Newsletter November 2008

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Investment News
Newsletter of Mid-America Association of Real Estate Investors
October 2008

Collecting on Your Judgments
Even after you have evicted your tenant and won a judgment for back rent, late fees, and court cost, you still have to collect on the judgment. This is where you will need to do your homework. First the government has created a few forms of protected property: you can’t go after their car, some forms of retirement funds, and if they declare bankruptcy under Chapter 7, you right to collect as a creditor on a small claims judgment may no longer exist. So lets look at some other choices: Garnishing Wages: You can file to garnish up to 25% of the debtors wages if they make a minimum amount. Welfare, Social Security, unemployment, pensions or disability checks are not incomes you can garnish. If may result in getting your money back over time, the debtor could quit or get fired and the debtor could file bankruptcy to get out of paying. Garnishment is one reason to make sure tenants have jobs and you have employment information, should you need to garnish for bad debt. Another question on your rental application should be information about bank accounts. If you have information on bank accounts—savings, checking, money markets, mutual funds, you have a place to start. You need to know the name of the bank, the branch where they bank, the name on the account, and the account number to levy against the accounts. So be sure to keep copies of those rent checks and rental applications. If you find the account is a joint account or if exempt income, you may not be able to go after the whole account. If the debtor owns real estate you can put a lien on the property. This lien will give you the right to be paid a certain amount from the sale proceeds of the property. This method does not get you too much money in your pocket quickly as you need to wait until the debtor goes to refinance the property or sell it. The good news is that if you can wait it out, you will eventually get paid. But note that liens on real estate get paid in the order they are filed so if you are way down on the list, you still may make nothing when the property is sold. So be sure to take pre-steps on collecting on judgments by having a good rental application that ask questions, keep accurate records and copies of checks. Be sure to take a few notes when you talk to your tenants. When they change jobs get new employer information. If they pay you with a check that looks different from an old one, get a copy—it may be a new account you don’t know anything about. If they mention any windfall income like lottery, inheritance or payment from an injury. Also note that you can collect on judgments for years. States can vary from 5 to 10 to even 20 years and in many cases can be renewed when they expire. With only one or two judgments, you can probably take care of all of this on your own. If you have a lot of tenants, you may find you have more on your plate than you can keep up with. You may want to consider hiring a full time debt collector. Most judgment collectors will charge a percentage of what they collect. Some will work for

free until they collect the judgment and then take their percentage—usually half. Others will want you to cover upfront minimal fees and then take a smaller percentage when they collect. Find out more on judgment collection at the November 11th General Meeting. Talk to our speaker during the networking and take notes during his presentation from 7:30 to 9:00.

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, Foreclosure, & Credit
With the ever changing credit and lending market, this information could change tomorrow. We as investor’s get asked which is better a foreclosure or a short sale, and while neither are desirable there are pros and cons to each. If a borrower let’s their home go into foreclosure, they could essentially live in the property for several months after the foreclosure auction until the lender or the buyer at sale pays them to move out or evicts them. So in essence they could profit by 3 or 4 months worth of rent, and if they get paid to move , could net another $500 to $1000. If the borrower decides to try to sell with a short sale, they need to list with a realtor to find a buyer or an investor buyer, the property will need to be viewed. Because realtors need to disclose the property is a short sale, the seller can expect to receive low ball offers and if they work with an investor to speed up the property, they will also be receiving low offers. The lender will not tell the borrower what kind of price they might take until they get an offer, so it could take a few months to get an offer to work with and then another month or so to get the offer negotiated to approval or rejected to find another buyer. Once the seller gets an offer, then the negotiation with the lender starts. In the past the seller needed to be behind on payments to be able to negotiate a short sale, but now most lenders will consider a short sale on most loans. But if the home is in good condition, the lender is not going to short too much and if the borrower has a lot of cash assets, a higher income, or is an investor, the bank may be less inclined to negotiate. The borrower’s also the differences of foreclosure vs short sale on their credit. From an article on About.com by Elizabeth Weintraub and her source David Steep a division manager at Vitek Mortgage.: foreclosure, deed-in-lieu of foreclosure and short sales all have a huge affect on credit. When looking at foreclosure vs deed-in-lieu, both have about the same affect on the borrowers credit. The article notes that it could drop credit by 200 to 300 points depending on the original credit score. And it notes that a short sale can do about the same thing. Then the next question is how long will this affect the borrowers credit. And it will be on the credit report for quite a while, but the borrower should see lenders willing to work with them in about 2 – 5 years. And if you sell through a short sale, Fannie Mae Guidelines are creating programs that will help in 2 years. After the short sale or foreclosure or deed-in-lieu the lender could file a deficiency judgment against the borrower for the difference between the amount the home sells for at auction or short sale and what is owed plus attorney and court fees. Usually always if the property is sold at auction a deficiency is filed while if a short sale or deed-in-lieu is negotiated, the deficiency judgment is a negotiating point. Deficiency judgments will be affected by the type of loan purchase money, hard money, equity loans, and refinances . The first may not be subject to judgment while the latter 3 are more likely to have one. This is a subject to talk to your tax advisor, and attorney. If the lender agrees to forgive the debt and not issue a deficiency judgment, the IRS wants their cut. So the lender will issue a 1099 to show the borrowers income as forgiven debt is income in the eyes of the IRS. So which is better, the foreclosure or the short sale? Well the process of selling and the time in the property is one factor, the deficiency judgment is another factor, and time to get a new home loan is also a factor. But the affects to the current credit score is about the same for both. But again because the rules and regulations are changing daily, please look to an attorney and a competent lender for advice. If you factor in the Mortgage Forgiveness Debt Relief Act of 2007, taxpayers may exclude debt forgiven on their principal residence if the balance of their loan was less than 2 million. So virtually every homeowner out there who decided to sell their primary residence through a short sale, can negotiate with the lender to not receive a deficiency judgment and the IRS will not require a 1099. For debt forgiven in 2007, 2008, or 2009. Debt forgiven on second homes, rental property, business property, credit cards, or car loans does not qualify.

More information: ♦ http://homebuying.about.com/od/4closureshortsales/ qt/foreclosures.htm (how do foreclosures work) ♦ http://homebuying.about.com/od/4closureshortsales/a/ shortsalebasics.htm (how do short sales work) ♦ http://homebuying.about.com/od/shortsale/ a/052208SScredit.htm (short sales can ruin credit) ♦ http://www.irs.gov/irs/article/0,,id=179073,00.html (Mortgage Forgiveness Debt Relief Act)

www.MAREInet.com

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General Meeting ~ November 11th ~ 6pm Networking ~ 7pm Presentation ~ Marriott, Overland Park

MAREI Presents:

Collecting of Real Estate Debt
With John Mischka
Collecting debt is unlike any other portion of your business. It is not simply a matter of picking up the phone. You are dealing with individuals determined to avoid you: Tenants who skipped on the rent, tenants who have been evicted and owe you a judgment, and other people who owe you money. The nature of these collection requires creative and innovative approaches to effectively track the debtors, file on them, and ultimately collect from them.

• • • • •

When employment or bank accounts can be founded, set up a garnishment and take away their ability to decide how much and when to pay you. If they buy a house or own a house, file a lien against the house for the debt, then they cannot sell, transfer, or refinance until your debt has been satisfied. If they owe you money, peruse them in court to obtain a judgment that can be perused by the usual means. Remember that a judgment will expire in 10 years in Missouri and 5 years in Kansas and often they can be renewed and extended. Find a resource that has data to track down the people who owe you money, find out where they work and where they keep their money, so you can go after your debts. Do you have late rents, properties that have been abandon with monies owed to you, or valid judgments that you need to collect on? Find out more on Tuesday November 11th. Bring your questions on judgment collections. Find out how to make those old collections profit in 2009! John Mischka Judgment Processors 9401 W 87th St, St 202 Overland Park, KS 66212

This meeting is sponsored by

816-841-2694 Would you like to sponsor a meeting? 816-22-0800 Includes your information here in the newsletter & online. Includes a vendor table at the meeting. Includes a listing on the Vendor Page Online for 2 months. We will include a 1 page article you provide in the newsletter. You receive 10 minutes to speak before the main presentation. You have the right to place your marketing materials on the seats in the meeting room. Call the MAREI office at 816-523-4400 for more information.

Tuesday November 11th, 2008 6:00 pm Networking 7:30 pm Presentation Sponsor Meeting: $200 Reserve Networking Table: $35 for Member’s

Overland Park Marriott 10800 Metcalf Members Attend FREE $25 Guest fee at Door Reregister for $15 on Web Site More info www.MAREInet.com

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Search & Analyze Property
Mid-America Association of Real Estate Investors and e Real Investor are teaming up to create a highly functional page for our viewers and members. This is currently in the start up stages. Allows you to do basic analysis and search properties for sale nationwide for free. Properties are imported from several property listing web sites as well as input directly by investor and realtor members of eRealInvestor. Our plan is to get this site up and functioning on the MAREI web site and then roll it out to all REIA groups nationwide. The plan is to allow any viewers access to the basic analysis and the property search, but only REIA members and paying members will be able to access the more advanced analysis and be able to list their own properties. To get these features on our site it must be a win win solution for us and for eRealInvestor. To that end they need you to test on our site and let them know you are using it. The more houses we list and the more traffic we generate, the more attractive it will be for paid advertisers. So please take a test drive!
♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦

Go to www.MAREInet.com Click on Search & Analyze Property on the purple bar on the left You will find a analysis page that is live Analyze your property deals on this page to see if they are profitable or not

Click on the Green Search for Properties Now link near the bottom left. Click on Search Properties on Green Bar Near the top. Select a State and Enter Your Search Parameters View Properties You can sort the list by column by clicking on up or down arrow near the top of the column you want to sort like city, state, beds, price, etc. ♦ Select up to 3 to analyze List your Properties ♦ MAREI members, click on Member Area on the purple bar on the left. ♦ Log into the member area and click on ERealInvestor on the purple bar. ♦ Read the instructions and our group user name and password. ♦ Log in and post all your property information. Check it out. You may find you want to upgrade to your own paid membership to be able to add the analysis button to your own web site so your viewers can analyze your properties. Analysis collects comparable date for sales and rentals from a variety of online sources and puts the information along with the information you enter into a simple to use and read form that is interactive. www.MAREInet.com

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INVITE A FRIEND To a MEETING
MAREI Members do you have a friend, coworker, or per. son who provides you a service that is interested in real estate investing? Our Next 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 reregister at www.MAREInet.com through the Calendar of Events, they can save ten bucks.

Membership Benefits
♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ Free entrance to General Meetings Printed Version of this Newsletter Discounts to Paid Events Access to Online Library 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

Cost: $99 annually for one, $50 per additional

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

To Join, fill out form below.
Name #1: ______________________________________________ Email: _________________________________________________ Name #2: ______________________________________________ Email: _________________________________________________ Company: ______________________________________________ Address: _______________________________________________ _______________________________________________________ Phone: ________________________________________________ Standard Membership $99 Add on Spouse or Partner $50 Business Membership $499 Additional Employee $50 Check Enclosed (make payable to MAREI)

REFERED BY: ___________________
Free entrance is limited to the October 2008 meeting at the Overland Park Marriott 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!

Credit Card: ____________________________________________ $______________________________ Total Amount ___________________ Expiration Date

_______________________________________________________ Name as it Appears on Card _______________________________________________________ Billing Address (if different from left) ______________________________________________________ Signature Date

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

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

David R. Nachman
816-756-5800

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

Yellowletter.com
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

Yellow Letter Automated Mailings Pre NOD Leads Available

John & Donna MacNeil
Phone: (904) 880-2742 Fax: (904) 880-2741 Email: [email protected]

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]

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

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].

I Buy Private Mortgage Notes, & Land Contracts, Lump Sum Cash Edward Griffin
**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

913-499-6518 [email protected]

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

Contact Realty Resource when you are ready to discuss your options with Kansas City Area Real Estate Investments. Consult with one of our Specialists to help you find the property to fit your investing needs. Contact Realty Resource when you are ready to discuss your options with Kansas City Area Real Estate Investments. Consult with one of our Specialists to help you find the property to fit your investing needs. We understand that buying a primary residence is much different that buying an investment property. You have a lot more factors involved that need to be looked from specialized financing, exit strategies, repairs, maintenance, management, and more. Our agents have expertise with: • • • • • • • • • Listing Bank Owned Properties REO Properties Wholesaling Properties Rehabbing Properties Renting Properties Section 8 Short Sales Apartments Property Management

176 Multi Family Units in Kansas City Package Price $4.7 Million
115-119 W 39th Street, KCMO 1027 E 9th St, KCMO 5609-5709 St John, KCMO 145 Hardesty, KCMO Locally Owned Owner Managed Seller to Sell as a Total Package Offers for Separate Purchase Considered Financials, Proformas Photos, & Rent Roll

www.MultiFamilyForSale.Wordpress.com
Listed for Sale by Joe Reece & Don Tucker Realty Resource 816-523-4400

Having a Kansas City Realtor who specializes in Real Estate Investment Properties such as Bank Owned Properties, Short Sales, Pre-foreclosures, Cash Flowing Rental Properties, Apartments, and Lease Options is a must if you are investing in Residential Investment Properties. www.RealtyResourceKC.com 816-523-4400

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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.

Accurate Title Company, LLC Ron Kraft

INVESTMENT PROPERTY REHAB LOAN SPECIALIST

FLATIRONS FINANCIAL, INC

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

EMAIL: [email protected] PHONE: 913-393-2448 or 866-393-2448 www.FLATIRONS.LENDINGSTATION.COM Ask us about MAREI membership reimbursement with your loan! Handyman Decks, Painting, Rehab General Contractor We’ll Beat Any price. RocMan Rehabs 913-631-8582
Your Neighborhood Rehab & Remodeling Specialist. Fast, Reliable Inexpensive. No job is too big or too small

www.AccurateTitleCo.com

Do you have IRA funds to invest? Want to invest in Real Estate? Earn a return on your IRA (or other) funds secured by Real Estate. Call Kim or Don Tucker 816-523-4400

Call us Today!

ONE STOP SHOP
Full Service for Real Estate Investors
Full Service Real Estate Company Buy & Sell Property Hard Money & Rehab Loans No Seasoning on Title Refits to Payoff Rehab Loans LLC Loans, FHA Loans, Purchase Money Lots of Crews, Cheap Prices Renovation, Rehab, Remodeling Services Patrick and Marta Grace Full Service Property Management

REAL ESTATE SERVICES

REHAB LOAN COMPANY

KC REHAB CONSTRUCTION

LAS CASAS MANAGEMENT

GRACE REAL ESTATE COMPANY LLC 207 NE 72nd St, KCMO 64118
www.MAREInet.com 816-453-5532 or 816-456-1843 [email protected]

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Articles Published
Are you an expert on a Real Estate Related Subject? Have you had a Great Deal to Brag About? Did you have a Learning Opportunity to Share? Consider writing an article for our newsletter and web sites: We are looking for contributors to add to the knowledge in our Newsletter & Websites on the following Subjects: 1031 Exchange Advertising & Marketing Appraisals Asset Protection Building a Team Closing a Transaction / HUD’s Commercial Real Estate Fair Housing Financing & Hard Money Flipping Properties & Wholesaling Foreclosures & Short Sales General Real Estate Investing Getting Started Home Improvements Home Inspections Income Taxes IRA Investing Land lording Lease Options Learning Experiences Low Income Housing Mobile Homes Motivated Sellers Negotiating Networking Notes & Paper (Mortgages) Options Owner Finance Private Lenders & Money Partners Probate Real Estate Agents Rehabbing Self Storage Units Selling Property Social Networking Subject to Success Stories Tax Liens & Tax Sales Tenants In Common (TICs) Web Site Technology

Please Email us Original Articles with a short 1 paragraph bio, reprint permission, and contact information. We will notify you when we publish in our newsletter and on our web site. Send emails to [email protected]

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There is Always Business
By Richard Flint If someone asked you to describe the business scene today, how would you do it? Would it be challenging or tough? Would it be adjusting or upside down? Would it be one where there is business to be done or one where the business just isn't there right now? I find it so interesting talking to people about what is happening. Ask ten people and most would explain the market as "tough" right now. The reality is the business market is whatever you perceive it to be. If you want it to tough, it is tough; if you want it to be challenging, it is challenging. I spoke the other day for a real estate group and as I was speaking, I was watching the eyes of those who made up the audience. My topic was, "The Soul of a Champion;" the message was about what separated those who do from those who don't. There were three groups in the audience. There were those who understood this was a different market and that they had to adapt to create business. There were those who had no life in their eyes; they were gone and had mentally shut down and were emotionally reacting to everything that was happening. Then, there were those who had no clue. They were new and didn't know anything except what they had heard. Each had a different presence to them and their presence said everything. My friend Bill Gove would always say, "Perception is reality." That is so true. Life isn't what is happening; it is what you perceive to be happening. Many had become comfortable with a marketplace that didn't demand too much business; you could show up in many industries and the business was there. Then, without asking permission, the market made a shift and these people who were busy doing business weren't prepared because they hadn't been building business. That one fact left them unprepared and emotionally reactive. Reality is, the market only becomes tough for those who haven't been preparing themselves. These are the people who have been knocked down and see the market as tough. Let me define what makes a market appear tough to some people: T Thinking diminishes O Opinions take over and facts go away U Understanding is clouded by emotions G Giving in strengthens one's doubt H Have no plan of action, so they are trapped Truth is, there is business in any market, but there are not always people seeking how to do business in a transitional market. When a person is reacting to what they perceive is happening, they lose the mental strength necessary to focus on finding the pathway to solution. To do business in the new marketplace, you must: • Believe there is business out there to do. If you believe there is business to be done, your behavior will demonstrate that fact. • Understand where the customer is coming from and what their expectations are. Today's customer is bringing a different set of emotions to the playing field and they must be understood and handled in the correct manner. • Stay focused. When you lose your focus, you will react to the perceptions of the market that are being created by the media. • Increase your positive presence. Your presence becomes important as you stand in front of the customer; your calmness can create calmness for the customer. • "Now" becomes your most important word. Every day that you wait creates another amount of time you have just wasted. • Expand you knowledge base. Knowledge and behavior must come together to create a presence the customer can see value in. • Slow down. The tendency is to speed up when you feel things are going right; the key to a market that is in transition is to slow your pace down. • Seek out a support group that is doing business. You will need support to stay on track and maintain focus; these people are out there; find them and develop a partnership of positive belief and action. The market is the market; it is what it is and that doesn't mean there is no business to be done. It just means to do business in the new marketplace demands a different mindset that doesn't look through yesterday to see today. Richard Flint counseled for many years both with businesses and private lives and taught at the university level before embarking on his speaking career 28 years ago. He brings to the platform a perfect blend of insight and experience. Visit his web page at www.RichardFlint.com.

www.MAREInet.com

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Finding Buyers in 2008
by Preston Ely Times they are a changin'. Whereas in 2005 finding a buyer for your wholesale deal was easy, we are now faced with a much more challenging predicament. I have personally coined this annoying situation as "Reality." "Reality" sucks. We all know this. Normally I can effortlessly bend it to my will, but it's actually putting up a pretty good fight this time. You see, what I want it to do is put things back the way they were a couple years ago. A couple years ago, if I so much as sneezed I would have rehabbers (buyers) lined up around the block thinking that was a secret signal that "the deal was in," or something. Here's a typical scenario from "back in the day" (which was a Wednesday by the way): Rehabber #1: He sneezed. It's on! Rehabber #2: Oh hellz yeah. It probably has at least $9,000 of equity in it just like the last one. I'm paying cash. Rehabber #37: You guys are idiots. He has a cold. It doesn't mean anything (as he secretly shimmies his way closer to me while butting everyone else in line). Rehabber #1: How do you have that much cash? Rehabber#2: I refinanced my house and pulled the equity out. Duh. Where does anyone get money from these days? Idiot. I bought my house in 1999 for $125,000, and it just appraised for $750,000. I did a 125% LTV cash out re-fi with negative amortization at .0027% APR so my payment is only $1.75 a month. They wrote me a check for over $600,000. Cool huh? Have you seen my new boat? Rehabber #1: But you only make $35,000 a year as a fire fighter. Rehabber #2: I know. Isn't America amazing? I love this country. My payment goes up to like $19,000 a month at some point. I forget when. I'm sure it'll all work out. I think I'm gonna bid $10,000 over the asking price to make sure I get this one. Ah the glory days. I'm not gonna lie - it was fun to be a wholesaler back then. And you know what? It's still fun! We simply have to adjust our sails and do things a little differently is all. Up until about a year ago, the only thing I did to sell my properties was blast out an email to my investor's list. That was it. I would then choose between 19 different offers that I would receive on each deal. I'd always pick the buyer who I felt was going to be the least amount of hassle (namely - whoever was paying cash and closing quickly). This is not enough anymore. The following is exactly what you must do if you have any hopes whatsoever of making big money wholesaling real estate in this current market: Create A V.I.P. Program For Your Buyers And Let Them Know About It People love to feel special. I know I do. And they love to feel special because they are special. If they were hairy monkeys, they would love to feel like hairy monkeys. If they were squishy jellyfish, they would love to feel like squishy jellyfish. But they are not hairy monkeys or squishy jellyfish. They are special humans. And if we make them feel like special humans, they will like us more and be more inclined to buy. Call All Your V.I.P. Members In Advance On All Deals This is a pain, and it almost qualifies as work in my book, which is why I never used to do it. But oh well. We gotta do it if we want these houses sold. The way a buyer gains membership into your exclusive V.I.P. program is to simply buy one of your properties, and close on time. That is it, and that is all. Simple enough? I have people all the time ask me to call them in advance when I get deals in. Well tell these people that you only do this for your V.I.P. members. Explain to them how they can be a part of this elite group. Explain to them that they are currently very "un-cool" by not being on your V.I.P. list. Show them how to be cool. Give Your V.I.P. Members A Discount Here is how it goes: You get a new deal in-house and decide you want to make $12,000 on the flip. Your purchase price with the seller is $100,000. Before blasting out the email and whatever else it is you are planning on doing to market the property, you call every single person on your V.I.P. list. "Hey - Sam! Sammy Sam! Sammaaaayyyyy! What up, Dawg? Listen, I got this new hot, hot property that you have got to check out asap. I'm going to start marketing it tomorrow, but I wanted to give you the personal heads up because you're fabulous and I love you more than all the rest. It'll be sold for $115,000, but we'll give it to you for $112,000 since I know you can close quick. Check it out and get back to me, alright?" It's just that simple. You will sell more properties this way. Trust me. People are more apt to respond to a personal "insider" phone call about a "new" deal than they are to a mass email that goes out to 2000 people. Make it happen. Preston Ely, started his career at the age of 17 selling vacuum cleaners door to door while still in high school. His claim to fame was selling a $1,700 vacuum cleaner to a family in a mobile home that had no carpet. He never went to college, and instead spent ten consecutive years at the same J-O-B as a financial broker making six figures since he was 20 years old. He began to get an itch to do something different. To become an entrepreneur. Real estate had always been an interest of his, so he bought the Carleton Sheets home study course! That didn't work for some strange reason. He spent the next three years trying to break into real estate but with very little success. Luckily, Preston stumbled across an extremely helpful mentor who was making over a million dollars a year wholesaling real estate. With his help, Preston Ely was able to quit his job and make $500,000 his very first year in real estate. He hasn't ever looked back. Reprinted from www.REIClub.com

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September Housing Statistics
Average Sales Price The average new home price this month ($291,243) is 3% higher than one year ago ($282,771). The largest increase of 11% occurred in Leavenworth county. There were three other counties in the region that posted increases in average sales price for new homes this month compared to September 2007. The average existing home price ($142,966) is 5% lower than the same month one year ago ($151,187). Leavenworth county experienced an increase in average sales price for existing homes from the same month last year. The average price for a home in the region this month was $159,812, which is down 6% from the average sales price for combined new and existing homes from September 2007. Leavenworth county experienced an increase in the average sales price for new & existing combined from the same month last year. Home Sales New home sales this month of 287 represents a 16% decrease from one year ago when there were 340 new home sales in September. New home sales decreased 11% over the past month when there were 323 new home sales. Existing homes sales were down 5% from last month’s sales of 2,258 compared to this month’s sales of 2,141. Existing home sales this month were up 15% from one year ago when there were 1,857 sales. Combined home sales of existing and new homes was 2,428 for September, which is down 6% from the total of 2,581 sales from a month ago. The September 2008 combined total sales were up 11% from the September 2007 combined sales of 2,197. Inventory New Home inventory decreased this month with 3,596 homes in inventory compared to 3,636 new homes on the market last month. The good news is the new home inventory for the region is 27% lower than it was a year ago at this time when there were 4,910 new homes on the market. Resale inventory this month was down 2% with 15,284 compared to 15,547 a month ago. The existing resale inventory this month is 7% lower than it was a year ago when the resale inventory was 16,386. New & existing inventory combined was 18,880 this month compared to 19,183 last month representing a 2% decrease in the past month. One year ago the inventory was21,297, which represents an 11% decrease in total inventory over the past year. Kansas City Region Supply of Homes on the Market Supply is determined by taking the “Inventory” and dividing it by the “Number of Sales.” Generally speaking, a 5-6 month supply of homes on the market equates to a “balanced” market. When the supply exceeds 6 months, the market begins to favor buyers, and when the supply is less than 5 months the market tends to favor sellers. Supply in the Region has been declining since January and showed very little change over the last month. Supply for combined new and existing homes increased slightly from a 7.4 months supply last month to months supply this month. The existing home supply also increased fro m 6.9 months in August to months in September; and the new homes supply also showed an increase over the past month from 11.3 months of supply in August to 12.5 months supply in September. Even though the supply had little change over the last month, we are still experiencing a buyer’s edge in both the new home market and in the existing home market. Source: Kansas City Regional Association of REALTORS® and Heartland Multiple Listing Service ©Copyright 2008. KCRAR is the “Voice for Real Estate in the Kansas City Area”

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BPO’s & Kansas Real Estate Commission
Kansas Real Estate Commission Has Determined That All Compensation for Brokers Price Opinions and Comparative Market Analyses Must Flow Through the Broker; Supervising Brokers Must Maintain Documentation in Brokerage Records Last month, the Kansas Real Estate Commission determined that all compensation for brokers’ price opinions (BPOs) and comparative market analyses (CMAs) completed by real estate salespersons must flow through the broker. As a result, if you are a real estate salesperson or associate broker that receives compensation for a BPO or CMA, that compensation must be paid to the broker just like a real estate commission. In addition, the Commission has determined that the documentation originating from a BPO or CMA is a brokerage record that must be maintained in the brokerage files like all other transactions documents. Under K.A.R 86-3-10, these records must be maintained in the brokerage files for a period of three years. Associate Brokers and Salespersons Are Prohibited from Accepting Compensation for Real EstateRelated Activities from Sources Other Than the Supervising Broker Under K.S.A. 58-3062(b)(1), an associate broker or salesperson is prohibited from accepting a commission or other valuable consideration from anyone other than the broker by whom the licensee is employed or associated with as an independent contractor. Accordingly, whenever the associate broker or salesperson earns a commission or other compensation for anything that requires a real estate license, that commission or compensation must be paid to the broker who in turn will pay the associated salesperson or associate broker. Associate Brokers and Salesperson Cannot Accept Compensation for a BPO or CMA That is Not Funneled Through Their Supervising Broker Since the Commission has determined that BPOs and CMAs are inherently real estate-related activities that require an individual to be licensed as a real estate salesperson or broker, they determined that all compensation paid to an associate broker or salesperson for BPOs and CMAs was subject to the provisions of K.S.A. 58-3062(b)(1). As a result, if an associate broker or salesperson is compensated for a BPO or CMA and that compensation is not funneled through the brokerage, the Commission will discipline that associate broker or salesperson for violating K.S.A. 58-3062(b)(1). All Documents Pertaining to BPOs and CMAs are Brokerage Records That Must Be Maintained in the Brokerage Files under K.A.R. 86-3-10 The Commission has determined that all documents pertaining to BPOs and CMAs are brokerage records that must be maintained in the brokerage transaction files for a period of three years under K.A.R. 86-3-10. If a BPO or CMA was performed in connection with a real estate transaction that had already been assigned a transaction identification number, the broker must add the BPO or CMA documents to that transaction file. If a BPO or CMA was performed that was not connected to a real estate transaction that had been assigned a transaction identification number, then the broker must retain them in a separate filing system. For more information on this and other issues, please go to http://www.kansasrealtor.com/. You may also contact Luke Bell, KAR Director of Governmental Relations at [email protected] or 785-267-3610 Ext. 2133. August 29th, 2008

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Short Sales & Kansas Real Estate Commission

Kansas Real Estate Commission Has Determined that Short Sales are Adverse Material Defects That Must Be Disclosed to All Parties in Real Estate Transactions The Kansas Real Estate Commission has determined that a real estate licensee must make a disclosure to all parties in the transaction when they have actual knowledge that a transaction will result in a short sale. If a real estate licensee has actual knowledge that a short sale situation exists and does not disclose that information to the other parties in the transaction, then that licensee could be disciplined by the Commission for failure to disclose an adverse material defect. What is a Short Sale? A “short sale” is a real estate transaction where the net proceeds of the sale, after payment of all the applicable closing costs and other charges owed by seller, will be insufficient to pay the outstanding mortgage and other related debts at closing. In these situations, the closing of the real estate transaction is contingent upon the written agreement of each lender and creditor to accept less than the amount actually owed to them and to provide a full release of each lien on or before closing date. A Short Sale is an Adverse Material Defect Under BRRETA Under the Kansas Brokerage Relationships in Real Estate Act (BRRETA), real estate licensees must disclose any material limitation on the customer’s or client’s ability to perform under the terms of the sales contract to all customers, clients or other parties to the transaction. In short sale situations, it is typically a very time-consuming, difficult and many times unsuccessful process in getting a lender or creditor to accept a short sale offer. In these situations, there is a very high risk that the short sale offer may not be accepted by the lender and that all funds expended by the buyer on the transaction (i.e. inspections, loan applications, etc.) will be lost in the event the transaction fails to close. As a result, the Commission has determined that a short sale situation is a material limitation on the listing party’s ability to perform under the terms of the sales contract. If you are the selling agent or transaction broker and you have actual knowledge that the sale of the listed property will result in a short sale, then you must disclose this information to all interested parties. Failure to disclose this information could result in discipline from the Commission. For Your Protection, We Advise That You Use a Short Sale Addendum For your protection, we would strongly recommend that real estate licensees utilize a Short Sale Addendum to advise all parties of the particular risks and difficulties encountered in short sales situations. You can access our approved Short Sale Addendum on the Contracts and Forms section of the KAR website at http://www.kansasrealtor.com/contractsforms.html. For more information on this and other issues, please go to http://www.kansasrealtor.com/. You may also contact Luke Bell, KAR Director of Governmental Relations at [email protected] or 785-267-3610 Ext. 2133. August 29th

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Mark Your Calendar Saturday November 8th Lee’s Summit Investor Breakfast Atlanta Bread Company, Lee’s Summit Tuesday November 11th MAREI General Meeting, Judgment & Debt Collection Overland Park Marriott, 110th & Metcalf Wednesday November 26th Northland Investor Lunch Old Town Buffet by Metro North Mall ** verify on the web site (may be cancelled)

Real Estate Questions
Do you have questions? Not sure how something works? Need to find a service provider? Can’t remember a name or a contact? We have several sources for answers and they all start with our web site: www.MAREInet.com Read Articles & Past Newsletters Listen to Recorded Meetings & Teleconferences Check the Vendor’s Online Online Forums linked from Web Site KCREI on Yahoo Groups http://kcrealestateinvesting.ning.com/ Member’s Only Forums Member’s Only Profiles You will probably find your questions discussed in an article or recording or answered in a past question on the forums. Ask again and get even more answers.

General Meeting
Overland Park Marriott 10800 Metcalf 110th & Metcalf, S of I435 Tuesday November 11th, 2008 John Mishca Judgment Recovery Registration, Networking, and Vendor Trade Show open at 6 p.m. See page 4 for more information.

Short Sale & Realtor Listings There are a ton of Realtor Listings in the MLS that are just waiting for an offer. The Realtor can list the property in MLS, put out a sign, market it, but until someone makes an offer on the property, they can’t start negotiating the short sale. The Realtor may not know what the bank will accept, but if they have an offer, any offer, it will get the bank started on the process and they can find out just how low the lender will go to accept an offer. So take some time to make an offer on Realtor Listed Short Sales.
Short Sale Listings 3444 Campbell, KCMO 3+ bdrm, 3 1/2 bath, 3 sty Listed $140,000 bring offers, www.RealtyResourceKC.com 2106 Sterling, Indep 3 bdrm, 1 1/2 bath, 1.5 sty Listed $55,000 bring offers, www.RealtyResourceKC.com 4747 Prospect, KCMO 3 bdrm, 1 bath, Bungalow Listed $25,400 bring offers, www.RealtyResourceKC.com 10 E 127th St, KCMO 4 bdr, 1.1 bath ARV $130k Listed $99,000 bring offers, www.stephaniesellskc.com 11107 Bristol Tr, KCMO 3bd, 1 ba, ranch Listed $32,500, Shonta Rosborough 816-651-9008 7703 E 110th St, KCMO 3 bed, 1.5 bath, ranch Listed $65,000, Tony Song 913-402-2587 4606 E 112th Tr, KCMO 3 bed, 1 full & 2 half bath, ranch Listed $72,500, Sheila Vardakis 913-754-0546 579 Short Sale Listings in MLS today! Contact your Realtor to make an offer

Online Social Networking http://kcRealEstateInvesting.ning.com Join us online
My Page: If you don’t have a web page or a blog, this is a great place to start. Share as much or as little about yourself and your business. Members: Browse all the members to see who does what. Search for a particular name, occupation, or key phrase to find members interested in your subject of the day. Feed in outside blogs or property listings and create a new blog. Forum: Interact with other members, ask question, answer questions, share referrals, complete a little due diligence Events: Click on the Event Button to see all the upcoming events and post your events too. Find MAREI events, networking meetings, Cashflow 101 game days, Real Estate Cruises, House Auctions, and more. Groups: These are basically sub groups with in our Main Group. Currently we have groups for: Property for Sale, Landlords & Property Managers, Political Stuff, Real Estate Travel, Wichita Investors, Nebraska Investors, Mobile Home Investors, and Sub 2 Investors. Don’t see a group for your interest? Start one, it only takes a few minutes. Blogs: If you write your blog on your own “My Page” it will appear on the main blog page. (sorry you can’t use a feed here from another site). Share your knowledge to build your business. Photos: Create photos albums on houses for tours, post your business card, or a funny clip art. Videos: Share videos you create related to real estate or business or bring in informational videos from other sites. Use as a marketing tool, create video tours of your houses and link to the posting here. Chat: Log in and see who else is online for a chat. Schedule an online networking chat on the events page and at the given time, invitees can log in and chat online.

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