Newsletter April 2008

Published on May 2016 | Categories: Types, Business/Law, Real Estate | Downloads: 57 | Comments: 0 | Views: 473
of 16
Download PDF   Embed   Report

April Investment News from Mid-America Associatin of Real Estate Investors

Comments

Content

Investment News
Newsletter of Mid-America Association of Real Estate Investors April 2008
414+ Members

How to Save up to 90% on Title Insurance
By William Bronchick If you have ever bought or sold real estate, you have probably paid for title insurance. What exactly is title insurance? Why do we need it? How can I save money on title insurance? These are common questions asked by real estate investors. Whenever title passes, the seller usually gives a deed containing certain guarantees or "warranties" (hence the name "Warranty Deed"). The seller warrants that title is good, that is, no one will come challenge the integrity of the title. For example, if a deed that was passed before him was forged, all subsequent transfers are void. Other problems may be more subtle, such as a deed with an incorrect legal description or misspelled name. Any irregularities in the "chain of title" will place a "cloud" on the integrity of the title. The Title Search When you are ready to sell a property, a title search is performed by a title company or attorney. The title searcher follows the chain of title back about 50 years, tracing the ownership through deeds recorded in pubic records. The searcher also checks to make certain that previously recorded mortgages and other liens have been released. Based on documents found in public records, the title company or attorney will prepare a "title insurance commitment." A commitment is a statement that based upon certain documents found by a search of public records, the company will issue a title insurance policy for a certain fee. The Title Insurance Policy The title insurance policy, unlike most insurance policies, covers past events. For example, the daughter of a previous owner claims that her father conveyed a deed while not mentally competent, the current ownership may be in jeopardy. The title insurance company will defend the claim and pay for any damages (usually the value of the property). The policy does not cover claims based on events that occur after the policy is issued. Furthermore, the policy usually contains numerous exceptions, such as claims based on information undisclosed to the title company. Thus, if you are aware of any potential problems that might lead to a claim, your failure to disclose this information to the title company will lead to a denial of a claim based on those events. Ask for a "Re-issue" Rate A title insurance coverage starts from ancient history and ends from the date you transferred title. Since most transfers are insured by a title company, the longer you own the property, the more the policy costs. Consider this: if you buy a property and the transaction is covered by title insurance, then you sell it six months later, what are the chances that something went wrong in the last six months? The answer is that the chances are slim to none, so the risk of a claim against the title are slim to none. For this reason, title companies offer a "re-issue" rate. The re-issue rate is a discounted price (usually about 40%) on the title insurance policy if another policy from a title company was issued on the same property within the last few years. The rate is lower because any claims that arise from events before the previous owner are covered by the previous policy. Thus the new policy really deals with the risk of claims from events that occurred while you owned it. Try a "Hold-Open" Policy If you are buying a property with the intent of re-selling it within a year, ask the title insurance company for a "hold-open" policy. For a small fee (usually an additional 10% on the policy), the title company will hold a title commitment open for a year or more. Rather than issue a policy based on the first transfer (from the seller to you), they will issue a policy on the second transfer (from you to the next buyer). Since the seller usually pays for title insurance, you can pay the additional 10% when you buy, saving 90% on title insurance when you sell.

MAREI
Mid-America Association Of Real Estate Investors
Mid-America Association of Real Estate Investors (MAREI) is one of the largest real estate investor associations in the mid-west. MAREI members consist of full and part-time investors, beginning investors, real estate brokers and agents, attorneys, contractors, accountants, property managers, renovation specialists, appraisers, bankers - people who want to enjoy the many benefits of real estate investing. MAREI was established in 2003 and promotes networking and educational opportunities to its membership. MAREI services members in Kansas, Missouri and Nebraska.

April 2008

Investment News

INVESTMENT NEWS © 2008 by Mid-America Association of Real Estate Investors (MAREI), a Real Estate Trade Association. Published monthly by MAREI and included as benefit for our members. Quotations and reprints are permitted with full credit given to author, plus “The Investment News: Newsletter of Mid-America Association of Real Estate Investors.” Subscriptions are $59 per year or are included with membership. MEMBERSHIP Twelve month individual membership is $99, 2 Person Membership is $149. Guest Fee is $25. Articles must be received by the 1st of the month two months prior to issue date to be considered for publication. To be considered for a specific issue, it is recommended you contact the Editor at least three months prior to issue date. All submissions are at the discretion of the editor and are subject to editing. Advertising space deadline is the 1st of the month one month prior to publication. All camera-ready artwork and materials for non-camera ready ads are due by that date. Please see www.MAREInet.com for more information.
CODE OF ETHICS MAREI members are expected to be civic minded and willing to operate with high standards of honesty and integrity. It is our duty to conduct ourselves with the highest principles of the free enterprise system. We strive for MAREI to be synonymous with competence and fairness. As MAREI members, we hereby bind ourselves to this code of ethics: 1. 2. 3. 4. 5. We shall not discriminate against any person with regard to race, color, religion, age, national origin, sex, handicap or familial status as defined by current Kansas, Missouri, or Nebraska law. We shall recognize that real estate is a service related industry. We shall refrain from engaging in any illegal practices, or defrauding any member, customer, or association, with the aim of always conducting business in a professional manner. We shall endeavor to stay informed and updated on matters affecting housing in our communities, and adhere to local, state and federal laws. We are individually responsible for our own due diligence and continuing education. Members are expected to verify any and all assumptions regarding business decisions to prevent falling victim to fraud, misrepresentations and illegal practices.

MISSION STATEMENT
To provide education, discussion and networking opportunities to help real estate entrepreneurs & investors reach their financial goals using sound, honest business practices.

BADGE POLICY
All members of Mid-America Association of Real Estate Investors and guests must wear a name badge to all General Meetings. There will be no exceptions.

Further, if any allegations of conduct considered detrimental to the purposes and interest of MAREI are received in written and signed communication to the management, we will consider the matter. Should a decision to take further action be made, a furnished copy of said allegation (s) to the accused, who shall be given adequate time to reply. Thereafter, management shall take such further action as it may deem property and in accordance to this code of ethics.

The information contained herein is believed to be accurate; however, it is not guaranteed or warranted in any manner and is subject to change without notice. Writers’ and speakers’ opinions are not necessarily those of MAREI. You are advised to seek professional advice.

Mid-America Association of Real Estate Investors 115 E Gregory Blvd, Suite B Kansas City, MO 64114 Info Line: Phone: 816-374-5885 Fax: 816-523-4448 www.MAREInet.com [email protected]

Mid-America Association of Real Estate Investors is a Member of the National Real Estate Investors Association And the National Association of Responsible Homebui

Page 2

———— Investment News —————

www.MAREInet.com

Illegal Flipping and Lender Seasoning
By William Bronchick

There has been a lot of negative press and misinformation lately about double-closings. Many people have been indicted recently under what the press has labeled "Property Flipping Scams." Misinformed lenders, real estate agents and title companies will tell you that double-closings are now illegal. In fact, they are nothing of the sort. A double closing is simply two back-to-back closings wherein the proceeds from the second closing is used to fund the first closing. Both closings are done in escrow so that the "middleman" can buy and resell a property for profit without using any of his own cash. The middleman profits because he buys the property below market and resells it for market price. This process has been done tens of thousands of times over the last 100 years - legally, ethically and PROFITABLY! The so-called "illegal property-flipping schemes" work as follows: unscrupulous investors buy cheap, run-down properties in mostly low-income neighborhoods. They do shoddy renovations to the properties and sell them to unsophisticated buyers at inflated prices. In most cases, the investor, appraiser and mortgage broker conspire by submitting fraudulent loan documents and a bogus appraisal. The end result is a buyer that paid too much for a house and cannot afford the loan. Since many of these loans are insured by the Federal Housing Authority (FHA), the government authorities have investigated this practice and arrested many of the parties involved. Despite the negative press, neither flipping nor doubleclosings are illegal. The activities described above simply amount to loan fraud, nothing more. Newspapers have inappropriately reported the activity as illegal "property flipping," rather than simply "loan fraud." So, whenever you hear a real estate agent or mortgage broker say, "flipping is illegal", you know they are misinformed. The misunderstanding of the flipping business has not been without consequence. Many title and escrow companies simply will not do a double-closing. Fortunately, there's many that still do double closings, but they are also keeping a close eye on potential fraud (as they should). Some lenders have placed "seasoning" requirements on the seller's ownership. If the seller has not owned the property for at least six months, the lender will assume that the deal is fishy and refuse to fund the buyer's loan. This may be a problem if you bought a property cheap and are reselling it quickly for a profit (the good, old American way!). This should not be confused with LAW - it is simply an underwriting guideline for some lenders. Of course, guidelines are just that - by going up the chain of command, you can generally get approval from loan underwriting by showing the property is being resold for a higher price because ei-

ther it was purchased in a distress situation (e.g., foreclosure) or that substantial repairs were made. Keep good records of your repairs to show to the lender. If the buyer is getting an FHA insured loan, there is no way around the "seasoning" issue. FHA regulations prohibit the funding of a purchase where the seller has not owned the property for at least 90 days, NO EXCEPTIONS. This generally should not be a problem in a fix-and-flip situation, since it will likely take you 90 days by the time you acquire, rehab and sell. But, if you are planning on buying the property and reselling it in a double-closing, the endbuyer CANNOT go with an FHA loan. Bronchick's Rule #14: Always Remain in Control of Your Deals! A smart investor should stay on top of the process and anticipate these issues. If you are buying a property and reselling it quickly, particularly in a double closing situation, you must anticipate this problem and deal with it. Let the buyer, his real estate agent and his lender know that there may be a seasoning issue. If you stay in control of the loan process and steer your buyers to a mortgage company that doesn't have a hang-up with doubleclosings, then seasoning won't become an issue. Generally speaking, only FHA and subprime lenders have the "seasoning hang up" - FNMA underwriting guidelines do not prohibit funding a purchase money loan where the seller has not owned the property for a minimum period of time. If you do get into a last-minute jam in a double-closing situation, there is a solution, which is called a "reverse assignment". You simply assign your contract with the end-buyer back to the owner and step out of the deal. Your "consideration" for doing so, is the profit you would have otherwise made. This consideration can be documented in writing and secured by a lien on the owner's property to be paid to you at closing.
William Bronchick, CEO of Legalwiz Publications, is a Nationally-known attorney, author, entrepreneur and speaker. Mr. Bronchick has been practicing law and real estate since 1990, having been involved in over 600 transactions. He has appeared as a guest on numerous radio and television talk shows including CNBC Power Lunch. He has been featured in Who's Who in American Business, Money Magazine, the Los Angeles Times and the Denver Business Journal. William Bronchick has served as President of the Colorado Association of Real Estate Investors since 1996. He also has numerous articles at MAREInet.com.

www.MAREInet.com

———— Investment News —————

Page 3

General Meeting - April 8th, 2008 Protect your Investment Use Your Title Company Attorney Ron Kraft from Accurate Title
Currently, we probably all know that we need a title insurance policy on every real estate transaction. But do we know all the things our title company can do for us? We have asked Ron Kraft and his staff from Accurate Title to join us on Tuesday April 8th to answer a few questions: What does a Title Company Do, What is Title Insurance, How do We Order Title, What are The Fees, Who Signs What When, and more!
Remember that we record our General Meetings and make them available to our members online. Join us at the Overland Park Marriott on Tuesday April 8th 2008. 6:00 to 7:15 pm Networking & Vendor Expo 7:15 to 7:20 pm Announcements 7:20 to 7:30 pm 30 Second Deals 7:30 to 9:00 pm Presentation and Questions and Answers. Please see www.MAREInet.com and click on General Meeting for exact addresses, more information and to check on scheduling changes due to weather. Please note that the month of August, our normal meeting space will be undergoing renovations, so we will be meeting in an alternative location!

Vendor Expo: At every general meeting we have tables that our vendor’s can reserve to share their product or service with our members. We generally see between 100 and 130 people at these meetings and they include new and experienced investors who may need what you have to offer today or may need you in the future. Take this opportunity to create a positive impression by visiting with members and visitors about real estate and how you can help our members in their real estate business. Full and Half Tables for either Member’s or Non-Member’s can be reserved by going to www.MAREInet.com and clicking on Calendar of Events. Select the appropriate deadline and reserve your table today. For our Silver and Platinum Members, please email us at [email protected] to reserve your tables, remember they are first come, first served, so reserve your’s today!.

Please Note August Meeting Will Not be at the Double Tree Hotel Marriott will be doing renovations!

Who should reserve a vendor table: Lenders, Realtors, Contractors, Insurance Providers, Property Managers, Wholesalers, Private Lenders, Real Estate Attorneys, Accountants, Appraisers, Tenant Screening Services, or anyone with property for sale or a service to provide to real estate business owners. Member’s be sure to visit with all of our Vendors at each meeting to see what they have to offer. They specialize in products and services that many area investors need. They just may have something you have been looking for or may have something to offer that you may need next week, next month, or next year. Take the time now to get to know them now so you don’t have to scramble to learn more about them at the last minute.

Sponsorship: If you would like more exposure than the standard vendor table, sponsor a meeting. Sponsors will receive a vendor table at the meeting, 10 minutes to speak at the beginning of the meeting, Announcement here in the newsletter that you are the sponsor as well as an announcement on the web site. Plus all sponsors are allowed to place marketing materials on the chairs through out the room. If you would like to learn more about sponsorship, please email us at [email protected] or call 816-523-4400.
Page 4

———— Investment News —————

www.MAREInet.com

Assignments and Double Closings
By Kim Tucker You have listened to some training somewhere and you are all set to start wholesaling or flipping houses. You just need to find a property, tie it up with a contract, then find a new buyer and assign it on over to them. Sounds easy. While not all that hard, you need to do a little homework ahead of time to make sure everything goes smoothly. First you need to know exactly what you mean by assignment of contract and double close. You need to be able to explain this to the person selling the property to you, the person buying the property from you, the buyer’s lender, and the title company. Not everyone will be as educated as you are, so you need to be prepared. So, what is an assignment. Basically in an assignment transaction you act as the middle man. First you find a property and get it under contract to purchase. Next you find someone who is willing to pay more for the property than your purchase price and then execute an assignment of contract between you and the end buyer. The end buyer is paying you an assignment fee either at the signing of the assignment form or more often you will get paid as a fee from the closing agent. You will provide the closing agent a copy of the purchase contract as well as the assignment contract. The closing agent will prepare a closing for your end buyer to purchase the property in your place from your seller. If you are getting paid through the closing agent, you assignment fee will appear on the HUD for both your seller and your buyer to see. You need to know that all contracts are assignable, except for contracts that state that they are not. For example if you are purchasing a bank owned property, more than likely their contracts state somewhere that “this contract is not assignable”. The reason for this is very simple: Too many new investors fresh from real estate investing school who were going to assign contracts did not close on their sale and cost the bank sellers money. So they all have had their attorney create a clause that states this contract is not assignable and made their earnest money deposits non refundable and now require they be in the form of a cashier’s check. You maybe able to get around the non assignability issue by using a double closing. But please be aware that many title companies that close for banks will not allow a true double closing. They may need you as the middle man buyer to completely fund your purchase and then get paid back from the proceeds of your sale. For a true double closing, you buy a house and sell a house all on the same day and you fund your purchase of the property with the proceeds of the your sale, brining no funds to closing. This is two separate purchase and sale agreements: one between you and the seller, and one between you and the end buyer. There will be two separate closings and while the closing agent will disclose to all parties that it is a double closing, they do not disclose how much money you are making. If assignments and double closings are in the works, you now know what they are, but you may ask why would you need to explain what they are to anyone. First you need to explain them to the title company or closing agent. Why . . because you need to be absolutely sure before you bring them a transaction that they will complete it in a fashion that you want, namely with out you bringing any money to the table. Some companies will tell you that these are illegal transactions, some because they have an attorney on staff telling them that they are and other times because they don’t know your terms. So being able to describe what it is, may help you find a closing agent that will do the deal. Second, to prevent the transaction from blowing up before closing, you need to explain what you are doing to your buyer. By being upfront with your buyers and letting them know that you purchase properties to resell to other investors, and that you use assignments or double closings, you can save yourself a lot of time. If you buyer knows this going into the deal, he will be less likely to have a problem further on in the transaction. And if he is getting financing, both your buyer and you will need to be able to explain what you are doing to the lender. If you have buyer’s lined up and they are paying cash, then there probably is not much of a problem. But when you find your buyer is using a lender, you need to be able to explain what you are doing to the lender. Some lenders will be fine with your transaction and others will not go along with the deal. If this is the case it is time to find another buyer or find your buyer a different lender. So before you jump into the wholesale business you need to line up buyers who are able to buy through an assignment or a double close, and also start interviewing lenders to find a few to turn in case of emergency. Last, you may need to explain the process to your seller. At the same time you may need to have some kind of out clause or extension clause in your original purchase contract that lets them know that you may have to back out of the contract or extend the contract to allow you time to find an end buyer. If you are prepared to buy the property anyway, then you have no problems. But if you have no way of buying the property, you need to have something in your contract that will allow you to get out of your purchase contract.
(Continued on page 10)

www.MAREInet.com

———— Investment News —————

Page 5

Tucker One Workshops: Financing Investment Properties
Financing Investment Properties is an in depth workshop, designed to cover how an investor can financing single family and other investment properties. Covering the following topics: ♦ ♦ ♦ ♦ ♦ ♦ Establishing Good Credit! Improving Bad Credit! Cash & Conventional Financing! The Magic of a Rehab Loan. Rehab Loan vs Hard money Loan. Unsecured Lines of Credit ♦ ♦ ♦ Investing Tax FREE with Self Directed IRA’s How to Find a Private Lender Applying for A Loan: The 1003, The Personal Financial Statement, Your Credibility Kit ♦ With personal examples along the way.

Presented by Donald & Kim Tucker of Tucker One Properties, Inc.
Don & Kim Tucker have been investing in real estate in the Kansas City market since 1999. Specializing in buying homes to rehab and resell to both owner occupants as well as investors they have worked with many aspects of real estate investing. Don has many years in construction and environmental including as a past Section 8 Inspector and home inspector. He also spent a little over a year as a mortgage loan officer, learning the ropes of a lender. He inspects our homes, manages the rehab and the contractors, and deals with all aspects of financing both for our purchase as well as for our buyer's purchase. Kim's role in the beginning was to locate the properties and negotiate a good purchase price. They started out buying bank owned properties and for 4 years Kim specialized in selling bank owned properties and completing BPOS. They also would find one or two extra deals each year that they did not have time to renovate or were not in their area that they wholesaled. In 2003 they purchased a large group of rental properties and learned the ins and outs of being a landlord. And along the way they were on the board of directors with a local Kansas City Investment Group and in 2003 started Mid-America Association of Real Estate Investor. With both groups they have attended many different real estate training events and have studied many different aspects of real estate investing.

SPECIAL OFFER! Workshop Package (register by March 21st & attend receive E-Book of workshop FREE)
Workshop: Beginner Fast Track to Success Donald & Kim Tucker share with you the knowledge they have acquired in 10 years of investing, to provide you with a solid start to your real estate investing business.
Dates/Hours Thursday May 1st 9:00am – 5:00pm Limited to 15 people. Location Tucker One Properties Building 115 E Gregory Blvd, Upstairs Kansas City Missouri (816) 523-4400

Bonus: Power Point Copy of Tucker One’s Private Lender Presentation, a copy of a Promissory Note and Deed of Trust. Plus a recorded copy of the workshop, once it is edited and available.
Register Now for bonuses and to reserve your seat Register by 4 pm on May 25th and receive your free copy of our Private Lender Power Point, plus a sample deed of trust and promissory note, and an MP3 recording of the workshop. Member Price: $59 for one / $79 for two Non-Member Price: $79 for one / $109 for two

REGISTRATION FORM - Financing Investment Property
□ One Attendee $59 Member Price □ One Attendee $79 Member Price

May 1st, Kansas City, MO

Please check one: Please check one:

□ Two Attendees (Spouse / Partner) $99 Member Price □ Two Attendees (Spouse / Partner) $109 Member Price

Registrant #1 _____________________________________________ Billing Address _____________________________________________ Phone ___________________________________________________ __________________________________________________________ Email ____________________________________________________ Method of Payment □ Visa □ Master Card □ America Express Registrant #2 ______________________________________________ Credit Card # _____________________________________________ Phone ____________________________________________________ Expiration Date ___________________________ Email _____________________________________________________ Referred by Mid-America Association of Real Estate Investors Fax form to (816) 523—4448 Register Online through the Calendar at www.MAREInet.com Or Call 816-523-4400

Page 6

———— Investment News —————

www.MAREInet.com

Service Guide
Advertising Supplement Beth Langston Homefront LLC
Call me to review your portfolio! 200 NE Missouri Rd, Ste 200 Lee’s Summit, MO 64086 816-679-4000 cell [email protected]

HEARTLAND
COMPLETE HOME INSPECTIONS

Heartland Complete Home Inspections
Complete Home Inspections Well & Septic Tank Inspections (ITA) Certified ASHI Approved

Chuck Bolton 816-590-5321

Accurate Title Company, LLC Ron Kraft
Title, Closing, & Escrow Services
7011 W 121st St, Ste 100, Overland Park, KS 66209 Jackie White / 913-338-0100 / Fax 913-338-0107

Own Your Own Vacation Townhome 7 Miles from the Maingate of Disney

24 month lease back guarantee

MAREI Members

Two Units for the Price of One

Units Starting from the $290’s www.AccurateTitleCo.com

Call 863-424-0130 www.biminibayresortandspa.com

www.MAREInet.com

———— Investment News —————

Page 7

Newsletter & Service Guide
Our monthly newsletter is the Investment News. All of our MAREI Business members receive a Business Card ad or a monthly $25 credit for a larger ad. The Investment News is currently mailed out in paper version to approximately 320 addresses and handed out at our monthly meetings. We also post our newsletter archives on our web site for any new members or guest to read past articles. Or write an article to be included in our newsletter that will showcase your expertise. We will include your contact information at the end of the article. Cost is currently just $100 for a one page article in the newsletter and posted on the web site.

Asset Protection Insurance Agency Investor Owned Insurance

• • • • • • •

Vacant or Occupied Properties Properties Being Rehabbed Hazard & Liability Insurance Entire Portfolio Under One Policy Monthly Premium Notice Fast Quotes Professional, Courteous & Knowledgeable Staff

Tile and Stone Direct to the Public -- at Wholesale Prices! Call Randy Deutch www.TileandStoneWarehouse.com 9821 W 67th St : Merriam KS : 913-432-7900

APIA, Inc. 877-752-2742 www.reoins.com

Dedicated to Excellent Service

Tucker One Properties, Inc.
Rehab ~ Wholesale ~ Foreclosures www.TuckerOneProperties.com
115 E. Gregory Kansas City, MO 64114 Phone: 816-523-4400 Fax: 816-523-4448

FREE LEGAL CONSULTATION*
Consult with an Attorney Experienced in Real Estate Law and Estate Planning

Joe Reece
Property Specialist Cell: 816.507.4203 Email: [email protected]

David R. Nachman
816-474-4114 * 15 minute consultation
Kyle Bush Jeff Williams
We specialize in providing rehab loans to real estate investors. FAST Closings & No Junk Fees! Phone: 816-561-5155 Toll Free: 888.348-7377 Fax: 816-268-5719 Web Site: http://www.FortressLending.com/kc

KC Family Home Buyers Joe Shojayi
[email protected] 913-851-4424 888-279-3058 www.kcfhb.com

Yellowletter.com Inc.

Yellow Letter Automated Mailings
INVESTMENT PROPERTY REHAB LOAN SPECIALIST

FLATIRONS FINANCIAL, INC

John & Donna MacNeil
Originators of the Yellow Letter Marketing System

EMAIL: [email protected] PHONE: 913-393-2448 or 866-393-2448 www.FLATIRONS.LENDINGSTATION.COM Ask us about MAREI membership reimbursement with your loan!

Phone: (904) 880-2742 Fax: (904) 880-2741 Email: [email protected] Website: yellowletter.com

Page 8

———— Investment News —————

www.MAREInet.com

MENTORSHIP PROGRAM
REAL ESTATE INVESTING
WE GUIDE YOU EVERY STEP OF THE WAY
♦ ♦ ♦ ♦ ♦

We mentor new investors and teach you no money down investment strategies and techniques. How to locate your property at 20% to 40% of value Take you step by step through Subject to / Rehab process The basics in Renting and Contact for Deed Tenancy Help you with your Purchase, Financing, and Rehab of your investments
LIMITED SPOTS AVAILABLE - MUST QUALIFY 620 mid-score - 2 year W-2 tax return—6k min. in assets Per House Contracts - No Up Front Costs WE OFFER OUR REAL ESTATE NETWORK TO YOU Real Estate Services Rehab / Subject to Loans Construction Services Permanent / End Loans Property Management Services WE LOOK FORWARD TO HELPING YOU WITH YOUR FUTURE FINANCIAL SUCCESS 816-453-5532 OR 816-456-1843 [email protected]

Patrick and Marta Grace

GRACE REAL ESTATE COMPANY LLC 5545 NORTH OAK TRAFFICWAY #1

REHAB LOAN COMPANY
HELPING INVESTORS GET THE MONEY
√ √ √ √ √

Commercial & Blanket Loans Hard Money Loans Purchase Money Corporation / LLC Loans High LTV Investment Property Loans

√ √ √ √ √

Rehab / Short Term Loans End Loans Lines of Credit Rate and Term Refinance No Seasoning on Title Loans

Call With Your Scenarios and for Qualifications. Quick Closings, Good Service, Good Rates! Pat Grace 816.453.5532 or 816.456.1843
www.MAREInet.com

———— Investment News —————

Page 9

Vendor Expo
Each of our General Meetings feature about an hour trade show before the presentation. Please arrive around 6 pm to visit with all of our vendors who have reserved tables. If you would like to have a table at the meeting or would be interested in sponsoring a meeting, please visit the calendar on the MAREI web site for more information. Vendor Tables are $35 for members and $75 for non members or sponsor the entire meeting. Reserve your table through the Calendar online or email us at [email protected].

Due Diligence
An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to a sale. Generally, due diligence refers to the care a reasonable person should take before entering into an agreement or a transaction with another party. Perform your own due diligence on all deals, service providers, product providers, lenders, realtors, contractors, etc . . Before going to contract with them!

NEED TO FLIP A PROPERTY FAST?
T.O.T.L. (TOP OF THE LINE) RENOVATIONS
will complete all your rehab quickly, at a reasonable price.

We specialize in: • Make - ready • Siding and Windows • Carpentry & Roofing • Plumbing & Electrical • Painting & Flooring • Drywall & Doors • Fences and Decks • Kitchens and Baths

Now Accepting

Call Anthony @ 816-606-0266 or Emily @ 816-252-0095
FINANCING AVAILABLE
(Continued from page 5) Assignment and Double Closings

Please take some time to get your ducks in a row before you start trying to assign or double close and the process will be a lot smoother when you start negotiating deals. Take some time to do a little online research on the topics. Then find one or two closing agents that will be able to work through an assignment or a double closing. Find out if they have any special forms you might need to use. Then if you are going to be wholesaling investment properties, start building up your list of buyers and interview them to find out how they will be financing their purchases and that an assignment or double close will not be a problem for their lender. Also find out what types of properties that they are looking for and the prices they are willing to pay, the repairs they are willing to make, and the locations they like to buy. Then you are ready to go out and start looking at properties to purchase and wholesale.
Kim Tucker along with her husband Don have been investing in real estate since 2000 in the Kansas City Metro area. Kim spend several years selling and buying bank owned properties. Currently the Tuckers wholesale investment properties in the Kansas City Metro area, their available properties can be found online at www.TuckerOneProperties.com. They also offer workshops on investing to the members of MAREI

MAREI 2008 Conference & Vendor Expo
Robyn Thompson Rehabbing & Retailing Steve Dillon & Curtis Brooks Short Sale Investing Plus 6 other National Trainers Reserving Vendor Tables for the Weekend Watch the Web for more info on Speakers Vendor Table Pricing Sponsorship Opportunities.

Page 10

———— Investment News —————

www.MAREInet.com

New for Members: Over 15 FREE Teleconferences, Value over $300
Have you logged into the MAREI web site lately? Log in and click on GURU to listen to all of the following: Than Merrill on Finding Motivated Sellers Alan Cowgill on Private Lending Made Easy (will need to register with Speaker’s web site)

Thomas Kish on Unsecured Lines of Credit (need to register with Speaker’s web site) Anesia Springborn on Systemizing your Landlord Business to maximize cash flow Troy Meyer (our own member) Stop Working Overtime

Darius M Barazandeh on Asset Protection and Tax Lien Investing (will need to register with Speaker’s web site) William Tingle on Buying Subject to Doug Ottersburg on Mobile Home Investing Bruce Norris on Mobile Home Parks

Lou Castillo on Real Estate Investing (will need to register with Speaker’s web site) Lonnie Scruggs on Mobile Home Investing Paul Wells on Foreclosure Investing

MAREI has been setting up teleconferences with many national trainers and they have all been recorded. We are also requesting copies of other prerecorded events to add to our library.
Rachel Young on Finding Motivated Sellers

Robyn Thompson on Rehabbing Houses

In most cases these recordings are in MP3 format and you can listen to them on our web site or download them to your computer. From there you can listen on your own time using a media player on your computer or load the file onto your MP3 player and take the show on the road. If you are not yet a member, just go to our web site www.MAREInet.com. Click on Membership Benefits and then on Join Today. It just takes a few minutes and $99 on your credit or debit card and you will gain instant access to all of these great presentations!

Scott Rister on Finding Motivated Sellers

www.MAREInet.com

———— Investment News —————

Page 11

How to Network with Seasoned Investors Without Scaring Them Away (And How I Did It All Wrong)
This article is for the new real estate investor who is trying to network and get to know seasoned investors. It’s for anyone who’s looking for an investor with some experience and success to “mentor” them. What is a Seasoned Investor? Quite simply, a seasoned investor would be someone who has bought and sold, repaired or rehabbed or wholesaled several houses – one who pretty well knows the ins and outs of real estate investing. This is just the type of person many new investors are looking to learn from. Just the type of person you want to learn from, right? So, you want to find someone you can wholesale deals too? Someone who will show you the gold mine areas for houses, allow you Multiple Listing Access (MLS), and give you the security of knowing they can close and pay you on your house or flip it in 5 business days? Maybe you want to take the seasoned investor out to lunch—heck, you’ll go so far as to buy lunch! What’s Standing in the Way? Well, most seasoned investors are great to know, and together you can make a lot of money. However, these investors often elude the new investor. Is it that you are intimidated by their vast knowledge and experience, or maybe they are initially just too busy to catch up with? Whatever the reason, a seasoned investor is great to get to know, but one important thing to understand is that this kind of relationship can’t just “happen” overnight. First, it’s a given that seasoned investors tend to be pretty busy people. They run usually a small business, where they are busy managing, advertising, and bookkeeping – or managing those that do. Outside the office, they are driving around all day looking at properties, running crews, dashing to Sam’s club buying new printers and problem solving with staff, realtors, and their title company. This, of course, is in between trips to Home Depot or Lowe’s where they scour the isles looking for that one elusive item. During all this, there are rehab crews waiting and the seasoned investor is constantly feeling pressure, pressure and more pressure as the cost of labor is expensive, especially when the crew waits around! What I have found in the Las Vegas area is that most seasoned investors are around 30 or more years old, with families. Therefore, they are busy with family life as well, such as taking kids to practice and trying to have a social or spiritual life with family and friends. Just maybe at the end of the week, they can carve out some oh-so-precious time all to themselves. So yes, they are busy. Very busy. How I Tried to Find A Seasoned Mentor (and Failed) When I began, I simply assumed that a seasoned investor would spend time with me as they realized I would bring them great deals, and because I was serious about this business. It seemed like a fair trade to me—their time and expertise for my house deals and soon-to-be house deals and endless (but sincere) questions. And if I’d offer to meet them for lunch, and actually PAY for it, well then the sky’s the limit, baby! I mean, who could turn that down? Well, my dream was to have many house deals, but it was only a dream at that time. And one thing I didn’t really understand was that these types of people often have lots of wide-eyes tenderfoots, just like me, calling and emailing them for their time on a regular basis. And even the most generous of people must begin to say “no” to the “good” for the sake of what’s “best”. “Why Are They Avoiding Me?” As time went on and I tried again and again to pursue these kinds of relationships, slowly I began to get it. The reality of the seasoned investors’ world, and the natural time constraints included, became more and more apparent. And as I began to do more and more deals, an interesting thing started happening. I actually started having new investors who started calling me, wanting to take me to lunch! Can you believe it???? So what did I do? I gave graciously of my time, for I was surely not going to selfishly limit myself same way that some of the oldtimers did to me when I was new. I was going to give of my time and expertise freely. Humpfh! I would tell each new investor, “I will help you along, and then you can offer me your house deals first over other investors.” And they, of course, readily agreed. So as the new investors would call, we would “talk shop”, and I’d answer their many questions, answer their emails, and even run comparables (comps) for them on their prospective deals. If needed, I would even stop what I was doing and perform skip traces to find their missing sellers (Deb is great, she can find a needle in a haystack nationwide.) Sometimes I would take them to my best areas and subdivisions where I found deals—my gold mine areas. Other times, we would get lunch and I would listen and encourage them in their hopes, challenges and dreams. Yes, we were off to the races! Until… The Other Side of the Coin I started noticing a disturbing trend. I started getting calls from my “apprentices” notifying me that they were fed up with this real estate investing thing, couldn’t make it work, and were ready to throw in the towel. At first it was only a few of them. Then a few more. And eventually it seemed that about 95% of them were suddenly on their way out the door. Some said they were going back to collage, while others were getting a nine to five job and so on. It was then that reality hit me. I began to realize that most of the newbies had stars in their eyes, and wanted to get rich quick, or were looking for an easy out from college. The older ones often had too many battle scars and couldn’t seem to get up again, due to some past experience. It’s tough to say, but true to form. So where did that leave me…the now-seasoned investor?
(Continued on page 13)

Page 12

———— Investment News —————

www.MAREInet.com

Honestly? Frustrated, let down and occasionally angry. And yes, burnt out with newbies. After all, I’d graciously invested hours and hours of my time, not to mention a good deal of mental energy and focus, into helping these folks take steps toward the real estate investing dream they’d seemed so passionate about before. And now it was all for naught. Then I would read in the real estate forums, “How do I find seasoned investors to work with?” – And often spoken with almost an air of entitlement. Now I Get It. Now it all makes sense. Now I really and truly understand why I had such a hard time getting on the “inside” with these guys, and why so many others do as well. And that, my friend, is why I wrote this article for new investors like you. There’s no doubt at all that the seasoned investor has a LOT to offer the budding newbie. They have great real estate software, MLS access, cash, and experience. They offer great resources, knowledge, have title companies and realtors in their back pockets, and know the other seasoned investors. They possess all the tools of the trade that anyone new desires. Furthermore I can say without hesitation the seasoned investors DO want new investors to bring them good wholesale or birddog deals. Believe it or not, they are looking to make new investor friends. So what do you do to ally with these guys? How do you get “on the inside” with them.

See who owns the property and find out if it’s possibly a motivated seller. Or is it owned by a realtor, county owned or does another investor own it? If it’s the latter, you may decide not to waste your seasoned investor or your time going after it. Next, continue to do your homework and attempt to contact of find the owner/seller. Now, when you call the salty investor, try saying something like this; “Iggy Investor, I have a 3 bed 2 bath boarded up 1500sf single family. Cross streets are Jones and Bethany. Owed is $30k, comps at $170k. I have done research and can’t find the sellers. Want to grab a cup of coffee and see if we can get it?” Now, doesn’t that sound better than the old “let’s us grab some lunch, so I can pick your brain.” approach? Honestly I cringe when I get that line from a new investor I just met. Why doesn’t that work? It’s simply because it’s a one-sided relationship, all give on the investor’s part and nothing from the new investor except his or her dreams of what they may or may not do. You need to start by GIVING, well before you even try to receive anything. You need to ask yourself, “What can I do to EARN this relationship, and all the powerful benefits that could come along with it?” Don’t Focus On The Money Notice in the hypothetical conversation above, I did not mention wholesale or birddog. One thing a seasoned investor taught me a long time ago was to forget about me making money. That’s right! Get my mind off my pockets initially and see if I could birddog, not even do wholesale, but just birddog. When I would “dog some properties” to show my willingness to help make him money, they would take more time with me. Trust me. The first 15 houses I bugged my seasoned investors with were definitely not deals. And by “bugged,” I mean that took precious time out of their day to look at my no-deal houses. Of course, the next hundred or so were definitely worth their time, but initially it was more like wild goosechasing on there part for months. I hope this makes sense and that I’ve been able to help you look at this “mentor” relationship from flip side of the coin. If so, then you will have a much better chance of making a new strong profitable relationship with seasoned investors. Don’t be afraid of these relationships. They’re well worth pursuing, and can really take you to the next level when they happen. But don’t start off feeling like you somehow deserve them. You don’t. The only thing you’re really entitled to is the same school of hard knocks we all have to learn from. But if you can earn the respect of a seasoned investor or two – by truly adding value to their business FIRST – then you’ll likely find some delightful short cuts to your learning curve as an investor. All the Best, Bill Guerra (Bill in Vegas) www.WillBuyAnyHouse.com Reprinted from www.flippinghomes.com

How To Get A Seasoned Real Estate Mentor… First, do your homework and don’t be lazy about it. Study and learn the areas, types of houses, cost of houses you will make offers on, and basic costs of repairing the rehabs. Then drive for dollars find a house. Driving for dollars means driving around a subdivision looking for abandoned or boarded-up houses and locating the owner. Do your work or research on the house. Invest some of your own time, effort, blood and sweat on the front end, to prove that you’re not just looking for a free ride or a cow to milk. And by this point, you should be able to talk to a seasoned investor and compare apples and apples with the experienced investor. Know enough in advance to be able to determine fairly well if there is even money in the house before you call him.

www.MAREInet.com

———— Investment News —————

Page 13

Bulk Wholesale
I keep seeing posts on message boards and in emails that come across my desk top that look something like: “I have $100MM in NV REO's. These are little or no rehab and ready for retail/rental. Property management services are available if requested. Bundles of $5-15MM cherry picked to the buyer's request are also available. NOI, POF required for list. We, too, are next to the seller, no daisy chain.” And unless you are in the business, it looks like a bunch of gibberish. I asked the author of the above paragraph, Larry Fosgate, Fund Administrator, www.sunriseholdingtrust.com to break this down a bit for us, and his response is below. The REO is the acronym for bank owned properties, for which they have a motivation to liquidate either because of reserve restrictions or because the mortgage insurance will compensate any difference between the face value of the mortgage and what they receive. The bundle we currently have is $100 million, but can be broken down according to the wishes of an investor to smaller bundles of $1 million to $15 million. When cherry picking from the bundle the discount must be adjusted. NOI or LOI is a "notice" or "letter" of INTENT. This states that the investor intends to purchase $XXX of "_________" type of REO's if found to be as represented and accepted upon inspection and due diligence. POF is "Proof of Funds." This is normally presented by the prospective investor as a bank letter of credit, a deposit, and or sufficient references from known sources to add credibility to their offer. When dealing with unknown clients, this is an act of good faith. Once a satisfactory business arrangement has been established, it often is waived. A "daisy chain" is alluding to the number of principals involved in the transaction. Normally only one party separates the buyer from the representative of the seller, so 4 parties are involved. More than that complicates the transaction and often inflates the cost. Brevity is used when wishing to flush out those who are players from those who are spectators. I hope this clarifies some of the terms used in bulk wholesaling of real estate.

Upcoming Events
April 8th - General Meeting Ronald Kraft and Staff from Accurate Title Protect Your Investment and Save by Utilizing All Your Title Company has to offer April 12th : Lee’s Summit Investor Breakfast April 18th, 19th, 20th: Mobile Home Millions 6 April 19th : RocMan Investing Workshop Investing 101 April 19th: KCIG Foreclosure Investing Workshop with Don DeRosa (speaking at MAREI on different topic in May) April 23rd : Northland Investor Lunch April 23rd : RocMan Investing Workshop Working with Your Contractor April 26th : RocMan Investing Workshop Never Pay Too Much for a Property Again May 1st : Tucker One Workshop Financing Investment Properties May 10th : Lee’s Summit Investor Breakfast May 13th - General Meeting Don DeRosa How to Sell Your House FAST for Maximum Profits August 12th - General Meeting Larry Goins Wholesaling Houses Note the August General Meeting will be held at the Double Tree Overland Park 10100 College Boulevard College & 69 Highway October 11th & 12th MAREI 2008 Conference & Vendor Expo 8 Speakers / 20 Vendors / 2 Days See Calendar at www.MAREInet.com for complete details.

Page 14

———— Investment News —————

www.MAREInet.com

Working With Your Contractor
Just to start off, I am a contractor; however, I have been on the other side of things too. My wife and I buy, remodel, and sell homes. So, I have had every problem with contractors you can have. I suppose that is why I became one. I got tired of dealing with the issues that typically come up when you are working with a contractor. I am not saying they are all bad (I mean I am one after all), most of them have your best interest at heart but things go wrong in a job when a contractor is not sure what is expected of them. I wanted to find a contractor that would provide me reasonable prices, quality work, and a good work ethic. That is why I became a contractor. I already knew how to do all the work, and I got tired of trying to babysit these issues. I decided it was time to do it myself, and low and behold, now I have a remodeling company (RocMan Rehabs). So short story long (ha ha), I have experience from both sides of the table and I would like to shed some light on the subject to hopefully aide people in the “arduous” task of dealing with contractors. · Always have more than one bid – this will help with trying to keep the bids competitive and will weed out the people that are going to charge you an arm and a leg. Bids – make sure your contractor itemizes your bid and breaks down exactly what he is charging you for labor and materials for EVERY piece of the job. Quality of work and materials – be specific about the outcome you are looking for on a rehab. Most of us do one rehab if the house will be a rental and another rehab if the house is going to be sold, let your contractor know this up front and what kind of materials you expect him to use. For example what brand of paint. This way you get an accurate bid of what the job will cost and there will be no surprises at the end of the job. Timelines – find a way to make it worth your contractors wile to meet his deadlines (offer them your next rehab job, offer bonuses…). Keep in mind that unexpected delays often come up in a rehab. If this happens ask your contractor how long the problem is going to take to fix and add that to your timeline without penalizing the contractor. Be specific about what you are asking for – for example don’t call a contractor and ask “do you do electrical work”. There are many forms of electrical work and they might be able to do things like change out outlets and rewire your lighting but they might not be licensed to change out an entire breaker box. This contractor is likely to say “no” and move on, but if you are more specific about what you are looking for “I have 5 outlets that need to be converted to gfci’s, do you do that?” you are likely to find a contractor that can do that and will charge you MUCH less than the major electrical companies would to do the same job. · Have a contract with your contractor – make sure that your contractor gives you a contract that specifically states the work that he will be completing. Make sure you READ this contract thoroughly! It is a good idea for you to have a contract of your own that states what you expect from your contractor. Be approachable – be stern and specific about what you want, however let your contractor know that no matter how minor the detail, if any problem arises you need and want to know about it, and together you can find a solution to the problem. Check on the progress of the job – visit the job site after the contractor has left for the day, make notes on anything that you have questions about. Don’t warn the contractor, just do a pop in visit and ask him about the issues you noted the night before.

·

·

·

·

Hopefully these ideas will help you communicate with your contractor better and give you the outcome you desire in a rehab. Please check the MAREI calendar for upcoming classes or call us for a full class schedule. And of course we would love to help you rehab your property. Rocky RocMan Rehabs 913-631-8482 Rocky & his wife Amanda Ahlering are new to MAREI and are both area investors in the KC metro. Rocky is a contractor and Amanda is a Realtor with Keller Williams Realty in the Northland. They have several short workshops and an all day event on the calendar in April that you will want to take a look at: ♦ 19th: Real Estate Investing 101 ♦ 23rd: Working with Your Contractor ♦ 26th: Never Pay Too Much for a Property Again Go to www.MAREInet.com and click on Calendar of Events to learn more

·

·

www.MAREInet.com

———— Investment News —————

Page 15

Mid-America Association Of Real Estate Investors
Building Networks for Success!
PO Box 8685 Prairie Village, KS 66208 Info Line: 816-374-5885 Business Office: 816-523-4400 Email: [email protected]

PRESORT STANDARD US POSTAGE PAID SHAWNEE MISSION KS PERMIT NO. 185

YOU CAN HELP
Let’s combine forces to reduce the impact of our newsletter on the environment. Reduce the amount of paper and ink used and discarded in the trash. Reduce the use of energy used to create the materials and the newsletter as well as used to deliver each and every one to your mail box. Reduce the amount of paper clutter in your office. Read your newsletter online! MAREI mails a paper copy of the newsletter to the primary member of every membership and emails the newsletter to all secondary members. If you would rather save a tree and read the newsletter only online, please let us know in one of two ways. (1) Go to www.MAREInet.com and log on to the member area, click on my info, scroll to the bottom and select email on the question on how you would like to receive your newsletter. Be sure to click update to save! (2) Send and email to us at [email protected]. Put “email me the newsletter” in the subject line. Include your first and last name in the body of the email.

General Meeting
Overland Park Marriott 10800 Metcalf Just south of I435 Tuesday April 8th, 2008 Attorney Ron Kraft from Accurate Title Registration, Networking, and Vendor Trade Show open at 6 p.m. See page 4 for more information.

For more information www.MAREInet.com

Sponsor Documents

Or use your account on DocShare.tips

Hide

Forgot your password?

Or register your new account on DocShare.tips

Hide

Lost your password? Please enter your email address. You will receive a link to create a new password.

Back to log-in

Close