Think-Realty-Magazine-May-June-2017

Think-Realty-Magazine-May-June-2017

THINK REALTY EVENT BRINGS POLICY & REAL ESTATE INVESTORS TOGETHER

SPECIAL REPORT

MAY/JUNE 2017

ONE-TO-ONE: DAREN BLOMQUIST: MAKING SENSE OF THE STATISTICS THE BIG PICTURE SOCIAL MEDIA STRATEGIES THAT WORK NUTS & BOLTS ‘PAY PER CLICK’ CAN GENERATE MOTIVATED LEADS STRATEGIES UNDERSTANDING THE POWER OF MILLENNIALS

Suited for Success AREI’S JOHN LARSON FOCUSES ON INVESTORS’ INTERESTS

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TABLE OF CONTENTS

INSIDE THIS ISSUE

THE BIG PICTURE 12 Basic Training

NUTS & BOLTS 76  Hold ‘Em or Fold ‘Em?

Service veterans carry on a mission to help returning personnel transition and succeed

Here are seven signs it could be time for an investor to cut his or her losses. by Teresa Bitler

through real estate. by Susan Thomas Springer

80  More Insurance Myths Debunked Make sure you have the proper coverages in place before disaster strikes your investment property. by Shawn Woedl

14  Forcing the Economy How tech corridors, robotics and real estate are helping shore up economies at risk. by Carole VanSickle Ellis 26  The Right Recipe Investors who are copycatting ill-conceived recipes for note-financing are headed for a rude awakening. by Eddie Speed 32  Market Update Oklahoma City cooling but stable after blazing start a year ago. by Carole VanSickle Ellis Acquiring stats is only one step in understanding what those housing numbers mean. by Robert Springer 57  Company Profile Think Realty Real Estate Services is a brokerage with investors’ success and interests in mind. by James Hart 58  Knowing Profitable When You See It Here are nine numbers to help identify a successful rental investment. by Kevin Guz 66  Rookie Investor With renters in place in their first rehabbed property, one couple’s path in real estate investing is set. by Abby Tillman UP CLOSE & PERSONAL 54  One-to-One: Daren Blomquist

92  Misconceptions Unmasked  The 1031 exchange is not exactly new, but misunderstandings remain. Here are seven myths refuted. by Steven Hickox

BYTHE NUMBERS 104  Get—and Stay—Ahead

The key value of active asset management is the ability to be proactive instead of reactive when it comes to your portfolio. by Cara Hogan

ON THE COVER KNOW THYSELF

JOHN LARSON (right, with colleague Marcus Reynolds) keeps himself and his company on track by concentrating on his area of expertise.

106  Flips Hit 10-Year High

Home flipping was hot in 2016, fueled by low inventory of homes in sellable or rentable condition along with a flood of capital searching for returns and stability. by RealtyTrac 109  Local Market Monitor Good company: In an uncertain economy, play it safe and choose markets with abundant renters. by Ingo Winzer

by Robert Springer :: photos by Lina Perment

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THE BIG PICTURE

UP CLOSE & PERSONAL

REGIONAL SPOTLIGHT

NUTS & BOLTS

SPECIAL REPORT 42   Think Realty’s upcoming Baltimore conference shines a spotlight on policy and legislation affecting investors.

MANUAL OR AUTO PILOT?

TAKING A NEW IDENTITY Finance of America Commercial unveiled.

PHOENIX-TUCSON COMING TOGETHER

WHAT CHANGE LIES AHEAD? Politics’ effect on lending environment.

Can automated trades “beat” real estate ROI?

100-mile gap is quickly closing.

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FROM THE EDI TOR- IN-CHI EF

PUBLISHER R. Michael Wrenn

World of real estate investing fits like a ‘forever home’

PRESIDENT, AFFINITY ENTERPRISE GROUP Eddie Wilson | [email protected]

EDITOR-IN-CHIEF Linda Wienandt [email protected] VICE PRESIDENT OF MEDIA SALES Rodney Halford [email protected] 816-398-6122

or the past seven years, I have had the privilege of watching

always been a generalist rather than specialist in the topics I covered. That required getting up to speed quickly on whatever I was assigned, immersing

F

SENIOR STAFF WRITER James Hart

this magazine, along with the indus- try it covers, grow and mature, even enter the “mainstream” of the investing world. It’s been a wild ride—challeng- ing, exhilarating, motivational, anything but

EDITORIAL ASSISTANT Heather Elwing-Dixon

myself in that subject so that I could interview the experts confidently and then relay their technical, complex stories in

DESIGN CONSULTANTS Rivet | www.WeAreRivet.com

GRAPHIC DESIGNER Emily Bowers

boring. And it has sparked an interest in the subject at hand—wealth-building through real estate—that I will continue to nurture even as I hand off the editor’s mantle to someone new. With this issue, I have chosen to step out of the editor-in-chief ’s role at Think Realty Magazine, but make no mistake: I am not retiring from the business of exploring, learning and working in this fascinating subject area. As most everyone involved in real estate investing will no doubt agree, there is something to learn from everyone you meet and any aspect of this business you investigate. Market needs and condi- tions change, technology evolves, and new challenges present themselves. I joined the publication in 2010, when it was known as Personal Real Estate Investor Magazine, with admittedly little more than a rudimentary un- derstanding of the world of individual or “mom and pop” residential real estate investing. Coming of age as a journalist in the days when newspapers dominated the media landscape, I had

such a way that the average reader could clearly—and accurately—understand it. Tackle one topic; master it; then move on to the next. I was constantly learning new things and gaining expertise in a wide variety of subject areas I might not otherwise have explored. Having been an editor in the business-news de- partment as well as a managing editor in newspapers and other media after that, I had more understanding of real estate investing than the average person on the street. But what an education it has been since coming to a publication with such a singular focus! As the editor-in-chief of this specialty magazine since 2012, I have gotten to delve deeply into the varied interconnecting layers that form this niche. It’s challenging. It’s exhilarating. It’s captivating. And there is seemingly endless opportunity for anyone who wants to profit and succeed in its many aspects, as long as they have passion, a willingness to work hard and unquenchable desire to learn. Welcome to the wide and wonderful world of real estate investing. May it also be your “forever home.” •

PRODUCTION & TRAFFIC MANAGER Carolyn Addington

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 for six issues in the U.S. Order online at www. ThinkRealty.com or call 816-398-4130. Provide your full name, address and telephone number. DISCLAIMER :: Think Realty Magazine , its owners, contractors, distributors and their respective representatives do not provide tax, accounting, investment or legal advice and make no guarantee as to the effectiveness or success of any investment or tax strategies discussed herein. Please consult your own independent adviser as to any questions you have or decision you are contemplating. ABOUT THIS MAGAZINE :: ThinkRealtyMagazine isapublicationof AffinityRealEstateMediaLLC.Reproductionoruseofanyeditorial orgraphic,withoutpermission, isprohibited.Wearenotresponsible for thecontentofanypaidadvertisements.Forreprintrights; toob- tainadetailedstatementofourprivacypolicy;and forallsingle-copy requests,addresschangesandothersubscription inquiries: CONTRIBUTING WRITERS Teresa Bitler, Sonia Booker, Carole VanSickle Ellis, Carter Froelich, CPA, Abhi Golhar, Kevin Guz, Chris Hanson, Steven Hickox, Cara Hogan, Danny Johnson, Michael Jordan, Mike Kalis, Linda Liberatore, Leon McKenzie, Robert “Bobby” Montagne, Kevin Ortner, Ben Rao, RealtyTrac, Elie Rieder, Eddie Speed, Robert Springer, Susan Thomas Springer, Mitch Stephen, BreAnn Stephenson, John and Corinne Tesh, Abby Tillman, John Trautman, Peter Vekselman, Ingo Winzer, Shawn Woedl and Brian Wojcik COVER PHOTOGRAPHY Lina Perment

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Think Realty now offers three levels of membership for real estate investors. Our Intro Level is designed for those just getting started. The Investor-Level Membership gives investors exclusive access to content, education, events and more! Have a large group and want to save? Check out our Corporate Group Membership option.

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LINDA WIENANDT, EDITOR-IN-CHIEF

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NEWS BRIEFS

NATIONAL UPDATES

PATCH OF LANDADDS VETERAN EXECUTIVES TO MANAGEMENT TEAM Leading online real estate lending marketplace PATCH OF LAND has rounded out its management team, adding Chief Financial Officer MIN LEE and Chief Investment Product Of- ficer MATTHEW ZALL , along with previously announced Chief Marketing Officer ROBERT GREENBERG . Lee joins the company from Credit Suisse, where he was a director in the Real Estate, Gaming and Lodging team responsi- ble for the execution of advisory and financing transactions. Lee assisted clients with over 25 financing and M&A advisory transactions, which have raised in excess of $15 billion of debt and equity financings for public and private companies. Lee’s expertise in financing strategies will allow the company to grow and manage its credit lines and will add to the company’s strategic planning by applying sophisticated statistical and predictive processes. Zall brings to Patch of Land Prior to joining B2R, he was a commercial real estate (CRE) trader at J.P. Morgan and Bear Stearns. He joins Patch of Land as the firmprepares to expand into the single-family rental market with longer term, permanent financing products. With the addition of Lee, Zall and Greenberg, a 25-year marketing and advertising veteran who led marketing and lead generation at B2R Finance, Patch of Land founders Jason Fritton and Brian Fritton have assembled a veteran management team with deep experience in growing lending and investment businesses. Other 2016 executive team hires include CEO Paul Deitch, who joined from Oaktree Capital Management, where he scaled the company’s technology, operations and investor relations functions to empower the firm’s growth from $50 billion to $100 billion in assets under management; SVP of Operations and Underwriting Gina Donato- ni, a 30-year veteran of several billion-dollar mort- gage companies, who most recently scaled a team at PennyMac MATTHEW ZALL more than 12 years of real estate and mortgage experience, as well as ex- pertise in financing and product develop- ment. He pioneered three of the industry’s first-ever multi-borrower single-family rental securitizations, helping build Blackstone Group subsidiary B2R Finance (now known as Finance of America Holdings, LLC) from start-up to a multibillion-dollar lender in only a few years.

SHARESTATES HITS $275 MILLION IN LOAN ORIGINATIONS After only two years in operation, real estate investment SHARESTATES has originated $275 million in loans, the company announced. December 2016 was the most prolific month in the company’s history, as it surpassed $42 million in loans, nearly doubling total loan volume in just over three months. Using its extensive due diligence process and real estate expertise, Sharestates performs a 34-point underwriting process for each project, focusing on the borrower’s experience and the project’s economics and fundamentals. All loans originated by Sharestates are secured by the property and the personal guarantee of the borrower. “A key to our growth has been our ability to identify safe and profitable investments that will generate higher yields than the industry average,” said Allen Shayanfekr, co-founder and CEO of Sharestates. “As the crowdfunding industry expands, we are confident in our model’s ability to maintain outstanding results for investors and generate competitive returns.” As of December 30, 2016, the company funded over 323 individual loans, returned more than $151 million to its inves- tors with no loss of principal, and yielded a net average annual return of 11percent to investors. • SOURCE :: www.sharestates.com In what co-president David Hicks called a fitting end to the company’s 20th year in business, HOMEVESTORS closed out 2016 with the purchase of its 75,000th “ugly house.” The home was purchased by Don Cameron, of West Palm Beach, Florida, a longtime franchisee for the “We Buy Ugly Houses”- branded homebuying network. “This is a very exciting, special achievement earned in our 20th year of business. We couldn’t have asked for a better way to end the year,” Hicks said. “Don is a loyal, hardworking franchisee who has well represented our national brand and best practices values in this industry …we can’t wait for what 2017 will bring.” Cameron has been a HomeVestors franchisee for more than 10 years. His company, Hi-Land Properties LLC, won franchise of the year for 2016, with 133 house purchases and revenue surpassing $24 million. Cameron’s sale volume was highest of any franchisee in the HomeVestors network. • HOMEVESTORS PURCHASES 75,000 TH UGLY HOUSE

NAR Q1 ‘17 HOUSING SURVEY REFLECTS UPTICK IN CONSUMER CONFIDENCE The National Association of Realtors’ Q1 2017 Housing Oppor- tunities and Market Experience (HOME) survey shows growing consumer confidence about the U.S. economy and housing sector. In the first three months of 2017, 62 percent of households believe the economy is improving, soaring to the highest share in the survey’s five-quarter history, up from 54 percent the previous quarter and 48 percent in March 2016. Con- sumer confidence is especially strong in rural and middle America, according to the survey.

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