Heartland Investment Partners - July 2022

Heartland Investment Partners - July 2022

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DARINGAR 319-350-53

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Stop Waiting for the ‘Perfect’ Property

IT DOESN’T EXIST!

A few months ago, I was walking my dog, Blu, down the road near our lake house when I ran into a couple of neighbors hanging out on their front porch. These folks were in full-on vacation mode: looking out over the lake, sipping cocktails, and shooting the breeze. When I waved, we struck up a conversation that quickly turned to the house next door.

Why are so many people living in regret? Well, because they waste time sitting around waiting for the perfect property … and end up passing on fantastic deals that check most of their boxes. I get why investors have hang-ups about investing in properties that don’t look like perfect deals. There’s a lot of money on the line. But as I told one of my partners on the phone the other day, “At some point you HAVE to invest in an imperfect property — because there’s no such thing as a perfect property!”

appliances. They come up with a long list of things that need to be fixed or replaced. But the truth is that these things aren’t important in a multifamily property. Hundreds of people will be more than happy to live in a place with old-school brass fixtures, 25-year-old appliances, and brown shingles instead of gray. Just because a place doesn’t smell new or match your living standards doesn’t mean it’s not an amazing deal. The key to successful investing is keeping an open mind about every property that crosses your desk. I’m not saying you should throw caution to the wind and go for a bad deal — some things SHOULD give you pause — but don’t be one of those folks who continues to procrastinate and sit on the fence waiting for the perfect property to show up when the one I passed on was 99% there. Perfection isn’t coming! If you wait for it, then you’ll be like my neighbors and end up kicking yourself and living with regret 10 years later. We’re already moving into the third quarter, and if you haven’t invested yet this year, now’s the time. Stop waiting, get in the game, and pull the trigger on a property that checks most of your boxes. Try this strategy, and 10 years from now — when you have several successful properties under your belt — you’ll look back and wonder, “What the heck was I waiting for?” –Darin Garman

“Wasn’t that place for sale not too long ago?” I asked.

“Oh yeah,” they said. “It just sold for $1.4 million! We’re absolutely kicking ourselves.”

“What do you mean?” I asked.

Why are so many people living in regret? Well, because

They told me the whole story, and a storm cloud of regret moved in. It turns out they had the opportunity to buy that property next door about 10 years ago — when it only cost $550,000. Why didn’t they do it? Because the place wasn’t perfect. They listed a half-dozen of their hang-ups before finishing by saying, “But man, do we regret worrying about those things now! If we’d jumped on this property back then we would have made a boatload.” Almost every real estate investor I know has a story like this: the property that got away. Some can tell you regrets about a half-dozen multifamily apartment complexes or single-family homes they wish they’d pulled the trigger on 20 years ago.

they waste time sitting around waiting for the

perfect property … and end up passing on fantastic deals that check most of their boxes.

A lot of the investors who wait make the same mistake: They look at every property as if they’re going to live in it.

Maybe they don’t like the light fixtures. Or the color of the carpeting. Or the age of the

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WHICH IS BETTER? Tax Deduction or Tax Credit

Have you caught your breath yet since filing your taxes? Well, it’s now time to start planning your taxes for next year! As you create a tax “game plan,” having two ways to deduct your tax bill can be very confusing. Let’s walk through it. We promise it’s a lot simpler than it sounds. TAX DEDUCTION — GETTING A LOWER TAXABLE INCOME Let’s say you’re a small-business owner. Sometimes, you might accidentally or intentionally pay off business expenses on your own dime. Luckily, the IRS doesn’t want to punish small- business owners for this. They consider many business expenses as tax deductible. So, when you file a tax deduction, it lowers your taxable income, and thus reduces your tax liability. The lower your taxable income, the lower your tax bill. TAX CREDIT — GETTING A TAX BILL ‘GIFT CARD’ Your taxable income can go up or down throughout the year, depending on what you make and types of expenses. However, once calculated at the end of

the year, your tax bill is often a fixed number. That’s when tax credits come in handy.

A tax credit is a dollar-for-dollar reduction in your actual tax bill. In fact, a few credits are refundable: If you owe $300 in taxes, but qualify for a refundable $1,000 tax credit, you’d get a check for the difference of $700. Because this credit applies directly to your bill, it can often take a bigger bite out of your tax bill than a tax deduction. It’s worth mentioning that, in most cases, tax credits aren’t refundable. However, unlike gift cards, their value doesn’t last into the following year. If you owe $300 in taxes, and have a nonrefundable $1,000 tax credit, you’ll owe zero dollars without getting a check for the difference. In 2021, you may know the government provided pandemic-inspired tax credits for Americans with dependents. However, many credits exist, and some, like savers’ credits, might surprise you. If you’re married and filing jointly, and have

a combined income between $43,001–$66,000, you’ll receive a tax credit of 10% of your 401(k) or Roth IRA contributions. A single filer with a $19,750 income or less qualifies for a credit of 50% of retirement contributions. Check out lists online of available federal tax credits for 2022, and make sure to research carefully how they work. If you want a better tax strategy for your next tax bill, this is a great way to start.

AND HOW I FIX THEM Blood-Boiling Property Management Issues

A few Sundays ago, I inspected one of our 100-plus unit properties and found the common areas in subpar condition.

So, I went back to those managers and whipped them into shape. That’s why I do personal inspections, even though the majority of the time the management folks do a great job. My cash flow and net worth and my partners’ cash flow and net worth depend on it. One mistake I see a lot of investors make is failing to “inspect what they expect.” Think about it. What if an investor owned a 100-unit property and didn’t inspect it? It would still be in a good location but with low rents due to the condition and crappy tenants … which is exactly what we want to avoid as property owners. I work very hard to make sure my partners and I have first shot at great projects that have gone to seed and shrunk in value. And I work equally hard to make sure our properties don’t become “those” properties. My investment clients and partners love this because they know I’m doing the work while they deal with other things in their lives. In my opinion, that is how investing should be. No hassle, no worry, and low risk. When you have an investment that works overtime for you, you are bound to get good results. Email me at [email protected] or call 319-350-5378 when you’re ready to see them. –Darin

This was a huge problem: Great common areas are key to making a good first impression on potential tenants and keeping the current tenant mix in their apartments as long as possible. But this common area wasn’t where it needed to be. Not even close. So, the very next day I gave our management folks direction on what needed to be done. A week later, I went back to the property, and what did I find? The common areas were in worse shape than before! To say my blood was boiling would be a huge understatement. When my money and the money of my investment partners is on the line, I take it very seriously. This property was doing fine cash flow-wise, BUT it could do so much better.

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SUDOKU

SOLUTION

Iowa doesn’t have an official state fish, but ask anyone and they’ll tell you about the one swimming just under the legal radar: the channel catfish, or “channel cat.” Channel catfish usually grow to about 22 inches long and live all over the central U.S. from Canada to Mexico. They’re funky creatures! According to the U.S. Fish & Wildlife Service, channel cats are also sometimes called “swimming tongues” because they have taste buds all over their bodies. Channel cats are bottom feeders, so to catch them you need stink bait from a tackle shop or something equally smelly like chicken blood, fish guts, chicken livers, or leeches. You can catch channel cats with a hook, or if you’re quick and careful, you can grab them by the gill cover and pull them out with your hands. (Yes, really! But don’t try this without doing your research on catfish stings.)

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The best places to find channel catfish are big rivers and streams, but you can snag them in lakes, too. Here are three of the most popular fishing spots.

1. THE BIG AND LITTLE SIOUX RIVERS — These rivers top Game & Fish Magazine’s list of places to find catfish. “The dam at Linn Grove, and other dams on those rivers, are traditional focal points for shore anglers and excellent put-ins for anglers who fish from kayaks or canoes,” the magazine reports. 2. THE MISSISSIPPI RIVER — Darin’s catfishing friends favor the Mississippi River and typically fish it from their boats. The Iowa Department of Natural Resources recommends looking for “areas with a big tree snag in the larger side channels” and advises catching channel cats by casting your stink bait “above the snag or rock pile so the bait can ‘ooze’ its way into the structure and lure the catfish out.” 3. STORM LAKE — Storm Lake is home to channel catfish, black crappie, walleye, white bass, and yellow perch. You can camp out along the 8-mile shoreline to fish, venture onto the fishing jetty and pier, or rent a boat for the day.

24 UNITS - PURCHASED!

56 UNITS UNDER CONTRACT!

24 UNITS QUICK CLOSING!

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

Next time you visit Iowa, add tangling with channel cat to your to-do list. According to Darin, “They’re fun to catch and put up a hell of a fight.”

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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 How to Avoid a Life of Regret

Page 2 Lower Your Next Tax Bill!

Why Darin Inspects His Partners’ Properties Page 3 How to Catch Iowa’s State Fish

Apartment Sales and Success

Page 4 Don’t Rely on Profit to Measure Success

Business Is a Never-Ending Game

HOW DO YOU PLAY THIS INFINITE GAME?

“The Infinite Game” by Simon Sinek is among the greatest motivational books you can get your hands on. He gives readers an inside scoop on the importance of adopting an “infinite mindset” while “playing the game” of business. Let’s look at some of the chapters that can help you and your business.

five of these principles: Victorinox, the creator of the Swiss Army knife, Bill Gates and Microsoft, and the GPS company Garmin.

CHAPTER 5: BUILDING A CULTURE OF TRUST A healthy work culture is based on trust. If your workers sense a lack of trust, that affects efficiency, since no one will feel comfortable voicing their concerns or mistakes. Ford Motor Company is a perfect example. Before 2006, the now-former CEO would reprimand and penalize workers who brought him bad information. This caused an unhealthy work environment and led to lower productivity. Sinek offers tips on how to create a culture where your employees are comfortable and confident. “The Infinite Game” teaches you that business is an endless game where you have to overcome many challenges. Successful businesses play the infinite game, constantly improving the business to become better. Sinek provides tips, solutions, and examples of how your business can thrive while playing the game. To get your hands on “The Infinite Game,” visit your local bookstore or online retailer.

CHAPTER 1: BUSINESS ISN’T A FINITE GAME The first chapter discusses why running a business isn’t a finite game. It focuses on how profit and income aren’t the only ways to measure success. Profit means nothing if you’re unable to survive current and future difficulties. This is why business is an infinite game — you don’t want to create something to “win” (finite); you want to build a foundation that will remain for future generations (infinite). CHAPTER 2: ESSENTIAL PRACTICES Sinek explains the strategies you need to play the infinite game. These skills include developing a “just cause,” creating trusting teams, studying your rivals, preparing for flexibility, and showing courage to lead. He follows up with examples of companies that embody all

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PROUD TO BE AN AMERICAN!!

GAIN YOUR INDEPENDENCE!! UNBELIEVABLE LANDLORD AND INVESTOR RESOURCES: WWW.DARINGARMAN.COM

Can you believe these resources?!! All of these re- sources are available to smart active or passive investors and landlords direct- ly from their phone or from their computer. The value that landlords and investors are receiv- ing by accessing this information is HUGE! START BY DOWN- LOADING DARIN’S MULTI-FAMILY APP! THE QR CODE IS BELOW OR GO TO DARINGARMAN.COM FOR MORE ACCESS!!

Multi - Family Podcast • For Owners Like You • Easy To Listen To • Knowledge You Can Use • Tens of Thousands of Downloads—Find The Episode You Need! GarmanTV • Instructional Videos Only For Multi - Family Owners Like You • Access 24 / 7 / 365 • Real Landlord Situations Discussed. Darin tells it like it is in the REAL WORLD of Multi - Family! Heartland Multi - Family APP! • The Only Heartland Multi - Family App To Use On Your IPhone or Android Phone. • Unbelievable Information • Download App And You Will Use It Every Day! !

VISIT DARINGARMAN.COM TO DOWNLOAD NOW AND NEVER MISS AN EPISODE!!

Visit DARINGARMAN.COM and view the best multi - family HOW TO videos on the planet! Search Darin Garman

SHORT TIME FRAMES FOR DUE DILI- GENCE AND COOPERATION

VISIT DARINGARMAN.COM TO GET YOUR VERY OWN MULTI - FAMILY APP!

WHERE? WWW.DARINGARMAN.COM Heartland Investment Real Estate, 1350 BOYSON ROAD A-1 HIAWATHA, IA 52233

WEB ACCESS TO ALL: DARINGARMAN.COM #319-350-5378 [email protected]

Give me a call and lets talk! There is never any obligation and I am easy to talk to. Also, I will help you with a tax deferred exchange too. Let ’ s chat! #319 - 350 - 5378

*Darin Garman is a licensed real estate broker in Iowa.