CREIA ReportCarolinas Real Estate Investors Association –Member of the National Real Estate Investors Association (NaREIA) • August 2007

CREIA’s August meeting will be held Monday, August 13 , beginning at 6:00 p.m., A-B Tech Enka Campus off I-40 at exit 44, .5 miles west on 19/23 toward Candler. Coming from I-40 toward Candler on 19/23, turn left at Sandhill Road and the new campus (old BASF plant) will be on your left.

August meeting

Learning how to spot ‘red fl ags’August

Program

– Continued Page 2

Time running out to sign up for PHP classes

Be Sure To Fill Out The Enclosed Member Survey To Help CREIA Better Meet Your Investing Needs

One of CREIA’s most popular speakers will make a second appearance before the group at its Aug. 13 meet-ing.

Veteran home inspector Russell Bu-chanan will show investors how to spot “red fl ags” before buying to avoid hidden problems that require expensive repairs.

The fi rst time Buchanan addressed CREIA, members stayed afterward un-til nearly 11 p.m. asking him questions.

Buchanan intersperses his talks with slides to show investors how to antici-pate problems that will affect their de-cision whether to buy the property or what price they will pay.

Buchanan has been a home inspec-tor in Asheville since 1994. In 2001 he formed HomeGauge.com, which pro-vides inspection software to more than 4000 users in the U.S. and Canada.

Buchanan was recently named vice president of the National As-sociation of Certifi ed Home Inspectors (NACHII), which has more than 10,000 members.

Scott Clark from Appalachian Energy will be the Hot Seat Speaker, presenting information on complete residential solar energy packages.

His company can reduce hot water heating bills by 80 to 90 percent and home heating costs 30 to 35 percent.

Clark’s systems rely on the green tech-nology of solar energy and are designed for effi ciency. He will show investors how they can increase their return on invest-ment, boost property value, comparing the value of energy-effi cient upgrades to other home improvements.

Time is running out to sign up for CREIA’s 12-week Pro-fessional Housing Provid-er (PHP) course, which will begin Sept. 13 at A-B Tech’s Enka campus.

PHP is designed to teach landlords and others how to manage housing properties in a way that is pro-fessional, legal and ethical while maxi-mizing the bottom line.

“If you are currently a landlord or an aspiring one, you will greatly benefi t from the PHP course,” said Bill Choate, who is directing the program this year. “Not only will you have a comprehen-

sive education and the local recogni-tion, but your business will run

smoother.”The class will meet at 7

p.m. each Thursday and last about three hours. The cost is $200 for CREIA members

and $229 for non-members, including the textbook “Every Landlord’s Legal

Guide.” This is a well-rounded certifi cation

program for anyone who is currently or plans to be a landlord or property man-ager, according to Choate.

“The curriculum covers everything you need for tools in managing properties

2 - CREIA Report

PHP– From Page 1

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from bookkeeping to eviction,” he said. “Every class is taught by an expert in their fi eld.”

The fi nal class will be a wrap-up and graduation for those students who have completed 36 credit hours by attending the 12 classes. Arrangements will be made for participants to make up one missed class.

Students who complete the program will receive certifi cation recognized by the National Real Estate Investors Association and will be entitled to use the PHP logo for advertising and recognition purposes.

Seating is limited and is based on a fi rst-come, fi rst-seated basis, Choate said, advising those who want to take advantage of this opportunity to make their payment to the CREIA offi ce as soon as possible to reserve a seat.

Anyone with questions can e-mail them to williamhcho-ate@bellsouth.net.

Following is the schedule of topics and instructors for each class:

• Sept. 13: Landlord-Tenant Law; taught by Gary Childers.• Sept. 20: Ethics; Bill Goacher, Liz Talmadge and Judy

Flaherty.

• Sept. 27: Property Management – Basics I; Pat Puckridge.• Oct. 4: Property Management – Basics II; Pat Puckridge.• Oct. 11: Finding and Screening Tenants; David Maggard

and Mark Waters.• Oct. 18: Record Keeping, Policies; Bobbie Gray.• Oct. 25: Record Keeping, IRS/Taxes; Karen Workman.• Nov. 1: Contract Law/ Lease Requirement; Ed Krause.• Nov. 8: Asset Protection/Property Ownership; Jeri Ku-

mar.• Nov. 15: Fair Housing Law/Section 8; Bob Smith and

Tonia Watts.• Nov. 29: Insurance/IRS Requirements; Doug McKinney

and David Worley. • Dec. 6: Graduation.

CREIA ReportCREIA Report is published monthly. Newsletter editor is

Tim Reid. Articles submitted are the express opinions and comments from various independent CREIA members and outside sources. CREIA members are urged to submit articles for publication. Deadline for articles to be published is the third Friday of each month.

CREIA Report - 3

Hard money loans a good option for some deals

Don LearFinancial Advisor

UBS Financial Services Inc.138 Charlotte StreetAsheville, NC 28801Tel. 828-250-3513, Fax 828-258-0516Toll Free 800-435-6503don.lear@ubs.com

–Continued Page 6

By Marilyn RobertsWhat are hard money loans?

These are privately fi nanced loans than can be used for real estate in-vesting. Hard money loans are short term, most only for six to 24 months. The interest rates are high, usually 12 percent to 18 percent.

However, if you intend to resell the property fast, then you will only be paying the high interest for a short time. If you intend to keep the property and rent it out, then hard money would not be the way to go.

Not all properties would qualify for hard money fi nancing. The private lenders will want to determine the property value after repairs and then will fi nance usually 60 percent to 70 percent of that.

As an example, a property is selling for $50,000 with $10,000 needed in repairs with an after repair value of $90,000.00. If you can fi nd a hard money lender to fi nance 70 percent ($63,000), then this would pay the $50,000 asking price plus

the $10,000.00 in repairs with $3,000.00 remaining.Some benefi ts with getting a hard money loan are as fol-

lows:1). In some circumstances you can get 100 percent of the

money you need if the purchase price is less than the 70 per-cent of the after repair value. Your only expense would be the closing costs on the loan.

2). These loans are made fast, usually closing within 10 days. If you are in a situation where you need to close fast, then a hard money loan could be the way to go.

Some things to consider when getting a hard money loan is how many points you have to pay at closing. A point is 1 per-cent of the loan amount. The points could be anywhere from 2 to 10. Be sure and fi nd this out up front as you will need to have this amount at closing.

As with a conventional loan, some hard money lenders will charge a prepayment penalty. Verify this and the amount of the prepayment penalty as you will need to consider this when fi guring your profi t.

Where can you fi nd a hard money lender? Most mortgage

4 - CREIA Report

CREIA Report - 5

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(Editor’s note: Lonnie Scruggs of Virginia Beach, Va., has been in some type of real-estate business most of his life. For 35 years he owned, rented, managed and maintained his own rental properties. After that he started buying discounted notes and mortgages. Then he got into buying, selling and fi nancing used mobile homes. Lonnie says you should never let your mail carrier pass your house without leaving a check.)

By Lonnie ScruggsHere’s a little selling technique that I’ve found to be very ef-

fective. I’ve written about this in my books, but it doesn’t hurt to refresh your memory.

After screening numerous calls from my ads and signs, I “pre-qualifi ed” three couples and scheduled appointments to show the home. But before I would agree to meet them for a showing, I required all of them to go through the park, check out the home and see if they liked what they saw.

When they called back wanting to make an appointment to see it, I told all of them that I would probably be able to show the home Saturday afternoon, but wasn’t sure. But I would call them Saturday morning to fi rm up a time.

Saturday morning I called and scheduled appointments for all of them to see the home that afternoon. The fi rst appoint-ment was at 2 p.m. with the best of the three. The next was at 2:15 p.m.and the other couple at 2:30 p.m. The reason for the alternate times was because I wanted to be talking with the best of the three before anyone else showed up.

The fi rst couple, who had already said they could pay cash, showed up right on time. They liked the home and started negotiating. They wanted to know if I could sell for less since they would be paying all cash. They also wanted to know if I could give them a break on the lot rent if they paid a full year in advance.

It didn’t work, but I had to admire the fact that they at least tried to negotiate a better deal. But they didn’t know they would soon have competition.

About that time, in walks the next couple, and you could ac-tually see and feel the change in the attitude of the fi rst couple. It was amusing to see the look on their faces and watch how they kept eyeing this couple.

The second couple checked out the home several times, and – Continued Page 9

6 - CREIA Report

CREIA librarian Jim Miller reminds members of guidelines for use of the library.

Following are the Library Check Out Rules & Procedures:

companies will have a list of these lenders. Also real estate in-vestment clubs will usually have some attend the meetings, plus some of the other real estate investors at the meetings will have connections with some hard money lenders.

The newspapers will usually list classifi ed such as “private lender” or “money to lend”. You can also do a Google search for hard money lenders and will come up with many sites.

Hard money loans are not for every real estate investing deal, but sometimes when you need to turn over a property fast and it will need a lot of repair, this type of loan could be a good option.

(Article Source: http://EzineArticles.com)

Hard money–From Page 3

Use library responsibly so everyone benefi ts“By signing my name to the check out register, I attest and

agree to the terms and conditions of checking out material from the CREIA library.

“I attest that I am a member of CREIA, in good standing, and I do not owe any late fees to the library. I understand and agree the material I am checking out on the noted date will be returned to the library at the next CREIA meeting held on the second Monday of the following month.

“If I fail to return the library material I will be obligated to pay a late charge of $10per piece of material, per month. If I do not return the material within 90 days, I will be billed at the retail value for the material that I have checked out.

“If I have late fee or any library material 90 days past due, I will forfeit my library privileges. I also agree to reimburse CREIA for all collections expenses associated with the attempt and process of collecting my late fees and/or retail value of the material past due.”

There is a limit of 1 tape/CD set or 2 books. This gives ev-eryone the maximum opportunity to make use of the library.

“Thanks for your cooperation in making your library better for everyone,” Miller said.

CREIA Report - 7

8 - CREIA Report gfont

The American residential real estate market is laboring under the steadily accumulating weight of bankrupt mortgage lending companies, rising mortgage defaults for subprime and even prime borrowers, home foreclosures, house price declines, and a frequent inability of homeowners to sell a house fast.

Recent stock market declines are tied in part to the troubles of the housing sector and the connection it has with credit avail-able for prospective homeowners as well as for businesses. This can have a trickle-down effect for those who buy a home.

While solutions to the overall economic situation may not be easily found, many consumers who are still in the market are turning to the Internet to help themselves buy or sell a house.

Online listings are up signifi cantly and a majority of people now report they used the Internet to shop for mortgage prices or real estate. One company that provides internet-based real estate services to homeowners looking to sell a house and peo-ple looking to buy a house is TheHomeBuyingCenter.com.

The company’s Web site connects real estate investors seek-ing to buy houses for cash with homeowners who are motivated to sell quickly. The company also provides a for sale by owner type “Buy A Home” listing service where people can post their homes on the Web.

Selling on the Internet

CREIA Report - 9

Competition

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kept waiting for me to fi nish with the fi rst couple. Then in walks the third couple. This couple did a quick walk-through, asked a few questions and left.

Seeing how motivated and serious the second couple was, the fi rst couple never again mentioned reducing price or lot rent. No more negotiating. They signed a contract for full price on both the home and lot. (Isn’t competition great?)

Then I let the fi rst couple hear me tell the second couple that I would call them in case anything should happen, or if this contract fell through. (This was Saturday, so it would actually be Monday before they could have the cash (cashier’s check) for the home and lot rent.

But they now knew if they didn’t show up with the money, I had another buyer waiting. But they did have all the funds Monday, signed all the docs and it was a done deal.

As you can see, this technique accomplishes two things. First, if you require all potential buyers to check out the park and home, and then call you back for an appointment, you have a more serious buyer. This will greatly minimize no-shows.

I hardly ever show a home unless the potential buyer has already seen the home and park. But even before you do that, you should pre-qualify your buyers to see if they have the nec-essary funds and qualifi cations to buy the home. Otherwise, you will waste a lot of time showing homes to people that are not able to buy, or not able to qualify for the lot.

Second, by having other potential buyers show up at the same time, you generate a feeling of competition between buyers. When one person sees someone else wanting the same thing they want, and there’s only one available, they want it even more. So in many cases, like this one, you eliminate the negotiation process and get full price/terms.

– From Page 5

The CREIA main meeting will always pro-vide a nice meal for $5. It is an individual sack prepared by our vendor. It includes one sand-wich, a bowl of salad, one fresh fruit, a dessert, bag of chips and a napkin. It will be available until 7:15 p.m.

Meet and eat

10 - CREIA Report

Let us know what you thinkBy Melinda Hendershott

CREIA needs to know more about you!! You have joined this organization for a reason – and that reason might be along the lines of learning more about...being a landlord...buying foreclosures...or fi xing up houses. Did I leave out the reason you are a member?

The only way this organization can schedule speakers who cover topics you are interested in - is if it knows what you want! The only way CREIA can support what you do as an investor - is if it knows what you do! The only way CREIA can mobilize support around an issue that is effecting you - is if it knows what issues you are facing!!!! What is the common denominator here?? It is YOU! Don’t be a silent face in a crowd! Speak up, tell CREIA about you. Where do you in-vest? What kind of investing do you do?

How can CREIA help you?I joined CREIA in 2003. I started

volunteering a little over a year ago. I did so primarily because I wanted to get to know more people in this organization. It has worked! I have been blessed by getting to know some amazing people. There is so much variety in this group, so much knowledge, talent, experience and - thank goodness – great humor!

You may not be aware of the different committees, the board members or the individual volunteers who work to put on CREIA meetings, focus groups, and seminars, etc. Well, they don’t get paid to do this! They do so because they are passionate about real estate investing, they want others to share in the benefi ts, and they want to give back by helping all of us to be successful. This organization is really about, and for, each one of us!

I think that it is extremely important for this organization to know its mem-bership well. How can CREIA work to convince politicians to change the latest House Bill because it is going to effect the way “x” number of honest “mom and pop” investors can provide affordable housing? CREIA has to know its membership!

Please take the time to fi ll out a survey! I am personally very interested and ex-cited to see what the profi le of this group really is. How many properties have been bought in pre-foreclosure? How many people do we, as a group, provide hous-ing for? What price range do our rentals fall into? How many of us use “subject to” or “lease options” to buy or sell proper-ties? What do our members invest in and where?

I think the results are going to be in-teresting and I hope you think so too!

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CREIA Report – 11

Each month the CREIA newsletter reaches a select group of active real estate investors. If you have a trade, service or business, or property to sell or exchange or any other advertising need, run an ad in this newsletter.

Standard Advertising Rate Schedule Member Non-MemberBusiness CardSize $ 15.00 $ 20.001/4 Page Ad $ 30.00 $ 40.001/2 Page Ad $ 60.00 $ 80.003/4 Page Ad $ 90.00 $ 120.00Full Page Ad $ 120.00 $ 160.00Insert $ 200.00 $ 250.00

Discounts10% discount for 12 months paid in advance (applies to standard advertising only)

Set Up ChargesIf ad is not camera ready, the following typesetting/setup charge will be added to bill: Full page $50; 3/4 Page $40; 1/2 Page $30; 1/4 Page $20; Business Card Size $10; revisions to completed ads will be charged by time: $35/hr.

Deadline and PaymentAll advertisements must be prepaid and received no later than the third Friday of each month for the next month’s issue. Mail check (payable to CREIA) to PO Box 615, Asheville, NC 28802. Mail or email ad (camera ready or roughed out) to The Word Shoppe, P.O. Box 5504, Asheville, NC 28813. Email: dave@wordshoppe.com.

Editing and Right of RefusalCREIA reserves the right to edit ads or to refuse ads.

Corporate SponsorshipCorporate Sponsors may display their promotional materials and business cards at the monthly meeting on the sponsors’ table. Each sponsor has an opportunity to talk about his/her business at a scheduled monthly meeting and/or write an article for the newsletter.

Option A – 12 business card ads – $400Option B – 12 quarter-page ads – $475

Advertising Rates

New members: $150 • Membership Renewal: $100 ($25 for a second member living in the same household)Note: All members will receive a renewal form by U.S. mail during the month of their expiration. Each member will have sixty days in which to renew his membership at the lower $100 or $125 (with signifi cant other living at the same address) rate. However, after sixty days have elapsed, the cost of joining as a new member will be reinstated

at the full rate of $150 or $175.

Member Name

2nd Member’s Name

Address

Phone: H W E-Mail Address

Level of Experience (check 1) ❏ Novice ❏ Intermediate ❏ Advanced

Would you be willing to share your expertise with others? ❏ Yes ❏ No

Committee(s) I might be interested in working on:

❏ Programs ❏ Library

❏ Finance ❏ Membership

❏ Newsletter ❏ Focus groups ❏ Marketing

Date Amount Paid

Make check or money order payable to: CREIA and mail to: CREIA, P.O. Box 615, Asheville, NC 28802.

If paying by credit card: ❏ Mastercard ❏ Visa

Name On Card Number: Expiration Date

Signature:

For membership information, call Liz Talmadge, 828 775-7355, sellersolutions@charter.net. or visit www.creianc.org

The Association is an educational organization only and does not offer investment, legal, or accounting advice of any kind and is not liable for any action or inaction taken or not taken as a result of its communications.

CREIA Membership Application

Brian Barrett William Brady and Karen SearleDr. Mary Ellen Brown Edward and Angela GerberKathy Gurney Neil and Jay Gurney

Melinda Hendershott and Heath CowartTeresa Jordan Steve Karner Charlene Livingston Allen Lomax Liz Provo

Memberships Expiring In AugustMelita Ritter and Valerie CarverJolane and Chet SchmidtMichael Trayford Alex and Caleb WilsonTammy Wood

PO Box 615Asheville, NC 28802

NC State Convention Jim Hitt/CREIA Board(828) 257-4949pokerjch@aol.com

Programs/Focus GroupsJudy Clodfelter(828) 683-4799silversrosebud@aol.com

Main MeetingWayne Busch(828) 456-9778wayneb4737@aol.com

Saturday SeminarsHeath Cowart 828-553-7214

CREIA is an educational organization and investors should consult an at-torney or accountant before making an investment. All members and guests

assume the risk of making their own investment decisions.

Upstate CREIAPresident, Deb Sisson, (864) 313-2101Debsisson@WeBuyHousesSC.comUpstateCREIA@yahoo.com

CREIA Info Line (828) 255-2727info@creianc.org • www.creianc.org Event Registration 1-800-477-1778

PresidentJim Hitt(828) 257-4949pokerjch@aol.com

Vice-PresidentGeorge Lycan(828) 231-4246glycan@charter.net

SecretaryJohn Noce(828) 255-9576mail@hotjohnnie.com

TreasurerTom Codington(828) 684-6994taxmannc@aol.com

Roy Chapman(828) 255-8191Cell: (828) 775-8191mountainNC@aol.com

Kris Kumar(828) 253-9786kriskumar@charter.net

Nicole Rogers (828) 242-4501nbrogers@gmail.com

Offi ce ManagerPalin Spruance(828) 255-2727creia@bellsouth.net

CREIA board of directorsCREIA board of directors

CREIA committee chairsCREIA committee chairs

ProductionMelinda Hendershottinfo@kensoproperties.com

Member Services

MembershipLiz Talmadge(828) 775-7355sellersolutions@charter.net

Yahoo Groups

Alex Van Dalenavdcc@bellsouth.net(828) 242-8542

LibraryJim Miller

Area REIAsArea REIAsFoothills REIAPresidentGlen Woodfi nfoothillsreia@yahoo.com

Marketing

NewsletterTim Reidtimreid4@charter.netHome: (828) 683-9943Work: (828) 681-1900

WebmasterKris Kumarkriskumar@charter.net

Sponsors & Ad Sales

SalesBrian Fuchs(828) 251-1400real estate @windsweptmarketing.com