Tom Hennigan

Real Estate Investing

       Tom Hennigan began his real estate investments in New Orleans in1980 when he purchased a “fixer-upper” to rent out just for the tax benefits.  After attending Al Lowrys “No Money Down” week-end seminar in the fall of 1981, he immediately became a full-time real estate investor; buying, rehabbing, selling and renting up to 25 single family homes a year. By 1986 Tom had accumulated 75 SFH rentals when the bottom fell out.  Massive un-employment in the New Orleans area resulted in 25 vacant houses.  Cash flow went from $10,000 per month positive to $10,000 negative.

 In the summer of 1986, Tom moved to San Antonio and began brokering private mortgages and purchasing partials. This also gave him a break from rehabbing, tenants and rentals, and allowed more time for developing the National Leadership Congress (now known as National REIA). In the fall of 1987 after turning control of NLC to others, he refocused his efforts to building the escrow service company. With the serving business booming in Louisiana, Tom moved back to the New Orleans area in 1991 and his investments turned almost exclusively to real estate paper (purchasing mortgages, tax deeds, making hard money loans and buying real estate subject to land contracts). Tom has owned & managed up to 75 rentals at a time.

  Contract Servicing

            In February 1985, Tom formed Escrow Servicing, Inc., to service private mortgages and land contracts. The original business plan was to service the needs of members of New Orleans REIA by assisting them with buying and selling their properties. Interest rates were high and the demand for seller financing was growing.  Louisiana Law favored selling under a Bond for Deed (a.k.a. Land Contract) because by definition, Bond for Deed is a contract to sell not a contract of sale, therefore the due on sale@ provisions did not apply. In addition, cancellations for non-payment were simple as compared to foreclosing on a mortgage.  Louisiana Law actually protects both the purchaser and seller by requiring an escrow agent to collect payments and pay mortgage holders first, with the balance paid to the seller. By teaching attorneys and real estate agents how-to properly structure Bonds for Deed the servicing business exploded. The portfolio of contracts being serviced provided a gold mine for investment opportunities. In 2002, Tom sold a $100 million servicing portfolio to a national company and down sized the company from 18 employees to one part-time employee. Tom took early retirement. By the time Hurricane Katrina hit New Orleans, the business had regrown to over $12 million in contract servicing and on May 1, 2006 Tom sold the company.

 Private Mortgage and Tax Deed Investments in a Roth IRA

            Tom purchased his first tax deeds in October 1982. The initial investment of $2,500.00 became a five-year seminar in Louisiana tax deeds. The on the job training proved that tax deeds were an ideal passive investment for his IRA account. In order to increase tax free investments, his company funded a Simple IRA for all employees. Then Roth IRA became available in 1997. Upon learning the benefits of Roth, Tom deferred enough earned income to qualify for the new Roth. At that time, Tom, Peggy (since deceased) and their son, directed their IRA Administrator to form a Limited Partnership FBO their Roth IRA.  This gave Tom full control. Over the next two years they converted their regular IRA and Simple IRA investments into the Roth IRA which went directly to the Partnership.

 Instructor Real Estate

         In 1984 Tom began instructing classes for NOREIA members. (Contracts, Bond for Deed a.k.a. Land Contracts, Financial Calculators and Time Value of Money) In 1989 Tom wrote and published a booklet, Louisiana Bond for Deed. Over 25,000 copies were distributed to attorneys, title companies and real estate agents. It is still the most used reference on the subject today. Tom also taught Bond for Deed classes to thousands of licensed real estate agents from 1989 thru 2003. Attendees qualified for 4 hours of CEC from Louisiana Real Estate Commission.

 Legislative

         Tom became involved in the legislative process in April of 1993 when he learned about proposed legislation that would have been disastrous to property owners, as well as investors and other buyers. Tom rallied the troops and delivered over 100 buyers, sellers, real estate agents and investors to the committee hearings. After he testified before the Civil Law Committee about the value of Land Contracts to Louisiana citizens, the proposed legislation died and never made it out of committee. With victory at one session, Tom knew that the opponents (bankers and mortgage companies) would be back the following year with more ammunition. So, Tom didn’t just quit there, he began to invest in the political process (both time & money) and countered the opponents by proposing legislation designed to strengthen the status of bond for deed with additional protection for the buyer. Competing bills forced the Legislature to refer the matter to Louisiana Law Institute Committee for review. Tom became the only non-attorney appointed to the Law Institute Committee on Bond for Deed. By the time the committee wrote it’s recommendations, Toms’ views were in the majority and the committee wrote the legislation requiring Licensed and Bonded Escrow Agents for Bond for Deed to process payments and recommending Homestead Exemption status for purchasers of real estate under Bond for Deed who occupy the property as their home. Both bills passed, Bond for Deed became respectable and Escrow Services, Inc., became the largest service company as a Licensed Escrow Agent in Louisiana. Today, Tom still contributes to political campaigns and keep abreast of proposed legislation that could affect his holdings in Louisiana.

 Associations

 New Orleans REIA. 1982 to present

Tom joined REIA in1982. Next thing he knew, he was on the Board when REIA and the RAND group incorporated into New Orleans REIA. The new NOREIA had a total of 35 members. With dedication membership grew and Tom became President in December 1984.  By December 1985 membership had grown to 800 paid members.  As President, Tom formed the 500 club an advanced sub-group with membership limited to NOREIA members who controlled over $500,000.00 (appraised value) in 5 or more rentals. Quarterly dinner meetings for the 500 club were held at a local country club. Tom still teaches and attends meeting when he is in New Orleans.

 National Leadership Congress (NLC) Founded, Funded & Promoted 1985 to 1987

While President of NOREIA, Tom proposed hosting a meeting of investment group leaders from around the country. The Board agreed, and funding for the first National Leadership Congress (NLC) meeting was approved. The First Annual NLC was held on October 17, 1985 at the New Orleans Marriot.  Tom then sponsored the next meeting for leaders in Orlando in January 1986.  He continued with regional NLC meetings in Atlantic City, Dallas and Lake Tahoe during 1986.  He also promoted week-end R/E conferences with many groups and started NLC Speaker Bureau to book speakers for groups. In January 1987 Tom promoted a 3 day-16 speaker event in conjunction with the annual NLC meeting in Orlando. There were 125 REIA leaders in attendance and 400 attendees to the conference. In June 1987 Tom took the regional NLC meeting to Atlanta.

 In August 1997, Tom was unable to handle the financial commitment for the continuance of NLC, Tom turned everything (group data and speakers bureau) over to Paul Bauer and Jean Yevick. Since National Leadership Congress was a d/b/a of Tom Hennigan and the finances were included in his Federal tax return, they changed the name to Real Estate Leadership Association of America (RELAA). RELAA is now National Real Estate Investors Association Inc., and Paul is still running the Speakers Bureau.

 American Escrow Association 1995 to 2001.
San Antonio REIA 2006 to 2010.
Alamo REIA, Founder 2011
REIA Investments, LLC, Founder 2012