Think-Realty-Magazine-February-2018

OFFICIAL 2018 THINK REALTY INDUSTRY INFLUENCERS

OF HIGHLY EFFECTIVE FLIPPERS

7 HABITS

BRUCE AND AARON NORRIS' BEAUTIFUL PROCESS YIELDS WEALTH, LEGACY. Good Timing Runs in the Family

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STATE SPOTLIGHT: EVERYTHING IS BIGGER IN TEXAS, INCLUDING INVESTMENT OPPORTUNITY

SPECIAL SECTION WEALTH BUILDING & LEGACY

RENOVATION ROCK STARS FATHER-SON TEAM TAKES 1,200 SQUARE FEET FROM AVERAGE TO ASTOUNDING

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TABLE OF CONTENTS

INSIDE THIS ISSUE

THINK REALTY 8 News & Events 60 Member Benefits

HOUSING NEWS REPORT 62 Local Housing Markets Most Impacted by GOP Tax Proposal Data in action article by ATTOM Data Solutions. by Daren Blomquist, SVP, Communications

64 7 Habits of Highly Effective Flippers A look at the most profitable flipping markets in Q3 2017. by ATTOM Data Solutions

COACHES CORNER 10 Panel in Print Investing with family. 12 How Food Delivery Could Change

NUTS & BOLTS 86 5 Bookkeeping Mistakes Real Estate Investors Must Avoid These little errors are easy to overloook and can cause big trouble. by David Rice 88 Redefining Legacy It's not just financial wealth you leave behind. by Jennifer Jo Cobb INDUSTRYVOICES 96 Local Lending Gains an Edge from Fintech How local lenders can compete nationally with the right technology. by Marc Heenan 98 Getting Outside Your Comfort Zone 5 reasons agents and investors should work together. by Bill Green DESIGN POINT 112 Renovation Rock Stars: Mountain Cabin Makeover A little house brings big returns, thanks to a total makeover. by Carole VanSickle Ellis

Everything About Commercial Real Estate Social science affects restaurant and retail space.

MARKET BREAKDOWNS 30 2018 Predictions As the year moves forward, investors should be on high alert. by Kathy Fettke 34 Regional Spotlight: Nashville, Tennessee Musicians aren't the only ones star-struck by this music city. by Bruce McNeilage & Carole VanSickle Ellis

COVER FEATURE

Above, AARON NORRIS (L) watches his father and The Norris Group founder, BRUCE NORRIS (R), thumb through stacks of data and charts. The Norrises are known for their astute, far-reaching predictions.

38 State Spotlight: Texas Has Texas "evolved" beyond the traditional housing cycle? by Carole VanSickle Ellis

GOODTIMING RUNS INTHE FAMILY

by Carole VanSickle Ellis :: photos by Noel Daganta

WEALTH BUILDING & LEGACY 42 Pursuing Your Passion, Profitably For Julie Ziglar Norman, a love of horses and real estate go hand in hand. by Carole VanSickle Ellis 44 Using Credit Creatively and Responsibly in Real Estate Credit can be your key to investing success, but be careful. by Douglas Skipworth

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INDUSTRY VOICES

MARKET TRENDS

MARKETING

NUTS & BOLTS

SPECIAL SECTION 67 Information Network Management (IMN) IMN highlights the 2018 Middle-Market Multifamily Forum (Northeast).

THINK REALTY INFLUENCERS

MARKETS THAT WILL "DOUBLE UP" IN 2018 Job growth and housing demand pair perfectly in these markets.

USING DIGITAL MEDIA TO SELL REAL ESTATE Flip the equation to have buyers and partners chasing you.

IT'S NOT COVERED PART 2 3 unseen outdoor threats likely on your property.

48 Leaving a Legacy Through Real Estate Building wealth that makes an impact. by Sonia Booker

Think Realty recognizes 7 leaders shaping real estate for the better.

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FROM THE EDI TOR- IN-CHI EF

PUBLISHER R. Michael Wrenn

What Did You Leave Behind?

PRESIDENT, AFFINITY WORLDWIDE Eddie Wilson | EWilson@AffinityWorldwide.com

EDITOR-IN-CHIEF Carole VanSickle Ellis CEllis@ThinkRealty.com

hen I was a kid, one of my favor- ite books was titled, What Did You Leave Behind? It detailed the many things that we leave behind us both in our everyday lives and on vacation, illustrated with warm pictures hazy with W

thinking you probably hung the moon. All I can say when those desires pass through my mind and heart is, “Good thing we’re in real estate with dreams like these,” because real estate is, as Think Re- alty coach Sonia Booker is so fond of saying, one of the “greatest wealth equalizers” available to those of us who wish to leave a legacy. Want to found a nearly timeless, largely recession-re- sistant family business to teach your children? Thousands of investors create lasting entrepre- neurial legacies for their families every year. Dream of endowing your favorite charity, church, or school with enough money to fund meaningful developments decades after you depart this plane? Countless investors quietly change the financial fu- tures and fortunes of their passion projects every day. Wish you could change the face of your local community permanently and for the better? Every successful real estate investor makes an ac- tive, meaningful contribution to the communities in which they invest with every dollar leveraged toward a productive, profitable deal. In this issue, we’re dealing directly with what you, as a real estate investor, will leave behind and how to leave it in the best way possible for your specific, personal purposes. Whether you are founding a dynasty or quietly (even anonymously) molding the world around you into a better place, real estate will help you leave a legacy like no other. Seize the day. Define your legacy. Fulfill your purpose. We’re here, as always, to proudly help you on the real estate leg of that journey. •

VICE PRESIDENT OF MEDIA SALES Rodney Halford RHalford@ThinkRealty.com 816-398-4111 x86122 NATIONAL SALES MANAGER Teresa Stanton TStanton@ThinkRealty.com 816-398-4111 x86224

nostalgia and a watercolor patina of memory. While that book was a children’s book and in- tended, I believe, mainly to be a fast, enjoyable read summed up with that time-honored scouting maxim, “Take nothing but memories, leave nothing but foot- prints,” I found the other day as I read it to my own little boys that the story held much more. Those colorful images and simple prose certainly made me want to leave something meaningful be- hind, and I wanted it to be something good. I wanted it to be something my little guys could be proud of long after I wasn’t around anymore to hold them. • Maybe, it could be something they could use to support and drive their own dreams. • Maybe, it would be something they would shake their heads proudly and say, “Oh, that Mom. She was unstoppable.” • Maybe, it would change their world in a way they’d never recognize, but that would mean great things not just for my children but for entire communities. I know I’m not the only parent with these types of daydreams, and they hit especially hard when the little guys are still sitting in your lap, looking up at you and

CONTENT DIRECTOR CariAnn Steward CSteward@ThinkRealty.com

ASSISTANT EDITOR Heather Elwing

DESIGN CONSULTANTS Rivet | www.WeAreRivet.com

GRAPHIC DESIGNER Emily Bowers

CONTRIBUTING WRITERS Daren Blomquist, Mark Bloom, Sonia Booker, Jennifer Jo Cobb, Bryan Ellis, Kathy Fettke, Pamela J. Goodwin, Bill Green, Bill Griesmer, Gary Harper, Marc Heenan, Pam Hughes, Bruce McNeilage, Julie Ziglar Norman, Mark Reginelli, David Rice, Douglas Skipworth,

GAME ON: TROY AIKMAN TO HEADLINE THINK REALTY DALLAS CONFERENCE

Teresa Stanton, Mitch Stephen, BreAnn Stephenson, Mike Ventry, and Ingo Winzer.

COVER PHOTOGRAPHY Noel Daganta

FOR ARTICLE REPRINTS :: Contact Jeremy Ellis at Reprint Pros, 949-702-5390. www.reprintpros.com. SUBSCRIPTIONS :: The annual subscription for Think Realty Magazine is $28.95 in the U.S. Order online at www.ThinkRealty.com or call 816-398-4085. Provide your full name, address and telephone number. DISCLAIMER :: Think Realty Magazine , its owners, contractors, distributors and their respective representatives do not provide tax, accounting, investment or legal advice and make no guarantee as to the effectiveness or success of any investment or tax strategies discussed herein. Please consult your own independent adviser as to any questions you have or decision you are contemplating. ABOUT THIS MAGAZINE :: ThinkRealtyMagazine isapublicationof AffinityRealEstateMediaLLC.Reproductionoruseofanyeditorial orgraphic,withoutpermission, isprohibited.Wearenotresponsible for thecontentofanypaidadvertisements.Forreprintrights; toob- tainadetailedstatementofourprivacypolicy;and forallsingle-copy requests,addresschangesandothersubscription inquiries:

When you think Dallas, you think Hall of Fame Dallas Cowboys Quarterback, Troy Aikman....and Troy Aikman Thinks Realty! Since retiring from the NFL, he has enjoyed success in broadcasting, philanthropy, and real estate. Think Realty is honored to welcome Troy Aikman to help us kick off the Think Realty Conference in Dallas, February 24, 2018. Register today to join Troy Aikman at the Think Realty Conference in Dallas and up your REI game!

Limited tickets still available at ThinkRealty.com.

CAROLE J. VANSICKLE ELLIS, EDITOR-IN-CHIEF

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REAL ESTATE & RETIREMENT

THINK REALTY NEWS

REAL ESTATE IRAS

This Month: Think Realty National Conference & Expo in Dallas | February 24-25

T his month at the Think Realty Conference & Expo in Dallas, Think Realty is focusing on business efficiency. Our theme, “Think Time,” drives to the heart of the idea that you can elevate your real estate ventures by leveraging time-saving tools and resources that will help you maximize your returns while re- claiming that most valuable of assets, time. You'll also learn about self-directed IRAs, alternative investment opportunities, tax sale properties, getting your credit score healthy, and more! On Saturday, February 24th, the event will feature eight educational breakout sessions, a local market discussion, invaluable networking opportunities, more than 40 exhibi- tors, and featured presentations from select keynote speakers. Sunday, February 25, will highlight Think Realty’s coaching team, with multiple educational training sessions as well as two workshop intensives hosted by Think Realty sponsors. Grab your tickets today, as this event will sell out. Learn more about our February event at https://thinkrealty.com/events/dallas. Invest in yourself by putting all our 2018 events (see right) on your calendar! • Think Realty Radio Hits the Airwaves O n the first day of 2018, Think Realty Radio went live on Wall Street Radio. The national talk radio show is hosted by Think Realty coach Abhi Golhar, an experienced real estate investor quickly on his way to becoming one of the forefront voices in real estate. Golhar covers topics such as foundations for success, long-term real estate market predictions, fix-and-flip strategies, and more with industry leaders and active investors at all levels.

REAL ESTATE IRA: A self-directed individual retirement account holding real estate investments. These accounts can hold almost any alternative asset, but investors who focus on real estate often refer to them as real estate IRAs instead of simply self-directed IRAs.

February 24-25, 2018 | The Westin Galleria Dallas

The Two Sides of Real Estate IRAs KNOW THE OPTIONS (AND PITFALLS) FOR REAL ESTATE AND RETIREMENT.

April 14-15, 2018 | The Marriott Inner Harbor at Camden Yards

by Mike Ventry

July 14-15, 2018 | The Marriott Irvine Spectrum

s an individual retirement account (IRA) administrator,

side and a lending side. The buying side is pretty familiar. People use the money in their IRA to purchase a property, fix it up, and then rent it out or sell it. The IRA funds the investment and then collects the rent or the returns from the sale. The other side of things, the lending side, is a little less well-known. It is definitely a less exciting process than fixing-and-flipping. When you make a real estate loan using your IRA, you loan an amount of money to someone who, in return, uses a piece of real estate as collateral on that loan. The borrower pays you back with interest based on the formal loan agreement. There are some small, education-based pitfalls on either side of this equation. On the buying side, investors often forget that their IRA owns the property, not them. The IRS forbids them to pay for anything directly and from working on the proper- ty. The IRA must pay all expenses on that

investment because it is the IRA’s invest- ment. Fail that, and you have committed a prohibited transaction, for which the fines and penalties are severe. On the lending side, the biggest pitfall seems to be that investors forget not every loan goes as planned. Most know how to foreclose, of course, but they often leave out language dealing with how they will handle prepayment and late payments. If you do not add in the right types of fees for these issues, you could end up not making the returns you were planning. Real estate is one of the best invest- ment vehicles out there for self-directed investors. For the best results, be sure you know all the angles and that you are abiding by all IRS rules. •

I see a lot of people switching over to self-directed IRA accounts to invest in real estate with their retirement capital. This has been happening in rising volumes thanks to the general public’s wider knowledge of and exposure to real estate investing these days. By the time an independent, creative investor with a traditional retirement account managed by a financial advisor has watched a few television shows and maybe done a little research, it’s not uncommon for them to make the switch with full confidence that they can handle their retirement investments as well or better than the person previously in charge. They’re almost always right about this, but that does not mean that they automatically know everything. Many investors do not realize there are two sides to real estate IRAs: a buying

September 22-23, 2018 | The Westin Buckhead Atlanta

DID YOU KNOW? Investor-Level Think Realty members receive free or discounted access to national and regional networking, learning, and deal-making events as part of their membership privileges. Learn more at https://thinkrealty.com/membership. and advanced investors.” Eddie Wilson, president of Think Realty, added, “Our national magazine, conferences, and website content are all designed to educate real estate investors. Think Realty Radio is an additional layer that will support investors with relatable guest interviews and expert personalities.” •

“Think Realty and I share a passion for educating real estate investors and help- ing them to succeed in the industry,” said Golhar. “The show includes the latest in- dustry trends and will inform, encourage, and inspire novice

Mike Ventry is a self-directed IRA admin- istrator with Advanta IRA. He may be reached at mventry@advantaira.com.

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COACHES CORNER

Family & Business

LINDA LIBERATORE: "DREAMING BIG WITH MY DAUGHTER”

Courses: Knowing Your Lease | Buy and Hold Strategies

“I run a property management company, and one of my daughters, Jenna, works with me. It’s funny: We never planned for her to work with me, but things just came together. She had been involved in my business since high school to varying degrees, but she never had been really with me full-time. A few years ago, she was in a process of transition and I desperately needed help. I already had two great ladies on my team, but we needed another team mem- ber and were really struggling to fill that position. Jenna came on board at just the right time. “Unlike a lot of people who work with their kids, I won’t tell you that everything came naturally. I am sure Jenna wouldn’t either! We struggled (and sometimes still struggle) to find a good balance. What makes it work, though, is that she really is a wonderful, moti- vated, creative employee as well as being my daughter! She has so much energy and a great work ethic, and she has been an amazing addition to the company. “Do I think she’ll stay with us forever? I know I would love it if she did, but I don’t know

Panel in Print: Investing with Family

if that will happen. One of the things that working with family involves sometimes is taking your company or your strategy in new directions to keep everyone personally fulfilled. That isn’t something you would necessarily prioritize in a strictly professional re- lationship with a co-worker or employee, but when you are dealing with family, it comes naturally and is so important if you want to keep the benefits of the working relationship intact. “I hope Jenna takes the company in some new directions that personally work for her so that she stays in real estate with me long-term. In the meantime, we’re doing something else you have to do when you work with family: We’re taking things a day at a time. For me, working with my daughter has been a godsend personally and professionally. She came on board when we needed her most and I’m so glad she did. I hope her future path includes us or, if it doesn’t, I hope we intersect professionally in the future. Because we’ve worked hard to treat each other professionally from a work perspective, I don’t have to worry about our personal lives intersecting. I know we’ll always be close as mother and daughter.”

sk a real estate investor why they got started in real estate, and nine times out of 10 the answer will have something to do with family. Some investors invest in real estate to create more flexibility in their schedules, so they can spend more time with children and loved ones. Others say that real estate is how they support their family financially and provide the things that family members want and need. One successful wholesaler we know started wholesaling to fund dance lessons for her daughter, then loved it so much she

grew the business to a city-wide opera- tion! Of course, we cannot overlook the retirement investors, who are investing in real estate to support themselves and, often, a spouse, during retirement while creating a financial legacy for their heirs in the process. These are all common ways in which family and real estate intersect, but there is an even more common way that does not get discussed as openly: investing with your family. We’ve all heard the conventional wisdom that tells us not to work with family members or loan them

money, but most real estate investors (and really, all family-run business own- ers) know that in most cases, there is no one more loyal to your interests than an- other member of your family. Of course, there may be no one more likely to push your buttons and send steam out of your ears, either, so it’s a fine line to walk. Three of our Think Realty Coaches agreed to discussing working success- fully with family. In this month’s panel in print, they describe the structure of that relationship and how it affected their investing and business.

GARY HARPER: "PARTNERING IN LIFE AND BUSINESS”

Courses: Vision | Personal Growth

“I have always said that my family is one of my biggest ‘why’s.’ My immediate family con- sists of two beautiful kids, a boy and a girl, and my wife, Susan. I love taking the kids along on business trips because I want them to see what I do and the possibilities that are out there for them, even if they do not end up following my professional path. My daughter, for example, is already a certified nursing assistant and pursuing a nursing degree. She decided not to get involved in the family business to a particularly great extent. Since my son is still in high school, we don’t know for sure what he’ll do either. No matter what, we know that they have seen how we run our business and they have a good understanding of what we hope to accomplish professionally and personally. “My kids may not be closely tied to my family business, but my wife, Susan, certainly is. She is not just my partner in life; she's also my partner in business. We run our company together, and I could not be more thankful for her.

EDDIE WILSON: "WORKING WITH MY FATHER"

Courses: Marketing on a Tight Budget | Inbound Marketing | The Importance of Finding Money

“When I first seriously started in real estate, my strategy involved going back to my hometown in Ohio. I saw a need there for student housing around the local college of med- icine. There were so many more students than housing! So, I started buying up a lot of little single-story properties and replacing them with duplexes for the medical students to rent. “One of the reasons I took this approach was because I knew I would be able to work with my father on this project. He was located in the area and, after evaluating the local market as well, he agreed with me that there was a huge gap in the housing marketplace that we could fill. We worked together on that project, and it was a great mentorship relationship for me both because I was just getting started in real estate and because it was really nice to work closely with my dad. I just have really fond memories of that entire experience, and I still have a portfolio of performing properties in that area.”

“The reason that working with my wife works for me (and that working with me works for her) is that we both want the same things from our business and our investing. We both agreed years ago that our goals would focus on giving back, be it to a com- munity or even the real estate industry. Because we share the same goals and passions, we work well together in business and in life. We also get to do a lot of great things together, such as travel, advise investors, and educate business owners. It is wonderful to know not just that we are making a difference, but that we are doing so together. ”

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COACHES CORNER

Commercial Trends

dining venue called a food hall that has 22 different restaurant venues inside. Each individual concept is about 300 square feet each. Food halls tend to have some common seating for diners and may have entertainment or other retail attractions as well, but they mainly serve as a central lo- cation for a lot of small kitchens providing delivery and take-out services. Historically, they’ve been more like the food courts in malls, but more modern versions have re- ally nice dining and often contain kitchens from “sit-down restaurants.” 3 COMMERCIAL TENANCIES MAY BECOME MORE FLEXIBLE One of the traditional arguments in favor of owning a commercial property instead of a residential one is that your tenants tend to stay in place much longer. A typical commercial lease might be five years or more. However, as restaurants and retail stores become more flexible and need less space, their residencies in commercial spaces may become more flexible as well. Pop-up stores, for exam- ple, tend to be more retail-oriented than food-service-oriented. However, restau- rants themselves are starting to function more like pop-ups in some areas, opening and closing seasonally around a kitchen that does deliveries rather than trying to support a full-blown dining operation. NEWDIRECTIONS FOR COMMERCIAL DEVELOPMENT While some investors might feel con- cerned about these changes, I find them very exciting! Shifts in consumer prefer- ences can signal the end of certain things in an investment sector, but they also herald new beginnings and exciting new investment opportunities. Sometimes, they bring positive improvements to our daily lives as well. For example, much as restaurants are getting smaller in a lot of cases and may be a little more transient (again, in some, not all cases) than they used to be, other industries

are getting in on the action as well. Soul Cycle, a gym devoted to giving its members a unique indoor cycling and fitness expe- rience, recently began experimenting with opening seasonal locations during certain busy seasons in order to meet the needs of their customers while they are traveling or on vacation. In another instance, a leasing company has dedicated itself to creating commercial venues that host pop-ups on short-term leases so that businesses can try out their concepts in a proven market loca- tion or hold events in an interesting venue. You can test your business idea out in a real retail setting using a short-term lease! AS ATTITUDES AND BEHAVIORS CHANGE, REAL ESTATE NEEDS CHANGE TOO These shifts in behavioral preferences are particularly important to real estate investors because they require us to reframe how we view our investments and potential investments. For example, in the past, a permanent location for a store or restaurant would likely have had certain allowances in the lease that let the tenant change the prop- erty in permanent ways. Property owners might have even made permanent upgrades to their properties in order to attract certain types of tenants. While this is still certainly relevant in today’s market, another option might be to keep the interior more open and generic so that it is easy to move tenants in and out as they transition from location to location seasonally or when their market testing is done. The retail world is changing. You definitely have to be innovative and evolve with it to succeed in commercial real estate! •

How Food Delivery Could Change Everything About Commercial Real Estate

they buy real estate and how commercial developers and investors invest in and design commercial real estate space. This shift has already created three dis- tinct changes in restaurant real estate: 1 VIEWS ON SPACE ARE CHANGING Can you imagine a classic chain restaurant with only a few hundred square feet? Big chains are starting to investigate opening extremely small restaurants that consist mainly of a small waiting area and a kitchen. The entire restaurant will be dedicated to food prep and delivery. Even restaurants that retain their seating areas are not necessarily opting to have as many thousands of square feet as they used to require. 2 THE AGE OF THE “FOOD HALL” IS APPROACHING Just yesterday, I went to a new type of

SOCIAL SCIENCE AFFECTS RESTAURANT AND RETAIL SPACE.

by Pamela J. Goodwin

s a commercial real estate broker and investor, I am constantly watch- ing how social media and technology affect my industry. Restaurants and retail spaces are two huge parts of my sector, and they are directly affected by anything that affects human social behavior, including social media, communication habits, and general behavioral preferences. Right now, I’m seeing the beginnings of a huge shift in behaviors centered around

delivery services. So many more people these days prefer to have things delivered, especially when it comes to meals. Every business is trying to cash in on this, from existing restaurants like Panera, which is launching its own internal delivery service, to services like Dash and Uber Eats, which pick up food from a variety of locations and deliver it. Even Facebook is getting in on the action. Just yesterday I received a promotion from Facebook that allows you

to select different restaurants in various categories, then order through Facebook and it will be waiting on you when you (or the person picking up the food) get there! Of course, this is a huge change from the traditional restaurant experience, wherein you would go sit down, order your meal, wait for them to prepare it, eat the meal on-site, then pay and leave. It will very likely completely change not just how restaurants do business, but how

Pamela J. Goodwin is the founder and CEO of Goodwin Commercial a commer- cial real estate firm specializing in retail/ restaurant development, brokerage and consulting firm in Dallas, Texas, and a

Think Realty coach. Learn more about her commer- cial real estate courses at www.thinkrealty.com/ coaches or reach her at pam@pamgoodwin.com

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MARKETING

DIGITAL MEDIA

The Think RealtyBeginner’s Guide to Using Digital Media to Sell Real Estate FLIP THE EQUATION TO HAVE BUYERS AND PARTNERS CHASING YOU.

LET’S GET SPECIFIC: GEOFENCING AND GEOTARGETING W hile some investors want to reach outward as far as possible, others are more interested in limiting their audience to a very specific subset of people. If you are working in a lim- ited area of the country or only wish to reach buyers, sellers, or investors in a specific city or even subdivision, then geofencing may be the answer for you. Geofencing involves using data about internet users to target your client base using parameters like geographic area, business sector, or income level. There has never been such a great time to get measurable marketing re- sults while getting your business name and services in front of specific lenders or companies and avoiding wasted im- pressions. Using these strategies enables you to place an ad or other promotion- al materials directly on the desktop, laptop, or cell phone of the people with whom you wish to speak most. Marketing Insider Tip: A good dig- ital marketing company will measure “drives” to your site allowing you to speak directly to prospective buyers. This is important because it allows you to accurately measure your returns on any campaign. Always ask your marketing representatives if they allow this practice and, if not, how they measure levels of success for their customers.

by Teresa Stanton

While there are a lot of programs and sys- tems designed to help you systematize and delegate your daily tasks, there are far fewer proven, reputable ways to outsource your outreach. Fortunately, you do have options that not only will build your credibility but also reverse the equation so that your leads and your future business partners are reaching out to you instead of you chasing them around. Today's digital explosion is the perfect time for real estate investors if you have a solid marketing strategy. As we already mentioned, it's likely your "driving days" are mostly over. That is true for your target market as well. For example, whether you are looking for retail buyers or investor buyers, the initial place they go to find potential properties is the internet, even if they eventually do a drive-by and a tradi- tional showing. The initial place investors go is usually the internet as well. If you are seeking leads on deals, then social media could be a perfect fit. Many of those house-shoppers are urged on by their real estate agent friends posting listings on Facebook and Twitter. Who can resist clicking on that cute cottage and flipping through the pictures, think- ing it might be time to move up? Get visible in those social media feeds and start enjoying the clicking!

he landscape of advertising is changing, especially in real estate.

Sure, the old standard, bandit signs, will probably always have a place on a corner at the local intersection, but with real estate investing businesses growing rapidly and unbound by geographic constraints, the fact of the matter is that most investors need more. This is particularly true if you provide turnkey real estate investment services, property management services, private lending services, or are seeking funding for your deals. Thanks to digital and social media, many investors are finding that their days of driv- ing around and looking at homes or busi- nesses are over. Often, they never meet leads – or even business partners – in person until well into a working relationship. This expands your growth potential exponen- tially, but how can you reach these folks in the first place? Sure, you could spend a lot of time “friending” everyone on Facebook, but that is time-consuming and, at the end of the day, not particularly efficient or effective. YOUR LEADS AND FUTURE PARTNERS SHOULD BE REACHING OUT TO YOU In an ideal world, if you are a talented real estate investor, you spend your time focused on real estate investing! However, most investors end up tangled in logistical matters that detract from building their real estate business and from their bottom lines.

enough, nor is being on location. Many investors are already online on their own doing live video feeds from their properties. These results tend to be, at best, mixed, and rely heavily on a video going viral, an effort SOCIAL-MEDIAADVERTISING IN CONJUNCTIONWITH THE “CLASSIC” ADVANTAGES OF RADIO. DIGITALMEDIA: Digital media combines technology and content, where content can be interacted with or consumed via digital means. Examples include apps for smartphones, interactive websites, and analytical software. GEOFENCING: The use of GPS technology to create a virtual geographic boundary. GEOTARGETING: The practice of delivering different content to a website user based on their geographic location. REAL ESTATE INVESTORS USING FACEBOOK LIVE IN CONJUNCTIONWITH RADIO ADVERTISING FIND THAT THEY GARNER THE BENEFITS OF HIGHLY TARGETED

in which 99 percent will fail. This issue is due to the common misconception that simply being out there will some- how result in people seeing you. Sadly, we’ve all posted at least one selfie that nobody liked, so we know getting “out there” is only half the battle. The more important half of the battle is getting in front of the right audience. Coming from a broadcast radio background myself, I remember spending many a Saturday doing “live remotes” from various subdivisions with limited results. At that time, the concept was confusing, and we just did not always reach enough peo- ple looking for houses on Saturday who were also listening to the radio. Thanks to social media, however, popular, topic-specific venues can predict not just that they will have an audience, but who will be in that audience and what that audience will be looking for. Fast forward a few years, however, and digital media has changed the game. For example, investors using Face- book Live in conjunction with radio advertising find that they garner the

benefits of highly targeted social-me- dia advertising in conjunction with the “classic” advantages of radio. Getting a local radio celebrity DJ to walk through your property while using Facebook Live gives prospective buyers the opportunity to watch live and enjoy that personality show off specific property highlights. A celebrity endorsement lends credibility and action to your marketing dollars while exposing your property to the large Facebook and Twitter audiences that follow that radio station. Furthermore, you can work with a local celebrity you already know is popular with real estate investors, or you can reach out to a larger audience by working with a venue that has an established viewing population of investors or other target populations. Whether you use traditional television, terrestrial radio, cable, or print consider adding a digital element to your advertis- ing campaigns. Done correctly you’ll see new sophisticated consumers going to your web site and creating greater for profits. •

Teresa Stanton is the national sales man- ager at Think Realty. She has more than two decades of experience in marketing in all types of media. Reach her for a con- sultation at tstanton@thinkrealty.com.

VISIBILITY IS NOT ENOUGH Of course, just posting images is not

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SPONSORED CONTENT

DHLC INVESTMENTS

DHLC Investments right reasons. I personally guarantee every loan to my investors. So if a loan goes bad, I am the one that has to take

ob Barney, President of DHLC Investments, Inc. and owner of DHLC Mortgage, LLC, has been involved with real estate and real estate financing since 1998 when he bought his first investment property. Since then Barney has become a Realtor, rehabber, landlord, speaker, mentor and a direct hard money lender. When asked about about DHLC’s focus, Barney stated, “Our focus is two-fold. 1.) Helping our 1st Deed of Trust Mortgage Investors build a low-risk passive income by earning an 8-10% ROI with non-owner occupied fix-n-flip loans; and, 2.) Helping real estate investors (borrowers) fund and profitably rehab their fix-n-flip projects.” Barney does not view the business as transaction based, but rather a partnership between DHLC and its borrowers. “We really like to work with our borrowers to make sure they are making the right decisions for the R

goals and dreams. Barney spends his personal time working on the 501(c)3 he founded in 2016 to provide no-cost contractor services to individuals and families in times of crisis with housing needs. “Giving back in this business is essential and starting a charity has been a long- term vision of mine,” states Barney. He hopes to expand this project to areas outside of the Dallas market in the very near future. Barney is also a frequent guest lecturer at Collin County Community College and Champions School of Real Estate. Rob is also a published author of several real estate investing articles in various print periodicals and online publications. For more information on Rob Barney and DHLC Investments, Inc., please visit: www.dhlc.com or contact us at contactus@ dhlc.com. We may also be reached directly at 214-501-5151. •

it over and solve the problem,” says Barney. “If the property doesn’t sell at foreclosure, then I may have rehab the property myself and sell it.” Barney has made every effort to instill these values in his team at DHLC. “I have a dedicated and reliable team that helps me look at every property as if it could be our own,” says Barney, who adds that this business approach has brought DHLC many new and long-time investors and borrowers. “They simply trust that we will do what we promise to do, it’s that simple,” says Barney. Whether flipping homes or lending money, both have the opportunity to change lives. Barney says it’s gratifying to give borrowers access to funds and investors a profitable opportunity that gives them the ability to reach their

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COVER STORY

BRUCE & AARON NORRIS

RUNS IN THE FAMILY GOOD TIMING

Bruce and Aaron Norris’ Beautiful Process Yields Wealth, Legacy.

THEMOST IMPORTANTTHING INTHEWORLD IS TIMING. I’DHAVE TOSAYTHATMOST OFTHEWEALTH IN REALESTATE I HAVE ACCUMULATED IS BECAUSEOFGOOD TIMING.”

BY CAROLE VANSICKLE ELLIS PHOTOS BY NOEL DAGANTA

BRUCE NORRIS PRESIDENT, THE NORRIS GROUP

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COVER STORY

BRUCE & AARON NORRIS

A LEGACY ROOTED IN FAMILY & INDUSTRY STRENGTHS Bruce credits his son with a great deal of this exponential growth. “He’s always been a team-builder. It’s just who he is. When Aaron was 10 years old, he was involved in acting and he always got leading roles. One day I heard him methodically calling his friends after landing one of these roles, and I thought I’d hear him start telling them that he had gotten the lead. Instead, he was asking what role they had gotten and then building it up, making sure they felt they were an important piece of the show even if they were just a tree.” Far more recently, Aaron’s teambuilding resulted in TNG receiving “Small Business of the Year” recognition from the Greater Riverside Chambers of Commerce and Inland Empire Volunteer of the Year from The Community Foundation thanks to similar behavior. “He helped put together about 150 nonprofits that normally do not work together,” explained Bruce. “Normally, they think of each other as competitors for the same funds. Aaron worked with a team and was able to get them to think of themselves as team members, and they went on to raise about almost a million dollars in three years.” TNG’s marquee nonprofit event, “I Survived Real Estate,” is also Aaron’s brainchild and has, thanks to TNG and the wider real estate community, raised nearly $1 million for Make-a-Wish OC/Inland Empire and St. Jude Children’s Hospital. “We created that event in 2008 during the economic recession as a way to celebrate the successes and survival of the real estate industry during hard times. We wanted to bring together thought leaders from all over the real estate space to share insights. We never thought it would also have such a positive impact on our community,” said Aaron. That event and other TNG projects are not just designed to support the

Aaron Norris (R) joined his father, Bruce (L) in 2005 to make Bruce's economic predictions as accessible and actionable as possible for real estate investors.

The impetus for Bruce Norris' "California Comeback" market report had roots in a revelation he had while buying his son a car for graduation. Today, the two produce TNG's influential industry reports together.

“THE MOST IMPORTANT THING IN the world is timing. I’d have to say that most of the wealth in real estate I have accumulated is because of good timing, and I would have to give credit for that wealth to the fact that I know when to get into a market and when to get out of one.” Bold words from Bruce Norris, president of California’s The Norris Group (TNG) and a nearly 40-year industry veteran. Norris is neither shy with his skills nor selfish. TNG has been accurately forecasting the housing markets in California and elsewhere since 1997, when Norris released his “California Comeback” report and, when the controversial information proved

accurate, first put his name on the board as a powerful seer in real estate. “Dad doesn’t keep secrets very well, and he doesn’t want to,” observed his son, Aaron Norris, who works closely with Bruce at TNG and is responsible for the compelling presentation that propelled Bruce’s equally controversial report, “California Crash,” to the forefront of industry headlines at a time (2005) when few believed that the housing industry was so close to collapse. Few except for the Norrises, anyway, and those who listened to them. Today, more investors are listening than ever, and the family is building a powerful legacy of real estate strategy,

analysis, and education. TNG’s reach has expanded far beyond periodic market forecasts. Thanks to the combined forces of father and son (and an army of investors, private lenders, and educators working with them), the Norris Group now offers a vast array of educational materials providing direction on interpreting market data and then applying it in real-life scenarios to existing real estate deals. Between them, father and son also host podcasts, radio shows, seminars, workshops, and a number of charitable projects and legacy-building strategy sessions tailored to the needs of the entrepreneurial, independent real estate investor.

community around real estate. They are designed to build up the real estate industry internally as well. “When I first started in this industry in 2005, I think a lot of people saw real estate investors as sharks,” said Aaron. “Really, we didn’t have a very good image even though we provide really important services and do really important things in real estate and in the broader economy that no one else really can do.” “Professional real estate investors bring tremendous value to the marketplace as residential redevelopment specialists, job creators, neighborhood beautifiers, tax-revenue builders, and vacant, blighted home transformers,” added Bruce. “We

are an important partner and solution in every real estate cycle.”

HONDAS, HEDGE FUNDS, AND HEADING HOME: HOW IT ALL BEGAN

The senior Norris had been investing for more than 10 years in 1995, when he began the research for his first major market report, “California Comeback.” “In 1989, after about 10 years as a successful real estate investor, I came off a project where I had made about a million dollars in six months,” he said. “That was from buying 50 building lots, so I decided that next I would build seven custom homes and they would immediately sell because

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COVER STORY

BRUCE & AARON NORRIS

my name was on them,” he recalled ruefully. “Unfortunately, I built all seven and nothing sold. I had seven custom homes that didn’t sell, $21,000 a month of overhead, and payments that I made for two-and-a-half years while I got rid of those houses one at a time. “By the time I was out from under that mistake, Aaron was graduating from high school and I bought him a car, a Honda Civic. It cost $15,600, and the only reason I remember that is because I bought a three- bedroom house in Riverside, California, the

next day for $13,300. It just struck me: Five or six years prior to that, I was so confident in the real estate market (and I was not alone) that I thought I couldn’t make a mistake. Just a short time later, I was buying a house for less than a Honda Civic. “I thought to myself, ‘I have been doing this for 15 years and I have no idea what makes prices go up or down. I have no idea.’ So, I decided to study it onmy own. I took 18 months and I put together a 25-year price chart going back to 1970. Then I got 25 years of data in every category I thought could

influence price, which wasn’t easy back then. There was no Googling that information! It was literally going into libraries, pulling books with data, handwriting data on note pages, making charts of that data, and then looking at all of it. “I finally took it all on vacation with me and I just started playing with those charts to identify trends that happened during each boom cycle and bust cycle. I was looking for the initial event, if you will. It was repetitive, and I found it. Once I found it, I wrote that first report,

published in 1997, called ‘California Comeback: Why Prices Will Double in the Next Eight Years.’ That report would take us all the way to 2005, by which time prices had actually tripled, and The Norris Group was on the map for getting the direction correct, if not the intensity.” In 2005, Bruce debuted his second major report. This time, his son was by his side. “I came to work at TNG with the intent of rebranding our company and to work on our education,” Aaron said. “‘California Crash’ was our first major project together,

and it consisted of about 400 pages and 800 charts dealing with why Dad was telling California real estate investors to get out of the state in 2005: Our foreclosures were going to increase by more than 3,000 percent and our prices would go down by half. It was a pretty big deal.” Aaron’s unique background made him perfect for the task at hand. After spending seven years in New York City as both a professional actor and a Wall Street temp creating acquisition and merger presentations for multimillion dollar hedge

funds, Aaron’s keen eye for imagery and uniquely adept methods of communication were perfect for conveying a message that no one wanted to hear in California at the height of the housing boom. “It took us two days just to produce the presentation after we had created the materials,” Aaron remembered. “Dad feels very responsible for conveying his insights and information to investors, and it was really important to be able to show people not just what we were saying, but also the rationale behind it. It was really important

TIMELINE OF CALIFORNIA REAL ESTATE

M ost real estate investors will agree that the vast majority of U.S. housing markets are cyclical, meaning that home values rise and fall intermittently over long periods of time. The phrase, “What goes up, must come down,” and vice versa, might come to mind. However, in California, that cycle tends to be less of a gentle swelling and ebbing and more of what analysts refer to as a “boom- bust cycle.” This simply means that over time, housing markets in California tend to experience extreme highs and extreme lows instead of more muted fluctuations. At right, you can view a brief timeline charting these cycles in California’s housing history, starting in the early 2000s. On page 25, read Bruce Norris' predictions for the rest of 2018.

2011 Median home values statewide were more than 40 percent below peak values recorded just five years earlier. California homeownership fell to 56 percent.

Bruce Norris publishes "California Comeback," predicting massive price increases over the next eight years.

1997

California experiences double-digit annual home-price appreciation for the first time since 1980.

2002

California markets post annual price increases in excess of 20 percent. 2004-2005 Bruce and Aaron Norris publish "California Crash," predicting astronomical increases in foreclosure rates and similarly dramatic declines in home values. California home prices fell 6.6 percent between Q4 2006 and Q4 2007. Twice as many homes were in foreclosure in California as were nationwide. Construction permits fell 49 percent from their peak in 2004. 2007

California “mortgage burden” is 33 percent of the average homeowner’s

2013

income. 30 percent is considered the upper boundary of housing affordability.

53.8 percent of homes in California are owner- occupied. Nationally,

2016

62.9 percent are owner-occupied. At the peak of the housing boom, 69.2 percent were owner-occupied. The average California homeowner spends 25.4 percent of their income on housing (more than any other state).

The rate of decline in home prices slowed, but the damage was done.

2009

CoreLogic declares multiple California markets “overvalued.” 37 percent of homebuyers tell Redfin they are considering leaving the state to buy. 75 percent of Southern Californians cannot afford to buy a home (according to California

2017

Merced, Modesto, and Stockton home values fell particularly hard (by 65 percent or more) after experiencing huge run-ups in value during the boom.

Association of Realtors, CAR) California median home price is $561,000 according to CAR.

Vacancy rates in rentals are well below national rates (7.5 percent vs. 10.2 percent).

2010

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