Newsletter August 2008

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

Builders Can Use New Tax Credit To Help Spur Home Sales
Prospective first-time home buyers who have been sitting on the fence now have a significant financial incentive to explore the opportunities available in today’s housing market. H.R. 3221, the Housing and Economic Recovery Act of 2008 — which has just been passed by the Congress and now is on its way to President Bush for his signature — allows first-time home buyers to take a $7,500 tax credit from the purchase of a singlefamily home, townhome or condominium apartment. Any home buyer who has not owned a home during the past three years and is a U.S. citizen who files taxes is eligible to participate in this program. (Some home buyers who are not citizens may also qualify; see #14 in the questions and answers below.) To qualify, buyers must actually close on the sale of the home on or after April 9, 2008 and before July 1, 2009. The original eligibility period expired in April 2009, but following a major grassroots campaign from NAHB members, the period was extended to enable home builders to include the credit in their sales and marketing next spring and into the early summer — the peak home buying season. The program does have income limits. Single or head-ofhousehold filers can claim the full $7,500 credit if their adjusted gross income (AGI) is less than $75,000. For married couples filing a joint return, the income limit doubles to $150,000. Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit. The same applies to married couples who earn between $150,000 and $170,000. The credit is not available for single taxpayers whose AGI is greater than $95,000 and married couples with an AGI exceeding $170,000. A refundable credit means that if a taxpayer pays less than $7,500 in federal income taxes, the government will write them a check for the difference. For example, if $5,000 in federal taxes is owed, the taxpayer would pay nothing and a $2,500 payment would be received from the IRS. If a qualifying home buyer were owed a $1,000 tax refund, they would receive $8,750. Buyers can take the tax credit on their 2008 or 2009 tax return. Those who close in 2008 take the credit on their 2008 return. Buyers in 2009 have the option of taking the credit on their 2008 or 2009 returns. The tax-credit program also has payback provisions. The credit essentially serves as an interest-free loan to be repaid over 15 years. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. If the home owner sold the home, then the remaining credit would be due from the profit of the home sale. If there is insufficient profit, then the remaining credit payback would be forgiven. Questions and Answers for Consumers Following are the “Frequently Asked Questions about the FirstTime Home Buyer Tax Credit” that will appear on NAHB’s consumer Web site (www.federalhousingtaxcredit.com). The site will become active as soon as the housing legislation is signed into law. 1. Who is eligible to claim the $7,500 tax credit? First time-home buyers purchasing any kind of home — new or resale — are eligible for the tax credit. 2. What is the definition of a first-time home buyer? The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. 3. What types of homes will qualify for the tax credit? Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses, and condominiums. 4. Are there income limits to determine who is eligible to take the tax credit? Yes. Home buyers who file their taxes as single or head-ofhousehold taxpayers can claim the credit if their modified adjusted gross income (MAGI) is less than $75,000. For married taxpayers filing a joint tax return, the MAGI limit is $150,000. The limit is based on the buyer’s modified adjusted gross income for the year that the house is purchased, except for certain purchases in 2009. 5. What is “modified adjusted gross income”? Modified adjusted gross income, or MAGI, is defined by the IRS. To find it, a taxpayer must first determine “adjusted gross income,” or AGI, which is total income for a year minus certain deductions (known as “adjustments” or “above-the-line deductions”), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income — including wages, salaries, interest income, dividends and capital gains.

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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.

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 PO BOX 8685 Prairie Village, KS 66208 Phone: 816-523-4400 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 Homebuilders & Remodelers

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Short Sales = Big Profits
In the world of Real Estate Investing, short sales can be a profitable niche for those who have the patience and finesse to negotiate with banks. A short sale is simply a bank taking a payoff of less than what they’ve lent. If a bank has lent $300,000 on a property, a "short sale" is someone paying off the loan for $280,000. If you are the investor that paid off the loan for $280,000, you likely have some instant equity in the property, before even lifting a finger. The intuitive question is, why would a bank take $280K if the property is worth $300K or more. The answer usually has to do with the process the bank must go through to obtain the property themselves. For example, if they’ve lent $300,000 on a property that is worth $310,000 and their borrower has stopped paying the mortgage, they may have to spend $20,000 - $40,000 between the foreclosure process, fix-ups and re-sale costs. They may actually net less by foreclosing and reselling than they can make by selling now to an investor like you. With current appreciation combined with 1st mortgage banks lending around 80% on average, most short sale opportunity rests with 2nd mortgages (If you come across properties with 3rd and 4th mortgages this is referred to as the proverbial Real Estate Goldmine). A 2nd mortgage (or any mortgage subsequent to the 1st) is usually in a position to lose more and therefore be more willing to sell short. Let’s look at a more realistic scenario. A buyer purchases a property for $300,000 at market value. They finance 100% of the purchase price by getting a 1st mortgage for 80% or $240,000 and a 2nd mortgage for 20% or $60,000. After a year of living in the home, they fall on hard times and can not make their payments. They fall into default and are in a position to have their 1st mortgage start foreclosure proceedings. This is the scenario you’re looking for. If the 1st forecloses, the property goes to auction which usually means it will sell for around 80% to 85% of value. The 1st mortgage will take everything they are owed, along with any late fees, penalties, legal fees, etc. The rest, which isn’t much, is left for the 2nd mortgage. the 1st mortgage. You simply write up the offer, let your title company get the payoff and close like you would any other deal. Since you own the 2nd, you simply file a reconveyance for the 2nd with your county recorder and you’re all done. Alternatively, you could make up the arrears on the first, bringing the loan current and either rent back to the homeowner or lease-option to someone else. One more idea; you could let the 1st foreclose, sending the property to auction and bid up the property yourself beyond what the 1st will take, everything else goes to you. The point is, once you have the 2nd you have many options and many opportunities to profit. Mastering the art of the short sale will take much practice and an abundance of patience. Despite what a bank may stand to lose on a deal, they rarely move quickly. Work with them on their terms. Get information to them as quickly as possible, follow-up often and expect delays. Each bank will be a little different but usually will provide a packet for you to complete. Once that is done, they will do their own research to determine the value and their own risk of losing money. If it all works out, you’ll end up holding the note and be in a good position to control the property. Stick with it. Negotiating short sales can be a profitable and often overlooked opportunity.

Robert Shemin "Millionaire Real Estate Investor"

Attorney, Robert Shemin, is another favorite at MAREI events. He has high energy and has plenty of implementable ideas! Robert began in 1992 when he met a couple who drove an old beat up pick up, yet had a monthly net income of over $65,000 solely from real estate. Inspired, Robert shifted his focus to real estate and personally bought more than 450 homes while documenting his techniques. If you want an easy, low-risk way to attain financial freedom, then this is it. If you want to quit your JOB, then discover solid, proven strategies for attaining financial independence through real estate. Find out how to locate, evaluate and negotiate for properties in one of the nation's most dynamic markets and how to apply your new knowledge of As an investor, a well-timed call to the bank that lent buying in your own back yard. Robert is an expert at systems and will the 2nd mortgage can land you some great equity. be sharing several of his: Let’s assume you come to terms with the bank to • How to Find Great Deals purchase that $60,000 note for $5,000. If they believe that $5,000 is more than they will get from • How to Negotiate the Best Deals the property going to auction, they will likely agree. • How to be the Best Landlord You may have to do some convincing to help the Robert's course is an excellent beginner course to get you started bank see that they will likely get less than that or and for the more experienced investor you will get a great refresher even nothing if they hold the note through the auction. Once you have the note on the 2nd, you can and still walk away with a few new items to implement in the next control the property. month! Speaking at MAREI’s EXPO 2008 on Saturday the 11th.
Visit www.mareiEXPO2008.com or page 6 for more info. Here are some ways to control the property. First, you can come to terms with the default homeowner to purchase the home. Your payoff is only what is owed on

www.MAREInet.com

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General Meeting ~ August 8th ~ 6pm Networking ~ 7pm Presentation ~ Double Tree Woods

MAREI Presents: Larry Goins
Mortgage Broker & Single Dad Turned Real Estate Investor Doing 10-15 Deals a Month and Never Sets Foot on the Property...Almost Ever!

Would You Like to Learn Real Estate Techniques and Strategies That You Can't Get Anywhere else AND Make a Lot of Money at the Same Time?
My name is Larry Goins and we buy and sell 5-10, sometimes 15 houses a month and never leave the office. We use my system called the Ultimate Buying and Selling Machine! to buy and sell all of our properties without ever leaving the office, having them sold in 2 hours or less, even in today’s market. I will teach you exactly how we do it! My System Will Work Without Experience, Cash or Credit. We Also Have Many Seasoned Investors That Use Our System. Get a Quick Preview of Larry’s Presentation at Www.MAREInet.com, click on General Meeting And look for a link for more info about Larry. Also check out all of Larry’s Articles on the “Article Page” Larry will also be bringing a few of his courses with him. Should you find you want to know more than what Larry can share in 90 minutes, please consider his program. Note that if you do purchase Larry’s Materials, MAREI will be including a voucher for 1 FREE Ticket to MAREI EXPO 2008, a Real Estate Investor Conference.

* * * Meeting at the Double Tree * * *

Tuesday August 12 6:00 pm Networking 7:30 pm Presentation Sponsor Meeting: $200 Reserve Networking Table: $35 for Member’s

Double Tree Hotel / Corporate Woods Located 69 Hwy & College Blvd Members Attend FREE $25 Guest fee at Door PreRegister for $15 on Web Site More info www.MAREInet.com

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How to Choose A Real Estate Guide
Do you want a great real estate book that will help you learn how to purchase just the right real estate properties, or to learn how to get the best deal or even to learn how to make money in real estate ventures? There are specific points that you will want to look for when selecting a book for purchase that will be a truly valuable asset in your search for property. You can spend a great deal of money on all the wrong books if you do not know what it is that you are really seeking and how you want to use the information. . First, determine exactly why you need a real estate book. Do you want to learn about financing options available for purchasing your first home for you and your family? That would require one simple book while learning about how to purchase foreclosed properties, fix them up and resell them for a profit might not be covered in that book at all and would be a much more complex topic anyway. Choose your topic to explore carefully. A book called "Everything You Ever Wanted to Know about Real Estate" would be very thick and costly because there are so many diverse aspects of this topic, many nuances even inside many of the topics involving real estate. So, it is far, far better to choose a book from an expert that focuses into the area of real estate that interests you. Of course, if you have little or no experience in real estate, books that are more general can provide you with a feel for the overall, bigger picture before honing in on one facet of real estate. If you are searching for a real estate book that will help you learn how many people have made money in the realm of buying and selling real estate property, a good real estate investor's guide is for you. Do not fall for any promises that you will earn millions overnight with no work at all. Those are empty promises. Making money in real estate or any other arena, requires time, effort and usually at least a little money with which to invest. No one can teach you how to make millions over night without any effort; overnight wealth is reserved for lottery winners. Keep in mind that even in the arena of real estate investment, there are several different avenues in which to consider before purchasing a real estate book. First consider what you plan on doing as far as investments go. Do you want to purchase foreclosed homes, fix them up and resell them? Do you plan on wholesaling homes, which simply means finding homes to purchase, contracting them out with the seller and then turning around and selling the contract to another buyer? Or you may simply be considering buying one or two rental properties to help boost your monthly income. Depending on your specific real estate needs, there are individualized books out there to help provide you with adequate information on real estate investing. If you are about to purchase property and know little about what financing options you can choose, then a real estate book about creative financing or mortgages is right for you. You can locate books that focus on mortgages for people with less than optimal credit, or ones that focus simply on all the many, many financing options. With the wealth of loan types today, there are easily enough different types of real estate loans to fill a substantial book. These include conventional, adjustable rate, FHA, VA, interest only, jumbo and many other types of financing options. If your desire in a real estate book is to learn how to find real values in properties to purchase, you'll want to turn to a buyer's guide. This type of book on real estate will teach you interesting points to check out which might alert you to an especially bad deal – or a very good deal. Buying foreclosed and tax sale property is, in itself, enough to write a real estate book about. This is a rather complex process and you have to know what you are doing in order to avoid losing money on the venture. The same goes for bidding on Housing and Urban Development (HUD) properties. You must know what is required on the part of the buyer to clear the title to the property as well as what must be done before selling or renting the property or even moving into the property yourself. Real estate books that help you determine trends and prices for housing and commercial buildings in other areas of the country are also available. These books can be a great tool if you are relocating to another region of the country and are not familiar with housing prices in that area. As you can see, there are lots of real estate books to choose from. You can purchase many great books about real estate online by searching websites for the ones that fit the area of interesting. Look for books that are clear and easy to read and understand. Too much real estate jargon can make a real estate book difficult to read. The best real estate books are worded in laymen's terms with easy to distinguish categories and chapters so that the average person will have no problem learning about real estate from these books. One final point is to check the original print date of the book. Since real estate is changing so rapidly, it is best to purchase a book that has been put out on the market in the last five years, or has a new edition that has recently been updated. This is the best way to ensure the advice you are getting will work in the current real estate marketplace. Review Articles & Teleconferences from Author Larry Goins on MAREInet.com and be sure to attend the August 12th Meeting at the Double Tree Hotel.

Visit www.MAREInet.com To review more articles from Larry And preview his presentation Speaking at MAREI’s August 12th General Meeting See Page 4 for more information

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PLUS....
We will be joined by many local and national Vendors who have products and services to help make your business easier!
On October 11th & 12th, 2008 at the Overland Park Marriott Hotel in Overland Park, KS, EIGHT of the nation's sought after, successful, multi millionaire Real Estate Speakers who live what they teach will be front and center to reveal their secrets, strategies and systems directly to YOU! We have lined up this all-star cast to offer YOU an unique experience and exclusive content that will launch your investing career into outer space! These speakers travel the US speaking at Conventions, Expo's, and Boot Camps and we have persuaded them to come to the Kansas City Area to teach you the highly successful tactics that they use every day to make millions of dollars investing in Real Estate.

So consider this your invitation to come and discover the closely guarded secrets from the nation's ELITE Speakers, Trainers & Authors on such topics as:
How to get Started the RIGHT way in Real Estate How to buy low and sell high with REO properites. How to Make Big Profits in Apartment Buildings How to Get Those Properties Renovated Effectively so they Sell Fast! Exploring the Alternative Investment Strategy of Buying Notes How to Create Your Ultimate Internet Marketing Machine

and MUCH MORE!

SEATING LIMITED
WE ONLY HAVE SPACE FOR 200 Only 175 left
With all the opportunities in today's Real Estate Market to buy up GREAT BARGAINS, this event will fill up fast. Don't wait until the last minute or you may miss out!

Go to www.mareiEXPO2008.com Page 6

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Service Guide
Advertising Supplement
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

This is a Business Card Sized Ad MAREI members place An ad for one month $25 Or included in Business Membership

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

Dedicated to Excellent Service

FREE LEGAL CONSULTATION*
Consult with an Attorney Experienced in
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

Real Estate Law and Estate Planning

David R. Nachman
816-474-4114 * 15 minute consultation

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

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

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

Kyle Bush Jeff Williams
We specialize in providing rehab loans to real estate investors. FAST Closings & No Junk Fees! Phone: 913-563-7170 Fax: 913-563-7179 Web Site: http://www.FortressLending.com/kc

Yellowletter.com Inc.
John & Donna MacNeil
Originators of the Yellow Letter Marketing System

Yellow Letter Automated Mailings

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

www.MAREInet.com

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GRACE REAL ESTATE COMPANY LLC
ONE STOP SHOP
OFFERING:
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Patrick and Marta Grace

GRACE REAL ESTATE COMPANY LLC 5545 NORTH OAK TRAFFICWAY #1

REHAB LOAN COMPANY
HELPING INVESTORS GET THE MONEY
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Commercial & Blanket Loans Hard Money Loans Purchase Money Corporation / LLC Loans High LTV Investment Property Loans

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Call With Your Scenarios and for Qualifications. Quick Closings, Good Service, Good Rates! Pat Grace 816.453.5532 or 816.456.1843
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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 $50 for a one page article in the newsletter and posted on the web site for members.

JEFF BASLER PORTFOLIO MANAGER

INVESTMENT PROPERTY REHAB LOAN SPECIALIST

FLATIRONS FINANCIAL, INC

O: 816-474-0010 C: 913-568-9344 F: 816-474-0016 FOR TURN KEY RENTAL PROPERTIES CONSISTENT CASH FLOW & APPRECIATION WWW .JBFUNDINGLLC.COM

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

Beth Langston Homefront LLC
Call me to review your portfolio! 200 NE Missouri Rd, Ste 200 Lee’s Summit, MO 64086 816-246-5999 cell [email protected]

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

www.AccurateTitleCo.com

Free* Monthly "Teleconferences"
**THE ANSWER TO INSURING YOUR PROPERTIES** OUR PROGRAM HAS BEEN IN EXISTANCE SINCE 1999 A NATIONAL INSURANCE PROGRAM THAT PROVIDES: • • • • • • PROPERTY & PREMISES LIABILITY COVERAGE CURRENTLY INSURING OVER 750 BUSINESSES WE OFFER MONTHLY REPORTING & BILLING VERY COMPETITIVE INSURANCE RATES WITH CARRIERS RATED A+ SAME DAY TURN AROUND TIME FOR PROOF OF INSURANCE FOR CLOSING FLOOD AND OTHER SPECIALTY LINES OF COVERAGE AVAILABLE

www.KCRealEstateCalls.com View Upcoming and Recent 90 minute training calls With Experts in their field. Don’t miss out on an information Packed call. Register for our Email updates!

Affinity Group Management Company: 1-800-790-4872 PHONE, 913-894-6534 FAX Email [email protected] Email [email protected]

www.MAREInet.com

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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]

Register for our Email Updates www.mareiEXPO2008.com A Real Estate Investor Conference Sponsorships Available Market Your Business to our Attendees Reserve Table in Expo Area Hand out Promo Items Limited Speaking Times Advertise on Web Site Inclusion in Promo Mailer Register early for an Extra 6-8 weeks of Exposure for YOUR COMPANY Investor News Delivered Monthly Via Email Announcements on Seminars & Teleconferences Breaking Real Estate Investing News Meeting Reminders Special Savings on Training Go to www.MAREInet.com Click on

A Area New Brokerage For Real Estate Investors By Real Estate Investors Now filling team player positions
♦ Office Located in Waldo 816-523-4400 Temporary Web Site www.kcmoHomes.com MO Broker: Don Tucker KS Broker: Kim Tucker ♦ ♦ ♦ ♦ ♦ ♦ ♦

REO Buyer’s Agent REO Listing Agent with Experience Residential Specialist First Time Home Buyer Specialist Short Sale Listing Specialist Area Regional Specialist Commercial Agents Investor Buyer / Agents Currently with 25 years experience

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Investing in Emerging Real Estate Markets in the US
Most new investors, and plenty of more experienced ones too, like to stick to what – and where – they know when it comes to investing their hard-earned cash in equities. This is a natural enough reaction from people who are asked to take a risk with their investments on a daily, almost, basis. Emerging markets are markets which are in the grip of a sudden growth spurt (like, for instance, Austin, Texas) or are in receipt of government incentives which help spur growth. The savvy real estate investor is able to understand what makes an emerging market attractive by studying the signs right from the start. He then gets in early, identifies the opportunities in multi-family real estate properties he should be investing in and makes the maximum amount of money in the shortest time possible. It really is that simple. Within this perceived simplicity lies a world of complexity in just how do you correctly identify an emerging market, how you go about finding the right real estate investment opportunities in it for you and how you then go about taking advantage of these while minimizing the risks, as much as possible, for yourself. a course of action that will free you from the daily wageslavery you find yourself in then any of my courses on the subject will be suitable for you. In order to be successful in any kind of real estate investment in an emerging market you need to do some careful analysis, you need a lot of drive and the vision to see what few others can see clearly at that stage. If you think you’ve got all this and are prepared to learn, then reading this article should be the first step in a journey that will take you to the rest of your life.

Dave Lindahl "Apartment House Riches"
In a very short, life-changing 18 months, David was able to go from being the broke owner of a struggling landscape company, working night and day just to pay his bills, to creating a monthly positive cash flow of $9700 that comes in month after month like clockwork, whether or not he decides to mow any lawns, rake any leaves or even get out of bed!

As a real estate investor who started out the hard way I know from experience that some of David will share with us how for the same the barriers which keep you from being successamount of time it takes to do a single-family deal, ful are perceived ones. I also know that once I you could have done an apartment complex (small or large) and show you what you should be doing you will be fully equipped to simply “get out there and make made up to 20 times the profit! Find out Dave's techniques for: money”. • Buying Apartments with No Money Down (you know OPM) • Understanding Real Estate Market Cycles so you know what While there are many real estate investment areas to buy, and when to sell to make the best profits. courses which purport to show you how to invest in real estate few actually tackle emerging mar• How to Manage Properties Without Ever Dealing With Tenkets in our country precisely because there is a ants! lot of skill required to correctly identify them and • How to find the Apartment "Gems" in Your own Back Yard then take advantage of them. that Others Miss. • The Truth about Tough Neighborhoods and Dealing with TenThe first thing to tackle of course is your own ants with Drugs on in Gangs! motivation. If you are not yet ready to leave the • rat race behind and embrace a future where your This is an excellent opportunity for you to expand your portfolio to hard work allows you to enjoy anything you include multifamily and for those who want to start big and bypass the really want then maybe you are not ready to take small stuff, Dave's information will put you way ahead of your compeadvantage of any kind of real estate investing, tition! never mind investing in the tough environment of an emerging market. Visit www.mareiEXPO2008.com or page 6 for more info. But if you feel that the time has come and you are ready to put in all that hard work, energy and drive in

www.MAREInet.com

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To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs. 6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit? Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phase-out limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000. 7. Can you give me an example of how the partial tax credit is determined? Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $7,500 by 0.5. The result is $3,750. Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625. Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances. 8. Does the credit amount differ based on tax filing status? No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files its taxes as “married filing separately” (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns. 9. Are there any circumstances under which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit? In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price. 10. I heard that the tax credit is refundable. What does that mean? The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit. For example, if a qualified home buyer expected federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15. Suppose now that taxpayer qualified for the

$7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed). 11. What is the difference between a tax credit and a tax deduction? A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS. A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15% tax bracket and owes $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15% of $7,500), or lowered from $7,500 to $6,375. 12. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program? No. The tax credit cannot be combined with the MRB home buyer program. 13. I live in the District of Columbia. Can I claim both the D.C. first-time home buyer credit and this new credit? No. You can claim only one. 14. I am not a U.S. citizen. Can I claim the tax credit? Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of “nonresident alien” in IRS Publication 519 (www.irs.gov/pub/irs-pdf/p519.pdf). 15. Does the credit have to be paid back to the government? If so, what are the payback provisions? Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven. 16. Why must the money be repaid? The intent of Congress was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices and will increase home sales. The repayment requirement reduces the impact on the U.S. Treasury and assumes that home buyers will benefit from stabilized and, eventually, rising future housing prices. 17. Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit? Yes. Because the tax credit must be repaid, it operates like a
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The Fair Lease / Purchase . . An investor’s perfect Hybrid!
We see them all over the roads today. Growing in popularity, Hybrid vehicles are beginning to offer an enticing option to dependence on foreign oil supplies. Similarly, the Buy Low, Rent Smart, Sell High lease/purchase model offers investors a Hybrid of the “buy and flip” and “buy and hold” investment models. Most residential investment models resemble and can be grouped into one of two general categories. Each has a major flaw that concerns many investors who consider or invest in each model. The “buy and flip” model by definition is for the investor who seeks to purchase property at a discount, oftentimes improve the property, then sell the property quickly for immediate gain. This model is ideal for investors who have no interest in landlording, as the “buy and flip” investor does not intend to seek a tenant for the property in advance of sale. The main problem with the “buy and flip” model is that if a buyer does not come by quickly, then the investor is faced with discounting the property and/or involving a real estate agent in the marketing of the property. Due to this possibility, most “buy and flip” investors need a discount of 25% or more even after adjusting for the necessary repairs and improvement. With such high investor discounts, the pool of properties available with such significant discounts is often small. Simply put, the higher the discount the investor needs to make his or her model work, generally the fewer properties available at such a steep discount. The “buy and hold” model by definition is for the investor who seeks to hold property for the long term. Many “buy and hold” investors envision funding their retirement years by selling the properties once the notes have been paid off, sometimes thirty years after purchase. A key benefit for these investors is that the need to acquire these properties at a significant investor discount is minimized, as the investors are seeking their primary return many years into the future. Thus, the supply of homes that meet their long term investment model is often plentiful. There are two main issues with the “buy and hold” model. First, there are no opportunities for “cash windfalls” from the real estate during the “hold period”. Without the cash windfalls, funds to expand the portfolio generally must come from the investor’s day job, other investments, and sometimes partly from positive cash flow. Because of such “slow growth” characteristics, it is rare to find a pure “buy and hold” landlord with much more than five or six properties. Second, many “buy and hold” landlords burn so much time, effort, money, and energy taking care of repairs, maintenance, and high vacancies common with pure rental property (some investors delegate this to a management company, and while this may save the investor time, it cuts into the profits as the management company must be paid for their work). The time, effort, money, and energy spent dealing with landlording issues often serves to minimize the investor’s ability to grow his or her portfolio to any reasonable size. Worse, troublesome landlording experiences often sour new investors on real estate. A properly implemented “buy and lease/purchase” model takes the best of the “buy and flip” and “buy and hold” models. It also minimizes each model’s most glaring flaws. First, most investors who use the lease/purchase model are able to “flip” some of their properties and sell others to their lease/ purchase tenants. This allows the investor to generate the “cash windfalls” necessary for portfolio expansion, without the pressure of having to sell that is specific to the “buy and flip” model. Additionally, the investor should be able to make purchases work with as little as 10% investor discount (much less than the typical “buy and flip” model), because the pressure and risk associated with having to sell fast is no longer present. Second, on the landlording side, most lease/purchase agreements transfer the repairs and maintenance responsibility to the tenant, as the tenant is not a typical renter but rather a “future homeowner”. The typical lease/purchase agreement can also be signed for significantly longer terms. Both these factors save the landlord much of the time, headache, and cost associated with upkeep and turnover common with most rentals. A final bonus is even when the tenant does not exercise the purchase and vacates either voluntarily or involuntarily, the properties gen(Continued on page 14)

Andy Heller “Buy Low—Rent Smart—Sell High"

When it comes to a sensible approach to building long lasting wealth in any market, Andy has go it down. Already a successful investor and Fortune magazine recommended author, Andy has put together an all inclusive system to show how everyday investors with day jobs can build large amounts of wealth in real estate. Listen in as Andy shares an invaluable update on the current foreclosure market throughout the US. The last 16 months have been a whirlwind of activity in every city in the US and it is time to be a part of it. Andy shared an hour of his time to explain the post-foreclosure process and how to cash in on it for long term wealth building. Are you dying to know more about the post foreclosure and lease option process? Andy shared in his most recent interview how the perfect storm is brewing for buying post-foreclosures and providing these homes under a lease-option program. It is more and more difficult for people with hiccups in their credit to get a mortgage. Lease-options are becoming the perfect solution for them to get a home and for you to build long term wealth without many of the issues that come with being a general landlord. Make sure you take the time to invest in your education and listen in to this interview for the first time or review it again.
Speaking at MAREI’s EXPO 2008 on Sunday the 12th. Visit www.MAREInet.com or page 6 for more info.

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zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers more than $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed. 18. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return? Yes. The law allows taxpayers to choose (“elect”) to treat qualified home purchases in 2009 as if the purchase occurred on Dec. 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount. 19. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest? Yes. If the applicable income phase-out would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount. Information on H.R. 3221, the Housing and Economic Recovery Act of 2008. You might find this helpful for your clients to immediately begin training as the President is expected to quickly sign this bill. The Question and Answer for Consumers section offers clarity as to how this Act, once signed by the President, will benefit resale and new construction markets. The Act is designed to stimulate the market and attract first time homebuyers. The key is the definition of a first time home buyer and according to the Act is "a buyer who has not owned a principal residence during the three-year period prior to the purchase". This increases the number of prospective new home buyers by definition alone. Hopefully this Act will help jump start the market, get some unsold product moved and drive inventory numbers down. Also keep in mind that you only have approximately 60 days to get your last FHA DPA deals done. They will go away after 9/30/08. This is the last of the "0" down deals. If you have anyone sitting on the fence they should be your next phone call. After 9/30/08 we go to a 3.5% down payment minimum unless they are VA qualified. Article provided by John Rode | Vice President Advance Mortgage | 11935 Riley Ste. 210 | Overland Park, KS 66213 * Phone (913) 451-8488 | * Fax (913) 647-0972 | * Email: [email protected]

erally are in much better condition than had the tenant been a typical renter. What do we mean by “fair” lease/purchase as noted in the title? Sadly, many investors have given lease/purchase a bad reputation by offering restrictive terms designed to minimize the lease/ purchasers probability of exercising the purchase option, while “supposedly” maximizing the investor’s return. We have found a correlation between offering attractive and reasonable option terms, and the profits available to the investor, our “win/win” philosophy. People are not stupid, and if the terms are not attractive demand for the investor’s lease/purchases will be minimized. By making the terms especially attractive, there should be higher demand for the lease/purchase, and the investor can be more selective among the available candidates. Carrying this supposition further, higher quality tenants placed in the property mean less money and time spent landlording. That time and money can then be better spent expanding the investor’s portfolio to truly significant levels. Does this “buy and flip” and “buy and hold” hybrid model work in practice? Indeed one must allow for variation as no model is implemented exactly the same by any two investors, and markets across North America can be incredibly different. However, implemented correctly and in the right market, we can attest that an investor can manage a large portfolio of properties with minimal management time with the Fair Lease/Purchase Hybrid. We have, and we’ve been able to do this while maintaining full-time day jobs. If Hybrids are the automotive future of our country, perhaps the Fair Lease/Purchase Hybrid will be the perfect model for investors concerned with the flaws of either the “buy and flip” or “buy and hold” investment models.

Membership Benefits
♦ ♦ ♦ ♦ Free entrance to General Meetings Printed Version of this Newsletter Discounts to Paid Events Access to Online Library - Forms & Contracts - Over 30 different E-Books - 20 Hours of Teleconferences - Recordings of Past & Future Meetings - How to Articles & Reports Post Houses on our Classifieds Interact on Member’s Only Message Board Post your Profile & Read Profiles for Other Members E-Messaging System through Profiles Membership List in Excel (no emails) Discount Card to Sherwin Williams Discount Card to Office Max

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Cost: $99 annually for one, $50 per additional To Join, go to www.MAREInet.com and click on Join Now. Will receive a discount code with your confirmation for your 2nd person to join at $50.

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OFFICIAL LAUNCH mareiEXPO2008.com
On Wednesday August 6th, MAREI will officially Launch www.mareiEXPO2008.com! Visitt to stay up to date on what is happening in October and to prepare for EXPO 2008. When you attend an event of this size, you can come in cold with no previews, but we highly recommend doing a little bit of homework before the event!
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INVITE A FRIEND MEETING
MAREI Members do you have a friend, coworker, or person who provides you a service that iss interested in real estate investing? Our August meeting will be an excellent opportunity for a new potential member to check us out. Please cut out or copy this page and provide it to all of your friends who want to attend and have never been to a meeting and they will be able to attend for FREE! If they have attended before, please encourage them to join, it’s only $99 a year and the get access to so much training through the web site. And if they are just not quite ready to join, and they have attended before, remind them that the guest fee at the door is $25, but if they preregister at www.MAREInet.com through the Calendar of Events, they can save ten bucks.

Review Bio’s of all Speakers Articles from all Speakers Sample Presentations from Speakers Review Training Programs Read or Listen to Testimonials

If you have attended our past events, you know that it will be a fast paced two days and the speakers will be offering specials on their training materials during the event. Be learning more about the speakers in advance, you will be prepared to take advantage of those discounts. This year we are also adding training information from our sponsors. Many of our sponsors will be providing articles and teleconferences that teach you a little more about their business and what you need to know as an investor. If you are a reader of blogs, be sure to subscribe to our rss feed so you receive notices of new articles, teleconferences, and event plans. If blogs are not your thing, be sure to click on the link to register for our newsletter so you receive updates via email. Don’t forget to reserve your seats for EXPO 2008 on October 11th & 12, $59 for members and seating is limited!

FREE GUEST ENTRANCE FOR FIRST TIME ATTENDEES NAME: _________________________ PHONE: ________________________ EMAIL: __________________________ ADDRESS: _______________________ CITY: ___________________________ STATE: _______ ZIP: ____________

REFERED BY: ___________________
Free entrance is limited to the August 2008 meeting at the Double Tree Hotel from 6 pm to 9 pm for first time guests. If you have attended before, remember guest fee at the door is $25. Membership is just $99 for one and you can join right now on our web site at www.MAREInet.com! Be sure to bring your business cards and flyers for networking. Don’t forget your note pad, because you will want to take notes during the presentation and take down names and contacts while you are networking. Arrive early and have dinner at one of the fine establishments in the area!

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

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

General Meeting
In Brief
Tax Credits to Help Sell Code of Ethics Short Sales Larry Goins to Speak Meeting Location Change How to Choose a Real Estate Guide Service Guide Investing in Emerging Markets The Fair Lease / Purchase Launch of www.mareiEXPO2008.com Invite a Friend FREE 1st Time Guest Form Upcoming Dates August 12th, General Meeting September 9th, General Meeting October 11th & 12th, EXPO 2008 October 14, General Meeting
Double Tree / Corporate Woods 10100 College Blvd Just off 69 Highway Tuesday August 12th, 2008 Larry Goins From South Carolina Ultimate Buying & Selling Machine Registration, Networking, and Vendor Trade Show open at 6 p.m. See page 4 for more information.

For more information www.MAREInet.com

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