TR_Investor_Review_August_2020

INVEST R SPONSORED CONTENT A Think Real ty Publ icat ion Hot

Market: Kansas City

LEE ROGERS realprotect

Aaron Chapman with Security National Mortgage Analyzes Housing in the Heartland

JEFF PEPPERNEY Real Property Management

MARCO SANTARELLI Norada RE Investments

NATHAN LONG Quest Trust

“ Although this was my first experience purchasing an investment property through a conventional loan Aaron Chapman and his team made the process seamless. Very professional team that answered all my questions and concerns quickly. Very impressed they took the time to mentor me about investing, equally impressed the entire team called to congratulate me after we closed on the properties. I will be using them for all future investments. Thanks, Aaron and Cristina!

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Hot Housing Market Predictions WHY KANSAS CITY BOASTS ENVIABLE INVESTING OPPORTUNITIES

by Aaron Chapman, SecurityNational Mortgage

A ccording to the research of my friend Marco Santarelli of Norada Real Estate Investments, as of April 2020, “There is probably no hotter market right now than Kansas City, Missouri. A large, prosperous, self-sufficient, and culturally rich city, which has seen a continuous rise in its employment, directly impacting the local real estate. The Kansas City real estate market is very hot and in many Mackaylee Beach at USREEB offers “The low cost of living and continuous revitalization efforts make it a popular spot to live and visit. I invest in Kansas City because I know it will remain a stable market.” What data can we produce to investigate both their statements? Kansas City, Missouri, famous for ways the envy of housing pundits on both coasts.”

quarter was around 2.7 percent, which equates to an annual appreciation rate of roughly between 10 to 12 percent. This can trigger a massive interest in the Kansas City real estate investment. Even small changes in the

its distinct barbeque cuisine and jazz heritage is now emerging as a growing market for real estate investments. High demand and low inventory are driving up both home prices and speed of home sales in the local housing market. Home sales were up about seven percent and prices were up about six percent throughout the region in the previous year. Data from the Kansas City Regional Association of Realtors shows the average home price reached $229,306 in November 2019, a 4.6 percent increase over the average in November 2018. At the same time, the average days homes remained on the market dropped 4.8 percent to 40 days. The home prices are expected to flatten nationwide, increasing by just 0.8 percent, according to Realtor. com. Kansas City properties have a track record of being one of the best long-term real estate investments in the U.S. The real estate appreciation rate in Kansas City in the latest

appreciation rate can change the long-term value of buying

considerably. For sellers, a nice profit is on the horizon. Let’s learn more about the factors that make Kansas City a good place to invest if you’re considering real estate investment. Real estate prices are deeply cyclical and much of it is dependent on factors you cannot control. Please note that there are many variables that can potentially impact the value of a home in Kansas City (or any other market) and some of these variables are impossible to predict in advance. In this article, our focus will be on the current state of the Kansas City real estate market and how it can affect the investors and home buyers.

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WHAT MAKES KC A TARGET FOR INVESTORS?

Turnkey Properties Starting at Only $90,000.

Cash flows up to $650/mo.

Population to grow to 2,200,000 by end of 2020.

Median prices up 11.3 percent year-over-year.

Cost of living 15.3 percent below U.S. average.

Much of this information will be dated by the time you the reader are able to review. Being that the Global COVID Interrupt has had its way with our economy, some of these numbers can be different. One thing we do know is that trends tend to continue. Humans like to go back into their past like the old saying “History repeats itself.” Or the star high School quarterback never lacks

for a story around the campfire. Knowing these things, we should expect KC to continue to be source of favorable real estate investment opportunity. • Sources: NoradaRealEstate.com, Kansas City Regional Association of Realtors, Realtor. com, Zillow. The above information is the sole intellectual property of the author. Any distribution without written consent of the owner is strictly prohibited ©2020.

Properties up to 10 percent below market.

3-year appreciation forecast of 9 percent.

Average annual home appreciation rate of 3 percent. Median home value is $160,180 according to Zillow. 12 percent of listings had a price cut in Feb 2020.

SecurityNational Mortgage Company, and its loan officers, unless individually licensed and specifically denoted in their credentials, are not qualified to, and are prohibited from representing themselves as accountants, attorneys, certified financial planners, estate planners, investment specialists or tax experts, andwill not advise you in those matters. Always seek the advice of a licensed professional. This article is for informational purposes only, contains the opinion of the author, not necessarily the opinion of SecurityNational Mortgage Company, and should not be construed as lending advice. Loans are subject to borrower qualifications, including income, property evalua- tion, sufficient equity in the home to meet LTV requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and programguidelines, and are subject to change without notice based on applicant’s eligibility andmarket conditions. Refinancing an existing loanmay result in total finance charges being higher over life of loan. Reduction in payments may reflect longer loan term. Terms of the loanmay be subject to payment of points and fees by the applicant. Equal Housing Lender. SecurityNational Mortgage Company Inc. NMLS# 3116. Any amounts, figures, payments or loan terms stated are based on continually changingmarkets, rates, loan programs and borrower specific qualifications, and subject to change without notice. See loan officers featured for a personal consultation and accurate pricing.

3.9 percent 1-yr forecast till Feb 2021.

Average days on market is 75.

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Should You Pay Off Mortgage Points for Your Rental Property?

by Jeff Pepperney, Real Property Management

to make buying points worth it. To know precisely whether buying points is right for you, it is important to determine how long it will take for your interest savings to equal the amount you prepaid in points. By calculating this “break-even” point, as well as how much down payment you have available to avoid PMI or other costs, you can gain a clear understanding of which loan strategy is the right choice for you. In this way, you can more confidently choose the route that will lead to your most profitable financing options*. Making financing decisions is a big part of investing in single- family rental homes. But it is only one small part of the tasks and decisions that will compete for your attention every day. Because your time is valuable, it should be spent on the most profitable aspects of your business, rather than the day-to-day management of your properties. Independently owned and operated Real Property Management franchises take care of your properties so that you don’t have to. We can free up your time so that you can spend it on your investing business, all while keeping you informed on every aspect of your property and tenants. Contact your nearest Real Property Management today to learn more about how we can help make each day a more profitable one. *Real Property Management is not a financial advisor. This information is provided in general terms. You should consult local advisors regarding specific investments.

O ne way to lower the rate on your next mortgage is to buy mortgage points. But while buying points might make sense for some investors, for others it may not be the right way to go. The question of whether to buy points for your rental property or not is an important question that every investor should ask. But each investor is different, so the answers are likely to vary. Although buying points to lower your mortgage rate may sound appealing, it is not always the right approach. Just as there are times when an investor should take advantage of mortgage points, there are other situations where paying mortgage points is simply not helpful. For example, if you plan to keep your rental properties for many years, you are more likely to

save more on interest in the long term than what you paid upfront to reduce your mortgage rate. In such a situation, it may not be worth buying points upfront. Or, if you plan to sell your properties within a relatively short period or would need to reduce your down payment in order to buy points, doing either could eliminate any benefit you could have recognized from buying points. This is because if your down payment is less than 20 percent, you may end up paying private mortgage insurance (PMI) which may effectively erase any interest savings. The same thing may be true if you take out an adjustable- rate mortgage (ARM). With an ARM, if your interest rate will be adjusted within the first five years or so, you may not see enough interest savings

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Real ROI

The real difference in using Real Property Management—optimizing your ROI.

Using the right professional property management firm can help you earn more, not less. As the largest single-family residence management franchise in North America REAL Property Management has more than 30 years of experience doing just that for clients. There are many ways REAL Property Management can help maximize your investment and even help you with ways to monitor financial goals for your real estate. That’s the Real Difference.

Visit www.realpropertymgt.com to learn how Real Property Management can put our experience to work for you, giving you real commitment, real ROI and real peace of mind.

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Each office is independently owned and operated. © 2020 Property Management Business Solutions, LLC.

Real Property Management is the trusted leader in reliable, cost-effective management of residential properties. With local expertise, highly-trained and responsive teams, independently owned and operated Real Property Management franchisees collectively manage tens of thousands of properties for individuals, investors, and institutions throughout North America.

We Offer:

Comprehensive Marketing and Advertising For each day a property is vacant, that’s

Online Reporting Owners maintain control of their property and keep tabs from afar using their own online account, with easy access to updates on property activity, including vacancies, leasing, maintenance, property evaluations and financial reports. Cost-Effective, Reliable Maintenance Relationships with preferred vendors result in discounted equipment and services. Maintenance staff is available 24/7 to handle emergencies and to make sure maintenance is timely, cost-effective and done in a professional manner. Timely Rent Collection Nothing affects cash flow more than late or missing rent payments. In addition to offering incentives for paying rent on time, our collection processes are professional but tough, and we are extremely diligent in collecting rent through a systematic, timely process. Strict and Compliant Evictions Even with careful placement there is occasionally a tenant who needs to be evicted. Our offices are knowledgeable in state and local landlord and tenant laws. If rents are not paid on time, we strive to minimize costs by following the legal steps quickly and efficiently to get the property leased again.

money lost. Professional management costs are easily offset by shorter vacancy. Our advanced planning and heavy advertising gets vacancies filled fast.

Thorough Tenant Screening and Selection

Placing the wrong tenant can quickly cost you more than professional management fees. We make every effort to find tenants who will pay rent on time and take care of the property with the use of criminal, credit, and employment checks. Full-Service Leasing In addition to advertising properties and screening tenants, our full-service leasing process also includes rent-ready guidance, market rent analysis, professional showings, move-in property assessments, and professional tenant education at lease signing. Routine Property Evaluations Regular assessments of both the inside and outside of your rental property ensure tenant compliance with the lease and identifies maintenance needs to preserve your property.

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Insurance for the Real Estate Investor

Why realprotect?

What We Do:

Property & Liability Insurance Lender Compliant Coverage Online Portfolio Management Instant Proof of Coverage Pro-Rata Coverage - Only pay for coverage for the days you need it! Coverage For: Buy & Hold Fix & Flip 1-4 Family Homes Apartments Tenant Insurance Programs Commercial Properties Business Insurance

As the nation's premier real estate insurance broker, realprotect is the expert in insuring real estate investors. We understand the real estate business and what investors like you look for and need in a comprehensive insurance program. You've built a business out of owning and investing in real estate. Let us help you protect it. We start with an understanding of your properties and design an insurance program that helps you meet your coverage and pricing objectives. We promise that we will work diligently to find the best coverage at the best price for you. Give our process a try and find out why many leading SFR lenders and firms trust realprotect with their insurance and risk management needs.

Ask about customized solutions for: Lenders, Property Managers, Market Places, Investor Groups, and Turnkey Providers!

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800.579.0652 ⋅ www.realprotect.com

California License #0J05796 Norton Agency Insurance, LLC D/B/A Norton Network Insurance Agency LLC in the State of California; Agency License # 0J13180

Real Protection for Your Properties

by Lee Rogers, realprotect

A s the real estate insurance program of Norton Insurance, realprotect is not only comprised of insurance professionals, but is also a real estate firm that has over 200 licensed agents and property managers. realprotect is the expert in insuring real estate investors and understanding the real estate business and what you look for and need in a comprehensive insurance program. You have built a business out of owning and investing in real estate, and realprotect wants to help you protect it. realprotect starts this process by gaining an understanding of your properties, business structure, and operations. Then, realprotect will de- sign an insurance program that helps you meet your coverage and pricing objectives. realprotect promises to work diligently to find the best cover - age at the best price for you – based on your actual needs. realprotect takes risk manage- ment and loss control seriously for every single client. realprotect has

risk management resources to offer you the tools you need to under- stand the risks that you face and has partnered with industry-leading companies to provide you risk con- trol products at discounted rates. At the helm of realprotect is Lee Rogers, President. As an insurance professional that has worked and consulted with different Sin- gle-Family Aggregators, Rogers brings unique value and perspec- tive for investors, fund managers and operations professionals. He and the Aggregation Risk Man- agement Team at realprotect have helped design and implement insurance and risk management strategy that is above and beyond what is being set as an industry standard for insurance structure in Aggregation Portfolios, while keeping costs contained and risk properly manage and transferred. Based in Atlanta, Rogers has unique insight and knowledge of many insurance markets, with direct access to many of the world’s lead-

ing insurance carriers. Rogers has helped develop analytical tools and insurance philosophies that are in line with the true risk exposures that Single-Family Aggregators are fac- ing. He understands that the Aggre- gation Market is unique, and that the insurance industry must be able to adapt to this emerging asset class. Rogers uses his vast experience and innovativeness to focus on building business relationships with prospective clients, marketing products and advising investors on coverage options for their real estate assets – while making sure that his entire team at realprotect provides the same quality experi- ence for each client. Lee Rogers and his team at realprotect work with industry leaders such as lenders, market- places, and property managers and wholesalers to provide them with the protection and service that their hard work deserves. To learn more about realprotect, please visit www.realprotect.com. •

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The Quest for Financial Growth

by Nathan Long, President of Quest Trust

T he real secret to success is not chasing the hottest deal; it is coupling the best tax strategy with your specific investment. I did not become a CPA or study to become a tax attorney to maximize my investment returns, and you don’t have to either. Instead, I spent my time learning about how I could do the same real estate investments I have always done, but grow my profits completely tax-free. In the process, I stumbled across life changing knowledge on how I could pay for my family’s everyday expenses for health and education also completely tax-free. This knowledge is accessible to anyone who wants it, and I’m happy to share some of it with you. I started my career in the automotive industry and spent more than 17 years in that field, working with Automotive Investment Group (AIG). Like many Americans, I spent my time in corporate America investing my hard-earned money in stocks or mutual funds, leaving my financial success in the hands of other folks who may or may not have understood my financial and personal goals. Over time, I became motivated to take my future into my own hands and I began to pursue real estate investing. It’s been 25+ years later and I have never looked back. Houston’s unique and thriving economy, in addition

to its historically strong local communities, present an unparalleled opportunity for collective and personal financial growth. Our city is not only poised for future growth (since 2010, the Texas population has grown by more than 3.5 million. [according to Forbes]), it is presently a hub for business, opportunity, and diversity. 26 Fortune 500 companies call Houston home, in addition to the largest medical center in the United States and major employers like ExxonMobil and HP (according to RWN). While these businesses continue to stimulate economic growth, our most important assets are the people who live here. By combining different tax-advantaged accounts with the real estate investing skills and strategies you already possess, you can create unlimited opportunities not only for yourself, but for your local community and for your city.

As the President of Quest Trust Company, I have the exciting opportunity to share my knowledge and help investors learn how they can make a good deal even better with the right education. Self- Directed IRAs allow Americans to choose their own investments; namely, private assets like real estate, private companies, promissory notes, and many other alternatives to traditional publicly traded investments. Choosing your investments is a strategic way to use your knowledge to your

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advantage, meanwhile growing your profits tax-free. The IRA owns the investments, the same way that your IRA would own stocks, and profits return to the account, without Uncle Sam’s fingers in the cookie jar. Imagine the impact of realizing the full benefit of your investments, by paying no taxes on the profits. In fact, imagine the potential of varied, self-directed investments, and how that could increase your wealth. I’ve seen countless situations where investors have chosen not to do an investment that may have created enormous growth inside of a self-directed account. Let’s say you have the opportunity to purchase a property, subject to the existing financing. Often in these cases, there is little to no equity in the deal and little to no cash flow after the maintenance and repair costs are considered. Many investors would walk away from this type of deal; however, this is an incredible opportunity for a Self-Directed Roth IRA. How so? One possibility is to hold that property for a long period and allow it to go up in value and for the loan to be repaid. In the end, your Roth IRA would own a property, free and clear, meaning that future cash flow and appreciation are accumulating tax-free inside of the account. By the time you enter retirement, you will see the benefit of tax-free distributions from this Roth IRA. However, Self-Directed accounts are not exclusively about long- term goals. In fact, you can start growing tax-free profits inside of accounts specifically designed for health or educational expenses and immediately take distributions. H. Quincy Long, my brother and the Founder of Quest Trust Company, did

an investment with his Self-Directed Roth IRA and his daughter’s Coverdell Education Savings Account, where each account owned a percentage of a property. Quincy bought the property at a great price and it had a decent cash flow. The renter paid their payments each month directly into Quincy’s Roth IRA and my niece’s Coverdell ESA. This investment enabled Quincy to pay for his daughter’s education tax- free by taking distributions to pay for her tuition, books, a laptop and other essentials. Quincy’s daughter graduated college and the same renters are still residing in the property. Now the ESA can pass on to Quincy’s granddaughter and her educational expenses can be paid tax- free – talk about generational wealth! Another potential strategy is to consider a Health Savings Account. With health care costs on the rise, many Americans fear the possibility of unexpected and unmanageable medical costs. A Health Savings Account allows for tax-free distributions for health expenses. HSAs allow for a diverse range of health expenses to be paid for tax-free, including necessary medications, surgeries, and braces for your kids, Real estate investors can leverage their skills to do investments within these accounts and start building a nest egg for themselves and their families. For this reason, HSAs are one of my favorite accounts. One of my all-time favorite investments involved partnering my HSA with my Traditional IRA. First, funds from my previous employer 401(k) were rolled over into my Self-Directed Traditional IRA. Combining my new Self-Directed Traditional IRA with an existing Self-Directed Health Savings Account, I invested both accounts

into an equity participation loan. By partnering my small HSA alongside my Traditional IRA, I created additional funds which would later be used for important health expenses. At the outset of this particular investment, I had only around $6,000

in my HSA. However, at

the completion of the loan six years later, my HSA was well over $40,000. My profits returned to my Traditional IRA and HSA, and I paid absolutely no taxes on these earnings. I like to think of HSAs as the best of both

worlds, because I also received a tax deduction on the contribution that I had made into my account, reducing my personal taxes too. This is the part where the story earns the title of my favorite investment – I was then able to take a tax-free distribution to buy an airplane engine. You may be thinking that an airplane engine is not a qualified medical expense, and you’re correct. However, you can take a distribution for a qualified medical expense that

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happened in a prior year, provided the HSA was established prior to the medical expense was incurred. HSAs have so many unique features and allow for a broad range of expenses to be paid for like optical, dental, holistic medicine and much more that you can read about in IRS Publication 502. In conclusion, there are many ways to increase returns you may not have previously considered, but education remains the key.

At Quest Trust Company we have highly educated staff and countless educational opportunities; live, online and in-person. We never charge for the education we provide at Quest, because we believe that an educated client is our best client. Your success is also ours, and it contributes to success of our extended community. The best part? You don’t have to be a client to access the benefits of our free education. I encourage you to visit

our website, but more importantly, setup a one-on-one consultation with one of our IRA Specialists to answer your questions. It’s completely free. •

Learn more about Quest Trust Company at questtrustcompany.com.

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Your Premier Source for Turnkey Cash-Flow Investment Property

We provide the knowledge, resources, and properties YOU need to achieve financial freedom!

Norada Real Estate Investments saves you time by providing you some of the best real estate investments in the best real estate markets.

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84 | think realty housing news report :: december 2019

Kansas City: SomeMetrics on theMid-size, MidwestMarket

by Marco Santarelli, Norada Real Estate Investments

K ansas City is a mid-size metropolis that spans two states: Kansas and Missouri. Let’s take a look at the Missouri side of this former fur-trading post that lies on the banks of the Missouri River. With a population of 463,202 people and 147 constituent neighborhoods, Kansas City boasts a mixed workforce of both blue- collar and white-collar jobs. Overall, Kansas City is a city of sales and office workers, professionals, and service providers. There are especially a lot of people living in Kansas City who work in office and administrative support (16.34%), sales jobs (10.42%) and management occupations (8.83%). Also of interest is that Kansas City has more people living here who work in computers and math than 95% of the places in the US. Of the large cities in America, Kansas City is one of the most car- oriented. This is reflected in the

the rest of the US. This equates to an annual income of $102,732 for a family of four. However, Kansas City contains both very wealthy and poor people as well. Kansas City is an extremely ethnically diverse city. The people who call Kansas City home describe themselves as belonging to a variety of racial and ethnic groups. The greatest number of Kansas City residents report their race to be White, followed by Black or African- American. Important ancestries of people in Kansas City include German, Irish, English and Italian. Information by Department of Numbers, Bureau of Labor Statistics, U.S. Census Bureau and Location Incorporated are deemed reliable but not guaranteed.

urban landscape, which features highways, wide streets, parking lots, and shopping centers of all sizes. It is also reflected in the statistics: 83.05% of people in Kansas City drive to work in their own car everyday, most often alone. So, if you’re going to live in Kansas City, you’ll need to learn to love driving. Although, a streetcar opened a few years ago serving the downtown area and the city has plans to expand its route. Kansas City Information and Demographics The overall education level of Kansas City citizens is substantially higher than the typical US community, as 29.55% of adults in Kansas City have at least a bachelor’s degree, and the average American community has 21.84%. The per capita income in Kansas City in 2010 was $25,683, which is wealthy relative to Missouri, and upper middle income relative to

Your Premier Source for Turnkey Cash-Flow Investment Property

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We provide the knowledge, resources, and properties YOU need to achieve financial freedom

Stay up to date while on the go with our twice-weekly podcast. Available in both audio and visual formats, the Think Realty Podcast is your source for the latest industry trends, hard-hitting insights and news. Vist thinkrealty.com/podcast to get your listen on now, or find it on your favorite podcast platform.

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