Think-Realty-Magazine-September-2020

Think-Realty-Magazine-September-2020

TM

Building an Elite Organization FUNDAMENTALS

7 Reasons to Diversify Your Portfolio in Panama STRATEGY Tom Meade is Dominating the Boston Market TITANTALK

The Wealth Creator SHERMAN RAGLAND IS HELPING OTHERS ACHIEVE THEIR FINANCIAL GOALS THROUGH REAL ESTATE INVESTING

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can be delivered to your nearest Batteries Plus Bulbs store and we’ll take care of the recycling for you. Or, if you have a business account, recycling services may be included; talk to your business rep to find out more. It’s never been easier to do your part. To learn about our commitment to sustainability through our partnership with Think Realty call 1-888-905-2014, Or email [email protected] Save up to 73% on retail prices, take advantage of local rebate assistance, tailored service options and much more by signing up for exclusive member pricing at batteriesplus.com/gpo/think-realty

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CONTENTS

INSIDE THIS ISSUE

THINK REALTY 8  News & Events 10  Contributer Corner Meet Bruce McNeilage

INVESTOR STORIES 15  Titan Talk: Tom Meade

ENGAGEMENT 30  Realty Matters: Sustainability Is Opportunity Exploring business operations that improve quality of life by Brian Wojcik

FUNDAMENTALS 32 The True Cost of Homeownership

Breaking the barrier to multifamily investing by Grant Cardone

35 Sponsored Content: Investor Review

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54 Using Fear as the Green Light for Action Instead of a hindrance, fear can be a powerful tool for success by Ellis Hammond

COVER FEATURE

THEWEALTH CREATOR

60 The Truth about Eviction Records: Judgments vs. Filings The difference comes down to timing and decision by Becky Bower

64 Building an Elite Organization

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Ensure your business thrives in a post-COVID world by Don Wenner

INVESTOR STORIES

ENGAGEMENT

PRESIDENT’S CIRCLE

EASY ANSWERS

Featured Member: Romney Navarro

Tips to protect yourself — and your investments

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STRATEGY 69  Land Investing Facts

How an invaluable resource can alter your REI perspective by Erika Bensen

74  Closing Deals

What happens if you don’t close an investment deal on time? by Michael Jordan

76  What Is the Right Real Estate Investment for You? Part II in a new article series on how to find the right niche by W. J. Mencarow 78  7 Reasons to Diversify Your Portfolio in Panama How organic farming can be a sustainable real estate investment by Evie Brooks

DESIGN POINT 81  Reuse and Repurpose

Featured Designer: Tamara Day

MARKETS & TRENDS 84  Most Improved Markets Resilience is key to measuring healthy markets by Ingo Winzer 86  Market Spotlight: Atlanta This southern market is anything but overheated by Fred Heigold III

Sherman Ragland helps others acheive their financial goals through real estate investing by Joe Dyton

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92  Sustaining Your Business During COVID-19 A tactical guide for small business owners in turbulent times by Shawn Tiberio 94  Container Home Villages Upcycled homes offer a solution to the housing crisis and to the environment by Kirk P. Taylor

STRATEGY

MINDSET

BUILD-TO-RENT, RENT-TO-OWN Two likely winning strategies in times of tight entry-level supply

THE 7 STEPS TO FINANCIAL FREEDOM Step 3: Explore, Educate, Assess & Begin!

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PUBLISHER & CEO Eddie Wilson

EDITOR-IN-CHIEF Kelli White

SALES MANAGER Rodney Halford [email protected]

FULFILLMENT COORDINATOR Blair Pierce

DESIGNER David Allen Rodriguez

CONTRIBUTERS Erika Bensen Becky Bower Evie Brooks Grant Cardone Clint Coons Tamara Day Joe Dyton Ellis Hammond Gary Harper Fred Heigold III Michael Jordan Bruce McNeilage W.J. Mencarow

HEY! LET’S BE FRIENDS! GET SOCIAL. STAY CONNECTED.

Gene Powers Shawn Tiberio Don Wenner Ingo Winzer Brian Wojcik

Like, Follow & Share for the Latest Real Estate News, Trends and Insights from Think Realty

COVER PHOTOGRAPHY Aaron Clamage

Are you following Think Realty on social media? Things move pretty fast in real estate. Don’t miss out on the latest trends, tips, insights and news from your trusted resource for all things real estate investing! Follow. Like. Love. Share. Comment. You can do it all with Think Realty’s social media channels. Join the conversations in Think Realty social communities and connect with like-minded members who range from first-time to seasoned investors. Check out all of our social media channels and connect with us - and other investors - today!

Think Realty 12200 N. Ambassador Dr. Suite 301 (Office A) Kansas City, Missouri 64163 816-398-4130 ThinkRealty.com Copyright ©2020 Think Realty ABOUT THIS MAGAZINE :: Think Realty Magazine is a publication of Affinity Real Estate Media LLC. Reproduction or use of any editorial or graphic, without permission, is prohibited. We are not responsible for the content of any paid advertisements. For reprint rights; to ob- tain a detailed statement of our privacy policy; and for all single-copy requests, address changes and other subscription inquiries: SUBSCRIPTIONS :: The annual subscription for Think Realty Magazine is $36.00 in the U.S. Order online at www.ThinkRealty.com or call 816-398-4130. 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.

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FROM THE EDI TOR- IN-CHI EF

What’s in Your Toolbox?

esourcefulness is a trait most entrepreneurs already R

to owning sustainable businesses. New Think Realty

contributor and founder of the 10X movement, Grant Cardone, talks about the true cost of homeownership; Ellis Hammond shares why

have in their toolbox. But like most life tools, it can and needs to be sharpened often. And it needs to be used. So far this year, most of us have had plenty of reasons to be resourceful—to use the tools necessary to pivot and persevere. The theme of this issue is resources and sustainability— how investors can use resources available to build a sustainable business. How have you been resourceful in this year of constant change? Our cover story person, Sherman Ragland, exemplifies the result of mixing resources with hard work. Now, he’s offering educational resources to others, helping them build wealth through hands- on learning in real estate investing. Read his story on page 20 and find out how educating others has led to his definition of ultimate success. The Think Realty team is excited to bring readers a wealth of information from qualified experts in their fields of REI— people who have walked the walk and who have been resourceful on their journey

fear, of all things, is the green light for action; and featured contributor Bruce McNeilage discusses the rise of the rent-to-own market. Plus, a magazine issue focused on resources wouldn’t be complete without information on land and agriculture, so we’ve included that too! We have also been working in anticipation to share other invaluable resources with you, like our first hybrid event in Atlanta! We feel this opportunity, although born of necessity and restriction, has actually ignited a best-case-scenario event that can reach even MORE people, educate even MORE blooming investors, and inspire even MORE business owners to scale their companies. We hope you join us—in person or from home—and take advantage of the resources available to YOU! Thank you for reading Think Realty Magazine, just one of many REI tools to help guide you on your ever-changing journey. •

Keep Going!

KELLI WHITE, EDITOR-IN-CHIEF

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THINK REALTY

NEWS & EVENTS

SPEAKERS

or once in the real estate world, it’s not about location! Held twice per year — this year in Baltimore and At- lanta — Think Realty events are conference- and expo-style learning experiences designed for real estate investors of all levels. Knowledgeable speakers at the top of their fields and more than 40 vendors share their expertise and help investors with the education, services, and products neces- sary to help build their real estate businesses. This year, we are holding on-site events as usual PLUS offering a virtual option to accommodate COVID-19 restrictions and for those not wishing to travel. Whether you stay where you are and learn virtually or experience the event in-person, you will gain knowledge to help you kick off your REI journey or to scale your already-growing business. There’s something for every real estate investor at Think Realty events! • F

Doug Duncan Fannie Mae

Brent Kesler The Money Multiplier

To learn more about upcoming Think Realty events and to buy tickets, visit ThinkRealty.com/TR-Events.

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Meet the Finalists! Think Realty honors the leaders and change-makers of real estate who represent the best the industry has to offer. These individuals are nominated by their peers, like you, and the winners are determined by voting via public ballot.

SINGLE-FAMILY INVESTOR Stuart Grazier Storehouse 3:10 Venture

Bruce McNeilage Harpeth Development and Kinloch Partners & Kinloch Homes

Greg Slaughter First Class Equities

MULTIFAMILY INVESTOR Neal Bawa Grocapitus

Ellis Hammond EllisHammond.com

James Kandasamy Tremaine Real Estate

Dan Handford PassiveInvesting.com

Brad Sumrok Multi-Family Investor

REAL ESTATE INVESTMENT SERVICES Ed Constable Constable Holdings LLC

Bryan McPherson Bay Equity

Michael Gevurtz Bluebird Companies

Carrie Cook Ignite Funding and Preferred Trust Company

Anne Marie Rogers Quest Trust Company

Justin Sloan BSP Insurance and Captivate Agents

Randy Newman Total Lender Solutions

LINDA’S LEGACY: INDUSTRY IMPACT AWARD Arianne Lemire

Anne Marie Rogers Quest Trust Company

Bruce McNeilage Harpeth Development and Kinloch Partners & Kinloch Homes

Josh Schaub Pro Serve Corporation

James Kandasamy Tremaine Real Estate

Glast Heim Real Estate

Winners in each category will be publicized in Think Realty Magazine, interviewed on the Think Realty Podcast, and invited to attend the 2020 Presidents’ Circle Meeting in Atlanta. Not pictured: Funmi Obatolu, individual real estate investor and John Parker, owner of Powder River Investments.

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THINK REALTY

NEWS & EVENTS

The Contributor Corner

Meet Bruce McNeilage

A former cover person for Think Realty Magazine, McNeilage is now a recurring columnist sharing his wealth of information on the build-to-rent and build-for-rent sectors of real estate investing. Here, he talks about his WHY for REI:

I’ve always been an entrepreneur at heart. Real estate investing and real estate development are among the purest and most exhilarating forms of entrepreneurialism you will find. There are inherent risks, but if you work long, hard, and smart, there are also plentiful rewards. But REI is much more than just a financial return. One of the key drivers, at least for me, is helping people live the American Dream. Economic conditions in the past several years have put up obstacles to home ownership and put the American Dream at risk. Through innovative programs such as Build-to-Rent, Build-for-Rent and Rent-to-Own, we are helping people find high-quality, affordable housing. Nothing beats the feeling of handing over the keys to a young family or first- time buyer. Writing for Think Realty helps me share my passion and innovative ideas with the entire industry. Hopefully, this will help developers and investors make the American Dream come true for people across the country.”

BRUCE MCNEILAGE, KINLOCH PARTNERS

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INVESTOR STORIES

PRESIDENTS' CIRCLE

FeaturedMember: RomneyNavarro

NAVIGATING THE UNKNOWN TAKES A SPECIAL TEAM

The Think Realty Presidents’ Circle is an elite group of real estate investors and private lenders who meet throughout the year to discuss and share ideas, insights, business practices, and more. This month, we turn to member Romney Navarro who shares the number-one invaluable resource that has helped him navigate the everyday ups and downs of 2020.

QUESTION: What resource has proven invaluable in the real estate investing space while navigating the changes caused by the COVID-19 pandemic?

ANSWER: “Without a doubt the most invaluable resource that I have had throughout this entire pandemic has been my team. It’s kind of a backwards way of answering this question as I mean this from the standpoint that I have only now really and truly realized how much all of those individual pieces that make up my team mean to me and to the companies. Like just about everybody, my opera - tions were disrupted tremendously by the pandemic (we all had our version of this, I am sure) yet my team an - swered the bell every single day, through thick and thin, fending off obstacle after obstacle (internal and external) and thanks to them, here we are again today positioning ourselves to conquer the next mountain. Best of all, and

by far the most rewarding part of this entire pandemic, today our customers are responding to us better than ever before. I would have never imagined that, in the middle of a pandemic, my collection ratios and my Net Promoter Scores (the client satisfaction survey that we subscribe to) are each at all-time highs and because of them our forecast now appears to be sunny with a chance of growth. With that said, my team, which consists of accountants, servicing representatives, asset & fund managers, processors, loan officers, creatives, and all the back office support that keep us roaring, are not only invaluable — they showed me that they are also 100% essential to me, to my company, and to my family.”

ROMNEY NAVARRO Co-Founder of The Private Lending Network

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INVESTOR RESOURCES

IRA

Five Factors for Choosing Your Self-Directed IRACompany

MAKING THE DECISION EASIER

Content provided by American IRA

You’re convinced . You know a Self-Directed IRA is a powerful way to build wealth, using its protec- tions to help you get the most out of investments like real estate. But there’s a catch: you can’t move for- ward unless you have a Self-Direct- ed IRA administration firm in your corner. And you’re not sure which one to pick. How can you tell which Self-Directed IRA company has the experience and know-how to make life easier for you? We’ve put togeth- er a list of the five most important factors to help you decide. TEAM KNOWLEDGE Simply put, a Self-Directed IRA company should know things. A lot of things. You’re working with a Self-Di - FACTOR #1 rected IRA company, after all, for a long-term commitment. Shouldn’t you be concerned about who it is that will help educate you? You’d be surprised. Many Self-Di - rected IRA companies have leader- ship and speakers with very limited experience in the asset classes they’re teaching you about. For example, let’s say you signed up with a Self-Directed IRA company because you wanted to invest in real estate. What if you work with a Self-Directed IRA company whose team knows very little about this asset class? Do you want to learn

from someone who’s reading out of a manual? American IRA’s team is comprised of investors who bring value to you from a place of personal experience. Our ownership AND employees are comprised of individuals who have created a 7-figure net worth by in - vesting in real estate.

while others will not allow check- book control if you’re going to work with them. But isn’t a Self-Directed IRA all about the freedom to call your own shots? American IRA realizes that every client has different goals and needs. For that reason we employ a hybrid approach to checkbook control. For clients that want to utilize a retire- ment account owned LLC, they can do so. For clients that do not want that structure, it is not mandatory. This gives all clients the tools that allow them to optimize their self-di- rected investments. FACTOR #3 FIRM CONTINUITY— AND A LONG-TERM RELATIONSHIP If you were going to propose to get married and knew there was a chance it would only last a year, would you re-think it? That’s often how it works with Self-Directed IRA administration firms. You’re happy to sign up with one if you know you can work with them for years and even decades. But if you knew that the firm doesn’t have a strong history of continuity, you might rethink things. You may think it a bit strange that we compare a Self-Directed IRA administration firm to a relationship. But here’s the thing: relationships do matter. Isn’t it frustrating to con-

LLCs AND CHECKBOOK

FACTOR #2

CONTROL LLCs like Single Member LLCs al - low the Self-Directed IRA to put a lot of power in your hands. In essence, a “Checkbook IRA,” as its called, can function much like a personal in- vestment account—with the obvious caveats and regulations of a retire- ment account. With Checkbook Control, an IRA/401(k) is a member of an LLC, which allows the investor to directly transact for their investment. There’s no going through middlemen here. They don’t have to check with their Self-Directed provider for paper- work, or for the flow of money for the account. It’s as simple as writing a check. Is there a catch? Of course. You have to set it up properly. Your Self-Directed IRA adminis - tration firm should allow you to do this. You’ll find that some compa - nies mandate that you have to use a checkbook if you use their service,

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There are Self-Directed Providers that are reliant on third parties to stay in business. And if there is a new policy by the custodian, it can mean that this arrangement can be shut down. This is a scary situa- tion. You got into Self-Directed IRAs because you wanted more indepen- dence. You didn’t want to cultivate dependence on a third party. Your Self-Directed IRA adminis - tration firm should be fully integrat - ed, meaning it doesn’t rely on third parties to get its work done. FACTOR #5 FEES Simply put: how much does it cost? Even if you have a great Self-Di- rected IRA firm to work with, exorbi - tant fees negate the good work you do. Many Self-Directed IRA admin- istration firms charge annual asset fees. This means that your annual fee for an account with 4 properties will be far higher than an account holding 1 asset. Do they charge a higher annual fee as the account balance grows? If so, then your fees grow with your wealth. American IRA charges a low, set annual fee of $285 per year, which means that the percentage of the fee relative to your account goes down as you grow wealthier. Your annual fee will not change with an increase in the value of the account or num- ber of assets, and that’s the way it should be. These factors all matter when you choose a Self-Directed IRA admin- istration firm. If you want one that meets all of the criteria here, learn more about what makes American IRA different. Give us a call at 866- 7500-IRA to find out how you can work with us and achieve a stronger retirement nest egg. •

Look for a Self-Directed IRA admin- istration firm that emphasizes the following: • A strong senior staff, many of whom should have experience at the firm for 8-10+ years. • Real relationships with clients, and a long-term understanding built on that communication. • Knowledge and experience within the team to offer the proper education.

stantly have to reinvent the wheel when your vendor is constantly hir- ing new employees? It’s like hitting the “reset” button over and over again. There’s no sense of long-term progress. And with retirement investing, long-term progress is the name of the game. When you constantly hit “Reset” because of new relationships, it means that you have to start over again. You have to communicate old ideas again. And you may be working with people who now don’t under- stand the investments you make. Or they might not know the way you prefer to communicate.

FACTOR #4 THE KIND OF SELF- DIRECTED “PROVIDER” YOU WANT

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INVESTOR STORIES

INDUSTRY LEADER

The Titan of Local Capital

TOM MEADE IS DOMINATING THE BOSTON MARKET

by Kelli White

orn and raised in Quincy, MA just a few miles south of

the late 1800s. That’s how Meade got his first real estate and construc - tion experience. He saw the major remodeling work his parents did on their new home, and throughout his formative years, Tom helped his dad do small projects around the house. In high school, Meade participat- ed in a foreign exchange student program and lived in Argentina for a year with a host family, an experi- ence that affected his life perspec- tive. “As a 16-year old kid, I moved to a foreign country in a different hemisphere (Christmas falls in the Summer!), learned a new language and culture, and attended school and church fully immersed in Spanish. Coming back from that year, I had a new outlook. First, I had a great-

er appreciation for my family and friends. It’s true what they say about absence making the heart grow fonder. I had really missed them. But at the same time, I had gained self-confidence and independence. I saw the value in learning things literally from the bottom up. I had to re-learn everything about day-to-day life. Beyond the obvious language barrier, they had bidets and they ate dinner at 8 or 9 pm every night!” Meade didn’t know at that time that learning from the bottom would turn out to be the strategy that helped him build his successful career. Right out of college, Meade went to work for Merrill Lynch where he had interned in the mailroom when he was still in school. This time, he

B

Boston, Tom Meade and his three siblings were children of working parents—his dad a nursing-home administrator and his mom a regis- tered nurse and clinical director of programs for autistic young adults. “I like to say I never missed a meal as a kid, but we didn’t have a lot of extra money. We went to Disney World once as a family, in August (the cheapest time of year to visit Florida),” he recalled. His childhood home was a two-family house; his aunt and grandmother lived on the first floor, and Tom’s family lived upstairs. When he was in 5th grade, his par- ents bought “a serious fixer upper,” an 11-room Victorian house built in

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was full time at the Boston office of their institutional money market fund. It was 1999. “Money market funds were not nearly as common,” Meade said. “[They were] mostly used by big corporations to manage short-term cash balances. To give you an idea, the Merrill Lynch Premier Fund had a $10mm minimum investment, and at that time was yielding in the mid- to high-five-percent range!” Meade worked his way up and transferred to a sales job at the Merrill Lynch asset management headquarters in Princeton, NJ. As a 25-year-old, he was making a good income with title of Assistant Vice President, but he was miserable. “I realized that I’m not really built to work for someone else,” he said.

He wanted to move back home to Boston, so he bought a house in Braintree, while still working at Merrill Lynch in NJ. “This was in the early 2000s before Dodd Frank, and we got really cre- ative with how to buy the house. The realtor rolled in his commission as my down payment, and I had pre-ne- gotiated with a neighbor to subdivide and sell off a portion of the land at the back of the lot. I did my first creative real estate deal and I was hooked. Back then, I bought a set of Carlton Sheets audio and video tapes to learn about how to invest with no money down,” he said. To learn the business from the ground up, Meade quit his job in financial services and went to work for a friend of his family who had a

small residential contracting busi- ness. “I went from making pretty good money as an AVP at Merrill Lynch, to a laborer on a construction crew, making a $100 a day. I learned a lot about both the trade and the busi- ness. I went on to get my General Contractor license and start my own contracting business, although I invested in a few deals on the side during these years.” In 2008, he went to work for Boston Capital, one of the largest owners of affordable housing in the country. They raise tax credit equity funds and partner with the develop- ers who build the apartment com- plexes. “I looked at this opportunity to learn how the big guys do it, as far as partnership structure, syndicating real estate funds, and asset man- agement. At this same time, I went back to school at Boston Universi- ty, and earned a certificate in Real Estate Finance. After a couple years at Boston Capital, I got a call from a recruiter and went to work for CW Capital, which was then a national mortgage banking shop. They were a big FNMA/Freddie/FHA lender on the multifamily side. CW Capital was subsequently bought by Walker and Dunlop, an even bigger national lender.” In his years there, Meade held roles in asset management, under- writing, and originations. Then, on New Years Eve 2014, Meade received an unexpected call that, at the time, seemed like a low point in his ca- reer, but it ended up being a bless- ing in disguise. Walker and Dunlop was heading in a different direction and Meade was told there wasn’t a spot for him. Once again, Meade gained life-changing perspective and learned that what hurts at the moment almost always provides a

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When we think of a Titan, we often think on a national scale. But sometimes we need to look for Titans who are dominating a specific market. Tom Meade is just that. He is dominating the market of Boston in a way that other national lenders and developers can only dream of.”

EDDIEWILSON OWNER AND CEO OF THINK REALTY AND THE AMERICAN ASSOCIATION OF PRIVATE LENDERS

Eddie Wilson (left) confers with Tom Meade (right).

flexibility has been imperative. “During this pandemic, instead of tightening down on leverage, increasing cash requirements, and lowering LTVs, we are leaning in. We see an opportunity to provide liquidi- ty into the market; we are looking for ways to help borrowers recapitalize their projects and put them on firm - er footing coming out of this crazy time,” Meade said. The markets in Meade’s home- town are not unlike other markets across the nation in that values are not dropping. Demand is high and supply is lacking, which has prices increasing and bidding wars esca- lating. Touchstone is answering with solutions in ways other lenders are not. “While everybody else is raising money for funds to buy distressed debt, we are raising additional funds for our existing pooled mortgage fund, which has the ability to invest up to 20 percent of its assets in mez-

zanine debt and preferred equity. We think putting some money to work deeper in the capital stack provides an excellent risk-adjusted return for investors, and some much-needed relief for borrowers,” Meade said. Meade attributes much of Touch- stone’s success on lending locally, especially when it comes to small balance construction and bridge loans. “In my view it’s very difficult to do this well at a national scale. There is the obvious issue about ‘knowing your market’ and understanding that you cannot underwrite based on zip codes. You can find very different val - ues from street to street in a given city/town/neighborhood. Hopefully we learned some lessons coming out of the 2008 debacle as far as ‘desktop underwriting’ and relying on appraisers. Beyond that, with construction and bridge lending, you need boots on the ground. We do all our own construction inspections

valuable lesson. Meade had formed Touchstone Capital Partners, LLC in 2010, when he and some partners were buying distressed debt from the 2008 down- turn and doing small volume fix- and-flip lending. During that time, Meade met his business partner Ray Loughlin in 2010, and together they continued doing one-off deals until 2014 when they launched what has become Touchstone’s flagship fund, TCP Fund II – a pooled mortgage fund. After that distressing news on the last day of 2014, Meade went all in with Touchstone Capital in 2015. “Looking back, that’s how my life has gone—I have gained perspective and life lessons from negative situa- tions,” he said. ALOCAL GAME Touchstone Capital is a flexible, full-service capital provider. And, with the current economic situation,

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and the majority of our deals come from referrals. We know our borrow- ers, we know our markets, and we know our deals. I hope the example Touchstone has set is that as a lend- er, you can scale intentionally and build a successful, sustainable busi- ness, right in your own backyard.” SUCCESS COMES FROM STARTINGATTHE BOTTOM Three values Meade admires in others is perseverance, integrity, and success and to him, these quali- ties are intertwined. “When I talk to potential borrow- ers or partners in real estate deals, I am very skeptical when they tell me ‘I have never lost money on a deal.’ This is a very difficult business; there is no easy money, and when you fail (and lose your own money), it should make you a better investor/lender/ business owner. Especially in real estate, which is a cyclical industry, having been through previous down- turns is a big asset (perseverance). Integrity to me means being the same person and having the same set of values at work, at home, and in social settings. Do the right thing, whether anyone is watching or not. If you can get through some adversity with perseverance and integrity, you are bound to find success.” The definition of success is sub - jective, what it means for some is different for someone else. Meade qualified his definition to the real estate industry and then to himself as an individual. He said, “success in the real estate industry to me means proving you can invest and preserve capital and survive a full cycle. Touchstone has now operated and invested through a full cycle. Certainly, we’ve taken our lumps, but we’ve come out the other side better and smarter,

and I think our partners appreciate that—whether that be borrowers who appreciate the straightforward way we do business, or our capital partners who have enjoyed outsized risk-adjusted returns. I attribute my success to curiosity and perse- verance. I always want to know how stuff works, and I’m always willing to dive in and start from the bottom.” ADVICE FROMATITAN Like any profession, real estate investing takes hard work. Meade acknowledges the valuable resourc- es out there that help investors build a good foundation of research. “But for me,” he said, “I have learned by doing. Both doing deals

on my own, and by actually working for other companies in the industry.” “Despite what you may see or hear in slick online marketing and radio commercials, you can’t take a free weekend seminar and become a real estate investor, flipping houses with other people’s money. The way I think about it is this: if it were that easy, then everyone would do it, and there would be no margin in it.” So, does a titan ever stop doing what he has proven to excel at? Does a titan have an exit strategy? “As far as exiting, that’s what I love about this business, I don’t feel it’s ever one I’m going to exit or retire from.” For Meade, it’s more about evolu- tion than an exit. •

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COVER STORY

SHERMAN RAGLAND

Sherman Ragland is helping others achieve their financial goals through real estate investing THE WEALTH CREATOR

BYJOE DYTON

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FUNDAMENTALLY, IFYOU LOOKAT THE ABSOLUTE NUMBERS IN TERMS OFWHERE WEALTH COMES FROM, IT COMES DOWN TO JUST ONE THING: HOME OWNERSHIP!”

SHERMAN RAGLAND

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Sherman with his sons, David and Gregory. David, a 19-year-old freshman at Towson University has closed two deals and was the Project Manager for this project. His older brother Gregory owns three properties and was assisting him in this rehab

No one could blame RealInves- tors® Chief Visionary Sherman Rag- land if he had shied away from real estate after his first introduction to the industry. When Ragland was in junior high school, he begged his mother to take him to a real estate seminar that someone he saw in an infomercial was hosting. He bought a pair of expensive cassettes only to find out the host would eventually go to jail for fraud. The event only strengthened Ragland’s resolve for real estate, however. “It didn’t deter me from wanting to pursue real estate success,” he said. “I got my real estate license while in college when I was 22, competed for a national fellowship to attend the MBA program of my choice, and ultimately chose the Wharton School of Business where I got my MBA in

real estate development.”

took on busted loans from the sav- ings and loan industry. The company also did a lot of work for the federal government for 12 years, achieving significant accolades for its work, including recognition from the White House. It was in the late 1990s when Rag- land decided to go back to what he really had a passion for—real estate investment and development. “When my youngest son was born in 2001, I remember saying to my wife that I really wanted to focus on real estate,” he said. “She said it was a great idea, and I went to a four-day event in Atlanta. It was funny because they keynote speaker was this up- and-coming investor, (Rich Dad Poor Dad author and businessman) Robert Kiyosaki that no one had heard of who had this board game and book that was going to be coming out in six

AREAL ESTATE CAREER IS LAUNCHED Ragland’s first job out of school was Chief Financial Officer (CFO) for a major land development project the Xerox Corporation was building in the Washington, D.C. area. He saw the opportunity as a chance to not only work on a large-scale project, but also return to his hometown of Wash- ington, D.C. and pursue a commer- cial real estate development career. It was also a chance to work for some of the biggest real estate developers in the D.C. area—Xerox Realty as well as the Oliver T. Carr Co. After working on major projects in the D.C. area, Ragland started his own company in the early 1990s. His firm mostly handled walkouts and

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months or so.” Ragland also met Steve Cook, another real estate investor at the event. When they returned to Wash- ington, D.C., Ragland paid $500 for a one-on-one mentoring session with Cook on how to get his first real estate deal. “It’s funny because here I was, somebody who had a career in commercial real estate, an MBA in finance and real estate development, and Steve by his own admission ‘barely made it out of high school,’” Ragland said. “[But], here’s a guy that basically taught me to fix and flip houses for my first year as a full- time real estate investor. I was fixing and flipping houses and the more I did it, the more people would come to me and say, ‘Hey, how do you do it?’ That’s how I got into the education business. People asked me, ‘Hey, can I look over your shoulder?’ Soon I became the ‘go-to guy’ in D.C. area real estate.” Ragland and his RealInvestors® Team have let a lot of people look over their shoulder and learn about real estate investing since 2001. The company began as a local networking group that helped one another out with real estate matters. It eventually turned into the largest real estate club on the east coast—the D.C. Real Estate Investor Association (DC- REIA). By 2003, it became clear that people really wanted to learn about real estate investing as it’s done closer to home. At the time however, there were a lot of speakers going around the U.S. pressuring attend- ees to sign up for training that was centered around going to out-of-town boot camps. SHARING REAL ESTATE KNOWLEDGE THROUGH REALINVESTORS ®

“The challenge with boot camps is they are a three-day event and by the time your credit card statement shows up, you don’t remember half the stuff you were taught in those three days,” Ragland said. “So, we started doing training in our own backyard for local investors in the D.C. market. We were doing a ses- sion one day when somebody asked what we called ourselves. I said, ‘I don’t know, RealInvestors®.’ We went online and found that nobody had grabbed the domain name.” The club soon started its own training programs that consisted of a day of training at a hotel and then 30-45 days of “hands-on” training at local properties. The hotel company asked what they wanted to call the

event, and Ragland replied “Real In- vestor Training.” That same weekend he registered the domain names and the training program was known as RealInvestors® from that point on. Located in Prince George’s County Maryland, RealInvestors® had to go through a number of processes to comply with the county and state regulations so it could offer formal training in a permanent facility. The company purchased a 5,000 square foot building and then became a licensed trade school and the Mary- land Higher Education Commission approved it. RealInvestors® is the only real estate investor school in the U.S. that a higher education com- mission has approved. The Maryland Higher Education Commission has

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also regulated popular colleges like Johns Hopkins and the University of Maryland. “We’re in the same peer group as (those schools),” Ragland said. “So with that, we have to provide a cur- riculum and go for an annual review. We’ve done everything except get accredited, but we’ve thought about that from time to time. We are li- censed and sanctioned by the state.” RealInvestors® also offers certain classes under career school pro- grams like the 60-hour real estate agent licensing program as well as continuing education (CE) classes, which a state agency regulates. The courses are part of the RealInves- tors® Academy, which students pay a small membership fee to join. Classes are now offered in a 10,000 square foot campus located just east of Washington, D.C. where people learn to become real estate inves- tors within a 90-mile radius of the White House. Programs offered vary from getting started in real estate,

the fact that you can continue to not only educate people, but as time goes on, those people that you educated now become successful real estate investors and teachers,” Ragland said. By having students become the teachers, RealInvestors® is consis- tently expanding its curriculum. Rag- land admitted that when the academy was first starting he questioned the need to go through so many certifi - cation hoops just so he and his team could teach some real estate classes. In hindsight, he realizes the process was worth it so RealInvestors® can be a longstanding educational resource. “This is the same certification process that a Johns Hopkins Univer- sity has to go through,” he said. “It causes you to think about how do you create something that is sustainable, something that has longevity and is an institution. That’s what RealInves- tors® has become—an institution.” CLOSING THE GENERATIONAL WEALTH GAP One of RealInvestors’® goals is to help members solve their real estate investing challenges in part so they can create wealth that they can pass along to their children and grandchil- dren. Ragland noted the large wealth divide in the U.S.—which unfortu- nately falls along the lines of ethnici- ty. African-Americans have one-tenth of the wealth of non-African-Amer- icans and Hispanic Americans have approximately one-eleventh of the wealth, according to Ragland. “Fundamentally, if you look at the absolute numbers in terms of where wealth comes from, it comes down to just one thing: home ownership!” Ragland said that “The vast majority of African-Americans do not own homes, and it is similar for Hispanic

“quick-cash” real estate strategies, transitioning to commercial prop- erties, raising capital, and using crowdfunding. “There’s something for everyone from the newbie to the more ad- vanced investor who’s looking to really take it big time,” Ragland said. “I have a project now that I’m work- ing on that’s a $10 million deal. Steve Streetman who co-teaches a com- mercial course with me just raised a $26 million fund. I would say a big part of sustainability and resources is can you actually take somebody who knows nothing about real estate and help them build a $26 million portfolio.” Streetman did his first commercial deal with RealInvestors® 10 years ago, not knowing anything about commercial real estate, according to Ragland. Six years ago, he became a RealInvestors® teacher and started to put together numerous deals using cryptocurrency and crowdfunding. “That’s ultimate success to me—

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Americans, while the vast majority of non-African-American and non-His- panic whites do own their home. I’ve been a student of these facts before social justice and wealth building was popular.” The motivation for Ragland’s inter- est in wealth building through real investing came from close to home. His daughter approached him one day and said she was thinking about buying a house and needed advice. They had a series of conversations and Ragland guided her though how to purchase her first home. That led to more people asking him how she did it. After getting a large amount of inquiries, Ragland sat down with his daughter again about everything they had discussed. This time however, he recorded the conversation. The transcript turned into a series of TV appearances on the topic and an Amazon best-selling book, 7 Simple Steps to Getting Your Own Home!, which discusses the wealth gap and the importance of home ownership. Today, home ownership is a family affair for Ragland. His three children all own real estate (even his youngest son who is a college freshman) and all three are on the path to financial security because of it—an achieve- ment that Ragland calls his “most important accomplishment.” “The reality is, the wealth gap can be closed in one generation if people just get serious about home owner- ship as that first step,” Ragland said. “After you get your first home, don’t stop. Get another rental property and then another rental. It’s almost like a game of Monopoly—four green houses, roll them up into a red hotel, except they aren’t hotels, they’re apartment buildings. And the for- mula for creating wealth isn’t hard. You just have to pay attention, find yourself a mentor, and be willing to

Ragland with Steve Streetman

can follow our system and own five to 10 rental properties if executed properly. Those rental properties could pay you between $5,000 and $10,000 a month in passive income in the Maryland/D.C. area. For many people, that is enough to be able to retire, or at least have your spouse leave their job and come home. “That gives you real choices in terms of what you want to do with your life,” Ragland said. “If you go to work, you go because you love the job, not because you need the paycheck.” DEVELOPANOWNERSHIP MINDSET Whether someone owns one property or 10, it’s important they think of themselves as a real estate investor, Ragland says. His thinking is home ownership draws a distinct line between the consumer and the producer. If someone spends their whole life consuming, they may look at life as, ‘What can I consume next?’

get out there and actually do it.” Ragland also noted the easiest way to close the financial gap is for people to pay attention to what they’re spending their money on— including how much they’re spending on rent versus what would that same rent payment would look like if were applied to a mortgage. “I think most people realize they could probably get more housing if they took the same dollars that they are spending on rent and dedicat- ed them to a mortgage,” he said. “Granted, it might cause them to move outside of an urban area and to a suburb. Case in point, my oldest son and girlfriend were paying $3,800 a month for a one-bedroom apart- ment in Washington, D.C. Finally, he said, ‘This is insanity.’ They’re now in the process of buying a four-bedroom house about 15 minutes outside of the city.” Home ownership can be the first rung on the ladder to creating wealth, according to Ragland. In as little as three to five years, anyone

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THAT’SULTIMATE SUCCESS TOME— THE FACTTHATYOU CANCONTINUETO NOTONLYEDUCATE PEOPLE, BUTAS TIME GOES ON, THOSE PEOPLETHATYOU EDUCATEDNOW BECOME SUCCESSFUL REAL ESTATE INVESTORSAND TEACHERS.”

SHERMAN RAGLAND

The producer meanwhile has a very different mindset. “It’s the mindset that says, ‘My wealth is dependent on what I do’ as opposed to a mindset of, ‘This hap- pened to me at work, or I got laid off, or it’s my employer’s fault,’” Ragland said. “You just look at things through a different set of lenses.” And it doesn’t matter if you have one property or a hundred. “Once you put yourself on the side of ownership or investor-ship, you begin to look at life very differ- ently. You realize that your capacity to create wealth for you and your family, and then teach those same concepts to other people is really just a function of how hard you want to work and not a function of catching a break,” he said. LEARNTHIS BUSINESS BY DOING IT When Ragland was in college, he had the opportunity to work an internship at the IBM Product center in the Inner Harbor in Baltimore. One day, Jim Rouse, a nationally famous real estate developer and founder of The Rouse Company, came into the

when talk about our training pro- grams at RealInvestors® because all of our training programs are designed around real projects. If somebody’s doing a rehab or we’re teaching a rehab class, you are meet- ing with a contractor. You’re going out in the field with us as we’re buying a property.” Ragland could have easily turned his back on the real estate industry when that seminar host was exposed as fraudulent when he was in junior high. Instead, he took the opposite approach and built a successful real estate development, investment and educational career. He didn’t quit— advice he gives to anyone interested in real estate today. “Real estate can be confusing and it can be challenging,” Ragland said. “There are a lot of times where peo- ple feel like it’s not worth the effort, but they should hang in there just a bit longer. I’ll say to people if you need to take a break, take a break, just don’t quit. You simply need to connect with the right people who will let you look over their shoulder and don’t be afraid to follow in their footsteps. Most importantly, just don’t quit.” •

store to purchase a typewriter for his wife. Ragland sold him the typewrit- er and two days later Rouse asked Ragland to come to his office and interviewed him for a job with his real estate development company. Rouse informed him he’d start in the intern- ship program, become a developer and eventually a project manager. Ragland said the opportunity sound- ed fantastic, but informed Rouse that he had just applied for a fellowship and if he was accepted, he was going to the Wharton School of Business to get his MBA. “I’ll never forget these words as long as I live,” Ragland said. “(Rouse) said, ‘Sherman, the Wharton School of Business is a very fine place, but you will never learn real estate in a classroom. You learn this by doing it.’ I would have to say that was the most powerful, impactful advice I ever got because you really do learn the real estate business by doing it. I got my MBA, and he was correct—learned a lot of stuff, but I did not truly learn real estate until after I started ac- tually doing it. I learned most of the stuff about real estate after I got out of Wharton. “It’s something I carry with me

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