9) Gdreia Sept 2008 Final

The Voice of Real Estate Investors Working Together

GDREIA GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

Visit our web site at www.gdreia.com

SEPTEMBER 2008 Vol. 32 No. 9

PRESIDENT’S MESSAGE

CALENDAR OF EVENTS WEDNESDAY, SEPTEMBER 3 6:30 P.M. - Investors Forum 7:15 P.M. - General Meeting

THURSDAY, SEPTEMBER 11 GDREIA W.I.N.G.S. Meeting 7 - 9 P.M.

WEDNESDAY, SEPTEMBER 17 Action Group 6:30 P.M. - New Member Orientation/Networking 7:10 P.M. - Session 1 8:20 P.M. - Session 2 SATURDAY, SEPTEMBER 20 9 A.M. - Saturday Investors Networking Group Frisch’s Restaurant 4830 S. Dixie Dr. (at Springboro Pike) Dayton

THURSDAY, SEPTEMBER 25 7 P.M. - Cashflow Club Wright State University Student Union Food Court

MEETING LOCATION: (Unless Otherwise Noted) Sinclair Community College, Bldg. 12, 444 W. Third St., Dayton, OH DIRECTIONS TO PONITZ SINCLAIR CENTER Take the Third Street Exit 53A off I-75 I-75 Northbound OR Southbound: Turn RIGHT on Perry St. Turn RIGHT on Fourth St. Turn RIGHT into the underground lot You can purchase a parking pass at the GDREIA meeting for $2 rather than pay the posted parking charge of $10.

Ph: (937) 586-3726 • Fax: (937) 586-3699 PMB 345, 3195 Dayton-Xenia Rd., Ste 900 Beavercreek, OH 45434-6390 email: [email protected]

Just when it seems that things are finally beginning to settle out, the headlines scream more negativity — this time it’s from an article with Forbes touting that Dayton is one of the top-ten “dying” cities. What was interesting for me to see was the criteria that the article cited: (1) loss of manufacturing jobs and (2) population exodus from the city. That’s it. What it doesn’t say is that the loss of manufacturing jobs is due to the economy — price of oil, which is causing gas prices at the pump to go up, which is causing consumers to seek less expensive gas guzzling vehicles, which reduces the need for trucks and SUV’s, which means less production of these vehicles, which reduces the need for employees. Also, in order for the manufacturers in our area to remain competitive, they have instituted the installation of new technology which increases their effectiveness and efficiency and reduces the need for employees. Exodus of population from the city? That’s been going on for years as the people have moved or are moving to the suburbs. That’s true with every municipality in the country. Let’s face it, people. Ohio has a population of over 11,000,000 as of the 2000 census. These people work and live in this state. Ohio is a state based on agriculture and manufacturing. Dayton is a city that was heavily involved in the industrialization of Ohio and has continued to be involved to this day. Dayton is also a city that has recognized a need to reinvent itself. That is most appropriate since Dayton has been the birthplace for numerous inventions. Dayton needs help, of that there is no doubt. However, we — the people —- need to get involved, get our voices heard and our presence felt in order to make these changes. So here I go back on my soapbox again. Real Estate Investors are in a unique position here in Dayton. We bring jobs to the city — electricians, plumbers, roofers, carpenters just to name a few. We are excellent sources of business for suppliers — tools, materials, vehicles, insurance, realtors, appraisers, etc. — just to name a few. We work hard at bringing vacant, distressed properties up to current building code and bring them back on to the tax roles providing income to the communities. We work with the population to provide comfortable, affordable housing. —Cont’d. on pg. 4

Inside… General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Upcoming Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Visitors, New Members, Membership Drive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 GDREIA Upcoming Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A True Rehabber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Proposed Amendments to the Code of Regulations . . . . . . . . . . . . . . . . . . . . . . . 6 Introduction to Self Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-8 How To Use Your Retirement Funds For Real Estate . . . . . . . . . . . . . . . . . . . . . . 9 Meeting Photos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-11 Board Election Bios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-13 Do I Have to Lease to This Jerk? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-14 The Key to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Real Estate Investors’ News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16-17 Legislative update. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Minutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

See page 3 for more information about the CALENDAR OF EVENTS.

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GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

Monthly meetings... All guests are welcome at the monthly meetings held on the first and third Wednesday of every month (unless otherwise noted) but must register at the welcoming table when they arrive. The first meeting is free to first-time attendees only. Any subsequent meeting attended by a guest carries an attendance fee of $15. Any former member attending a meeting must also pay a $15 fee. Meetings are held at Sinclair College, Bldg. 12 (Ponitz Center), 444 W. Third St., Dayton. Wear your membership card!

Your first card holder is provided free. Other card holders may be purchased separately. Stop in early and visit the library or chat with fellow investors. Note: There will be a $2 fee for not wearing your badge! Proceeds go to charity.

Help GDREIA grow!! Remember, for each new member you bring in, you will receive $20 in REIA BUCKS. You can spend them for any goods or services we provide, including membership renewal.

GDREIA Newsletter Advertising Rates Send your CAMERA-READY ad copy and payment payable to GDREIA to: PMB 345, 3195 Dayton-Xenia Rd., Ste 900 Beavercreek, OH 45434

Commercial Member rates Bus. Card Size 1/4 Page (3.5" w x 4.5" h) 1/2 Page (7.5" w x 4.5" h) Full Page Insert

$ 15 $ 35 $ 74 $149

per issue / $149 annually per issue / $360 annually per issue / $650 annually per issue

Non-Commercial member rates are double the Commercial member rates. Deadline for ads is the 5th of the month for the following month’s issue.

We would love to have articles submitted for inclusion in this newsletter. Please email them to Newsletter Editor at: [email protected]. or call Tom Di Nino at 937-689-3603.

A Reminder... As a courtesy to your fellow members, as well as to our speakers, please turn off all pagers and cell phones in our meetings!!

Bulletin Board/ Solicitation Policy • Bulletin board is for General (non-Commercial) members to post properties that they have for sale, and for Commercial members to post properties for which they have real estate listings to sell. • Only Commercial members may distribute or display materials advertising their business, and only the business that they have on file with GDREIA. General (non-Commercial) members may not distribute or display materials marketing their business.

GDREIA WEB SITE NEWS!!! GDREIA members have a place on the website where properties for sale, for rent or looking to buy can be posted — FREE for members! This area will be accessible to the public and will be a great place for you to advertise for FREE. Pictures can be included for the property — just do an attachment to your email! The advertisement will be active for 60 days and then drop off. You can readvertise it as often as you wish. Our website: www.gdreia.com. Now…here’s the secret code — don’t tell anyone! The password is gdreia07 (note: must be ALL lower case) plus your I.D. number (which is on your membership badge). Another great benefit for our members!! Any concerns or comments, send them to: Marsha Grosmann, [email protected] Web Master

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

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GDREIA UPCOMING PROGRAMS *Meeting Location: Sinclair Community College, Bldg. 12, 444 W. Third St., Dayton, OH Parking is available under Bldg. 12 (4th & Perry St.) with $2.00 passes available at each meeting.

* Unless otherwise noted

Wednesday, September 3, 2008

Wednesday, September 17, 2008 ACTION GROUP

6:30 P.M. - INVESTORS FORUM

(Admission is FREE for members and first-time visitors.) Meeting Location: Sinclair Community College, Bldg. 12, W. 4th & Perry St., Dayton, OH

Speaker - John Zimmerman

“Fair Housing” OPHP Credit: 1 hour Fair Housing

6:30 P.M. 7:10 P.M.

7:15 P.M. - GENERAL MEETING

- Information Hotline & Buy-Sell Trade Time - Session 1– Keeping Investors Out of Trouble - Holly Johnson

Speaker - Nick Sidoti

“Renting to Special Needs People” OPHP Credit: 1 hour Marketing

OPHP Credit: 1 hour Elective

8:20 P.M.

- Session 2 – New Rental Clauses You Need to Know - Johnthan Deevers

OPHP Credit: 1 hour Law NOTE: The library will be open during the meeting.

Thursday, September 11, 2008 7 - 9 P.M. GDREIA WOMEN’S INVESTOR NETWORKING GROUP (WINGS) MEETING Sinclair Community College, Bldg. 12, rm. #231 (second floor opposite the auditorium)

For more info contact Janice Kemmer at [email protected] or 937-581-0507 or Kelly Robey at [email protected] or 937-626-7934.

Saturday, September 20, 2008 9:00 A.M. - Saturday Investors Networking Group Frisch’s Restaurant, 4830 S. Dixie Dr. (at Springboro Pike) Dayton Informal breakfast meeting (buy your own). Everyone welcome. Experienced investors needed who might be willing to host meetings at other locations as increased attendance necessitates.

Thursday, September 25, 2008 7 P.M. - CASHFLOW CLUB Your newsletter editor, Tom Di Nino, welcomes your comments. You may email them to Newsletter Editor at: [email protected].

Wright State Univ. Student Union (no parking fee)

If you are interested in honing your Cashflow 101 skills or becoming a facilitator, contact Laura Ceville at (937) 427-4521 or e-mail [email protected]. Meetings are held on the 4th Thursday of every other month. —Laura Y. Ceville, Chair

GDREIA UPCOMING EVENTS DATE SEPT 3 3 11 17 17 20 25 OCT

NOV

EVENT Investors Forum General Meeting WINGS Action Group 1 Action Group 2 SING Cash Flow

SPEAKER

TOPIC

John Zimmerman Nick Sidoti

Fair Housing Renting to Special Needs People

1 hr. Fair Housing 2 hr. Marketing

Holly Johnson Johnthan Deevers

Keeping Investors Out of Trouble New Rental Clauses You Need to Know

1 hr. Elective 1 hr. Law

Local experts

Maintenance Workshop

GDREIA panel

GDREIA new web site use Finding Owner Financing

1 9 15 15 18

WINGS Action Group 1 Action Group 2 SING

5 5 13 15 19

Investors Forum Main Program WINGS SING Action Groups 1 & 2 Mike Butler

OPHP CREDIT

New Federal Guidelines How to do Short Sales

Management Software

2 hr. Management

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GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

Thank you... t o

these members who renewed their membership

GENERAL: Dennis Barrett; Steven Burggraf; Laura & Braden Childers; David & Joanne Cronin; James & Hsiao Yung Ford; Carolyn Hardesty & Howard Smith; John Johnson; Joseph & Sherry Lucas; Kelby Moore; Ted & Sheila Myers; Denny & Deborah Park; Mark Payne; Ralph & Delores Strother; John & Tara Theis. COMMERCIAL: CJH Mechanical, Inc./Charles & Linda Hamilton; Like New Homes/Murray Chapple.

The following persons are in the running for a $500 drawing for sponsoring a new member for 2008. 1 1 1 1 1 1 1 1

Robert Batin Scott Belton Brad Boehmke Bill Brandewie William Burt Michael DiFlora Morris Dixon Marsha Grosmann

1 1 1 1 3 1 5

Paul Heintz Arthur Jones Janice Kemmer Jon Lauver Sham Reddy Travis Rucker Jerri Todd

Guests —

Welcome! New GDREIA GENERAL MEMBERS: Nickolas Algren; Jan & Brett Baylor (sponsor: Sham Reddy); Joelle & Jason Engle; Basudde & William Kajubi; Eric & Brenda Phelps; Tim Silvers; Doug & Yvette Snyder (sponsor: Jon Lauver). New GDREIA COMMERCIAL MEMBERS: There were no new Commercial members.

We were glad to see the following guests at recent meetings: Melinda Cooper; Bill & Matt Heidenreich; Bruce Hull; Sharon Ivy; Paul Lander; Mark Murdoch; Cynthia Ricker; Carolyn Ripp; Rhonda Sutherland; Joan Brown; Mark Hackney; Lauren Hunter; Robert Jollay; Jennelle Love; Doug & Yvette Snyder; Anthony Williams. We hope you enjoyed the meeting and will come again as members. — Theresa Welch, Member Relations Chairperson

President’s Message............................................................................................ Cont'd. from pg. 1 We are treated not, as an asset investing millions of dollars into these neighborhoods — and I am talking about not just Dayton but Trotwood, Fairborn, Kettering, Centerville, Huber Heights as well — but as a liability. These communities are making it more and more difficult for us to work with them. The neighborhoods imply that we simply cause more problems because we either don’t maintain the properties — not recognizing that the tenants/residents who occupy these properties do not treat the properties with respect in regards to the amount of monies we’ve invested in fixing up these properties; or we move in just anyone — such as drug dealers or prostitutes or whoever. It seems that the communities and municipalities do not see us as businesses who are in business to make a profit in order to stay in business. We recognize that there are a few investors out there who do us no service. Unfortunately, those are the ones that get the press and the attention. Our state officials through various legislative acts have made it very difficult for us to do our business. I am speaking primarily here of those pieces of legislation that hamstrung most of us for financing. Most of the investors use their own monies or private money to invest in these properties. Legislation that was targeted to prevent “Predatory Lenders” from taking advantage of the populace actually ended up cutting the feet out from under investors because a great many lenders simply

pulled out of the state refusing to do loans here or tightened up the criteria to such a degree that self employee investors could no longer get financing. If we can’t get the money, we can’t do the work. It’s that simple! And by the way, whatever happened to holding people accountable for their actions? If someone signs on a contract without reading it or understanding it — whose fault is that really? Which leads to our school system but that’s another issue.Bottom line here is — investors — get involved. Pay attention to what’s happening in our communities. Attend these meetings. Voice your opinions. Talk to our representatives in Washington. Get to know the candidates and vote! If you don’t like who is running — then get active and do it yourself. Don’t just sit there complaining. That’s what got us into this fix we’re in.Do something about it! Be accountable! You have an opportunity right now. GDREIA has 5 positions opening on the Board of Trustees. Elections are in September. Make it a point to attend this meeting and vote! This organization needs your voice. Volunteer and get on a committee. Make your membership count! Talk to the Board members and let them know your opinion on matters. The Board represents you, so the Board needs to know what you are thinking. Attend the meetings - network - volunteer - vote! Do well by doing good! — Jerri Todd, President

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

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A TRUE REHABBER by Connie Di Nino, OPHP, NPHP

Most of us consider ourselves true rehabber’s, but what criteria make a “true rehabber”? Just the other day, I was visiting with two of GDREIA’s top rehabbers and sharing with them my excitement on getting my very own light weight drill. My husband’s drill that I had been using was too heavy to really negotiate. So I got to thinking what excites us rehabbers and came up with this list. TOP 10 ITEMS ONLY A TRUE REHABBER CAN GET EXCITED ABOUT: 10. Winning the big flashlight at the last GDREIA meeting.

Insurance Works, LLC • VACANT Bill Montgomery, CIC • RENTALS 937-424-5633 (Office) • APARTMENTS 937-424-5667 (Fax) • COMMERCIAL • REHABS CONTACT:

9. Offer accepted on first try. 8. Getting materials needed on sale AND in stock.

$179

7. No water in basement. 6. Copper pipes still in place. 5. Clean title. 4. Receiving responses from listing on Craigslist. 3. No critters! 2. Getting a new tool (especially a light weight drill). 1. Checking the mail and finding money on time. OK – I know I missed a few, but what more would a true rehabber need? If you think of other items, feel free to share them with me. By the way, I now know I am a true rehabber.

SAVE THE DATE: DECEMBER DECEMBER3,3,2008 2009 While Santa may be taking a break on the beach, GDREIA has begun planning our annual Christmas Party. Watch for upcoming announcements and ticket sales. Make sure you have the date marked on your calendar because you don’t want to miss the fun—just ask someone who was there last year. If you would like to help please contact Connie Di Nino 689-3602 or email at [email protected]

HO! HO! HO!

WE PAY CASH! We Buy: • Seller-held Mortgages, Land Contracts & Trust Deeds (no seasoning required)

• Business Accounts Receivable • Business Notes • Other Cash Flows including: Structured Settlements, Medical Accounts Receivable Inheritances

Providing Financial Solutions CONTACT JOHN OR MARSHA GROSMANN

RONMAN INVESTMENT GROUP (937) 429-3916

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

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Introduction to Self Storage By Scott Meyers Self Storage Association Definition: Self Storage facilities are real property designed and used for the purpose of renting or leasing individual storage spaces to tenants who are to have access to such space for the purpose of storing and removing personal property. They offer rental on a month-to-month basis of individual spaces where customers provide their own lock and have sole access to their space. Today’s typical storage facility may comprise several one or two-story buildings on two to six acres of land, or a multiple-story building, containing a carefully designed unit mix of spaces. The units typically range in size from 5X5 to 10X30 feet with 30,000 to 120,000 total rentable square feet of space. Self storage facilities frequently feature large roll-up doors and drive up access to outside spaces and offer outside parking for storage of boats and recreational vehicles, which often can’t be stored in residential communities. Today’s facilities normally have the following features: • Contain 10,000 to over 100,000 rentable sq. ft. • Offer a wide range of unit sizes

• Are well lighted • Are paved vs. graveled • Have storage units divided by steel, movable panels •aa May have some or all of their spaces climate controlled • Contain high-tech security systems, including electronic access, cameras, and digital video recording • Have perimeters that are walled or fenced with security gates • May or may not have a resident manager • Have single or multi-story buildings • Provide carts and dollies for use by its customers • May contain movable storage modules • Sell storage and moving related supplies • Provide ancillary retail services and products. From the real estate perspective, self storage: • Meets the needs of several consumer groups (residential & commercial) • Uses simplified structures • Makes efficient use of land,

especially odd shaped parcels in less desirable locations • Has short construction time, thereby providing little traffic disruption • Uses very little energy!

History The conventional concept of personal storage began in England when British banks were asked to safeguard valuables for clients embarking on extended voyages. Overcrowded vaults quickly forced them to seek storage lofts from drayage companies (the first moving companies). The first miniwarehouses for household and personal items were built. The two story structures were built with packing on the lower floor and private storage rooms on the second. Except for expansion into multistory buildings, things remained the same for decades, until the 1950’s when costs rose. This led to construction of palletized warehouses which were designed to handle crated customer goods that could be stacked three levels high. Access to household/personal goods was restricted and it was expensive, since customers had to — Cont’d. next page

PROPOSED AMENDMENTS TO THE CODE OF REGULATIONS ARTICLE V. – AUTHORITY AND SELECTION OF THE BOARD OF TRUSTEES Section 2. ELIGIBILITY AND COMPOSITION At least seven (7) Trustees serving on the Board of Trustees must be current real estate investors. To be elected to and remain on the Board, a Trustee must: A. Be a member in good standing with GDREIA at least one (1) year. B. Be at least 18 years of age. C. Sign and abide by the GDREIA Board Confidentiality Agreement. We wish to add: D. Have spent at least one (1) year on a GDREIA committee.

Also under Article V, we wish to ADD Section 7: Section 7. TERM LIMITS Board members shall serve for a limit of three (3) consecutive terms, including partial terms. At that time that member must remain off the board for at least one year before being elected again. The term limitation shall begin with the first full or partial term beginning with the 2008 elections. This provision shall not apply to the immediate Past President if the president’s three terms have expired but the president must serve on the executive committee to fulfill other provisions of the Code of Regulations.

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

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Introduction to Self Storage.............................................................................. Cont'd. from pg. 6 make appointments to obtain items and pay each time for the service (stored property could only be reached by forklifts which were operated by staff) and business hours were limited and normally did not include weekends. Initial development of self storage facilities in the US occurred primarily in the Western United States and the Sunbelt states. Contributing factors were: a transient population moving to new jobs and better climate, retirement condominiums, apartment and townhouse residences, slab construction, etc. Many facilities were developed prior to 1979, with 1978 generally acknowledged as one of the greatest growth years in the industry. As the decade of the 1980’s began, increased self storage construction activity occurred along the Eastern coast of the United States, with increased interest in Canada, Europe, Australia and other countries of the free world.

Self Storage Tenants It’s been said that self storage is used by people and businesses in transition, but that’s only part of the picture. Self storage is used by a wide range of consumers with different needs that may include: • Homeowners and businesses in need of temporary space for overflow of property or inventory • Those in the process of relocating • Property stored in relation to an estate in transition due to death, litigation, restoration, etc. • Businesses in need of space for general control of inventory, records, supplies and equipment • Businesses that are expanding or contracting

• Businesses storing seasonal displays • College students storing books, desks, etc. during summer • Military personnel in need of low cost space or are on temporary duty • Seasonal visitors with household items and sports equipment The advantage of using rental storage space is increased flexibility, low cost, convenience, and value. Self storage space is generally rented on a month-to-month basis and does not commit customers to long term leases. Tenants may typically leave whenever they want and rent only the space they need. A recent study shows that the average length of tenancy for a typical customer is 11 months, and 24 months for the average commercial tenant. The cost of self storage space is lower than office or retail space, saving users money. On average, self storage is roughly 60% less than the cost of most office on a per square foot basis. Self storage users

can often find facilities in their local area and they receive additional service value because self storage managers are trained to counsel consumers on how to store items more efficiently in less space, thereby reducing the cost. Self storage is a useful management resource for small businesses, since businesses can easily obtain more space as they grow without committing to expensive long term leases. Furthermore, it provides businesses with a means to cut costs, should they need to downsize. Self storage is also useful for college students and seasonal visitors who may rent space for a season, and for military personnel who go on temporary tours of duty, but intend to return to the area, and for those who can’t afford to rent more living space.

Today’s Market Estimates of the overall number of self storage facilities operating in the United States varies greatly but most industry veterans estimate — Cont’d. next page

Comtech Realty

Commercial & Investment Property Specialists

Commercial Sales & Leasing Commercial & Residential Property Management Short Sales & Bank REOs Creative Financing Consulting

Whatever your need, COMTECH REALTY IS THE SOLUTION!

Spirit

Each office independently owned & operated.

Dayton, OH 45440 email: [email protected] www.shamreddy.com

Office: (937) 427-2626 Pager: (937) 234-1340

MIKE BAUGHMAN, Broker MARK MONROE, ABR

Comtech Realty LLC 22 McDaniel Street, Dayton, Ohio 45405 Phone 937.227.2929 • Fax 937.227.2930 [email protected]

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GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

Introduction to Self Storage.............................................................................. Cont'd. from pg. 7 that there are somewhere between 45,000 and 50,000 facilities as of the date this went to press. As the population becomes more familiar with self storage, the demand for off-site storage has expanded to accommodate the growing needs of the business community by storing files, medical records, excess inventory, equipment, etc. In some areas, business storage accounts for 30% or more of the total tenancy of a facility. Easy access, convenient office hours, short term rental agreements, and no long-term commitment to pay for space which may not be needed in the future, make the self storage facility extremely attractive to the retail customer, contractor, home based businesses, manufacturer’s, pharmaceutical representatives, etc. The industry still remains relatively unsophisticated and highly fragmented. Today, roughly 75-80% of all self-storage facilities are owned by small independent “mom and pop” operators. In addition, there is a considerable amount of

medium to large players undergoing consolidation, although it is becoming more difficult for the larger buyers to accomplish since most owners realize what a great low maintenance high-cash business it is, and therefore are reluctant to sell. As a result, the top 50 companies control approximately 25 percent of the square footage in the industry. As demand for space has grown and the self storage industry has evolved, consumers have become more familiar with the property type (92% of the households in the U.S. were familiar with the concept, according to a survey sponsored by the Self Storage Association in 1989). Inasmuch, local and regional competition ranges from a handful of properties to scores in a given trade area. Accordingly, customers may choose where they will store and from many different options, with unit size and the choice of climate or non-climate controlled space being the base options. Today consumers have the ability to compare and choose from among a

variety of self storage property styles and customer services to meet specific storage needs. Competition in the self storage market is increasing. Maximum success for investors/operators depends on the ability to meet customer needs with convenience and value. To satisfy customers, today’s self storage must look to locate in retail corridors, light commercial or even high density residential neighborhoods, in addition to traditional industrial and heavy commercial areas. Newer facilities emphasize architectural aesthetics in construction and are designed to blend in with the retail or residential nature of the areas they serve. Landscaping has also become a prime consideration, as well as the interaction of storage development with adjacent planned tracts of offices, retail stores and business parks, in order that incubator space is available to support public planning. All of this is done with the aim of creating a clean, stable, secure upscale image that supports the perception, and the reality of trust among current and prospective customers. ................................................... Scott Meyers, CSSM©, is the nation’s leading Self Storage educator. He travels the country revealing why Self Storage has become the hottest sector in Commercial Real Estate over the past 30 years that virtually nobody has heard about. Scott Meyers, CSSM is the owner and President of Alcatraz Storage® which operates several Self Storage Facilities in the Midwest. Scott is a Certified Self Storage Manager (CSSM©) through the National Self Storage Association and is a Certified Apartment Manager (CAM) through The National Apartment Association. He has been a real estate investor since 1993, and was an instructor of the Landlord 101 course through the University of Indianapolis. Scott Speaks to Investor groups nationwide but mostly enjoys spending time at home with his wife and 3 young children in Indianapolis, Indiana.

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

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How to Use Your Retirement Funds for Real Estate by Hugh Bromma In this articles, we will examine how one can use the tax-deferred money in their retirement plans to take advantage of real estate investing opportunities. This article explains how you can use your 401(k) funds to diversify your portfolio mix into real property.

The 401(k) Plan First, it is important to understand some basic features of a 401(k) program. The 401(k) is a subsection of the Profit Sharing Plan section of the Internal Revenue Code. It allows for employee deferrals on a pre-tax basis. Employers may make this type of plan available to their employees by adopting an acceptable format for such a plan. There are limits of how much an employee can contribute. Adoption of such a plan also permits the employer to match employee contributions and to make profit sharing contributions (at the employer’s discretion). An individual employee may contribute up to about 20% of annual compensation, to a maximum of $9,500 per year. Employers may make matching contributions (such as 25 cents on the dollar) up to 8% of total compensation for each employee. Sometimes profit sharing contributions may also be made and, under certain circumstances, one may have a combined package of 401(k), match and profit sharing/money purchase up to $30,000 in a given year. All of this is variable, and one rule does not apply for all cases. If you are an employer, you can design the features of the plan and provide the investment alternatives for yourself and your employees. If you are an employee (not defined as an employer), you are permitted to operate your deferrals and investments as established by your employer. If some of the features we discuss here are not available to you as an employee, you may wish to discuss them with your employer to determine whether they can be adopted by your 401(k) plan. If your

present plan does not permit the flexibility we are about to discuss, remember any plan may be amended and restated to make such capabilities available.

How to Use the 401(k) for Real Estate and Notes After all this, how can the funds in your 401(k) plan be used for real estate transactions? Once you have found out that your 401(k) plan funds can be used for real self direction, and the trustee of the plan also permits such transactions, the rules are simple: You can purchase assets into your plan which are not prohibited. Real estate is not prohibited. You may not deal with yourself or members of your family (other than siblings).

All Transactions Must Be Arm’s Length This means that you can purchase mortgages with your plan assets. This means you may purchase real property in your plan for income purposes. While debtfinanced properties may be subject to unrelated business income taxes, in almost all investment cases we are aware of this has not applied.

How It Works How does it work? First, you find the property or note. These are selfdirected plans, and no one is going to give you a list of real property to c h o se from . I t’ s a l l up to you. Remember, you take all of the risks and receive all the benefits. Neither the employer or the plan trustee has any obligation to you in a properly designed plan. Second, you request that the administrator of the plan ask the trustee of the plan to purchase the asset you have selected for your benefit in your plan. All this is performed through written documents. Third, the security interest in the asset you have asked to be purchased is perfected for the benefit of your plan account. Income and expenses are allocated to your account.

How Often Can You Do This? As often as you like. Some people like to buy distressed properties, fix them up, and then sell them. Others buy discounted notes. Some purchase income streams. There are as many options as one can think of, provided you follow the rules. Typically, employers will use the completely self-directed option for compliance with 404(c) of the code for self trusteeship safe harbor. Some combine the complete self direction along with a number of mutual fund choices, making complete self direction available on a non-discriminatory basis to all employees. There is a cost associated with this. As can be imagined, the process of purchasing notes and real property is a labor intensive process; the process of purchasing mutual funds in a daily valuation environment is almost fully automated. Your 401(k) administrator can provide you with the costs. If your administrator doesn’t handle complete self direction, there are some that will. It’s up to you, as an employer or employee to ask. You may be surprised at the answer. .................................................... Hubert (Hugh) Bromma is CEO of Entrust Administration, Inc. He has decades of experience on the cutting edge of investment education. His business philosophy is providing quality education to enable his clients to enhance their investments. Hugh has written several books on tax-free and tax-deferred investing and has an extensive background in economics and investing.

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

10

July 16, 2008 3rd Wednesday/Action Group Meeting

SPEAKERS

1st Speaker Dave Bohardt

2nd Speakers Mark Monroe & Mike Baughman

Winners

Door Prize Winner Judy Kaster

Door Prize Winner Basudde Kajubi

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

11

August 8, 2008 GDREIA General Meeting

SPEAKERS

1st Speaker Dave Murray

2nd Speakers Matthew Tillack & Edwin Kelly

Winners Door Prize Winner Denny Park

Split-the-Pot Winner Gary Crowell

Door Prize Winner Johnathan Newman

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

12

Elections for the GDREIA Board of Trustees Elections will be held in September for GDREIA board positions. Six candidates are seeking those positions. Information on each candidate is presented below.

DARRIN CAREY

TOM DI NINO

Darrin has been a member of GDREIA for almost 4 years, attending his first meeting within a few days of moving here. He’s attended almost every meeting and event since, and sat on a multiple member panels, assisted with the library and cash flow games. Most recently, he presented a 2-hour session to WINGS on creative financing. He read his first book on real estate in 1983, but didn’t buy an investment property until 2001 (yes, almost 20 years; same long list of excuses). Since that first purchase, he’s been fully immersed in real estate investing— land contracts, lease options, subject to, short sales, seller seconds, wholesaling, etc. If there’s a technique out there, he’s probably done it or tried to do it at least once. Darrin has progressed from his first naïve purchase (still owned) to a near bankruptcy caused by a crooked property manager (not a REIA member) to current successes. He’s learned many of the lessons the hard way. (He should have joined REIA way back then.) After dozens of rentals and rehabs, he’s built up a lot of experience, but there’s still more to learn. After 20 years of service, he’s retired from the Air Force to work Real Estate full-time. While in the Air Force, he worked diverse projects at worker and management levels, and served on various boards. He also co-wrote and taught several different classes related to personal finance and investing that formed the basis for an Air Force-wide education program. Darrin is now giving back to the community by helping others attain their investment and business goals (and helping them avoid his mistakes). He wants to help grow the great organization we have in GDREIA into an even better one.

Tom asks for your vote and support for a GDREIA board position. Tom knows GDREIA is a very important and beneficial organization and he wants to help GDREIA grow and increase support to its members. Tom is currently the GDREIA news letter editor. He has volunteered in other areas of GDREIA including chairing the transition committee, helping with the holiday party, work crew volunteer at Rebuilding Together Dayton, and participating in the OREIA newsletter round table during the 2008 OREIA Leadership Retreat. Tom has been a real estate investor since 1979. His experience is with single family rentals. He has past holdings in Arkansas and Virginia, and currently has several houses in the Dayton area. He retired from the US Air Force having served for 26 years. He now owns and operates a successful marketing and consulting company serving the defense community. He and his wife Connie are focused on expanding their real estate holdings. As well as his volunteer work with GDREIA, Tom currently serves as the Communications VP for the Dayton Chapter of the Air Force Association and is a past president, and current chair of two committees of the Dayton Area Defense Contractors Association. Tom holds a National and an Ohio Professional Housing Provider certification.

ART JONES Art Jones is a full-time real estate investor who has been a GDREIA member since January 2001, has served as OPHP chair, Commercial chair, Workshop and Mentorship chair and is presently the Volunteer chairperson. A Board member for the organization since March 2002, Art received his Ohio Professional Housing Providers designation for completing the mandatory 60 hrs of training in November of 2003, is a National Professional Housing Provider and has been an active mentor for the GDREIA since 2002. Art has been a speaker for various other organizations in Ohio and surrounding states concerning real estate investing, is always willing to help other investors be the best they can be and show new investors how to get started correctly to make money in this business.

JOHN GROSMANN John asks for your support and your vote. He has been an investment property owner since 1972, owning rentals in many states. A GDREIA member since 1984, he has been involved with the Board for many years, serving on several committees and special projects. He has served as Secretary, Chairman of the Public Relations Committee, Newsletter Editor, Program Chair, President, Vice-President, and is the current Treasurer. His goals are to help enhance GDREIA’s image in the eyes of area rental property owners, the Public, government entities (elected officials and public employees), and also encourage more member involvement in the organization. He believes that his experience and knowledge as a full-time real estate investor and his leadership and Board experience in other organizations has and will continue to benefit GDREIA.

— Cont’d. next page

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

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Elections Bios...................................................................................................... Cont'd. from pg. 12 DAVID MURRAY

JERI TODD

Dave is an accountant since 1989, in public practice since 1994, an investor since 1997, and currently owns about 35 rental units and flips a couple houses a year. Dave is currently chair of the internal audit committee. He was the former chair of the WHIO Real Estate Radio Committee and recently chaired the committee to update the association’s Bylaws and Code of Regulations. Dave has spoken at numerous GDREIA workshops. Dave has enjoyed professional success as a result of working with members and wants the opportunity to continue to give back through his efforts at the Board level.

Born in Birmingham, Alabama just a “few” short years ago, Jerri worked for over 20 years in the corporate world of employee benefits and insurance. Jerri arrived in Dayton by way of Denver, Colorado 10 years ago and began investing in real estate as a way of supplementing the home income in preparation of her husband’s retirement. Jerri’s “crisis” point came in August, 2001 when her husband’s company incurred a major change that resulted in his job loss and 9/11. His job change came with an 80% reduction in income. Shortly after, he became seriously ill and required surgery. While she stood by his bed in the Surgical ICU unit, she questioned the future in the event her husband did not recover as hoped. That was the kick she needed to get into investing full time and at full speed.

Do I Have to Lease to This Jerk? By Charles Brown As an attorney, I represent property management companies and provide legal advice to apartment managers. Periodically, I have a conversation with a client that goes something like this: Manager: This guy came in this week and applied for an apartment. He is really obnoxious and I get “bad vibes” from him. Do I have to lease to him? Me: Why does he give you “bad vibes”? Manager: He has called every two hours to see if his application has been approved. Then, he puts me on hold every time he gets another call on his call waiting. He yelled at me when I told him that we would not be able to process his application without a copy of his driver’s license. He has asked to see the same two apartments every day for the last week. He told my assistant manager that our staff was incompetent because we could not tell him how many cubic inches the refrigerator freezers have. He wants to see the resumes of the maintenance staff. He made one of my leasing agents cry. This guy is obnoxious and rude. Me: Did he complete his application? Manager: Yes. Good credit, no criminal history, sufficient income. I verified the information on the appli-

cation. He is qualified to be a tenant here. Me: Do you have a written policy that outlines your admission criteria? Manager: Yes, and he meets all of the criteria, but I can’t imagine dealing with this guy for the next year. Do I have to lease to him? Me: No. Manager: I don’t? Isn’t that discrimination? Don’t I have to treat everyone the same? Me: Not necessarily. As long as your reason for not leasing to this person has nothing to do with this person’s race, color, religion, national origin, sex, familial status or handicap, (the “protected classes” under the Fair Housing Acts), you don’t have to lease to them. Manager: If he is in the “protected class” don’t I have to lease to him anyway? Me: No. You do not have to rent to him just because he is in the “protected class”. Your decision to deny the application is not based on this applicant’s race, color, religion, national origin, sex, familial status or handicap. You may deny the application for another reason. For example, the applicant could be in the “protected class”, but if he refuses to fill out the application completely, you could refuse to lease to him based on that reason. It’s all right as long as

you would have rejected someone in the non-protected class for the same reason. However, you might want to document in your file the reason you rejected someone because you may have to defend the decision in the future. Manager: You mean we can have a “No Jerks” policy? Me: Yes. Just as you may have a policy that rejects applicants who have a criminal record, who do not have sufficient income, who have bad hygiene or who have bad credit history. The legal test is whether your decision is because of the applicant’s race, color, religion, national origin, sex, familial status or handicap. If your decision is for some other reason, you are not violating the law. Manager: What do I tell him about why I’m denying his application? Don’t I have to give him a reason why we will not lease to him? Me: No. As long as the reason is not based on his credit report you do not have to give a reason. I do recommend that you confirm all disapproved applications with a polite letter confirming their disapproval but it is not required. In this situation, you do not have to state the reason for the disapproval in the letter if — Cont’d. next page

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GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

Do I Have to Lease to This Jerk?..................................................................... Cont'd. from pg. 13 you send one Managers are often surprised to hear that they do not have to lease to people who otherwise qualify to be tenants. The misconception is that they have to treat everyone the same. While it is a good idea to be consistent in your treatment of all tenants and prospective tenants, you do not have to treat everyone the same. However, if you deny an applicant just because you don’t like them, you run a greater risk of a discrimination claim if they are in the protected class. For example, say you deny the application of a Hispanic female who is in a wheelchair and has three minor children because she is obnoxious and rude to you and your staff. A jury could more easily infer that your denial was based on some other reason (i.e. her disability, her race, her familial status) than the fact that you did not like her behavior. Be consistent in enforcing the policies, otherwise, it may be hard to prove that you did not discriminate against someone in the “protected class” illegally. The problem with a “No Jerk’s” policy is that it may be viewed by a jury as a pretext for discrimination. In other words, a jury might think that your rejection of someone based on their offensive behavior is just an excuse that you are using to discriminate against them for some unlawful reason such as their race, color, religion, national origin, sex, familial status or handicap. You should have a written policy that outlines your admission criteria for tenants. You may want to modify the written policy to include a category for “Management Discretion”. Your file should have some documentation that the basis for your denial was in accordance with your policy. If someone otherwise meets your admission criteria but you are not comfortable leasing to them, you may use the Management Discretion category as the basis for rejecting the application. In addition, include notes of the specific conduct that you found to be offensive as well as the basis for your decision. If you reject an applicant based on the applicant’s obnoxious behavior, be sure that their behavior is not

due to a mental disability. The applicant may be in the “protected class” and you may be inadvertently denying their application based on a mental disability, which is reason for their unacceptable behavior. The same question arises in lease renewals. Sometimes you lease to people who make life difficult for themselves and everyone around them and you wish you had never leased to them. While their behavior may not warrant an eviction, you may decide to refuse to renew their lease. As long as decision to deny the lease renewal is not because of this tenant’s race, color, religion, national origin, sex, familial status or handicap, you do not have to re-new their lease. Like lease applications, you do not have to tell the tenant why you did not renew their lease. Another factor comes into play in lease renewals. You may not refuse to renew a lease in retaliation for a tenant exercising his rights. Here, you must make the distinction between a tenant who is rude and obnoxious in making legitimate demands and asserting their legal

rights and the tenant that is just rude and obnoxious without merit. If a tenant has been obnoxious and pushy but in the context of asserting their legal rights such as requesting repairs, you should probably renew their lease. Otherwise, a jury could easily infer a motive of retaliation. You would have a difficult time proving that the reason for not renewing the lease was based solely on the tenant’s conduct and was unrelated to their exercising their legal rights. Life is too short to have to put up with certain people as tenants. As long as your reason for not leasing to a person has nothing to do with their race, color, religion, national origin, sex, familial status or handicap, you don’t have to. ................................................... Charles Brown is an attorney who invests in real estate in the Austin, Texas area. He is Board Certified in Residential and Commercial Real Estate Law by the Texas Board of Legal Specialization. He can be reached at 512-476-8942.

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GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

15

The Key to Success By Dwan Bent-Twyford e meet many investors who are looking for a magic pill. They think there is a magic sentence; a special program; the perfect boot camp; the easy way to find deals. Folks, I have to tell you, there is no magic pill. You can be successful if you’ll do one thing: WORK! There are an unlimited number of foreclosures every single month. The number of homeowners who needs help is mind-boggling. In most larger cities, as many as five hundred foreclosures are filed every week. This doesn’t include the homeowners who save their property before it hits public record. Do you know what the real key to success is? It’s good communication skills. Seriously! If you can’t talk to homeowners and bankers, how do you expect to close deals? We have been studying NLP: Neuro Linquistic Programming. NL…What? NLP is the way you communicate with others. It’s simple folks, the better you communicate, the easier the deals come. NLP is cause and effect language. It uses patterns of speech and words in the correct group to persuade others to see things your way. Here is an example: You could ask a homeowner, “Will you sell your property to me?” Or you could say the same thing using NLP. It sounds like this: “Mrs. Homeowner, when you decide now to work with me and we get your property sold, you’ll know you made the right decision. Let’s do the right thing and sign this agreement now so we can get you what you want in the time you want it. Won’t that be great!” Doesn’t the second sentence sound better? It’s embellished language and works remarkably well. In our second sentence, we used “embedded commands.” These are commands within the sentence that call homeowners to action. Can you guess the embedded commands? They are: decide now, work with me, get your property sold, do the right thing, and sign this agreement now. By adding just a few commands to your presentation, you’ll be able to close more deals.

W

Here are a few of our favorites: work with me, sign this agreement now, decide now, trust me, buy now, accept this offer, make a commitment, convince yourself, postpone the sale date, motivate yourself, take the short sale, get it approved, and begin to realize. You might be thinking, “How do I begin to use these commands in my communication?” It’s easy, folks. Plan a presentation, write several basic sentences, and more importantly, practice. Here are a few examples: “When you decide now to accept this short sale, you’ll begin to realize that working with me is easy. I close my deals in record time, which makes you look great to your boss.” Here is another: “Mrs. Homeowner, you have to convince yourself that working with me is the right thing to do. Let’s sign the agreement so you can start sleeping well again. Won’t that be great?” NLP takes practice to be good at it. We truly believe it is the difference between earning $100,000 a year and $500,000 a year. Which would you rather earn? We’re sure most of you answered $500,000. Fellow investors, have you taken the time to determine your numbers? If you sit face-to-face with a homeowner, how many deals do you get under contract? We get seven out of ten and we are certain it is because of our communication skills. With proper communication skills, you can close seven out of ten as we do. Without proper communication skills you might close two out of ten.

If you are getting two out of ten homeowners to contract, look how many more people you have to sit down with just to get the same seven deals we get. We can speak to one hundred homeowners and get seventy contracts. Likewise, you speak to one hundred homeowners and only get twenty to contract. Which would you rather do? We agree, seventy. Look how much more money you can earn from the exact same work? Folks, take time to learn how to communicate. Read a few books on NLP, attend sales seminars, invest in books that teach how to close deals, and take the time to really listen to your homeowners to see how you can be helpful. With the right words and the right attitude, you’ll make millions! We do! ................................................. Dwan Bent-Twyford, the Queen of Foreclosures, learned the “foreclosure” business the old-fashioned way, by knocking on doors. She needed a career that would allow her the freedom of working from home and raising her daughter at the same time. Investing in foreclosures was the perfect solution. She made $22,000 her first deal and never looked back. She now successfully handles every aspect of wholesaling, short sales, buying, rehabbing, marketing, and financing foreclosures and distressed properties. In a business dominated by men, this amazing woman quickly learned how to apply her unique experience to create win-win situations when buying property. With so many folks asking Dwan, “How can I learn this business?”, she developed a complete training series as well as a five-day “boot camp”. Dwan BentTwyford now enjoys traveling and sharing her vast knowledge with new as well as seasoned investors. Don’t miss this exciting lady!

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

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Real Estate Investors’ News Digest

This column is a timely report of real estate investment trends and opportunities selected from national, state and local news media, as compiled by Gene Fox, GDREIA member. Bank stocks drop anew amid worry over falling home prices Stuck with a growing glut of foreclosed houses, banks and investors are shedding them at increasingly steep losses, potentially adding to the banking industry’s red ink this year. Banks are selling foreclosed homes in some cases for less than half the price they fetched two or three years ago. The cuts are coming as the U.S. banking sector, slogging through its worst crisis in decades, bites the bullet out of fear that prices will keep falling. J.P. Morgan Chase & Co. warned Aug. 11 that it expects “a continued decline in U.S. housing prices.” J.P. Morgan’s warning was notable because the bank has been ahead of the curve over the past year in sounding the alarm about emerging troubles, such as mounting defaults in home-equity loans and credit cards. The steep

losses on sales of foreclosed homes are painful for banks and investors in the short run but should help clear the backlog. That would allow for an eventual recovery of the housing market and clean up the banks’ balance sheets. “I do not think this is the time to be holding onto [foreclosed homes] and hoping for a better day,” Daniel Mudd, chief executive of Fannie Mae, said during a conference call Friday. Banks and investors have grown more leery of the rising costs of holding onto vacant homes. Along with such expenses as insurance, lawn care and maintenance, banks are being hit with higher costs for complying with local regulations applying to vacant homes. The price cutting may mean even deeper losses for banks, but in some areas price tags have fallen enough to entice bargain hunters back into the market. Losses to banks on foreclosed prop-

erties result from a variety of factors, including declines in the home value below the loan balance; missed payments by the owner before the foreclosure; real-estate commissions; and the costs of repairs, taxes, insurance and maintenance while the bank or loan investor owns the property. The pain may get worse before it starts to ease. A recent report from Barclays Capital estimates there are 721,000 bank-owned homes nationwide, up from 112,000 two years ago. Barclays expects the total to rise 60% more before peaking in late 2009. Financial institutions are acquiring homes through foreclosure much faster than they can sell them. Fannie Mae, a governmentsponsored mortgage investor, disclosed in early August that it acquired 44,071 homes through foreclosure during this year’s first —Cont’d. on next page

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Real Estate Investors’ News............................................................................. Cont'd. from pg. 16 half but sold only 23,627, leaving a balance of 54,173 as of June 30. Fannie said it is opening field offices in California and Florida to try to speed sales of such homes and is evaluating offers from unidentified parties interested in “bulk” purchases. -The Wall Street Journal, Aug. 13, 2008

Vacant-property fees add to mortgage firms’ woes As home foreclosures continue to rise, a growing number of local governments are imposing stiff fees on mortgage companies responsible for the vacant properties. Local officials say the levies are intended to offset the cost of maintaining and policing abandoned homes and to keep these properties from becoming blights on neighborhoods. The tougher rules also are adding to the financial burden on mortgage companies grappling with a surge in foreclosures, which some economists estimate may reach three million by the end of this year. And the new rules may raise costs and lower returns for investors who hold bonds backed by

pools of mortgages. “These ordinances are popping up every single day,” said Robert Klein, chief executive of Safeguard Properties in Brooklyn Heights, Ohio, which maintains vacant homes for mortgage companies nationwide. Klein said his office is tracking more than 60 local ordinances that deal with foreclosed properties. Local governments taking a tougher stand span the country, from Providence, R.I.; to Cincinnati; to Chula Vista, Calif. City officials complain that local taxpayers can’t continue to pick up the cost of cutting lawns, draining swimming pools, boarding up windows and policing vacant properties. Some municipalities are responding to the challenge by doubling or tripling existing fees and stepping up enforcement of existing ordinances, while others are adding fees and penalties. Other municipalities are beefing up existing statutes. While Cincinnati has had a vacantproperty ordinance for more than a decade, in 2006 it increased the application fees for vacant proper-

ties to as much as $3,500 a year after five years from a flat $300. This year, the city began obtaining civil judgments against property owners who don’t pay their fees. It also is putting together a program that will let the city repair, demolish or barricade abandoned homes and then, to recover the cost, put a tax lien on the property. City officials say they have collected about $192,000 in fees so far this year compared with roughly $265,000 in all of 2007. Many of the vacant properties “are owned by lenders, and we are having a difficult time of getting them to step up to the plate,” said Edward Cunningham, Cincinnati’s division manager for property maintenance and code enforcement, adding that the money collected by the city goes into a fund used to deal with vacant buildings. -Wall Street Journal, July 29, 2008

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

18 L E G I S L AT I V E U P DAT E OREIA LEGISLATIVE COMMITTEE LEGISLATIVE UPDATE by Michelle Wells

The Legislature is in Summer Recess The Ohio Legislature is on summer recess, but there are many hot issues that the legislative committee is tracking on your behalf. The lawmakers may be out campaigning, but the Supreme Court is still in session. There have been several rulings that effect our industry. The R h o d e Is l a n d Su p r e m e Court has thrown out a lead based paint suit against Sherwin-Williams and two other paint manufacturers. That court ruled that they could not be held liable for manufacturing practices that were legal when they were performed. The lead based paint groups wanted about $10,000. per house to remediate the lead based paint problem. You are ask-

ing yourself what do I care what happens in R.I.? Well, within a week of the R.I. court’s decision, the cities of Columbus and Toledo dropped their suits against the manufacturers group. Other cities and states in the weeks following have dropped their suits. The Ohio Supreme Court has ruled that a landlord or property owner is not liable for discrimination when they do not evict a tenant who has made racial comments about another tenant. The Ohio Civil Rights Commission has prosecuted landlords for discrimination involving tenants using racial slurs.

Summertime is Campaign Time Ohio House of Representatives: As you know, there are 99 House districts in Ohio and all those seats are up for election. Each districts represents about 110,000 people. Currently, the Republicans hold

53 of the seats while the democrats hold 46. The Democrats have 41 incumbents running and they have no candidates in 15 districts. The Republicans only have 32 incumbents, with 3 districts with no candidates. There are 26 districts where there are no incumbents running. With a little help, we could get “friendly” lawmakers elected to those seats. The districts by number are 2, 3, 19, 22, 27, 31, 34, 35, 36, 37, 38, 40, 50, 53, 58, 70, 79, 80,82, 83, 84, 90, 92, 94, & 97. http://www.ohiodailyblog.com/content/list-2008-ohiocandidates Ohio Senate: There are 33 state senators, each representing about 330,000 people. At present there are 21 Republicans and 12 Democrats. Each is limited to two four-year terms. Even-numbered districts will be put to a vote in 2008. There are 6 former State Representatives that due to house term-limits are now running for new senate seats.

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FREE TENANT REFERRALS GDREIA and the Montgomery County office of Family and Children First have entered in to a joint agreement to provide referrals to Landlords of prospective tenants from several local non-profit agencies. These offices work with various homeless and displaced residents. An agency with a prospective tenant can now send out a blast email to all participating landlords with information on the prospective tenant such as income, number of people in the family, number of bedrooms needed and rent price range required. If you have a unit that might fit that criteria, you can then call the agency and discuss the rental. You will also have the opportunity to talk to the family and screen them however you want. To participate in this program, you may send an email to: [email protected] and request to be put on the “listserve” for the tenant referrals or you can call 937-225-4218 or 937225-4631. You may also call Mike Baughman who is GDREIA’s representative to the Montgomery County Homeless Solutions Policy Board at 937-227-2929.

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION

19

GDREIA Board Meeting The August Board meeting was called to order by Jerri Todd, President at 5:02 p.m. Those present: Mike Baughman, Mike DiFlora, Ed Evers, John Grosmann, Marsha Grosmann, Larry Hudson, Art Jones, Sham Reddy, Paul Ragland, and Jerri Todd. Absent: Dave Murray. MINUTES: John Grosmann made a Motion: Approve the minutes from the July Board meeting Approved. TREASURER REPORT: John Grosmann distributed the Treasurer’s report from June. Cash available as of June 30 was: $8,750.66. Mike Baughman made a motion: Approve the Treasurer’s report as distributed. Approved. Authorization for expenditures: Mike Baughman made a motion: Approve paying $618 for Liability insurance Approved. Mike Baughman made a motion: Renew NFIB membership at $250. Approved. REPORTS: Member Relations: Theresa Welch reported there were 14 renewals and 4 new members in May and 12 renewals and 4 new members in June. She still hasn’t received a new member list or the guests to member conversion numbers from MEI. Library: Mike DiFlora sent a list of GDREIA equipment inventory stored in the Library cabinets. Jerri Todd asked that each Board submit what GDREIA “stuff” they may have. Commercial Members: Ed Evers presented the following companies for approval as Commercial members:

COMPANY

MOTION

MADE BY

DECISION

Real Living (Cindy Comchoc) John Grosmann Ronman Investment Gp. Larry Hudson

Approved Approved

Sherwin Williams Norris insurance Internet Country Club (Monarch Cancun)

Approved Approved Approved

John Grosmann Mike Baughman Mike Baughman

Program: Marsha Grosmann distributed a schedule of programs for the remainder of the year. John Grosmann made a motion: Mail postcards for the September meeting to the registered landlord list. Approved. Will try to get sponsors for the mailing. Workshops: Sham Reddy passed out his report on the July Workshop. Net income $196.50. Government Relations: John Grosmann reported meeting with several of the local officials and with the Trotwood City Manager and Housing Inspector. He also has asked that GDREIA and GDAA be a part of the First Tier Suburban Committee. Cash Flow: Laura Ceville reported that Darrin Carey had headed up the July meeting. There were 8 adults and 4 children. The next Cash Flow game will be September 25. REIA Manager: Paul Ragland reported that REIA Manager had gotten the GDREIA data base August 5. He is getting a second domain name for GDREIA (GDREIA.biz). REIA Manager is Verisign compatible. NEW BUSINESS: Volunteers are needed. Art Jones is to put together a Volunteer recruiting Pizza Party in the near future. Have interest sheets for them to fill out ADJOURNMENT: The meeting was adjourned at 5:50 PM. The next regular Board meeting will be August 21, 2008 at 6:00 PM at the Hickory Center. — Marsha Grosmann, secretary

There was no report on guidelines for a Commercial member. Ed Evers was asked to have a draft for the next Board meeting. Members that are upgrading to Commercial status pay $250 and will be rebated their unused General Membership fees. Sham Reddy will talk to Jeff Bonham about his dues. SING: Laura Ceville submitted a report that there was a small turnout (5) at the July meeting. The next SING will be August 16.

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GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION, INC. PMB 345, 3195 Dayton-Xenia Rd., Ste 900, Beavercreek, OH 45434

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Phone: 937-586-3726 • Fax: 937-586-3699

MEMBERSHIP APPLICATION

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(Members agree to abide by our Code of Conduct)

General $125 Commercial: n Bronze - $250

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Silver - $750

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Gold - $1,250

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Platinum - $1,750

I voluntarily contribute an additional $5.00 to the OREIA PAC to preserve my rights as a Real Estate Investor (corporate checks prohibited for the PAC)

Check Enclosed

Credit Card:

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MC

n Visa

n Discover

n American Express

Name ______________________________________________

Spouse’s Name ________________________________________

Company name ____________________________________

Address ______________________________________________

City________________________________________________

State__________________

Home Phone ________________________

Work Phone ________________________

Would you like your name published in our members-only telephone directory? YES n

Zip Code __________________

Fax Number ______________________ NO n

Email Address: ____________________________________ Who told you about us? ________________________________________

The Voice of Real Estate Investors Working Together GREATER DAYTON Real Estate Investors Association Visit our web site at www.gdreia.com

POSTMASTER: Please deliver by 29 August 2008

BOARD MEMBERS * term expires 2008

President:

Presorted Standard U.S. Postage PAID Dayton, OH Permit 644

** term expires 2009 *** term expires 2010 PHONE FAX E-MAIL

Jerri Todd*..................222-3277. . . 222-3361 . . [email protected]

Vice President: Sham Reddy**............427-2626. . . 306-1445 . . [email protected]

Secretary: Marsha Grosmann***.429-3916. . . 429-3916 . . [email protected]

GREATER DAYTON REAL ESTATE INVESTORS ASSOCIATION PMB 345, 3195 Dayton-Xenia Rd., Ste 900 Beavercreek, OH 45434-6390 Phone: 937/586-3726 • Fax: 937/586-3699

Treasurer: John Grosmann* ........429-3916. . . 429-3916 . . [email protected]

Members: Mike Baughman** ......227-2929. . . 227-2930 . . [email protected] Michael DiFlora** .......776-1541 . . 754-9696 . . [email protected] Ed Evers***.................470-7384. . . 436-5069 . . [email protected] Larry Hudson*** .........478-4437 . . . . . . . . . . . . . [email protected] Art Jones*...................623-3279. . . 885-7891 . . [email protected] Dave Murray* .............335-3652. . . 335-7526 . . [email protected] Paul Ragland*** .........902-4477 . . . . . . . . . . . . . [email protected]

Commercial: Ed Evers

Gov’t Relations: Derrick Strahorn

Library: Michael DiFlora

Program: TBD

Public Relations: Marsha Grosmann

COMMITTEE CHAIRPERSONS Member Relations: SING: Theresa Welch

Workshops: Sham Reddy

Newsletter: Tom Di Nino

OPHP Coordinator: Paul Ragland

Laura Ceville

Website: Marsha Grosmann

Address Correction Requested

Cashflow Club: Laura Ceville

Community Relations: Kelly Robey

WINGS: Kelly Robey Janice Kemmer

Laura Ceville can be reached at 937-427-4521 or [email protected] Larry Hudson: phone: 478-4437; email: [email protected] Janice Kemmer: phone: 581-0507; email: [email protected] Theresa Welch: phone: 232-1593; email: [email protected] Newsletter Contact: Phone: 689-3603 or 572-1795; email: [email protected] Kelly Robey: Phone: 626-7934; email: [email protected] Contacts for other Committee Chairpersons are under Board Members above.

MEMBERS OF THE OHIO REAL ESTATE INVESTORS ASSOCIATION AKRON/CANTON REIA

REIA of TOLEDO

330-786-0258

419-327-8427

INVESTMENT PROPERTY OWNER ASSOC.

Mansfield Area REIA 419-526-2931

513-856-7722

Trumbull County FOSTORIA HOUSING PROVIDERS

330-856-4314

419-894-6547

Defiance Henry 419-762-5988

The Greater Dayton Real Estate Investors Association, Inc. (GDREIA) is a private, non-profit educational organization. We are a charter member of the Ohio Real Estate Investors Association (OREIA) and a member of National Real Estate Investors Assoc. (NaREIA), National Federation of Independent Business (NFIB), Greater Dayton Apartment Association (GDAA), Dayton Area Board of Realtors (DABR), Dayton Area Chamber of Commerce (DACC), and Xenia Area Chamber of Commerce (XACC). Information and news presented in this publication, and at group meetings, is not to be construed as legal advice. Opinions and viewpoints are those of the author (or the speaker) and not necessarily those of the organization or its Board of Trustees. GDREIA does NOT exist to render, and does NOT give legal, tax, financial, or other investment advice. We disclaim all liability for the actions taken or not taken as a result of communications from and/or to its members, trustees, speakers, and any employee. Each member should consult with his/her own attorney, accountant, certified financial planner, and/or Realtor for professional legal, tax, investment, and /or financial planning services when considering real estate or other investments. Real estate, like any other investment, involves a degree of financial risk. GDREIA does not discriminate on the basis of race, color, religion, sex, disability, familial status, or national origin. The editor reserves the right to reject any advertising or articles for publication that may be a violation of anti-discrimination laws. Send newsletter articles, classified ads or other materials to Newsletter Editor, PMB 345, 3195 Dayton-Xenia Rd., Ste 900, Beavercreek, OH 45434. Deadline is the 5th of each month. Publication of ads in this newsletter does NOT constitute GDREIA’s endorsement or approval of any products or services.

REIA of CINCINNATI 513-829-4446

MARPA 740-387-1840

REIA of COLUMBUS 614-644-4289

TRI-COUNTY 330-345-3012

GREATER DAYTON REIA 937-586-3726

CLARK COUNTY PROPERTY MANAGEMENT ASSN.

STARKE COUNTY PROPERTY OWNERS ASSOC. 330-488-1916

937-323-2641

ASHTABULA COUNTY REIA KNOX COUNTY

219-988-REIA

740-393-2687

NORTH COAST REIA TIFFIN AREA REIA

440-808-9717

419-448-7212 (Jerry)

MAHONING VALLEY LANDLORD ASSN. 330-824-0023

For current meeting times and locations, please visit the OREIA web site at: http://oreia.com/contacts/Associations/associations.html or contact OREIA Executive Director Jerry Conley, toll free 866-448-7212.