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THINK REALTY 8  News & Events 12  Think Realty's Newest Coach: Shawn Woedl Leading risk management expert joins the team.

HOUSING NEWS REPORT 42  5 Financial Benefits of Owning Residential Real Estate Investments

"My Take" article from ATTOM Data Solutions. by Glenn Hamburger

DESIGN POINT 14  Renovation Rockstar: Historic Home Yields Hidden Treasures

46  The Most Underwater and Equity Rich U.S. Housing Markets "Data in Action" article from ATTOM Data Solutions. 48  Flipping Mysteries Explained

“Good bones” save a tricky renovation from disaster. Featured Investors: Kathryn Harbour, Realtor with Keller Williams and Steve & Denise Nunley, Steeden Preferred Properties

Daren Blomquist talks metrics, warning signals, and where certain markets may be changing “the rules” for flipping. by Carole VanSickle Ellis

SPECIAL FOCUS: STRATEGY 26  How to Identify the Best Secondary Markets for Investment For reasonable returns on risk, secondary markets are the answer. by Paul Fiorilla 30  Productively Placing Tenants with “Thin” or No Credit As credit-scoring changes, landlords may find themselves in the dark. by Carole VanSickle Ellis 32  Case Study: Tenant Screening in a Challenging Market Local policies require flexibility and creativity from landlords. by Eric Worral 34  Every Real Estate Investor’s Guide to Digital Assistants Property management, mobility, and artificial intelligence. by Linda Liberatore

THE BIG PICTURE 50  3 Simple Stories About Effectively

Negotiating with Buyers & Sellers Communication case studies that demonstrate how to get deals done. by Shaun McCloskey



86  Real Estate, Precious Metals & The Truth About Inflation Why more investors are buying real estate than ever before. by Samuel K. Freshman MINDSET 60  New Opportunities & New Worlds as a Cultural Ambassador Bringing fresh eyes to international real estate investing. by Jennifer Jo Cobb

Greystone & Co.’s STEPHEN ROSENBERG attributes growth to giving.


by Carole VanSickle Ellis :: photos by Emily Frances

36  7 Crucial Actions to Keep You Current Through Networking at Conferences Don’t ever miss another emerging industry trend with this to-do list. by Bill Griesmer









HOWTOMAXIMIZEYOUR INSURANCEBENEFITS Don't let a minor oversight void your disaster claim.

15 “SWEETSPOTS” FOR RENTAL INVESTORS These markets are just right for rental real estate.

THETHINKREALTY WALKABILITYPRIMER 3 keys to understanding and using walkability measures.

3COUNTERTOPOPTIONS FROMTHEFIELD What materials are right for your investment property and why.

38  3 Signs an Airbnb Rental Could Be Right for Your Market Look for these “green lights” when considering a short-term rental investment. Featured expert: Daniela Andreevska

INFORMATION MANAGEMENT NETWORK (IMN) 67  Middle-Market Multifamily Forum (Southeast) October 4-5, 2018 | Orlando, FL

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PUBLISHER R. Michael Wrenn


There's No Place Like Home

EDITOR-IN-CHIEF Carole VanSickle Ellis

VICE PRESIDENT OF MEDIA SALES Rodney Halford 816-398-4111 x86122 NATIONAL SALES MANAGER Teresa Stanton 816-398-4111 x86224 CONTENT DIRECTOR Abby Tillman DESIGN CONSULTANTS Rivet |


eal estate is the business of homeownership – quite

establish a sound, clearly delineat- ed real estate strategy for our deals before we enter them. Real estate investors truly have it

literally. No matter our investment strategy of preference, we are con- stantly engaged in the physical cre- ation, maintenance, and cultivation of hearth and home not just for ourselves, but for our buyers, tenants and residents, our own families, and, yes, even our sellers. With the advent of “reality real estate” and the ever-present fishbowl of the internet, inves- tors’ ties to the “home side” of real estate have become closer than ever: • Not only can we showcase our flips on social media for likes, loves, and lots of positive busi- ness exposure; we can also defend our choice of color scheme to a batch of critical peers and colleagues with opinions maybe a little stronger and more-lengthily-worded than necessary. • Not only may we shoot video of our latest dis- tressed property acquisition to demonstrate just what we’re about to do for the neighborhood; we can also face the (unfair and uninformed!) crit- icisms of those in our network who believe real estate investors are villains, not the problem-solv- ing, marketing-stabilizing force they truly are. • And, of course, not only can we educate ourselves to the “nth degree” using the best of digital and print resources; we can also find ourselves paralyzed by indecision if we fail to

all: access to the very best of entrepre- neurial success in one of the soundest investment vehicles in existence and one of the most difficult and intangible processes in the world, making a house into a home before a potential homeowner or resident ever steps foot in the door. In this issue of Think Realty Magazine , we’re taking a close look at some of the largest-scale endeavors an investor could possibly imagine with Greystone & Co. CEO Stephen Rosenberg, who started out just about as small as one might begin, as many of us have, with a plank and two file cabinets as a desk. We’re also dissecting the strategies behind the daily activities of the most active of investors in the industry today and digging into the details of why and how they make the big decisions (like where to buy next) and the little ones (like what price threshold warrants granite vs. quartz). We’ve interviewed some of the biggest and most comprehensive sources of housing and financial data and the industry experts whose living relies on their ability to make every aspect of an investment flow to- gether, profitably and productively, from acquisition to exit over the course of days, months or years. At Think Realty, we know your business depends on your ability to create homes out of houses. We're dedicated to being your home for all things real estate. •

DESIGNER Emily Bowers

CONTRIBUTING WRITERS Jan Britt, Laura Chalk, Jennifer Jo Cobb,

Harding Easley, Christy Edgar, Charlie Einsmann, Kathy Fettke, Paul Fiorilla, Samuel K. Freshman,

Bill Griesmer, Glenn Hamburger, Linda Liberatore, Shaun McCloskey, W.J. Mencarow, Justin Schneider, Douglas Skipworth, BreAnn Stephenson, Ingo Winzer, and Eric Worral.



Greg Rand has joined Think Realty Radio for The Power Play ! Tune in to Think Realty Radio to catch our new segment, The Power Play, where Abhi Golhar is joined by REI playmaker, and OwnAmerica CEO, Greg Rand. The duo deliver hard-hitting facts and get to the truth behind market news to give you the info you need to optimize your time, wealth, and purpose! Listen to Think Realty Radio every day at We’re also available on, iTunes, and a radio station near you. Visit for a complete list of our stations.

FOR ARTICLE REPRINTS :: Contact Jeremy Ellis at Reprint Pros, 949-702-5390. SUBSCRIPTIONS :: The annual subscription for Think Realty Magazine is $28.95 in the U.S. Order online at 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:

Think Realty 7509 Tiffany Springs Parkway, Suite 200 Kansas City, Missouri 64153 816-398-4130 Copyright ©2018 Think Realty


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Think Realty is a part of the Affinity Worldwide family of companies. Below, find exciting news about Think Realty and its sister companies.



What You Missed in Irvine, California Think Realty hosted its third national conference & expo of 2018 in Irvine, California, on July 14-15 at the Marriott Irvine Spectrum. Attendees gained access to the best in real estate when it comes to comprehensive resources, trusted and relevant tools, and real estate strategy, in keeping with the conference theme, Think Resources. Featured speakers included Carrie Cook of Ignite Funding, Sam Freshman of Standard Management Company, Linda Liberatore of

July 14-15, 2018 | The Marriott Irvine Spectrum THINK RESOURCES : Tech & Innovation IRVINE


Secure Pay One, and Bruce Norris of The Norris Group. The event was emceed by California’s Real Wealth Network CEO Kathy Fettke. Learn about future events in your area and access special insights from past events at

by Harding Easley, Account Executive at

T he headlines about housing coming out of Orlando, Florida, are, to put it bluntly, a bit bleak:

FACTOR #1: Growing Population of “Active Adults”

Affinity REI Club Tackles First Investment Project

Recently, the number of age-restricted communities in and around Orlando has spiraled upward. As many as 1,041 units have been added just in the age-restricted, 50-or-more-units category, an increase of 26 percent in the past 4.5 years. Investor Takeaway: There is a demand for housing from the active adult population, and that translates to steady, skilled jobs for younger residents and an overall growing population in need of somewhere to live.

In February 2018, the Affinity REI Club, an investment club formed to give employees of Think Realty and its parent company Affinity Worldwide firsthand experience with real estate investing, made its first purchase. The property (left) is a brick Tudor in a local neighborhood the investors believe to be on the cusp of regeneration. The group is working with National Real Estate Insurance Group (NREIG), Affinity Loss Prevention Services (ALPS), Radius Renovation Group, and well-known designer Paul Helmer from Touch of Distinction on the project. Follow their progress on or on Instagram #TotalGutJobTudor.

“Millennial Buyers Face a Tough Housing Market”

“Orlando Housing Market Heats as Home Prices Outpace Wages” “The Orlando Housing Market is Complete !*&% Right Now”

FACTOR #2: Steady Employment Growth in Certain Attractive Sectors

In the Orlando area, professional and business services, education and health services, and leisure and hospitality services dominate employment growth. The first two in particular offer steady employment at a solid wage and all tend to attract reliable, long-term renters.

American Real Estate Investors Gain Access to Spanish Market

Yes, that last one is a real headline.

In July 2018, Think Realty’s parent company, Affinity Worldwide, announced a partnership between LoanMLS and LEM Loan eMarket to create the first debt- buying and -selling portal in Spain. The new site allows American investors to browse hundreds of Spanish real estate notes and is designed to enable more physically distant investors to enter the Spanish market. For more information, access, or email Learn more about responsibly and legally investing in real estate notes in foreign markets on p. 92.

Investor Takeaway: Individuals moving into the area and most likely to need housing are more likely to to rent than own.

When the going gets tough in a given housing market, the return-oriented real estate investor takes a closer look for opportunity. Let’s take a closer look at three characteristics of the area surrounding “House of Mouse” and said mouse’s “Magic Kingdom” for that opportunity.

FACTOR #3: Constrained Housing Inventory

There is a need for more residential inventory, rentals and otherwise. Large multifamily developments’ (50+ units) occupancy rates have held steady at 96 percent for more than a year. The current inventory is hovering around two month’s supply. Five months is considered a “healthy balance.”

Don't miss our upcoming events!

Investor Takeaway: There is a desperate need for more housing in Orlando and the surrounding areas.

THE SAVVY INVESTOR’S SOLUTION TO ORLANDO’S MARKET EQUATION The Orlando area is going to keep bringing in new residents: retirees, who are living longer and have specific (and expensive) wants and needs for their housing, and populations who serve them. With single-family housing at an all-time low, the most bang for your investing buck could well be found in the form of upgrading existing multifamily to create higher cash flow or in new development of multifamily housing, age-restricted or otherwise.

September 22-23, 2018 | The Westin Buckhead Atlanta THINK PURPOSE : Investing with Impact ATLANTA

Think Realty Conference & Expo - Dallas February 16-17, 2019

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Investor JoAnna Anderson's focus is firmly on her family, and every minute matters.



sole proprietorship as a realtor, and coaches as an independent contractor) and became a licensed realtor. “All those businesses are a blessing, and so is being able to share wealth building and entrepreneurial strategies with my family to create generational wealth,” said Anderson, who is the youngest of 28 children and most precious commodity, though,” she not- ed, making particular mention of her Reale- flow systems, which she says help keep the many facets of and individuals in her real estate business organized. “Having a tool like Realeflow has been really invaluable to me. When you’re literally running out of time, having something that saves time so not a minute is wasted is like a godsend.” Realeflow is an all-in-one investing software intended to help new and experi- enced investors find, fund, and flip houses quickly. The software provides real estate investing leads including sellers, buyers, and private lenders, automates direct mail coaches many of her nieces and nephews as well as her own two daughters. “Time is still my

hen JoAnna Anderson found out she was pregnant with her sec-

campaigns, makes designing and launch- ing custom websites easy, and can even be used to create repair estimates and co- ordinate rehab projects, keeping multiple individuals all on the same track through- out the path of a real estate investment. “To me, legacy means the portion of you

ond daughter in 2005, she was a full-time biology teacher pursuing her passion for ed- ucating others. Like all mothers, she already knew the value of cherishing the time with her little one, but six months later, time took on an entirely newmeaning. Anderson learned she had severe hypertension and kidney failure. Her doctors warned her if she opted not to terminate the pregnancy, it was unlikely she or her baby would survive. Suddenly, every minute mattered more than it ever had before. “I was ready to give up my life so my daughter could live,” Anderson recalled. “But then she was born, small but healthy, and we were both still alive.” Doctors hoped that once the baby was delivered, Anderson’s kidney function would return. It never did. Instead it fell further, to 18 percent, where it remains today. Anderson knew her time could be very limited. “I was still teaching full-time when I did my first deal. I made $50,000 in six weeks – the equivalent of an entire year of teach- ing!” she said. Anderson began building her real estate businesses (she now owns four, including two rehab/active investing companies, one holding company, and one

that remains even when you are no longer physically present,” Anderson observed. “The legacy I want to leave my family is education and a path to free-

“Having a tool like Realeflow has been really invaluable to me. When you’re literally running out of time, having something that saves time so not a minute is wasted is like a godsend.”

dom.” For Anderson, her business structures and the knowledge and ability to manage themproductively are that legacy, and the organizational support structure beneath them gives her confidence that her legacy is in good hands. •


Realeflow is a Think Realty Supplier. Learn more about how you can access Realeflow

advantages and member benefits at

Spots are limited to first 32 players. Registration closes on 10/19/2018.

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Residential Real Estate IndicatorsYouMust Know RENTALS ARE “HAVING A MOMENT” AND YOU NEED TO KNOWWHY.

SHAWN WOEDL Leading Risk Management Expert Joins the Team THINK REALTY'S NEWEST COACH:

by Douglas Skipworth

ow is the time to buy residential real estate. I have been in the real estate investing business for more than 20 years, and all the signs are there: • The stock market is near all-time highs • Debt market yields are still histori- cally low • Supply and demand factors in residential rentals strongly favor landlords and other investors As of the middle of 2018, buying rental real estate seems like a wonderful op- portunity to get a solid long-term return with low risk. N

AGOOD BALANCE OF RISKAND REWARD “Residential real estate offers the returns of stocks with the low risks of bonds. It is the best of both worlds,” said Doug Bendt, economic consultant to real estate companies including Roofstock and Investability. Referencing the graphic below, we can draw two important conclusions about rental (or turnkey) real estate in compar- ison to other, more traditional invest- ment offerings: 1. RENTAL PROPERTIES OFFER DIVIDENDS AS WELL AS CASH FLOW. This makes their list of benefits similar to

that of a publicly traded stock offering, which offers growth and dividends. What that means to me today: Based on today’s rent rates, carrying costs, and rising home values, the return side of the rental ownership equation is very attractive. 2. RESIDENTIAL REAL ESTATE IS COM- PARABLE TO BOND INVESTMENTS. Rental yields are not nearly as volatile as the stock market, which clearly exhibits dramatic swings. It is steadier, like bonds. What that means to me today: I do not expect major surprises for real estate returns in the near future because the fundamentals are very favorable for investors regardless of outside factors. WATCH RENTAL DEMAND DRIVERS CAREFULLY Just like we learned in Economics 101, the two main drivers of the risks and rewards of residential real estate investing are supply and demand. These fundamentals will guide you as you SFR RENTAL

al experience in real estate, business, and property management to NREIG’s unique, investor-oriented brand of

for the cheapest policy he could get on the property because his insurer at the time told him it would cover him in an extreme emergency. That coverage, which had to cover all of his losses in a total-loss scenario, was worth a max- imum of $20,000. Neither party un- derstood what the ramifications could be in an ‘emergency’ and they made a terrible financial decision with horrible financial ramifications since the inves- tor had not factored this potential loss into his worst-case-scenario plans.” FAVORITE BOOKS: • The Ranger Way , by Kris Paronto • Relentless , by Tim Grover MENTORS AND ROLE MODELS: “My Dad and my late Uncle Rock, who both taught me the importance of work- ing hard every day to provide for my fam- ily, and TimNorris (CEO of NREIG and a longtime friend and mentor for Woedl), who taught me insurance and helped get me started in this business.” •

TITLE AND AFFILIATIONS: Senior Vice President of National Real Estate Insurance Group (NREIG), former Vice President of CORE Insur- ance Group, former Vice President of the National Condo and Apartment Insurance Group COURSES:  • An Introduction to Risk Management  • Protecting Yourself and Your Investments • Insuring Your Fix-and-Flip EXPERIENCE: Shawn Woedl has spent nearly 10 years of his professional life in proper- ty insurance after starting out on the other side of the table. “I started out managing health clubs in Ohio,” he recalled. “There is a lot of insurance fine-print in that business!” When he was offered the opportu- nity to begin to work with property owners on insuring their real estate, however, he jumped at the chance and never looked back. Woedl, who spe- cializes in residential and commercial real estate insurance specifically for real estate investors, brings his person-

property insurance. WHY HE’S HERE:

Favorable risk profile for SFR rental equity investment relative to bonds should attract large amounts of c pit l Greater efficiency of SFR rentals . . .

Favorable risk profile for SFR rental equity investment relative to bonds should attract large amounts of capital Greater efficiency of SFR rentals . . .

“Insurance has been great to me, but not everyone can say that. In fact, every day I talk to real estate investors who have suffered immense losses because neither they nor their insurance agents (not NREIG, of course!) really under- stood the unique aspects of insuring investment properties. I travel all over the country educating investors on the types of things they need to know, ask, and demand from their policy provid- ers to help make sure they do not expe- rience unnecessary losses. My mission is to help investors better manage their risk while only paying for coverage they truly need, but part of that involves making sure that protection is the right fit for their business model.” Woedl added one particular case of a now client of NREIG’s that haunts him. While the investor was still a prospective client, he suffered a total loss on an investment property. “It was completely gone,” Woedl recalled. “Unfortunately, the investor had opted

Favorable risk profile for SFR rental equity investment relative to bonds should attract large amounts of capital Greater efficiency of SFR rentals . . . Favorable risk profile for SFR rental equity investment relative to bonds should attract large amounts of capital Greater efficie cy of SFR ren als . . . 10% 12% 14% 16% 18% 20% computed from annual data 1988 - 2016 computed from annual data 1988 - 2016

10% 12% 14% 16% 18% 20%

0% 2% 4% 6% 8%

0% 2% 4% 6% 8%

computed from annual data 1988 - 2016

computed from annual data 1988 - 2016

0% 2% 4% 6% 8% 0% 2% 4% 6 8% 10% 2 14% 16% 18% 20% 10% 12% 14% 16% 18% 20%





Avg. Yield




Avg. Yield

> Continued on :: PG 96

© 2016 Investability, AllRightsReserved

© 2016 Investability, AllRightsReserved

Douglas Skipworth, CPA, CFA is the Co-Founder and Principal Broker at CrestCore Realty in Memphis, TN. CrestCore manages over 2,500 units




for approximately 500 individual investor clients, of which Douglas and his business partner Dan Butler are the largest. Connect with Douglas at

Access Shawn's courses at


Avg. Yield





Avg. Yield

© 2016 Investability, AllRightsReserved

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© 2016 Investability, All RightsReserved




The original home boasted a total of five rooms. The investors doubled the square footage of the home during the renovation (see after floorplan below) but kept four of the five rooms intact as well as the original wood floors, walls, and ceilings.


Steve and Denise Nunley, owners of Steeden Preferred Properties, are no strangers to historic renovations. In fact, when they found this historic property on the MLS and purchased it for $75,000, they had just undertaken renovations on a local farmhouse as well. When they saw the five-bedroom cabin, however, they knew it was something too special to pass on.


by Carole VanSickle Ellis | Featured investors: Kathryn Harbour, Realtor with Keller Williams and Steve & Denise Nunley, Steeden Preferred Properties


Deal Notes & Numbers 1935 historic home in Acworth, Georgia. Within walking distance of Lake Acworth, multiple public parks, and the historic downtown Acworth area, home to local dining, boutique retail, an arts district, and other local businesses and services.




When the work was completed, bright, wide windows and light colors complemented ornamental granite, modern fixtures, and dark, original wood floors. At right, one of two guest bedrooms, a full bath and a half- bath are visible from the hallway.

• 1,300 square feet • Five rooms total • Nine-foot ceilings in the attic • Loft in the garage • Hidden cellar area below porch area

• Original wood floors, walls, and ceilings restored and intact • 3 bedrooms (1 master suite)/2.5 baths, living room, upstairs bonus room, mudroom, laundry room • 2,750 square feet • All new plumbing, electrical, HVAC, plumbing, roof • Ornamental granite, custom cabinetry, floating pantry shelves • Screened porch with hidden wine cellar

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The Nunleys incorporated the surprise cellar space in the sunroom (below) by creating a hidden, custom wine cellar in the bright new entertainment area. The pantry (left) also boasts modern design, including floating shelves and granite counter tops.



“This 1935 property had some of the same features [as the farmhouse], good wood walls and the original floors, and it boasted a prime location near new, local development in the downtown Acworth, Georgia, area,” said Denise. Of course, with historic homes, half the work comes with getting the property ready to renovate, she noted. “Nothing was square, and the floors were not level. We discovered the attic had nine-foot ceilings, which led to a complete change to the floorplan midway to add a bonus room and unique storage area,” she said. “Then, it turned out there was an old cellar accessed from the sunroom. We turned it into a hidden wine cellar!” The Nunleys pride themselves on restoring homes many investors would consider tear- downs. “If we can see ‘good bones,’ we give it our best,” Denise said proudly. “These renovations are harder, but the rewards are great when you discover the history of a home and the families who lived there. You cannot build a new home today and have the character an older home provides.” •





(Left) When the investors discovered their new open-concept floorplan was “topped” with nine- foot attic ceilings, they immediately added a bonus area upstairs with a reading nook, unique additional living area, and “secret” storage space.

(Above) Bathroom 2 After: Notice the exposed brick detail and space-conscious shelving in the full bath.

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Greystone & Co.’s Stephen Rosenberg Attributes Growth to Giving




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The Deals in the Details P art of Stephen Rosenberg’s vision for Greystone & Co. has always been that the company would lead the way in bringing new investors into the real estate sector along with new concepts, strategies, and solutions. This has created a vast history of creative deals and innovative lending on a grand scale. “Our goal, from the beginning, has been to take a product that seemed intimidating, those HUD loans and other large-scale lending programs, and really make them accessible to the mom-and-pop real estate owners,” explained Judah Rosenberg, Stephen Rosenberg’s son, a vice president at the company, and an experienced real estate analyst entrenched in HUD lending. Greystone & Co. routinely brings underwriters to what Judah refers to as “the front lines” to meet with clients directly and best assess their needs, and the company’s focus on transparency throughout the entire application process has the pleasant side effect of creating some of the fastest closing times in a notoriously slow industry. The company does more than just boast short timelines; a recent pilot program designed to expedite the loan process closed three deals in four months, whereas this type of lending often takes a year or more to close. Below is a small cross-section of the types of deals Greystone & Co. facilitates on a regular basis.


“Greening Up” in Raleigh, North Carolina

Growing a Portfolio in Williamsburg, Brooklyn

One of Rosenberg's stated goals is to make Greystone & Co. one of the best places to work in the industry. Here, he confers with Serafino Tobia, Greystone's head of CMBS trading.

This transaction involved a $29.2 million Freddie Mac Green Up loan, a 368-unit

multifamily property in

TODAY’S FIRST ORDER OF business for Stephen Rosenberg, CEO of commercial real estate lending, investment, and advisory firm Greystone & Co., is simple, but it may catch the uninitiated by surprise. It is not, for example, allocating the approximately $30 billion in assets that his company manages, nor is it coordinating a high-profile meeting between the executives who lead his 34-odd company offices and some 8,000 employees. It is not even (although this is a close second on the list) a close review of the due diligence on history- making loans to help create affordable multifamily housing in some of the most astronomically unaffordable markets in the country. This morning, as soon as we're done with our interview, Stephen Rosenberg is off to provide some personal assistance to an employee in need before getting on with his to-do list and his day. “This firm runs on logic, except when it comes to the way we care for people in distress,” Rosenberg said. “When people are not treated fairly, when someone’s ‘rainy day,’ so to speak, is today, then that becomes my priority.” That “someone”

of our profits went to charitable causes, helping others and enhancing lives.” The company has never raised any outside equity, unusual in this sector. “We’re a principal lender with a loan servicing portfolio of about $26 billion and we have never gone outside to raise equity. We always invest whatever profits we make, however meager or substantial, back into the company and into the lives of others,” Rosenberg said. Over time, Rosenberg was able to expand and contextualize Greystone’s philanthropic vision in several sustainable and profitable ways. Perhaps most notable in this regard is the nonprofit Harmony Housing, a 501(c)3 focused exclusively on the acquisition of affordable housing assets nearing the end of their initial tax credit compliance periods, meaning the cost of living in those developments could rise, sometimes astronomically, in the near future and dramatically alter the lives of many residents. For example, in mid-2017, Harmony Housing acquired three multifamily properties in Texas with a total of 862 units. The acquisition was funded largely through the entity’s

can be a client, an employee, or anyone in need. “I was brought up to understand the only things that really belong to us are the deeds we do, good or bad,” he added. “Those seeds were planted early by my parents, and I’ve spent my life living that my purpose is to love and do for others.” Rosenberg’s values have been proving themselves for more than 30 years on an increasingly large scale. Greystone & Co.’s foundation was, literally, two filing cabinets and a spare door: the desk at which Rosenberg sat to make calls to the owners and managers of HUD-insured multifamily properties in default. “We had to call them. Nobody else would call us back!” he recalled ruefully. “I had to develop an expertise that was better than their other options, and that became our specialty: working out defaults of apartment buildings.” Greystone has been in the business of problem-solving ever since. THE GROWTH FACTOR: GIVING From the very first loan workout, Rosenberg’s philosophy was enacted in full force. “Every year, no matter how well (or not) we did, at least 50 percent

Raleigh, and residents and

borrowers committed to energy and water savings. Greystone originated the loan on behalf of one of the largest publicly traded REITs in the country. The terms provide both attractive returns and an attractive philosophical angle for REIT investors, who value the energy savings for environmental reasons as well as how they translate in the bottom line.

On the “smaller” side of Greystone’s lending operations, the company recently provided $13.3 million in Freddie Mac financing for a 24-unit apartment building in Williamsburg, Brooklyn. The loan enabled the sponsor to permanently exit construction financing after building the competitive new rental property. Construction loans are short- term and intended to finance the building phase of a project. They tend to have higher interest rates and are perceived as higher risk. Entering permanent financing enables an investor or investment group to reduce carrying costs once the project is complete.

Affordable Housing Rehab Hangs On in Newark, New Jersey

Greystone & Co. combined efforts with Hudson Housing Capital and Freddie Mac to finance a $160 million effort to upgrade 842 subsidized housing units in Newark, New Jersey. The development serves seniors and residents in deep poverty who may pay as little as $80 a month in rent because their incomes are so low. Financing this type of upgrade project is vitally important to communities with a scarcity

of affordable housing because without financial wherewithal to upgrade the units, the inventory will either eventually be lost to neglect and disrepair or “gentrify” out of existence to make way for higher rents. Making upgrading these types of units both affordable and attractive from a returns standpoint is crucial to serving the housing needs of an increasingly large portion of the population.

Photo courtesy of New Community Corp.

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MEMPHIS INVESTMENTS AD October Memphis Investment Properties Real Estate Investment Summit and Tour of Homes


October 5-6, 2018

Memphis TN

AN EYE FOR OPPORTUNITY ANDAN EAR FOR SOLUTIONS Harmony Housing may be a nonprofit but make no mistake: Greystone & Co. itself is dedicated to the growth side of the equation as well as the giving side. The company provides financing for deals as small as $900,000 (for example, a mom-and-pop real estate company buying a six-unit brownstone) to hundreds of millions that might be used to help a real estate investment trust (REIT) refinance a national portfolio or a developer create an entirely new and desperately needed multifamily community in an attractive area. This eye for opportunity translates to an ability to create new developments and resolve problems in existing ones. That ability directly correlates to the

own revenue, and Rosenberg and his colleagues expect the investment to not just increase the number of affordable housing units in the Harmony Housing portfolio by 20 percent but also to yield strong returns on its own after renovations and repositioning. “This type of acquisition both furthers our goals for providing a good, affordable lifestyle to residents who need it – often the elderly and disabled – and to create a sustainable model for enhancing the property without taking it out of the range of affordability for residents,” said Rosenberg. “Many buyers look for properties that can be taken out of the affordability criteria and into market rates. That is not what we do with Harmony Housing.”

firm’s ongoing growth and portfolio expansion (see sidebar on p. 21). “A recurring theme for us in our own property development projects is that there are usually one or even several challenging issues that make others want to avoid the project,” Rosenberg observed. “We go in aware of those issues and undertake the projects with their resolution in mind.” THE FUTURE: LEVERAGING INDUSTRYUPHEAVALAND FILLINGADESPERATE NEED These days, Rosenberg’s eye for opportunity rests squarely on skilled- nursing facilities. Greystone is already one

Memphis is a perennial market for investors • Brand new homes built as rentals • 901-531-9792

> Continued on :: PG 24

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of the nation’s largest providers of funding and financing to nursing homes and skilled nursing facilities, and the company owns and operates about 3,000 beds. “That industry is going through a lot of upheaval right now,” Rosenberg observed. “We are launching an effort on behalf of some of our clients to acquire more of these properties over the next couple of years. We might acquire 100 or even more than 200, so it will be an area of great expansion.” He explained where the opportunity comes into the sector: “A lot of the largest operators in the country are realizing they just can’t operate in every state anymore because hospitals only want to do business with skilled nursing facilities that provide a really high level of care. In today’s world, good care is not enough for state regulators, and standards still vary state to state. Every state has its own personality, and every regulator is different.” As operators exit their facilities in some states, Rosenberg noted many buyers do not “have as much experience as they should have to run their new investments, and that creates trouble for them as well.” Greystone & Co. is poised, thanks to its history with nursing homes and skilled-nursing facilities, to leverage this industry-wide instability, acquire the distressed assets, and return those facilities to a level of high-quality care. “Thankfully, we’re really better positioned than any company in the country to address this,” he said proudly. “There will always be incredible opportunity wherever there is industry instability, and real estate investors tend to be the best-prepared to identify it, leverage it, and remediate it.” •

Carole VanSickle Ellis is the editor of Think Realty Magazine. She can be reached at

Stephen Rosenberg sees opportunities to help investors and improve access to housing everywhere, even in the most expensive markets in the country. (View: Central Park from Greystone & Co. headquarters)

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•  Atlanta , which is a center of media, healthcare, and communications. The important point is that the impact of these intellectual nodes is not limited to one industry – a surfeit of highly educated and skilled employees creates a positive climate that helps attract a wide range of businesses. APLACE TO LIVE, WORK, PLAY The phrase “24-hour cities” refers to primary markets that have amenities such as restaurants, theaters, shopping, groceries, schools, libraries, transpor- tation and parks. These cities not only feature a wealth of employment oppor- tunities but have the elements necessary to be an enjoyable place to live. Secondary markets are not as large and don’t have the same level of ame- nities as the top markets, but many are considered “18-hour cities.” Metros such as Denver, Seattle, Atlanta, Dallas, Austin, and others have made huge strides toward becoming more livable – and thus more attractive for profes- sionals and high-income families, and in turn businesses. Strong secondary markets take a holistic view of economic development, recognizing that growth involves devel- oping communities where people want to live and not just work. Studies show that assets in metros that are “walkable” – that have a wide range of amenities within walking distances of offices and living ar- eas – have more rapid price appreciation.

ucated graduates into business has been a key in many markets for many years. Boston, for example, is greatly aided by its affiliations with Harvard and MIT. New York’s universities – including but not limited to NYU and Cornell –feed the financial services industry; and Cal- ifornia universities such as Stanford and Berkeley help produce the intellectual capital for Silicon Valley. Major metros tend to attract highly educated workers, which serve to in- crease the overall intellectual capital of the market and help produce economic growth. There is no surprise that the top is dominated by primary markets (Washington DC, San Francisco and Boston) and/or have dynamic growth (NC Triangle, Austin and Denver). CONCLUSION In order to get a reasonable return for the level of risk, investors simply must branch into secondary markets. As such, deciding which offer the best long-term prospects is critical to in- vestment performance. Our method of deciding involves three prongs:

How to Identify the Best Secondary Markets for Investment FOR REASONABLE RETURNS ON RISK, SECONDARY MARKETS ARE THE ANSWER.

By this we mean markets that have ef- fective government support for business and key intellectual nodes that underpin job growth. Examples of this include: •  Portland’s Economic Develop- ment Commission , which devel- ops partnerships and funding for economic development, restoration of downtown submarkets and living wage jobs; •  Pittsburgh’s Regional Alliance , which provides project manage- ment services to attract companies in key sectors such as manufactur- ing, energy, financial and busi- ness services, healthcare and life sciences; and •  Denver’s Metro Economic De- velopment Corporation , which is working to improve the area’s trans- portation system and tax structures and helping to create science and arts districts. Public-private partnerships often intersect with a market’s intellectual nodes, which are key industries that use intellectual capital to attract jobs and investment capital. Examples of this would include:

by Paul Fiorilla


that are necessary to attract and main- tain economic growth: •  Government support for business that engenders the creation and retention of “Intellectual Nodes” that produce high-paying jobs. •  Amenities that create a “live, work, play environment,” attracting jobs and residents. •  Strong educational system that pro- duces brainpower for high-quality jobs and helps to lift the prospects of lower-income residents. GOVERNMENT SUPPORTAND INTELLECTUALNODES One important factor in producing economic growth is the business climate.

ight years into a recovery that has seen property values soar to

On average, commercial properties are up 32 percent over the last 10 years, per the RCA Commercial Property Price Index (CPPI). During that time, prices for properties in six core markets (New York, Washington D.C., Bos- ton, Chicago, San Francisco and Los Angeles) increased by 46 percent while properties in all other markets rose 25 percent. Over the last three years, how- ever, the tide has turned, and non-core markets rose 27 percent to 25 percent for core markets, reflecting the move to secondary metros. How do investors identify the best secondary markets? Smart investors want to be able to choose between mar- kets that are temporarily being lifted by the influx of capital and general nationwide recovery and those that will outperform over the long haul. Yardi Matrix has identified three conditions

all-time highs, the real estate market is growing nervous about how long the good times can last. The economy is fast approaching its post-World War II record of 120 months without a recession and acquisition yields are at all-time lows. Investors are responding in two ways: NO. 1 they are being less aggressive in bidding on individual properties, leading to a decline in transaction activity; and NO. 2 they are increasingly moving into secondary and tertiary markets where yields are higher than core markets. The goal is to invest in markets that are on the upswing, where cash flow is likely to grow.

NO. 1 markets that have strong government-private partnerships;

NO. 2 those with a broad range of amenities that attract residents and workers, and NO. 3 those with quality educational programs to develop highly skilled workers and provide opportunities for low-income residents. •


Paul Fiorilla is the director of research at Yardi Matrix, a leadingmultifamily real estate research and data platformtailored specifi- cally to address the needs ofthe commercial

Another important factor to identi- fy strong secondary markets is those with a strong educational foundation. University systems that feed highly ed-

• Seattle , which has thriving tech, edu- cation and aerospace industries, and

market industry. Learnmore at

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Important Insights on Billboard Technology

Billboard Business Facts:


There are few or no college classes on billboard real estate and business. The Harvard Business School’s book on marketing gives billboards one paragraph. Most of the value in billboard real estate lies in the lease and the permit for the sign. If you are not crazy about a location and do not want to manage the advertising, you can sell the lease and permit and garner most of the value. Billboard properties are very low management. Most investors rent the ad space for six- or 12-month periods, make sure the sign is in good shape, and, as Rolfe described it, “walk away for about a year.” Billboard real estate has a very low capital entry point. “You can build a wooden telephone-pole billboard for less than $4,000 and purchase old, abandoned signs for next to nothing,” Rolfe said.

In the past 20 years, billboard advertising technology has changed dramatically. Rolfe recalled the first “tri-vision” billboards, which consisted of a series of rotating, triangular strips that enabled billboard owners to post three ads during the same leasing period. “When that was new, the whole sales pitch was it would allow you to have three ads on your sign, and the first few years people would pay the same for a third as for a whole because the idea was that every time the thing flipped, people would take note,” Rolfe said. However, over time, the novelty wore off and most people, including Rolfe, stopped using them because they did not generate enough revenue to make the increased maintenance of managing three signs and the mechanical side of things worth it. “When they brought in LED boards, a similar thing happened,” Rolfe recalled. If an investor owns multiple signs in multiple locations, LED signs allow advertisers to change the locations of their advertisements and prevent “ad blindness.” While the hypothesis sounds strong, Rolfe noted most cities do not like these installations and advertisers do not report the returns they hoped from using LED-based strategies. “For the average investor starting out, I would recommend focusing on the ‘meat and potatoes’ in the industry, the basic billboard,” he concluded.

by Carole VanSickle Ellis


government,” said Frank Rolfe, co-own- er at CREUniversity and formerly the largest private owner of billboards in the Dallas-Fort Worth area. “Historically, the government would regulate an industry in its infancy, then deregulate it. With billboards, however, they found they could not deregulate it because there was so much opposition through Scenic America and other groups,” he said. “Basically, billboards exist under a federal mandate that only allows them in certain zones and spaces. If you know where those zones and spaces are and you know how to identify places where a billboard would be attractive and can

magine being able to spot a piece of real estate that no one else realizes is full of potential, get a great deal on it, and then leverage it in a way that requires very little maintenance, upkeep, or management. It might sound like an impossibility, but you drive by dozens or more of these types of investments every day when you drive by billboards. If you understand what makes this industry unique, you are well on your way to investing with a huge advantage in the space. “Most people do not realize that the billboard industry is one of the few industries wholly controlled by the U.S.

gain control of that property, then you have a huge advantage in a niche of real estate most people know nothing about.” Rolfe, who specializes in niche areas of real estate, said billboard-based real estate investments come with special “protections” for the investment that few other types of development or real estate investing have. “If you have a billboard location, basically having a billboard in that location excludes anyone else from building another billboard within so many feet of that location. That exclusion never goes away, and that is where the value is: in the lease and the permit that let you have that sign and no one else can have on in that location.”


fic-count map” is a good start, although you may have to speak with several people before reaching the right office. 2. COMBINE YOUR TRAFFIC-COUNT INFORMATION WITH ORDINANCE INFORMATION If your target location is within the city limits, start with those ordinances. If it is outside the city, review county and state ordinances. High-traffic areas with the right ordinances for building a billboard will be your bullseye. 3. IDENTIFY POTENTIAL PROPERTIES Determine what type of sign will work best for your potential property,

how much it will cost to erect that sign, and what type of income you are likely to generate from renting out that ad space. Then, get to work identifying properties and making offers! “A lot of people think you can ran- domly go out there and start building billboards anywhere you want," Rolfe said. "You can’t. There is a very limited supply of options.” •

Billboard investments are relatively straightforward, once you know the rules. Rolfe said the starting point for any billboard property investment is to learn your local and state laws. Then, the serious due diligence starts: 1. BREAK OUT THE MAPS Use an “old-fashioned” paper map to identify major highways in your area. Once you have a list, request a traf- fic-count map from your state. While the process will vary by state, going to the state department of transportation (DOT) website and requesting a “traf-

Frank Rolfe is co-founder of CREUniversity and an expert in niche real estate investing. Learn more at or email

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