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Re investment news April 2016

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The RE Investment News is the newsletter for Mid-America Association of Real Estate Investors. This month funding and credit, next month rehabbing houses.

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Re investment news April 2016

  1. 1. N E W S Credit Resources from Kim Tucker N E W S L E T T E R F O R M I D - A M E R I C A A S S O C I A T I O N O F R E A L E S T A T E I N V E S T O R S APRIL 2016 Elite Start Real Estate Investor Training 2016 From VIP Financial W A Y S T O F U N D R E A L E S T A T E I N V E S T M E N T 10 PLUS REINVESTMENT Event Calendar See what's coming up. MAREI Business Directory
  2. 2. RESOURCES FOR MONITORING CREDIT KEEP AN EYE ON YOUR CREDIT Identity IQ Credit monitoring services allow you to monitor the data that is reported to each of the 3 bureaus. However, these services do not provide access to your FICO score. Instead, these services usually provide a consumer credit score. If you have challenged credit or are in need of a monitoring service, these are the services you might consider.. Credit Check Credit Check Total is an alternative to Identity IQ. It provides a 3 bureau credit monitoring service. If you have challenged credit and are in need of CREDIT MONITORING: Services allow you to monitor the data that is reported to each of the 3 bureaus. However, these services do not provide access to your FICO score. Instead, these services usually provide a consumer credit score. If you have challenged credit or are in need of a monitoring service, these are the services you might consider. FICO CREDIT SCORES: Credit scores that are derived from the FICO scoring model can only be obtained from FICO directly by the consumer. If you have perfect credit or are looking to determine which debt weapon you may qualify for, you’ll want to know your FICO score. FREE CREDIT REPORTS OR CONSUMER CREDIT SCORES – If you are unsure of the standing of your report only or are unsure which of the services above you many need, you may want to use one of these sources first to obtain a free copy of your report. However, these sources do not give you a true FICO score. IDENTITY THEFT PROTECTION – Identity protection services provide protection from and help in dealing with identity theft. These service should be considered if you are in need of protection from identity theft. By VIP Financialmonitoring service to track the data as it appears on your report, this product could be useful. The cost is $1 for the 7-day trial period. After the trial period, the cost is $29.95 per month. However, the monthly cost can be lowered. Credit Report.com Continue reading at next page > Credit Report is an alternative to Identity IQ. It provides a 3 bureau credit monitoring service. If you have challenged credit and are in need of monitoring service to track the data as it appears on your report, this product could be useful. The cost is $1 for the 7 day trial period. After the trial period, the cost is $19.95 per month. VIP FINANCIAL 2 | M A R E I . O R G
  3. 3. RESOURCES FOR MONITORING FICO My FICO.com My FICO is the only resource that allows you to pull and/or monitor your true FICO score. However, you may only pull your EFX and TU reports from this resource. Additionally, MyFICO only allows you to monitor the score for you EFX report. When determining which debt weapons you’ll qualify for, you’ll want to use this service. The cost for pulling your credit report and score is $19.95 per bureau. The cost for monitoring your Equifax score after the 10- day free trial is $14.95 per month or $149.95 per year. VIP FINANCIAL RESOURCES FOR CREDIT REPORTS Annual Credit Report Credit Karma Credit Karma gives you the ability to pull your consumer credit score for free. However, this service does not provide a report or an accurate FICO score. It is merely a tool that can be used to obtain an approximate score for each of the 3 bureaus. There is no cost for this service. RESOURCES FOR IDENTITY THEFT LifeLock Life Lock provides is essentially a monitoring service that offers help in the event that identity theft occurs. The cost is $25 per . FICO score. Instead, these services usually provide a consumer credit score. If you have challenged credit or are in need of a monitoring service, these are the services you might consider.. Identity Theft Shield remedies. Available products and costs vary by state. Normally, Identity Theft Shield costs $12.95 per month. However, the cost may vary when combined with other products. Annual Credit Report gives you the ability to pull your report only without a score. If you are unsure what your credit profile looks like, you’ll want to use this resource first before obtaining any of the above services. There is no cost for this service. However, you may only use this service once per year. Identity Theft Shield provides both monitoring and legal help with identity theft. This service provides the best form of identity protection and R E I N V E S T M E N T N E W S | 3
  4. 4. SUCCESS TOP TEN WAYS TO FUND REAL ESTATE INVESTMENT by VIP Financial Photos from OneofthebiggestquestionsIreceive fromnewrealestateinvestorsafterthey getanideaofhowtheywanttoinvestis whatisthebestwayformetofundmy deal? Whenstartingoutmostnewrealestate investorswhohavethefundsmightuse theirownfundstobuythatrental propertyorflippropertyorwhatever,but thenalltheirfundsaretiedupandwhen anothergreatdealcomesalong,theyhave topassitupbecausealltheircurrentfunds aretiedup. Forexample,Ihaveafriendrightnowthat wasteamingupwithsomeoneelseandjust whenoutonhisownforinvesting. Hefounda greatrentalpropertyandusedhisownfundsto purchasethispropertyandrenovate. Then alongcomesanotherkillerdeal. Becausehis modelistopaycash,hehastoscrambletofind otherfundingtodothiskillerdealorpassitup. Thenextmethodnewinvestorsusedependson theirinvestingmodel. Thosewhoaregoingto acquirebuyandholdrentals,usuallygotoalocal smalltownbankandmakeadownpaymentand purchasetherentalpropertywithamortgage. Thisisactuallyagreatmodel,however dependingontheinvestorscashfundsand bankingrules,eventuallytheycan’tbuyany 4 | M A R E I . O R G more. Thiscouldbebecausetheyrunoutof cashforthe30%downpaymentorbecause theyhitthelimitonthenumberofhomesabank willmakeloansontoonepersonforinvestment purposes. Therearequiteafewotheroptionsthatwill dependonthereasonforinvestingandthe individualinvestorsresources Theyrangefrom yourownliquidfunds,toyourownretirement funds,yourowncredit,otherpeople’smoney, otherpeople’screditandeventhedealitself. ThisarticleistotakeaVERYBRIEFLOOKata realestateinvestor'soptions.
  5. 5. Youcanstartanewaccountwithminimal fundsandusingoptionsandassignments, builtthataccountwithafewtransactionsa year. Oryoucouldpartnerseveralofthese fundstogethertocompleteatransaction Theycanevenborrowmoney. Therearea lotofrulesontheseandthebigoneisthat youusuallycan’tlendmoneyfromthese accounttoyourselfforadeal–thedealmust bedonebytheretirementaccountandthe profitmustgobackintotheretirement account. Youcouldalsopartnerwiththeretirement accountandtheproportionofthefunds goingintoatransactionwouldbethe proportionofbillstobepaidandprofitsto bemade. SoforexampleyourIRAandyour LLCpartnertogethertobuyahousefor $40,000towholesalefor$60,000. TheIra Invest$10,000andyourLLCinvests $30,000,theIRAisa25%ownerandyour LLCisa75%owner. Sotheclosingcoststo buyandtosellwouldneedtobepaid25%by theIRAand75%bytheLLCandthe$20,000 inprofitwouldbedivided25%or$5,000to theIRAand75%or$15,000totheLLC. Thisisawholemonthlongcourseinitself,so besuretogeteducatedaboutRetirement Funds. InsurancePlans: Therearelifeinsurance plansthatcombineatermlifeinsurance policywithasavingsplan. Thatsavingsplan cansitandearninterest,withtheright companyitcanbeinvestedinrealestate,or itcouldbeusedtoborrowagainstfor investing. SomeRealEstateInvestorsliketo usethisasaninvestmentvehiclefor retirementbecausetheprofitsmadeby investingwithinthisplanhastaxbenefits. ThisisbyfarnotmyspecialtyandIhaveno experienceinthismodel,butitmaybe somethingtolookatashaveafamily memberthatusedthisasawaytoforhis childrentopayforcollegeandonechildalso usedittostarthisownbusiness. InvestmentFunds: Otherinvestormayalso findthattheyhavefundsinvestedinmutual fundsorstocksandbondsatabrokerage ELITE START asgood(notstellar)creditonbehalfofthe borrower,quiteoftenitmustbemadeinthe nameofacorporation,notanindividual. Typicallyitcosttheinvestoraminimumof2 to5percentagepointsand10to15% interest. Theloanisgenerallyonlyfor6 months,possibly9monthsandmayormay notrequireadownpayment. Combo: Somesmallerbankshavebeen knowntoofferaRehabtoPermanentLoan thathasallthecharacteristicsofaRehab Loanthatoncethepropertyisfinished convertstoapermanentloanwithalower interestrateandthenamortizedovera longerperiodoftime. HomeEquityLineofCredit: Thisisjust whatitsoundslike. Iftherealestateinvestor ownshisownhomeandthereissufficient equityinthehome,thatequitycanbeused ascollateralforarevolvinglineofcredit. For afirsttimeclosingcosts,thelineofcreditcan besetupandthenthemoneyborrowedand paidbackoverandoveragain. Greattooltousetobuy,renovateandthe sellorfinancebackoutforlongtermhold. Wouldonlyuseinsituationswheretheplan istogetthelineofcreditmoneybackon6to 9months,notforapermanentloanonalong termhold. RetirementFunds: Manynewinvestorsas wellassomeofthemoreexperiencedones donotknowthatretirementfundscanbe usedtoinvestinrealestate. Thisisahuge areawhereinvestorssometimesnevereven findtouseandifbuildingforretirementis theplan,usingthistypeoffundingcansave $1000,even$100,000intaxesmakingit thatmucheasiertobuilduparetirement nestegg. Firstoff,alloftheretirementvehicleslike IRAs,RothIRAs,401(k)s,Coverdale EducationSavingsAccounts,HealthSavings Accountsandmaybeafewotherscanbeset upwithspecialqualifiedcustodiansandthen beusedtoinvestdirectlyinwhatevertypeof realestateinvestmenttheinvestormight wanttodo. R E I N V E S T M E N T N E W S | 5 LiquidFunding: Thisismoneythatthenew realestateinvestorhasavailablethatisnot tiedupinaretirementaccountsuchasa401k oranIRAorPension,cashthatyoucan actuallyaccesstospendhowevertheinvestor wouldlike. Iftheinvestorhasalargesum available,sayover$250,000thiscouldbea greatresourcefordoingafewwholesaleflips orrehabflipsinayear. However,ifthemodel istobuyandholdforrental,thenthiswould onlygosofar,maybe2or3housesandthen theycan’tbuyanymore. Whenusingtheinvestorsownliquidfunding, itisadvisabletokeepareserveaccountfor potentialhotdealsthatcomealongwhereyou havetoactfastorinthebuyandholdmodel,if therearerepairstobemade. Sokeepreserves inmindwheninvesting,theamountof reservesneededaregoingtovaryhouseby houseandinvestortoinvestor,howeverifyou arewholesalingorrehabbing,Iwouldsaya reserveof$40,000wouldbeadvisableandfor buyandholdrentals,atleast$10,000ifnot $15,000ahouse. OwnCredit: Thenextresourceifthenew investorsowncreditandthereareabunchof optionshere. PurchaseMoneyLoan: Thisoneisusedto buyandholdarealestateinvestment. It assumesthepropertyisingoodliving conditionanddoesnotneedanyrepairs. This loanwillrequireatleast30%downandusually acertainamountofmoneyinreservesincase therentalgoesvacantorneedsamajorrepair, theamountofreserveswilldependingagain ontheexperienceoftheinvestorandalsothe conditionofthehome. RehabLoan: Thistypeofloanissometimes offeredbythesmallerlocalbanksaswellasby hardmoneylenders. Thisloanisforthe purchaseandrenovationofahomethatneeds fixedup. Thesecouldbeloansusedtobuy rehabandflipahouse. Oritcouldbeusedin combinationwithapurchasemoneyloanto buy,rehab,rentupandthenrefinancetoa purchasemoneyloan. TheRehabloanusuallyinvolvesthedealitself meetingcertaincriteriaforthelender,aswell
  6. 6. ELITE START TheDealItself: Therearealsowaysthatthe dealitselfcouldprovidethefunding. For examplewhenyougetintolargerapartments orcommercialproperties,aloancanoftenbe obtained,non-recoursemeaningtheonlything thelendercandoiftheborrowerstopspaying isforecloseonthehouse,andtheloanisbased onthemeritsoftheinvestmentandthecash flowfromtheinvestmentandnotbasedatall ontheborrowerortheborrower’scredit. However,whatwemostlyseewhenaDeal fundsitselfiswhentheinvestorisbeing creativewithahighlymotivatedanddesperate sellerORwithasellerwhojustnolongerwants thepropertyanddoesnotneedthecashup front. Forexampleifabuyandholdinvestorfindsa rentalpropertyfromanotherinvestor,the otherinvestormightfinancethedealforhim. Oraretiringlandlordmightownerfinance theirrentalpropertiestoanewperson. Ora homeownerwhohasafreeandclearhouse, hasalreadymovedtoFloridatoretire,wantsto sellahouseherebutdoesnotneedthecash, understandsinterestandhasarapportwith theinvestorbuyer..thisownermightowner finance. Orahomeownerwhocannolonger affordtheirhomeandtheupkeepmightletan investortakeovertheirmortgagepaymentson thehome,justtogetoutfromunderthem. Nomatterhowyougoaboutgettingyour transactionfundedyouaregoingtowantto takethetimetopresentyourselfandyour transactiontomakesurethenumberswork. Soforeachdealtaketimetonotewhyyou wouldbeinvesting,yourstrategy,themoney neededforpurchase,themoneyandtime neededforrenovationsifany,themoneyand timeneededtogetitrentedandpotential profits. Iftherearerenovationsalsoworkouta scopeofworkandabudget. Thenpresentyour dealtoyourselftomakesureitworks. Then makesureyouhavetheneededfundsor reserves. ThenifyouaregoingtouseOPM, youhaveafundingplantopresentthem. accountthattheycouldcashoutformoneyfor theirinvestment,butbecausetheyaredoing shortterminvesting,theyopttogetalineof creditusingtheseinvestmentfundsfor collateralandbasicallyborrowingtheirown moneyforafewpercentagepointsininterest overwhateverthefundispaying. Sofor exampletheyhave$100,000investedinaCD atthebankpaying2%interest,theycouldgeta lineofcreditofupto$80,000at4%fromthe bank. Youcandothesamewithmost brokerageaccountsaswell. PrivatePartners: Mostnewinvestorsdonot starthere,theyaspiretogettothispointwhere theyinvestwithotherpeople’smoneyorcredit. Thiscanbeassimpleasonepersonorcompany lendingmoneytotheinvestorforaflatinterest rate,interestandpoints(likethehardmoney scenario),equityshareoracombinationoftwo orallthree. Usingprivatepartnersisalsoanentiretraining classallbyitself,butwewillcoverjustabitright here. Firstaprivatepartnerissomeoneknowntothe investor. Itcouldbeafamilymember,afriend,a professionalacquaintanceorsomeoneyou meetatthelocalrealestateinvestorassociation (REIA. ) Typicallyasanewbieinvestor,youwill havetoearnyourstripessotospeakanddoa fewsuccessfuldealsbeforeanyonewillpartner withyou. AndTypicallyifyouarepartnering withsomeonefromthelocalREIAitisgoingto costyoumorefrompointsandinterestto50% ormoreofyourprofit,whileifyouare partneringwithsomeoneoutsideofrealestate, youcouldgetjustborrowforinterestonlyforas littleas8to10%interest. ThePrivatePartnersmayalsoborrowmoney fromanyofthewayswehavejustmentioned andthenlendtoyou. Orifyoumightbe partneringonalongtermhold,theymightput thecashdownandusetheirowncreditto obtainalongtermloanontherentalandthe investorfindsthedeal,rehabsthedeal,rentsit outandthenmanagesthedealandsplitsthe profitwiththeprivatepartner. 6 | M A R E I . O R G Earn Up To 7% Back  On All Purchases  Home Depot offers up to 5% Rebate Quarterly to Those Registered with Home Depot Pro Rewards. MAREI Members can register for an additional 2% Rebate Bi­Annually 5% Rebate Varies based on total spend in a year.  2% Rebate has a minimum purchase of $3000 in 6 month period.
  7. 7. ONE YEAR OF LOCAL REAL ESTATE INVESTOR COACHING SUMMARY OF TRAINING Weekly Training Training will occur once a week via webinar through your own device. Each training will be recorded and made available for replay. Each training will have a structured topic to be discussed and have time after that topic is discussed to answer questions emailed in by the students. Answers to Questions Because real life rarely matches a training schedule we will have room each week at the end of the call for student questions, however there is a catch. Local Real Estate Investor Kim Tucker and her team at KCInvest have committed to a weekly Elite Investor Training to get the local new investor off to the right start. Training will be held via internet each Thursday night from 7:30 pm to approximately 9:00. You don't have to worry about missing a webinar as each one will be recorded and made available for replay. Section 1: Starting with the Basics: Mistakes New Investors Make, Types of Strategies, What is a Deal, Creative Financing, Where to Find Deals, Buy and Hold Strategies, Wholesaling and Retailing. Next Webinar: April 21st - Finding Deals Section 2: What is a Deal: Where to find comparables, how to inspect properties and estimate repairs, what to offer and a special session on values of multi family properties. Section 3: Finding Great Deals: MLS vs buying Directly from the Seller, REOS and Short Sales, Marketing for Motivated Sellers and Advanced Marketing Techniques. Section 4: Funding all those Deals: Using Mortgages vs Private Partners, Using Creative Financing plus IRA and 401K Investing. Section 5: Putting those Deals Together: Talking with the Seller, Managing Leads and Follow Up, Negotiation and Due Diligence, Closing and the role of the Title Company. Section 6: Exit Strategies: Building a Buyer's List, Rental: Tenants, Management, & Budgets, Rehabbing Houses, Creative Selling, Wholesaling and Retailing. Section 7: Business Management: Asset Protection, Time Management, Systems, Outsourcing, and Simple Bookkeeping. To have your questions answered on the call they must be emailed in at least 1 hour prior to the call so the instructor has them available for discussion. Student will be given time to discuss with instructor. Deal Analysis Register Today > MAREI.org/EliteStart As a bonus, for everyone who purchases the full package of coaching at $799 or $999, we will include 1 Free Deal Analysis. To have a deal analyzed, you would need to call and schedule with us a time to walk through your deal and work through the numbers with you. If not part of this package, a deal analysis can be purchased at MAREImember.com for $199 to $249. ELITESTART R E I N V E S T M E N T N E W S | 7
  8. 8. THE CALENDAR Join us to learn from 3 LOCAL INVESTORS as we interview them about REHABBING AND RETAILING HOUSES. May 10, 6 PM to 9:30 PM GUESTPANEL REHABBINGQ&A MAY MEETINGFROM OTHER GROUPS> How to Own Real Estate Without Mortgages. At this meeting you will learn to dominate the banks, own multiple properties, eliminate mortgages in ten years and start with very little cash flow. Member's & First Time Guests No Charge, Internet Members & all others $25 at the door ($15 online) DAVEVANHORN APRIL MEETING MAREI. ORG/ CALENDAR 1ST SATURDAYS NetworkingCoffee1stSaturdays February6th 10amto12pm PaneraBread 7070Martway, Mission HostedbyJim& BethKasper Tuesday April 12th 6 pm to 9 pm Holiday Inn - Top Floor 8787 Reeder Road, Overland Park Pre-Register at www.MAREI.org WINVESTORS Wednesday Mornings at 9 Lucky Brewgrill 5401 Johnson Drive, Mission Hosted by Brian & Michelle Winberry, 1STTUESDAYS WhiteboardDiscussionwith JDAsbell March1st- 9am CrossroadsInvestmentLending 7759ShawneeMissionPkwy OverlandPark, KS HostedbyJDAsbell 8 | M A R E I . O R G
  9. 9. Access the #1 Software Platform for Real Estate Investors and Generate More leads, More Time, and More Money The National Real Estate Investors Association is pleased to announce an exciting new partnership with Realeflow, the largest real estate investing software company in the country.  There are many benefits to YOU, the member, including a FREE 30 Day Trial of any version of Realeflow (Lite, Basic), a discount on normal monthly pricing after the free trial period, and version upgrades with more users, websites, and leads. LEADFLOW $49 Basic $99/ MO / MO $7        $39       Per Month Per Month 1 NATIONWIDE Leadpipe 100 LEADS PER MONTH from all other Lead Pipes 1 WEBSITE DIRECT MAIL Engine CRM HAMMERPOINT Only 2 NATIONWIDE Leadpipe 100 LEADS PER MONTH from all other Lead Pipes 2 WEBSITES DIRECT MAIL Engine CRM ALL INVESTING TOOLS LEADS :  DIRECT MAIL : WEBSITES : QUICK ESTIMATES  COMP REPORTS : DEAL ANALYZER :  MORE HTTP://REALEFLOW.COM/REIA/Mid­America
  10. 10. DIRECTORY BUSINESS ASSOCIATES A C C U R A T E T I T L E A Full Service Title Company David Green www.AccurateTitleCo.com 913-338-0100 A L P H A T I T L E Full Service Title Company Patsy Archer www.AlphaTitleLLC.net 913-498-8999 A P I A Asset Protection Insurance Agency Lindsay Griffin www.APIAProtects.com 877-752-2742 A Z U R E W A T E R F R O N T Luxury Waterfront Property Investment Brad Reddick www.AzureWaterfront.com 800-240-3606 Find out more about each of these associates by visiting their website. Or go to MAREI.org and click on Business Directory. CROSSROADS INVESTMENT LENDING C O N T I N E N T A L T I T L E Investor Lending Britton Asbell and BarakTschirhart www.KCLend.com 913-766-2900 A Full Service TitleCompany Sharon Bower www.CTitle.com 913-338-3232 1 0 | M A R E I . O R G B R I D G E M A N A G E M E N T A Turn Key Real Estate Experience Nathan Brooks www.BridgeEquity.com 913-695-8213 AZURE CARPET CLEANING Carpet, Hardwoods & More Jerry Myers & Tiffany Krout www.AzureCarpetCleaning.com 816-668-0258 BOULEVARD CONSULTING A Foreclosure Solutions Group Danny Hammond www.Fighting-Foreclosure.com 816-985-4950 D I S C O V E R H V A C Heating & Airconditioning Complete System for $2785 www.DiscoverHVAC.net 816-500-2900
  11. 11. DIRECTORY INVESTORS CHOICE FUNDING The Flexible Funding Solution L. Scott Ficinus www.InvestorsChoiceFunding.com 816-668-7223 J A M I E S O N H O M E T E A M Realtor & Property Management Kevin Jamieson www.KevinJamieson.ReeceNichols.com 913-384-8331 K C I N V E S T Investment Property Seller Kim Tucker www.KCInvest.com 913-735-0018 K C M O H O M E B U Y E R Property Buyer Don Tucker www.kcmoHomeBuyer.com 816-200-2198 REAL PROTECT Insurance for Investors Brought to you by National REIA www.RealProtect.com 1-800-579-0652 P R I D E P R O P E R T I E S M E R C H A N T S M O R T G A G E Real Estate Professionals Marcus and Matt Bray www.PrideProperties.com 913-213-5370 Real Estate Finance Company Susan Aubin www.MerchantsMtg.com 720-554-9480 H O M E R E N T A L S E R V I C E S Kansas City Property Management Sandy Fisher or Paul Branton www.Home4Rent.com 913-469-6633 L O N G H O R N I I I I N V E S T M E N T S Private Lending Partner Lawrence Hopkins www.LonghornInvestments.com 214-420-7329 R E I N V E S T M E N T N E W S | 1 1 REALTY RESOURCE Real Estate Brokerage Scott Tucker www.RealtyResourceKC.com 816-406-0701 M I D - A T L A N T I C I R A Self Directed IRA Services www.MidAtlanticIRA.com 800-607-0145 G U A R A N T E E D R A T E First Digital Mortgage Beth Langston www.GuaranteedRate/com/BethLangston 913-225-9323
  12. 12. memership NETWORK CONNECT JOIN MAREI TODAY $99 Annually Meet and discuss real estate investments at our Meetings, Training and other Events just for the Real Estate Investment Industry LEARN SHARE Establish and Perfect your investing techniques and share your knowledge. SAVE PROTECT Save with our money saving discounts with industry providers and help protect our industry.

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