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INSIDE THIS ISSUE
THINK REALTY 8 News & Events
STRATEGY 51 A Buyer’s Advantage Nine note terms for seller-financed transactions. by Bruce Kellogg 58 ACH Fraud A con that criminals love. by Richard Hart 60 Making a Positive Impact with Real Estate Investing in community without sacrificing returns. by Tom Olson 62 The Power of Mobile Home Rentals How turning mobile homes into real property brings more cashflow. by Max Keller 64 Contractors for the Long Haul The long-term contractor partnership that works for fix-and-flip. by Abhi Golhar 65 Sponsored Content: Investor Review MARKET & TRENDS 84 Dallas: Still a Solid Market Market reports for the Dallas-Fort Worth area show steady performance. by Fred Heigold III 90 Seeing Things Differently A different point of view can shed light on your investment strategy. by Ingo Winzer MINDSET 96 Great Thinkers Learning to use what you already have can bring about the most effective change. by Aaron Chapman DESIGN POINT 82 Design Guide: Country Chic Exterior Featured Designer: Michele Van Der Veen
Updates from around the industry.
10 Think Realty Supplier: Sherwin-Williams Paint Bring balance into 2020 with the Sherwin-Williams Colormix Forecast. by Sue Wadden
INVESTOR STORIES 20 Presidents' Circle Featured Member: Abhi Golhar 26 Revival of the Fittest
Joe and Shawn King, the Revival Brothers, use real estate as a helping hand. by Kelli White
ENGAGEMENT 29 Easy Answers
Tips from an attorney to protect yourself — and your investment. by Clint Coons
32 Realty Matters: FAIR Housing
Introducing a new advocacy group for the rental housing industry. by Brian Wojcik
Ethics underpin growth for CrestCore Realty's DOUGLAS SKIPWORTH and DAN BUTLER .
BUSINESS FUNDAMENTALS 38 Real Estate for Humanity
RUNNING WITH VALUES
Touching lives and impacting communities with every deal. by Deborah Razo
by Bobby Burch :: photos by Mark Yates
42 Growing a Healthy Business Are you limiting your business by not letting go? by Gary Harper 46 Mastering Meetups How to meet others in the industry while marketing your brand. by Bruce Kellogg 50 Sharper Tips
PRETTY AND PRACTICAL
A PEOPLE BUSINESS
Top 2020 design trends from HGTV’s Bargain Mansions host Tamara Day.
When to push the pedal and when to brake to achieve optimum results.
Everyone wins when the purpose is to help everyone.
Why trading spaces could be the ultimate creative deal structure.
Helpful stories to sharpen your real estate investment business. by Gary & Susan Harper
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PUBLISHER & CEO Eddie Wilson
EDITOR-IN-CHIEF Kelli White
SALES MANAGER Rodney Halford RHalford@ThinkRealty.com 816-398-4111 x86122
FROM THE EDI TOR- IN-CHI EF
One for All
FULFILLMENT COORDINATOR Blair Pierce
ART DIRECTOR Emily Bowers
CONTRIBUTING WRITERS Bobby Burch Aaron Chapman
this situation right here at home, as well as beyond our borders. And many of you already are. Read about Brian Wojcik’s nonprofit initiative FAIR Housing on page 32 and how you can be a part of something with potential to positively impact communities coast to coast. Wojcik writes, “If you’re in the business of providing rental housing of any sort … whether it be high-end luxury or low-cost housing, you will be impacted by the affordable housing debate.” As always, this issue of Think Realty Mag- azine is full of business insights and invest- ing strategies, but also stories that illustrate what can be done to effect positive change in the industry. Although every real estate investor’s story is unique, the ones told in this issue have the underlying theme that real estate is a PEOPLE business. •
elcome to 2020! A new year, a new decade, and
Clint Coons Tamara Day Abhi Golhar Gary Harper
new opportunities. We’re kicking off the new decade by discussing humani- tarianism in real estate — how bringing more of the human touch to every deal can result in so much more than dollars.
Susan Harper Richard Hart Fred Heigold III Max Keller Bruce Kellogg Tom Olson Deborah Razo Steve Streetman Sue Wadden Ingo Winzer Brian Wojcik Michael Zuber
HEY! LET’S BE FRIENDS! GET SOCIAL. STAY CONNECTED.
The real estate investing industry is not unlike many others in that you have the ca- pabilities to create something better through your work. And by doing so, everyone wins. As I tell my kids — who are quickly becoming men — “You get what you give.” Sometimes it’s hard to believe that the Unit- ed States — the greatest, and still wealthiest, nation on earth — is in the midst of a human- itarian crisis in part due to lack of affordable housing in many parts of the country. You, savvy real estate investors, can actively change
Like, Follow & Share for the Latest Real Estate News, Trends and Insights from Think Realty
COVER PHOTOGRAPHY Mark Yates
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!
SUBSCRIPTIONS :: The annual subscription for Think Realty Magazine is $36.00 in the U.S. Order online at www.ThinkRealty.com or call 816-398-4085. Provide your full name, address and telephone number. DISCLAIMER :: Think Realty Magazine , its owners, contractors, distributors and their respective representatives do not provide tax, accounting, investment or legal advice and make no guarantee as to the effectiveness or success of any investment or tax strategies discussed herein. Please consult your own independent adviser as to any questions you have or decision you are contemplating. ABOUT THIS MAGAZINE :: ThinkRealtyMagazine isapublication ofAffinityRealEstateMediaLLC.Reproductionoruseofanyeditorial orgraphic,withoutpermission, isprohibited.Wearenotresponsible for thecontentofanypaidadvertisements.Forreprintrights; toob- tainadetailedstatementofourprivacypolicy;and forallsingle-copy requests,addresschangesandothersubscription inquiries:
KELLI WHITE, EDITOR-IN-CHIEF
Think Realty 7505 Tiffany Springs Parkway, Suite 100 Kansas City, Missouri 64153 816-398-4130 ThinkRealty.com Copyright ©2020 Think Realty
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Think Realty's Core Focus is to be the trusted source in the Real Estate Investment Industry by providing products and services focused on serving the Real Estate Investor.
NEWS & EVENTS
hu·man·i·tar·i·an·ism Humanitarianism is defined as “the promotion of human welfare.” Though this term is not largely associated with real estate investing, many in the industry are trying to change that. So, we devoted this issue of Think Realty Magazine to humanitarians in the REI space, those who are working deals while doing something for the greater good.
Think Realty Conference and Expo Returns to Baltimore EXPERIENCE FIRSTHAND WHAT THINK REALTY HAS TO OFFER.
We asked some leaders in our think group, the Presidents’ Circle,
“What does Humanitarianism in Real Estate mean to you?”
S aturday features the acclaimed Think Realty Expo with exhibits open from 8:30 a.m. – 5:00 p.m. There will be more than 40 exhibi- tors with various tools and services focused on helping you achieve your goals as a real estate entre- preneur. Saturday will also feature keynote presentations, educational sessions, and a local market panel. Sunday our Think Realty Resident Experts will deliver educational sessions on topics including wealth building, establishing your business and brand, residential investing, risk management, and commercial investing. Attendees can also sign up for educational workshops host- ed by some of Think Realty's valued partners. Think Realty events are the best opportunity to invest in yourself and your business!
We allow others to thrive by providing safe and healthy housing opportunities. Very few investments have that kind of meaningful reach and impact that also build wealth for those that control the asset.
We focus on helping distressed sellers, which is a humanitarian effort because we are often helping people when they're going through major life transitions or crises. We offer a way for them to move forward with their lives and ease their emotional and financial burdens. By working with these sellers and houses that have not been kept up, we build community value by making neighborhoods great again with improved homes. Also, we offer owner- financed options to help put home ownership within reach of more people.
Considering we work in C-class properties, humanitarianism to me means making sure the homes are in great shape, are clean, and problems are addressed immediately. It means being fair with the tenants. I see so many people take advantage of these individuals, and it is sad. They deserve the same respect and courtesy as a tenant in a B or A class area.
Brent Kesler The Money Multiplier Keynote Speaker
Clint Coons Anderson Business Advisors Featured Speaker
AARON NORRIS The Norris Group
Look for more speakers to be announced in the February issue of Think Realty magazine!
GREG SLAUGHTER First Class Equities
To learn more about upcoming Think Realty events and to buy tickets, visit ThinkRealty.com/TR-Events.
NANCYWALLACE-LAABS KBN Homes LLC
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BRING BALANCE INTO 2020 WITH THE SHERWIN-WILLIAMS COLORMIX FORECAST.
by Sue Wadden, director of color marketing at Sherwin-Williams
The use of color in home design is evolving as we enter a new decade. 2020 promises to be an empowering year of change, focused on colors that bring joy, serenity, and clarity. People continue to move beyond how spaces look and toward how they make them feel. Sherwin-Williams 2020 Colormix Forecast identifies five inspirational palettes — Alive, Mantra, Play, Haven and Heart — that help pave the way for wellness and self-nurturing in today’s new interiors. Here is a look at two of the palettes:
East meets West in this serene palette of softly muted neutrals that glide from warm to cool. Nordic simplicity entwines with the order and ele- gance of Japanese aesthetics to create a look that’s simple yet utterly essential, with tones like Glamour (SW 6031) to Misty (SW 6232). Mantra lends itself to clean lines, minimal ornamentation, warm metals and rounded forms.
Creating a space to feel good about living and working is a must, and Naval (SW 6244), the 2020 Color of the Year, creates a sense of mindfulness for gathering spaces. Naval is a deep, sapphire-like blue reminiscent of the night sky and the deep sea and celebrates blue’s role in satisfying our yearning for relaxation and retreat. Along with Naval, the Alive palette incorporates colors centered on being present and soaking up every moment, including Ripe Olive (SW 6209), which evokes a satisfying and rejuvenating sense of community and living well. This palette incorporates materials and finishes that are locally sourced, hand- made, and reflective of care and craftsmanship.
The unique tones and stories in the 2020 Colormix Forecast are meant to inspire future projects and help designers and homeowners alike bring exciting aesthetics into their spaces. Check out more color palettes in future issues of Think Realty Magazine! •
Through the Think Realty Supplier Program, Think Realty partners with companies like Sherwin-Williams to bring discounts to Think Realty members. Learn more about savings available to Think Realty members at ThinkRealty.com/supplier-discounts. For more about Sherwin-Williams Colormix Forecast, visit swcolorforecast.com.
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Ethics underpin growth for CrestCore Realty RUNNING WITH VALUES
BY BOBBY BURCH PHOTOS BY MARK YATES
IN THEIR NEARLY TWO DECADES of working with one another, CrestCore Realty co-founders Dan Butler and Douglas Skipworth have run halfway around the world together — literally. A year after they became neighbors in 2003, Butler and Skipworth embarked upon a morning running routine that has honed not only the duo’s values of perseverance, but also their perspectives on operating CrestCore. In spite of snow, rain, fatigue or some other excuse, the two have run five miles, four times a week for nearly 16 years. In running more than 16,000 miles together — which tops more than half of the earth’s 24,901-mile circumfer- ence — Butler and Skipworth have deepened their friend- ship through accountability, support, and determination.
Pounding the pavement each dawn also has helped solidify a cornerstone value that helps the two founders guide their businesses through consistent growth. “There’s that old African proverb that says ‘If you want to go fast, go alone. If you want to go far, go together,’” said Skipworth, who serves as CrestCore’s principal broker. “I think running has helped us forge a friendship, and respect for one another to build this business to- gether. We’re able to watch each other in how we handle commitments and accountability to one another.” With eight-minute mile splits, Butler notes that the two runners aren’t lollygagging on their morning treks. The idea behind the brisk pace is to not only create a healthy lifestyle but to also further sharpen their discipline.
WEWANT TO PUT IN THEWORK ANDWE BOTH HAVE ADELAYED GRATIFICATION AND INVEST- FOR-THE-FUTURE
MINDSETWHERE YOU SACRIFICE TODAY IN ORDER TO GETMORE DOWN THE ROAD.”
DOUGLAS SKIPWORTH (PICTURED RIGHT) CO-FOUNDER, CRESTCORE
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“Rain, snow, whatever — there are always excuses. But we know that the other one is going to be out there at 6 a.m.” said Butler, who serves as CEO of CrestCore. “There’s not many people in our circles that are as consistent as we are year-round, and that plays into our business. We know that being consistent is kind of like the tortoise and the hare. We’ll outlast other people in this business because we just don’t stop. We just keep doing what we do.” Founded in 2012, Memphis-based CrestCore helps clients in the greater Memphis metro area and North Mississippi buy, sell, and manage real estate invest- ment properties. With offices in Memphis, Jackson, and Dyersburg, Tennessee, CrestCore also takes pride in helping educate its clients on deals and the nuances of real estate investing. “We help people succeed through real estate,” Butler said. “We help individual investors — people like you and me — that are looking for financial freedom or to build wealth. Our clients are more like mom and pops, not insti- tutional investors, hedge funds, or private equity groups.” Now with more than 750 clients and 75 employees, the co-founders have grown thanks to their methodical, deliberate approach that was in part cultivated through their running program, Skipworth said. “The consistency you need as a long-distance runner is the same for our business — it’s a long-term mind- set,” he said. “Buying a home isn’t a get-rich-quick thing like fix-and-flip or wholesale. We want to put in the work and we both have a delayed gratification and invest-for-the-future mindset where you sacrifice today in order to get more down the road.” A FOUNDATION OF VALUES In September, Butler and Skipworth were both rec- ognized with Think Realty Magazine ’s Master Investor award. The commendation recognizes real estate invest- ment professionals with a proven track record of suc- cess, integrity, and service in the real estate industry. Integrity is, in fact, a central tenet of CrestCore’s philoso- phy, Skipworth said. The word “Core” serves as an acrostic that relays the firm’s values of character, ownership, re- spect, relationships, evolution, and keeping the end in mind. “I would say our six core values are pretty much the essence of who Dan and I are,” Skipworth said. “These values are what we aspire to. Sometimes we might slip or might not live out the values or standards we have for ourselves, but it’s what we encourage each other to do and they’re the standards that we hold for each other.”
the cultivation of their values to their families, friends, and faith. The two view their friendship as “iron sharp- ening iron” and are thankful for the good people that have enriched their faiths and determination to make an impact for their families, employees, and clients. Such values have undoubtedly helped their company
CrestCore — which is one of a handful of real estate businesses under Butler’s and Skipworth’s parent firm, 6AM Core Collective — has a passion to partner with oth- ers to develop thriving real estate businesses that bring fulfillment to people, benefit to society, and glory to God. Both ardent Christians, Butler and Skipworth attribute
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grow from what was helping friends and family with real estate deals to now serving hundreds of people with properties in Tennessee and Mississippi. “When talking about success, it makes me think what is real success?” Skipworth asked rhetorically. “For Dan and me, real success is people using the talents ambitions, and opportunities to serve others and glorify God. What we’re trying to do is to encourage our em- ployees and colleagues to do the same.” A native of Dallas, Texas, Butler agreed, noting that CrestCore has helped at least 10 of its employees go on to launch real estate investment businesses of their own. By helping to instill their values in others, Butler believes that it will not only help their community and the real estate industry, but the world. “To me, that’s a big deal,” Butler said. “We want others to succeed — whether it be with us, or starting their own thing or going on to the next level of another company, we want to see the best use of their skills … Putting that footprint in other businesses and industries is just as good as them continuing to build with us.” The two also work to help better the real estate industry. “We love helping people, and our peers in the in- dustry in Memphis and across the country,” Skipworth said. “Whether it’s a Think Realty conference, other conferences, or Mastermind groups, we love sharing best practices and resources … We’re just constantly wanting to see everybody get better.” With a stronger real estate industry, everyone wins, Butler said. Just recently, Butler said he had lunch with a Memphis competitor with the purpose of helping connect them with a quality virtual assistant. “When we make them stronger, they’re a stronger competitor — but that’s OK,” he said. “We’re all trying to win together.” By rejecting a scarcity mentality and embracing an abundance mindset, Skipworth believes that the compa- ny is opening itself up to more opportunities to connect with others. Ultimately, CrestCore’s values are what set the business apart from its competitors, Skipworth said. “Some of those core values, the way we operate and who we are sets us apart over the long term — even if others use the same tools,” he said. “Somebody can lace up with the same sneakers and use the same equipment, but that doesn't mean they're going to be able to get the same results.”
become more collaborative in recent years. In general, Skipworth added that that the buy-and-hold landlord business has become more professionalized — particu- larly from third-party management groups. Aided in part by a growing library of public resources, a more collaborative environment and more inexpen- sive tech tools to help manage portfolios, more people are seeing entry ways to become real estate investors or launch real estate businesses. Skipworth added that renters and landlords have greatly benefited from improved insight into the world of real estate. “The technology improvements that have happened in the last 15 years have really upped the game,” he said. “And the transparency for residents and clients has been really great for the business as a whole. They all benefit from that.” While there hasn’t always been the best reputation for property management firms, Butler thinks such ef- forts to encourage transparency have helped weed out bad actors and generate more trust among brokers, investors, and renters. In addition to its other strong values, Skipworth said that CrestCore’s culture of constant improvement and evolution set it apart from its competitors. CrestCore’s leadership acknowledges that the real estate industry can change quickly, and that to keep up, it must be willing to adapt. “We are constantly evolving,” Butler said. “We are constantly trying to build systems, processes, and foundational tools to scale the business to take it to other markets, and into other segments.” Over the years, Skipworth said that CrestCore’s biggest obstacle is finding people that deeply connect with their values so they can also live them out in the course of their business relationship. When employ- ees, clients or others identify with and exemplify their values, CrestCore can optimally operate knowing that everyone strives for the greater good. When there are disconnects, however, it can create not just operational challenges, but also ethical and moral obstacles that can create difficult situations. At times, CrestCore has found itself extending grace to clients when it should’ve likely cut ties with the per- son. As a result, it prolonged and intensified the dam- age, Skipworth said. It’s especially challenging because CrestCore so highly values personal relationships and trust, he added. “Our biggest challenge has been finding like-minded people,” Skipworth said. “Whether it be employees, clients, or prospective clients, learning how to communicate our
values appropriately and vividly such that they can come in and get aligned with these values has been [challenging]. If someone isn’t a long- term relationship type of person or they’re more of a ‘what’s in it for me’ type of person as opposed to a service-oriented person, or if they lack personal accountabil- ity, that can be hard for us.” Finding employees that strive for excel- lence and keep the company’s values top of mind was also a challenge, Butler said. “Once we decided that we weren’t go-
recently entered its third market in The Volunteer State, which checks off a 2019 goal for the company to reach more people and real estate in west Tennessee, Skipworth said. Skipworth said the company’s goal is to integrate the new market into its operations and get its team focused on providing world-class experience with that opportunity. In addition to cap- italizing on its new Tennessee market, Skipworth said that the company is looking to expand its regional foot-
ing to be the only team members, we’ve been fighting hard and putting in long hours over weeks and months to get those values at a high organizational level,” he said. “Excellent customer service and performance is what we want and expect from ourselves, which exactly ties to values and finding the right people.” Coaching clients and developing their skills is one of Butler’s most cherished duties with CrestCore. In par- ticular, he loves to find opportunities for students and to cultivate their professional skills to help advance their careers. For Skipworth, supporting CrestCore’s team is what deepens his passion for this work. Skipworth’s drive to help others succeed reminded him of high school basketball, wherein he relished any opportunity to help the team win. “In high school, I played point guard and just loved that position for so many reasons,” he said. “In that role, it’s mainly how the other players do and how that point guard can help those team members succeed and do well. That’s how the point guard wins. For me, seeing our team members win, get better, and put that ‘W’ in the win column is important to me. Everybody getting to shine is what makes me happy.” With its expansion into Dyersburg, Tennessee, CrestCore
print and look for other metro areas that might benefit from its services. CrestCore is also looking to grow its business within its existing markets and is exploring other offerings that might augment its buying, selling, and managing services. “We want to be opportunistic as well as look for new opportunities to grow our business,” he said. “We’re not looking to do things totally different but rather find things that complement what we’re doing now.” Seeing CrestCore grow from a small business that helped only its friends and family to a team of 75 helping hundreds of clients has been incredibly gratifying, Skip- worth said. Experiencing the company’s steady growth energizes him for the future and makes the “It’s been very fulfilling and rewarding to see where things are now,” he said. “Being able to provide for our families and to make people look at the industry differently has been a blessing. There’s definitely pent-up excitement about what the future holds … We often say to each oth- er that we feel like we’re just getting started.” •
PLACE IN THE MARKET While there’s still room for improvement, Skipworth believes that the real estate investment world has
Bobby Burch is the Founder of Bobby Burch Creative, a small business storytelling studio. Learn more at bobbyburchphotography.com and contact him at firstname.lastname@example.org.
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Believe in the Dream
HARD MONEY - COMMERCIAL - FIX & FLIP Stated income and Full doc programs! Purchase & Refinance loans
WHY YESTERDAY’S “CAPITAL DAYDREAM” IS REALITY FOR REAL ESTATE INVESTORS TODAY.
by Eric Tran, Universal Commercial Capital
H ow would you like to work with a lender as eager to loan you money as you are to borrow capital for your real estate projects? In today’s real estate market, that “daydream” for many real estate investors has become reality. Real estate has always been an attractive asset class for investors wanting to diversify their portfolios with highly collateralized investments. Those investors have been making private and “hard money” loans for more than a century in the United States. However, in today’s uncertain eco- nomic times, real estate lending has become mainstream, and that has had some very positive ram- ifications for today’s active real estate investors. Wondering how a real estate market that is increasingly compet- itive is good news for your ability to borrow large amounts of capital at low rates quickly and on highly custom terms? Here’s your answer: The com- petition in the real estate lending market is heating up, and that is to your benefit because lenders – even those who prefer to acquire real property instead of lending on real estate deals – are finding them- selves with far more capital than they are finding good acquisitions. “Wait, how can too much money be a bad thing?” you may be think- ing to yourself right now. Well, the
truth is that when that money has been entrusted to a lender, it was entrusted to that lender with the goal of getting that money loaned out to earn interest! The goal was not for the money to sit “under the mat-
However, a lot of lenders who are new to this industry can represent a pitfall to you instead of an oppor- tunity – particularly if they do not appreciate the importance of timing and the finesse involved in real estate transactions. Before you sign with just anyone lending out money, make sure they can meet your needs. Ask a few questions, such as:
tress,” so to speak. For example, recently the New York State Teachers’
• Can you fund my loan quickly?
• Are you flexible on credit requirements?
Hard Money: Commercial: Fix & Flip Rates starting at: 9.99% LTV up to 70% 1-3 year I/O Under 7 Day Funding Rates starting as low as 6.5% LTV up to 75% 1-3-8 years fixed Under 4 weeks Funding
Retirement Sys- tem allocated about
• How many steps are involved in your process?
$200 million to a North American direct lending fund. Do you think that in 10 years, NYSTRS is hoping to still have $200 million with that fund? Of course not! They’re hoping for substantially more. The only way that fund can deliver is to make the direct loans in which they specialize by finding projects that are a good fit for their loans. With allocations like this (both at this volume and great- er) happening all over the country, the direct lending and hard-money sectors are really heating up. WARNING: NOT ALL CAPITAL IS GOOD CAPITAL This hot lending market is great for real estate investors like you , who actively generate quality leads and do productive, profitable deals.
Rates starting at 7.99% LTC up to 90% ARV up to 75% 1 year I/O Under 2 weeks funding
A lender that is a good fit for your type of real estate will be able to accommodate your timing, have the flexibility to work with you on individual projects and require- ments, and have a professional and fast application process that will not delay your transactions. In today’s real estate market, real estate investors deserve and can insist upon the best lending programs possible. Don’t settle for anything less. •
BRE# : 01217502 NMLS# : 1730798
ERIC TRAN CEO 714.300.8223 email@example.com
Eric Tran is the CEO of Universal Com- mercial Capital, a private lender based in Southern California specializing in Fix and Flip and Rent and Hold loans. Universal Commercial Capital also offers a no-tax-
18 | think realty magazine :: january / february 2020 IVY BACA VP SALES 213.784.2497 firstname.lastname@example.org www.universalcommercialcapital.com
return, non-recourse apartment lending program. Learn more at UniversalCommercialCapital.com.
thinkrealty . com | 19
A FEW FAVORITES
setting goals and holding yourself accountable to achieve them? AG I use a life book course that really helps. It pinpoints areas of my life and I review it each week. Some examples of life areas that I focus on are health/fitness, spiritu- al, emotional, intellectual, finan- cial, social, career, and quality of life. There are others, but it guides you to narrow down your goals in specific parts of your life. TR The real estate investment indus- try is widespread and evolving. What excites you and what concerns you? AG What excites me is that people are waking up. And for those that are smart, long-term real estate invest- ing will become a larger part of their portfolio. It’s no longer an alternative investment class. It’s real, and it’s a good thing. What concerns me though is despite more opportunities, there is more chaos. People aren’t using as much logic as they should, and they are not educated on deals. They are overlooking red flags of a deal just to get in. Making decisions based on emotion can be very dangerous, especially when buying something as valuable as real estate. TR What do you do or where do you go when you need inspiration? AG I go to experts in the industry and have a conversation with them. I am a big relationship person, so I love to surround myself with those who are doing great things. It’s kind of like jumping in a pool with an Olympic swimmer! Also, I travel. My wife and I have a plan to visit seven countries in seven months. Experience is import- ant. The vulnerability I feel when trying new things and seeing new places has a positive effect, always. Travel is the world’s greatest teacher. It opens me up and exposes a side of me that I want to be in touch with more. And traveling with my wife is
as I could about real estate invest- ing and finally made enough money to get started. My first two proper- ties were in inner city Detroit and turned out to be my biggest failures, but I had to keep going. I continued to explore how to make money as an entrepreneur and continued to invest. I focus on SFR and have some multi. I like the buy and hold. TR What is your WHY? What drives you each day? AG Three things. 1) The pursuit of happiness and creating good energy. 2) Offering a sounding board and perspective on financial education. One of the biggest evils I see today is lack of financial intelligence and that challenge is not being adequately met by gurus in the marketplace. I love speaking nationally, doing podcasts, and sharing trustworthy information. 3) Working with kids. Children need to be empowered to know it’s OK to make mistakes. I work with The Boys & Girls Club and go to local schools to read to kids and do question and answer sessions. Also, I am going on a mission trip to Ukraine to teach English and business skills. TR Besides the mission trip, what other goals do you hope to accom- plish in 2020? AG I want to stay true to my investment philosophy by buying into businesses and more properties. I want to position one of my compa- nies for an exit and contribute more to masterminds by bringing my technology background and knowl- edge of scaling companies to help others and to show businesspeople that their company can feed their lifestyle. It doesn’t have to be just a job. And, I want to become a parent! TR Do you have a process of TR (And, he did end up graduating from the University of Michigan.)
Places you’ve traveled: • Barcelona • Portugal • London Books: • Principles by Ray Dalio • Principles of Real Estate Syndication by Samuel Freshman • The Law of Success by Napoleon Hill • The Startup Playbook by David Kidder • Rehumanize Your Business by Ethan Beute and Stephen Pacinelli • A New Earth by Eckhart Tolle • The Power of Now by Eckhart Tolle
Featured Member: Abhi Golhar
Cuisine: • Thai • Indian
Podcast: American Elections: Wicked Game
A CONVERSATION WITH ONE OF THE MOST DYNAMIC — AND LIKEABLE — PERSONALITIES IN THE INDUSTRY.
by Kelli White
the greatest thing ever!
AG I was a hot-shot, know-it-all in high school and didn’t do well my first year at the University of Michigan. I finally learned that a crazy ego never works well for anybody. My uncle was a real estate developer and I helped him some but didn’t think of it as a job. It didn’t click for me until my friend Tommi gave me Rich Dad Poor Dad and other books. I learned as much
odcast Host Extraordinaire. Accomplished Investor. Pub-
investment space and beyond. We got a chance to interview The Inter- viewer about real estate investing, goal setting, entrepreneurialism, the biggest evil in today’s market, and more. TR Your preferred niche of REI is single-family rentals, and you now own properties in multiple states. How did you begin your career in real estate?
TR What do you do to ease a bad day?
lic Speaker. Think Realty Resident Expert. Presidents’ Circle Mem- ber. World Traveler. Social Media Maven. And perhaps, Best Dressed Real Estate Investor. Ok, that last one might be a bit subjective, but it’s no secret that Abhi Golhar has earned many acco- lades and titles, in the real estate
AG Run to clear my head. Take a warm shower. Meditate. And have a glass of red. TR To celebrate a great day? AG Call my wife. Call my parents. And have a glass of red. •
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THE SELLER I first met our seller when a friend connected us as he knew I buy problem houses. In this case, the seller had allowed her adult grandson to move into one of her rental homes as he got his life together. To hear her speak, she did it because she loved him, but she needed the income
work in this case and we should be ready for an eviction that could take 90 days if he chooses to fight it. Once the house was vacant, we could see the destruction caused and that we could be looking at 6-10 weeks depending on the amount in damages. Once finished, we would put a new tenant in at market rent and then sell the property to a landlord looking for a property cash-flowing day one.
from that property to support her life. Apparently, he had agreed to pay a reduced rent, stay only 90 days, and promised to keep the unit clean so she could rent it again easily when he moved out. A year later, she had seen only one rent check and the home was full of people she didn’t know as her grandson invited friends
THE BUYER The buyer in this case was a busy professional living out of state who didn’t have time or the desire to take on a
fixer upper. He just wanted a property that was ready to go, leased at market and would produce some cashflow day one. Lack of time was his issue given his work and family commitments. He was happy to pay market price for a unit that had been totally remodeled and already producing income. OTHER PARTIES I would be remiss if I didn’t highlight all the other parties helped by this transaction. The neighbors are happy as the party house is shut down and all the cars are gone that flooded the street parking. The contractors and trades peo- ple employed on the job are happy as they had work during the remodel process. The City is happy as we reduced police calls and raised their property tax value when we sold. The tenants are happy as they are living in the best rental they have ever seen, and I am happy because after a long process I finally saw a little profit at the end of the journey. I believe real estate investors are some of the most selfless people around as we work to make sure everyone else is good before we get our small piece. We are the chefs that eat last after everyone else is done. Depending on the deal, sometimes there is food left and sometimes there is none, but we can help others in the process. • Michael Zuber worked in the Silicon Valley since graduating from Santa Clara University 20+ years ago. After wasting time and money in his 20s, he began investing buy and hold rental properties and never looked back. Michael grew his rental property portfolio from a single rental house to financial freedom in 15 years. Now that he no longer has a day job, he shares his story via his self-published book and YouTube Channel, both called One Rental at a Time.
to live with him and party all the time. She reached out to me after finally going over to see the place and crying at what she saw. The destruction was more than she could handle. She still loved her grandson and didn’t have the heart to evict him. I told her I would handle the eviction and I would pay cash to avoid surprise inspection, credit requests, and agent fees so any amount I gave her she would walk away with. She was so thankful of the speed and the fact that I took the property as is with headaches and all.
THE INVESTOR Real estate investing can be a cash-intensive busi- ness when you are run- ning multiple projects, and thus it is common to raise private money to keep individual projects afloat. In this case, the private investor acted as the bank and received both a monthly interest payment and
A People Business
EVERYONE WINS WHEN THE PURPOSE IS TO HELP EVERYONE.
by Michael Zuber
part of the profit of the deal once sold. The investor was able to take money out of the stock market which she considered as too volatile and be the bank with recorded interest for security. The investor signed up for a six- to nine-month project as I shared the plan with her. We needed to issue a 60- day notice to vacate the house. I told her this might not
eal Estate Investors are sometimes thought of as selfish, greedy, and only out for themselves. While many investors might fit this mold, I am here to tell you that of the thousands of investors I have encountered over my career, 99 percent of them base their business on helping people. R
Most successful real estate investors know that it is a people business first. To be in this game for a long time, you must be able to interact, listen, and help peo- ple long before you see any profit. Here is a story that highlights what I mean:
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WHAT ARE YOU BUILDING?
DIFFERENT LOAN OPTIONS PROVIDE DIFFERENT BENEFITS FOR REAL ESTATE INVESTORS.
Content provided by GROUNDFLOOR
ne of the things that makes GROUNDFLOOR unique as a source of funding for real estate
qualify) to keep the most cash in hand to use towards their projects. Since payments are not collected monthly in the deferred payment model, the terms of the loans revolve around regular property inspections and updates from the borrower regarding the progress of the project. Borrowers are required to order inspections every 60 days and send monthly progress updates to ensure work is progressing according to schedule. GROUND- FLOOR withholds the renovation budget in escrow and releases the funds to the borrower as they complete the renovations. Some developers, however, choose to stick with the more traditional monthly payment loan option. The in- terest and points on these loans are slightly lower than on deferred loans, and as such a monthly payment loan may make more financial sense for shorter-term proj- ects. Under the terms of our monthly payment loans, borrowers agree to make payments each month. Pay- ments are due on the 1st of the month, with the final day to pay with no penalties by the 15th of the month. If a borrower is late on a payment, draws to receive addi- tional funds will not be processed until their account is current. More than one late payment causes GROUND- FLOOR to issue a notice of default, and additional inter- est is charged to encourage timely repayment. If a loan becomes 60+ days delinquent, GROUNDFLOOR begins the foreclosure process. (Fortunately, in the company’s history, we have only had one monthly payment loan ever go into foreclosure.) •
projects is that we offer a true deferred payment loan option in addition to the more standard monthly pay- ment option. The difference between the two is simple. The monthly payment option requires the real estate developer (whom we commonly refer to as the “bor- rower”) to pay interest to GROUNDFLOOR on a monthly basis until the loan term ends. The deferred payment option, however, allows the borrower to not pay a single interest payment until the end of the loan term, at which point he will pay the entire interest balance known as a “balloon payment.” Each kind of loan offers different benefits for real es- tate developers and having the option to choose allows them to pick a loan structure most suited for their proj- ect. However, there are some key differences between the monthly payment and the deferred payment option. A BORROWER’S PERSPECTIVE For real estate investors looking to get financing, having the option to choose between monthly payments and deferred payments can make a big difference for their projects. Since unanticipated problems — and therefore unanticipated costs — happen frequently in the real estate industry, it is an advantage to be able to keep all funding in hand until the very end of the loan term. As a result, most borrowers we work with choose the deferred payment loan option (provided they
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hat do you get when two brothers, one with a back- ground in architecture and another in finance, join forces? A success- ful real estate investing company, that’s what. And it just so happens, that for the King brothers, helping others along the way has made their road to success that much brighter. Through their company Revival Brothers, Joe and Shawn King’s mission is to rebuild and revitalize blighted neighborhoods, helping families throughout the United States. Shawn King earned a finance degree and started his real estate investment journey in commercial real estate and mobile home parks before segueing to the mortgage industry. With a degree in archi- tecture, Joe King’s experience includes design communication for some of the largest companies around, design/build with teams constructing energy-efficient homes, and volunteer efforts with Habitat for Humanity. With extensive fix-and-flip projects and single-family rentals under their belt, the Kings started learning about their next niche in Revival of the Fittest JOE AND SHAWN KING, THE REVIVAL BROTHERS, USE REAL ESTATE AS A HELPING HAND. W by Kelli White
"THE ONLYWAYTO BRING CHANGE IS THROUGH EDUCATION.” - JOE KING
to your investment when approaching foreclosure. We want to create a win- win for all.”
LEADERS OF INTEGRITY One reason Joe and Shawn feel so strongly about their methods of doing business is because they have been burned in the past. From unethical underwriting to an inexperienced developer promising what he couldn’t deliver, the Kings have struggled with whom to trust. “We have seen shady deals and bad actors in the industry, on both sides. When we began to under- stand how the industry was chang- ing — how a lack of transparency related to business — and how mis-teachings are setting investors up for failure, we felt a desire to bring awareness to what is going on in the industry, both good and bad. People are hungry for trust- worthy information. We wanted to build a transparent company with solid communication. This led to making our IPA property analyzer available to the public with the notion that folks would get a true understanding of the potential performance of their investment. I’ve always said, ‘numbers don’t lie, people do.’ There is no better way to build trusted relationships in my opinion,” Joe said. Joe and Shawn have partnered with some of the most reputa- ble people in the industry to form LOI (Leaders of Integrity) events where they offer free webinars and cost-effective workshops. Their LOI channel is their way of addressing unethical dealings in the industry and providing a trusted resource. Shawn said they are flooded with questions from people needing help in bad deals. “Putting people first and putting
aside greed develops a community of trust and awareness instead of counting every penny that comes through the door,” Shawn said. But they wish they could do more.
element in reducing risk and in- creasing profit margins,” Joe said. The tool that the Revival Brothers created is called IPA (Ideal Project Analyzer). And because neither brother was interested in adding software developer to their re- sumés, they offered it to the indus- try to help others mitigate risk. “The goal is to provide an avenue to analyze assets in notes and off market REO,” Joe said. “Revival Brothers was set up to buy, sell, manage assets, and make money, but our purpose has evolved to so much more. The market is flooded with new investors taught by some gurus with unethical meth- ods. A good portion of these students are taught to make offers based on percentages of UPB rather than yields and returns; as a result, the pricing and risk of these investments skyrock- et. They are also taught that if there is equity in the asset, there is more value to the note. The problem is, you are not buying real estate, you are buying paper (a note) and with this line of thinking and pricing offers, investors are quick to foreclose rather than figure out a win-win solution to keep a family in their home, not to mention the fact that many things can happen
REI — notes. Their efforts include helping troubled borrowers stay in their homes through loan modifi- cation settlements and providing seller financing solutions to new home buyers who have problems fi- nancing through traditional banks. It was their research into the notes business that led them down some confusing paths. “After more than six months researching, I still struggled to find reliable information,” Shawn said. “This created a passion to educate and raise awareness. People don’t know what they don’t know.” This learning curve also led to an evolution in their business. Their fix and flip rehab business turned into a real estate investment company that has the necessary infrastructure to quickly identify, acquire, and manage distressed residential assets. “Eventually, we decided to dive deeper into analytics and exit strategies,” Joe said. “I wanted to develop a tool to analyze company assets. Our investment strategy involves extensive analytics and our process produces multiple potential exit strategies for every investment, which is an essential
THINK REALTY HONORS THE KINGS -
Joe and Shawn King, known as The Revival Brothers, won Think Realty’s 2019 Humanitarians of the Year Award in September. They were chosen in part because their core values align with those of Think Realty — to provide trusted resources for real estate
investors and to raise awareness for integri- ty-based investing. Their humanitarian mindset has brought them great success in their business, but even more so for those they touch along the way. The
Kings believe the foundation of prosperity is built on a set of core values: Education, Integrity, Excellence, and Fun. “It is important to be informed with the right knowledge to produce successful results. Developing re- lationships that are built on honesty and trust result in more favorable futures for all,” Joe said.
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