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The Investment News: October 2010


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The monthly newsletter for Mid-America Association of Real Estate Investors. A Real Estate Investing Trade Association based in the Kansas City Metro Area. Find us online at

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The Investment News: October 2010

  1. 1. u MEMBER D ISCOUNT C ONSTANT C ONTACT O c to b e r 2010 PAGE ............. 15 u W ORKSHOP S ELLER FINANCING TO THE R ESCUE PAGE .......... 8 u MONTHLY O CTOBER 12 MEETING PAGE ............. Investment 2NEWSLETTER OFMID-AMERICA ASSOCIATION OFREAL ESTATE INVESTORS newsFor Real Estate Investors & Property OwnersNO MORE FORECLOSURESLawsuits are flying, foreclosures being set aside, paper-work not reviewed . . . It’s a real mess. So quite a few ofthe nations lenders have stopped doing foreclosures whilethe review their processes and procedures.But what does that mean for the 1000’s of homes alreadyforeclosed and worse yet, bought on the courthouse stepsor sold as an REO? Is the title any good, should we beworried?Check out Repo Gate on page 12 provided to us from thegreat staff over at Accurate Title! 2 Holes or 3, will it pass inspection As we renovate older homes we are faced with what to do with those 2 hole, ungrounded out- lets. Do we go back with newer versions of the same thing, they do exist, but cost a bit extra. Just put in the new 3 hole, grounded ones? Will that work? Will it get called out on inspection for both Section 8 and FHA Home Loans to name a few? What do we do with the GFCI? Find out the details in Grounded or Not Grounded on Page 20 from MAREI Member Bill Vaughn with Accessible Electric Inc.
  2. 2. Round Table Discussion Rare Treat Our Panelists Local, Live, Working Real Estate Frank Investors are going to share Janssen HOW THEY DO IT. Brian We have asked them to pick Winberry One of their recent deals Ray And walk us through: Eaton Marketing Where the deal came from Our panelists have all different kinds of Situation Surrounding the seller & property experience from our newest part-time Negotiation Discussions with investor to our seasoned veteran. seller & buyers We have full and part time investors. Funding How they paid for Be prepared to take NOTES! the deal or not See details on page 23 Exit Strategy How they sold/ rented the deal Structure How they put the deal together Outcome How it all turned out Interested in learning & what they learned November Meeting Speed Networking Back by Popular Demand more about creative fi-Page 2
  3. 3. Contents MAREI News In This Issue October Meeting 2 Visit Our Web Site Contents 3 MAREI Staff 5 What’s Up . . In the News Member’s Properties 7 Blog Seller Financing to the Rescue 8 Amendment 3: Vote in Missouri 10 Properties Repo Gate 12 Message Board Title Defects 13Business Associates Membership Has it’s Privileges 14 Video Content for your Web Site 16 Vendors Market Update 18 Grounded or Not Grounded 20 Calendar 22 Investment Opportunities 24 Features ‫ ׀‬October 2010 Seller Financ- Video Content Advertiser’s Directory ing to the for your web site: Stop Workshop on Notes 9 kcmoHomeBuyer 25 Rescue: How making ex- Amendment 3 11 T.O.T.L. Renovations 25 Investors Can cuses: You 8 Profit from the Emerging 16 can find the time, you can Accurate Title Constant Contact 13 15 Home Depot MAREI Library 25 26 Solutions to figure out technology, Rockstar Investor 17 27 the Real Es- and here’s the Classifieds 24 28 tate Crisis content.Investment News Page 3
  4. 4. 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 render 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 4
  5. 5. 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 5
  6. 6. Director Notes What’s Up In the News Did you attend the Find it Fund it Fix it and go to the MAREI web site Flip it Bootcamp and Bus Tour last month? ( and click on Lead Safe under the Government Affairs Tab on the top Boy was it fun and we all learned we cannot you will find links to tons of Resources, includ- live with out the IPad. I really envy those who ing our meeting earlier this year. As the gov- took the plunge and bought one. ernment did not do a good job getting the And how the driver got that big bus down all word out, they are not fining un-certified con- those little residential streets in Kansas City tractors yet, but they will be soon. So if you was amazing! are renovating houses built before 1978, get to a Lead Safe Work Practices Class or get your General Contractor to one. Our speaker earlier this spring has open classes coming up that you can attend: go to to register. The other big issue we talked about was the 3% real estate tax that was in the health care bill. So I checked with my accountant and here’s what he had to say. If you want to do a bus buying tour of REO’s, or all your lease to own houses or what ever, This is a new tax on investment income, in- you can rent the smaller 24 person bus for the cluding capital gains. It’s a tax on the profits, day for a fairly reasonable price. Then take a that at current rates would make the tax bunch of buyers around at once. 18.8% versus 15%, and it does not start till 2013. It only applies if your income is over In the classroom we talked about a lot of $200,000 ($250,000 married). On personal things where to find deals, how to find private home sales, it only applies to profit over money lenders, great ways to save money on $250,000 ($500,000 if married) and then only a rehab. All the things promised. if your income is over $200,000 ($250,000 if But there were a few issues that everyone married). On rental properties it would apply really wanted to know more about. Lot’s of to all profit, but again only if you are over soap box moments if you will. $250,000 in income. And the law will proba- One big topic that took up the chunk of the bly be repealed before then anyway, as all the day was Lead Safe Work Practices. Pete ex- states are picking the Obama Care Law apart tended this portion just for our members be- across the country. If you are going to make cause they had so many questions. I am not that much profit for the tax to affect you, then going to detail everything for you, but if you do a 1031 Exchange, no profit, no tax.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, Contact Kim Tucker, Director, At or call 816-523-4400 x 222Investment News Page 7
  8. 8. W. Eddie Speed Seller Financing To the Rescue . . . How Investors Can Profit from the Emerging So- Qualifying for a conventional mortgage today is much lution to the Real Estate Crisis more difficult than it was just a few years ago. More restrictive underwriting criteria disqualify countless As a real estate investor, you know all too well that candidates who have both a willingness and the abil- the mortgage industry is suffering from a major melt- ity to meet the requirements of the loans. down. Lending institutions are folding, foreclosures are reaching record highs, and subprime lending has As a result, as many as 50% of the people who caused a catastrophe for property sellers, buyers, would have qualified for a conventional mortgage and lenders alike. just two years ago no longer do. Since the shake- out in the lending industry, many good candidates As a result, there’s a limited pool of qualified buyers are being denied the opportunity to borrow money. and a shrinking supply of conventional lending sources. In addition, there’s an abundance of proper- Seller financing is the ideal solution for these people ties on the market at low prices. and investors alike. To avoid the same pitfalls that brought down many lending institutions, however, the Seller financing is filling the void created by the mort- investor must weigh the risk of each gage crisis, offering an alternative loan, and proceed only with those that to those hard-to-come-buy conven- Eddie will be teaching an present a high likelihood of success. tional loans. It moves property, more quickly and at higher prices. all day workshop at JCCC From This Day Forward . . . Seller Financing Goes Main- on October 23rd. Visit Most people enter into seller financing stream contracts with the same enthusiasm with which they enter into marriage. After the high-interest rates of the For more info or see page They’re as happy at closing as newly- 1980s, seller financing became a weds at the altar. But if the commit- specialty niche among real estate 9. Paper registration at the ment is based on blind faith, the rela- transactions. The upheaval in the back of this newsletter. tionship may dissolve faster than ice in housing market, however, is now the punchbowl. creating an extraordinary demand for this alternative financing No investor finances his property for a method. buyer with the belief that the arrangement will turn sour. At most, it’s considered a remote possibility Two years ago, seller financing accounted for about with tolerable consequences. If the buyer defaults on 1 in every 400 real estate transactions. Today, it ac- the loan, the investor assumes that he can simply counts for 1 in every 50 transactions. What’s more, annul the deal, repossess the property, and avoid some experts predict that it will soon become the fi- any loss. nancing vehicle for one out of every ten real estate transactions. But the buyer has likely occupied the property for months, perhaps years. What condition is it in now? What does this mean to you? Seller financing pro- Have the taxes and insurance been paid? Have vides you the opportunity to sell your properties to needed maintenance and repairs been done? Has quality buyers—at the full retail property values and the buyer trashed the place and fled? Has the equity more quickly--for a substantial and steady income disappeared? The seller/lender could get stuck with stream. unpaid bills and costly repairs. The honeymoon is For Quality, Qualify over. (Continued on page 9)Page 8
  9. 9. (Continued from page 8) A Safe Bet on paper.Like fiancés, borrowers are emotion- How risky is seller financing? Much What the savvy investor must do isally involved with the transaction and lower than it used to be. That’s be- differentiate between these deservingmight not view their financial situation cause it used to be easy, too easy, to buyers and the riskyones.objectively. Equally excited about obtain a conventional loan. Peopleclosing the deal, the seller might also I Do Diligence who failed to qualify for traditionalbe blind to the risks in doing business mortgages were, by definition, the Approving your seller-finance candi-with a particular buyer. riskiest borrowers. date is like choosing your life partner.Other investors recognize the risks but During that first encounter, your datebelieve they can sidestep a foreclo- Lending institutions have since tight- presents himself or herself in the bestsure action by having the buyer pre- ened their criteria, making it far moresign a deed back to them at closing. possible light. He appears honest; she difficult for would-be buyers to borrowHowever, the buyer cannot waive his seems responsible. You like what youfuture rights. There’s no protection for money. Many are ―just missed‖ bor- see and you want this to work. Youthe seller if the arrangement goes rowers who now fall narrowly outside make plans.sour. Seller financing doesn’t come the newly tightened criteria of lendingwith a pre-nup. institutions. These are reliable, low- Smart couples conduct due diligence risk prospects who show every inten- before saying their ―I do’s.‖ They learnClearly, the smart approach is to learn their fiancés’ background, character,all you can before you’re heavily in- tion of meeting the terms of their values, strengths, and weaknesses.vested in the relationship. loans, and have the ability to do so. Many singles even hire private investi- They simply no longer ―measure up‖ gators to do a background check onAlternative Financingfor Today’s Economy.One Day Workshop Saturday October 23rd With Eddie Speed  How to Create Loans for ―Just Missed‖ Buyers who can’t Qualify for Conventional Loans.  How to Maximize the Value of the Note.  Minimum Credit, Down Payment, Borrower Qualifications . . . Plus Federal Disclosure laws.  The most Effective Ways to Find Notes: Direct Mail and Reverse Ad Marketing  How to Purchase Notes: Without Investing a Dime of your Own Money  Negotiation Skills that turn Note Owners into Note Sellers  How to Enrich Your Own Portfolio with Income Producing Assets that will last.  And Much, Much More!You can’t miss at this one day workshop. Cost is $19.95 for one person, $29.95 for a coupleDetails and Registration on the MAREI calendar: Note the room only seats 70 people, so ensure your seat and register early! Investment News Page 9
  10. 10. Take Action Amendment 3 The Facts Amendment 3 stops politicians from taxing your erty sale – that’s $40,000 handed over to politi- property AGAIN. cians off the top, discouraging economic activ- ity, delaying business growth, denying entre- There is a threat of a new tax in Missouri called a ―real preneurs their dreams of success. Especially in estate transfer tax.‖ The tax adds to the cost of selling communities bordering other states with trans- commercial property, farms, and homes. fer taxes, Missouri has a competitive advan- What is a Real Estate Transfer Tax? tage with NO transfer taxes. Let’s keep it that way! A real estate transfer tax is a state or local govern- ment imposed tax that is collected when you transfer Death taxes. Small farms and family homes that ownership of your commercial property, farm or home. have been passed on or transferred to family Typically, once the tax is initiated, the rate can be in- members for generations would face new bur- creased by the state, county or city at any time. densome transfer taxes even if they are inher- ited and even though the family has paid prop- Voting YES on Amendment 3 kills this new double erty taxes on the same land for years. tax on property. Double Taxation. Real estate transfer taxes are Amendment three keeps the money you earn from the nothing more than double taxation. They are sale of your property in your pocket. In this fragile often paid by the seller – that is people who economy this double tax would put an additional bur- have lived in their home for years and have den on the sale of your property making it harder to already paid tens of thousands of dollars in profit from your investment. Amendment three elimi- property taxes, sales taxes and other fees. nates this economic killer. Vote YES on Amendment 3 and stop politicians from double taxing your commer- Punishment of Homeowners. In the current econ- cial property, farm or home. omy, many people are having to sell their homes because of a job loss or pay cut. With Amendment 3 will provide protection from: home values dropping, many are selling at a Damage to the economy. We need to keep taxes loss. It is unfair to impose additional taxes on low in Missouri. New taxes discourage people people who already are facing severe financial and businesses from locating here, and a new hardship. real estate transfer tax would have a negative An Unfair Impact on Lower-Income Missouri- impact on our state’s economic development. ans. A real estate transfer tax would impose a Business Killer: Imagine adding a 4 percent higher tax burden on lower income households transfer tax to a $1 million commercial prop- that typically spend a larger percentage.Page 10
  11. 11. Investment News Page 11
  12. 12. Title Issues from our Repo Gate Business Associate Your Title Ally Bank, JP Morgan/Chase and Bank of these and other legal foreclosure issues. Only America, so far, have all halted foreclosures in Old Republic Title Insurance Co., so far, has 23 states and the situation is also affecting the refused to write title insurance on these banks sale of REO property. Most of these states are REOs. judicial foreclosure states. (Kansas is one, Mis- Short sales are another matter entirely, as you souri is not). are actually buying from the current owner Depositions in other states have revealed that and of course, an owner’s policy of title insur- there were "robo-signers" who signed several ance will protect this investment. thousand affidavits a month attesting to The American Land Title Association, which is "personal knowledge" of the status and owner- working closely with Fannie Mae, Freddie Mac ship of a loan without even looking at the file and federal banking regulators to keep the and the notaries who attested to witnessing REO market fluid, is discussing what steps were not present. Sometimes, these "robo- lenders might take in order to ensure that title signers" did not have any legal authority to insurance policies can continue to be issued on sign. REO properties. What does this mean for the investor in fore- Please note this information was provided to closure property as far as marketable title? If us by Natalie Kraft with Accurate Title Com- reversed, it is possible that purchases from pany. If you read this article on the MAREI the courthouse steps could go back to the blog, you will find that the underlined areas original owner or the lender will have to make are clickable to further articles or Google those some kind of monetary compensation to them. specific words to find related articles. Any property with a foreclosure in its chain of title could be affected. The future is very un- Accurate Title is a full service title insurance certain. The courts will have to decide if the agent and escrow company that has been a property reverts to its original owner and if MAREI member since its inception. Our staff the purchaser receives a refund of the pur- includes an attorney and experienced escrow chase price. You may have to obtain legal professionals. We are committed and experi- counsel. enced in assisting investors and, as always, we strive to exceed your expectations. You If purchased from the lender, as an REO, title can find them online at insurance should be a requirement of your as well as on Face- purchase. Many of the Special Warranty Deeds book and Linked in. and contacts now "disclaim" any liability forPage 12
  13. 13. Title Defects Is the Lien ValidMany investors buy homes on the This seems to be a common oc- vit to continue has been filed bycourthouse steps, with a quit currence, especially in today’s the holder or owner of the mort-claim deed, or otherwise take a wild market. with all it’s title defects. Some liens can be usually be One would assume that sinceWhile it is good to have an experttitle person check out all the is- eliminated automatically from the there are new mortgages or running in Missouri if: deeds of trust in place, that thesues, many times the investor mortgage had been paid. But todoes the initial looking at liens.  10 years after the maturity find out for sure you can takeSo what do you do when there is date on the note. some steps.a first mortgage or deed of trust  20 years after recited date,sitting out there from a few years execution date, recording  Call the lender and ask, butago without a release being filed, date, acknowledgement date as many have gone out ofyet there is a new first mortgage  40 years after a future ad- business it might take a bit ofin place. Is it safe to assume it vance date. investigative work to find outwas released? How can you find who took them over and then In Kansas the lien can be re-out. Likewise if there is a lien for the new company to lo- leased on July 1 of the followingthat is so old that one would cate the right information. year preceding the date 42 yearsthink it should be paid off, what after the date of initial recording  Call the title company thatdo you do? of the mortgage and if no affida- (Continued on page 26) ACCURATE TITLE COMPANY ―When You Need Timely, Top-Quality Service . . . ―  Owners and Loan Policies  Endorsements  Ownership & Encumbrance Reports  Foreclosure Reports  Ownership Information  Tax Information  Buyer’s Closing Services  Seller’s Closing Services  Lender’s Closing Services  Recording Services  Funds Disbursement Services  1031 Exchange Services  Special Requests 913-338-0100 phone 913-338-0107 fax Investment News Page 13
  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  Sherwin-Williams: One of our most largest provider of real estate training popular and most used benefit, Sher- materials—Dearborn, Nolo, and Kap- win-Williams offers unbeatable pricing lan. to National REIA members. Enjoy To find out complete details on all these deep discounts on paint, applicators, member discounts log into the member floor covering, paint sundries, wall area and look at the Benefits Section in covering, spray equipment, and even the Library. We also mail a complete window treatments! Your discount booklet with all discounts and instructions card is in your membership package. on how to access when you renew or join  FedEx: Receive significant inbound or upon request. To request email and outbound discounts on small and ask for the package shipments through FedEx, as member benefits booklet. well as copying and printing services through FedEx Office.Page 14
  15. 15. C h  Partnering with MAREI Go to T v FREE 60 day Trial Personal Coaching to do it right Get 15% off if you prepay for 6 Event & Social media Marketing months Get 20% off if you prepay for 1 year Tons of tools to grow your contact list Same Service MAREI uses!Investment News Page 15
  16. 16. Marketing Video Content For your web site . . . It’s official, there are over 2 billion videos viewed tips, lease to own tips, even getting the most on YouTube each day. Its simple to say that for your rental dollar tips. You are looking video is one of our hottest tools. So why aren’t for ideas to create a series of short very fo- more real estate investors using video marketing cused tips that when you explain take about to attract people to their ―I Buy Houses‖ and ―My 2 or 3 minutes. Wholesale‖ web sites, not to mention the uses it  Home Selling Tips – You buy houses right? has for just about any business. Think about all those phone calls you have In talking with quite a few Kansas City Real Es- with sellers explaining what you do? So tate Investors I have found there are 3 main rea- what if you recorded a series of 2 -3 minute sons why they don’t: videos on how you buy houses, how short sales work, other options to get their home 1. Time: Make time, skip the Chiefs this sold. You know this stuff, just talk about it Sunday and get busy. Schedule time and record it. during the week, this is important. Or hire someone to do it for you.  Bio – Talk about yourself, how long you have been buying, selling, or renting houses, 2. Technology: Use the digital camera where you do it, how many you have done. you already have, the video features on Make yourself a real person in the viewers your lap top, or go spend $200 at Wal- eyes. Mart for a flip cam. Then log into You- tube and start playing with it – it’s free for  Home Tours – these are easy, have a crying out loud! house for sale or rent, walk through the house and create a short video as you walk 3. Content: What do I put in my videos? through the front door to the kitchen. You What will people want to see? may even want to walk through the whole This article is here to answer reason #3, and house and talk about all the great features. show you where to start when creating content You can even create a video with just digital for your videos. stills using online tools and add music.  Testimonials – you have a lot of choices  Community Events – As a real estate in- here! Did you help a past desperate seller? vestor it is very important to support your Did you flip a really great deal to a whole- community where you invest. Attend events: saler who made a ton of money? Did you ball games, festivals, neighborhood garage help some lucky family lease to own their sales and take video or stills shots to create way into owning their first house? Talk to into video. Edit with your web site name them a bit, give them some ideas, play with over it and then post online. Let the the camera and record 30 seconds of video. neighborhood folks know you created a  Home Buying Tips – Go through all those video memory of their event, and they will how to buy houses articles you already have view it and share it with their friends – in- or go online and look for some on other web stant, free advertising for you. sites, that fit what you do – home buying (Continued on page 17)Page 16
  17. 17.  Team Players: Interview some of the key people on your team to find out what they do. Post to your site, and share with the key player, they share with their friends, that’s what they call going viral, sort of anyway. Before and After: If you reno- vate properties, a great before and after video will show off your quality renovation and skills.So after you create the video, youmay want to find some online edit-ing tools and maybe record a shortintro to add to all of them or tooverlay your web site address, soas folks share your video with oth-ers, they can find their way back toyour web site.As you post on Youtube, don’t for-get to write something about yourvideo in the space provided, usekey words – I buy houses, I sell PRIVATE LENDERhouses, private lending, sell your Locally Owned & Operated Private Money Lenderhouse fast, lease to own . . . youget the idea and be sure to locate We are a Direct Lender, not a Brokeryourself on the map.  Rehab Loans up to 100% of CostsThen take the post and put it on  Up to 65% of the After Repaired Valueyour blog. Be sure to write a bit  Terms from 30 Days to 1 Yearabout what the video is on the blogusing key words again. Then us-  Rates from 12 to 16% Interest Onlying services that like HootSuite or  Points from 6 to 10 in Lieu of EquityNetworkedBlogs, have it automati-  Appraisals Requiredcally post to your pages on Face-book, Twitter, and Linked In. Draw Requests on Wed. Paid on Fri-And did you know the search en- daygines really like video too?If you want to get some feedback RockStarInvestor.comon videos, be sure to post them tothe MAREI Facebook Page so Jeff Basleryour fellow members can take apeek. 913-221-9080 Investment News Page 17
  18. 18. Trends Market Update August 2010 Housing Trends Supply of Homes in the Kansas City Re- The Kansas City Regional Association of gion is determined by taking the Realtors tell us that it looks like the Kan- ―inventory‖ and dividing it by the 1‖2 sas City Market is rebounding from the fall month average of number of sales.‖ As a in after the Tax Credit Ended. We are rule of thumb a 5-6 month supply of starting to see a very slow increase in homes on the market is balanced, over 6 prices and sales numbers, which they say months is a buyer’s market and less than is not usual for July and August. 5 months is s sellers market. Combined supply of homes in the metro is at about The two key factors that are still having a 8.7 which is up slightly over the 8.1 in huge effect is employment and consumer July. Existing homes is at 8.7, up slightly confidence. from 8.1 last month and the new home If we look at the Kansas City Market: supply was also 8.7, up from the 8.2 sup- ply in July. Average Sales Price of a new home in August was $313,007 which is 2% higher Local data is from than a year ago. There were price in- where you can read the complete report. creases in Cass & Platte. Existing home Real Trends has the following analysis re- prices averaged $152,944 which was a garding trends across the nation: 1% decrease from last year. over last year. All counties except Jackson, ―While the market for home sales Leavenworth, Miami & Wyandotte saw an slumped as expected with the expiration increase in the average sale price for ex- of the tax credit program, results for Au- isting homes over August of last year. gust were not as bad as feared earlier in the summer. July 2010 was down 20.4% Home Sales saw sales of New homes of so, by comparison, August’s decline of 131 properties which is a 30% decrease 13.7 percent in units was not as severe. from 2009 and New home sales increased It is clear that even though mortgage in- in August by 28% over July . Existing terest rates are at their lowest point in home sales were down 24% over last year over 40 years and prices are stabilizing, and up 7% over last month. June’s com- high unemployment the lack of equity and bined total sales were up 8% from last liquidity among homeowners is restricting month and down 25% from last year. American families’ ability to take advan- Inventory saw a 32% decrease in new tage of record low rates and soft prices,‖ homes from last year and existing is 3% said Steve Murray, editor of the REAL higher that last year and just 5 % higher Trends Housing Market Report. ―Many than July. Overall for August we have a housing forecasters assumed that the ex- 5% increase in total inventory from July piration of the tax credits in and a 13% increase for 2010 over 2009.Page 18
  19. 19. (Continued from page 18)April would have a negative Market Experts Wantedimpact on housing sales forthe remainder of the year. Are you an expert on the market in your area orThe August results confirmedthat with no more tax-favored field of expertise? We are looking for experts ontreatment for housing pur- Residential, Apartments, and Commercial tochases and with the continua-tion of high unemployment, contribute to the newsletter, the blog, and thethe housing market would re- meeting. Be seen an expert in your Niche.treat.We expect the market to im- Contact info@MAREInet.comprove slightly in the monthsahead as buyers return slowlyto the housing market. Ofgreat concern to most housingexperts is the possibility thatthe slump in housing willcause administration officialsto discuss some additionalforms of housing tax creditassistance. Were these discus-sions to be made public, ashappened last week with Sec-retary Donovan, buyers couldchose to sit out any decisionsto purchase and await furtherFederal aid. This would havea major negative impact onhousing sales in the nearterm.‖On the National Level we havepulled information from RealTrends August 2010 issue.Complete digital issue is in themember library. Be sure to login and read.Find the current copy in theMAREI member library online. Investment News Page 18
  20. 20. Renovations Grounded or Not Grounded Grounded (3 Prong) -VS- circuit, you may facilitate the use an appli- ance that under the right circumstances Non-Grounded (2 Prong) Receptacles. could cause serious injury or death to an un- Anyone who has ever worked on or lived in suspecting user. a home that was built before the Mid 1960s Since most homes that were built before the has seen them, the old "2 prong" non- Mid 1960s were wired using an un- grounded receptacles. grounded electrical system, the use of "2 How many of them have you changed out prong" non-grounded receptacles was all with new "3 Prong" grounded receptacles in that was required. order to accommodate a new appliance or Changes to the National Electric Code that computer? started requiring the use of an equipment How many times have you failed a Mechani- grounding conductor in all branch circuits cal inspection due to a receptacle with an and the introduction of sensitive electronic "Open Ground" devices into our homes over the last40 So whats the big deal anyway? years, have driven the need to install Grounded type (3 Prong) receptacles to ac- An equipment grounding conductor installed commodate the way we live today. in an electrical branch circuit is designed to provide a continuous path to facilitate the So whats the right way to do this? movement of electrical current caused by How do you update the outlets in your surges and or faults - to earth via the home, without creating a potential electrocu- homes grounding system. tion hazard? If an appliance that has damaged wiring is We all know that rewiring an entire home plugged into a supposed "Grounded" (3 can be very expensive and can potentially Prong) receptacle, instead following the as- cause severe secondary damage to the sumed grounding path back to earth, fault or homes finish. surge currents could be passed through the Fortunately the National Electric Code af- user. fords us a few less drastic options. By installing a "Grounded" (3 Prong) recep- Article 406 of the 2008 NEC says that only tacle on an un-grounded electrical branchPage 20
  21. 21. where connection to an equipment groundingconductor is possible shall a Grounded (3Prong) receptacle be installed, unless one ofthe following replacement methods are used.1) A non-grounded (2 Prong) receptacle shallbe allowed to be replaced with a Ground FaultCircuit Interrupter (GFCI) receptacle. These re-ceptacles shall be marked " No EquipmentGround". This marking is usually done by use ofa small sticker placed on the receptacle coverplate.2) A non-grounded (2 Prong) receptacle shall Depending on the type of electrical service in thebe allowed to be replaced with a grounded (3 home, Fuses or Breakers and the wiring methodProng) receptacle, where supplied through a used when the home was initially wired, it is oftenGFCI device. These receptacles shall be more cost effective to install GFCI breakers to pro-marked as " No Equipment Ground" and "GFCI tect the entire circuit than it is to spend severalProtected". Again this is usually done by use of hours of labor trying to separate out individual de-small stickers placed on the receptacle cover vices for protection.plate. One thing to keep in mind any time you are install-A GFCI device may be either a circuit breaker ing a GFCI device of any kind, is that the contentsor receptacle. GFCI Devices are designed with of refrigerators and chest freezer can be lost ifan internal circuit that measures the amount of plugged into a GFCI protected receptacle that tripselectrical current returning on the white- and is not reset before the contents thaw.grounded circuit conductor ( or what is often re- As always every home is different, as is every wiringferred to as the "Neutral"), as compared to the system. You should always consult a licensed Mas-amount of current being drawn from the device ter Electrician before starting any electrical project.on the black- ungrounded circuit conductor( "Hot"). If the amount of current returning var-ies by more than the amount allowable bysafety standards then the GFCI will open, thus Article Provided bycutting the flow of current through the circuit. Bill VaughnIt is important to note when employing the use Accessible Electric Inc.of GFCI protection as outlined in option #2above, protection may be achieved through the Serving the KC Metro Area since 1995use of either a GFCI receptacle, or a GFCI (913)-915-0838Breaker. Investment News Page 21
  22. 22. Calendar Upcoming Events Sub Group: MAREI’s Commercial Investors meet every Oct other week. This month on October 6th & 20th. This group is for MAREI members and their guest. See online calen- dar of events for more information. 6 Lee’s Summit Investor Breakfast Lee’s Summit Investors Oct Networking Group meets the 2nd Saturday of the month for coffee, breakfast, and conversation at the Panera Bread on 9 Chipman in Lee’s Summit. Open to MAREI Members & Guests.Children & College Students Oct MAREI Monthly Meeting MAREI meets for networking & 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 Meeting estate? Is ready to learn? 12 Charge for Members, Guests $25 at the door, $15 if pre- Add your child aged 12 to 18 registered. to your membership. OctCollege Students with student All Day Workshop Alternative Financing for Today’s Econ- ID, we have internships omy: Create Seller Financed Notes to Sell your houses available. Work in the faster. Buy and Sell Seller Financed Notes. Cost $20 to 23 $30. More info & Sign up MAREI office for $10 in MAREI bucks to use for Membership & Workshops Webinar As a Real Estate Investor should I have a real Contact Oct estate license and How to go about obtaining a real estateMAREI Office for more info. license in Kansas and Missouri . 30Page 22
  23. 23. Monthly MeetingSylvester Powell JrCommunity Center6200 Martway, Mission KS913-722-8200Tuesday, Oct 12 5:30 Member’s Only -Doors open at 5:30 let’s talk Private LendingMembers: FREE 5:45 Set Up / RegistrationGuest Fees: $25 at door . . 6:00 Industry Partner Expo Pre-register online for $15 Invite your friends 6:00 Member Networking colleagues to visit theIf guests join with in two days of 7:00 Haves & Wants (Bringthe meeting, their guest fee will be your Deals) Monthly Meeting forapplied to the membership fee with 7:30 Round Table - with a Guest Passproof of payment. How I Did the Deal (available online atPlease call 816-523-4400 x 222. 9:00 New Member Registration Location For each new member you 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 23
  24. 24. Properties Investment Opportunity Address City Offered as Price Bed / Bath Contact Phone 55th & Swope Pkwy Kansas City, Mo Rehab $7,000 3/1 Al Fraser 913-735-5549 304 Grant Liberty, MO Owner Occupant $117,500 Bob Baldwind 816-520-9330 1220 W 30th St Independence, MO Owner Occupant $108,900 JJ Pawlowski 816-916-4593 219 W 81st St Kansas City, MO Owner Occupant $109,900 3/ 1 1/2 Rick Zeitun 913-461-8560 21813 Lombardo LN Peculiar, MO Fixer Upper $134,900 4 bed, 1 bat Donna Wilson 816-213-8151 8812 Evanston Way Kansas City, Mo Owner Occupant $97,900 JJ Palowski 816-916-4593 1634 Kensington Kansas City, Mo Rental $48,000 3 bed, 1 bath Stephen Summers 816-350-7200 3124 Mersington Kansas City, MO Rehab $15,000 3 bed, 1 bath Danek Fonrose 816-804-4506 1515 Haystack Rd Raymore, MO Pre-Foreclosure 195,000 2900 sq ft Joyce Myers 816-509-0884 1112 E 4b2nd St Kansas City, MO Rehab 24,000 4 plex Eric Deeter 913-579-3354 6009 Cherry St Kansas City, MO Rehab $40,000 1 + bed Maggie Sheehan propertyloca- 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. 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 223 Roger Holyfield  (816) 510-9199  All MAREI members can register through our special link to receive a 2% rebate on all pur- chases made at Home Depot. From a $5 item for a week end project to a $10,000 rehab: kitchen, lights, appliances, Etc.Investment News Page 25
  26. 26. (Continued from page 9) (Continued from page 13) filed the new lien, if they did the refinance, they should have paidtheir potential mates. the old lien and be able to in- NEW IN THELikewise, real estate sellers should demnify you and have some kind MAREI LIBRARYcarefully analyze their seller-finance of proof that the old lien wascandidates, using disciplined under- paid such as the HUD1, copy ofwriting. The primary variable that af- the check and payoff letter.fects the cash value of their note is  If you are in contact with the A Look Behind Your Web Site:the buyer’s credit. Thus, not only does owner of the property, they maygood underwriting mean a more trou- Filed In Marketing also have the required documen-ble-free loan, but you also create a tation you need as many lenders 7 Secrets to a $100,000 + Paymore valuable, salable loan. will mail the lien release to the homeowner and leave it up to Raise: Filed in Real EstateAs Ronald Reagan said, ―Trust but them to file. As they don’t knowverify.‖ what to do with it, they save it Real Trends September 2010:Seller Financing: It’s a Good Thing away in a box. Filed in Market Data  It is also important to note thatYou can be extremely successful in because of privacy laws it may Real Estate Glossary: Filed inthis business, if you use a methodical difficult to get an answer unlessapproach that calculates the risk and you have the loan number and Real Estateweighs the benefit. Plus, it’s much the borrowers social securitymore profitable than sitting on an un- number. Release from Real Estate Con-sold property. As investors it is very important to tract: Filed in Forms & Con-With due diligence, good judgment, have a good team in place to deal with these issues and look at them tractsand some common sense, you canbecome very successful with seller early on in the process. For example if you just bought an REO with a quit 27 Ways to Buy Multi-Familyfinancing. And the timing couldn’tbe better. claim deed or on the courthouse Properties With NO MONEY steps without title insurance, youIn addition to your own success, you may want to order title now, before DOWN!: Filed in Multi-Familycan provide a much-needed service to you have a new buyer so you canpeople who deserve the opportunity to deal with issues. If you wait untilown their own homes. Are you ready the last minute, your closing mightto say ―I do‖? because you can’t locate all the re- leases and forms needed. OLD IN THEAbout the Author If not all can be found, it is importantEddie Speed, Founder of Note School®, to note, they probably can’t be found MAREI LIBRARYhas purchased more seller-financed notes to prove they are owed money ei-than anyone else in the business. With a ther. In which case you can file a Book of Real Estate Formslifetime volume of seller-financed notes quiet title suit and get these liens released. But that could be time – from Robert Allen: Filed intopping half a billion dollars, Eddie has that you may not have. Quiet titles Forms and Contractsseen just about every scenario. He is alsoan acclaimed instructor, mentor, and re- can cost on average $2000 to $2500 or even up to $3500 if it is Assignment of Contract: Filedcipient of the industry’s most prestigious a really tough one to clean up.award. in Forms and Contracts The Science of Getting Rich: Filed in SuccessPage 26
  27. 27. Professional Real Estate Websites This is a completely customizable real estate website with all of the capabilities tai- lored to meet the business development needs of any real estate investor, agent, realtor or broker. Your very own professional quality real estate website is just a few clicks away! List of Features Included on Your Real Estate Website Hosting and Email Included Unlimited Property Listings Map Links and Local School Information Property Listings in our National Database Unlimited Number of Website Pages Financial Calculators Hundreds of Website Templates Powerful Easy-to-Use Design Tools Custom Form Wizard Real Estate Directory Real Estate Discussion Groups Guestbook and Online News and Calendar Publishing Ready-to-Use Content Website Promotion Tools Website Reseller Program 10 Day Tutorial Included Your Complete Website (including hosting) is just $39.90 per month plus a one-time initial setup fee of $39.90 Go to Risk Free - No Obligation - No Credit Card Required!Investment News Page 27
  28. 28. MAREI is partnering with KCIG to allow our members to go to their 1 day training event on October 23rd: Alternative Financing for Today’s Mar- ket. Discussion on buying & selling notes and creating seller financed notes with guest speaker & Note Expert: Eddie Speed. Register Now  How to create loans for buyers who just can’t qualify Name Name  Screening the Tenants: Verifications, Credit, Down Pmt Address  How to maximize the value of the Note Address  Where to find ready sources of funds to buy notes Phone  How to find notes sellers and note buyers Email  Government Disclosures Required and More  Sign up online at 2nd Person 2nd Person EmailMethod of Payment Sign up for: Price Visa Check MasterCard For One Person $19.95 Discover American Express $29.95 For Two People Credit Card # Exp. date Credit Card # Exp. date Signature Signature Email to or fax to 816-523-4448 Mail to: PO Box 8685, Prairie Village, KS 66208 See Page 9 for More Info or go Online to