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The Investment News: December 2010 for Real Estate Investors


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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: December 2010 for Real Estate Investors

  2. 2. Holiday Networking Meeting Preparation: Agenda: Attend Prepared to network in- 5:30 Reservations Start formally. Have Business Cards Join us when you can. Attend in your pocket. If you have a from 5:30 to 8:30 or later. Or flyer or other item that might stop in for an hour anywhere come up to hand out, have between 5:30 and 8:30 available in your car. Location: Mechanics: Fox & Hound MAREI has reserved a corner in 103rd & Metcalf the Pool Table Room as well as a Pool Table. These are tall ta- bles that are designed for us to Cost: stand up and move around. Mix Free for Everyone to Attend and mingle. Want to sit down Food & Drink Extra and eat, claim a seat. Accepting Donations For Harvesters Interested in learning more about creative fi- nancing? Be sure to at- November2Meeting tend the day Bootcamp January Meetings with Don DeRosa & Pete Speed Networking Youngs, they will talk Again at about creative financing! Back by Popular Demand And be sure to watch for upcoming meetings of Sylvester Powell MAREI’s new subgroup.Page 2
  3. 3. Contents MAREI News In This Issue December Meeting 2 MAREI Staff 5 In the News This Month 6 Member Pics 7 Investing as a Team Sport 8 Three Tab vs Structural 10 Key 2010 Tax Law Changes 12 Marketing Toolbox 14 Building an Email List 16 Economic Update 18 Mortgage Interest Deduction Under Attack 20 MAREI Member Tool Boxes 21 Calendar 22 Investment Opportunities 24 Craigslist Advertising 26 Features ‫ ׀‬December 2010 Have you The Housing Advertiser’s Directory been consider- Recovery is off to a shaky T.O.T.L. Renovations 11 Realty Resource 25 ing partnering start in 2010. Te-Tee Light 11 Home Depot 25 on larger Don’t let our 8 deals? Won- der how it 20 government slow it even Constant Contact Free Trial Web 17 17 AAA Screening Office Max 26 27 would work? further by tak- ing away Mort- Rockstar Investor 18 Accurate Title 28 Investing as a gage Interest kcmoHomeBuyer 25 Team Sport Deductions.Investment News Page 3
  4. 4. MAREI Notes Contact Information 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 in- vesting 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 disclaims 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 concerning real estate and other investments. Content Disclaimer The views and opinions expressed by authors of articles contributed to this newsletter do not neces- sarily reflect those of the association, the board of directors or the staff. Advertise in the Investment News Rate Schedule 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.comBertie Janssen 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’s Notes Is it really nearing the end of 2010? It has been a very you see them. If you have not had a chance to volun- interesting year for area real estate investors and the teer, think about adding it to your to do list for 2011! country as a whole. I have to ask, did you do all you The benefits of being a volunteer are invaluable. planned in 2010? I have learned in life that we should We will continue 2011 at the Sylvester Powell Jr Com- always set high goals, so that we try harder and suc- munity Center in Mission as well as outside events at ceed more. I know for many MAREI members it was a other locations. We are working right now on the right year of survival, yet for others it was a very successful mix of education, networking, and community events year. for 2011. If you have any suggestions for topics, MAREI has had a very busy year. We have seen a speaker, or events, please feel free to contact me. complete makeover on the website adding in a blog While I can‘t really tell you if we are at the bottom of and other features. The newsletter is always in a stat this economic downturn, I can tell you that the oppor- of change. Last we have brought some great new tunities for us are all over the metro. I urge you to benefits in for members including the awesome new make a commitment in 2011 to obtain the education Home Depot Rebate, discount, and oth- you need, to set high but workable goals, make imple- ers. mentation plans and do something! Reading about it We really want to thank all the mem- and talking about it, does not bring you profits! bers for being there for us. Without Have a safe Holiday Season! I hope to see you at the members interacting online and at December networking, if not . . . See you Next Year! meetings, there would be no need for us to be here. If you were a volunteer Kim Tucker this year, let me take this place to say Director of MAREI ―Thanks!‖. You can see our volun- teers listed on page 5 and we urge you to be sure to thank them when While I can’t really tell you if we are at the bottom of this economic downturn, I can tell you that the opportunities for us are all over the metro. I urge you to make a commitment in 2011 to obtain the edu- cation you need, to set high but workable goals, make implementa- tion plans and do something! Reading about it and talking about it, does not bring you profits! - Kim TuckerPage 6
  7. 7. Get Involved We are looking for a volunteer to help us with taking photographs at the monthly meetings. If you have a digital camera and can attend the monthly meetings regularly, this would be a great way to get to know the members. Volunteers receive discounts on Membership and or Outside Training Events. For more information on becoming a volunteer, Contact Kim Tucker, Director, At or call 913-208-3544Investment News Page 7
  8. 8. Michael Morgan Emerging Acquisitions Investing . . . As a Team Sport . . . I‘ve been asked to cover some basic definitions in (US) of an accredited investor is one who has an in- regard to the investment process, specifically in re- come (can be combined with a spouse) of $200,000 gard to Multi Unit Investment, as in larger Apart- or more annually and/or $1 Million of net worth. If you ments, where one or many investors are involved. have ever played the Cash Flow Game this is re- ferred to as being on the fast track. Acquiring wealth In single-family acquisition, we are familiar with re- has a momentum, and this is reflective of the risks habs, fixes, flips and short sales. In all of these cate- and rewards at this level. gories frequently one individual, spending from $5,000-$10,000 or more, will to able to purchase, fix Active and Passive Investors: As the name implies, up, rent out or resell a property. Usually this is time the type of investor you may be. Active investors are intensive and is perfect for the ‗do it yourself-er‘, es- more hands on, like the detail and participation in a pecially appealing to the one who wants to keep an project. Passive Investors like to monitor a project, eye on every part of the process. No doubt, money but do not either have the time or inclination to man- can be made in this process. age an investment. If they know a team is competent, they would like to watch their investment grow as As we move up from duplexes, triplexes, 5 plexes they put their attention on other matters. etc, the cost of capital commitment increases. Also, however, the amount of cash flow and return on our Associate: also known as an investor. These indi- investment increases. Typically 100-300 units cost viduals are considered partners in a project, espe- between $3-10 million, and it may take 20-25% of cially in a project that may require several individuals that figure to acquire. That‘s $750,000-2.5M for a to contribute the equity (cash) towards the down pay- down payment and acquisition costs (the costs for ment and acquisition costs (costs of acquiring a prop- RE agent, legal, financial, loan processing, etc) erty) So at this stage we can ask, what is an investor, General and Limited Partners: The legal structure and why are they needed? that we typically use for a Multi Family Investment is called a limited liability corporation or LLC, which is The following is a list of terms that may help you in composed of General and Limited Partners. The looking at these types of opportunities: General Partners take care of the purchase, manage- Investor: as in Real Estate, one who is looking for a ment, distribution of profits, and eventual sale of the reasonable and even unreasonable return on invest- property. The Limited Partners (investors) are in- ment. As opposed to ‗traditional‘ investments, such formed on a quarterly basis of the progress of the as savings, CD‘s, money market accounts, Treasury project and enjoy the benefits of ownership without notes, annuities, and the stock market, Real Estate the hands on day to day management required in investors can enjoy returns of 8-10% or much more smaller projects. annually on an investment, and often enjoy the secu- Return on Investment: Simply put, how fast you get rity of having ownership in the ‗brick and mortar‘ of a your money back on an investment. The higher the property. Part of the homework in becoming an in- return, the faster your money comes back to you. It is vestor is knowing your comfort level with risk, reward, considered great if you can double your money every how fast you would like your investment to grow, and 7 years. If you can do it in 2, 3 or 5 years, even bet- familiarity with the asset (type of real estate) you are ter. This is the basis that many use to determine how interested. long it will take to get out of the ‗rat race‘ (live off your Accredited Investor: Typically a more sophisticated investment income) or permanently retire and do investor who has some acquaintance with risk, re- what you love to do… ward, and investment. The governmental definition (Continued on page 9)Page 8
  9. 9. (Continued from page 8) Kansas is an emerging market as make over the life time on their invest- well? ment.) With this formula, they are as- Equity: in terms of real estate, the sociates and passive (but informed) Cash Flow: Perhaps my favoriteamount of ownership you have in a investors who have a percentage term. From an investor point of view,property. Depending on the amount ownership in the project, ongoing this is the amount of cash that a pro-invested, an investor has an equity cash flow and profit at the end of the ject throws off after all the bills areposition (percentage of ownership) in investment when the property is sold. paid. This is cash available for thethe project. They form part of a select group of investors to enjoy on an ongoing basis investors who fund larger projects. Market Cycles: Describes the phase even before the property is sold. This is the same strategy that largeof the market or economy real estate Now as a way of explaining what institutional investors use. We makeis in. Did you know by and large we we do, let‘s use the above definitions this a simplified process for a singleare in a Buyer‘s Market Stage II Cycle to define our mission: investor to enjoy the same benefits asright now? There are 4 market cycles a larger, multi million dollar investor.and each one of them has a different At Grady Morgan Acquisitions, webuying strategy. Right now, buying locate 100-300 unit Multi Family Article provided by MAREI member Mi-and holding, and getting some of the Apartments to acquire, manage and chael Morgan, Senior Managing Partner atbest deals of a lifetime, is the strategy sell at the proper time. We look at Grady Morgan Acquisitions. Based infor the moment. Southeast Iowa, Grady Morgan special- Market Cycles to determine how and izes in Apartment Acquisitions in the Mid- when to buy. We buy in Emerging west. Their specific focus has been in Emerging Market: Describes an Markets where employment is strong Iowa and Kansas, and they currently havearea where job growth is still strong and the economy will support the best a 150 unit plus project under contract ineven in a down economy. This is a value. We look for Investors and Ac- Topeka Kansas. For more information onkey place to buy because an Emerg- credited Investors who can retain an specific projects and to sign up for ouring Market will be one of the first to newsletter contact Michael at 312 543 Equity Position in the property, andrecover from the recession. Did you 4719 or email at receive ongoing cash flow (cash re-know parts of Kansas City are consid- turns annually on their investment) to have the criteria of an emerg- which is part of their over all return oning market? Did you know Topeka investment (the amount of money they Date & Time: Wednesday December 11th 5:30—7:00 pm Location: Panera Bread 103rd & State Line Cost: No Charge to Attend Please support Panera Investment News Page 9
  10. 10. Mike Quinn Casa Bonita Roofing & Real Estate Solutions Know Your Roof Three Tab vs Structural Whats the difference between 3-tab shingles and between a 3 tab shingle roof and a roof with a di- dimensional (Timberline) type? mensional shingle is around $600, for the cheap- est dimensional shingle. The short answer… Im a strong believer in the benefits of the dimen- The dimensional shingle is heavier, thicker, sional shingles. I rarely bid a 3 tab shingle any- shaped the same as the 3 tab shingles, (but more. Aside from wind issues, the 3 tab shingle with cut pieces "chevrons" overlaying the "tabs") can be expected to last 17-20 years, but the di- so essentially the dimensional ( as it sounds like) mensional shingle will go 25 years. The more ex- is thicker due to an overlay of material and so pensive dimensional shingles may go 30 consequently on a tract house, a couple hundred years. Some of them are rated as 40 year or 50 more dollars more expensive. year shingles, but you would be wise not to expect The long answer… more than 30 years. ( Considered by some to be The 3 tab shingles are fairly thin, lightweight, sin- "Lifetime" ) gle thickness and the "3 tab" element makes it so Recently, there have been a whole host of great that an individual part of the shingle (one third) products introduced that can withstand hurricane can be lifted by the wind without having to lift the force winds, hail, and even reflect 40% of the entire shingle. All of those factors make a 3 tab "heating" rays from the sun. These can get you shingle less desirable if you live in a moderate to the energy star tax rebate of up to 1500.00 and high wind area. Yes, Missouri and Kansas are in the impact (hail) resistant ones can get you addi- that zone. tional $$ off your homeowners insurance premi- The basic base material for the dimensional shin- ums… gle is a little bit thicker. There are also extra pieces laminated on to each shingle to give it a Here is a great website for my preferred shingle thicker and more random look. Those extra provider. Check them out at pieces also add more weight and rigidity to the shingle. If the wind is going to lift the shingle, it has to blow hard enough to lift the entire shingle, because the shingle isnt cut into individual 13" Article Provided by MAREI member Mike Quinn: long tabs. These are all the reasons why some insurance companies insist on the dimensional "Because Everybody Needs to Know a Good Roofer..," shingles. Mike Quinn Expert Roofer and Team Leader Most of the dimensional shingles are a rectangle, Casa Bonita Roofing and Real Estate Solutions about the same size as the overall 3 tab shin- Visit us on the web at gles. They are installed the same. The basic 816.875.3357 asphalt material in the shingle is the same. Theres just more of it. I normally dont discuss prices online, however, the differences on an average size tract homePage 10
  11. 11. NEED TO FLIP A PROPERTY FAST? T.O.T.L. RENOVATIONS Top of the Line Renovations for all your rehab needs quickly, at a reasonable price. We specialize in: Licensed and InsuredStructural Shingle Make-ready Siding & Windows Call Anthony @ 816-606-0266 Carpentry & Roofing or Emily @ 816-252-0095 Plumbing and Electrical Painting & Flooring Drywall & Doors Fences & Decks Kitchens & BathsThree Tab TE-TEE LIGHT ELECTRICAL SERVICESThe only complete Keeping you ―In-Powered‖ withcatastrophe is the Superior Electrical Service!catastrophe from which welearn nothing.  FREE Estimates -William Ernest Hocking  FREE Consultations on Non-Emergency  24-hour Same Day Emergency ServiceThere’s a mighty bigdifference between good, Licensed, Insured, Bondedsound reasons and reasons Serving Kansas & Missourithat sound good. - Burton Hillis George Z. Bai, Sr. - OwnerBe careful about being too Office (816) 356-1870careful. Cell (816) 210-4710 - Beryl Pfizer Investment News Page 11
  12. 12. Carl Heintz Carl Heintz CPA Key 2010 Tax Law Changes From Self-Employed Individuals may now deduct their health insurance premiums when computing self- Carl Heintz, CPA ( employment tax in 2010! Estimate your 2011 taxes under various scenarios Credits for Energy Efficiency are dramatically re- at duced after 2010! Don‘t miss out on the $1,500 Child Tax Credit is cut in half after 2010, from credit for energy efficient improvements. $1,000 to $500, and higher income thresholds are Converting a Rental home to a Primary Resi- applied again. dence may have tax consequences as the result of a Payroll Tax Credit ($400 for single filers and $800 tax law change! for joint filers) is no longer available in 2011. America Opportunity Credit of up to $2,500 for col- Tax Credits for College to Expire American Oppor- lege tuition and books expires after 2010. It applies tunity Credit expires, and the Hope Credit is limited to to the 1st 4 years of post-secondary education. Keep a non-refundable maximum of $1,800. good records on educational costs. Earned Income Tax Credit will decrease as tempo- 529 College Savings Plans can be used to pay for rary changes expire. computers and internet access in 2010 only. Mortgage Insurance Premiums (PMI) are no longer Tuition and Fees Deduction of up to $4,000 expired deductible, starting in 2011. for 2010—unless congress takes action. Coverdell education accounts contribution caps Deductible and Roth IRA income limits have been decrease from $2,000 to $500. raised. If you are covered by a retirement plan the deductible IRA phases out for Adjusted Gross In- Credit Energy-Saving Home Improvements The come (AGI) of $89,000 – $ 109,000 (married filing 30% credit will be reduced to10%, and will be capped jointly) or $56,000 — $ 66,000 (single or head of at $500. household). Roth IRA is now phased out as your Flexible Spending Accounts and HSAs can no AGI rises between $167,000 and $177,000 if you are longer be used to pay for non-prescription drugs. married filing jointly, or $105,000 to $120,000 if you Additionally, a tax on non-qualified or early withdraw- are single or a head of household. als from HSAs increases from 10 to 20% 401(k) Contributions Limits 2010 maximum of Landlords must issue 1099’s to service providers $16,500 ($22,000 if age 50+) paid over $ 600 cumulatively in a year. It will be criti- Donations from IRAs directly to Charity can no cal to obtain completed W-9 forms from all service longer be made tax-free in 2010. providers (ex. managers, repairmen, etc). Gift Tax Exclusion remains at $13,00 per person. A Standard Mileage Rates for 2010 are 50¢ per mile gifting plan can save substantial taxes. Gift tax rate for business miles, 14¢ per mile for charitable miles, for 2010 lowerd to 35%. and 16.5¢ per mile for medical miles. Estate Taxes – there are none in 2010! This can Unemployment Benefits The first $2,400 of unem- cause dramatic tax differences when inherited assets ployment benefits are no longer tax-free in 2010! are sold. Sales taxes are no longer deductible as an itemized Receipts for Charitable Contributions – you must deduction, and there‘s no deduction for sales taxes (Continued on page 13) on a new vehicle.Page 12
  13. 13. now have a receipt from the charity for 25,000. Contact us to see if you qual- of up to $10,000 each can be writtenany contributions in excess of $ 250. ify. off (up from $ 5,000).Section 179 limits have been raised Partnership and S-Corporation Late Per-diem rates (high cost areas)to $ 500,000 for 2010, meaning the -filing Penalties have increased dra- have decreased from $258 to $233cost of more equipment can be de- matically! The S-Corporation penal- effective 10/1/10ducted this year! Additionally, lease- ties are up to $ 2,340 per shareholder. Special exemptions for small busi-hold improvements, restaurant prop- See us early in the season to avoid ness stock issued between 9/27/10erty and retail improvement property them! and 12/31/10 result in no tax on anycan be written off as part of Sec 179. 1099 Penalties are Way Up! Late gain if the stock is held for 5 years.Bonus Depreciation (50% write off) filing of 1099s could cost as much as Yes, that‘s a 100% exclusion fromhas been extended to 2010 and 2011 $ 100 per 1099, and the IRS is deny- taxation of any gains.for qualifying property! ing deductions when no 1099 is is- sued. Contact us before you work withAutomobiles and trucks still qualify outside contractors to avoid penalty!for the special $8,000 first-year bonusdepreciation in 2010. Start-up and Organizational costsReporting Health Care InsuranceCosts on form W-2, schedule to bemandated for 2011, has been made Accurate Title Companyoptional.Unused credits can now be carried ―When You Need Timely,back up to 5 years. Losses from prod- Top-Quality Service . . . ―uct liability claims can be carried backup to 10 years. Operating losses,  Owners and Loan Policieshowever, can no longer be carried  Endorsementsback up to 5 years: they can only be  Ownership & Encumbrance Reportscarried back 2 years, and carried for-  Foreclosure Reportsward 20.  Ownership Information  Tax Information  Buyer‘s Closing ServicesHiring the Unemployed may qualify  Seller‘s Closing Servicesyou for tax incentives. There are two  Lender‘s Closing Servicescredits, the HIRE credit and the Work  Recording ServicesOpportunity Credit. These credits can  Funds Disbursement Servicesbe over $ 6000 per employee. If you  1031 Exchange Services 913-338-0100 phonekeep a HIRE credit employee a year,  Special Requeststhere‘s another $ 1,000 credit. 913-338-0107 faxSmall Employers Providing HealthInsurance could receive a newcredit! This redit is optimal for em-ployers with less than 25 employeesand average wages of less than $ Investment News Page 13
  14. 14. Marketing Tool Box .Real Estate Investors and Landlords are small business owners. Successful small business own- ers understand that the biggest tool they can have is their Marketing ability. With our marketing Successful Real Estate Businesses would not have buyers and sellers, renters, customers, or cli- ents. MAREI has assembled a package of Marketing Tools that we use here at MAREI for our own mar- keting. Constant Contact: Is the email service that MAREI utilizes for all email marketing and digital news updates. To sign up for a free 60 day trial, discounts for prepay, and training on how to utilize email marketing in your business, click here. PartnerShip: Through our agreement with PartnerShip, which developed and manages the program, enrolled local and national members receive significant inbound and outbound discounts on small package shipments through FedEx (up to 22%), as well as copying and printing services (up to 20%) through FedEx Office. Sign up instructions in the Member‘s Area under Member Discounts. EZ Data Group: Having a hard time finding CUR- RENT foreclosure or short sale leads? Try this service for 7 days FREE. If anyone is looking for CURRENT short sale or foreclo- sure leads in Jackson County or St. Louis, try our service 7 days FREE. If you are in business ELSEWHERE consider probate leads, PRE NOTICE OF DEFAULT (30,60 and 90 days) many times these are short sales waiting to happen- get the heads up before other investors! We ser- vice only the serious real estate investors, nationwide CURRENT leads, we have references, please visit our website or give us a call. Click here for more information. Receive 20% off standard listings at – an online business tool designed to rent your property fasterPage 14
  15. 15. and maximize your investment. List easily, edit anytime, reach millions of qualified renters and save yourselffrom future hassles with archive capabilities – when your property is rented, your property details and photosare archived so you can reactivate it anytime. To obtain your members‘ only discount code visitthe Member‘s Area under Member Discounts.Vista Print:The first marketing tool you may need as a new investor or in any busi-ness is by far the simplest, the Business Card. MAREI utilizes BusinessCards and other printed materials from Vista Print for much of their mar-keting: Business Cards, Post Cards, Brochures, etc. Click here for $250 FREE Business Cards. Visit theMember Discounts in the Member‘s Area for other great savings with Vista Print, 20%, 30%, up to 75% off.Bandit Signs:Trying to drum up seller calls. Plant a Bandit Sign in theneighborhoods where you want to buy. MAREI members can order 25 FREE Bandit Signs – just pay ship-ping. visit the Member‘s Area and look on the Member Discounts Page for special link.Click2MailOne of the best, low cost marketing tools is direct mail. Here at MAREI weuse Click2Mail to send our letters and post cards at the absolute lowest prices.FreeTrialWebsite.infoRealtors and Investors need to have a web pres-ence. Through our FreeTrialWebSite you can have a siteup and running using simple templates in less than 24 hours. You can totally customize in a fewdays. Property Marketing features, buyer or seller list building tools, direct mail marketing. Check our our10 day trial at AcrobatWhile we all love to create audio and video and post for free, if youget over 10 minutes your file is to large. Please click here to checkout a 30 day FREE trial of Audio Acrobat to find out a great low costsolution that will host your audio and video files as well as help youcreate your own PodCast with the click of a button. Excellent Training. Investment News Page 15
  16. 16. Building An Email List . . Find out more at : newsletters into different topics, allow them to select which topics interest them. Whether you‘re a Wholesaler, a Landlord, a Realtor, a Mortgage Broker, or an Accountant, you need a  If you have a place of business where clients steady stream of business, referrals or response from come in, have a display with a teaser about get- the people that keep you in business. ting the inside scoop or exclusive offers from you via email and a way for them to sign up for the This starts with staying in regular communication with information. your audience. When you build an ongoing dialogue with them, you increase the trust and comfort level  Use a fishbowl on your counter to collect sign up they have with you. They look forward to hearing forms or business cards. Use an incentive like a from you. You‘ll stay in their mind. free prize drawing. This is great at trade shows, As a result, they‘ll become more loyal, and be more drop your card into our fishbowl to sign up for our likely to use or refer your services. And one of the newsletter and to register for a $25 gift card. easiest, most effective ways to build that dialogue is  Add join my mailing list button to all your web- with email marketing—by using email newsletters sites and include after your signature line on all and promotions that you send regularly. emails or message board posts. That‘s why you should have a list of your customers‘,  Ask your twitter followers from time to time to clients‘, or members‘ email addresses: it‘s a real sign up for your newsletter. assset to your business and it is easy to build with very little costs.  If your email newsletter service allows you to re- post your newsletter article to twitter, repost it. Keep in mind you want to build a permission-based Your followers may go back to the newsletter list where people say yes you can send me your online, read, and then sign up. email. So how can you do this, keep ―email mailing list‖ in mind in everything you do:  Use an email newsletter provider service like Constant Contact that has a sign up application  When a motivated seller calls or anyone, ask if for Facebook or other Social Media so your they would like to receive your email newsletter. friends can sign up for your newsletter.  When a potential buyer visits your website, have  Look for a app that lets you input emails into your a way for them to sign up via email for a special service from your phone. So you meet a poten- report on how ―Lease Options‖ or what ever your tial client at a networking event, you can not only service might be works. Add them to your opt in add their phone number to your phone, but their list and then send them the report. email to your newsletter.  When you collect tenant info for rental application  Bring a sign up sheet to very public event. For or any time you collect contact information, re- example if you have a vendor table at MAREI, quest customer email address. Then even if the have a sign up sheet for your newsletter, usually potential tenant or client does not buy now, you offer some teaser free item for signing up. can follow up with them so they might buy in the future, using your email newsletter.  Add a forward to a friend link on the email mar- keting you are already doing. Your client likes  Add space on comment cards for people to sign the article you sent, they forward on to a friend, up for your newsletter. If you segment your and the friend likes the article too and wants fu- (Continued on page 17)Page 16
  17. 17. ture information so they sign up The viewer signs up, gets the free To find out more about how to build for your email newsletter. report that in most cases does not tell your email contact list or how to use you a whole heck of a lot and directs email in your marketing plans, visit Host an event, a class, a seminar, them back to a web site where they, sign up for a a demonstration, an online event, have to do more to get more. free trial, and then watch for their collect contact info including email FREE training emails. They are very from all attendees and ask if you These pages are called squeeze informative. can add them to your mailing list. pages. They attract a viewer for a very specific reason andHave you seen the experts in action then get them all excited thaton email newsletters? If you have if they get the free report allbeen to more than a few real estate their problems will be events I bet you have. . . . The free report is to buildReal Estate Gurus: credibility so they will thenBuy a training program from a Real fell comfortable enough toEstate Guru and what does the order give you their life history soform want? Your name and address you can buy their house. Orto send the package, your phone in give you their life history socase there are problems AND your you can make them a About a week later if not Or fork over their credit card www.MAREIandCC.infosooner you are instantly signed up for number so they can sendtheir FREE online training system that you a training program.send you training information on a ———————weekly basis.You bought from them once. Theemail newsletter is there to teach youmore for free, build their credibilitywith you even more and then WAM,would you like to buy this new andimproved training program.Online Marketing:You may have came across a pagefor an online marketing expert. It‘s Your Complete Website (including hosting) is justvery basic web page that has their $39.90 per monthteaser message, usually targeted for aspecific topic: Stop Foreclosure, Sell plus a one-time initial setup fee of $39.90Fast, Get Financed, Learn How toGet Rich . The page teases them withwouldn‘t it be great if you could dothis, think of all the things you couldthen do. . . Please give me your nameand email and I will send you a free Go to www.FREETrialWebsite.inforeport to show you how. Risk Free - No Obligation - No Credit Card Required! Investment News Page 17
  18. 18. Kansas City Federal Reserve Economic Update TENTH DISTRICT - KANSAS CITY Manufacturing and Other Business Activity The District economy strengthened in October and After rebounding in the last survey period, District early November, despite headwinds from the resi- manufacturing activity continued to expand, and dential and commercial construction sectors. Addi- many firms expected further growth in the next six tional gains in consumer spending boosted optimism months. While production levels varied across indus- for holiday sales among retailers and auto dealers. tries, some of the strongest gains were at food, fabri- With moderate gains in October andNovember, cated metal, and electronics manufacturers. In gen- manufacturing plant managers expected production eral, new orders, shipments, and production activity activity and new orders to rise further with a pick-up strengthened in recent weeks, contributing to in export activity. Energy and agricultural activity rose rising order backlogs and shrinking finished goods robustly with strong demand, low inventories, and a inventories. In the next six months, plant managers weaker dollar lifting commodity prices. In contrast, expected production, shipments and orders, espe- residential and commercial construction remained cially for export, to strengthen further. In addition, weak, although commercial real estate sales and va- more factory managers planned to increase staff or cancy rates were expected to improve in coming make capital purchases in coming months. High-tech months. Banking conditions remained stable with firms also reported a rise in sales that was expected more District bankers expecting improvements in to continue through year-end. After slowing in the loan quality. Despite higher raw material prices, last survey period, activity in the transportation sector wholesale and retail prices held steady. stabilized and some firms noted a shortage of quali- fied drivers. Wage pressures remained subdued, though some firms were hiring for seasonal and specialized labor. Real Estate and Construction Consumer Spending Residential and commercial construction remained sluggish in October and November, while commer- Consumer spending improved further in October and cial real estate sales and vacancy rates were ex- November, and contacts were optimistic about future pected to improve in coming months. After contract- sales heading into the holiday season. District retail- ing with the end of the homebuyers tax credit pro- ers reported stronger sales with limited discounting gram, a few District homebuilders noted a slight up- on merchandise. Contacts indicated an uptick in du- tick in housing starts. Still, District home prices rable goods sales, especially appliances, while sales edged down and sales continued to fall heading into of luxury items were slow. After declining in the last the typical winter lull in home buying activity. District survey period, auto dealers reported aslight improve- contacts noted that the starter home market re- ment in sales, especially for trucks and used cars. mained active, but long lead times for selling mid- Dealers anticipated demand would continue to and upper-priced homes were boosting inventories strengthen through year-end, and some planned to and limiting ―move-up‖ opportunities. Mortgage loan hire sales staff and service technicians. Restaurant activity rose as homeowners refinanced existing traffic was up, while the average check amount de- mortgages to lower payments and shorten terms. clined. With the end of the summer travel season, Commercial construction activity declined and was average room and occupancy rates edged down at expected to remain weak over the next three months. District hotels, but tourism activity was District commercial real estate contacts reported stronger than expected. little change in vacancy rates, absorption rates, and prices. Some firms, however, reported an uptick inPage 18
  19. 19. (Continued from page 18) interest rates. steady. District manufacturers re-sales and expected vacancy rates to Energy ported higher raw materials prices andedge down in coming months. expected additional increases in the District energy activity continued at a next six months. They also expressedBanking robust pace in October and Novem- a limited ability to pass on higher input ber. The number of active drilling rigs costs to current finished goodsBankers reported stable loan demand, in the District rose further, primarily prices. However, more factoryincreased deposits, and an improved due to natural gas expansion in Okla- managers expected to receiveoutlook for loan quality in the recent homa and New Mexico. Producers higher finished goods prices oversurvey period. Overall loan demand expected drilling activity to remain the next six months. Restaurantscontinued to hold steady as demand elevated over the next three months; paid more for food, but keptfor commercial and industrial loans, however some firms reported that menu prices stable. After rising incommercial real estate loans, and equipment shortages, difficulty finding the last survey, prices for build-consumer installment loans remained qualified labor, and availability or cost ing materials held steady.stable. In contrast, bankers reported of financing were constraining drillingstronger demand for residential real activity. District contacts anticipated a Though a limited number of firmsestate loans. Compared to the previ- modest increase in natural gas prices were hiring, primarily for special-ous survey, credit standards remained as the winter heating season ap- ized labor or seasonal workers,unchanged in all major loan catego- proached. Crude oil prices were also few were raising wages to attractries. Loan quality was essentially un- expected to strengthen with rising de- qualified applicants. Wage pres-changed compared to one year ago. mand and a weaker dollar. After surg- sures were expected to remainBankers, however, expected loan ing in the last survey period, Wyoming subdued through the end of thequality to improve over the next six coal production continued apace. With year.months. Deposits, especially for trans- higher ethanol prices, profits at etha-action accounts and savings ac- nol plants held steady despite higher From the Federal Reserve Beigecounts, increased after having been corn prices raising operating costs. Book for Novemberflat since late last year. Read full report for all Districts at Wages and Prices fomc/beigebook/2010/20101201/ Prices paid for raw materials rose fur- fullreport20101201.pdfAgricultural conditions improved since ther in October and November, butthe last survey period. Favorable selling prices and wage generally heldweather conditions across the Districtfacilitated an early corn and soybeanharvest with yields less than original PRIVATE LENDERestimates but slightly better than theirfive-year average. The winter wheat Locally Owned & Operated Private Money Lendercrop was progressing normally. Crop We are a Direct Lender, not a Brokerprices continued their steady climbthrough the fall harvest, boosting in-  Rehab Loans up to 100% of Costscomes for crop farmers but raising  Up to 65% of the After Repaired Valuefeed costs for livestock producers.Farmland values and cash rental rates  Terms from 30 Days to 1 Yearstrengthened further with higher farm  Rates from 12 to 16% Interest Onlyincomes and robust demand for good  Points from 6 to 10 in Lieu of Equityquality farmland from both farmersand non-farm investors. Farm opera-  Appraisals Requiredtors also increased spending on farm Draw Requests on Wed. Paid on Fridayequipment and grain storage bins.Demand for farm operating loans was RockStarInvestor.comsteady, and agricultural bankers re-ported ample funds were available for Jeff Baslerqualified borrowers at historically low 913-221-9080 Investment News Page 18
  20. 20. Mortgage Interest Deduction Under Attack When President Barack Obama took office he ap- talk of changing MID harms an already fragile pointed a National Commission on Fiscal Respon- market. sibility and Reform to assess the Nations fiscal crisis. This commissions task was great, particu-  News reports saying that Congress threatens larly given the public outrage after the bailouts of to repeal or limit MID will only further delay the the banks and auto industry, but they were to de- housing recovery. termine viable ways to strengthen the "balance Please oppose any efforts to reduce or eliminate sheet" of this country. the Mortgage Interest Deduction in any future defi- While many suggestions within their recently pub- cit reduction proposals or legislation. Thank you for lished 66-page report, entitled "The Moment of helping to ensure the ongoing recovery of the Truth" are legitimate, page 32 of their report details housing market. a suggestion to eliminate the Mortgage Interest Deduction. Despite signs that the real estate mar- ket is poised to rebound, this recent development sent shock waves through the industry, particularly on the consumer side, according to National Asso- ciation of Realtors President, Ron Phipps. While this report only offers suggestions, it is im- perative that we send a resounding message, as an industry, to Congress that this time tested de- duction must not be eliminated. Please contact your Representatives and Senators and let them know you strongly opposed the National Commis- sion on Fiscal Responsibility and Reforms sugges- tion to eliminate the Mortgage Interest Deduction. Take Action: Please contact the U.S. Capitol Switchboard at (202) 224-312 or look up your rep- resentatives number at http:// Talking points include:  I am a constituent and a member of the Na- tional Real Estate Investors Association:  I am strongly opposed to the Deficit Commis- sions proposal to limit or eliminate the Mortgage Interest Deduction.  I have experienced, first-hand the terrible housing crisis and I can assure you that even ACT NOWPage 20
  21. 21. MAREI Member . . . Tool BoxesHave you been on the web site lately? We have a new  MAREI Job Board: We invite all members to post theirfeature that we are working very hard to implement to job openings here.bring you more benefits and tools that you can utilize. We have several other tools we are working on bring-Currently you will find: ing to you in 2011: MAREI Service Directory: This is a searchable list  Web Site Help Videos: We are recording a series of products and services for our members. of videos to help you navigate the web site.  Education: We have several new educational MAREI Audio Downloads: A work in progress that items we will be rolling out to offer you more op- lists all the Recordings of General Meetings that are portunities to learn. These tools will include—an available to MAREI members for free in the Member interactive online university and digital training Area and we are slowly adding the ability to purchase programs from local members that you can pur- these downloads by non-members. chase, download and access from home. MAREI Landlord Resources: Area landlords are  Investor Tool Box with tools for the real estate in- need of many services from tenant screening, to vestor. forms and documents, and more. As we add new benefits for our landlords, we will add the services  Wholesaler’s Tool Box with tools just for the whole- here. sale real estate investor. MAREI Marketing Resources: Tools for all mem-  Rehabbers Tool Box with tools for the rehab inves- bers: Investors, Landlords, and Service Providers for tor or anyone who is renovating a home. marketing. If you need to boost your business in 2011, check out this page for some ideas. Success in real estate is all about having the right tools and knowing how to use them. We hope that we MAREI Message Board: Currently this tool is avail- can bring in all the tools you need into our tool boxes able for the general public to read. But if you want to and then help you learn how to implement them post or respond to a post, you need to log into the through articles, webinars, and live training in 2011. member‘s area. We also welcome your ideas for needed tools. If you MAREI Properties for Sale: This tool is for the gen- eral public to view your properties for sale. To post have a tool that you really like to use that a large ma- your properties, here, be sure to log into the MAREI jority of members might be able to utilize, we may be member area. able to approach the provider as an association and negotiate a discount. To suggest tools, please email them to, include web sites and MAREI Newsletter: This tool will allow everyone to read our 3 latest issues of the Investment News (our provider contact information so we can follow up with newsletter). To go back further in the Newsletter Ar- them. chives, visit the Library in the Member Area. Investment News Page 21
  22. 22. Upcoming Events Lee’s Summit Investor Breakfast Lee‘s Summit Investors Dec Networking Group meets the 2nd Saturday of the month for coffee, breakfast, and conversation at the Panera Bread on Chipman in Lee‘s Summit. Open to MAREI Members & 11 Guests. Dec Alternative to the monthly meeting: Holiday Networking Holiday Party, Tuesday December 14th at the Fox and Hound at Networking 103rd and Metcalf. Open to everyone. No charge except 14 for your food and drinks you order. We have a pool table Party reserved.Children & College Students Jan Monthly Meeting: MAREI meets on the 2nd Tuesday of each month for networking and education. Basic AgendaIs your child interested in real Monthly Meeting and Location Information on the next page. estate? Is ready to learn? Add your child aged 12 to 18 11 to your membership. JanCollege Students with student Workshop: We have a tentative date set for a Saturday ID, we have internships morning workshop. Watch calendar and blog for details. Workshop available. Work in the MAREI office for $10 in MAREI bucks to use for 22 Membership & Workshops Jan Webinar - we have a tentative time penciled in for a webi- Contact nar in January. Topic to be determined. FREE for MAREIMAREI Office for more info. Webinar members to join live or access replay. 27Page 22
  23. 23. Monthly MeetingSylvester Powell JrCommunity Center6200 Martway, Mission KS913-722-8200Tuesday January 11 5:30 Member‘s Only -Doors open at 5:30 Round tableMembers: 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 Presentation – Guest with a Guest Passproof of payment. Speaker (available online at 9:00 New Member Location For each new member you Registration 6200 Martway refer, earn MAREI Bucks Mission, KS 66210 which can be used towards seminars, advertising, North of Shawnee Mission Pkwy Park in North Lot or membership fees. South of Johnson Dr 2nd from the Building East of Lamar Less Kids & Door Dings Investment News Page 23
  24. 24. Investment Opportunity Address City Offered as Price Info Contact Phone 5837 Forest Kansas City, MO $36,000 Bank Owned Ann Wilkinson 913-402-1500 6206 E 95th TR Kansas City, MO Turn Key No Reserve Absolute Auction Robert Mayo 816-361-2600 8517 Blue Ridge Raytown, MO Rehab No Reserve Absolute Auction Robert Mayo 816-361-2600 Blvd 405 W Dartmouth Kansas City, MO Under Value $209,900 Investor Owned Joe Reece 816-507-4203 5855 E 10th St Kansas City, MO Needs work $14,500 2+ Bed / Owner Steve Summers 816-350-7200 Finance Agnes Package Kansas City, MO Needs Work $16,500 2 houses Christoph Becker 816-419-1165 Wabash / Indiana Kansas City, MO Need Work $5,000 2 houses Christoph Becker 816-419-1165 3703 College Kansas City, MO Updated Rental $27,500 Rent $700 to 800 Christoph Becker 816-419-1165 4733 Bales Kansas City, MO Rental $22,500 Wholesale Christoph Becker 816-419-1165 3860 E 59th Tr Kansas City, MO Rental, needs up- $16,500 Wholesale Christoph Becker 816-419-1165 dates 3012 Wabash Kansas City, Mo Rehab $3,500 Wholesale Christoph Becker 816-419-1165 1030 Park Kansas City, Mo Renovated $69,900 Bank Owned JJ Pawlowski 816-916-4593 4311 Flora Kansas City, MO Renovated $7,000 Bank Owned JJ Pawlowski 816-916-4593 7208 E 100th Tr Kansas City, MO Renovated/ Rented $108,900 Bank Owned JJ Pawlowski 816-916-4593 13415 Spring St Grandview, MO Bank Owned $89,900 100% Financing JJ Pawlowski 816-916-4593 1301 E 59th St Kansas City, MO Updated $95,000 Bank Owned JJ Pawlowski 816-916-4593 3933 Wyandotte Kansas City, Mo Updated / Rented $142,000 100% Financing JJ Pawlowski 816-916-4593 5044 Walrond Kansas City, Mo Rehab / Rental $14,500 $5k Repairs Christoph Becker 816-419-1165 6101 Agnes Kansas City, MO Rehab / Rental $23,500 $5k Repairs Christoph Becker 816-419-1165 Duplexes Gardner, KS Rented $100k Each $600 rent / unit Jon Bichelmeyer 913-579-3354 Duplex Merriam, KS Rented/ Vacant No priced listed $850-$900 Eric Deeter w/ Realty 913-579-3354 Resource of KCPage 24
  25. 25. Wholesalers, submit your properties at: Looking for Investment Properties Investment Opportunity There are 100‘s of great deals right now. Let me help you through the process.There are over 40 properties Real Estate Investor / Agent with experience in listed for sale today on the Bank Owned, Short Sale, and Rental Properties MAREI web site. All MAREI members may log Eric Deeter in and list their property for Realty Resource of KCsale, include details, photos, www.EricDeeter.comsimple html, and contact info. Call (913) 579-3354Must be your property or list- ing, no fishing for buyers with out proper contracts.All new listings emailed outon Fridays in our E-Updates Home Depot go to  2 % Bi-Annual Rebate for MAREI members  Volume Discount Pricing Click no Tool Box Click on Property for Sale Call me to find out how you can save on your next home renovation! Roger Holyfield (816) 510-9199 Investment News Page 25
  26. 26. Craigslist Advertising Generate Leads for FREE 76 percent of consumers believe renting to be a their current residence or rent new residences better option than homeownership! within the next year. Twelve percent of renters said they have plans to buy a new home this < time the for least at consumers, some out dy- year and only fourteen percent believe that buy- ing be to seems homeownership of dream re- ing a house is preferable to renting given the covery, towards battle uphill an fight continues current state of the market. market estate real As results. survey 2008 from jump percent 5 a market, current in home own- Homeowners tied down and staying put. Sev- ing option favorable more renting deemed con- enty-one percent of homeowners will stay in sumers 76 May, conducted online new> their current home over the next year, mirroring almost exactly the response from 2008 (72%). When asked why, individuals gave the following reasons: Leverage this information in your marketing and sales and sign more leases.  64% cited having no responsibility for major repairs or maintenance as the primary rea- son. Source: Harris Interactive. This survey was con-  50% cited financial reasons such as not ducted online within the United States between being impacted by an unpredictable real es- May 3, 2010 and May 5, 2010 among 2,140 tate market and not being susceptible to adults (aged 18 and over), of whom 1,443 own foreclosure. their primary residence and 617 rent their pri- The findings in this survey mirror what is being mary residence. seen throughout the country, especially in areas of the country that are experiencing the first signs of economic recovery. See MAREI member area for Mem- The simple fact remains that in a ber Discounts with AAA Screening bad economy, people must make whatever changes necessary to improve their situation, especially if they have lost their job. Sometimes this might mean moving to another city where there is more opportu- nity, and if youre tied to a mort- gage, you dont have the same ease of mobility as you do if you lease your home. Renters are not eager to make a change this year. Sixty percent of renters plan to continue rentingPage 26
  27. 27. Discounts of up to 65% Details in MAREI member areaInvestment News Page 27
  28. 28. accurate Accurate Closings: Smooth, Timely, Professional. Our office is located in Accurate Title will provide you with a smooth, timely, and profes- Overland Park, KS and sional closing. This is accomplished by removing title defects Serves all Kansas City which could affect the owner‘s title and lender‘s mortgage. Title Metro Area Counties, plus Nationwide Insurance fulfills a need by providing a financial guarantee to the Affiliations. buyer that their title is free and clear of any encumbrances of re- cord. It also guarantees to the lender, that all conditions of their loan are satisfied.  Experienced staff to Title Services Provided for: handle all of your closing needs.  For Sale by Owner Transactions  24-48 turnaround on title  New Construction Closings commitments on searches.  Commercial Purchases and Refinance  If you need a RUSH  1031 Exchanges order, please let us  FHA, VA, USDA, Conventional Loans, and Hard know. Money Loan Closings  Friendly service and cus- tomer satisfaction with  Refinance and Reverse Mortgages every closing.  Closings, Prelim HUDS, Curing Issues  Remote closings  Wholesale Investor and REO Closings  Short Sale Closing and Negotiation Assistance  Online Order Tracking  100 Years of Combined Service! Accurate Title Company 913-338-0100 www.AccurateTitleCo.comOwned by Attorney Ronald L Kraft. Mr. Kraft has over 39 years experience in real estate and small businesslaw and is licensed in Kansas & Missouri.