Newsletter - August 2010

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u MEMBER DISCOUNT SHERWIN WILLIAMS PAGE ............. 15 u CALL
TO ACTION

August

2010

LEGISLATIVE ACTION COMMITTEE PAGE

.......... 10

u MONTHLY

MEETING

AUGUST 23TH PAGE ............. 8

Investment
news

NEWSLETTER OF MID-AMERICA ASSOCIATION OF REAL ESTATE INVESTORS

For Real Estate Investors & Property Owners

BOOTCAMP & BUS TOUR
Don DeRosa and Pete Youngs are teaming up with MAREI in September to offer you a cost savings bootcamp. Total cost is less than $200 and it’s right here in Kansas City, so no airfare or hotel expense. Don is well know for using creative financing techniques to purchase and sell homes combined with using private money to have a truly no money down transaction. And he has totally automated his office on his new IPad and is going to share his secrets. Pete is know for his money savings techniques when it comes to rehabbing houses to sell or rent. If you want to do it yourself or you want to hire a contractor, he will have tips to save you money. See Page 27 for more details.

Register Online www.MAREInet.com

ARE YOU PROTECED
As small business owners all members of MAREI from investors and landlords to our support team members, we all need to protect our assets, our profits, and all of our hard work. Don’t get caught with out protection. Find out at our August meeting how to protect yourself. Details page 23.

Organization

MAREI
Notes
Fax: 816-523-4440

Contact Information
Mailing Address PO Box 8685, Prairie Village KS, 66208 Phone: 816-523-4400 x 222

Our Mission Statement
Mid-America Association of Real Estate Investors is dedicated to promoting ethical real estate investing and to protect and promote the best interest of our membership through educational and networking opportunities as well as community, legislative and public relations.

Legal Disclaimer
MAREI does not exist to renter and does not give legal, tax, economic or investment advice and disclaims all liability for the action or inaction taken or not as a result of communications from or to its members, officers, directors, employees and contractors. Each individual should consult his/her own counsel, accountant and other advisors as to legal, tax, economic, investment and related matters concerning real estate and other investments.

Content Disclaimer
The views and opinions expressed by authors of articles contributed to this newsletter do not necessarily reflect those of the association, the board of directors or the staff.

Advertise in the Investment News
Reach more than 1000 active real estate investors monthly! Rate Schedule Size Full Page 1/2 Page 1/4 Page 1/8 Page Non-Member $175 $145 $75 $55 Member $140 $105 $65 $35 Business Associate $115 $85 $50 $25

A 10% discount is given on ads pre-paid for 6-12 months. Any changes to a pre-paid ad will incur a minimum charge of $20. The deadline to submit ad copy is the 1st of each month. All ads must be prepaid. Contact to verify ad format can be accepted. PDF preferred. There is an additional charge of $25 to typeset a business card ad or 1/4 page ad layout, $60 for a 1/2 page or full page lay-out. Opportunities also exist for advertising on www.MAREInet.com. Call 407-328-7773 for more information. Email ad copy to [email protected]. Mail payment to MAREI, PO Box 8685, Prairie Village, KS 66205 or request an online payment for to use credit or debit card.

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MAREI
Staff
Kim Tucker 816-523-4400 Director [email protected] Don Tucker 816-523-4400 President [email protected] Steve Burns Audio Visual [email protected]

Robin Sage Meeting Ambassador [email protected]

John Welchert Meeting Ambassador 816-268-3849

Larry Prato Commercial Subgroup 913-227-4693

Dan Goodwin 913-642-5218 Meeting Ambassador [email protected]

Shelda Goodwin Meeting Ambassador [email protected]

Frank Janssen Creative Financing Subgroup 816-865-6514

Member Profile Realtor Frank Janssen
Active Member of MAREI since Feb 2007

D OUBLE D UTCH H OMES
Get the best deals on beautiful homes in your area even before real estate agents know they’re for sale! Through our massive network, we have access to tons of motivated sellers who want to sell their houses quickly, and at the lowest prices in the marketplace. Investors be sure to sign up for our email list of homes! Visit:
DoubleDutchInvestments.com

Frank Janssen not only joined MAREI in 2007, but he started his real estate investing career with the purchase of his first property in June 2007. He bought it for $7,000 and resold it, “as-is”, meaning no work for $17,000. Not bad for a first deal!

real estate investors, he said you need to “learn the art of putting a deal together. Listen to the seller’s needs and offer a winwin solution for both of you.” He also offered that you should “never quit”. We asked him for some advice for new investors trying to get their first deal. His response was: marketing. Learn how to implement marketing systems to generate motivated seller leads. The more leads you can generate, the better you will become in finding a truly motivated seller. Don’t deal with sellers who are not motivated.

Currently his focus is on residential real estate investing. Frank is a “wholesaler” meaning he buys and sells houses with out doing any repairs, he also holds properties as a landlord. His specialty is creative financing meaning using subject to, lease He also said: money. Start with as little as purchase, and contact for deed as a way to possible. “It’s a curse to have a lot of buy and sell properties and is now venturing money as a new investor.” Another word into the fix ‘n flip property was: education & implemenWords of Advice: method. tation. “Make a commitment We asked Frank to share a  Learn Deal Structuring to read a lot and implement good learning experience he  Market for MOTIVATED what you learn. Don’t be the Sellers had and he wanted to share investor who reads for 10 his “worst deal”. It’s a property  Start with very little money years but never takes ac Educate Yourself that he wholesaled for $500 tion. Invest in your educa Implement and he had to work very hard tion. This is the most profit Never Give Up to get it sold and was not a able business I know. It’s good use of his time, but at worth it to invest in your least he didn’t loose on the deal. So before education, I did and I have never regretted you jump into a marginal deal, think about it. the profits to be made vs the time you are We asked him one last question on his going to spend on it. thoughts on the current real estate market. Some other example deals include his 1st Frank shared that it is obvious that there are two wholesales in 2007, that made him a lot of motivated sellers out there. In this $10,000 each. His highest gross profit on a market if we have the marketing, are dealing wholesale deal was $15,800. His best subwith the motivated sellers, we will have ject to deal (meaning he bought it subject to deals. Then the focus is going to be on getthe seller’s existing financing and did not go ting the houses sold or rented. The key to find a new mortgage) was from one seller this is offering a good product for a fair price who sold 2 duplexes and a 4 plex with $0 and to be loyal to your customers, especially down. He still has these units today. those investor buyers that purchase the wholesales. And remember your reputation When asked for advice to share with new can go a long way.

To register for our buyer’s list.

DoubleDutchHomes.com 816.359.3337 F: 888.996.2010 [email protected]

Interested in learning more about creative financing? Be sure to attend the 2 day Bootcamp with Don DeRosa & Pete Youngs, they will talk about creative financing! And be sure to watch for upcoming meetings of MAREI’s new subgroup.

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Contents
In This Issue New Web Site
Member Profile Staff MAREI 2.0

MAREI News
2 5 6 8 10 12 14 16 18 20 22 24 27 Things that make you go . . .Hmm. . Legislative Trends Give Back Membership Has it’s Privileges Worker’s Compensation Issues Market Update Conversations with Betty Buyer Calendar Investment Opportunities Find it, Fund It, Fix It, Flip It Bootcamp

It’s up and running Check it out www.MAREInet.com Click on New Website

Features ‫ ׀‬August 2010
Do you own a business, hire employees, have tenants, show houses, drive a car. Make sure you are taking the proper steps for protection. Don DeRosa interviewed one of his recent buyers find out how she ended up being his buyer and what works for marketing.
Advertiser’s Directory

Double Dutch Homes MAREI 2.0 Online Networking Sherwin Williams Accurate Title Rockstar Investor

4 6 13 15 17 17

Market Updates Classifieds kcmoHomeBuyer T.O.T.L. Renovations Home Depot F Bootcamp
4

18 24 25 25 25 28

16

20

Director Notes

MAREI 2.0
Interactive
Last month we were talking about MAREI 2.0 and all the changes . . . Have you had a chance to look at a few? Blog: This is an excellent place to interact and drive traffic back to your web site. You see when you read a blog post and make a comment on it, the comment tool has a space for your name and your web site. So you can not only share your knowledge by commenting on a blog, but get a quality link back to your web site, increasing your rankings in Google. Business Associates: Have you checked out the Business Associates on the MAREI web site? Have you used one? Have you rated them yet? As a member of MAREI, log into the member’s section and make your way to our list of vendor’s online. When logged in the comment section will be active so you can rate a Vendor or Business Associate. Sub Groups: We are getting some interaction in our sub-group level. We want more. Our Lee’s Summit investors lead by Gary Cross continue with their Saturday morning breakfasts. Our Commercial Group is growing and changing with Larry Prato stepping up to become group leader supported by the members. I am hoping the commercial group can track market trends in the commercial sector for the rest of us and help lead an Invest in Kansas City campaign in the next year or so. If this or any commercial topics interest you, be sure to join this group. Our former Commercial Leader, Frank Janssen is looking at starting a new sub group for us— Creative Real Estate Financing as that is his specialty. If you are interested in Creative Financing, then please look for Frank at the Next Meeting. And finally we had our first meeting of our Government Affairs committee and are working to get a solid base under us to monitor our local governments, focusing on Kansas City Missouri to Start by the committee and we are also tapping into several other legislative action committees in other groups to monitor Kansas, Missouri, and National Legislation. Last but not least, our Face Book and Linked In Groups are growing, we would love to have our members interact and share their expertise, and deals on our social networking groups. Look for Kansas City Real Estate Investors on both Facebook & Linked in and share: your deals, interesting news articles, things that are happening in real estate. This not only brings more people to our social networks, but also brings recognition to you. So please network with us.

Kim Tucker Director MAREI

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Get Involved
Admission to Monthly Meeting . . . Free (For Members) Volunteering Monthly at the General meeting Acquiring enough MAREI Bucks to pay for Membership Volunteer in MAREI Office Real Live Working Real Estate Investor Office Sponsor a Sub Group Your own Private Coaching Group Teach a Class Be the Expert in Your Field Join a Committee Give Back For more information on becoming a volunteer,

September Guest Speaker

Things that . . .
Make you go hmm . . .
In my latest deal that closed on Friday, there were many things that happened from the inspection that most of the people doing rehabs might have overlooked. Part of my teaching style in my systems and live events are to teach you things that you would not have realized on your own. gutter situation). An inspector would have picked up on this and made a big deal out of it. You see, siding must not touch the ground around the house. This makes for easy insect infestation such as termites, and also stops some loan institutions from financing a deal with this situation. Commonly, siding must be about 6 inches from the ground to be considSometimes you must look very hard a propered correct. To save money, we did not tear erty to find the little things that will add up, out the siding and start over. We got on both and cost you thousands of dollars that you had ends of the side portions of the house and not intended to spend. I teach how to do propmeasured up six inches from the ground, and erty inspections…one of the most important then snapped a chalk line that marked the sidtasks that will save you big bucks, if you know ing all the way across each side of what to look for. See, the the house. Then we adjusted the buyer will hire a property inblade on our skill saw to ½ inch spector to list the defects of and used it to trim the bottom six Pete will be our guest your property as a tool for speaker in September and inches off the house. This now getting a discount on the deal, was acceptable when an inspecor get you the seller, to pay is partnering for a 2 day tion would be done. for these repairs. Here’s what Bootcamp & Bus Tour we had to recognize on my The toilets in the house seemed with Don DeRosa right last deal. as if they could be kept if they were given new working parts on here in Kansas City. First, the gutters did not have the inside. I put newspaper a nice line to them. They had around the bottoms and flushed a sagging areas that made the few times, then left the newspaproperty look as if it would be per overnight. When we returned best to replace the gutters. This would have the next day, we found that the paper had abcost around $800.00 to do. But for under sorbed some water. This indicated that the $20.00, I got some gutter brackets that atwax ring in both toilets had been seeping a tached with a screw gun, and had a helper use little. So by the time you have added up the a 2 x 4 stud to push up on the gutters to get moving parts . . Or guts to be replaced, then them back in line as I screwed the brackets the wax rings and then the plumbers labor tightly into the fascia board. This made the cost per hour it was actually cheaper to just appearance 100% better and saved about buy new toilets. The new ones came complete $780.00. with all new parts, most installed already. Next problem was something that most would Therefore, it takes the plumber less time at have missed seeing, unless you have a trained his hourly rate to install new toilets rather eye. There had been some siding replaced due than rebuild the old ones. It also looks good to to moisture rot on the bottom of the house the buyer to see brand new fixtures. around the entire exterior. (Probably from the

(Continued on page 9)

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(Continued from page 8)

The cabinets were stained dark brown and had a thin layer of poly on them. They really needed a fresh look to avoid replacing them. I have written techniques on how to prep and paint stained cabinets to a nice white look but here; this is a great way to restore a brand new look for under $5.00. There is a product in most any store that sell cleaning supplies called “Old English Scratch Remover”. You pour this dark oil onto a white terry cloth rag and rub over the entire cabinet area. This will not only blend in any light and dark areas, but also give the appearance of freshly stained and varnished cabinets. Saving easily about $1000.00

this one tip is one you will use over and over in your investing career. Last, was the big killer. If overlooked this could easily cost you several thousand dollars and in many cases is a deal breaker if you do not replace it. It is also something you should use as a discount when buying the house as an investor. Either way, somebody is likely to have to pay for this replacement. I am talking about polybutelyne water piping. Usually identified by being blue in color, this pipe has a reputation of breaking and leaking causing thousands in water damage. Though many houses may have it, nobody wants it. Not only is it unpopular,

it’s expensive to replace. But using the techniques I teach in Rehab 101 we got our estimate to replace the entire pipe in the house and the underground service from the street down from $7995.00 to about half the cost at $4200.00. That’s a great savings on just that item alone. So be careful not to overlook a houses “fine print” when you do your initial walk around. See beyond what you think you see, and learn to look for the less obvious repairs that could make or break a good deal. These and other great money saving techniques are on my site www.peteyoungs.com

Find it, Fund it, Fix it, & Flip It . . .
A 2 Day Bootcamp & Bus Tour  Saturday & Sunday September 18th & 19th  With Pete Youngs and Don DeRosa  Where to find the best real estate investment deals!  Don & Pete’s best ways for funding these deals!  How would Don & Pete Fix them up for fast sale!  How they flip houses.
You get two full days packed with both class room and in the field training with two of the countries best real estate investment trainers who actually practice what they teach.

Details and Registration on the MAREI calendar or go to our special web site at:
https://sites.google.com/site/4fweekend/ - there are only 50 seats on the bus, so be sure to purchase your tickets today!

Legislative

Legislative
Trends
 
President Obama has signed sweeping financial services reform into law. The law creates an oversight agency for financial services companies and a consumer financial protection bureau. It also includes provisions to curb risky mortgage lending and to address appraiser selection by lenders. It is important to note that quite a few changes were made in the law due to efforts by government action committees from several different trade associations including National Association of Realtors (Realtors, this is your REPAC dollars at work) and National Real Estate Investor Association and their Government Affairs Committee. Effects of this lobby effort include: CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) A safe harbor from the “ability to repay” requirement was created, which limits the total points and fees collected by lenders and their affiliates to 3. This provision was included over NAR’s strenuous and repeated objection. However, we believe there is some regulatory flexibility in this provision including flexibility for smaller loan amounts with “smaller” being left undefined. NAR will work diligently to ensure this provision is interpreted in a manner consistent with the best interests of real estate professionals, their lender partners, and their clients and customers. NAR and National REIA was successful in getting the legislation amended to allow an individual to conduct three seller financed transactions in a 12 month period without being subject to the complicated mortgage rules in the new Act. NAR has asked HUD to adopt a similar approach to exempt seller financing, up to three transactions in a 12 month period, from loan originator licensing requirements under the S.A.F.E. Act.



Seller Financing

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An exemption for Realtors & real estate agents performing traditional real estate activities from the jurisdiction of the Consumer Financial Protection Bureau except to the extent they are governed by existing laws such as the Real Estate Settlement Procedures Act (RESPA) that will now come under the bureau’s purview.



MORTGAGES Risk Retention – Qualified Mortgage Exemption



At NAR’s request, Congress included a qualified mortgage exemption from potentially costly-for both lenders and consumers--risk retention requirements. Congress gave the regulator flexibility in determining what a qualified mortgage is, however the mortgage must meet the standards laid out in the predatory lending portion of the bill. These standards include underwriting based upon full documentation, ability to repay, and limitations on fees among other things. NAR will work with the regulators to ensure that the regulatory framework maximizes access to affordable mortgages for consumers.

COMMERCIAL Accounting Rules Study





The Act requires the Federal Reserve to study the combined effects of the risk retention requirements with recent new accounting rules put in place by the Financial Accounting Standards Board (FASB) that represent dramatic changes in securitization accounting (FAS 166 and 167). The Act gives the SEC the authority to review the current standard and update it to reflect inflation and the characteristics of the modern
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Accredited Investor

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

Qualified Mortgage Safe Harbor

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economy. The bill excludes the investor’s primary residence from $1 million net worth standard. The SEC review may raise the threshold for defining a customer as an accredited investor, forcing companies that sell securities to them to register the products with the SEC. Commercial End Users

their swap transactions and meet margin requirements. APPRAISAL

To find your congressman:
Visit http://www.house.gov and put in your zip code in the top left hand corner of the screen. To find your senators: Visit http://senate.gov/general/ contact_information/senators_cfm.cfm



Appraisers are to be compensated at a rate that is reasonable and customary for appraisal services in the market area of the property being appraised. Home Valuation Code of Conduct (HVCC) sunsets when Consumer Financial Protection Bureau issues interim final regulations implementing the appraisal provisions of the Dodd-Frank Act. A subprime mortgage requires a written appraisal of the property to be mortgaged.





The Act appears to allow commercial end users – including owners, operators and developers of commercial real estate – to continue to engage in swaps used to manage commercial risk without being subjected to central clearing. However, regulators would now be authorized to impose initial and variation margins on these un-cleared trades. As for provisions governing securitization, the final language retained --with minor modifications-- an amendment by Senator Mike Crapo (R-ID), allowing “third party” (B-piece) investors to satisfy new risk retention requirements for commercial mortgage-backed securities (CMBS). This language also directs bank regulators to consider exemptions or different risk-retention requirements for CMBS. The Act requires banks that package loans into CMBS to keep 5% of the credit risk on their balance sheets. Directs regulators to exempt low-risk mortgages that meet certain minimum standards. (See “Risk Retention – Qualified Mortgage Exemption” above.) Financial firms, a class that likely includes mortgage real estate investment trusts (REITS), will be required to centrally clear





Modified Crapo Amendment

The applicant is entitled to one free copy of the appraisal. The applicant must be notified that the appraisal is prepared for the sole use of the creditor.

Bureau become members of ASC. The Office of Thrift Supervision is no longer a member of ASC because it is being merged into the Office of the Comptroller of the Currency. 1031 LIKE KIND EXCHANGE INTERMEDIARIES  NAR supported language re-





quiring the SEC to conduct a study on how best to regulate 1031 Like



Securitization



Kind Exchange Intermediaries to end It is unlawful to coerce, extort, collude, instruct, induce, bribe, the fraudulent practices that have or intimidate an appraiser in an attempt Watch the MAREI Blog for Updates . . . to influence And Working Links. the independent judgment of the been taking place. appraiser. An appraiser may consider additional, appropriate property information Including additional comparable sales to support an appraisal, provide further detail, or correct errors. Appraisal Qualifications Board (AQB) Qualification Criteria for licensed and trainee appraisers becomes mandatory for the states (currently voluntary). The Federal Housing Finance Agency (FHFA) and the new Consumer Financial Protection There are more laws in the works that will affect not only Realtors, but Investors, Mortgage Lenders, and other’s in the industry. It is very important that we as the Real Estate Investor trade organization and our respective individual trade associations such as NAR work hard to support our leaders working in Washington, State Capitals, and City Government.

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Swaps

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Membership

Give Back
One of the best ways to grow your real estate business is to GET INVOLVED. From volunteering at events, serving on committees, to just giving back to the community your business will grow. When you get involved, you meet more people, you learn new things, and you gain recognition in the community, all resulting in either more business or more profitable business or both.
Here at MAREI we have a goal for the 2010 – 2011 year, to get more members involved and more interaction at all levels. We would like to share with you a few of our goals that are also opportunities for you to become involved. Quarterly Market Report: We would like to offer a 30 minute state of the market in the Kansas City Metro area once a quarter or divide up the metro into 3 areas and offer one a month at the monthly meetings. Would need to add an extra 30 minutes to the meeting. We need to locate 3 – 6 people who are experts or who could become the expert on the markets in Kansas City and be able to provide a detailed report to the group. We are getting examples from other REIA’s across the country. The Volunteers here would become much more knowledgeable about the market as a whole and by being the “expert” gain recognition and business in the community. Do you know someone who we be a good expert on the Market? Please email us their contact information. Educational Session: We would also like to offer up a 30 minute educational session provided by one of our expert investors or business associates on a specific topic of interest. Can be basic real estate concepts to advanced exchange techniques. Will need to add an addiPage 12

Get Involved
tional 30 minutes to the meeting. Then we would need experts to create the 30 minute presentation and teach it. Again by evaluating what you do in your chosen field and breaking it down to teach to others give you more knowledge and being an “expert” gains you more recognition and business. Do you know someone at MAREI who has a lot of knowledge to share who would be a good trainer? Please email us their contact information. Legislative / Government Affairs Committee: We are under attack! Okay, you hear that often, but it’s truer now than ever. Our governments at all levels need money and they will take the path of least resistance. This means that people or groups that are not represented, will be targeted for increased fees and taxes. So while we do not currently have funding to employee a full time lobbyist, we need to form a committee to at least be a watch dog for local and state legislation and report back to the membership as a whole. Allowing us to be proactive rather than reactive. Get involved here as a member and have a great impact on your business. Community Involvement: Will be designed to involved the associate, it’s members and the broader real estate investing community in worthwhile community programs or project that delivers a valuable service to the community, creates a “sense of community” within MAREI, provides value to our members that generate and promotes MAREI’s positive vision and mission. Get involved by being part of the committee that selects what we become involved in and give of your time or money to help support these worthwhile charities. We are currently support(Continued on page 13)

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ing: Harvesters Food Bank, Habitat for Humanity, and Habitats Restore. Subgroups: Group leaders do not have to be experts in the topic, but have some general working knowledge. More importantly they need to be organized and able to secure a speaker from time to time, locate and reserve space to meet, communicate with our Marketing team to get the word out, and control the meetings. Could meet monthly, twice a month, or quarterly. Meet at a local eating establishment for FREE space. Proposed Sub Groups
             

Online Networking
Update Your Profiles!!! Use MAREInet.com to update Your profile and ensure your Information is correct.
MAREI is a networking organization and part of the MAREI 2.0 plan is that we interact. One of the best ways to ensure interaction is to make sure (1) you know how to access member profiles (2) make sure that members know WHO you are and HOW TO REACH YOU! 1. Log into the Member Area of www. MAREInet.com 2. Update your information by going to “My Info”
  

Women in Real Estate Wholesale Investors Rehab Investors Short Sale Investors Lease to Own / Subject To Private Funding Note Buyers Self Directed IRA Investing REO Buyers Apartment Investors 1031 Exchange Group Landlords Other Topics Groups based on Location in Metro our other cities  Cash Flow Investors  Advanced Investors  Realtors who are Investors

Be sure your contact info is correct Be sure you include what you do Be sure your profile is turned on at the top

3. After updating your info, check off the boxes on the right side to display the contact info in your “Member Profile” in our online member directory 4. Make sure to hit the update button at the bottom of the screen 5. Get fancy
  

Add a Photo Preview your Profile Edit Your Bio

Once your profile is updated, click on Profiles to find out more about your fellow member! MAREI staff cannot provide any member’s contact info to another member if it is not on your profile.

Benefits

Membership
Besides getting awesome deals on training programs on our webinars and at our seminars, are you taking advantage of everything MAREI has to offer you? As a Member of MAREI you are also a member of the National Real Estate Investors Association (MAREI). These and many more benefits are available to you for FREE!
 

Has Privileges!
Office Max: From printing & binding, to finishing & customizing - to reducing time & money with discounts from 10% to 60%, Office Max ImPress offers solutions for the full range of your needs. Rentals.com: Save time and money while shortening the duration of vacancies between tenants with our marketing and save time with our tools. Members receive 20% discount off regular pricing. Number 1 in the search engines. Travel Discounts with avis, Budget, and Enterprise. Real Estate Books by the nation’s largest provider of real estate training materials—Dearborn, Nolo, and Kaplan.


Home Depot: A biannual rebate of 2% of your net sales for your purchases at The Home Depot and Home Depot Tool Rental through an unparalleled Material Purchase Rebate Incentive Program. Many members across the country have cashed checks for $1,000, $2,000 and $3,000. Sherwin-Williams: One of our most popular and most used benefit, Sherwin-Williams offers unbeatable pricing to National REIA members. Enjoy deep discounts on paint, applicators, floor covering, paint sundries, wall covering, spray equipment, and even window treatments! Your discount card is in your membership package. FedEx: Receive significant inbound and outbound discounts on small package shipments through FedEx, as well as copying and printing services through FedEx Office.

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To find out complete details on all these member discounts log into the member area and look at the Benefits Section in the Library. We also mail a complete booklet with all discounts and instructions on how to access when you renew or join or upon request. To request email [email protected] and ask for the member benefits booklet.

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All MAREI membership packages include a Sherwin Williams Discount Card to be used at Sherwin Williams Stores Nationwide:
 

Most Paint discounted 40% or more off Retail. Paint Sundries discounted about 35% from List

Not just for Paint, Sherwin Williams also offers:
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Paint & Supplies Demos & Training Floor Coverings

Tim Norris

Worker’s
Compensation Issues .
Worker’s Compensation Issues . . For the Real Estate Investor Though frequently overlooked by many real estate investors, worker's compensation (WC) and related issues should certainly be addressed early in your business planning stages. Bear in mind, that advice from your attorney, accountant and/or from the State Department of WC (if applicable) certainly trumps what I communicate here. The most important consideration is to understand that how you compensate your labor may or may not excuse you from carrying WC coverage on them. In effect, just because you pay them on a 1099/ independent contractor basis, doesn't mean that the courts or WC commission will agree. Be sure you understand (seek legal advice) on what constitutes an “independent contractor” relationship. It may not be what you think (and may vary from state to state, as well). Be wary not to create an unintentional employer-employee relationship, which could create a WC exposure for your business. Having tenants do odd jobs, such as cleanup, grass cutting, or landscaping as a way to reduce rent may be construed as consideration” and potentially subject you to carrying WC insurance. Do not confuse this with upkeep and maintenance requirements of your lease. What I am addressing here is the reduction, discount, or even waiver of rent in exchange for labor provided by a tenant, especially when such labor takes place on/at locations other than the tenant's residence. The last thing you want/need is this tenant to be injured while doing such work, only to find your liability insurance will deny the claim based upon such an arrangement”. Pertaining to hiring contractors and thirdparty service providers, be certain that they carry not only “General Liability” (GL) coverage, but also current WC coverage, whether State sponsored or from a private insurer. The best time to obtain such validation of coverage is at the onset of the bidding process. Once Certificate (s) of Insurance (COI) are secured from the contractor or service provider a quick phone call (or email, which I prefer as it creates a “paper trail”) to the carrier or Agent can confirm the coverage (s) are current and valid. Being named a “certificate holder” is typically sufficient for most scenarios, especially when you do not utilize a contractor more than a few times a year. For larger/longer term jobs and projects, being named as an “additional insured” may be preferred. Put simply, a certificate holder is simply notified in the event the policy cancels. An additional insured not only is notified when the policy cancels, they are actually protected by the coverage/ policy. Review with your legal advisor, and be advised that being named as an additional insured may cost the contractor some additional premium, usually no more than $50-100 per year. Depending on the situation, it may behoove you to pay this additional premium, if the contractor “balks”. My attitude is “no insurance, no project award”. If the contractor or service provider decides to cut expenses by sacrificing these vital coverages, then I do not want them doing
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any work for my business. Understanding that the relationship between you/your business and those that provide labor and services is not simply a by-product of how you compensate them is the first step in making sure your real estate (and any other business) is protected appropriately from WC (and GL) exposures. Securing and confirming coverages is a must when dealing with any and all contractors and service

providers. Unfortunately, in today's litigious world, the risk of using uninsured “spot labor” far outweighs any short-term time or financial benefit. If you are currently using and satisfied with such labor, review with your legal and accounting advisors and consider securing coverage for them, in the most appropriate and efficient manner they/you decide. It only takes one uninsured claim to put you out -of-business. Article provided by Tim Norris

with National Real Estate Insurance Group. NREIG was built to specifically address the unique needs of the real estate investor. Tim Norris is an investor and NaREIA, OREIA and Cincinnati REIA member. We can be reached at 513-2751350, 888-741-8454, or . Check out

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Trends

Market
Update
June 2010 Housing Trends The Kansas City Regional Association of Realtors project that we will see fluctuations in in sales and prices until the fall and then they expect prices and sales to start increasing slowly but steadily. They also expect as the inventor of New homes continues to fall, the price of the new homes will start to rise. One key factor that is keeping the market where it from rebounding very quickly is the high unemployment. And they expect that interest rates which are at historic lows will start to go back up getting a lot of buyers to get off the fence and buy before they go to high. If we look at the Kansas City Market: Average Sales Price of a new home in May was $296,768 which is a little lower than a year ago. There were price increases in Cass, Clay/Ray, Jackson & Plat with decreases in Johnson, Leavenworth, Miami, and Wyandotte. Existing home prices averaged $167,487 which was a 4% increase over last year. All counties except Cass saw an increase in the average sale price for existing homes over June of last year. Home Sales saw sales of New homes of 308 properties which is a 23% increase from 2009 and New home sales increased in June by 31% over May . Existing home sales were down 5% over last year and down 13% over last month. June’s combined total sales were down 10% from last month but only down 3% last year. Page 18 Inventory saw a 37% decrease in new homes from last year and existing is 3% higher that last year and just 3 % higher than April. Overall for May we have a 5% increase in total inventory for 2010 over 2009. Supply of Homes in the Kansas City Region is determined by taking the “inventory” and dividing it by the 1”2 month average of number of sales.” As a rule of thumb a 5-6 month supply of homes on the market is balanced, over 6 months is a buyer’s market and less than 5 months is s sellers market. Combined supply of homes in the metro is at about 7.7 which is up slightly over the 7.4 in May. Existing homes is at 7.7, up slightly from 7.4 last month and the new home supply was 8, down from the 8.3 supply in May. The good news is that these numbers are lower than 2009 and the existing and combined totals are nearing a balanced market. Local data is from www.KCRAR.com where you can read the complete report. So if we look at housing trends in the nation as a whole we see that Unit sales were up 28.3% in June 2010 over 2009. The average home price was up 8.8 over last May and we saw a continued 10 month trend of stronger sales and raising prices Looking at the years sales over all, Real Trends predict that while we have seen our 10th month
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of increases in a row, we expect this to fall off in the 2nd half of th year. On the National Level we have pulled information from Real Trends June 2010 issue. Complete digital issue is in the member library. Be sure to log in and read.

Market Experts Wanted
Are you an expert on the market in your area or field of expertise? We are looking for experts on Residential, Apartments, and Commercial to contribute to the newsletter, the blog, and the meeting. Be seen an expert in your Niche. Contact [email protected]

From Real Trends June 2010 Market Report

Marketing

conversations
With Betty Buyer
This article is a compilation of two Blog Posts from Don DeRosa’s Web Stei Betty Buyer (believe it or not, that isn’t her real name!) is in the process of buying one of the rent to own homes in the Atlanta metro area. She has found a home she loves, and she closes in a week. I love finding buyers like Betty, and I thought it might be instructive to let her tell you about her purchase. Betty, by the way, refuses to let me use her real name, because she is pretty sure she’s paying a lot more for the house than I would have. (Like I said, Betty is just the kind of buyer I’m always looking for!) But here – let’s let Betty tell you: ME: So, you say you’re paying too much for the house? BETTY: Well, I didn’t exactly say that. It’s a fair price, but it’s definitely retail. I started out looking for a bargain, but this house has a lot going for it. So it’s worth it to me to pay some extra. ME: How did you find the house? BETTY: Well, I didn’t think I could qualify for a loan, so initially I looked on Craigslist at a rent to own homes listing and saw a listing for ‘Owner Finance or Rent to Own. Just Like the Banks, with No Credit Check.’ ME: So you were looking to buy, but weren’t sure if you could? BETTY: I don’t exactly have bad credit, but I had stumbled a bit with a job loss. Now that I have a good, stable job with a steady income, I wanted to find out whether I could buy outright or whether I would have to rent to own. But at that point, I didn’t completely understand how rent to own worked. You know – how much of my monthly payment would go toward the purchase price or the down payment. How soon could I buy? How would I qualify? etc. ME: And what did you work out with the seller? BETTY: The seller was very flexible. I really like the terms. Given my current job situation, he was willing to sell or rent to own, whichever I wanted. We agreed on seller financing, so I don’t have to mess with a bank, and he’s giving downpayment assistance. So that’s why I am paying retail, but since it works with my budget, it’s good for me.

(Continued on page 21)

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have a lot of discretionary income after the house payment. ME: So the home warranty helped seal the deal for you. BETTY: It took some of the hesitation away about owning my own place. I didn’t want to have to worry about garage door openers, water heaters or my washer/dryer going out on me. So I just pay the co-pay if there is a problem with any of the systems – which is kind of like having the comfort of renting where the landlord takes care of most things. Spotting a trend? Our friend Betty wants a house with easy finance terms, and she wants it to be move-in ready. It’s worth it to her to pay significantly more for a house that fills those requirements. She’s willing to pay you, the seller, to take care of the details. We’ll continue our conversation in my next post. You can find out more about how to sell a house quickly in a buyers market in Sell Your House Fast. And if you have any comments or experience with this , please leave a comment below. I was looking at ads that I thought would attract renters and home buyers and came across one that said ‘Buy Now Pay Later No Credit Check’ and another that said ‘No credit check apartment in Atlanta Georgia.’ Now, these aren’t that attractive to me because I DO check credit. But they do work to attract renters and buyers who might not have stellar credit. In my last post, I wrote about my conversation with Betty Buyer, who is paying retail for a house she’s purchasing from an investor. She has had
(Continued on page 26)

ME: I always tell my students – negotiate on price or terms. So you got the terms that worked for you. BETTY: Yes, and he made it really easy to look at the house, too – he gave me the lockbox code, so I could look by myself and not have to coordinate schedules with him. ME: What specifically appealed to you about the house? BETTY: Well, there were a few things that did it for me. First, it’s in a good neighborhood, and my daughter won’t have to change schools. Next, the house is brick, which I like, and it has a lot of curb appeal. The minute I saw it, I liked it. ME: What else did you like about the house itself? BETTY: Well, the house has been completely renovated. On the inside, it’s like a new house: new kitchen, new bathroom, new air conditioner, new floors, and new paint. New roof, too. It’s even going to have new stainless steel appliances. I don’t have to do a single thing but move in, and I won’t have to worry too much about repairs.  ME: But when you buy on owner finance, as opposed to rent to own, you take care of the home and repairs, don’t you? BETTY: Yes, that brings me to the last point. I had looked at the different home warranty companies and he agreed to put an Old Republic Home Warranty on it, too. With everything new in the house, it seemed like overkill. But I am NOT a fixer-upper, and I don’t

Calendar

Upcoming
Events
July 7 July 9
Children & College Students
Is your child interested in real estate? Is ready to learn? Add your child aged 12 to 18 to your membership. College Students with student ID, we have internships
Absolute Auction (www.BillFair.com) Nineteen Bank Owned Homes to be auctioned. Absolute all sell regardless of price. See complete details online at www.BillFair.com

Table Deadline

Industry Partner Expo Table Deadline MAREI members may reserve table space for the Expo & Networking time from 6 to 7pm at the Monthly MAREI Meeting. Must be reserved by July 12th. Reserve through the calendar at http://www.MAREInet.com

July 10 July 11 July 14

Monthly Meeting

MAREI Monthly Meeting MAREI meets for networking & education on the 2nd Tuesday of the month from 6pm to 9 pm. At the Sylvester Powell Jr Community Center. No Charge for Members, Guests $25 at the door, $15 if preregistered.

available. Work in the MAREI office for $10 in MAREI bucks to use for Membership & Workshops

Sub Group: MAREI’s Commercial Investors meet every other week. This month on July 11th and July 25. This group is for MAREI members and their guest. See online calendar of events for more information.

Contact MAREI Office for more info. [email protected]

Lee’s Summit Investor Breakfast Lee’s Summit Investors Networking Group meets the 2nd Saturday of the month for coffee, breakfast, and conversation at the Panera Bread on Douglas in Lee’s Summit. Open to MAREI Members & Guests.

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Monthly
Meeting
Sylvester Powell Jr Community Center
6200 Martway, Mission KS 913-722-8200

Tuesday, August 10th
Doors open at 5:30 Members: FREE Guest Fees: $25 at door . . Pre-register online for $15 If guests join with in two days of the meeting, their guest fee will be applied to the membership fee with proof of payment. Please call 816-523-4400 x 222.

5:30 Member Benefits 5:45 Set Up / Registration 6:00 Industry Partner Expo 6:00 Member Networking 7:00 7:30 Haves & Wants (new feature) Presentation w/ Tammy Robb & Janice Dehart See Page 8 & 9 9:00 Informal Q & A New Member Registration For each new member you refer, earn MAREI Bucks which can be used towards seminars, advertising,
Park in North Lot 2nd from the Building Less Kids & Door Dings

Invite your friends colleagues to visit the Monthly Meeting for with a Guest Pass (available online at www.MAREInet.com).

Location 6200 Martway Mission, KS 66210

9:00

North of Shawnee Mission Pkwy South of Johnson Dr East of Lamar

or membership fees.

Properties

Investment
Opportunity
Offered as Rehab Rehab Rehab Wholesale Wholesale Price $25,000 $29,000 $30,000 $55,000 $105,000 Bed / Bath 4 Plex 6 Plex 3 bed, 2 car 1 + Home 3 duplexes Contact Eric Deeter Candace Vanice Candace Vanice Maggie Sheehan Bill Textor Address 1112 E 42nd St 2912 Lockridge No address 6009 Cherry St Truman Library City Kansas Coty Kansas City, MO Grandview Kansas City, MO Independence Phone 913-579-3354 816-268-4722 816-268-4722 [email protected] 913-206-0979

Market Your Properties
Do you have investment properties to market to the membership? Be sure to log into the MAREI member area and post your properties on the classified page. Be sure to include: Address: Street & City, State Type of sale: Wholesale, Listing, Turn Key Price: Your asking price Type of Property: Single, Duplex, Multi, Etc Contact: Name & Phone Number Web Link: For more info and more photos You can include 1 photo, but make sure it is not too high quality a photo or it will have too many pixels to load. New web site will have direct link on the main page to the properties on the Classified section of the web site. You may also want to list on the message board as well and post links on our social media pages.

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Roger Holyfield


(816) 510-9199
[email protected]

All MAREI members can register through our special link to receive a 2% rebate on all purchases made at Home Depot. From a $5 item for a week end project to a $10,000 rehab: kitchen, lights, appliances, Etc.



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Licensed and Insured Call Anthony @ 816-606-0266 or Emily @ 816-252-0095 [email protected]

Continued from page 21

some bumps with her credit, but now has a good, stable job that will allow her to qualify with an investor to buy a house with seller financing. This post is a continuation of our conversation.  ME: Betty, you told us you wanted something that was move-in ready and had easy terms, and you were willing to pay extra for a house that fit those qualifications. Now I’d like to find out how the house was marketed. How did you find it?  BETTY: I found the ad on Craigslist, actually. There are tons of properties on that site!  ME: What made you follow up on that particular property?  BETTY: It’s kind of a fluke that I found it. It was listed under rentals, not under sales, because the seller was willing to do a rent to own or lease purchase as well as a sale. The ad said the house was for rent or for sale with owner financing, and that’s just what I was looking for. (So list your home in the ‘Rental’ section as a rental or a rent to own house. And of course, you can put it under Homes for Sale, too. It also helps put the listing in Spanish – broaden your market reach!) ME: What other tips would you give to investors on how to attract home buyers and renters? BETTY: Well, I do look for certain things. First of all, I always limit my Craigslist search to ads with pictures. I don’t want to waste my time driving to a place that ends up looking horrible. If there hadn’t been a picture, I wouldn’t have seen the ad.

ME: With all of the sites that you can add pictures of the entire interior and exterior of the house, there really is no excuse for not putting pictures on any web site you advertise on. BETTY: Another thing: if there’s no price in the ad, I don’t call. I don’t want to waste my time on houses I can’t afford.  ME: So, put the list price of the house in the ad. And if you’re offering good terms, and will work with folks with less than perfect credit, put something like ‘No credit check loans’ to get their attention. BETTY: Yes. And finally, curb appeal is important to me. The first time I saw my new house in person, the lawn was neatly trimmed and the house seemed well cared for. ( As I’ve said before, fix it up like they do on the Curb Appeal TV Show. You can read this post to see some pictures and get some more ideas.) ME: Thanks for those tips, Betty. When do you close on your house? BETTY: In less than a week! I’m excited about moving in! Betty could have gotten a house for less money. But because of the seller’s successful marketing, she chose his house out of hundreds, and happily paid more for it because it was move in ready. I’ll do that kind of deal all day long! From Don Derosa’s Web site: www.DonDeRosa.com

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Find it, Fund it,
Fix it & Flip It
Join Pete and Don DeRosa on Saturday and Sunday September 18th and 19th for their renowned, Two-Day Find It, Fund It, Fix It and Flip It Boot Camp and Bus Trip. On Saturday, Don will teach you where and how to find and evaluate the best properties in the market, so you can make at least $20,000 on each deal. He’ll also share exactly what to say to get private money to fund all of your deals, so you never have to go to the bank or qualify for a loan (do you really want to try to get a loan in this market, anyway?) Then on Sunday morning, you’ll take a bus trip to 2 bankowned houses, where Pete and Don will show you the specific things they look at when they evaluate a house for purchase and repair. You’ll get the perspectives of both of these real real estate investors (yes, they actually buy houses. They don’t just travel around talking about it!) Then Sunday afternoon, Pete will talk about rehabbing the houses, what he’d do and how much it would cost. In addition Pete will go over the new EPA LEAD PAINT work practices to stop the spread of lead dust. So… you’ll walk away knowing exactly what to do if you want to buy one of those houses. (Remember, these are bank-owned. YOU can buy them!) Be sure to join us on the Tuesday preview with Pete shares his contractor knowledge with investors and homeowners alike, teaching everyone how to put THOUSANDS OF DOLLARS into your own pocket. To register go to www.MAREInet.com and click on Calendar and look for both the Tuesday Meeting on the 14th & the Bootcamp and Bus Tour on the 18th & 19th. We only have room for 50 people on the bus, so if you want to attend be sure to register as soon as possible. Saturday: 8 am to 6 pm Sunday 8:30 am to 5:30 pm Early Bird Pricing: $149 for Non-Members $79 for Members After September 16th $199 for Non-Members $99 for Members Or use form on back page.

Find it, Fund it,
Fix it & Flip It
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