Heartland Investment Partners - July 2020

Heartland Investment Partners - July 2020

& STRIPES

HEARTLAND INVESTMEN T COMPANIES STARS

JULY 2020

AN.COM

DARINGARM 319-350-5378

WHAT I LEARNED FROM MY TIME AS A PRISON GUARD CHEERLEADERS AND INMATES

Do you ever look back at your first couple of jobs and think, “Who would have thought I’d end up here with a start like that?” I definitely do. In fact, that question starts pinging around in my head whenever I think about my three years working as a prison guard. Yep, you read that right. Fresh out of college, I picked the Iowa Men’s Reformatory as my 9-to-5. I’d just earned a bachelor’s degree in criminology, and my logic was that, of course, I had to find a career where I could use my degree! So, even though I was already interested in real estate and thought it would be fun, I started clocking in at the prison. As you might imagine, a men’s maximum-security prison is its own little world. I spent a lot of time with the inmates because part of my job was overseeing group activities like program meetings and leisure time. They had basketball and softball tournaments, Alcoholics Anonymous meetings, religious gatherings, and more, so I oversaw all that and dealt with anything that came up. One day that might’ve meant enforcing discipline, and another it could be playing a pickup game of basketball. These guys were in for all kinds of reasons — fraud, bank robbery, multiple murders, you name it. The dynamics took a while to get used to, but once I acclimated to the job, I learned pretty quickly not to take things too seriously. In fact, I may have loosened up a bit too much by my third year there. At that point, I was pretty bored with all of the prison’s little routines, including the monthly inmate photos in the prison yard. Every third Saturday like clockwork, the inmates would line up in the yard to have their picture taken with an old Polaroid Instamatic camera. Their picture would pop out, and they’d get to walk away with it. My job was to sit there with them and watch while they got their pictures taken to make sure they didn’t throw any gang signs or do anything else that would fall under the category of “stupid.” Usually they didn’t, and I spent a few hours feeling bored. Well, one day, I decided to spice things up a bit. Every month in the days leading up to the photos, my team and I would put posters up around the prison. These posters always said the same thing, but I added a line as a joke this time. It said, “Special Guest: The Dallas Cowboys Cheerleaders!” with

a little smiley face. I was just screwing around and having fun, and pretty quickly I forgot I’d even thrown the line in there.

I didn’t stay absent-minded for long. About an hour before the photos, I was sitting in my office looking at the clock when my phone rang. It was my supervisor, and he was seeing red. He threw a string of curse words and questions at me finishing with, “Listen, idiot, we have about 200 inmates sitting outside of our office right now because they think the Dallas Cowboys Cheerleaders are coming to get their photos taken with them! Where the heck do you think they could have gotten that idea?” These guys had taken me seriously! I think I felt my jaw hit the floor — I couldn’t imagine anyone would believe that not only were the Dallas Cowboys Cheerleaders coming to Iowa , but they were coming to a men’s prison to get their pictures taken with a bunch of inmates! My joke got a lot less funny when I had to go into the yard to disperse the prisoners, who greeted my bad news with a lot of swearing but, thankfully, no violence. That was the first and biggest lesson I learned while working at the prison: how to communicate with people effectively (and how absolutely not to communicate). The second lesson I learned, which I’ve carried with me ever since, is the importance of patience. That one hit hard because if you’d asked any of the inmates I worked with what they were in for, odds are they’d tell you it was because they tried to take a shortcut and that shortcut led them to do something awful. From them, I learned that while shortcuts are tempting, they’re not worth the consequences. If you want to reach your goals without landing behind bars, you have to take your time and put in more work, effort, and energy than you think you’ll need to. The way to wealth and happiness isn’t around — it’s through. Hopefully you got a laugh out of my checkered past and learned a thing or two from my time as a guard! Next time we talk, fill me in on your craziest job. I’m always up for a good story.

–Darin Garman

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L SCAMS

AVIRUS EMAI

HESE CORON

BEWARE OF T

THEY’RE STILL AROUND!

SUSPICIOUS LINKS AND EMAIL ADDRESSES During the past few months, people’s email inboxes have been littered with advertisements for fake coronavirus tests and cures, fake alerts from government agencies like the Centers for Disease Control and Prevention, and fake coronavirus updates. If you get an email containing an unusual link in your inbox, do not click on it — even if the email address looks legitimate. Scammers use links to spread malware on computers, which helps them get your personal information. SPELLING AND GRAMMAR MISTAKES This is usually a dead giveaway. While genuine, official updates about the coronavirus will be meticulously checked for spelling and grammar, scammers aren’t as careful. Missing periods, misspelled words, and wacky syntax errors are all hallmarks of scam emails. Make sure you carefully read any email you’re not sure about. If you can spot spelling and grammar mistakes, delete the email. Much like the coronavirus will remain in the American psyche long after cases and deaths have peaked, scammers will continue using it as a means to steal from honest, hardworking Americans. But, if we keep our guard up, we can make sure they get absolutely nothing from their efforts.

While it seems like the worst of the COVID-19 pandemic might be behind us, that doesn’t mean we should let our guard down completely — especially when it comes to internet scams designed to prey on the fear and uncertainty brought on by the pandemic. It’s no surprise that scammers have found ways to use the coronavirus scare as an opportunity to steal personal information from the vulnerable. Fortunately, you can spot coronavirus scammers using the same techniques that help identify otherwise run-of-the- mill phishing scams. REQUESTS FOR PERSONAL INFORMATION When the federal government started distributing relief checks, several scammers sent out unsolicited emails, disguised as legitimate instructions, asking for personal information from people in order to receive their $1,200. Since many people have now received their

checks, this particular scam may become less common, but always be suspicious of emails that ask for personal information, no matter the circumstances.

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I got some information yesterday on an apartment community that is “upside down.” That means the property isn’t paying its expenses, including its loan obligations. I think of properties like these as “troubled.” They could be great projects to purchase at a discount, or they could be absolute disasters! So, what do I do? Well, there are a few things I always do when looking at a real estate project that’s “troubled” or “distressed,” and I’d recommend you try them, too. Whether you’re an active or passive investor, these tips will pay off! 1. CHECK AND DOUBLE-CHECK THE OCCUPANCY AND BACK RENT BALANCES OWED! Just because an owner has a 60%, 80%, or even 100% full building doesn’t mean their tenants are paying rent. A while back, I was looking at a 150- unit project and found out that half of the tenants were at least a month late! Let’s just say that

changed the dynamics of the deal pretty quickly. So, make sure you get proof that the units are occupied and that rent is being paid! 2. MAKE SURE YOU LOOK AT ALL OF THE UNITS OR AT ALL OF THE PROPERTY. Don’t fall for lines like, “We can’t get into their unit because we don’t have permission,” or “The unit is locked, and I don’t have a key.” They’re just excuses! You don’t need any surprises that will cost you money later, so no matter how large the property is, always look in every unit. 3. GET MORE THAN ONE LENDER READY TO FINANCE THE DEAL. If you require some type of financing, make sure you have more than one lender quoting the deal for you and working it, too. You never know when a lender will get cold feet at the last minute and back out. Plus, you could find a huge difference in terms. For example, right now I‘m working on

redoing a 120-plus unit project that my partners and I own. Here are the three interest rates I’ve been quoted so far: 3.85%, 3.95%, and 4.25%! Here’s the big takeaway: Use common sense and take your time ! You can rush to get the property tied up and under contract, but whatever you do, don’t rush through your due diligence. Don’t let these “troubled” property owners dump their problems on you, no matter how good the deal looks! I covered some of these tips already in our last Heartland Investment Summit, but I have plenty more to share! To sign up for the next summit, visit HeartlandInvestmentSummit.com.

–Darin Garman

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I WA LIFE

SUDOKU

HAUNTED CAVE TOURS

BY BOAT? IN IOWA?

THE WELL-KEPT SECRET OF SPOOK CAVE AND CAMPGROUND

SALES AND SUCCES S

Here’s the legend as told by camping website The Dyrt: In the early 1800s, a group of pioneers settled on a hilly patch of land bordering the Mississippi. They called their bit of Iowa’s northeast corner “Beluah.” It seemed peaceful at first, but before long, the citizens started hearing weird noises drifting up from a mysterious hole in the hillside on the outskirts of town. Was it ghosts? Demons? The townspeople never found out. In 1896, a massive flood swept through the area, killing more than 20 residents and turning Beluah into a ghost town. The souls of the dead joined the ones already in the hole, which was abandoned for more than 50 years. In 1953, an Iowa man named Gerald Mielke pried it open and discovered the secret behind the wailing: a network of flooded underground caves. Today, thrill seekers and tourists can explore the watery depths of Spook Cave in guided boats from May through October and even camp nearby in tents or luxury cabins. If you’re claustrophobic, this isn’t the cave tour for you! The water level can get so high that you need to lay flat in your boat to ease inside the cavern entrance, and a plethora of rock formations make navigation difficult. Every once in a while, your tour guide will shout “DUCK!” and they’ll mean it! While there’s plenty for geology buffs to enjoy, including a striped flowstone wall, a 35-foot dome room, and a frozen mineral waterfall, Spook Cave offers even more fodder for fans of the paranormal. In addition to the moaning of the townspeople of Beluah, tourists peering from their boats can peek at scratch marks in the cave wall made by “Old Joe,” an early spelunker who drowned there. Iowa has its fair share of haunted barns and creepy cornfields, but few attractions have the historic mystique of Spook Cave. Even better, tours cost just $14 per adult, giving you a lot of spooky bang for your buck. The cave recently reopened in the wake of the COVID-19 pandemic and is welcoming guests with the caveat that they must wear masks during the tour. To learn more about this creepy piece of Iowa history, visit SpookCave.com.

APARTMENT

FOR SALE: FOUR EIGHTPLEX BUILDINGS — ALL TWO-BEDROOM AND SIDE BY SIDE — AVAILABLE AS SINGLE INVESTMENT YOU OWN OR OWN WITH DARIN

FOR SALE: 12 UNITS – $500K-PLUS ALL TWO-BEDROOM UNITS — AVAILABLE AS SINGLE INVESTMENT YOU OWN OR OWN WITH DARIN

SOLD! YOUMISSED OUT! 12 UNITS — 14.7% CASH ON CASH!

CONTACT DARIN TODAY AT 319-350-5378 FOR MORE INFORMATION ON THESE LISTINGS!

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HEARTLAND INVESTMENT COMPANIES

PRST STD US POSTAGE PAID BOISE, ID PERMIT 411

Darin Garman: Heartland’s Most Trusted Multi-Family Investment Advisor 2505 Silver Oak Trail Marion, IA 52302 DarinGarman.com 319-350-5378

INSIDE Page 1

Cheerleaders and Inmates

Page 2 How to Spot a Coronavirus Scam Email

Darin’s Tips for Vetting ‘Troubled’ Properties

Page 3 Haunted Cave Tours by Boat? In Iowa?

Apartment Sales and Success

Page 4 Are You Tracking the Right Metrics?

In the last few months, the coronavirus pandemic has forced businesses across the country to tighten their belts. Odds are your company is among them, but even if you’re doing well, accurately tracking your business’s performance is more vital than ever. Of course, this is easier said than done. Even in good times, it’s difficult to know which key performance indicators (KPIs) to track daily, weekly, or monthly to get an accurate picture of how your business is doing. However, many successful entrepreneurs report that three KPIs rise to the top: churn, pipeline revenue, and average annual revenue per employee. CHURN This metric will tell you how many customers leave your business in any given month, which will then tell you how many new customers you need to bring in the following month to break even. If you track this KPI weekly and monthly, patterns will start to emerge, and you’ll be able to find holes in your systems and processes more easily. Then, you can take proactive steps to reduce your churn. PIPELINE REVENUE Your pipeline revenue is the total sales volume you’d have if you won each and every piece of business you quoted over a given period of time. When compared with your actual sales volume each month, it becomes an incredibly valuable number for setting goals and tracking. For example, if you need to produce $100,000 in new pipeline revenue to close your goal of $30,000 in sales each month but are only at $54,000 in pipeline revenue 20 days into the month when you should be 3 KEY PERFORMANCE INDICATORS TO WATCH HOW WELL ARE YOU TRACKING YOUR BUSINESS?

at $67,000, then you’ll know that you’re falling behind and need to make adjustments. AVERAGE ANNUAL REVENUE PER EMPLOYEE (RPE) Most companies with

over $1 million in revenue make a minimum of $100,000 in average annual RPE, and it’s not uncommon to see small businesses making $125,000, $150,000, or $200,000-plus per hire, depending on the industry. The higher your RPE, the more effective your business is at maximizing its greatest resource: the people who work there. This number can become skewed or decrease if you’re growing quickly and hiring or if you’ve recently laid off staff. If you haven’t made changes and your RPE is under $100,000, you’re either overstaffed or facing a struggle ahead. As you’re tracking these KPIs, remember to be skeptical. If a metric looks too good to be true, it probably is! So dig in and double-check the math. If you uncover an inaccuracy, you can take steps to fix it, and if you find the number is accurate, you can learn from your successes. Armed with these metrics, you will be in a much better spot to be proactive in your business and solve minor problems before they ruin your month, quarter, or year. It’s a win-win situation, which is exactly what we need in these tough times!

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