that has since expanded to include expert educators specializing in everything from rentals to rehabs, marketing to commercial investing, and creative deals to effective networking. This conference also was the site of a num- ber of other firsts, includingThink Realty’s “Women to Watch in Real Estate” panel, a veterans’ Rally Point hosted by HGTV T
other groups at home and abroad. In Au- gust 2017, Think Realty powered an event in Raleigh, North Carolina. The Triangle Real Estate Investors Association (TREIA) hosted the two-day event in conjunction with Think Realty, and both organizations provided a powerful team of instructors and educators to the benefit of attendees. Real estate icons Ron LeGrand and Steve Down both spoke during dedicated ses- sions, and TREIA hosted a private dinner with LeGrand for attendees who signed up to ask the real estate legend questions in a more intimate setting. In September 2017, Think Realty took an elite team of investors all the way to Shanghai, China, to participate in the three-day Global Destination Investment Summit, an event co-hosted by Think Realty. Shanghai is home to Affinity Investments, an international branch of Think Realty’s parent compa- ny. Affinity Investments is dedicated to helping Chinese investors identify and invest in credible investment opportuni- ties in the United States. If you missed a Think Realty event, don’t worry! We provide an array of digital coverage and content related to our events. Access it at https://think- realty.com/think-realty-events/.
star and veteran Andy Williams, the Think LIVE! Booth, where real estate experts were interviewed live on social media, and a post- event networking reception that included live entertainment from rising country music star Tori Martin. The next conference and expo took place in Baltimore, Maryland, at the end of June. As usual, Think Realty’s groundbreaking educational teams were on the ground instructing and providing one-on-one personal insight to attendees. The theme in Baltimore was “Navigating the Legal Landscape” and the conference once again debuted a cutting-edge panel presentation complementing the conference theme. A panel of legal and real estate experts dealt with complicated policies and leg- islative issues facing real estate investors today and offered actionable solutions for investors struggling with these issues. The American Association of Private Lenders (AAPL) also partnered in this event with its own exclusive educational track, and a number of local politicians and D.C. “movers and shakers” were seen in attendance as well. More coaches were added to the Think Realty coaching program. Key- note speakers included Financially Fit’s Steven Down and Good Success. Recently, Think Realty teamed up with
WhereWe’re Thinking Realty in 2017 and 2018 THINK REALTY EVENTS OFFER OPPORTUNITIES FOR GROWTH AT ALL LEVELS.
by Think Realty
THINK REALTY NATIONAL CONFERENCE & EXPO | ATLANTA, GEORGIA “PATHWAYS TO SMART INVESTING” OCTOBER 14-15, 2017 AT THE WESTIN BUCKHEAD
very local housing market holds multiple routes to successful returns in real estate, but Atlanta, Georgia, is particularly noteworthy for the vast array of opportunities its housing market represents. At this two- day event, local and national experts, Think Realty coaches and educators, and investors at all levels of activity and success will join forces to identify the pathways to smart investing. Saturday, October 14, will feature educational E
COMINGUP IN 2018
will have the opportunity to attend the Think Realty Honors Awards Luncheon, where the winners of the 2017 Think Realty Honors will be presented (see p. 10 for information on all finalists). Don’t miss the chance to define and refine your pathway to smart investing with the assistance of some of the most influential investors from all sectors of the industry. Learn more and reserve your spot at thinkrealty.com/events/atlanta.
breakout sessions and a vendor hall filled with industry experts eager to connect with you, and Sunday, October 15, will feature an array of educational intensives from Think Realty educators, including the Think Realty coaches. In addition to Think Realty’s premier educational offerings, including a local market spotlight panel, sessions on real estate strategy at all levels, and a feature presentation on creating wealth when real estate markets are at their peak, attendees
IRVINE, CA JULY 2018
DALLAS, TX FEBRUARY 2018
BALTIMORE, MD APRIL 2018
ATLANTA, GA FALL 2018
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MARCO SANTARELLI FOUNDER & CEO, NORADA REAL ESTATE INVESTMENTS
Marco Santarelli has been investing in real estate since he bought his first property at 18. He is the founder and CEO of Norada Real Estate Investments, a nationwide provider of turnkey cash-flow investment properties. He is a published author, host of the “Passive Real Estate Investing” podcast and the creator of the DealGrader™ system that scores the quality of potential real estate investments in a snapshot format. “Real estate has been and still is the greatest wealth creation vehicle available,” he said, adding that the “time freedom that comes from financial freedom through real estate” and spending that time with his loved ones is the real reason he invests. One of the clients who nominated him added,
Introducing the 2017 Think Realty Honors Finalists THIS YEAR’S INDUSTRY “MOVERS AND SHAKERS” ARE MAKING A DIFFERENCE EVERYWHERE.
“Marco is one of the most genuine investment providers out there and one of the most conscientious. His years of experience and successful investing are self-evident when you meet him.”
Finalists for Multifamily Investor of theYear
by Think Realty
ach year, Think Realty honors the leaders and change-makers of real estate who represent the best the industry has to offer. These individuals are nomi- nated by their peers, and the finalists are determined by an independent panel of judges who are former Think Realty Honors recipients themselves. This year, our finalists cross the entire spectrum of the industry. Their stories range from new investors just beginning (and exponentially growing) to E
true industry veterans with decades of expe- rience, from single-family investors focused on just a few neighborhoods to multifamily moguls buying millions of dollars’ worth of real estate at a time, and frommajor industry players employing hundreds of real estate experts to one-man (or -woman) operations making a difference with just the energy of the CEO alone. We are incredibly proud of this field of finalists, and we’d like you to meet them all.
All finalists are invited to attend the Think Realty National Conference & Expo in Atlanta, Georgia, on October 14, 2017, to be recognized at the official awards luncheon and spend the day networking with attendees at this exciting event. Reserve your spot at https://thinkrealty. com/events/atlanta/.
ALBERT DANIEL “DAN” BUTLER III CEO & FOUNDER, CRESTCORE REALTY, LLC, CITYLIGHT COMMERCIAL SERVICES
Dan Butler is CEO and founder of CrestCore Realty LLC and CityLight Commercial Services in Memphis, Tennessee. Since 2001, he has purchased more than 500 single-family homes, duplexes, and small apartment complexes in Memphis, 99 percent of which still reside in his portfolio. He specializes in improving occupancy and raising cash flow and rates of return in multifamily properties. His companies employ 75 people who serve 500 investors in the United States and internationally who own 2,500 properties with more than 5,000 tenants. “I started in- vesting in multifamily real estate to give me choices in life over the long term, but I had no idea that the opportunities I created would be 10 times what I thought they would be!” he said.
Finalists for Master Investor of theYear
One of his colleagues said of him, “Dan humbly flies under the radar, but he truly deserves to be recognized for his inspiring and industry-leading accomplishments.” JAY “FIXER” DECIMA CEO, KJAY PUBLISHING
ABHI GOLHAR MANAGING PARTNER, SUMMIT & CROWNE
Jay “Fixer” DeCima is a published author, mentor, and multi-family real estate investor with more than five decades experience in the industry. “One of the things that makes me the proudest is that for 50 years I have been able to provide affordable, clean, safe housing to hundreds of families,” he said, adding, “At any given time 25 to 30 percent of those units were rented under HUD Section 8 to low income families, many of which have rented from me for two generations.” One of DeCima’s favorite things about real estate is when it’s time to sell. Because he provides seller-financing on his deals, he receives monthly note payments that create a substantial retirement nest egg that he refers to as his “pajama money.” He explained “Once a month I trot down to the mailbox, in my pajamas, to pick up my checks.”
Abhi Golhar is a member of the Think Realty coaching team, where he is known as “The Connector,” host of daily radio show and podcast “Real Estate Deal Talk,” a managing partner at real estate investment firm Summit & Crowne since 2008, a real estate developer and single- and multifamily investor, and a private lender. He is also a contributor to Forbes, Inc., Entrepreneur, and The Huffington Post. Golhar excels in building proven, custom teams for difficult projects, coaching new investors toward their real estate goals, and, as his coaching title suggests, effective networking. “Without the people in real estate, acquisitions and assets mean nothing,” he observed in his application. The students who nominated him added,
“Abhi is the perfect example of the fact that if you focus on helping people, success will jump right out at you!” and “Abhi is a friend and business partner as well as being one of the sharpest young investors I’ve ever known.”
One of his mentees said of DeCima, “Jay helped me buy 85 rental units in Northern California. I continue to own and rent most of these units to this day. He has certainly been a very strong mentor to me.”
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Finalists for Single-Family Investor of theYear
Finalists for Educator of theYear
MARCUS PAINTER CEO, M&C PROPERTIES LLC
JAN BRITT FOUNDER & CEO, JAN BRITT INTERIORS
Marcus Painter is the CEO of M&C Properties LLC in Kansas City, Missouri. He and his wife, Cara, started M&C Properties a little more than 10 years ago and have grown the business from what Painter describes as a “do-it-yourself rehabbing operation” to a “proud business with more than 1,000 successful property transactions.” He added, “To date, we have a fully integrated company that sustains a growing construction, acquisi- tion, and property management company and provides services to hundreds of customers in several countries.” One of his clients said of Painter, “Marcus and his team have added a tremendous amount of value to my portfolio. His expertise and experience are an integral part of my business.”
Jan Britt is the founder and CEO of Jan Britt Interiors and has been helping clients decorate their homes and investment properties for more than 20 years. She also teaches a continuing education course for Georgia real estate agents and has been an instructor in Kennesaw State University (KSU)’s College of Continuing and Professional Education for 17 years. Britt not only teaches and implements traditional staging and design; she also creates affordable, repli- cable design themes optimized for real estate investors to minimize time on market, maximize rents and sales prices, and eliminate negative experiences associated with showing investment properties that can scare off potential buyers. “My techniques make my students’ lives easier and more profitable, and that makes me feel good,” Britt said.
“Jan recognizes the value of hands-on learning,” observed the KSU Department of Continuing Education representative who nominated her. One of her students added, “I know many instructors, but none like Jan. She is always excited to learn and share her knowledge as well as going the extra mile to make sure we receive more than we expected in every class.”
Painter said that the things he values most about real estate are revitalizing communities and giving back. He cited a recent neighborhood revitalization project that M&C Properties undertook to bring back a number of derelict homes in a local, “once-vibrant” neighborhood and his family’s support for mission work in Africa and the Cystic Fibrosis Foundation.
BRAD SUMROK FOUNDER, BRAD SUMROK MULTIFAMILY INVESTING
MITCH STEPHEN OWNER, 1000HOUSES.COM
Brad Sumrok is the founder of Sumrok Multifamily Investing, a company he founded in 2012 to “help people retire in fewer than eight years by investing in multifamily real estate (apartment complexes).” Sumrok has been principal in more than 3,000 units in the past 15 years. “I’ll never forget quitting my job after just three years of apartment investing,” he said, adding that he loves multifamily investing because it is a “feel-good business [that enables investors to] not only make some serious money, but also transform apartment communities by providing a great product and service for residents.” One of Sumrok’s students said about him, “Brad’s coaching and mentoring in apartment investing changed my family’s life. With his help, we have acquired three apartment complexes in the last year and a half.” Another added, “Before I met him, I was in the rat race and was miserable. Within six months of meeting him, I was passively invested in almost 300 doors and now I am a partial owner in 700 doors.”
Mitch Stephen started investing in real estate full-time 21 years ago and has been proudly self-employed ever since. He has spent much of his time refining the art of owner financing to the benefit of his own portfolio and those of other investors. He has purchased more than 1,000 houses in and around his hometown of San Antonio, Texas. That number inspired the title of his book, My Life & 1,000 Houses: Failing Forward to Financial Freedom. “I think my proudest moment was when someone drove 300 miles to shake my hand and thank me for allowing them to quit their job and take control of their own life,” he said, adding that the time he bought a property for $230,000 and sold it for $1.1 million 12 months later is a close second.
One of Stephen’s students described him as “one of the most humble people I know who values everyone he meets every day.” Another added, “He created a successful business from nothing!”
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Finalists for PropertyManager of theYear
Finalists for Service Provider of theYear
LINDA LIBERATORE FOUNDER & PRESIDENT, SECURE PAY ONE INC.
KEVIN ORTNER PRESIDENT & CEO, RENTERS WAREHOUSE
Linda Liberatore is the president of Secure Pay One, Inc., a property management company dedicating to saving property managers and real estate investors money by reducing slow-paying residents and resolving cash-flow issues. She is also the author of Daily Inspirations to Achieve Your Real Estate Investment Goals and My Landlord Helper: Keys to Managing Your Real Estate Investments, Achieving Explosive Growth, and Saving Money. “Probably one of my proudest moments was helping a landlord save his building from foreclosure by moving to timely cashflow just in time to avoid foreclo- sure,” she said.
Kevin Ortner is the president and CEO of Renters Warehouse and author of the book Rent Estate™ Revolution. Ortner joined the Renters Warehouse team in 2009 when he opened the first franchise in Phoenix, Arizona. Renters Warehouse manages more than $3 billion in residential real estate and services for more than 13,000 investors owning 20,000 residential homes. Ortner said, “Today, homeownership is at an all-time low [and] Americans are also increasingly unprepared for retirement. Our goal at Renters Warehouse is to help investors leverage a rental portfolio, what we call ‘Rent Estate’ or ‘Real Estate for the Rest of Us,’ as a tool to take hold of their financial future and build a legacy.” Ortner has a personal passion for real estate as well: “When I lost my job as a corporate pilot in 2009, my real estate holdings and my interest in property management saved me and my family from financial ruin. Real estate is one of the most powerful investment vehicles available to ordinary Americans.” According to the client who nominated him, “Kevin’s investors are able to relax knowing their properties are receiving first-class care regardless of portfolio size.”
One of her clients called her “the driving force behind her team’s success” and another called her “a role model to the community through her efforts in giving back,” citing her involvement with local colleges, fundraisers, and local business incubators. “Linda and Secure Pay One are a godsend for independent landlords with small holdings and those with dozens of units,” another stated.
DEB SALEK CEO/BROKER, AVENUEWEST NORTHERN COLORADO
BLAKE JOHNSON FOUNDER & PRESIDENT, FINISHING TOUCHES REMODELING
Deb Salek is the CEO, owner, and broker at AvenueWest in Northern Colorado. Ave- nueWest is a corporate housing provider specializing in fully furnished and serviced residential property rentals. Salek and her husband started their Colorado branch of the franchise in 2013, hitting $1.1 million in gross revenue during their first year of business and doubling that in the second. Although Salek focuses primarily on corpo- rate housing now, she bought her first condo in 1995 and that investment appreciated 47 percent over the next three years. She works closely with many investors who wish to enjoy the benefits of owning corporate rentals but do not wish to manage them directly. “I love that real estate is a tangible asset that is easily understood and evaluated based on market, physical, and environmental factors,” she added.
Blake Johnson is the founder and president of Finishing Touches Remodeling, a contract- ing company dedicated to serving the needs of real estate investors in the Fort Worth, Texas area. “Our team has a deep understanding of real estate investing, especially in the North Texas region, and we know what it takes to ensure properties sell,” said Johnson. “I’m probably proudest that we have survived 17 years in real estate, including the market crash. We turned that situation into a successful growth opportunity for our business.” One Finishing Touches client described Johnson and his company as “loyal” and added, “He truly cares about his clients.” Another wrote, “Finishing Touches has completely changed the way I think about general contractors for the better because he understands investors’ needs and care about them.”
“Some of my favorite things about Deb are her drive for excellence and sustainability in her business, her passion for people, and her willingness to always try and improve what she does,” observed one of her colleagues.
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Finalists for 2017 Emerging Leader/Rising Star
Finalists for Private Lender of theYear
LUKAS KRAUSE CEO, REAL PROPERTY MANAGEMENT
ROB BARNEY FOUNDER AND PRESIDENT, DHLC INVESTMENTS, INC., DHLC NOW
Lukas Krause became the CEO of Real Property Management, the largest single-family property management company in North America, less than two years ago in March 2016. Not only does his company have more than $13 billion in assets under manage- ment, but Krause cultivates a personal real estate portfolio as well. While he describes his proudest moment in real estate as the purchase of his first home, he said of being a landlord, “My investment property is someone else’s home while they are living in it, and I believe as the financial beneficiary of this arrangement it is my duty to maintain a standard so that the tenant is proud to call that property home. I lead my organization with this phi- losophy.” Krause added that his goal for Real Property Management is to “fundamentally change service standards for the property management industry as a whole.”
Rob Barney founded DHLC Investments, Inc. in 1998 with proceeds from what he de- scribes as “an internet venture.” Barney is experienced in all aspects of real estate investing but has chosen to focus mainly on the lending side of the equation, staying in business and thriving throughout the financial downturn thanks in large part to his personal guaran- tee to investors that he will take over and manage any project on which he makes a loan should that become necessary. “Whether you’re flipping homes or lending money, you have the opportunity to change lives. It’s gratifying to give borrowers access to funds and investors a profitable opportunity. Both parties get the ability to reach their goals and dreams,” he said. Barney not only is a volunteer educator at two different local colleges but also recently founded his own nonprofit, DHLC Now (Delivering Hope, Labor, and Compassion Now), that provides free construction services and materials to military and first responder families in crisis with housing repair needs.
Krause’s colleague said of the young CEO, “During his first year [as CEO] the company grew by 16.3 percent in units managed and increased revenue per property by 20 percent while franchisee satisfaction scores reached the highest in company history.”
“He’s just an all-around good guy,” said one of the investors who nominated him.
CITYLINK REAL ESTATE SOLUTIONS (TYLER WEITZ & KEITH MURRAY) CO-FOUNDERS, CITYLINK REAL ESTATE SOLUTIONS
BILL GREEN CEO, LENDINGONE FINANCIER & CHAIRMAN, THE GREEN FAMILY CHARITABLE FOUNDATION
Although CityLink Real Estate Solutions has only existed since 2014, the company is taking the Raleigh, North Carolina, area by storm. Co-founders Tyler Weitz and Keith Murray buy distressed properties and convert them to profitable, productive investments at high vol- ume and breakneck speed while still managing to keep empathy at the very heart of their investing model. “We always want to be extremely sensitive to our clients’
Bill Green is the CEO of LendingOne, a financial technology company focused on providing creative financing to professional real estate investors. “My initial interest in real estate was fueled by its non-correlation to the stock market and the healthy risk-ad- justed returns over the long term,” said Green, adding that ultimately this interest “paved the way for LendingOne’s technology-enabled private lending, which makes us one of the fastest-growing private lenders in the country.” Green recently published his first book, All In: 101 Real-Life Business Lessons for Emerging Entrepreneurs. Green noted that LendingOne currently has a presence in 41 states after just under three years in business.
perspectives,” said Weitz, who does not refer to motivated sellers as “leads” or “deals” but always “clients” or by specific case or name. “They’re often not in a great situation: foreclosure, debt, distress,” he added. “Our goal is to try to build an offer that meets their needs, whatever those needs may be, as well as our own.” Weitz and Murray officially joined forces to found CityLink just under three years ago. “They have such a creative, compassionate approach to real estate,” said a client who nominated them. “It’s making their investors love them and it’s one of the main reasons they’ve been so successful so quickly.”
“Bill is a dedicated businessman, serial entrepreneur, successful real estate investor, and published author in addition to contributing time and effort to numerous organizations including the Young Presidents Organization, the Children’s Hospital of Philadelphia, and The Green Family Charitable Foundation,” observed a colleague. Another added, “He’s got incredible business acumen.”
TYLER WEITZ (ABOVE) KEITH MURRAY (LEFT)
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Finalists for Humanitarian of theYear
STEVE DOWN, LINDA LIBERATORE, BILL GREEN, ROB BARNEY, BRAD SUMROK
Finalists for Commercial Investor of theYear
Think Realty has five Humanitarian of the Year finalists, unlike our other categories where the field was narrowed to two. It is particular- ly noteworthy that all five were also nominated in other categories. Read about them in the profiles above or skip to page 8 in the Inves- tor Review supplement to read more about the causes that inspired members of our judging panel and our nominees in every category.
TAMMY PHELPS-KEGLOVICH DIRECTOR OF ACQUISITIONS & MANAGEMENT, CAPSTONE INVESTMENT ACQUISITIONS & FOUNDER, CAPITAL CITY REIA
Tammy Phelps-Keglovich is the founder of Capital City Real Estate Investors Alliance (ccREIA). At Capstone Management, she and her husband, Jim Keglovich, lead the acquisi- tion, repositioning, stabilization, and management of 15-to-150-unit properties in multiple U.S. states. Part of that process includes renovating many of those properties to establish maximum value within their communities. “Building communities where we can make a last- ing and profound difference in the lives of others is why we are here,” she said. Phelps-Keglovich and her husband recently “purged” the majority of their physical possessions in order to move on- site into one of their newer communities to better participate in repositioning that investment. “We’re dedicated to giving our residents truly awesome communities to call home,” she explained.
STEVE DOWN LINDA LIBERATORE
BILL GREEN
BRAD SUMROK
ROB BARNEY
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“Tammy is not just a landlord buying up commercial properties. She is creating communities at every property she and her husband control,” wrote the colleague who nominated her. “Additionally, she invests her time and passion in other investors [through ccREIA] to teach them how to use commercial property investing to create financial independence and legacy.”
STEVE DOWN FOUNDER, FINANCIALLY FIT, EVEN STEVENS SANDWICHES, THE FALLS EVENTS CENTERS
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Steve Down is the founder and CEO of Even Stevens, a sandwich shop that has become a force for sustainable change in the communities it serves, and The Falls Event Cen- ters, innovative and state-of-the art event facilities that are rapidly becoming “the place” to hold business gatherings, dream weddings, and family events. “For every sandwich sold, Even Stevens donates the value of that sandwich to a local non-profit which, in turn, feeds the hungry,” Down explained. Even Stevens has already donated more than 1 million sandwiches in its two years of business. The Falls Event Centers also support Down’s “cause capital” concept, offering free facility space to local non-profit partners from their unused inven- tory. Both endeavors meet Down’s priorities of making a difference in the communities in which he in- vests while also turning a profit. “I invest in real estate because it is a hard asset and provides preservation for your investment during the wealth creation phase,” Down said. “Steve has an unwavering commitment to building businesses that change lives and communities for the better,” said an investor who nominated him. “He’s helped more people than can be counted through his cause capital philosophy.”
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COVER STORY
Garrett Fuller (left) and Dallas Hall (right) believe that with the right set of parameters, successful real estate investing can happen absolutely anywhere.
RETURN ON RENTALS
NOT ROCKET SCIENCE REAL ESTATE,
Return on Rentals “No Limits” Investing Relies on Clarity, Focus, and the Right Equation.
BYCAROLEVANSICKLE ELLIS PHOTOS BY JAVIER OLIVERO
EVERYONE IN THE COMPANY UNDERSTANDS THATTHEIR SUCCESSAND THE BUSINESS’ SUCCESS HINGES
ON CLIENT SUCCESS.”
DALLAS HALL CO-FOUNDER, RETURN ON RENTALS
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COVER STORY
RETURN ON RENTALS
ago, we could hop online, contact local bird dogs, dig up deals by the dozens. Now, it’s a little harder. You have to think a little farther outside the box. “We only operate in markets where we have 100-percent confidence. If we don’t have it or something changes our outlook, we move somewhere else.” Given that Dallas and Fuller per- sonally vouch for every property they sell, this level of caution and measured consideration is not surprising. Interestingly, both founders are con- stantly on the lookout for signs in any market that a ceiling is approaching in home values, despite their model focus- ing on cash flow rather than apprecia- tion. Many turnkey operators, including the Return on Rentals founders, refer to appreciation over the short- or long-term as “the cherry on top” of any turnkey rental purchase. This is because as prices rise, inventory tends to become tighter across the spectrum, particularly at the “starter home” level, which is where most turnkey rental properties reside. As long as the properties are cash-flowing, many investors will sacri- fice buying at a deep discount in favor of reliable monthly income. Return on Rentals, however, prefers to snag both for investors whenever possible. “The key to getting around that issue and keeping our inventory available to our investors is creative purchasing,” said Hall. “For example, we have a great rela- tionship with the land bank in Detroit, which lets us buy direct and for less in a market that we expect to have a long run remaining.”
WHEN GARRETT FULLER AND DALLAS HALL, co-founders of Return on Rentals, talk about their company, the first thing you hear is “no limits.” Immediately thereafter, the two enthusi- astically delve into the near-obsessively organized process they use to purchase, rehab, lease, and sell hundreds of turnkey properties annually to inves- tors building their portfolios though cash-flowing, turnkey rentals in mul- tiple markets around the country. “We cast a very large net and we are clock- work,” said Hall of the process, which the two built together starting in 2010. “We have a very simplistic model. We have the same metrics, the same rehab standards in every city, and we have boots on the ground in every one of our markets,” he continued. “It means that we can move a very large quantity of properties to real estate investors both within the United States and interna- tionally. We’re meeting the demand for turnkey, cash-flowing rental properties in very competitive, attractive markets and providing investors access to the deals that they really want to buy.” WHERE IT’SWORKING Return on Rentals currently has a presence in three major markets and those markets’ commuter suburbs: Detroit, Michigan; Cleveland, Ohio, and Buffalo/Niagara Falls, New York. “We are constantly creating new avenues of acquisition that allow us to continue generating the volume of properties our investors expect from us,” said Hall, noting that the company has largely moved out of its fourth market, India- napolis, Indiana, thanks to oversatura- tion and inflated pricing. “We are always working to generate new, creative networks that help us find better and better ways to buy properties at a discount,” added Fuller. “The housing market is constantly evolving. Four years
plague turnkey providers. “There are a lot of turnkey companies out there that are vertically integrated, both selling the properties and running the companies that manage those properties for inves- tors. For me, though, that model simply does not make sense,” said Hall. Hall and Fuller believe property man- agement, like property acquisition, is best left to the experts. “Property man- agement is a very tough business. I have a property manager for my investment properties and I recommend property managers unassociated with Return on Rentals for my investors because that way there is no overlap of interest. We are for our investors. Period. If they’re not collecting rents, then we don’t have a business model, and that’s the end of the story,” explained Fuller. Another benefit of staying firmly in one lane is the amount of investor support that the company can offer its investors after they make a purchase. “The property man- agers we recommend are uncontrolled third H all and Fuller believe that successful investing hinges on consistency. Part of that “clock- work” relies on all parties in a transaction being clear about a couple key definitions. TURNKEYRENTAL: a real estate investment purchased rent-ready, often with a tenant already in place and paying rent. CASH-FLOWING PROPERTY: a property that is generating regular income at time of purchase.
ESTABLISHING CLEAR DEFINITIONS
Hall and Fuller credit much of their success in the turnkey industry to their dedication to sticking with the parts of the process they are good at and avoid- ing the many distractions that often
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COVER STORY
RETURN ON RENTALS
working together, they were colleagues at a large turnkey company based not in the real estate business, but rather in what Hall refers to as “the seminar busi- ness.” The company that employed them presented turnkey opportunities to real estate investors in an educational setting. Over time, they worked together with their team to build up that company’s property division and eventually created Return on Rentals as an independent company. “It was so important to me to have control of the assets and be able to personally vouch for every piece of product that was sold,” explained Hall. “I had to have my own company so we could raise money, build teams, and scale our networks.” Hall and Fuller agreed at the outset that everyone working within their company and with their investors would have to have skin in the game in order to create and maintain a relationship with their new company. “It’s not just for our needs, but for the clients’ needs as well,” Fuller said. “Everyone is fully vested, and no one is middle-manning deals. We’re fully committed to the success of our clients and everyone in the company understands that their success and the business’ success hinges on client success.” This philosophy has led to a unique brand of what Hall and Fuller refer to as “post-settlement care,” wherein Return on Rentals helps hold all parties involved in the transaction account- able and keeps things transparent even after a property has closed. “When you run a high volume, there are going to be issues from time to time. Not all tenants are perfect. We pride ourselves in helping people through those issues, especially in that first six to 12 months when the property and process may be new to the investor,” said Hall. A CORE OF CREATIVITY In a business so dedicated to focusing on its specialty, it may be surprising to discover a layer of creativity lurking just beneath the surface of the highly
NOBODY’S PERFECT: A PICTURE OF POST-SETTLEMENT CARE
R eturn on Rentals prides itself on steering clear of conflicts of interest by focusing solely on providing turnkey rentals to clients rather than getting involved with any other aspect of turnkey rental service. However, that focus sometimes means they find themselves in the role of advocate for a client during the post-settlement period. Garrett Fuller pulled back the curtain on what that role may look like with a recent, real-life example: “Last year, we had a client buy a property. The tenant had been in place about three months before there was a divorce and the husband left. The wife tried to keep up with the rent but ultimately came to the manager and told him she simply had to give up. She left her deposit and she moved out. “Within 72 hours of her departure, the home was burglarized and the fur- nace was stolen. There was already going to be downtime since the tenant left on short notice so this made the experience a really rough run, especially for a new buyer. This is the type of situation where Return on Rentals might step in. “In that case, we helped with rent concessions, provided some insight and guidance on the remodel, and we assisted with some of the fees associated with re-leasing the property as well. “We’re not obligated to do any of that. Post-settlement, the deal is legally done, but we understand that customer experience is what makes or breaks a company long-term, so we and our partners are always willing to work together to try to help investors out. “That’s where the benefits of everyone being vested in the company really come out: When we all work together to try to turn a really negative experience that no one could have controlled into a positive one that protects our investor’s interests and our own.”
Return on Rentals moved into the Buffalo/Niagara Falls area just after the housing crisis. Fuller credits state tax incentives, an expanding technology corridor, and a growing professional population for the ongoing demand in the area for rental properties.
SIGNS OF THE TIMES
D allas Hall and Garrett Fuller run their market research division based on Warren Buffett’s famous statement, “Be fearful when others are greedy and greedy when others are fearful.” To that end, many of the signs most investors believe indicate “trouble” pending in a market are, for Hall and Fuller, signs that things are about to get interesting and potentially profitable. “These are things that happened in the wake of the housing market melt- down that were pointed out as terrible signs of the times at the time,” said Hall. “In reality, those things opened up the markets for our investors and we really took off. It was like shooting fish in a barrel for our clients to get great
properties at incredible prices.” The two cited three signs that typically are inter- preted as bad news for a market that can be good news for real estate investors: • Increased inventory levels • Massive foreclosures and distressed property sales • Significant decrease in home ownership “When these three things coincide in the same market, it sends a lot of people running scared for the sidelines,” explained Hall. “However, for a turnkey rental owner or provider, these signs indicate that a
market is ripe for entry because as people leave their homes they need rental hous- ing, which pushes rents up, and at the same time it is easier at this point than any other point in the housing cycle to get deep, deep discounts on properties that are ideally suited to be cash-flowing rentals. “In markets where these three things come together, you’ll see rent premi- ums skyrocket and, with them, investor rates of return. “Of course, you must remember that we are operating in a very specialized position. We don’t flip to the retail mar- ket. The majority of our investors are cash buyers that realize when a market is in trouble, the iron may be hot for them to invest.”
parties and we get no financial benefit from an investor’s relationship with them, which frees us up to fully support our investors if they do have a problem,” said Hall. “There will be issues that no one sees coming from time to time when you do the volume of deals that we do,” he added. “Our model delivers a cash-flow property with tenants in place, but if you end up with an issue with the management company or an unforeseen complication, we’re able to step in and help you precisely because we do not owe the management company anything.” Hall cited a company practice that will, in some cases, allow investors to use Return on Rentals’ contractors rather than handling
repairs though the property management company. This can save serious expense on a major repair job because property manag- ers are often paid a percentage-based fee for handling this type of work. “Our managers expect this from us because they know at the end of the day, our objective is clear: keep costs as low as possible for our clients. That may mean we’re available with our crews to make sure they can get discounted work, materials, and labor,” he said.
NO MIDDLE-MANNING HERE When Hall and Fuller first began
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