The RE Investment News is the monthly newsletter for Mid-America Association of Real Estate Investors - this month Rehab Flip Houses, Renting to Convicted Felons and Finding the Best Deals. Plus the regular calendar and directory.

1. N E W S
New HUD Rules on Tenant Screening
from MAREI Staff
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
MAY 2016
Finding Deals,
the Calendar,
the Directory,
and All Star
Networking
from Vena Jones-Cox
M I S T A K E S
F O R R E H A B F L I P S
9 PLUS
REINVESTMENT

2. THE PROFITABLE
REHAB FLIP
Average House
You want to buy the
average house in the
best neighborhood.
The best
neighborhoods are
going to have good
schools and amenities and will be easier
to sell. By being the average house,
rather than the biggest, the smallest or
the weirdest it is also going to be easier
to sell and in the eye's of the Realtors
who control the buyers - easier to
finance.
Poor Curb Appeal
Finding a house
with an overgrown
landscape and an
overall lack of curb
appeal can often be
a cheap and easy
Not Every House is a Good Deal: Every house has a number and
you have to find it. But while very house has a number to be bought,
not every house is going to make a good flip.
Some Things You Can't Fix: You can't change the location of the
house, unless it's a mobile home, and that becomes a different article
entirely. So if it is located in a bad neighborhood with bad schools, no
place to buy groceries and not many jobs it will be tougher to sell.
Likewise if it is located on a busy street or the neighboring property is
less than desirable, like a run down house with a yard full of junk, or a
gas station right next door or a strip club down the street are all
things you can't fix and will affect your ability to sell the house.
Some things are an Easy Fix – Sometimes you get lucky and find a
house that is not selling, primarily because the yard is overgrown and
no one can see past the clutter. Clean it out and clean it up and it's
good to go. Other times the clutter is just on the inside.
Contractor's & their Issues – The mechanics and logistics of hiring a
good contractor, paying them correctly and documenting properly
can be the difference between making a profit and breaking even or
even worse, loosing money because you have to redo it, get fined, or
can't document the repairs were ever made.
These tips will help you make a profitable rehab flip.
MAREI Staff
fix. Just do some trimming, some
mulching, some power washing and
you have it all cleaned up. A little
paint on the shutters, mail box, light
fixtures and front door and it's all
brightened up.
Do Your Homework
Work your numbers
and make sure they
are correct. Never
take the seller's or
the wholesaler's
repair estimate.
The average "perfect" house you
might buy, typically needs $10,000
to $20,000 in repairs and updates.
2 | M A R E I . O R G

3. Don't Pay Retail
Right now the
market is hot and
fixer uppers are at a
premium. Don't fall
into the trap of
paying more, just
to get the deal. If the numbers don't
work for you to buy, rehab and
retail, either go on to the next house
or explore a different strategy.
REHAB FLIP
Check out the
Neighbor's House
Avoid Busy Streets
A house on a busy
street is going to sit
no matter if it is for
sale or rent,
because no one
wants to have to
get in and out of the driveway, listeni
to the road noise, or worry about
the kids or the pets getting run over.
You can rent and sell these, but be
sure to adjust your price
expectations downward.
Paying Draws
Be sure to pay
invoices in trackable
checks and be sure
to get a W-9 for
reporting to the IRS.
This way you have
all your bases covered in case of an
audit, but also if you have to prove
repairs to a lender. Be sure to pay
contractors based on a draw
schedule and make sure scheduled
work is complete before they get a
scheduled draw.
Get Permits
permits were obtained. Plus, should
an inspector just show up on your
job site to see permits and you don't
have them, you could be a thorn in
your side going forward, where if
you had been proactive and
obtained the permits, the inspector
might help you solve a few costly
problems in the future.
Once you buy the
house and fix it up,
you have to sell it
and if the house
next door is a junk
yard or in poor
repair it is going to be tough getting
buyers to overlook the mess next
door. Unless you can fix the
neighbor's house, lower your
expectations or go on to the next
one.
Yes, permits cost
time and money.
However when you
go to sell the project
you are often asked
if all the necessary
R E I N V E S T M E N T N E W S | 3
CONTRACTORS
Be sure to check
out your
contractors. Make
sure they have all
the necessary
licenses and
insurance. Also ask for references
from past clients and check them
out. Go see their work and if
possible visit them on a current job
site, just to see what everything
looks like while they are working.
Earn Up
To 7%
Rebate On
Purchases
5% Rebate Varies based on total spend in a year. 2% Rebate has a minimum purchase of $3000 in 6 month period.
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

4. LEGISLATION
"SO NOW I HAVE TO RENT TO FELONS?"
What the New HUD
Guidelines Actually
Say About Applicants
with Criminal Records
By
Vena Jones-Cox
OnApril4th,HUDreleasedastatement
entitled“GuidanceonApplicationofFair
HousingStandardstotheUseofCriminal
RecordsbyProvidersofHousingandReal
EstateRelatedTransactions”thatsetsocial
mediasitesafirewithalotofangry
speculationandhalf-truthsregardingwhat
thestatementactually“means”..
ButwhatdoesHUD’smovemean,andwhat
doesitactuallyrequireyoutodo?
First,thisisNOTa“newlaw”.Therehasbeenno
actionbycongressorthecourts;felonshavenot
beenaddedtothelistof“protectedclasses”.It’s
astatementbytheFederal-levelpolicingagency
forfairhousinglawclarifyingitsintentionto
4 | M A R E I . O R G
interpret and enforce the existing law
in a new way. So while no act of
Congress created this, you can assume
that HUD WILL prosecute cases based
on it.
Second, in order to understand why
HUD thinks that whether or not you
rent to felons is a discrimination issue
AT ALL, it’s important to understand
the “Doctrine of Disparate Impact”.
The original Fair Housing laws of the
late 60’s more or less defined illegal
discrimination as an intentional, if not

5. criminalsarebadtenants”.Forinstance,you
mighthavecriterialikethis:
•Noviolentordrug-relatedfelonies
•Nocrimesagainstchildren
•Nofeloniescommittedwithinthelast10
years,andnoimprisonmentforfelonies
withinthelast5years
•Nocrimesagainstlandlordsorrental
properties
•Noconvictionsorpleastoanycrime
involvingmetaltheft,vandalizingproperties,
orotherwisedamagingproperties.
•Noarsonconvictionsorpleas
And,asalways,you’llneedtohavethese
policiesinwriting,updatethemasthey
change,keepwrittenrecordsofhowany
applicationrejectionsviolatedyourpolicies,
andaboveall,theymustbeappliedequallyto
allapplicantsofallraces,religions,disabilities,
familialstatuses,andsoon.
Inotherwords,don’tbewhatthefolkswho’d
liketofurtherimpingeonyourproperty
rightsthinkyouare.Don’tuseyourcrime-
relatedapplicantpoliciestodiscriminate
againstapplicantsbecauseoftheir
membershipinaprotectedclass.
Ontheonehand,yourrentalhousesareyour
privateproperty,andyoushouldbeableto
decidethat,asablanketpolicy,youdon’twant
criminalslivingthereforyoursafety,the
safetyofyourproperty, andthesafetyofyour
othertenantsandneighbors.
Ontheotherhand,it’sunforgivablynaïveto
refusetoadmitthatAmericahassystemic
problemsthat arenobody’sfaultand
everybody’sfault—butwhichleadtoasystem
that’sstackedagainstthepoorandminorities.
Andwhenthisstackedsystembecomesan
impedimenttofindingaplacetolive,it
becomesHUD’sconcern.
Thesenewguidelinesareanattempttouse
HUD’spolicingpowerstoremedyaperceived
socialinjustice—theblanketdenialofhousing
toALLpeoplewithafelonycriminalrecord,
regardlessofthedetailsofthatrecord—that
impactssomecategoriesofAmericansmore
thanitdoesothers.
Andyes,thewayinwhichthepowersthatbe
areattemptingto“remedy”thissituation
furtherrestricts yourrightstocontrolyour
privateproperty.
So whileit’snot“fair”thatyoushould,
personally,beburdenedwithhavingtoright
thewrongsthatotherpeopleperceivewith
theworld,youAREtheonewiththeabilityto
denyhousing,soofcoursetheresponsibility
to“fix”itfallsuponyou.
Butthegoodnewsis,thenewguidelinesdon’t
saythatyouMUSTrenttofelons,nordothey
saythatyoucan’ttakecriminalhistoryinto
account.
.WhattheysayisthatapolicythatbarsALL
felons,nomatterwhatthenatureoftheir
crimeorwhenitwascommitted,mightbe
consideredtobediscriminatory.
YouCANhavepoliciesregardingrentingto
felonsthatprotectyourproperty,yoursafety,
orthesafetyofyouothertenantsand
neighbors.Whatyoucan’tdoishaveano-
felonspolicybasedongeneralizationslike“all
R E I N V E S T M E N T N E W S | 5
overt,act.Butastimepassed,fairhousing
“thinking”begantoevolvetoincludetheidea
thatevencompletelyunintentionalacts,ifthe
effectsofthoseactsservedtolimitthehousing
choicesofprotectedclasses,couldbe
discriminatory,illegal,andpunishablebylaw.
Forinstance,landlordswhocreatedpolicies
thatlimitedthenumberofpeopleallowedina
unit—forinstance,“Iwon’trentmy2bedroom
apartmenttomorethan3people”—were
accusedofdiscriminatingagainstfamilieswith
childrenundertheDoctrineofDisparate
Impact.
Seethelogic?Thispolicywouldinnoway
impactacouplewithnochildren,butwould
denyacouplewith2children,orasingleparent
with3ormorechildren,accesstoanapartment
thatcould,theoretically,suittheirneedsfor
space.Thus,it“disparatelyimpacted”a
protectedclass—familieswithchildren.
Thefactthatthereasonbehindthesepolicies
hastodowiththeeconomicsofowningrentals
(moreoccupantsusemoreutilitiesanddomore
damage)doesnotstopthem,underthe
DoctrineofDisparateImpact,frombeingillegal.
Whiletheideathatyoucanbeprosecutedfor
unknowinglyandunintentionallydiscriminating
mightseemdangerousandunfair,theSupreme
Courtdidupholditina2015decision,saying
thattheCivilRightsActdoesgovernanyandall
policiesthatcreate“artificial,arbitrary,and
unnecessarybarriers”tohousingbasedon
“statisticaldisparities”.
Andit’sthose“statisticaldisparities”that
connectpoliciesagainstrentingtofelonsto
discrimination.HUD’sargumentisthat,
becausepeopleofcolormakeupamuchhigher
percentageoftheprisonpopulationthanthey
doofthegeneralpopulation,theyareprovably
morelikelytobekeptoutofhousingbysuch
policiesthanarewhites.
Sowhatwehavehereisoneofthosedeeply
complex,messy,divisiveissuesthatpitsthe
naturalandconstitutionalrightsofonegroupof
peopleagainstthoseofanother.
Vena Jones-Cox is a full-time real
estate entrepreneur, real estate
broker, and past president of the Ohio
Real Estate Investors Association and
National Real Estate Investors
Association. She publishes weekly
articles about real estate investing,
wholesaling, and the legal
environment at www.REGoddess.com

6. Hosted by Brian & Michelle Winberry
Wednesday Mornings at 9 am
Lucky Brewgrill
5401 Johnson Drive, Mission
Tobeasuccessfulinvestoryouneedtohavesystemsand
tools. JoinusThursdayMay19thasweexploreallthesystems
andtoolsplusdiscountsthatRealeflowhastooffermembers
ofMAREI. Nocostforthewebinarat7:30pm.
Registeronline.
REALEFLOW&
YOURBUSINESS
WEB CLASS
WINVESTORS
FROM OTHER GROUPS >
JoinusTuesdayMay10that6pmfornetworking
andgetreadytotakenotesasweinterview3ofour
verybestrehabinvestors. Ourspecialguests
includeJimKasper, J.D. AsbellandDonaldTucker.
WearetakignquestionsthroughtheMAREI
calendaruntil2pmonTuesday. Sogoto
MAREI..orgtogetregisteredandwhileyouare
theresubmityourquestions..
REHABFLIPSWHATTHETV
GURUSDON'TTELLYOU!
MEETING >
MAREI. ORG/ CALENDAR
Asalwaysmembersandfirsttimeguestscanpre-
registerfornocharge. Allotherspay$25atthe
dooror$15onlineinadvance.. Weinviteeveryone
tojoin, itisonly$99annually.
Comingnextmonth - ProfitswithVacation
Rentals.
Hosted by Jim & Beth Kasper
1st Saturday of the Month
Networking Coffee
Denny's
9001 Shawnee Mission Pkwy, Mission
1STSATURDAYS
Hosted by Crossroads Investment
Lending & JD Asbell
White Board Discussion
7759 Shawnee Mission Pkwy, OPKS
1STTUESDAYS
THE CALENDAR
Hosted by Dave Hankamer
3rd Tuesday of the Month
Lone Star Steak House
1501 Village West, Kansas City, KS
LANDLORDINC
OFKCK

7. memership
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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
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SHARE
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share your knowledge.
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Save with our money saving
discounts with industry
providers and help protect
our industry.

8. "WHERE ARE ALL THE DEALS AT?"
Some of the best places
to find deals and
things to make the
deal find you!
By
Kim Tucker
#1–ListedProperties: ifyouaregoingtostart
withlistedproperties,youaregoingtowantto
workthroughaRealtororIcontendgetyour
ownlicenseandbecomeyourownRealtor.
Fortheselistedpropertiesyoucanfindseveral
toolsthatwillallowyoutoenteryour
search criteria and then have it email you every
property that comes on the market. This is a
great place to start if you are a brand new
investor, primarily because it gets a lot of houses
in front of you so you can learn your area, go
look at houses and learn what is a deal.
However to get the best deal, you will want to
8 | M A R E I . O R G
narrowyoursearchtopropertiesthat
fityourcriteria. Forexampleonlyin
yourarea,with3ormorebedrooms,
withatleast1or2 garagesandwitha
basement. Youmaywanttolimitto
underaspecificprice,although
personallyifit’sinmyarea,Iwanttosee
themallandiftheyseemlikeagood
prospectIgolookandmakeanoffer.
Thelistingpriceisirrelevant.
Whatareyoulookingforinthese
propertiesthatgetemailedtoyou?
Itemsthatindicateamotivatedseller.
FirstIlookatpictures,istheyarda

9. Thatfairlywellcoversthelistwestartedwith,
butbynomeanshasitfoundusmorethan
maybe10%to20%ofthedeals. Sowhatthen,
howdowefindtheother80%to90%? Well
youdon’tfindthem...youmakethemfindyou
...andyoudoitthegoodoldfashionedway. ..
youmarkettothem.
Top5MarketingTools:
#1BusinessCard: Byfaroneofthecheapest
andbesttoolsisyourbusinesscard. Carry
themeverywhereandfindareasontogiveone
toeverypersonyoumeet:
#2WebSite: Thewebsitedoesseveralthings.
Firstitisaperfectfirstimpressionforbuyers.
Seconditletsyoushareyourknowledgeand
expertise. Thirdisisaplacetocapture
information. Lastisisaplaceforsellersto
communicatewithyou.
#3DirectMail: Thisisoneofthetopwaysto
markettospecificallythetypeofmotivated
sellerthatyouwanttotarget. Youcanbuyor
buildlistofpropertyownersthathavesoesort
ofimmediatemotivationtosell. Thensenda
seriesofdirectmailpiecestothesesellers.
#4Internet: Thisisgoingtobeabroadrange
ofthingstoreachouttopeoplefromyour
website,tosocialmediacampaignstoemail
campaigns.
#5Signs: YoumayhaveheardthesongSigns,
SignseverywhereareSigns..andthatisjust
whatyouneed. Thesecanrangefrom
brandingonclothing,tolittlebanditsignson
thesideoftheroad,tobannersinyardsand
billboards. It'sallinyourbudgetandyourplan.
Hopefullythishasgivenyouafewideastouse
togooutandfinddeals.
Seeyouatthenextmeeting,besureto
connectwiththeotherfolksthere,someone
justmighthaveadealforyou.
Youcouldalsocheckotherclassifiedsites,the
newspaperorthepennysaverpublications.
#3DrivingforDollarsiswhattheycallitwhen
youdrivearoundaneighborhoodlookingfor
signsofhousesforsale. However,it’salsoagreat
waytobuildalistofnotonlythehouseslistedfor
saleorthehouseswithForSaleByOwnerorFor
RentByOwnersigns,butalsoofhomesthatare
vacantand/orindisrepair. Thendependingon
yourmotivationtobuyhouses,youcouldgo
knockonthedoorsandtalktopeopleorlookup
theowner’snameandaddressupandsendthem
aletterorpostcardorinthisdayandage,seeif
youcanfindthemonFacebookorLinkedInand
sendthemsomemessages. Thereisevenanapp,
whereyoucouldsnapaphotoofthehouseand
sendapostcardtotheowner,allfromyour
smartphone.
#4ReferralsfromPeopleYouKnow: Thiscould
beoneofyourbestresourcesbecausepeople
whothesellerknows,tellsthemtocallyouor
youtocallthem,sotheyareawarmlead giving
youbuiltincredibility. Besuretocultivate
everyoneyouknowtosendyouleads. Letthem
knowthatyoubuyhousesandhowyouwork,
thenwhentheycomeacrossapersonwho
needstoselltheirhomeanddoitquicklythat
theyshouldcallyou. Thiscouldbepeopleyou
knowlikefriendsandfamily,butdon’tforget
peopleyourunintoatthegrocerystore,orwho
makeyourcoffeeatStarbucks,orcleanyour
teethattheDentist. Oryoucouldalsoworkto
createagroupofpeopletorefertoyoulikepast
sellers,probateattorneys,Realtorsandother
peoplewhomightbeworkingwithmotivated
sellers.
#5OtherInvestors: Thereisawholecategory
ofinvestorthatisnotbuyingtorehabandflipor
buyingtohold,theyarebuyingtoselltoyou.
Theyarecalledwholesalersandyouwanttobe
suretogetyournameoneverywholesaler’s
emaillistsoyoucanfindoutabouttheirhouses.
Youwillfindthesepeopleasyoustart
networkingatyourlocalREIAandyouwillstart
toseetheirmarketingasyouworkonyourown
marketing,andyoumightrunintothemat
houses. Besuretogettheircard,gototheir
websiteandgetontheirlist.
R E I N V E S T M E N T N E W S | 9
mess? Doestherooflookinbadshape? Isthe
sidingfallingofforthepaintpeeling? Arethere
boardeduporbrokenorancientwindows?
Whenwelookatinteriorphotos,isitcluttered?
Iseveryflatsurfacecoveredwithstuff? Does
thekitchenneedupdating? Istherealotofpink
oraquabluegreeninthebathrooms? Istherea
lotof80’sbrass? Ifthepicturessayitneeds
updatedorremodeledorrepairedithas
potential.
Isitobviouslyvacant? Thentheselleralready
movedout. Verybigflashingindicatorthatthis
couldbeadeal.
Isitbeautiful,liketheafterphotosonthehome
renovationshows? Thenthisisprobablyan
investorfixeduphouseandwillbeyour
competitiononceyouremodelandlistitforsale.
Secondlookatwhatthetextsaysaboutthe
property. Doesitsayanythinglike“motivated
seller”,“bankownedproperty”,“handyman
special”,“fixerupper”,“estatehouse”,etc? These
termsareallindicationsofmotivation.
Sometimesthesystemyouareusingmightallow
youtosearchforkeywordterms. Byfarthebest
systemtoworkwithistheRealtorssystem
throughtheMultipleListingService,youcanset
upsearchesforeachofthesekeywords.
Butremember,ifyouaregettingapropertysent
toyouviaemail,awholebunchofotherpotential
buyersaregettingthesameemail. Soifitisa
deal,youhavetoactfastandbringyourbest
offer.
#2Craigslist: Craigslistandothersimilarsites
whereyoucansearchforhousesadvertisedfor
salebyownercanbeagreatresource. However,
youmightwanttosetupasystemtodealwith
theadvertisementswhereyoumakealistofall
thehousesavailableforsaleANDforrent,and
sendanemailtothemwithsomesortofbrief
messagethatyoubuyhousesandclosequickly
andaskthemtocallyou,emailyoubackor
maybesubmitonyourwebsite. Oryoucould
makealistofallthehousesforsaleandthe
associatedphonenumberandsendavoiceblast
ortextblastforthemtocallyou. Themotivated
sellerswillgetintouchwithyouandyoucanthen
golookat,buildrapport,makeanoffer.

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
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. 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
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. SAVETHEDATE
Second
Annual RAISING
MONEY FOR
HARVESTERS
F O R M A R E I ' S V E N D O R E X P O N I G H T
VENDORS &
EXHIBITORS
PACKAGE
REQUEST