This is the very detailed story of how NARREIA came about. It is my hope that by reading this, you will better understand my motivation for spending a lot of money and time developing this national network. I hope that you can identify with some of the issues I personally had when trying to find help in residential real estate investment. I also hope you realize that we really are a group of high-caliber real estate agents whose integrity and passion for real estate meets your expectations. Be forewarned: this narrative is quite long. You might want to grab a Starbucks before you begin.

Necessity is the Mother of Invention
I had a pretty fun career prior to becoming a real estate agent. I was in the Air Force and AFRES for twelve years. I ran a small aviation training company in Denver. I helped start Frontier Airlines as a Director of Publications and later a line pilot. I ended up as a pilot for United Airlines, captaining the 737 and flying the 747 and 777 internationally out of Los Angeles. A lot of fun challenges, but the job as a pilot gave me a lot of time to explore other avenues.

I wanted to get into real estate investing to make some money on the side. When I first started, what I discovered was the following:

1. Not very many real estate agents knew anything about real estate investment.
2. Not very many real estate agents nor loan officers knew much about lending other than the standard 30 year fixed and 5/1 ARM programs.
3. Not very many real estate agents worked full time, let alone weekends. Oddly enough, it seemed the more experience the agents had, the less willing they were to work other than banker’s hours.
4. While there were plenty of good books on how to get into real estate investing, most of the methods required access to a proficient real estate agent.
5. Agents wanted to sell investments in their region, even when it would be better to invest in other markets.

I wasted years of time not investing because I could not find adequate help.

I finally jumped in at the beginning of 2003. The airline industry was in a poor condition so I decided to pursue real estate, although I didn’t know exactly how I was going to go about it. In a 2-week period starting in January 2003, I obtained my real estate license and hung it with Coldwell Banker Wardley. Coincidentally, the year 2003 turned out to be one of the hottest markets on record anywhere in the United States.

Although I got the license so I could personally invest, I wanted to do everything that I could - including buying and selling houses and homes for other people. One of the main reasons I chose the brokerage that I chose was because of a mentor there, Jon Garman. He taught me the art of the real estate transaction and how to work the system. He taught me ways to think outside the box, to think differently than the other agents.

I began to read countless books about real estate investment. “Real Estate Riches” by Dolf de Roos is one of the more motivating books about the topic. Some authors shed light on the many different criteria for financing, while others outlined the process of rehabbing a house. Some books were worth reading to learn what you should do. Other books were good examples of what you shouldn’t do. In all of the reading, it seemed there was no super-secret technique, no magic formula in a spreadsheet. One could read several good books and understand what they needed to do.

The First of Many
In April of 2003, my good friend Phil Luts and I both bought a pair of 3-bedroom houses. This was the first transaction where I assisted in the purchase of a investment property where it was not my own. We made great preparations, pretty much making it up as we went. Trying to figure out a cash flow analysis, we calculated everything, almost. We had not included the PMI in the calculations, but fortunately we were still barely positive cash flow. At this time, we felt that it was critical to be in a positive cash flow scenario.

As 2003 progressed I sensed the market was gaining momentum. My own properties had appreciated 2.5% in two months, which is a 15% annual appreciation. Phenomenal. The buzz on the internet and in the magazines was really catching on in Las Vegas.

Still flying full time for United Airlines, I was also working over 40 hours a week in real estate. By July I requested and was granted a three year leave of absence from the airline. I began buying and rehabbing houses and turning them to resale. This process connected me with many contractors and laborers, building a local network. This is also when I started a business networking group that was primarily focused on the real estate industry.

In 2001, I had designed and administered a website for pilots called PilotsUnited.com. This free site (not coincidentally as NARREIA is a free site) provided a portal for pilots to connect with the services and information they needed. This was a perfect forum to present a high-wage earning group with the incredible 2003 Las Vegas real estate market. The word caught on, and many of my early clients were pilots from United Airlines.

I learned something on every single deal. As the year continued, I started noticing that very few other agents were tapping into this phenomenal niche of the market. Having extensive experience with the internet and other technology devices, I began to fully market the people who wanted to buy investment property in Las Vegas. The more people I talked to and the more I read and I practiced, the more I began to understand the immense array of loan products and the myriad of investment vehicles.

Traditionally, real estate agents will build relationships with lenders and title company reps in hopes to get referrals from them as well as to provide joint marketing dollars. As I was fortunate enough to have a reasonable number of clients from the very beginning, I opted to not take this traditional route. I worked with several title companies and several loan officers so that I could ensure that the client got the best service. I felt that if I had too close of a relationship with my lender or title company and things hit the fan, I wanted to be unencumbered in resolving the issue in favor of my client. Nicely enough, even though I do not have a financial or marketing tie to the lenders and reps I chose to work with, they have all ended up becoming friends over time.

Throughout this time I was working with several loan officers. Primarily, I was working with Jeff Crampton of Republic Mortgage and Robert Coomer (now with Meridias Capital), as well as Dax Tobin of Meridias Capital. Using these lenders as sounding boards, especially Jeff Crampton, I was able to quickly learn the nuances specific to non-owner occupied (investor) financing. It was during this process that I learned how PMI, Interest Only and Negatively Amortizing loans, and negative cash flow weren’t completely bad things, and that when used correctly, allow you to maximize your leverage and cash flow positions.

The Best Way to Learn is to Teach
I do two things when I try to learn something. The first is to organize it in insane detail. The second is to teach it. I did this when I was an instructor on the Airbus A320. To learn the airplane inside and out, I became an instructor. I learned more from the student’s questions than any training program could ever teach me. I organized all of their questions and my explanations into a book. I wrote, designed, created the graphics, and published the book and sell it at www.PersonalizedInstructor.com.

I started to do the same thing for real estate investment. I organized seminars about the Las Vegas real estate market. I attended countless pre-seminars for national real estate investment programs like Robert Allen and Carleton Sheets. I read as many books as I had time for to develop my understanding of real estate investment. Jud Carpenter, a good friend and agent who had started the same week as me, started helping me handle the multiple transactions that I had put into escrow. This was the beginning of The United Group.

One of my more unusual revelations was that most of the real estate gurus and authors had more than just educating the clients on their agenda. For example, one of the seminars was there to encourage clients to go from door to door looking for properties that would go for well under market value and would allow the contract to be assigned to “another investor.” The angle this guru was playing was that he himself would be the “other investor” and would end up with the lion’s share of the equity while the client ended up with much less equity and had to do the majority of the work. It was certainly not a slimy tactic, but it opened my eyes to the idea that the gurus might just not have the pure agent-client relationship that I had naively expected.

Honesty is the Best Policy
By the end of 2003, the Las Vegas market was in a serious crescendo. I had averaged over one transaction a week and I had learned a lot from each client. Although I had started my real estate career with integrity being a top priority, I came to realize that it was a more important attribute than I had anticipated. I started giving 2-4 hour introductory interviews where the client could meet us (typically in our office). During these interviews, we found that once the client determined we knew something about real estate investment, they were more interested in determining our integrity than our experience.

Another underestimation was how the typical real estate agent would either avoid working with investors all together, or they would not take the time to learn about investing but would represent investors regardless. As a result, I began focusing my marketing efforts specifically on investors. The volume increased, so I started referring business to other agents within my office.

Planting the Seed
While I was referring most of my business to a select group of Realtors whom I respected, I started The United Group. As opposed to the typical real estate team, where the agents paid a good portion of their commission to the team leader or owner, our “team” was more a confederation. We were independent agents, independently marketing our own business, but we were banding together to cover each other’s backs as well as to refer our overflow clients. This convenient relationship was the foundation of the NARREIA concept of win-win. In traditional teams, the owner is the clear winner, taking a very large cut of the commission. With The United Group, and now with NARREIA, there are no fees, the referral commissions are generous, and the client gets a highly qualified agent to work with at no additional cost to them.

Almost immediately I realized that I could not refer investors to just any agent. I would educate the client, select the prospective properties from the MLS myself, provide all the cash flow data, and then I would send them out with one of the members of The United Group. Before they would go out, I would inform the client that the agent was not an investment specialist, but more a taxi driver with a SupraKey. No matter how much I tried to explain that the agent was just there to take them to the prospective properties, when they would return the clients would regularly complain that the agent didn’t know anything about investing. The lesson here was that even if the person was an excellent residential real estate agent, I needed to train a cadre of agents on investing so they could hold their own with the clients.

By January 2004, people were beginning to pay well above the appraised price of a home. This phenomenon lasted through mid-May, and many Realtors were complaining it was impossible to get an offer accepted due to too many multiple offers. Meanwhile, we at The United Group were continuously finding decent properties and getting our offers accepted. Our adaptability to the market, to shift from a Neutral to a Seller’s market and then to an unheard of Seller’s market allowed us to serve our investor clients throughout the entire frenzied Las Vegas market. We had weekly United Group meetings to determine how we could improve our techniques, dishing out lavish amounts of constructive criticism in an attempt to refine our system.

January 2004 was very significant in that I hired Sue Rudden to be my transaction coordinator. Jud’s own business was taking off, and Sue came highly recommended. This was the first official employee of The United Group and marked the beginning of The United Group becoming a true real estate team.

With a gift of gab, I started posting market conditions all over the web. While I continued the more traditional marketing tactics, I spent a considerable amount of energy getting my name and website information on any real estate website that I could find. These articles led many investors to our website www.TheUnitedGroupRE.com where they were able to read the many pages of investment information (much of this information now appears on www.NARREIA.com).

The Catalyst
In the spring of 2004, I met two clients that became the catalyst for NARREIA. Phil M. and Robert M. found me through the internet, and we arranged a visit in Southern California. Mixing a rare Disney family vacation with several business meetings, Robert and Phil indicated that they wanted to invest on a more national level. Since I wanted to diversify my portfolio, and since they indicated that they wanted to look at Phoenix, we located several agents in Phoenix and arranged for a visit.

Coincidentally, I had several other agents that I wanted to organize nationally. As I was referring a lot of business all over the US, I wanted to create a system that would make this process automatic. The timing of adding an agent in Phoenix was perfect.

I went to Phoenix and met with several agents. Jason LaFlesch of Arizona Investment Liaisons appeared to offer the most for my clients. The next day, Phil, Robert, Dave M., and I piled into a luxury van with several other groups that Jason had arranged. We visited several new construction sites, and between the four of us we purchased 11 properties. I discussed with Jason the concept of a national organization, and he was immediately on board with the idea.

The volume from our marketing became too much for me to handle by myself, so I started to train other agents on how to talk to investors. Not every agent can “talk the talk,” and after a long search I found Richard Lasica and later Scott Meservey. Once Richard and Scott were up to speed, we were able to ensure that each of our investor clients would be shown properties by someone who could address the majority of their questions.

Bringing an Idea to Life
Being very tech oriented, I decided the best way to create the national organization of Realtors who were qualified to work with investors was to create a website. Although I have extensive experience in developing websites, I realized that I didn’t have the time to create yet another website. In spite of my propensity to control every possible element, I was discovering the value of delegation. I also realized the website that I envisioned required some programming skills that I didn’t possess and that the site would probably require a team of developers. After researching website development companies, I contacted Jonathan Remund and Jeff Klein of Bizwala.com. (This was an excellent move… I highly recommend Bizwala if you’re looking to have a website created for yourself.)

By June of 2004, the Las Vegas market started to top off. In spite of this, I had between 12-30 transactions in escrow at any given time. The development of NARREIA became the focus of my daily business, and I needed someone who could lead the team I had built. I needed a tactical leader so I could pursue the more strategic, national issues.

I contacted Kevin Carman who had been a Realtor with Coldwell Banker in Cocoa Beach, Florida. Kevin and I had met in Phoenix, Arizona, in 1991 where we attended pilot training for the U.S. Air Force. Kevin had completed his active duty assignment and was currently an MD-11 pilot for FedEx. He and I dispute how much I needed to encourage him to take a leave of absence from FedEx to come out to be my right hand man, but by August, 2004, he had moved to Las Vegas and obtained his broker's license in Nevada.

About this time Cliff Baird, a very good friend who spoke at real estate conventions, introduced me to his son, Brad. Brad had the foreclosure process well under control in Phoenix, so I went down to meet him. We quickly realized that he needed to be part of NARREIA, so I introduced him to Jason LaFlesch. As Brad is the host of “The Real World of Real Estate” on 960 AM the Patriot, he had us as guests on his radio show.

In October, 2004, I started contacting and visiting potential advisors for the website. Our objective is to have an appropriate number of advisors in every market in the U.S. Because I believe that you can find some kind of investment property in any market, I think this is a challenging but realistic goal. The criteria for new advisors is tough, and becoming an advisor is by invitation only. As the word of NARREIA spreads, the demand to become a NARREIA advisor will escalate. We believe this will create an incredibly talented group of real estate investment advisors.

The development of the NARREIA.com website was (and still is) a very creative process. Along with Bizwala, the core group of NARREIA often gets together in Phoenix and spends hours coming up with idea after idea for the site. This constant evolutionary process played havoc with the launch date for the website, but it’s also the reason the site will become the most robust real estate investment website ever.

In the End
There you have the long winded, detailed explanation of how NARREIA came about. It is my hope that you now understand why and how NARREIA came to be. Our advisors are not national gurus. They don’t know everything there is to know about each investment vehicle or loan product, and they should not claim they do. We’re an association of agents who have a good handle on how to go about locating good investment properties and are willing to help you in return for you using them as your agent. Now go enjoy the site! (did I mention it is free?)

Sean Brown
NARREIA

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