KREE Real Estate Exchangors, Louisville, KY

July, 2013
KREE Real Estate Exchangors,
Louisville, KY
KREE MEETINGS:
Please join us on the First
& Third Thursday of each
month for our Creative
Real Estate Marketing Sessions.
8:45am to 11:30am
RAMADA PLAZA
LOUISVILLE
9700 Bluegrass Parkway
Louisville, KY 40299
Page 1
KREE To Partner with
NCE
Russell Quick
Page 2
Kessler’s Corner
Kree Social Corner
Creative Real Estate
Jargon, SEC—Society of
Exchange Counselors
Page 3
Business Valuation
Methodologies & How
To Value A Business!
Brian Mazar
A Few Choice Words
Page 4
Issue 8
KREE To Partner with NCE
At the May Board of Directors meeting the Board voted to partner up with the National Council of Exchangors (NCE). That means we will eventually be linked up
to their web site, we will be on their mailing list, we can use their marketing tools
and other things they offer. If you want to join NCE personally you can do that
which gives you a few added advantages.
We will be linking up with them for our annual Marketing Session next April. That should bring
in another 20-30 people that are exchangors and many of them will be from west of the Mississippi River. As times goes on I am sure that number will rise significantly as more of their members’ feel there is added benefit to going across country for a marketing session. That will open
up many new markets for our clients and ourselves to market our properties. Our packages next
year will be on their format which we can use all year round and we will also be able to use them
at IREX and OCREA exchange meeting later this year. You will not have to put your packages
into ree.com anymore.
For a little more about NCE let me provide some information they relayed to me.
NCE is a Nevada corporation and they hold most of their national sessions in Las Vegas, which
is why they want to partner with our April session as it gives them an Eastern session. NCE provides services which include client and group development, educational opportunities, information, technical support, training, networking opportunities and promotional materials.
They have a benefits brochure which I will try to remember to bring copies to our next meeting.
The benefits of interest are having the ability for our members to search all exchange groups who
participate in the database. They provide tools to exchange groups so they may easily create
professional level marketing books for their own meetings. Both of these benefits are free. For
$25.00 per year participants’ inventory will be available to exchangors throughout the country.
When new properties are placed in the inventory you can preset yourself to receive that information by parameters that you want.
Full membership is available for $195.00 per year ($99.00 for the balance of 2013) or payments
automatically withdrawn from your account of $20.00 per month. Some of the benefits for full
membership include private on-line broadcast of your listings, assistance from all members with
one e-mail, national designation, national marketing book mailed to you by PDF whether you
attend the meetings or not, roster of members, tools and forms and a $100.00 discount on national meetings sponsored by NCE.
I am excited about the potential of this membership and the marketing benefits it will provide.
As we move forward with this agenda I hope you will become affiliated.
Technology
Paula Colvin
Member Spotlight—
Craig Heindel
Call For Nominations
Join the KREE Board of Directors. Two year term. Join
the fun and get a free lunch at our monthly Board
Meetings. Contact David Day at:
502-296-5596 or [email protected]
Page 2
KREE
Social Corner
The KREE Social Committee would
like to thank Ben Morris and U.S.
Bank for hosting another great event
at Louisville Slugger Stadium on August 1, 2013. Everyone had a great
time even though our Bats lost.
The KREE Social Committee would
like to thank everyone who came out
and celebrated Mark “The Big Dog”
Lechner’s birthday on August 10,
2013 at Vernon Lanes!
In addition, the
KREE social
committee
would like to
invite you to the
following
events:
September we will be going to
Check’s Café – 1101 E. Burnett Ave.
for a fun night of karaoke. I’ll update
everyone and send an invite once we
have a definite date.
October we will be going back to
Derby Dinner Playhouse for a murder
mystery. More details to follow soon.
November we will be going on a
ghost tour of Old Louisville. I’m
working with Barb Lechner to finalize
the date and details.
December 6, 2013 will be KREE’s
annual holiday party. Our location
has moved to the Marriott Louisville
East in the Bluegrass Industrial Park.
The event will be from 6:00 until
10:00 pm. Tickets are $40.00 each
and there will be a cash bar. A block
of rooms have also been reserved.
The Social Committee knows we
have a great group of people and we’d
like everyone to get to know each
other better and have a great time!
We’re looking forward to seeing you
at the upcoming events.
Sincerely,
Michelle R. Rawn
KREE Social
Committee Chair
Kessler’s Corner
Don Kessler’s World of Creative Ideas
Edited by Dan Kessler
“Up Your Yield”
Situation - You have an opportunity to purchase a $5,000 note paying
$50.00 per month including principal and interest at 8% - for
$4,000.00 or a 20% discount. The end result of this
discounted purchase is an increase in your yield is 12.17%.
You would like to “up your yield” even more.
A Solution - Contact the payer of the note and instead of discounting the
note you offer to reduce the interest rate if he will increase the payment by
$100.00 per month. By doing this you are receiving your initial investment
back much quicker resulting in a new yield of 16.08%.
Note - To determine your yield under different payment
scenarios Calculate the number of months to amortize
$5,000.00 at 6% payable at $100.00 per month, then insert
your cost of acquiring the note at a value $4,000 to determine
your yield.
EVEN BETTER IS - $150.00 per month at a 4% interest rate
will increase the yield to 19.75%
Looks like everyone got some benefits! Share your ideas
with the group!
Good luck and see you at the next meeting!
Dan
Creative Real Estate Jargon, SEC—Society of Exchange Counselors
Catalyst – An element (cash, property, services, or person) brought into an otherwise impossible or
improbable transaction to effect its completion.
Client – A carefully counseled person under contract whose situation has been accepted for representation by the professional.
Counseling – Seeking information, which enables one to help a client achieve his goals through intelligent questions and insightful listening.
Counselor - A real estate practitioner who has acquired the knowledge and developed the skills
necessary to more effectively assist the client in achieving his goals.
Couplets – That segment of a multiple party exchange where property is transferred between only
two parties at a time. The total exchange transaction may consist of any number of these segments or
couplets.
Crank – Cash generated from a property or note.
Created Paper – A note originated by an owner under agreeable terms to owner and used to acquire
benefits such as other property without transferring title to the property that is used to secure the note.
Currency Land – Land that is used like money as a down payment on other property.
Customer—An uncounseled person in a transaction with whom the professional has no contractual
relationship.
CYA—Cover Your Assets (Assets is sometimes abbreviated). Steps taken to protect yourself.
Dealer—One who buys and sells real estate as a business, as opposed to an investor. The term has
importance in relation to taxation of income derived from dealer activities.
July, 2013
Page 3
Business Valuation Methodologies & How To Value A Business!
Business Valuations have grown to be
both a science and an art. To arrive at a
defensible business valuation (value) an
expert on valuations needs to follow the
standards and norms that have been developed by experts in the business valuation services field. Many well intentioned
business valuation services professionals
fail to produce a accurate and defensible
valuation because they do not possess the
knowledge of the "art". The art "how to
value a business" portion of business valuation comes from the forces of the market
including mergers & acquisitions services
experience and the constant changing dynamic of expected rate of returns for given
risks.
How to Value a Business? There are
several commonly accepted business valuation methodologies, the following are the
most common methods: Capitalization of
Earnings, Discounted Future Earnings,
Adjusted Book Value, Comparable Price,
Excess Earnings Capacity. The business
valuation expert will carefully utilize the
appropriate methods and also utilize the
applicable weights to each of the methods
to arrive with a accurate and defensible
business valuation (value).
In evaluating a business opportunity business buyers and investors use three key
factors in a business valuation (value).
Buyers (Investors) of businesses place an
extensive weight on the business's ability
to generate sufficient earnings, since these
earnings allow them to 1) pay themselves
a suitable salary, 2) be able to service the
debt incurred in the acquisition of the busi-
ness, and 3) receive a appropriate return
on their investment.
Additionally buyers (investors) look at
value drivers which are characteristics
that reduce the risk of owning the business or increase the probability the business will grow in the future. If these characteristics are present in a business, a
buyer will pay a premium price. The most
common value drivers include: Management Team, Systems & Procedures,
Customers & Suppliers, Facilities &
Equipment, Financial Discipline and
Growth Strategy.
Another consideration of a business valuation (value) is the relationship between
size and risk. Mergers and Acquisitions
professionals refer to a "small-company
discount," which often applies because of
the perception that very small companies
are riskier than larger businesses. It is
generally understood that larger businesses are more substantial and stable
organizations because they have found a
way to grow beyond the efforts of the
owners (s) and are therefore less reliant
on the owner(s). Because of this perception, the size of a business affects the
valuation of a business.
One of the biggest factors of "how to
value a business" and in determining the
valuation (value) of a company is the
extent to which an acquirer (buyer) can
see where the company's sales will come
from in the future. A business that must
bring new business each month, the value of such a company will be lower than
if the company had repeat sales and
could pinpoint the source of future revenues.
A recurring revenue model acts like a powerful pair of binoculars to help see month
or even years into the future, so creating a
steady stream of revenues is the best way
to increase the value of a business. There
are various forms of recurring revenue.
The more assured the future revenue is,
the higher the business valuation of the
company.
Why Perform a Business Valuation?
A Business Valuation is an important tool
because it helps to validate and benchmark the true worth of your company.
Once you know the value of your business,
you can concentrate your resources on
maintaining and increasing its value.
A Business Valuation prepared by a valuation services expert sets in place a credible
value benchmark. Professional business
valuation services prepare a fully documented detailed written report and provide
a realistic, credible, and defensible value
of a company.
Brian Mazar, CBI, MBA
502-244-0480 x24
[email protected]
www.fortunebta.com
Board of Directors
OFFICERS
President: Paula C. Colvin
[email protected]
Vice President: Michelle R. Rawn
[email protected]
Secretary/Treasurer: Dave Parks, Sr
[email protected]
Immediate Past Pres.: David Day [email protected]
DIRECTORS
Term Ending 12/31/13
Craig Heindel [email protected]
Roger Taylor [email protected]
Ben Morris [email protected]
Russell Quick [email protected]
Term Ending 12/31/2014
Wade Ramey [email protected]
Paul Jordan [email protected]
Tony Stefater [email protected]
A thought for today and for tomorrow:
A quote from the Dalai Lama, , “Man sacrifices his health in
order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about
the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never
going to die, and then dies having never
really lived.”
Hope you have a great week and really consider these words.
Membership Chairman
Paul Jordan
502-992-4107
[email protected]
KREE—KY Real Estate Exchangors, Inc.
PO Box 32398
Louisville, KY 40232
Newsletter Information:
Paula C. Colvin
502-817-9990
[email protected]
Anne Ray
The Mission of the Kentucky Real Estate
Exchangors is to unite those who are qualified in
real estate exchange counseling into a network
organization for the mutual benefit of the members
and their clients. The agents of KREE are willing
to give 100% of their knowledge and abilities to
complete a transaction.
502-276-3783
[email protected]
Technology Page
How can you tell if your computer has a virus?
If your computer displays any of the follow symptoms, it may
be infected with a virus:
 Existing program icons or files suddenly disappear. Viruses
often delete specific file types or programs.
 If you start your browser and it takes you to an unusual
home page (i.e., one you didn’t set) or it has new toolbars.
 Odd messages, pop-ups, or images are displayed on the
screen or strange music or sounds play.
 Data files become corrupt. However, files can become corrupt for reasons other than a virus infection.
 Programs stop working properly, which could be caused by
either a corrupted file or a virus.
 Your system slows down or takes a long time to boot up.
Make sure your antivirus software is up to date. Most antivirus software have automatic update features.
Other mobile devices, such as iPads and smartphones also
need virus protection. Because these devices are running operating systems and contain files, they are susceptible to infections
by viruses. Cybercriminals are now hiding viruses in legitimatelooking apps for download to mobile devices. Many companies
now offer antivirus software specifically designed for these devices. You need to make sure you purchase the correct version of
the software that is designed for the operating system on your
mobile device.
What is Wolfram/Alpha? It’s a new way to search for information on the Web. At www.wolframalpha.com, there are massive
amounts of data and algorithms that represent real world knowledge. Instead of typing in a question and getting internet search
tools, it understands the questions and computes the answer. It can answer questions regarding mortgage rates, technology, geography, cooking, business, travel, news, music and etc. Check it out!
Member Spotlight—Craig Heindel
Sometimes members and others ask me why I drive to
Louisville twice a month for KREE meetings. Let me share a
short (?) story that may explain it.
Many of you may have known Pat Gorman, member
emeritus of KREE. Pat was a gentleman’s gentleman: Sharp
dresser, sharp mind, always polite and kind. A few years ago,
Pat and I both attended an Innwood Condo Association meeting.
After the meeting, he approached me and offered to sell me his
three units at a much discounted price of, right around $20,000
each, cash. Being in an acquisition mode, I immediately accepted. I contacted his agent, wrote a purchase agreement and started the hunt for funding.
After what seemed like a short time (it wasn’t), his agent
contacted me and advised me that Mr. Gorman was tired of waiting for me and was selling the units to someone else. I replied
that I felt we still had a contract and still wanted the units. A few
days later, she contacted me and stated that my contract was
void and Mr. Gorman was closing the next day with another buyer.
Finding this distressing, I called my attorney, Hank S. and
got his opinion that my contract was still valid. What to do?
Hank filed a “memorandum of purchase agreement” with the
clerk’s office.
Late the next afternoon, I got a call from Pat Gorman. It was
not the Pat Gorman I knew! This guy was ranting and raving and
most upset. Apparently, he had closed on one of the units, only to
get a call from the closing attorney stating that the proceeds check
was “stopped payment.”
After inviting me to never cross the Ohio southbound again,
Pat calmed down and we agreed to release the closed unit in return for him honoring the original agreement on the other two
units. We scheduled the closing for Thursday, about two weeks
later. Guess what my have/want was!!
About two weeks later, I showed up for the KREE meeting, with
the closings scheduled for that afternoon, but still not funded. During the meeting, I got a call from IREX member, Ron Tedrow,
agreeing to fund one of the two. After the meeting, Mimi Guarnieri
approached me and offered to fund the other one!
End of story? We closed that afternoon, everyone was happy. Pat and I made up, and I was the proud owner of two more
Innwood units.
WHERE ELSE BUT KREE!