The Investment News: August 2010


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The Investment News: August 2010

  1. 1. u MEMBER D ISCOUNT S HERWIN WILLIAMS August 2010 PAGE ............. 15 u CALL TO ACTION LEGISLATIVE ACTION COMMITTEE PAGE .......... 10 Investment u MONTHLY MEETING A UGUST 23 TH PAGE ............. 8NEWSLETTER OFMID-AMERICA ASSOCIATION OFREAL ESTATE INVESTORS newsFor Real Estate Investors & Property OwnersBOOTCAMP & BUS TOURDon DeRosa and Pete Youngs are teaming up with MAREIin September to offer you a cost savings bootcamp. Totalcost is less than $200 and it‘s right here in Kansas City, sono airfare or hotel expense.Don is well know for using creative financing techniques topurchase and sell homes combined with using privatemoney to have a truly no money down transaction. Andhe has totally automated his office on his new IPad and isgoing to share his secrets.Pete is know for his money savings techniques when itcomes to rehabbing houses to sell or rent. If you want todo it yourself or you want to hire a contractor, he will havetips to save you money. See Page 27 for more details. Register Online ARE YOU PROTECED As small business owners all members of MAREI from in- vestors 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.
  2. 2. Organization MAREI Notes Contact Information Mailing Address PO Box 8685, Prairie Village KS, 66208 Phone: 816-523-4400 x 222 Fax: 816-523-4440 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 dis- claims 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 con- cerning real estate and other investments. Content Disclaimer The views and opinions expressed by authors of articles contributed to this newsletter do not necessar- ily reflect those of the association, the board of directors or the staff. Advertise in the Investment News Reach more than 1000 active real Rate Schedule estate investors monthly! Size Non-Member Member Business Associate Full Page $175 $140 $115 1/2 Page $145 $105 $85 1/4 Page $75 $65 $50 1/8 Page $55 $35 $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 Call 407-328-7773 for more information. Email ad copy to Mail payment to MAREI, PO Box 8685, Prairie Vil- lage, KS 66205 or request an online payment for to use credit or debit card.Page 2
  3. 3. MAREI StaffKim Tucker 816-523-4400 Don Tucker 816-523-4400 Steve BurnsDirector President Audio cashflowtreasures@gmail.comRobin Sage John Welchert Larry PratoMeeting Ambassador Meeting Ambassador Commercial 816-268-3849 913-227-4693Dan Goodwin 913-642-5218 Shelda Goodwin Frank JanssenMeeting Ambassador Meeting Ambassador Creative Financing 816-865-6514 Investment News Page 2
  4. 4. Member Profile Realtor D OUBLE Frank Janssen D UTCH Active Member of MAREI since Feb 2007 H OMES Get the best deals on beautiful homes in your real estate investors, he said you need to area even before real es- “learn the art of putting a deal together. tate agents know they‘re Listen to the seller‟s needs and offer a win-Frank Janssen not only joined MAREI in win solution for both of you.” for sale! Through our2007, but he started his real estate investing massive network, wecareer with the purchase of his first property He also offered that you should “never quit”. have access to tons ofin June 2007. He bought it for $7,000 and We asked him for some advice for new in- motivated sellers whoresold it, “as-is”, meaning no work for$17,000. Not bad for a first deal! vestors trying to get their first deal. His re- want to sell their houses sponse was: marketing. Learn how to im- quickly, and at the low-Currently his focus is on residential real es- plement marketing systems to generate est prices in the market-tate investing. Frank is a “wholesaler” motivated seller leads. The more leads you place.meaning he buys and sells houses with out can generate, the better you will become indoing any repairs, he also holds properties finding a truly motivated seller. Don‟t deal Investors be sure to signas a landlord. His specialty is creative fi- with sellers who are not motivated. up for our email list ofnancing meaning using subject to, lease He also said: money. Start with as little as homes!purchase, and contact for deed as a way to possible. “It‟s a curse to have a lot of Visit:buy and sell properties and is now venturing money as a new investor.” Another wordinto the fix „n flip property was: education & implemen-method. Words of Advice: tation. “Make a commitment To register for ourWe asked Frank to share a  Learn Deal Structuring to read a lot and implement buyer‘s list.good learning experience he  Market for MOTIVATED what you learn. Don‟t be thehad and he wanted to share Sellers investor who reads for 10his “worst deal”. It‟s a property  Start with very little money years but never takes ac-that he wholesaled for $500  Educate Yourself tion. Invest in your educa- DoubleDutchHomes.comand he had to work very hard  Implement tion. This is the most profit- 816.359.3337  Never Give Upto get it sold and was not a able business I know. It‟s F: 888.996.2010good use of his time, but atleast he didn‟t loose on the deal. So before worth it to invest in your education, I did and I have never regrettedyou 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 hisgoing to spend on it. thoughts on the current real estate market. Interested in learningSome other example deals include his 1st Frank shared that it is obvious that there are more about creative fi-two wholesales in 2007, that made him a lot of motivated sellers out there. In this nancing? Be sure to at-$10,000 each. His highest gross profit on a market if we have the marketing, are dealing tend the 2 day Bootcampwholesale deal was $15,800. His best sub- with the motivated sellers, we will have with Don DeRosa & Peteject to deal (meaning he bought it subject to deals. Then the focus is going to be on get- Youngs, they will talkthe seller‟s existing financing and did not go ting the houses sold or rented. The key tofind a new mortgage) was from one seller about creative financing! this is offering a good product for a fair pricewho sold 2 duplexes and a 4 plex with $0 and to be loyal to your customers, especially And be sure to watch fordown. He still has these units today. those investor buyers that purchase the upcoming meetings of wholesales. And remember your reputation MAREI‘s new subgroup.When asked for advice to share with new can go a long way.Page 4
  5. 5. Contents MAREI News In This Issue Member Profile 2 New Web Site Staff 5 MAREI 2.0 6 Things that make you go . . .Hmm. . 8 It‘s up and running Legislative Trends 10 Check it out Give Back Membership Has it‘s Privileges 14 Worker‘s Compensation Issues 16 Click on New Market Update 18 Website Conversations with Betty Buyer 20 Calendar 22 Investment Opportunities 24 Find it, Fund It, Fix It, Flip It Bootcamp 27 Features ‫ ׀‬August 2010 Do you own a Don DeRosa Advertiser’s Directory business, hire interviewed one of his Double Dutch Homes 4 Market Updates 18 employees, recent buy- MAREI 2.0 6 Classifieds 24 have tenants, ers find out 16 20 show houses, how she Online Networking 13 kcmoHomeBuyer 25 drive a car. ended up Sherwin Williams 15 T.O.T.L. Renovations 25 Make sure you being his buyer and Accurate Title 17 Home Depot 25 are taking the what works Rockstar Investor 17 4 F Bootcamp 28 proper steps for market- for protection. ing.Investment News Page 4
  6. 6. Director Notes MAREI 2.0 Interactive Last month we were talking about MAREI 2.0 Our former Commercial Leader, Frank Janssen and all the changes . . . Have you had a is looking at starting a new sub group for us— chance to look at a few? Creative Real Estate Financing as that is his specialty. If you are interested in Creative Blog: This is an excellent place to interact and Financing, then please look for Frank at the drive traffic back to your web site. You see Next Meeting. when you read a blog post and make a com- ment on it, the comment tool has a space for And finally we had our first meeting of our your name and your web site. So you can not Government Affairs committee and are work- only share your knowledge by commenting on ing to get a solid base under us to monitor our a blog, but get a quality link back to your web local governments, focusing on Kansas City site, increasing your rankings in Google. Missouri to Start by the committee and we are also tapping into several other legislative ac- Business Associates: Have you checked out tion committees in other groups to monitor the Business Associates on the MAREI web Kansas, Missouri, and National Legislation. site? Have you used one? Have you rated them yet? As a member of MAREI, log into Last but not least, our Face Book and Linked the member‘s section and make your way to In Groups are growing, we would love to have our list of vendor‘s online. When logged in the our members interact and share their exper- comment section will be active so you can rate tise, and deals on our social networking a Vendor or Business Associate. groups. Look for Kansas City Real Estate In- vestors on both Facebook & Linked in and Sub Groups: We are getting some interaction share: your deals, interesting news articles, in our sub-group level. We want more. things that are happening in real estate. This Our Lee‘s Summit investors lead by Gary not only brings more people to our social net- Cross continue with their Saturday morning works, but also brings recognition to you. So breakfasts. please network with us. Our Commercial Group is growing and chang- ing with Larry Prato stepping up to become Kim Tucker group leader supported by the members. I am hoping the commercial group can track Director market trends in the commercial sector for the MAREI 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.Page 6
  7. 7. 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,Investment News Page 6
  8. 8. September Guest Speaker Things that . . . Make you go hmm . . . In my latest deal that closed on Friday, there gutter situation). An inspector would have were many things that happened from the in- picked up on this and made a big deal out of spection that most of the people doing rehabs it. You see, siding must not touch the ground might have overlooked. Part of my teaching around the house. This makes for easy insect style in my systems and live events are to infestation such as termites, and also stops teach you things that you would not have real- some loan institutions from financing a deal ized on your own. with this situation. Commonly, siding must be about 6 inches from the ground to be consid- Sometimes you must look very hard a prop- ered 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 prop- measured up six inches from the ground, and erty inspections…one of the most important then snapped a chalk line that marked the sid- tasks 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 in- blade on our skill saw to ½ inch spector to list the defects of Pete will be our guest and used it to trim the bottom six your property as a tool for getting a discount on the deal, speaker in September and inches off the house. This now was acceptable when an inspec- or get you the seller, to pay is partnering for a 2 day tion would be done. for these repairs. Here‘s what we had to recognize on my Bootcamp & Bus Tour The toilets in the house seemed last deal. with Don DeRosa right as if they could be kept if they here in Kansas City. were given new working parts on 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 newspa- property 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 ab- cost around $800.00 to do. But for under sorbed some water. This indicated that the $20.00, I got some gutter brackets that at- wax 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)Page 8
  9. 9. (Continued from page 8) this one tip is one you will use it‘s expensive to replace. But us- over and over in your investing ing the techniques I teach in Re-The cabinets were stained dark career. hab 101 we got our estimate tobrown and had a thin layer of replace the entire pipe in the Last, was the big killer. If over-poly on them. They really needed house and the underground ser- looked this could easily cost youa fresh look to avoid replacing vice from the street down from several thousand dollars and inthem. I have written techniques $7995.00 to about half the cost many cases is a deal breaker ifon how to prep and paint stained at $4200.00. That‘s a great sav- you do not replace it. It is alsocabinets to a nice white look but ings on just that item alone. So something you should use as ahere; this is a great way to re- be careful not to overlook a discount when buying the housestore a brand new look for under houses ―fine print‖ when you do as an investor.$5.00. There is a product in most your initial walk around. See be-any store that sell cleaning sup- Either way, somebody is likely to yond what you think you see,plies called ―Old English Scratch have to pay for this replacement. and learn to look for the less ob-Remover‖. You pour this dark oil I am talking about polybutelyne vious repairs that could make oronto a white terry cloth rag and water piping. Usually identified break a good deal. These andrub over the entire cabinet area. by being blue in color, this pipe other great money saving tech-This will not only blend in any has a reputation of breaking and niques are on my sitelight and dark areas, but also leaking causing thousands in wa- www.peteyoungs.comgive the appearance of freshly ter damage. Though manystained and varnished cabinets. houses may have it, nobodySaving easily about $1000.00 wants it. Not only is it unpopular,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 countriesbest 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: there are only 50 seats on the bus, so be sure to purchase your tickets today! Investment News Page 8
  10. 10. Legislative Legislative Trends President Obama has signed sweeping financial  A safe harbor from the ―ability to repay‖ re- services reform into law. The law creates an over- quirement was created, which limits the total sight agency for financial services companies and a points and fees collected by lenders and their consumer financial protection bureau. It also in- affiliates to 3. This provision was included cludes provisions to curb risky mortgage lending over NAR’s strenuous and repeated objec- and to address appraiser selection by lenders. tion. It is important to note that quite a few changes  However, we believe there is some regulatory were made in the law due to efforts by government flexibility in this provision including flexibility action committees from several different trade as- for smaller loan amounts with ―smaller‖ being sociations including National Association of Real- left undefined. tors (Realtors, this is your REPAC dollars at work) and National Real Estate Investor Association and  NAR will work diligently to ensure this provision their Government Affairs Committee. is interpreted in a manner consistent with the best interests of real estate professionals, their Effects of this lobby effort include: lender partners, and their clients and custom- CONSUMER FINANCIAL PROTECTION BUREAU ers. (CFPB) Seller Financing  An exemption for Realtors & real estate agents  NAR and National REIA was successful in get- performing traditional real estate activities ting the legislation amended to allow an indi- from the jurisdiction of the Consumer Financial vidual to conduct three seller financed transac- Protection Bureau except to the extent they are tions in a 12 month period without being sub- governed by existing laws such as the Real Es- ject to the complicated mortgage rules in the tate Settlement Procedures Act (RESPA) that new Act. NAR has asked HUD to adopt a similar will now come under the bureau‘s purview. approach to exempt seller financing, up to MORTGAGES three transactions in a 12 month period, from loan originator licensing requirements under Risk Retention – Qualified Mortgage Exemption the S.A.F.E. Act.  At NAR‘s request, Congress included a qualified COMMERCIAL mortgage exemption from potentially costly-- for both lenders and consumers--risk retention Accounting Rules Study requirements.  The Act requires the Federal Reserve to study  Congress gave the regulator flexibility in deter- the combined effects of the risk retention re- mining what a qualified mortgage is, however quirements with recent new accounting rules the mortgage must meet the standards laid out put in place by the Financial Accounting Stan- in the predatory lending portion of the bill. dards Board (FASB) that represent dramatic These standards include underwriting based changes in securitization accounting (FAS 166 upon full documentation, ability to repay, and and 167). limitations on fees among other things. Accredited Investor  NAR will work with the regulators to ensure  The Act gives the SEC the authority to review that the regulatory framework maximizes ac- the current standard and update it to reflect cess to affordable mortgages for consumers. inflation and the characteristics of the modern Qualified Mortgage Safe Harbor (Continued on page 11)Page 10
  11. 11. economy. The bill excludes the their swap transactions and To find your congressman: investor‘s primary residence meet margin requirements. from $1 million net worth stan- APPRAISAL Visit and put in dard. The SEC review may raise the threshold for defining a cus-  Appraisers are to be compen- your zip code in the top left hand cor- tomer as an accredited investor, sated at a rate that is reasonable ner of the screen. forcing companies that sell secu- and customary for appraisal ser- rities to them to register the vices in the market area of the To find your senators: products with the SEC. property being appraised. Visit End Users  Home Valuation Code of Conduct contact_information/senators_cfm.cfm The Act appears to allow com- (HVCC) sunsets when Consumer Financial Protection Bureau is- mercial end users – including sues interim final regulations owners, operators and develop- implementing the appraisal pro- ers of commercial real estate – visions of the Dodd-Frank Act. to continue to engage in swaps Bureau become members of used to manage commercial risk  A subprime mortgage requires a ASC. The Office of Thrift Super- without being subjected to cen- written appraisal of the property vision is no longer a member of tral clearing. However, regula- to be mortgaged. ASC because it is being merged tors would now be authorized to into the Office of the Comptroller impose initial and variation mar-  The applicant is entitled of the Currency. gins on these un-cleared trades. to one free copy of the appraisal. 1031 LIKE KIND EXCHANGE IN-Modified Crapo Amendment TERMEDIARIES  The applicant must be As for provisions governing se- notified that the ap-  NAR supported language re- curitization, the final language praisal is prepared for retained --with minor modifica- the sole use of quiring the SEC to conduct a study tions-- an amendment by Sena- the creditor. on how best to regulate 1031 Like tor Mike Crapo (R-ID), allowing ―third party‖ (B-piece) investors  It is unlawful to coerce, extort, Kind Exchange Intermediaries to end to satisfy new risk retention re- collude, instruct, induce, bribe, the fraudulent practices that have quirements for commercial mort- or intimidate an appraiser in an gage-backed securities (CMBS). at- tempt This language also directs bank regulators to consider exemp- to Watch the MAREI Blog for Updates . . . tions or different risk-retention influ- requirements for CMBS. ence And Working Links. theSecuritization independent judgment of the appraiser. been taking place. The Act requires banks that package loans into CMBS to  An appraiser may consider addi- There are more laws in the works keep 5% of the credit risk on tional, appropriate property in- their balance sheets. Directs that will affect not only Realtors, but formation Including addi- regulators to exempt low-risk tional comparable sales to sup- Investors, Mortgage Lenders, and mortgages that meet certain port an appraisal, provide fur- minimum standards. (See ―Risk other‘s in the industry. It is very ther detail, or correct errors. Retention – Qualified Mortgage important that we as the Real Estate Exemption‖ above.)  Appraisal Qualifications Board Investor trade organization and our (AQB) Qualification Criteria forSwaps licensed and trainee appraisers respective individual trade associa- Financial firms, a class that likely becomes mandatory for the tions such as NAR work hard to sup- includes mortgage real estate states (currently voluntary). investment trusts (REITS), will port our leaders working in Washing-  The Federal Housing Finance be required to centrally clear ton, State Capitals, and City Govern- Agency (FHFA) and the new Consumer Financial Protection ment. Investment News Page 10
  12. 12. Membership Give Back Get Involved One of the best ways to grow your real estate tional 30 minutes to the meeting. Then we business is to GET INVOLVED. From volun- would need experts to create the 30 minute teering at events, serving on committees, to just presentation and teach it. Again by evaluating giving back to the community your business will what you do in your chosen field and breaking it grow. When you get involved, you meet more down to teach to others give you more knowl- people, you learn new things, and you gain rec- edge and being an “expert” gains you more rec- ognition in the community, all resulting in either ognition and business. more business or more profitable business or Do you know someone at MAREI who has a lot both. of knowledge to share who would be a good Here at MAREI we have a goal for the 2010 – trainer? Please email us their contact informa- 2011 year, to get more members involved and tion. more interaction at all levels. We would like to Legislative / Government Affairs Committee: share with you a few of our goals that are also We are under attack! Okay, you hear that often, opportunities for you to become involved. but it‟s truer now than ever. Our governments at Quarterly Market Report: We would like to of- all levels need money and they will take the path fer a 30 minute state of the market in the Kan- of least resistance. This means that people or sas City Metro area once a quarter or divide up groups that are not represented, will be targeted the metro into 3 areas and offer one a month at for increased fees and taxes. So while we do the monthly meetings. Would need to add an not currently have funding to employee a full extra 30 minutes to the meeting. time lobbyist, we need to form a committee to at We need to locate 3 – 6 people who are experts least be a watch dog for local and state legisla- tion and report back to the membership as a or who could become the expert on the markets whole. Allowing us to be proactive rather than in Kansas City and be able to provide a detailed reactive. Get involved here as a member and report to the group. We are getting examples from other REIA‟s across the country. The Vol- have a great impact on your business. unteers here would become much more knowl- Community Involvement: Will be designed to edgeable about the market as a whole and by involved the associate, it‟s members and the being the “expert” gain recognition and business broader real estate investing community in in the community. worthwhile community programs or project that Do you know someone who we be a good ex- delivers a valuable service to the community, pert on the Market? Please email us their con- creates a “sense of community” within MAREI, tact information. provides value to our members that generate and promotes MAREI‟s positive vision and mis- Educational Session: We would also like to sion. Get involved by being part of the commit- offer up a 30 minute educational session pro- tee that selects what we become involved in and vided by one of our expert investors or business give of your time or money to help support these associates on a specific topic of interest. Can worthwhile charities. We are currently support- be basic real estate concepts to advanced ex- change techniques. Will need to add an addi- (Continued on page 13)Page 12
  13. 13. Online Networkinging: Harvesters Food Bank, Habi-tat for Humanity, and Habitats Re-store.Subgroups: Group leaders do Update Your Profiles!!!not have to be experts in the topic,but have some general working Use to updateknowledge. More importantly they Your profile and ensure yourneed to be organized and able tosecure a speaker from time to Information is correct.time, locate and reserve space tomeet, communicate with our Mar-keting team to get the word out, MAREI is a networking organization and part of the MAREI 2.0 plan is thatand control the meetings. we interact. One of the best ways to ensure interaction is to make sureCould meet monthly, twice a (1) you know how to access member profiles (2) make sure that membersmonth, or quarterly. Meet at a lo- know WHO you are and HOW TO REACH YOU!cal eating establishment for FREE 1. Log into the Member Area of www. MAREInet.comspace. 2. Update your information by going to “My Info”Proposed Sub Groups  Be sure your contact info is correct Women in Real Estate Wholesale Investors  Be sure you include what you do Rehab Investors  Be sure your profile is turned on at the top Short Sale Investors Lease to Own / Subject To 3. After updating your info, check off the boxes on the right side to dis- Private Funding play the contact info in your “Member Profile” in our online member Note Buyers directory Self Directed IRA Investing 4. Make sure to hit the update button at the bottom of the screen REO Buyers 5. Get fancy Apartment Investors 1031 Exchange Group  Add a Photo Landlords  Preview your Profile Other Topics Groups based on Location in  Edit Your Bio Metro our other cities Cash Flow Investors Advanced Investors Once your profile is updated, click on Profiles to find out more about Realtors who are Investors your fellow member! MAREI staff cannot provide any member‟s contact info to another member if it is not on your profile. Investment News Page 12
  14. 14. Benefits Membership Has Privileges! Besides getting awesome deals on train-  Office Max: From printing & binding, ing programs on our webinars and at our to finishing & customizing - to reduc- seminars, are you taking advantage of ing time & money with discounts from everything MAREI has to offer you? As a 10% to 60%, Office Max ImPress of- Member of MAREI you are also a member fers solutions for the full range of your of the National Real Estate Investors As- needs. sociation (MAREI). These and many more  Save time and money benefits are available to you for FREE! while shortening the duration of va-  Home Depot: A biannual rebate of cancies between tenants with our mar- 2% of your net sales for your pur- keting and save time with our tools. chases at The Home Depot and Home Members receive 20% discount off Depot Tool Rental through an unparal- regular pricing. Number 1 in the leled Material Purchase Rebate Incen- search engines. tive Program. Many members across  Travel Discounts with avis, Budget, the country have cashed checks for and Enterprise. $1,000, $2,000 and $3,000.  Real Estate Books by the nation‘s larg-  Sherwin-Williams: One of our most est provider of real estate training ma- popular and most used benefit, Sher- terials—Dearborn, Nolo, and Kaplan. win-Williams offers unbeatable pricing To find out complete details on all these to National REIA members. Enjoy member discounts log into the member deep discounts on paint, applicators, area and look at the Benefits Section in floor covering, paint sundries, wall the Library. We also mail a complete covering, spray equipment, and even booklet with all discounts and instructions window treatments! Your discount on how to access when you renew or join card is in your membership package. or upon request. To request email  FedEx: Receive significant inbound and ask for the and outbound discounts on small member benefits booklet. package shipments through FedEx, as well as copying and printing services through FedEx Office.Page 14
  15. 15. 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:  Paint & Supplies  Demos & Training  Floor CoveringsInvestment News Page 14
  16. 16. Tim Norris Worker‘s Compensation Issues . Worker’s Compensation Issues . . this tenant to be injured while doing such For the Real Estate Investor work, only to find your liability insurance will deny the claim based upon such an arrange- ment‖. Though frequently overlooked by many real Pertaining to hiring contractors and third- estate investors, workers compensation party service providers, be certain that they (WC) and related issues should certainly be carry not only ―General Liability‖ (GL) cover- addressed early in your business planning age, but also current WC coverage, whether stages. Bear in mind, that advice from your State sponsored or from a private insurer. attorney, accountant and/or from the State The best time to obtain such validation of Department of WC (if applicable) certainly coverage is at the onset of the bidding proc- trumps what I communicate here. ess. Once Certificate (s) of Insurance (COI) The most important consideration is to un- are secured from the contractor or service derstand that how you compensate your la- provider a quick phone call (or email, which bor may or may not excuse you from carry- I prefer as it creates a ―paper trail‖) to the ing WC coverage on them. In effect, just carrier or Agent can confirm the coverage because you pay them on a 1099/ (s) are current and valid. Being named a independent contractor basis, doesnt mean ―certificate holder‖ is typically sufficient for that the courts or WC commission will most scenarios, especially when you do not agree. Be sure you understand (seek legal utilize a contractor more than a few times a advice) on what constitutes an ―independent year. For larger/longer term jobs and pro- contractor‖ relationship. It may not be what jects, being named as an ―additional in- you think (and may vary from state to state, sured‖ may be preferred. Put simply, a cer- as well). tificate holder is simply notified in the event the policy cancels. An additional insured not Be wary not to create an unintentional em- only is notified when the policy cancels, they ployer-employee relationship, which could are actually protected by the coverage/ create a WC exposure for your business. policy. Review with your legal advisor, and Having tenants do odd jobs, such as clean- be advised that being named as an addi- up, grass cutting, or landscaping as a way tional insured may cost the contractor some to reduce rent may be construed as consid- additional premium, usually no more than eration‖ and potentially subject you to car- $50-100 per year. Depending on the situa- rying WC insurance. Do not confuse this tion, it may behoove you to pay this addi- with upkeep and maintenance requirements tional premium, if the contractor ―balks‖. My of your lease. What I am addressing here is attitude is ―no insurance, no project award‖. the reduction, discount, or even waiver of If the contractor or service provider decides rent in exchange for labor provided by a to cut expenses by sacrificing these vital tenant, especially when such labor takes coverages, then I do not want them doing place on/at locations other than the tenants residence. The last thing you want/need is (Continued on page 17)Page 16
  17. 17. (Continued from page 16) providers. Unfortunately, in to- with National Real Estate Insur- days litigious world, the risk of ance Group. NREIG was built using uninsured ―spot labor‖ far to specifically address theany work for my business. outweighs any short-term time unique needs of the real estateUnderstanding that the rela- or financial benefit. If you are investor. Tim Norris is an in-tionship between you/your currently using and satisfied vestor and NaREIA, OREIA andbusiness and those that provide with such labor, review with Cincinnati REIA member. Welabor and services is not simply your legal and accounting advi- can be reached at 513-275-a by-product of how you com- sors and consider securing cov- 1350, 888-741-8454, or .pensate them is the first step in erage for them, in the most ap- Check outmaking sure your real estate propriate and efficient manner(and any other business) is pro- they/you decide. It only takestected appropriately from WC one uninsured claim to put you(and GL) exposures. Securing out -of-business.and confirming coverages is amust when dealing with anyand all contractors and service Article provided by Tim Norris ACCURATE TITLE COMPANY “When You Need Timely, PRIVATE LENDER Top-Quality Service . . . “ Locally Owned & Operated Private Money Lender  Owners and Loan Policies We are a Direct Lender, not a Broker  Endorsements  Ownership & Encumbrance Reports  Rehab Loans up to 100% of Costs  Foreclosure Reports  Up to 65% of the After Repaired Value  Ownership Information  Terms from 30 Days to 1 Year  Tax Information  Rates from 12 to 16% Interest Only  Buyer‟s Closing Services  Seller‟s Closing Services  Points from 6 to 10 in Lieu of Equity  Lender‟s Closing Services  Appraisals Required  Recording Services  Funds Disbursement Services Draw Requests on Wed.  1031 Exchange Services Paid on Friday  Special Requests P: 913-338-0100 Jeff Basler F: 913-338-0107 913-221-9080 Investment News Page 16
  18. 18. Trends Market Update June 2010 Housing Trends Inventory saw a 37% decrease in new The Kansas City Regional Association of homes from last year and existing is 3% Realtors project that we will see fluctua- higher that last year and just 3 % higher tions in in sales and prices until the fall than April. Overall for May we have a 5% and then they expect prices and sales to increase in total inventory for 2010 over start increasing slowly but steadily. They 2009. also expect as the inventor of New homes Supply of Homes in the Kansas City Re- continues to fall, the price of the new gion is determined by taking the homes will start to rise. ―inventory‖ and dividing it by the 1‖2 One key factor that is keeping the market month average of number of sales.‖ As a where it from rebounding very quickly is rule of thumb a 5-6 month supply of the high unemployment. And they expect homes on the market is balanced, over 6 that interest rates which are at historic months is a buyer‘s market and less than lows will start to go back up getting a lot 5 months is s sellers mar- of buyers to get off the fence and buy be- ket. Combined supply of fore they go to high. homes in the metro is at about 7.7 which is up If we look at the Kansas City Market: slightly over the 7.4 in May. Average Sales Price of a new home in Existing homes is at 7.7, up May was $296,768 which is a little lower slightly from 7.4 last month than a year ago. There were price in- and the new home supply creases in Cass, Clay/Ray, Jackson & Plat was 8, down from the 8.3 supply in May. with decreases in Johnson, Leavenworth, The good news is that these numbers are Miami, and Wyandotte. Existing home lower than 2009 and the existing and prices averaged $167,487 which was a combined totals are nearing a balanced 4% increase over last year. All counties market. except Cass saw an increase in the aver- Local data is from where you age sale price for existing homes over can read the complete report. June of last year. So if we look at housing trends in the nation as Home Sales saw sales of New homes of a whole we see that Unit sales were up 28.3% 308 properties which is a 23% increase in June 2010 over 2009. The average home from 2009 and New home sales increased price was up 8.8 over last May and we saw a in June by 31% over May . Existing home continued 10 month trend of stronger sales and sales were down 5% over last year and raising prices down 13% over last month. June‘s com- Looking at the years sales over all, Real Trends bined total sales were down 10% from predict that while we have seen our 10th month last month but only down 3% last year. (Continued on page 19)Page 18
  19. 19. (Continued from page 18)of increases in a row, we expectthis to fall off in the 2nd half of th Market Experts Wantedyear. Are you an expert on the market in your area orOn the National Level we havepulled information from Real field of expertise? We are looking for experts onTrends June 2010 issue. Com- Residential, Apartments, and Commercial toplete digital issue is in the memberlibrary. Be sure to log in and read. contribute to the newsletter, the blog, and the meeting. Be seen an expert in your Niche. Contact info@MAREInet.comFrom Real Trends June 2010 Market Report Investment News Page 18
  20. 20. Marketing conversations With Betty Buyer This article is a compilation of two Blog listing for ‘Owner Finance or Rent to Own. Posts from Don DeRosa‘s Web Stei Just Like the Banks, with No Credit Check.’ Betty Buyer (believe it or not, that isn’t her real name!) is in the process of buying ME: So you were looking to buy, but one of the rent to own homes in the At- weren‘t sure if you could? lanta metro area. BETTY: I don’t exactly have bad credit, She has found a home she loves, and she but I had stumbled a bit with a job loss. closes in a week. Now that I have a good, stable job with a steady income, I wanted to find out I love finding buyers like Betty, and I whether I could buy outright or whether I thought it might be instructive to let her would have to rent to own. But at that tell you about her purchase. point, I didn’t completely understand how Betty, by the way, refuses to let me use rent to own worked. You know – how her real name, because she is pretty sure much of my monthly payment would go she‘s paying a lot more for the house than toward the purchase price or the down I would have. (Like I said, Betty is just payment. How soon could I buy? How the kind of buyer I‘m always looking for!) would I qualify? etc. But here – let‘s let Betty tell you: ME: And what did you work out with the ME: So, you say you‘re paying too much seller? for the house? BETTY: The seller was very flexible. I BETTY: Well, I didn’t exactly say that. It’s really like the terms. Given my current job a fair price, but it’s definitely retail. I situation, he was willing to sell or rent to started out looking for a bargain, but this own, whichever I wanted. We agreed on house has a lot going for it. So it’s worth seller financing, so I don’t have to mess it to me to pay some extra. with a bank, and he’s giving down- payment assistance. So that’s why I am ME: How did you find the house? paying retail, but since it works with my BETTY: Well, I didn’t think I could qualify budget, it’s good for me. for a loan, so initially I looked on Craigslist at a rent to own homes listing and saw a (Continued on page 21)Page 20
  21. 21. (Continued from page 20) have a lot of discretionary income after the house payment.ME: I always tell my students – negotiate on ME: So the home warranty helped seal the dealprice or terms. So you got the terms that for you.worked for you. BETTY: It took some of the hesitation away aboutBETTY: Yes, and he made it really easy to owning my own place. I didn’t want to have tolook at the house, too – he gave me the lock- worry about garage door openers, water heatersbox code, so I could look by myself and not or my washer/dryer going out on me. So I justhave to coordinate schedules with him. pay the co-pay if there is a problem with any ofME: What specifically appealed to you about the systems – which is kind of like having thethe house? comfort of renting where the landlord takes care of most things.BETTY: Well, there were a few things that didit for me. First, it’s in a good neighborhood, Spotting a trend? Our friend Betty wants a houseand my daughter won’t have to change with easy finance terms, and she wants it to beschools. Next, the house is brick, which I like, move-in ready. It‘s worth it to her to pay signifi-and it has a lot of curb appeal. The minute I cantly more for a house that fills those require-saw it, I liked it. ments. She‘s willing to pay you, the seller, to take care of the details.ME: What else did you like about the houseitself? We‘ll continue our conversation in my next post.BETTY: Well, the house has been completely You can find out more about how to sell a houserenovated. On the inside, it’s like a new quickly in a buyers market in Sell Your Househouse: new kitchen, new bathroom, new air Fast. And if you have any comments or experi-conditioner, new floors, and new paint. New ence with this , please leave a comment below.roof, too. It’s even going to have new I was looking at ads that I thought would attractstainless steel appliances. I don’t have to do renters and home buyers and came across onea single thing but move in, and I won’t have that said ‗Buy Now Pay Later No Credit Check‘to worry too much about repairs. and another that said ‗No credit check apartmentME: But when you buy on owner finance, as in Atlanta Georgia.‘opposed to rent to own, you take care of the Now, these aren‘t that attractive to me because Ihome and repairs, don‘t you? DO check credit. But they do work to attract rent-BETTY: Yes, that brings me to the last point. ers and buyers who might not have stellar credit.I had looked at the different home warranty In my last post, I wrote about my conversationcompanies and he agreed to put an Old Re- with Betty Buyer, who is paying retail for a housepublic Home Warranty on it, too. With every- she‘s purchasing from an investor. She has hadthing new in the house, it seemed like over- (Continued on page 26)kill. But I am NOT a fixer-upper, and I don’t Investment News Page 20
  22. 22. Calendar Upcoming Events Absolute Auction ( July Nineteen Bank Owned Homes to be auctioned. Absolute all sell regardless of price. See complete details online at 7 Industry Partner Expo Table Deadline MAREI members July Table may reserve table space for the Expo & Networking time from 6 to 7pm at the Monthly MAREI Meeting. Must be 9 Deadline reserved by July 12th. Reserve through the calendar at http://www.MAREInet.comChildren & College Students MAREI Monthly Meeting MAREI meets for networking & July Monthly education on the 2nd Tuesday of the month from 6pm to 9Is your child interested in real pm. At the Sylvester Powell Jr Community Center. No 10 Meeting estate? Is ready to learn? Charge for Members, Guests $25 at the door, $15 if pre- Add your child aged 12 to 18 registered. to your membership.College Students with student Sub Group: MAREI‟s Commercial Investors meet every ID, we have internships July other week. This month on July 11th and July 25. This available. Work in the group is for MAREI members and their guest. See online MAREI office for $10 in 11 calendar of events for more information. MAREI bucks to use for Membership & Workshops Lee’s Summit Investor Breakfast Lee‟s Summit Investors ContactMAREI Office for more info. July Networking Group meets the 2nd Saturday of the month for coffee, breakfast, and conversation at the Panera Bread on 14 Douglas in Lee‟s Summit. Open to MAREI Members & Guests.Page 22
  23. 23. Monthly MeetingSylvester Powell JrCommunity Center6200 Martway, Mission KS913-722-8200Tuesday, August 10th 5:30 Member BenefitsDoors open at 5:30 5:45 Set Up / RegistrationMembers: FREE 6:00 Industry Partner ExpoGuest Fees: $25 at door . . 6:00 Member Networking Pre-register online for $15 Invite your friends 7:00 Haves & Wants (new feature) colleagues to visit theIf guests join with in two days ofthe meeting, their guest fee will be 7:30 Presentation w/ Tammy Monthly Meeting forapplied to the membership fee with Robb & Janice Dehart with a Guest Passproof of payment. See Page 8 & 9 (available online atPlease call 816-523-4400 x 222. 9:00 Informal Q & A 9:00 New Member Location For each new member you Registration 6200 Martway refer, earn MAREI Bucks Mission, KS 66210 which can be used towards seminars, advertising, North of Shawnee Mission Pkwy Park in North Lot or membership fees. South of Johnson Dr 2nd from the Building East of Lamar Less Kids & Door Dings Investment News Page 22
  24. 24. Properties Investment Opportunity Address City Offered as Price Bed / Bath Contact Phone 1112 E 42nd St Kansas Coty Rehab $25,000 4 Plex Eric Deeter 913-579-3354 2912 Lockridge Kansas City, MO Rehab $29,000 6 Plex Candace Vanice 816-268-4722 No address Grandview Rehab $30,000 3 bed, 2 car Candace Vanice 816-268-4722 6009 Cherry St Kansas City, MO Wholesale $55,000 1 + Home Maggie Sheehan propertyloca- Truman Library Independence Wholesale $105,000 3 duplexes Bill Textor 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.Page 24
  25. 25. Roger Holyfield  (816) 510-9199  Roger_L_Holyfield@HomeDepot.comAll MAREI members can register through our spe-cial link to receive a 2% rebate on all purchasesmade at Home Depot. From a $5 item for a weekend project to a $10,000 rehab: kitchen, lights, ap-pliances, Etc. NEED TO FLIP A PROPERTY FAST? T.O.T.L. RENOVATIONS PROPERTY LEADS WANTED Top of the Line Renovations for all your rehab needs quickly, at a reasonable price. NOTICE: We specialize in: WHOLESALERS, INVESTORS Make-ready Siding & Windows Carpentry & RoofingOur company money is sitting idle for Plumbing and Electrical Painting & Flooring lack of houses. Looking for rehabs Drywall & Doors Fences & Decksto retail in Lee‟s Summit, Blue Springs, Kitchens & Baths and Johnson County. Licensed and Insured Call Anthony @ 816-606-0266 or Emily @ 816-252-0095 816-523-4400 x 223Investment News Page 24
  26. 26. Continued from page 21some bumps with her credit, but now has a ME: With all of the sites that you can add pic-good, stable job that will allow her to qualify tures of the entire interior and exterior of thewith an investor to buy a house with seller fi- house, there really is no excuse for not puttingnancing. pictures on any web site you advertise on.This post is a continuation of our conversation. BETTY: Another thing: if there’s no price in the ad, I don’t call. I don’t want to waste my timeME: Betty, you told us you wanted something on houses I can’t afford.that was move-in ready and had easy terms,and you were willing to pay extra for a house ME: So, put the list price of the house in thethat fit those qualifications. Now I‘d like to find ad. And if you‘re offering good terms, and willout how the house was marketed. How did you work with folks with less than perfect credit,find it? put something like ‗No credit check loans‘ to get their attention.BETTY: I found the ad on Craigslist, actually.There are tons of properties on that site! BETTY: Yes. And finally, curb appeal is impor- tant to me. The first time I saw my new houseME: What made you follow up on that particular in person, the lawn was neatly trimmed andproperty? the house seemed well cared for.BETTY: It’s kind of a fluke that I found it. It was ( As I‘ve said before, fix it up like they do onlisted under rentals, not under sales, because the Curb Appeal TV Show. You can read thisthe seller was willing to do a rent to own or post to see some pictures and get some morelease purchase as well as a sale. The ad said the ideas.)house was for rent or for sale with owner financ-ing, and that’s just what I was looking for. ME: Thanks for those tips, Betty. When do you close on your house?(So list your home in the ‗Rental‘ section as arental or a rent to own house. And of course, BETTY: In less than a week! I’m excited aboutyou can put it under Homes for Sale, too. It also moving in!helps put the listing in Spanish – broaden your Betty could have gotten a house for lessmarket reach!) money. But because of the seller‘s successfulME: What other tips would you give to investors marketing, she chose his house out of hun-on how to attract home buyers and renters? dreds, and happily paid more for it because it was move in ready. I‘ll do that kind of deal allBETTY: Well, I do look for certain things. First of day long!all, I always limit my Craigslist search to adswith pictures. I don’t want to waste my time From Don Derosa‘s Web site:driving to a place that ends up looking horrible. www.DonDeRosa.comIf there hadn’t been a picture, I wouldn’t haveseen the ad.Page 26
  27. 27. Find it, Fund it, Fix it & Flip ItJoin Pete and Don DeRosa on Saturday and Sunday Sep- want to buy one of those houses. (Remember, these aretember 18th and 19th for their renowned, Two-Day Find It, bank-owned. YOU can buy them!)Fund It, Fix It and Flip It Boot Camp and Bus Trip. Be sure to join us on the Tuesday preview with Pete sharesOn Saturday, Don will teach you where and how to find his contractor knowledge with investors and homeownersand evaluate the best properties in the market, so you can alike, teaching everyone how to put THOUSANDS OF DOL-make at least $20,000 on each deal. He‟ll also share ex- LARS into your own pocket.actly what to say to get private money to fund all of your To register go to and click on Calendardeals, so you never have to go to the bank or qualify for a and look for both the Tuesday Meeting on the 14th & theloan (do you really want to try to get a loan in this market, Bootcamp and Bus Tour on the 18th & 19th.anyway?) We only have room for 50 people on the bus, so if you wantThen on Sunday morning, you‟ll take a bus trip to 2 bank- to attend be sure to register as soon as possible.owned houses, where Pete and Don will show you the Saturday: 8 am to 6 pm Sunday 8:30 am to 5:30 pmspecific things they look at when they evaluate a house forpurchase and repair. You‟ll get the perspectives of both of Early Bird Pricing:these real real estate investors (yes, they actually buy $149 for Non-Membershouses. They don‟t just travel around talking about it!)Then Sunday afternoon, Pete will talk about rehabbing the $79 for Membershouses, what he‟d do and how much it would cost. In addi- After September 16thtion Pete will go over the new EPA LEAD PAINT work $199 for Non-Memberspractices to stop the spread of lead dust. $99 for MembersSo… you‟ll walk away knowing exactly what to do if you Or use form on back page. Investment News Page 26
  28. 28. Limited Seating Register Now Sign-Up Form Title Name Sign up for: Price Address Find it Fund it Fix It Flip It Non-member Early Bird $149.00 Phone / Fax Find it Fund it Fix It Flip It Non-member Early Bird 2nd Person $149.00 Email Find it Fund it Fix It Flip It Member Early Bird $79.00 2nd Person 2nd Person Email Find it Fund it Fix It Flip It Member Early Bird 2nd Person $79.00Method of Payment Visa $199.00 Find it Fund it Fix It Flip It Non-member After Sept 16th Check MasterCard Find it Fund it Fix It Flip It Member After Sept 16th $99.00 Discover American Express Subtotal: Tax: Credit Card # Exp. date Total: Signature Email to or fax to 816-523-4448 Mail to: PO Box 8685, Prairie Village, KS 66208