The Anatomy of Build to Rent


Realty Matters: Rethinking Community Development


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Discover investing tips, must-know strategies and data-driven content in our all-new digital quarterly magazine, arriving online March 2021. Topics include: MULTIFAMILY • STORAGE •

RETAIL • OFFICE • INDUSTRIAL • AND MORE! Think Realty FREE members can access the

magazine at Not a member? Subscribe today at

2 | think realty magazine :: november 2020

“M ultifaMily real estate is so good to My faMily ; K nowing i’ M taKing care of theM with indestructible investMents is rewarding . P lus , i aM looKing hard at retail and office because where there is so Much bad news , there is oPPortunity .” – OCTOBER THINK REALTY MAGAZINE COVER PERSON AND FAMED REAL ESTATE INVESTOR, GRANT CARDONE

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THINK REALTY 8  News & Events

10  Contributer Corner Meet Brian Wojcik

INVESTOR STORIES 12  Cardone on Community connecting people one apartment complex at a time by Grant Cardone

FUNDAMENTALS 30 Planning to Sell

What to do when you receive a low appraisal by Michael Jordan

32 Life Lessons that Lead to Better Business Teamwork and tenacity can turn into billions by Ellis Hammond


35 Sponsored Content: Investor Review


52  Success Story: Map of Hope

How real estate investing can lead to the greater good by Nancy Wallace-Laabs


54 Using a C Corporation to Hold Real Estate Exploring the differences between these two investment strategies by Richard Hart 60 Real Estate Crowdfunding and REITS Exploring the differences between these two investment strategies by Jacob Blackett







Featured Member: Sam Kaddah

Rethinking Community Development

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STRATEGY 64  Community Pages Increase Your Local SEO

Why every real estate investor should have a community page by Shawn Tiberio

74  Finding the Right REI for You Commercial Real Estate: Is the risk worth the reward? by W. J. Mencarow

78  Coworking: A Viable REI Strategy Even during the pandemic, this strategy is working by Terri S. Turner

DESIGN POINT 82  Investing in Community

Restoring and raising home values is part of the profit for flippers by Michele Van der Veen

MARKETS & TRENDS 86  Market Spotlight: Tampa Bay Area Showing strong fundamentals with short-term challenges by Fred Heigold III

Nathan Brooks is building community through real estate by Abby Tillman

92  The Price is Right Markets likely to weather the recession storm better than others by Ingo Winzer



MINDSET 94  The 7 Steps to Financial Freedom Step Four (Part 2): CHOOSE your Passive Income Vehicle! by Gene Powers



THE ANATOMY OF BUILD TO RENT The life cycle of an intriguing investment strategy


Finding your most powerful mindset can explode your business growth

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PUBLISHER & CEO Eddie Wilson


SALES MANAGER Rodney Halford


DESIGNER David Allen Rodriguez

CONTRIBUTERS Jacob Blackett Grant Cardone Ellis Hammond Richard Hart

Fred Heigold III Michael Jordan Nancy Wallace-Laabs Bruce McNeilage W.J. Mencarow Gene Powers Shawn Tiberio Abby Tillman Terri Turner Michele Van der Veen


Ingo Winzer Brian Wojcik Michael Zuber

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Are you following Think Realty on social media? Things move pretty fast in real estate. Don’t miss out on the latest trends, tips, insights and news from your trusted resource for all things real estate investing! Follow. Like. Love. Share. Comment. You can do it all with Think Realty’s social media channels. Join the conversations in Think Realty social communities and connect with like-minded members who range from first-time to seasoned investors. Check out all of our social media channels and connect with us - and other investors - today!

Think Realty 12200 N. Ambassador Dr. Suite 301 (Office A) Kansas City, Missouri 64163 816-398-4130 Copyright ©2020 Think Realty ABOUT THIS MAGAZINE :: Think Realty Magazine is a publication of Affinity Real Estate Media LLC. Reproduction or use of any editorial or graphic, without permission, is prohibited. We are not responsible for the content of any paid advertisements. For reprint rights; to ob- tain a detailed statement of our privacy policy; and for all single-copy requests, address changes and other subscription inquiries: SUBSCRIPTIONS :: The annual subscription for Think Realty Magazine is $36.00 in the U.S. Order online at or call 816-398-4130. 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.



Think Realty


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Community: The Cornerstone of REI


Realty Matters on page 26, discusses the need to rethink pandemic-induced evictions. Each month, Wojcik tackles tough topics and brings them to the forefront of discussion, encouraging readers to engage in issues that reach all corners of the industry. Plus, our cover person Nathan Brooks is doing great community-enhancing projects in his market—Kansas City. Read his inspiring story on page 16 and see how this musician- turned-minister-turned real estate investor is building more than a business. He is lifting up communities through real estate. In a year that has brought so much havoc, negativity, and uncertainty to so many people, the team at Think Realty is focused on bringing you not only inspiring content and real estate education, but also a community of support and encouragement to help you navigate the downturns and the upswings. I will leave you with some exciting news: In 2021, Think Realty will launch our new quarterly digital magazine devoted solely to commercial real estate—so get ready for more information, more data, and more investing strategies coming soon! •

n nearly every issue of Think Realty Magazine ,

the word “community” comes up. Why? Because in addition to ROI and wealth building, community is one of the building blocks of real estate. One part of Think Realty’s mission is to empower real estate

investors with the mindset and knowledge to build and rebuild communities. Think of all the people you can help and home values you can raise through your real estate deals! Still, community is the often-overlooked cornerstone of REI. And so, each November, we dedicate the entire magazine theme to Community Development. This month, we share stories and investing strategies from investors who have created (literally) entire communities. Bruce McNeilage, for example, takes readers through the Build-to-Rent process as he explains the anatomy of this strategic real estate plan that results in affordable, new housing for thousands of families in his markets. Read about this viable investment strategy that is gaining national attention (p 68). And our featured contributor of the month, Brian Wojcik, in his monthly column

Keep Going!


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Member Perks! The Think Realty Supplier Program Sometimes it’s not how many deals you make, it’s what you save that can put more profit in your portfolio! Think Realty’s Supplier Program saves members time and money.

Some of Think Realty’s trusted partners include Sherwin-Williams, Home Depot Pro, Sunbelt Rent- als, Anderson Financial Advisors, and TaskEasy just to name a few! The Think Realty team is excited to share new partnerships with Top Results Consult- ing, and later this month, UPS! Keep watching our weekly newsletter for more member perks coming your way in 2021!

T he purpose of our Supplier Program is to con- nect with companies that bring unique value to our members. We seek suppliers with a nationwide footprint that provide a product or service to help real estate investors do business more effectively. Suppliers provide exclusive discounts or benefits to Think Realty members, which puts more profit into their investment deals.

Only those who join Think Realty, including the FREE level of membership, are eligible. Look for this logo throughout Think Realty Magazine and visit supplier-discounts/ for a listing of companies that offer exclusive discounts to Think Realty members and start saving money today!

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Think Realty Goes Virtual!


or once in real estate, it’s NOT about location!

Due to pandemic-induced restrictions on in-person events, the Think Realty team had to get creative and the result was a series of successful hybrid events this fall! In fact, Think Realty and sister company, the American Association of Private Lenders, plan to hold onsite events with a virtual option even after restrictions lift. “We are excited to be the first in our field to offer onsite real estate and private lender education despite current travel and event restrictions,” said Linda Hyde, Managing Director of Think Realty and

Real estate investors connect in Atlanta at the Think Realty Conference and Expo in September.

AAPL. “The hybrid option allows us to reach an even broader audience, so participants can still gain a wealth of knowledge that will help them continue to do business

and invest in real estate whether from home or in person. Plus, our new app allows attendees to safely participate in all sessions while networking and making new contacts.”

“Thank you to Think Realty for making the decision to do hybrid events this year. [The Atlanta event] was so impactful and I made some amazing new connections in personAND online!” —Lorraine Beato Think Realty contributor and real estate investor

To learn more about upcoming Think Realty events and to buy tickets, visit

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The Contributor Corner

Meet BrianWojcik

“Writing for Think Realty is a joy because it is an opportunity to serve others, even though it is hard work and requires deep critical thinking and objectivity. The Realty Matters column is my opportunity to analyze issues related to the real estate industry, particularly the inde- pendent investor and rental segment of the market. As a landlord and then later with my property management business, I had experienced a system that was antiquated on the tech- nology curve. In 2016, I liquidated my real estate assets and set out to create a technology company to solve these issues. While the solutions themselves to the problems were manageable, I had underestimated

the difficulty to gain traction and the challenges for implementation. I was already aware of the astonishing variation of laws from one juris- diction to the next. What I had not realized was how broken the system was, and when I learned of new legislation that was going to make it worse, I raised my hand to help. On legislative matters, I was flabbergasted to realize legislators often view anecdotal stories of renter hardship as fact among all housing providers; yet, they were unwilling to listen to facts, often extracted from studies by the very same govern- ment entities. As my relationship with Think Realty grew, a theme emerged

In 2020, Think Realty contrib- utor, real estate investor, and industry advocate Brian Wojcik started a recurring column called Realty Matters. We are fortunate to share his breadth of knowledge and his passion for improving the real estate industry on the legislative level with Think Realty readers. Here is what he had to say about why he enjoys writing and advocating for real estate investors and his latest efforts in shifting percep- tion to gain more awareness for the REI community.

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providers on the merits was met with great skepticism; it is probable that some individuals in that room had been evicted. If we wanted people to listen, our message had to shift. We then appealed to an outcome-based high-impact solution that captured the imagination of listeners, with a message that renters and housing providers alike could agree on. Our new message: Prevent 2,100 families, including mothers, fathers, brothers, sisters, children, and grandparents from being evicted in Baltimore City. This eviction pre- vention conservatively repatriates $8.4M back into the community for reinvestment into additional low-cost rental housing. It was in the BOOST Program we learned a lesson — be empathetic to the experiences of the other side. Solving that problem will create standing and will likely serve both parties well. We chose a path to stand for both sides, and to be a stand for the industry, and we named our effort the Federated Association to Innovate Rental Housing (FAIR Housing). Although COVID-19 has caused delays with launch plans; we are tracking to finally launch FAIRH. org before the end of 2020. The bottom line, contributing to Think Realty has emerged into more than I could have imagined; it has born new friends and meaningful relationships who value being in service to others, and it may even have potential for legacy beyond my years when FAIR Housing rises and lives on.” •

Brian Wojcik with Think Realty team member Carmen Fields

from independent investors across the country: a collective body was needed to speak on their behalf and effect change for the very same issues that we saw were broken with the system. That led to the emer- gence of the Realty Matters column in which I research and speak to the issues that the industry is facing and to begin offering solutions to those

problems. Think Realty team member Car- men Fields and I were referred to an opportunity to apply to a mini-accel- erator program created by Innovation Works (based in Baltimore City) to build and create a Social Enterprise organization, entitled BOOST. During the workshops, we quickly realized our message of defending housing

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by Grant Cardone


you askme, as a real-estate investor with nearly $2B in assets under management, what is the first

thing that comes to mind when I think of real estate you might expect to hear me say “cashflow,” which is one of my favorite expressions. However, while I’ve always got cash- flow on my mind, these days I’m also thinking of another word starting with the letter “c.” Community.

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I’m originally from a small town in Louisiana where everyone knew everyone. I grew up with a pretty big family including a lot of siblings, so I was always part of a close-knit community. Now I’m 62 and I’ve got a family of my own. I got a wife and two daughters. I also own several compa- nies in addition to my real estate fund, Cardone Capital in Aventura, FL, with over 150 employees. I consider every one of them part of the Cardone family. And you know what else? Anyone on the planet who shares my passion for helping people to improve their lives and the lives of those around them, I want to be connected to them. I want people like that to be part of my extended family. So now you can understand why “community” is important to me. If you visit any of the properties Cardone Capital has acquired on behalf of our many investors, you will see the value I place on creating communities right away. When I scout potential investment prop- erties, which I do personally—this is one thing I do not delegate—the first thing I consider is whether I can transform it into the center of an actual com- munity. This means the property must be located near good schools, plenty of shopping centers, restaurants, gyms and all the other types of retail outlets and services people want. There are a lot of properties to choose from out there, but I’m not interested in locations that are nice if they’re com- pletely isolated from everything. Once I acquire a property, I put my plan in motion to transform it, so it meets my standards for being a community and not just a collection of apartments. That starts with doing any renovations on the apartments and the grounds to create a welcoming environment where people will enjoy living. Cardone Capital works with the country’s best architects and interior designers to make sure the units look good, as well as being modern and functional. But what really makes Cardone prop- erties communities and not just apartment com- plexes, are the exclusive high-quality amenities we include. I look for properties that have an atmo-

sphere I would want to live in. In fact, I have a name for this vision: 10X Living. To promote that sense of community among resi- dents, I add features that people can enjoy together but safely, like walking trails, playgrounds, dog parks and large resort-like pools. Also because physical fitness is so important, I make sure that the fitness centers in my properties are all state- of-the-art like what you’d find at a resort or pre - mium-level gym. Other amenities include modern game rooms with billiards tables, outdoor kitchens perfect for entertaining, fully equipped business centers ideal for working remotely, and luxurious clubhouses for holding social gatherings. Some of our communities even have movie theaters on the premises. Why do I go to these extremes when many other property owners do not? Part of my 10X philosophy is the willingness to do what others will not. I put 10X into practice in every one of the prop- erties I manage across the South and Southwest. We are all so wrapped up in our personal and professional lives that it’s easy to cut ourselves off from other people, even with all the technology that “connects” us. Now with the pandemic causing shutdowns and isolation, people are more discon- nected than ever. That can’t last and when it’s over folks are going to want to hang out the way they used to, going to movies, barbecues, parties. I want to help make that happen. I want to create commu- nities. I want to give them the means to live their best lives, and I can’t imagine anything that has more potential than an entire community of people enjoying life together. •

Grant Cardone owns and operates seven privately held companies, and a $1.8B real estate portfolio as the Founder and CEO of private equity real estate firm, Cardone Capital. Cardone is also the founder and leader of The 10X Movement and The 10X Growth Conference, which is now the largest business and entrepreneur conference in the world. Moreover, Cardone founded the Grant Cardone Foundation, a non-profit organization dedicated to mentoring underprivileged and troubled youth in character and financial literacy.

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FeaturedMember: SamKaddah

by Kelli White

Plan B and C, along with grit and putting in the effort and the hours to do something right, are more important than the vision if you want to achieve your goals,” he said. It turns out, what he learned from his first career as electrical engineer—to adjust—helped him make what would be life-changing decisions. Because of his global operations experience, Microsoft re- cruited Kaddah to lead their internal global marketing and sales sys- tems, but he took a couple months off before he took the job.

“During that 60-day transi- tion period,” Kaddah re- called, “A friend asked me to review a national lending platform that was being built and that had chal- lenges after more than $2.5 million had been invested in it. The rest is history—or destiny—depending on your point of view. No matter what happened after that, the lending industry just kept sucking me back in.” Kaddah spent only a matter of weeks at his friend’s company, dis- covering the issues and the chal-


hink Realty Presidents’ Circle member and President/CEO of

Liquid Logics, Sam Kaddah, nev- er imagined he would move from global operations into the financial industry, but life sometimes takes a funny turn. Before his career in global op- erations, Kaddah was an electrical engineer. And as happens at all first jobs, Kaddah learned a lot. “I learned that change and flexibility to learn and adjust as necessary is key to reach your ultimate goals. In other words, your goals do not care about your problems.

14 | think realty magazine :: november 2020

lenges and implementing corrective actions. His task complete, he left to start his new job with Microsoft, thinking that working as a CTO for a lending bank was not practical as he would pass up an executive salary. “A few days after joining Mi- crosoft, the bank decided to outsource the software de- velopment to be sold back to them for a mid-eight-figure number over five years. That agreement made it worth- while for me to start Liquid Logics,” he said. Founded in 2004, Liquid Logics provides Next Generation Cloud- Based Loan Origination Software (LOS) primarily for private/hard money lenders. As founder of such company, it is no surprise Kaddah’s preferred investing strategy is to invest in fintech that supports real estate investments and to use AI to make decisions. “I am excited about AI and tech prefoliation,” Kaddah said of the evolving REI in- dustry. “But I am concerned about keeping the balance between healthy markets and price bubbles, so I am always on the lookout to re- view the data and indicators for a specific local market.” For beginners in the real estate in- dustry, Kaddah’s number-one piece of advice is to build a network. “Knowwhere you can go for help and for advice. Ask for support on every aspect, then start with projects you can reasonably man- age. Crawl, walk, then run,” Kaddah said. •

A quick Q&A with Sam Kaddah

What makes you laugh, no matter what mood you’re in?

Seeing my son’s happy face. What makes me serine is the smell of fresh dew in the morning when I step out of my garage to take a deep breath before taking on the day.

Why did you join the Think Realty Presidents’ Circle?

I always believe in learning and evolving. This is a wonderful opportunity to learn, share knowledge, and gain insight from the top leaders in the space.

What is your favorite movie? The all-time classic The Hunt for Red October

What is your favorite television show? Big Bang Theory

What book do you recommend often? Start with Why by Simon Sinek

If you could choose a best meal, what would it be? BBQ brisket from Terry Blacks in Austin, TX

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Nathan Brooks is building community through real estate MORE THANA BUSINESS


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We are building an incredible team and we have big dreams, not just for ourselves and our team, but for our clients and our community as well. –Nathan Brooks

L isten to Nathan Brooks tell his story and you may feel a bit like you’re on a rocket ship watching a blur of lives pass by. As a kid, he displayed an aptitude for music, picking up a variety of instruments including string base, piano, and guitar and developing a passion for the arts, as well as entrepreneurship. As he grew, he enjoyed traveling internationally through his church and the subsequent opportunities to exercise his leadership on mission trips. After college, he dove headfirst into a career as a successful singer-songwriter, captivating au- diences and creating records. Then he took his talents to real estate where a series of challenges and a bad-acting partner forced him to declare bankruptcy and step back into music. He took a full-time staff position at one of the largest Methodist churches in the nation and did a stint as their worship leader. One Sunday during the holiday sea- son, after a long series of holiday services, Brooks came home to his family and realized he wasn’t living the life he wanted to live. Knowing real estate could afford his family the freedom, flexibility, and quality of life they desired and not being someone to shy away from a challenge, he

turned his sights back toward it. “The truth is that if I would have had more liquidity and been more prepared the first time around, I would not have had the issue I had with real estate investing. But I had grown too fast too quickly and I also had enlisted the help and sought information from people, such as this banker, who didn’t actually want to help me. I didn’t know what I didn’t know and I didn’t seek out trustworthy men- tors to help me,” he reflected. “That’s really why I’m so passionate about what I’m passionate about now — help- ing others, building an excellent team, being a mentor— that passion all came out of that [bankruptcy] experience.” Today, Nathan Brooks is the CEO of a Kansas City- based turnkey real estate company he and his business partner co-founded just five short years ago. His com - pany, Bridge Turnkey Investments, recently received the ranking of #1304 on Inc.’s list of the 5,000 fastest-grow- ing, privately held companies in America. To date, they’ve bought, renovated, and sold over 430 turnkey rental properties, added $54.2 million in value to their clients’ portfolios, and started one of the largest real estate

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Constant Learning Is Key to Success B rooks shared that his friend and fellow real estate investor, Shawn McCloskey, once said told him all the successful real estate investors he knows have one thing in common: they are avid readers. At that time, Brooks was already consuming content regularly, but this correlation brought new focus to practice. “I am a huge fan of audio books,” he said. “I prefer to listen at 1.7x speed, which is much more my pace, and I like that I can listen while driving or sitting on the back porch, having a cigar. I get the most excited about business development, real estate, and leadership content. Here are a few of my all-time favorites books and podcasts for anyone looking for a place to start.”

P O D C A S T S :

• The Joe Rogan podcast • Jocko Podcast • The Tim Ferriss Show


• Leadership Strategy and Tactics by Jocko Willink • It Takes What It Takes by Trevor Moawad • Culture Code by Daniel Coyle • Millionaire Next Door by Thomas J Stanley & William D Danko • 4 Obsessions of an Extraordinary Executive by Patrick Lencioni • Dichotomy of Leadership by Jocko Willink & Leif Babin • 4-hour Work Week by Tim Ferriss • Never Split the Difference by Chris Voss

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investor meetups in the nation (currently pushing almost 9,000 members). But, according to Brooks, they’re just getting started at Bridge Turnkey Investments. “We are building an incredible team and we have big dreams, not just for ourselves and our team, but for our clients and our community as well. So many people dream about real estate and we get to DO it, and impact lives while doing it,” he said. “It’s what makes this work so exciting and is what has kept me passionate about real estate for so long.” The version of the company today isn’t exactly how it started. “Bridge Turnkey Investments started out with the aspiration of my business partner, David, and me buying and holding investment properties for ourselves,” Brooks explained. “We’ve had many versions of our company since that initial launch, but over the years we dialed it in, to a company that buys, renovates, and leases rentals for investors. It took lots of learning (the book Traction has been a massive resource for our company), hiring a busi- ness coach to help us implement Traction, and commit- ting to focus on what we’re best at to reach the success we have today. And, even then, we still have tough months and lots to learn. Real estate is exciting that way. There’s always something new.” Brooks attributes his company’s success in large part to the focus and accountability their business coach brought to their team. “Once we made a decision of what we were going to do and not do, we got a lot better at understanding who we were as a company and then attracting people who wanted to be here and brought skills we didn’t have. When we focus on the things that matter to us, we attract the people that resonate with that focus, and we get to build something really incredible for ourselves, our team, our clients, and our community.” MORE THANABUSINESS Like any company, to stay in business, you have to make money. But, Brooks was quick to point out, it’s about so much more than that for him and his team. “We talk to clients every day who have huge dreams for themselves and their families. Those dreams are not unlike the dreams my business partner and I have, or the dreams our team members have for their own families. We all want to create passive income to give ourselves more time with our family, more freedom in our sched- ules, and more opportunities for the future. We want to build generational wealth. We want to leave behind a leg-

acy. There are few investment vehicles that achieve these goals for people in the way real estate does. And that’s what we get to work on every day at Bridge.” In addition, he points toward the power of real estate to help investors give generously—whether that be through the wealth they gain through real estate, or in giving back to the community through the homes they provide to the cities they invest in. “I’ve always had big philanthropic goals, and I believe real estate is going to be the conduit to achieving those goals.

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Setting Your Day up for Success: AMorning Routine

W hen asked about his keys to success, Nathan Brooks mentioned all the regular suspects: mentors, team, family, education, and a morning rou- tine. Here is what Brooks does to start each day: “I’m not the earliest riser, and I don’t beat myself up about that. I wake up around 7 a.m., when it makes the most sense for me. Then, and this might not be the healthiest of habits, I do a quick check of my email and Facebook to make sure there are no houses to be bought immediately. Time is the killer of all deals, and I don’t want to miss a good one, if it’s out there. After that, I go downstairs for a 15-minute, high-intensity workout. Before COVID-19, I was regularly training MMA as my daily workout, but with the stay-at-home order, I had to pivot and have found this 15-minute morning activity to bring the same mental and physical health benefits I enjoyed with my previous MMA regi - men. Then I spend 10 minutes in meditation using the Sam Harris Waking Up App. I have tried several other apps and haven’t liked anything nearly as much as I like this one. I highly recommend it. After I get myself some water and coffee, I spend the next 15 minutes journaling. I use the Best Self Journal to check in on my goals and write daily affirmations. I find this prac - tice helps me keep the important things important, and the unimportant things away. Overall, it is simple and a relatively quick routine, but I have found that it makes all the difference between a day where I feel like I’m racing around without purpose, and a day that is focused and fulfilling.”

Before I leave this earth, I will give away a million dollars a year in perpetuity. Real estate is going to help me do that. On top of that, Kansas City, where the Bridge team lives and invests, has a need for the work that we’re doing. Abandoned houses and lack of quality homes to meet rental demand are real problems we face. It’s a joy to not only beautify the city we love, but to provide a real service in the high-quality rentals we bring to the market for families in Kansas City. I can’t really think of a better, more fulfilling purpose for our business, and it really is what drives me every day.”

BUILDING COMMUNITY THROUGH REAL ESTATE Aside from his notoriety as a highly accomplished investor and business leader, Nathan Brooks garnered national attention for founding and operating Bridge Real Estate Investing Meetup, which grew to be one of the largest meetups in America in less than a year. “The meetup is really just a further extension of our mission. We want to help all people build a bridge to wealth and freedom through real estate,” Brooks said of

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the decision to start Bridge Meetup in 2018. “We are con- stantly talking about building that bridge to wealth and freedom for ourselves, our team, and our clients. It only felt right to extend that out to our community as well.” Pre-COVID, the group was meeting monthly with a couple hundred members of the Kansas City community coming together, in person, to connect, learn, help each

other, and take action together. The online expression of the group boasts a staggering 92 percent engagement rate with over 8,600 members commenting, posting, rec- ommending, and educating on the platform. “It’s actually a huge amount of effort to monitor and facilitate that group to ensure we provide value in a positive, helpful forum. But, it’s been totally worth it. The community has responded with enthusiasm and there are stories coming from members who have started investing for the first time because of a connection they made, or businesses with real estate support services increasing their revenue by 300 percent because of referrals from the group. We all get better when we work together and that go-giver attitude is a staple in the Bridge Meetup,” Brooks explained. ABRIGHT FUTURE Nathan Brooks has an insatiable desire to be all in and to build something big. With a growing list of successes in his past, he is looking forward to the future. What’s next for Nathan Brooks and Bridge Turnkey Investments? “Well, we started our New Construction division this year and we couldn’t be more excited about it. We are on pace in 2021 to scale that part of the business and build sixty new homes in Kansas City next year, which our clients can purchase as investment properties. We’ve also got some exciting new opportunities coming down the pike right now that I can’t discuss in detail, but they’re go- ing to be huge for our clients and our company,” he said of Bridge’s future. “Keep an eye on,” he explained with a wink when pushed for more details. Outside of the business, he expressed a desire to continue growing as a leader and achieving balance. “I am finally starting to find the balance between the need to death grip hold what I’m working on and totally letting go of it,” he said. “I’m growing a lot in my patience and my ability to chill, and I plan to keep working on that.” Sounds like it could be tough for a man so hardwired for action, but to Brooks, that’s part of the fun. “Is it a chal- lenge? Of course! It’s uncomfortable for me to choose something that’s so unnatural. But, I’ve learned to actually seek the discomfort. You see, it’s in the discomfort that the opportunity actually lies.” •

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We offer investors a one-stop-shop for tax planning, asset protection, and business planning, but never take a one-size-fits-all approach. We aren’t going to fit you into a box. Your investing situation and goals are unique, so your business plan should be, too. We look at each client’s situation individually and formulate the best plan to fit their needs. Implementing the correct structure for your specific situation is essential to protecting your assets and minimizing your tax burden. Whether you invest on the side or as your full-time job, you must treat your investing as a business to increase your financing options and take full advantage of the tax and asset protection strategies available to you.





24 | think realty magazine :: november 2020



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by Brian Wojcik

hile Washington continues to address the crisis of people unable to pay rent, they have not addressed

our nation’s housing woes. Why the contradiction? The notion of low-cost rental housing as a business model within private industry is regarded as being part of an “extractive market.” This fallacy is an echo-cham- ber of groupthink perpetuated by many academics and renter activists with political support who believe govern- ment-run programs are the answer. This is patently false. In April’s Realty Matters Column, I revealed indisputable evidence to the contrary — that government-run programs are largely cause for the worsening problem. That unfortunate thinking crowds the space for inno- vation and pragmatic free-market solutions to supply the necessary demand for affordable housing (both rentals and retail) faster — and at lower net cost to the taxpayer — with improved Community Development programs. We have to think about both supply and demand. “Economic instability among tenants leads to economic instability among landlords” according to a HUD Office of Policy Development and Research Report (PD&R) (Gar- boden, Rosen, Greif, DeLuca, Edin, 2018). RETHINKING EVICTIONS Will circumstances of the pandemic offer a new lens for renter activists to finally realize that regardless of exter - nalities, unpaid rent places independent housing providers at risk too? In the midst of all this pain, both renters and housing providers are experiencing the effects of this pandemic. Lost jobs, lower wages, and unpaid rent provide a high- ly visible and contrasting story to the age-old narrative “Landlords are evil and are the blame for evictions.” In contrast, eviction is not the “fault” of the housing provider;


the issue of rental property owners who are unable to pay mortgages, which can create another “domino effect” of evictions and loss. The rental providers, therefore, sud- denly find themselves thrown under the bus carrying the financial burden of this crisis: they are in effect subsidiz - ing those who are not paying rent. Further, as a collective group, their burden lacks a representative voice in both federal and state governments. RETHINKING COMMUNITYDEVELOPMENT In the wake of the COVID-19 pandemic, we need to un- derstand that the independent investor rental housing pro- vider (with one, or even a handful of units, who provides necessary market-rent units to low-income communities) is in the midst of this pandemic wave, too. All involved have concerns of staying afloat. The notion of Community Development must begin to address needs of the rental industry as a whole, understanding segmented market supply and demand dynamics. If the low-income renter is vulnerable and at risk of eviction, we must also address the vulnerability of the small-unit count low-cost housing provider (referred throughout as “Independent(s)’’), the majority of whom have one to three rental units. The impact on small business during this pandemic is making headlines — revered as the backbone of the econ- omy — and rightfully so. Independent housing providers, the backbone of low-cost market-rate housing, are also Small Business. Yet, it has become fashionable for renter activists and the politicians they support to vilify and blame rental owners, who are Small Business owners, for

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it is a consequence of unpaid rent. The pandemic puts an entire industry in jeopardy be- cause it disproportionately affects those who are most at risk: low-income renters and their low-cost market-rate housing providers. As a group, Independents provide the largest proportion of all rentals and the highest proportion of low-cost market-rate rentals. Nationally, post-pandem- ic unpaid rent monies disproportionately impact indepen- dent investor rental providers more than “large” institu- tional rental housing providers. THE REAL CONSEQUENCES OFUNPAID RENT Independent rental housing providers often cannot absorb multiple months of unpaid rents from normally thin margins. This group often lacks access to additional capital, making them particularly vulnerable. Those who have some savings will likely exhaust it all to pay their mortgages and utilize whatever means of credit they have to “subsidize” unpaid rent, hopeful that better days will come. Why? They are optimists, intent to keep a bad situ- ation from turning worse and will often stop at nothing to protect their credit scores. As funds deplete, the cascade begins: deferred maintenance or under-maintained rent- als and an inability to pay the mortgages, property taxes, and utilities. Backlogged courts are further burdened with unpaid rent defenses due to lack of maintenance. Risk of criminal charges, fines, or even jail time percolate in the minds of independent providers who are scrambling for funds to keep the utilities on, even though rent is unpaid, where state retaliatory laws exist. With eviction protec- tions in place, the unprotected independent rental provid- er, who relies on maintaining good credit scores, will burn

through personal savings to protect their score and to stay afloat.

PANDEMIC-INDUCED EVICTION RISK IS OVERSTATEDWHILE RENTAL DELINQUENCY IS UNDERSTATED We normally picture large institutional housing provid- ers when we think of rental housing. And it is not surpris- ing given the representation by the National Apartment Association and the National Multi-housing Council in Washington. However, the majority low-cost rental housing is typically owned and managed by independent housing providers who do not have a representative body to speak collectively about how the pandemic has impact- ed them. There are scores of renter-advocate organiza- tions focused on evictions, while low-cost rental housing providers remain underrepresented. This group is dispro- portionately affected by the pandemic, and both the renter and the housing provider are financially vulnerable. The eviction risk tallies are not reliable data sets for predicting outcome; they are largely derived from monthly opinions taken from a poll, and the monthly tallies are not additive as many of those organizations suggest. The total rent delinquency for some housing providers, say six or maybe nine months, may not be recoverable, causing long-lasting industry consequences at a scale never be- fore experienced — all induced by the pandemic.

BEHIND THE NUMBERS The NAA representation for the rental housing industry is critical and much appreciated. The independent housing

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providers benefit greatly from their hard work. As an NAA member of their local affiliate, the Maryland Multi-housing Association (MMHA), I inquired to learn what their members are reporting. When HUD PD&R measured the national delinquency levels in 2017, they ranged 5-10 percent. The pandemic rock- eted that range to 10-20 percent depending on the class of property, according to the MMHA monthly survey of roughly 100,000 units participating be- tween March and September. (This surveyed largely the Baltimore metro area). Class-C property delinquencies are greater, which is not surprising; however, the magnitude of the difference is telling. They are roughly twice as high again, or quadruple the normal average, and an increasing percentage of those renters now owe multiple months of rent. An apartment complex has

the benefit of absorbing cash-flow reductions across multiple units that are still paying rent. The In- dependent provider of one or two units does not have that oppor- tunity – and most of them are in the Class-B or Class-C property category. (See top right graphic) According to the newly released 2018 Rental Housing Finance Sur- vey, 60 to 70 percent of available units, accounting for 29-34 million housing units on the market, are owned by independent investors; the majority own fewer than two units. Many place their ownership in an LLP, LP, LLC, or trust. (See graphic right) This is significantly more than the conventional belief that half of all rental housing units are owned by small landlords. According to Pew Research, COVID-19 job and wage losses disproportionately affect those who rent low-cost market rate units, totaling half of lower-income Americans. These findings are consistent with the internal MMHA survey.

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small-unit count rentals – and we know now that they too are “vulnerable to the vicissitudes of the low-end rental market” as one HUD study phrased it. The system is frail, both parties are at risk and prefer no eviction. Perhaps now, people will look through a new lens: evic- tions may not actually be the housing provider’s fault un- der most circumstances, particularly during the COVID-19 pandemic. As post-pandemic programs are assembled to heal and shore up hard-hit markets, it is time to reimagine “Community Development” as an innovation opportunity that collaborates with a collective community of inde- pendent housing providers to safeguard renters against funding the same flawed programs that have not met the demand. It will require courage to do something new, and embrace independent housing providers as well-regarded Small Business operators who graciously serve a critical need for tens of millions of low-income families: the back- bone of humanity’s most essential need, housing. Next month, a bold new plan and vision for the Rental Housing Industry will be revealed. HOWAREYOUMANAGING DURING THESE CHALLENGING TIMES? Please complete our short survey. Let us know of any gen- erosity or acts of kindness you have extended to your renter as they too are experiencing struggle during this COVID-19 pandemic. Either scan the QR code, or navigate using the link: We need your good stories to counteract the predomi- nant negative stories - and we will get your story out in a big way - stay tuned for next month! •

ADDING ITALLUP Bottom Line: It is a compound problem with depth beyond the obvious. 1. Individual investors are the majority owners and operators of small unit-count properties. 2. That category is the largest unit count of all rentals and household population. 3. Those owners have limited funds and access to credit to cover missed rent payments. 4. Those small-unit count rentals also contain the highest proportion of low-cost rental units. 5. The renters of those very same low-cost units are vulnerable low-income households. 6. They have been disproportionately impacted by COVID-19 job or wage losses (half of all lower- income Americans). 7. 75 percent of them do not have three months’ worth of emergency funds, and 8. Surveys show that Class-C rental unit delinquency rate during the pandemic may be as high as quadruple the normal average. The cascade continues with potential foreclosures and bankruptcies that remove availability of low-cost rental housing from what is already in undersupply, which fur- ther reduces available low-cost rentals that are normally in high demand which, in turn, may be a cause for increas- ing market rent prices at a time during high unemploy- ment, etc. COMMUNITYDEVELOPMENT FUNDING IS NEEDED TO SHORE UP INSTABILITY The pandemic changes the context through which to see the broken system and the pandemic demonstrates that an eviction may be neither party’s fault. Unfortunately, the pandemic effect of sustained unpaid rent with increased delinquency for low-cost rentals may overstress the financial fragility in the system with poten - tial cascading effects that permeate the industry, begin- ning with low-cost rentals. The pandemic effect may cause this precarious system to tip out of balance with unknown and unpredictable outcomes. With no aid relief package passed (at the time of print) and in an election year, uncer- tainty lingers. The rental supply balance largely depends on independent investors to provide low-cost housing with

For Column Notes, Resources and Language Translation for this Column, go to: RealtyMatters.Online/Column/November-2020

BrianWojcik is a housing industry advocate who transitioned into real estate, both as an investor and property manager, after more than two decades of experience in engineering, sales, executive management, and operational/business process reengineering consulting. He resides in Howard County, MD, where he volunteers to teach a “Tenant Success” program he created for Bridges to Housing Stability, and where he created Landlord411 to assist rental housing providers. His expertise of the independently owned rental-housing market has been sought after for local and state level legislation/policy development. Mr. Wojcik has been published in national publications about legislative issues, affordable housing matters, and rental housing advocacy. He holds a Bachelor of Science degree in Manufacturing Management from Clarkson University and a Master of Science degree in Real Estate from The Johns Hopkins University. He is founder of

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