the real estate investment news: january 2013

8/13/2019 The Real Estate Investment News: January 2013

1/48

2014RE investment News

REinvestmentinvestmentinvestmentNEWSNEWSNEWS

January 2014 Volume 1January 2014 Volume 1January 2014 Volume 1

SUCCESSFUL

Real Estate InvestorsNine Characteristics

LEASEPURCHASEFive Common MistakesAnd How to Avoid Them

fFINANCIALLY FITPlanning for Real EstateSuccess in 2014


2/48

2 RE investment News 2014

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3/48


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4/48


From the Publisher

CONTENTS

Ten Years!

The years have crept up on us and MAREI

and the Real Estate Investment News is cele-

brating our 10 year anniversary.

We have came a long way since that long ago

Sell-A-Thon Real Estate Convention at

Wealth Builders in Tampa Bay where it rainedfor 4 days straight, forcing us to bypass the

beach and enjoy 100% of the entire confer-

ence.

We were subjected to training speakers from

8 am to 10pm every day for 3 1/2 days and

we spent many hours networking with the

members Wealth Builders finding out what it is

that they liked about their group why they at-

tended.

We also spend many hours talking to their

group leaders before, during and after the

event getting tips on how they managed their

REIA group. The result was after four days

that we came home with a course on how to

Wholesale Houses, which made me $10,000

after I finally implemented it and that I still re-

fer. Plus we came home with a business plan

for our own Group.

With the help and support of a few key friends

and business associates, we launched MAREI

in January of 2004 with $300 for a marketing

budget and my 3000 member buyer database.

At the high of the market in early 2008 we were

approaching the 500 mark in membership andwe weathered the downturn quite well. We

could not have survived with out the help and

support of our Members who Attended, our

Business Members who provided services and

Volunteers who helped in many capacities.

We have recently added an Executive Director

to manage the MAREI office, websites and coor-

dinate events. We hope with this addition we

will be better able to serve our membershipbase.

In the next 10 years we want to work with our

members to have more involvement in the com-

munity and a stronger voice in our local, state

and government affairs. We know that with your

support we will be able to reach that goal. We

are looking for committee volunteers to take part

in both of these projects.

Kim A. TuckerPublisher & Founder of MAREI


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cover story

28SUCCESSFULReal Estate Investors Nine Characteristics

34LEASE

PURCHASEFive Common MistakesAnd How to Avoid Them

40 FINANCIALLY FITPlanning for Real Estate Success in 2014

CONTENTS


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Industry Services

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Market

Kansas City Real Estate Market Report

Sales Prices Up, Sales Up, Inventory DownYear end reports for the Kansas City Housing Industry support that 2013 was a good year for Real Es

in Kansas City.

Permits for single family construction was at

4087, the first time they were over 4000 since

2007 and up 24 percent over 2012 according to

the Home Builders Association. Multi Family

permits were up 62.2 percent over last year.

The year also closed strong with the existing

home prices up 95% and new homes up 3%

over 2012. According to the KCRAR we are

now in a sellers market with only a 4.1 supply of

existing homes on the market at the end of 2013

after having a balanced market for most of the

past year

Get involved: MAREI is looking to partner with our mem-bers and business Associates for a Habitat for HumanityHouse Project, a Summer in July Type Project, a BloodDrive, Project Warmth and/or a Food Drive for Harvesters.If this is a project your company has been considering, or

you might be willing to chair a committee to organize acommunity project, please email [email protected].


9/48


Advocacy

The New Rules

For 2014 . . . Are You Ready?

Qualified Mortgages

Consumer, Owner Occupied Loans

Verify and Document Borrowers are Qualified

Must be fully amortizing, no Balloon Payments

Fixed Interest Rate for First Five Years

Can adjust no more than 2 points per year with cap of six

points from original rate. And it must be tied to the Prime

Rate at the Start.

Have to Prove and Document the Borrowers Ability to Re-

pay, not just the initial rate, but the Adjusted Rate

Standard Debt to Income Ration of 43%

If borrower goes into Default

For the Life of the Loan, if it goes into foreclosure, the Bor-

rower can claim faulty underwriting and go payments, in-

terest, fees, and all legal fees.

More Information:

See Article Page 38

See Website: www.MAREInet.com/QM

Dodd Frank E-Book from Alan Cowgill

MAREInet.com/AC-Dodd-Frank

ForeclosuresDecline 26%The Kansas City Star reports that

hoe foreclosures at the national

level are at their lowest level since

the early stages of the mortgage

crisis.

RealtyTrac reports that default no

tices, schedule auctions and bank

repossessions are down 26 per-

cent in 2013 from the previous

year.

Shadow cast by the foreclosure

crisis is shrinking according to

Daren Blomquist at RealtyTrac an

he predicts a greater drop in fore-

closures in 2014.

Foreclosure rates have also

dropped in the KC Metro area with

Kansas down 39 percent and Mis-

souri down 40 percent in 2013over the previous year.


10/48


MOLDWhat YOU Need to Know

Hairy, black mold isnt just unattractiveits un-

safe. Whether in your home or place of business,

mold could be an issue and your health at stake.

Sure, the idea of throwing a dinner party at your

moldy home isnt an optionwho wants to show

off their hairy, black regions? But, the risk of

grossing out your friends is just superficial. The

real concern is the underlying risks youre taking

by living in moldy conditions.A mold problem can usually be seen or smelled

but not always. Mold growth may often appear as

slightly furry, discolored, or slimy patches that in-

crease in size as they growor it could be danger-

ously hidden out of site. Often times they produce

a musty odor, which may be the first indication of

a problemor when hidden, the first sign is your

failing health.

The best way to find mold is to examine areas forvisible signs of mold growth, water staining, or fol-

low your nose to the source of the odor. If you can

see or smell mold, you can assume you have a

mold problem. Other clues include excess mois-

ture and water damage. It may be necessary to

look behind and underneath surfaces, such as

carpets, wallpaper, cabinets, and walls. There are

some areas of the home that are always suscepti

ble to mold growth and should be part of routine

cleaning to keep them under control.

The EPAs: Ten Things You Should Know

About Mold

1. Potential health effects and symptoms associ-

ated with mold exposures include allergic re-

actions, asthma, and other respiratory com-

plaints.

2. There is no practical way to eliminate all mold

and mold spores in the indoor environment;

the way to control indoor mold growth is to

control moisture.

3. If mold is a problem in your home or school,

you must clean up the mold and eliminate

sources of moisture.

4. Fix the source of the water problem or leak to

prevent mold growth.

5. Reduce indoor humidity (to 30-60%) to de-

crease mold growth by: venting bathrooms,

dryers, and other moisture-generating sources

to the outside; using air conditioners and de-

humidifiers; increasing ventilation; and using



11/48

2014RE investment News 1

exhaust fans whenever cook-

ing, dish washing, and cleaning.

. Clean and dry any damp or wet

building materials and furnish-

ings within 24-48 hours to pre-

vent mold growth.

. Clean mold off hard surfaces

with water and detergent, and

dry completely. Absorbent ma-

terials such as ceiling tiles, that

are moldy, may need to be re-

placed.

. Prevent condensation: Reduce

the potential for condensation

on cold surfaces (i.e., windows,

piping, exterior walls, roof, or

floors) by adding insulation.

. In areas where there is a per-

petual moisture problem, do not

install carpeting (i.e., by drink-

ing fountains, by classroom

sinks, or on concrete floors with

leaks or frequent condensa-

tion).

0.Molds can be found almost any-

where; they can grow on virtual-

ly any substance, providing

moisture is present. There are

molds that can grow on wood,

paper, carpet, and foods.

(Sourced from epa.gov)

OT MOLD? Call Titan Environmental at816-

61-0959today for a free consultation. Or visit

em online at www.titankc.com!

Who is Titan?

Titan Environmental Services, Inc.

(TES) was established with the pri-

mary purpose of offering more effi-cient and personalized client ser-

vices. They are a Minority and

Women owned business based in

Kansas City, Missouri serving both

the private and public sectors

throughout the Midwest region and

beyond.They are the go-to envi-

ronmental agency, which can assist

your firm, agency or organization

with any environmental management

and/or regulatory compliance issuefacing your existing and future pro-

jects.

Titan is dedicated to serving its cli-

ents in a professional and cost-

effective manner. Their highly

skilled team includes industrial hy-

gienists, inspectors, various level

abatement and remediation project

managers, and field technicians

years of environmental consultin

testing and contracting experi-

ence. This combination of techn

expertise, multi-variable project

management experience and a

cated industrial hygiene staff allo

all TES employees to serve as a

of a well-rounded, professionally

powered team.

What does Titan do?

As a full-service environmental c

sulting, testing and contracting c

pany, they provide a wide-rangeenvironmental management and

spection services for asbestos, l

based paint, mold and suspecte

meth labs. Though they are bas

in Kansas City, Missouri, they se

the entire Midwest region; from

neapolis to Omaha, St. Louis to

Wichita, Little Rock and beyond


Member Spotlight


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12 RE investment News 201412 RE investment News 2014


13/48


Marketing


NetworkingNine Effective &Efficient Steps to Success

By Patti DeNucci and Ed Rigsbee, CAE, CSP

Ever wonder why some people are so powerfully connected, are the first to hear about great

opportunities, and earn more quality referrals? The answer may surprise you. To attract more

success in business, you dont have to networkmore; you just have to network

moreintentionally. This means becoming more focused, engaging, trusted, and memorable.

And not necessarily with more people, but with your peoplemeaning the people who natu-

rally bring the most value into your world.

After years of experience and study, weve discoveredyour networking successboils down tonine critical steps. Here they are for you, presented in their most basic form and derived from

Pattis award-winning bookThe Intentional Networker: Attracting Powerful Relationships, Re-

ferrals & Results in Business.

1. Know yourself.

Ittruly is notselfish or narcissistic to practice self-awareness. This involves knowing your

strengths, weaknesses, beliefs, passions, preferences, and traits. Fact is, knowing yourself is

a key component to creating success and building connection. It breeds authenticity, enthusi-

asm, and discernment, which helps others see and get the real you more readily.

2. Know what you want.

If you arevague, ambivalent, scattered, or unsure of your vision, intention, and goals, then you

are likely drifting along, preserving the status quo, and possibly even invisible to others. Clarity

and focus go a long way to helping you become more memorable, which in turn means others

are clearer and more focused on how to help you.


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3.Show up in alignment withthe

above two points.

Everything about you, from your

attitude and appearance to your

correspondence and conversation,

gives off messages. Whats more,

you have mere seconds to make a

first impression. If your image

doesnt line up withwhomyou say

you are and what you aspire to,

then confusion, disengagement,

and distrust can result. Be sure

everything associated with you and

your career or business is congru-ent with who you are and what you

want.

4. Focus onquality, not quantity.

People often believe that doing lots

of networking and having hundreds

of contacts and connections

equalgreater success. Not so fast!

Rather than adding more new peo-

ple to your network, invest some

time identifying your most valuable

connections; the ones who not only

bring you referrals and opportuni-

ties, but also provide you with valu-

able insights, information, and sup-

port. Focus on these top connec-

tions fora while. The same goes for

your networking activities. Which

ones really bring energy, value, and

results to your career or business?

Next, make a list of the traits thatmake these top people and events

valuable to you.Note for future ref-

erence how you originally met or

heard about them. This information

will help you recognize and attract

more of the same. Youve just cre-

ated a faster track to your success!

5.Say no with grace.

Once you identify your top contacts

and networking activities, youll start

to see who and what no longer

serves you. It will be easier to priori-

tize, which iscrucial to your net-

working efficiency and suc-

cess.Figure out who and what

needs to be edited out (or given

less attention). Gradually

andgraciouslybackaway from

those who drag, drain, and disena-

ble you.

6.Focus on your best connec-

tions.

Stay in touch with your best con-

nections.Thismeans reaching out

and staying top-of-mind on a regu-

lar basis.Invest a few minutes each

day to sending friendly, helpful,

grateful, congratulatory, or suppo

ive notes to your valued connec-

tions. Set up one ortwoweeklystrategic coffee or

lunchdates. Attend a few targeted

business or association events

each month. Organize and make

time in your weekly routine to follo

up and succeed utilizing the

above.The key is doing these

things regularly and consistently.

7. Stand out in the crowd.

You just never know where or wh

an important conversation will tak

place, when an opportunity will

arise, or when you will run into a

valued colleague or customer. Be

ready, alert, and aware. Live your

brand and allow it to guide how yo

show up and conduct yourself.

Show genuine interest in other pe

ple by being the first to say hello,

offering a professional handshakeand engaging in friendly conversa

tion. Ask questions that show inte

est. Then take the time to actively

listen to what others have to say.

With a little extra effort and courte

you can make connections and

meetings so much more memorab

Marketing

New to MAREI, Meeting Tips

1. Taking Your Seat: Remember during the networking portion, this is your time to get up and speakto several new people you dont know. By all means mark the seat you want to take for the presetation portion, but dont sit for an hour and wait. Get up and visit with vendors, browse the deals othe marketing table, visit with people you know, AND go meet 3 or 4 new people.

2. Business Cards: Spend $20 at Vista Print and get something that you can use. It does not have tbe perfect. Include your name, company name if you have one, contact information and a bit abowhat it is that you do. If you have a business outside of real estate, that you would like to share ,utilize that business card.


15/48


and valuable, for you and for oth-

ers.

8. Give first.

This isnt about giving away your

expertise or time randomly. Its

about offering a positive attitude

and a willingness to listen and offer

ideas to those you meet. This dra-

matically separates you from peo-

ple who focus only on themselves.

Certainly its okay to be purposeful

and focused on what youre seek-

ing, but sincere acts of generosity

are rare and endearing.

9. Reap your reward.

Consistently practicesteps 1

through 8and youll be on your way

to making more powerful connec-

tions, earning more likability and

trust, and attracting more referrals.

But add one more step: thoughtful-

ly, concisely, and most of all humbly

(and without assumption) educateothers on what youre seeking and

what constitutes good opportunities

and referrals for you. If you are gen-

erous in giving to others, help them

respond in kind.

Copyright 2013 by Patti DeNucci & Ed

Rigsbee

Marketing

3. Deals: If you have real estate deals, print flyers for the General Marketing Table. All attendeescan place a stack of flyers for their own products and services or business cards. Be sure yourName and contact information is included. Have a lot to share, then please reserve vendor table.

4. Traffic Flow: We want you to get the most of networking. So please check in and get a name tagquickly then move out of the check in table traffic. If we cause a traffic jamb, the harder it is forpeople to get in, and the fewer people you will get to meet.

These are just a few basics that can help you slow down, get focused, an

the seeds of more powerful relationships and quality referrals. Take the n

step to learning even more by requesting your free sample chapter from P

bookThe Intentional Networker. Email her

[email protected].

Patti DeNucciis a business networking and referral attraction expert, prosional speaker, and award-winning author ofThe Intentional Networker: A

tracting Powerful Relationships, Referrals & Results in Business.

She is afounding board member and current president of theAustinchapter of thetional Speakers Association.www.IntentionalNetworker.com

Ed Rigsbee, CAE, CSP,is the author of several books and over 2,000 aron business growth through collaboration and strategic alliance developmHe travels internationally lecturing on the topic and helps organizations toreach farther through alliance relationships.www.rigsbee.com
mailto:[email protected]:[email protected]://www.intentionalnetworker.com/http://www.intentionalnetworker.com/http://www.rigsbee.com/http://www.rigsbee.com/http://www.rigsbee.com/http://www.intentionalnetworker.com/mailto:[email protected]


16/48


The First Two MonthsAre the Hardest

Chris Lengquist:

The first two months are always the hardest. Im talking about when we take

over a rental property for the first time. Whether its already been managed

by your or we have just finished rehabbing the house and now its ready to

rent (well,e specially if its being rented after rehab) we find that the first two

months, from aproperty management standpoint are always the hardest.

Why?

If we are taking over the property the tenants usu-

ally will want to tell us why. Lets face it. If we are

taking over a property it is probably because

someone else hasnt been doing a bang-up

job. So first we have to clean up the deferred

maintenance issues that are no doubt present,

smooth over the tenant and do all this without

freaking out your check book too much.

If we are renting a house that just got through with

an extensive rehab then there are all sorts of

things that may not have shown up in the re-

hab. For instance, you can run drains and flush

toilets for construction crews but until you have a

house full of people using toilet paper and using

the toilets often you cannot know if there is a prob-

lem somewhere deep down the drain line. Or per-

haps the furnace only works intermittently because

of some weird deal. We always find at least a few

things like this.

The caution here? Just make sure you have some

repairs dollars still set aside for the first couple

months of new tenancy. After that it usually slows

down to just an occasional trickle of problems. But

those first couple months I can almost guarantee

you we will speak quite often.

Monthly Speaker

Setting Goals in 2014

Instead of making resolutions you may never in-

tend to keep, may I suggest setting your 2014

goals for your real estate investing ventures? How

many properties do you own? How many would

you like to own? Here are some things to thinkabout as you are setting 2014 goals;

Should you sell or exchange in 2014?

Should you buy?

Should rents be moved up or down?

Is it time to change who manages the property

Is this the year to catch up on deferred mainte-

nance?

Have a good tenant? Maybe its time to send

them a thank you letter.

Any value-added improvements that could be

done?

Hopefully those few things can get you started on

your planning for next year.


17/48


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Insurance forVacant PropertiesRehab Properties

Renter Insurance for Your TenantsBusiness Insurance

Umbrella LiabilityHealth Insurance

Life Insurance

www.MOFB.comStephanie Cunliff

816-781-4370


18/48


Small Claims CourtDealing with Deadbeat Tenants Cynthia SchmiWhat if the tenant vacates the rental property owing back rent, damages above the security deposit an

or an unpaid utility bill?

The majority of real estate investors across the country will rationalize to themselves I got my place

back or I don't care about the money.

That was not good enough for me, I didn't get into real estate investing to have my profits stolenfrom a

non-paying tenant. I deserve every dime the tenant owes me and I knew I had to get aggressive to pro

to the non-paying tenant that I mean business!

This is when a Small Claims lawsuit is filed with the clerk of the court. The average time allowed to file

after the infraction in the 50 states is 5 years. So, the investor has 5 years to pull the judgment debtor

into Small Claims to obtain the judgment.

At the court hearing, the Judge or Magistrate will have to be presented the rental agreement to render

money judgment concerning any back rent owed. When seeking a judgment concerning damages abo

the security deposit, he/she will want to see a copy of the itemized statement concerning the deposit th

was sent to the tenant 30 days vacating and all pictures and receipts of the excessive damages. If it is

for the unpaid utility bills, he/she will ask for the rental agreement that states the tenant's responsibilitie

concerning the utilities and the unpaid utility bills.

Once the judgment is awarded in Small Claims Court, the Judgment Creditor will have to proceed to th

post-judgment proceedings to collect. So, when I hear through the grapevine that it isn't worth the pap

it is written on-I challenge that statement! I have collected 90 satisfied judgments and I haven proven

those 90 tenants that I want my money!

Monthly Speaker

March Main Meeting

Cynthia Schmidt

Collecting

Back Rent


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Monthly Speaker

Have you ever evicted a tenant and received a judgment for back rent?

Were you able to collect on the judgment? No?

Would you like to know how to collect all the back rents due you?

If so you will not want to miss hearing Cynthia Schmidt at our Main March MAREI

Collecting Back Rent and Judgments!?Now I know what you are thinking --this will not work in Texas!

That is what I thought too! But after five minutes on the phone with Cynthia Schmidt--she had me con-

vinced that this should be a very interesting meeting.

You owe it to our profession and yourself to give the Schmidt's 90 minutes to enlarge your vision. A must

for the serious investor that wants to change the mindset when dealing with a non-paying tenant.

Here is just some of what will be covered...

--> Serving of the Notices

--> Forcible Entry and Detainer

--> Small Claims

--> Abstract of Judgment

--> Writ of Execution-Personal Property

--> Writ of Garnishment (Bank Levy)

--> Subpeona Duces Tecum

--> Show Cause Hearing

--> Contempt to Judgment Satisfied

--> And much much more

Tuesday March 11th Main Meeting. Register on the

calendar of events at MAREInet.com

About the Speakers

Cynthia and Gary Schmidt have been landlords

for 20 years with over 500 tenants. Fifteen years

ago, they ventured into post-judgment proceed-

ings and has collected 90 satisfied judgments. In

2005, they wrote their first Collect Back Rent

Manual and the filming of their first DVD.

Today, after constantly improving they havecomprised the 50 State Overview Books-Dvd's

with an additional book for each of the 50 states.

They have been endorsed by Jeffrey Taylor

(Mrlandlord) and have spoken on his 22nd An-

nual Cruise and Convention this year with great

reviews.


20/48


www.KCInvest.com

Looking for cash-flowing

or fix and flip

investment property

for your Self Directed IRA?

The KCInvest Team

offers one of the topselections in the KC Market.

Visit our Website

view our Current Properties

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Your Buying Criteria.


21/48


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www.TitanKC.com816-561-0959

See Web for RRP Training


22/48

22 RE investment News 201422 RE investment News 2014

ChangesThe New FHA

MAREI St

The Federal Housing Administration recently announced they were going to reduce loan limits, one of

their high costs areas. They raised these limits back in 2008 when the financial markets just were not

making loans and the economy was entering the recession. The FHA raised the limits to help

support our failing housing industry and the economy at large.

Since that time, the economy and the housing sector has recovered and the government wants to minimize their exposure to losses from higher end loans.

So here is what to expect for 2013

1. Loan Limits will be reduced. That means that

on average the maximum price of a house they

will finance in the Kansas City Metro area be

$278,300.

2. Jumbo Mortgage Loans will be coming back,

but with harder qualifications in terms of credithistories and debt to income ratios. So while

FHA will finance people sooner out of foreclo-

sure, short sale or bankruptcy, the Jumbo bor-

rowers will in most cases have to wait the full

seven years or have a 30 percent down pay-

ment.

3. Credit Scores are going to need to be higher.

The higher the score the better the loan you are

going to be ble to obtain.

4. Borrowers May Need a Minimum 20 Percent for

Down Payment. If you are not getting an FHA

loan you are going to see that 20 percent down

is going to be the new normal in many markets.

5. With larger down payments and harder FHA

standards, borrowers are going to be turning to

friends and family for documented gift money to

help them purchase the property.

6. Lenders are going to be looking at the borrow

ers reserve funds to cover future payments.

While FHA does not have a requirement on r

serves, most jumbo loans do. For example y

may need six months of mortgage payments

your post closing escrow account.

7. Buyers may have to buy houses they can act

ally afford rather than buying the big house a

hoping their income grows to afford the large

house. Or they may want to

wait to buy while they spend time to save up

substantial down payment.

8. Keep in mind that the housing market is show

ing a strong improvement and while FHA is re

ducing limits, other types of loans are steppinup to fill the gap.

Real Estate Investors need to keep a strong eye

what is going on in the mortgage markets as this

will affect how hard it is for buyers to get tradition

bank and mortgage company lending.

Investors who retail houses to owner occupant

buyers will often have to jump through special


23/48


hoops to help make sure the sale goes

through the are channels.

Other real estate investors are offer crea-

tive financing options for their buyers

through lease options and seller financing.

These options are also being challenged by

new rules.

Join us on Wednesday February 19th when

MAREI Business Member Beth Langston, a

loan officer at Pulaski Bank in Lees Sum-

mit hosts MAREIs roving meeting for the

month. We will have an open house for

networking and a discussion about chang-

es in FHA lending and how this will affect

us as home sellers.


MAREIROVING

MEETINGNew for 2014:

Starting in January 2013, MAREI will

no longer hold the secondary north-

land meeting.

The main monthly meeting will con-

tinue on the 2nd Tuesday of the

Month, as it has been for the past 10

years.

The secondary meeting will vary by

month.

Januarys secondary meeting will

be hosted by Chris Lengquist of

Keller Williams in Olathe.

Februarys will be hosted by Beth

Langston of Pulaski Bank in Lees

Summit.

March on the 5th Monday we will

be going back up north for a net-

working and discussion. Location

and topic yet to be determined,

watch the MAREI calendar.


24/48


Learn how to save money at Home De-pot and register for a 2% Rebate for all

purchases & rentals across the US.

Plus 20% Discount on Paint in KansasCity. And coming in 2013 the New

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25/48


We have several services as part of our

website to help you grow your business.

Calendar of Events to stay up to date with

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Browse the member properties to find

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26/48


Why You Should Join

Your Local REIAGroup Tim Herriage

HomeVestors & RE

Just recently I returned from a National REIA mid-year conference in Pittsburgh. Needless to say, I was very im-pressed with the organization and all the hard work and dedication put forth into the event to make it a success.

was a coming together type of mastermind group of REIA leaders so that they could compare notes and ideas

to hopefully do a better job with their local REIA groups.

For me personally, my REIA experience started in 2003 when I was struggling with additional financing for my R

Estate investing. The irony was not only did I find additional financing but I found a whole new career in note inv

of which I can attribute directly to the education I had received from my local REIA in Philadelphia.

So take note from me, if youre in the note business, you need to be a part of your local REIA. And here are 3 r

sons why:

1.) Education this was the beginning for me as I was introduced to people like Jimmy Napier, Donna Bauer,

Fortunato, and later on Eddie Speed. My local REIA offers monthly meetings with guest speakers and Saturdayshops. When I was getting started, I took every single weekend workshop I could. Im glad I did it too because I

wouldve networked or learned as much as I did in such a short amount of time. Some of these speakers and fe

REIA members became mentors to me, and in turn I did the same to others. If youre looking for a coach or men

youre REIA group is a great place to start.

2.) Sources of Capital Not only to build relationships with like minded investors, I made a lot of friends who s

vest in my Real Estate projects as well as my current note funds today. And its not just the people Ive met, but

the sources I have learned about. 37% of the capital that we raise is from Self-Directed IRAs, a technique I lear

about at a REIA meeting.

3.) Networking My REIA group has turned into a great distribution network for my deals, both hard real esta

notes. Its funny, now when I go to a meeting I see two groups note investorsand everybody else. Being in sniche business is great because within our REIA weve built a little community where we can see each other at l

every month to discuss deals and give advice. I love it!

Now if youre in the note business and youre not in a REIA group, I strongly urge you to consider joining and m

even actively participating. Im not saying you have to be a speaker like me, but maybe you can become a vend

volunteer that just helps out. Youll not only help out your local REIA, but you and your business could get mo

recognition. If you dont have a meeting in your area, you could start one yourself. As Tom Hennigan p

out theres over 38,000 members in National REIA, with chapters both for profit and non-profit alike. So

you want to get an education, sell a note, or meet like minded investors join or start a local REIA today

Membership


27/48


MAREIMid-America Associationof Real Estate InvestorsHave a Product or Service

To Promote to Real Estate ProfessionalsWho Live or Invest in Kansas City

Business MembershipBy far the best bang for your buck when targetingthe Real Estate Professional for your product or ser-vice in the Kansas City Metro would be a BusinessMembership with Mid-America Association of RealEstate Investors.

The business membership includes all the access toour website and all the discounts that our StandardInvestor Membership. However, unlike the InvestorMembership that is for the person, the BusinessMembership follows the Business. So as a Busi-ness you receive two guest passes to every monthlymeeting (20+ meetings a year) that can be used bythe same two people or interchanged among sever-al people each month.

Advertise in our NewsletterAlso included in a Business Membership is an ad-vertisement in our monthly newsletter, the Invest-ment News. This is published once a month andposted on our website, our social media pages, sev-eral online file sharing sites and emailed out to our5000+ database. We highly recommend submittingeducational articles for the newsletter for maximumexposure.

Advertise on our Website

Our website has a Service Provider Section thatprovides you with a home on our website where youcan create a full page advertisement of your choos-ing and link it to your website. Some examples ofad pages might include: a photograph, two or threeshort paragraphs, an embedded video, contact in-formation and a sign up page for your product orservice. We can make it as elaborate or as simpleas you would like. Also submit educational articlesand videos for our blog.

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REHAB FUNDING



29/48


SUCCESSFULReal Estate Investors

Nine CharacteristicsVena Jones Co

In my 18 years in the real estate business, I bet I've met 100,000 investors at all levels of knowledge and experi-

ence. Some have become amazingly successful, while others have lost steam or experienced dramatic failures. I

this time, I've noticed that there are certain characteristics that come with real estate investing success. As a mat

ter of fact, that I have come to believe that I can predict with fair accuracy whether a particular investor will be suc

cessful. All I have to do is find out a little about their attitudes and actions, and I'll know what their chances of be-

coming successful are.

Before I outline the specific characteristics that I've found in successful investors, Id like to define what I mean by

"successful investor". A successful investor is NOT the person who owns the most properties or does the most

deals, or who has the most zeros in his net worth. A successful investor is simply a person who knows what he

wants -financially, personally, and in terms of what he wants to contribute to the world -and uses real estate in-

vesting as a way to get those things. For a successful real estate investor, real estate is a means to an end, not

an end unto itself. A successful real estate investor works to become as financially secure as is necessary for his

peace of mind and who is happy and comfortable with his investment activities.

Successful investors I've known include high school dropouts and PhDs, men and women of all races and back-

grounds, people born into poverty and people born with trust funds, guys who started investing at 19 and those

who started in their 70's, part-timers and full timers. There is no single predictor of success, but there are things

that I've found that all successful investor have in common. Here are a few.

1. Successful investors have a plan -and work it.

It's simple enough to put pen to paper and figure out how to become financially independent in 2 or five or ten

years. It's another thing altogether to wake up each morning and do the things you need to do to reach this goal.

Somehow, your real life always seems to get in the way of your long-term goals. Successful investors battle this

tendency to get caught "in the thick of thin things" by creating not just a list of goals, but a daily plan for getting

there.

COVER STOREY


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2. Successful investors net-

work.

Real estate investing must be

the only profession in the coun-

try that has no accepted curricu-

lum of formal training. Since

your success as a real estate

entrepreneur relies in no small

part on your ability to get reliable

information and advice when you

need it, and since your local

community college doesn't teach

courses on important topics like

how to evict a non-paying ten-ant, the only answer is for you to

find a mentor who can teach you

the ropes.

Choose a mentor who is knowl-

edgeable, motivating, accessi-

ble, and is known for high ethical

and business standards. Don't

abuse your mentor by constantly

asking for information that youcould get from a simple trip to

the library. And don't forget to

thank your mentor by taking him

to lunch, giving him gift certifi-

cates to his favorite restaurant,

and, of course, letting him in on

good leads when you find them.

Where do you find mentors? Try

your local non-profit real estate

investment or landlording associ-

ation. It's full of people who are

there to share.

3. Successful Investors Cull

Their Herds.

When I was a little kid, I read an

article about chicken farmers.

This article mentioned that when

the new chicks hatched, the

farmer killed the weak, under-

sized, and deformed chicks be-fore they had a chance to grow

up. I was, of course, horrified,

and immediately began making

plans to open an orphanage for

runt chickens. Unfortunately, my

home in the suburbs and my in-

sensitive parents conspired to

keep my project in the planning

stages to this day.

Most real estate investors look at

selling their "dud" properties with

the same horror with which I

view the wholesale slaughter of

slightly imperfect baby chicks.

They will keep a property year

after year despite the fact that it

loses money, doesn't fit the own-

er's goals, is a huge manage-

ment hassle or is in a neighbor-

hood that has become a

warzone. Successful investors

review their portfolios at least

once a year, and aggressively

get rid of their loser properties

before they can damage the

profits from their winners.

4. Successful Investors Pro-

tect Their Assets.

What's the use of building a

huge real estate portfolio if a sin-

gle lawsuit could wipe it all out?

Why bother to achieve financial

independence if the bulk of your

estate will end up in the hands of

the government? And why is it

that the average real estate in-

vestor does absolutely nothing

reduce their #1 yearly expense

taxes?

Arranging your affairs to prote

your assets from creditors, pla

tiffs, and the taxman is tedious

complicated, and time consum

ing. Yet every successful real

estate investor takes the time t

do it, thus assuring that their

hard-earned money stay theirs

5. Successful investors have

code of ethics.

We tend to think of our invest-

ment activities in terms of brick

and cash. In fact, the real esta

business is about PEOPLE.

Without sellers, renters, contra

tors, agents, and so on, you

would have no real estate bus

ness. And since your businessactivities affect so many other

people, I think it's important to

decide how you are going to

treat the people you come into

contact with each day.

Since there is no formal code o

ethics for real estate investors

it's up to each of us to decide

how we'll behave toward cus-tomers, tenants, sellers, worke

etc. Instead of using as a mea

ure, "what can I get away with?

or "what allows me to sleep at

night?, perhaps the proper

question is, "whats FAIR?".

Take the time to think about yo

COVER STORY


31/48


COVER STOREY

activities and how they affect peo-

ple that you come into contact with.

6. Successful Investors Involve

Their Families.

In ten years, I have yet to meet a

truly successful investor who did

not have the support of his (or her)

significant other. Because your

real estate activities generally in-

volve spending (or promising to

pay back) tens of thousands of dol-

lars at a time, and since your busi-

ness will take time away from your

family, I think it's very important to

sit down with everyone who's old

enough to feed themselves and

explain what you're doing, and

why, and that you'd really like to

have their help or at least their un-

derstanding. If you have a spouse

who's reluctant to allow you to take

out a second mortgage on your

home in order to invest in the dealof a lifetime, try sending him or her

to a beginner's seminar on invest-

ment. Some of your significant oth-

ers very natural fears may be

overcome by an understanding of

what you're doing.

7. Successful Investors Treat

Everyone Better than They Ex-

pect to Be Treated.

What goes around comes around.

If you think that your reputation as

a buyer or landlord doesn't pre-

cede you, think again. When you

go the extra mile to solve people's

problems, both profit and success

will follow.

8. Successful Investors Stay Ed-ucated.

Since I began investing in real es-

tate full time in 1989, my state has

passed a mandatory seller disclo-

sure law. The federal government

has made lead-based paint disclo-

sures mandatory and expensive to

ignore. Congress has changed the

rules for capital gains taxes twice.

HIV-positive people have become

a "protected class" in terms of fair

housing. My city has passed ordi-

nances that say that I can be fined

or jailed for renting to drug deale

Mortgage money for high-risk bo

rowers has become cheap and

easy to get. The Fair Credit Re-

porting Act has been revised to iclude landlords. Things change.

Your business is affected. Stay o

top of it.

9. Successful Investors Pass O

What They've Learned.

Just as successful investors hav

mentors, successful investors be

come mentors. By passing on th

knowledge to novices, they keep

our industry alive, give others at

chance a financial independence

and get a wonderful sense of the

own accomplishments. Now that

what I call success.

Reprinted from The Real Life Real Est

e-letter with permission of Vena Jones

Cox. Get a free subscription at

www.TheRealEstateGoddess.com

Listen to Vena and her gue

speakers on her real estate

radio show: Real Life Real

Estate Investing, find in pod

casts on iTunes. Join Vena

to learn Real Estate 101 in

Her Express Success

Training Program pre

sented here at MARE

MAREInet.com/ES
http://www.therealestategoddess.com/http://www.therealestategoddess.com/http://www.therealestategoddess.com/


32/48


How to Retail Houses, Sell Creatively

and when to Rent Properties.

How to Screen Sellers for Motivation an

Negotiate the Best Deals.

Understand Due Diligence, Disclosures

and What Happens at the Closing

How to Protect Your Assets and the Ba-

sics of Using Land Trusts

Understanding Contracts and all Those

Clauses and Addendums

Time Management, Planning and the Importance of Systems

The Real Estate Goddesss GuideTo Getting Your First Deal

Learn Property Evaluation for Single

Family & Multi Family Properties.

How to Inspect Properties Efficiently &

Estimate Repair Costs.

Buying Creatively with Seller Financing

and Alternative Financing.

How to Find and Utilize Private Funding

and When to Use Hard Money

How to find desperate sellers with direct

mail, bandit signs and internet marketing.

How to Wholesale Houses

EXPRESSSUCCES

S

6MonthsWednesdayW

ebClasses

Featuring

20 Year Vetteran Real Estate Investor

Vena Jones Cox


33/48


BONUSES

for Paying in Full

Saturday MAREI WorkshopsMAREI has 1 Saturday Workshop plannefor every month except November & De-cember, thats 10 Live Workshops

Real Estate 101Vena will mail out her Real

Estate 101 Training Course:-a 200 Page Manual-10 hours audio-CD Rom of Forms & Docs

Venas Email Coaching

Register

Online MAREInet.com/ES

Call 913-815-0111

12 Month Curriculum of Education,Support & Accountability to takeyour Business to the Next Level

Two Payment Plans

Pay in Full

1 MAREI Member $599

2 MAREI Members $799

Financing Options

1 MAREI Member $100 Up FrontThen $55 a month for 11 months

2 MAREI Members $100 Plus

$75 a month for 11 months

Ever wonder why some of the folks at MAREI are doing really well and others just cant quite get startedAfter all, they have the same info and opportunity.

We sat down with Vena to find out and we recordedDownload and Listen now at www.MAREInet.com/E


34/48


If you think you can be successful in real estate investing without making mis-

takes, you have a lot of surprises in store!And in fact, if you are afraid to make

mistakes, you will probably never be successful in this business. Its a crazy

world out there, and you are going to make mistakes. Its time to face up to it

and get used to it. Its a crazy reality, but you will probably learn more from your

mistakes than anything else.

Along with all the success I have had, I have made a lot of mistakes in my busi-

ness. I list only a few of them here in hopes that I can help you avoid the same ones. But if you ar

hard-headed like me, you will read this list and think, OK yeah, thats great. Thats really good

stuff. But I wouldnt do anything like that. I already know that. Im cool. Whatever

The most successful people in this business learn from their mistakes, and they are wise enough to

learn from the mistakes of others. When they fail, they fail falling forward. So here are some mista

I have made. I hope you will learn from them so you can avoid them yourselves!!!

Mistake #1 Slowing Down Your Marketing

Its tempting. You have been doing some marketing and you are getting some success. Now you

starting to get sellers to call you. Congratulations your marketing is working! You might be gettin

real excited.All of the sudden, you are busy. Youre starting to wheel and deal. Youre a deal-

maker now! You find a motivated seller and you get a house under contact. You start seeing dolla

signs. You start advertising and marketing the house all over the internet. You take a ton of calls f

tenant-buyers. You drive around all over town, meeting the tenant-buyers at the house. You stick

Lease PurchaseF i v e C o m m o n M i s t a k e

A n d H o w t o A v o i d T h e mJoe Mc

I believe there is no easier way than Wholesaling Lease Options to

make quick chunks of cash in 2-4 weeks. Its so easy to do, doesnt require any money, and involved very little risk. Join me at my Whole-

saling Lease Options Full Day Seminar on March 22nd, being hostedby MAREI.

Success Strategies


35/48


36/48


signs and flyers all over the neighborhood. Then final-

ly, you sell the house! You breathe a big sigh of re-

lief. The tenant-buyer is happy. The seller is hap-

py. You are happy. You just made $5,000! Congratu-

lations!And then you look around you and say to your-

self, Awesome! Lets do another one!

But what just happened? You just wasted 3 weeks

spending all your time & effort selling a home while

your marketing for sellers has completely ground to a

halt. Now what are you going to do for new

leads? Well, okay, you start marketing again for

sellers. But now it takes another 2 weeks to find anoth-

er seller.And then it takes another 4 weeks to sell that

property.All of the sudden, its been 6 weeks since

your last paycheck and youre starting to freak out!

This mistake is real easy to avoid, and it should be ob-

vious how to avoid it Dont stop your market-

ing! Keep doing it consistently, systematically, reli-

giously, etc!

Mistake #2 Trying To Sell Houses People Dont

Want to Buy.

I get a lot of investors that call me and ask me to help

them sell their investment property on a lease op-

tion. They are usually extremely frustrated by a lack of

results. I ask them what they have been doing to sell it

and usually, they are doing all the right things. Then I

find out where the house is located and discover imme-

diately what their problem is. They bought a good

house in the wrong neighborhood. The numbers work,

but no one wants to live in the home at least no one

who wants to eventually buy it.And dont you think

that might be a problem? There is usually nothing I

can do to help investors sell these types of homes.

Heres one of the most important keys you can everlearn in this biz whether you learn it from me or you

learn it after you buy the wrong property You can

only sell homes people want to buy! Stay away from

ugly houses in bad neighborhoods! Only lease pur-

chase nice homes in nice neighborhoods.

What are buyers looking for in your area? I run most of

my lease purchase business in St Louis, Missouri. Ob-

viously, each market is different. But here is a list o

what buyers are looking for in my area:

1. 3+ bedrooms & more than one bathroom

2. Homes in good school districts

3. Homes in the median price range ($120,000

$175,000)

4. Homes that have a basement and a garage

So its logical to see which homes I stay away from

the plague:

1. Anything less than 2 bedrooms & only 1 bathro

2. Houses with no garage and/or no basement

3. Houses in bad school districts

4. Houses in rental neighborhoods

If you follow these simple rules when marketing for

Lease Purchase homes, you will save yourself a toheadaches and you will make more money!

Mistake #3 Not Treating Your Investing Busin

Like a BUSINESS

Real estate investing should not be a hobby to

you. You need to treat it and run it like a business.

you have a business plan? What are your busines

goals? If you dont have something in writing, crea

business plan today! It doesnt have to be an epic

tome. What type of real estate investing business dyou want to have? How many homes do you need

sell a month? How much marketing do you need to

every week to meet your goals? What cash flow do

you need every month to break even? What type o

sellers and tenant-buyers are you looking for?

There is so much that could be said about this topic

that I dont have the time to write it all our here. Th

main point is that you need to have a plan. You ne

to have something in writing that guides everything

do. Whats the saying If you dont know whereyoure going, I can guarantee you will get there. G

plan and work the plan!

Also, one final important tid-bit learn to manage y

cash flow. Cash flow will make you or break you.

have to know whats coming in and out every mont

Mistake #4 Being Too Hard For Your Sellers a

Success Strategies



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Success Strategies

Buyers to Reach.

Does it really need to be

said? Would you ever do business

with someone who is impossible to

reach? If you look at any successful

investor in your area, I can almost

promise you they do not use all

those expensive & elaborate voice

mail systems and websites that all

the gurus try to sell you

on. Why? Those systems pre-

screen everyone out. If you want to

be successful in this business, you

must be easy to talk to. When a

seller calls, dont make them jump

through 100 hoops and answer

1,000 questions before you call

them back. When a tenant-buyer

calls, dont make them listen to a 10

minute message that tries to answer

every question they have about

Lease Purchasing. Be accessible!

On all my marketing and in all my

voice mails, I have a way for people

to reach me at my office. They canleave a message if they want, but

they also all know that they can be

re-directed to my office if they want

to talk to a live person.

Now I am not talking about answer-

ing the phone at all hours of the day

and night. I am just talking about

basic, simple customer service. You

wouldnt believe how much business

I used to throw away before Ichanged this part of my business

and became easier to get a hold of.

If youre worried about spending too

much time on the phone with tire

kickers, your focusing on the wrong

thing! Youre focusing on yourself

and not your customers. Heres the

key youre going to waste more

time playing phone tag than you

would if you just answered the stu-

pid phone and answer their 3 ques-

tions! Usually, I am not on the

phone more than 2 minutes with atenant-buyer, and not more than 5-

10 minutes with a seller. But before

they ask me all their questions, I ask

them my questions first. I stay in

control of the conversation. I only

talk to motivated sellers and tenant-

buyers. If they are not motivated, I

thank them for their time, and I get

off the phone as quickly as possible.

Mistake #5 Not Outsourcing

Your Marketing.

I have a virtual assistant that does

ALL my marketing for sellers and

tenant-buyers. Yes, you heard that

right.Actually, I have 3 virtual assis-

tants but thats a different story. I

have already talked about how im-

portant marketing is. But this is one

of the easiest parts to outsource yet I dont understand why so few

investors are actually doing it!

You think its too expensive to hire a

virtual assistant? Guess how much I

pay my VA? $2.78 / hour. She lives

in the Philippines, has excellent

English, and is very happy with

$2.78/hour.

What do I have her do? Well, you

need to subscribe to my course to

find out! In my course, I will give

you the exact instructions, check-

lists, and videos I give to all my virtu-

al assistants. Its not rocket sci-

ence.All you need to do is write

down everything you do for market-

ing, and have your VA do it. Here

are two tools that I use all the time

my outsourcing:

www.oDesk.com I like the VAfrom the Philippines

www.JingProject.com a freetool where you can record videos

and instructions for your VAs

Listen, you have more important

things to do than researching the

internet, stamping envelopes and

addressing postcards. Hire some-

one else to do all your marketing.

will be some of the best money you

ever spend on your business.

Summary

This list of mistakes could easily be

2-3 times longer. These are just A

FEW of the lessons I have learned

along the way. You can learn mor

about the mistakes I made and how

to avoid them by subscribing to ou

membership site and gaining acce

to all our great content.

Happy investing!


Saturday SeminarSaturday SeminarSaturday Seminar

WholesalingWholesalingWholesaling

Lease OptionsLease OptionsLease Options

WithWithWith

Joe McCallJoe McCallJoe McCall

Saturday March 22ndSaturday March 22ndSaturday March 22nd

Details atDetails atDetails at

MAREInet.com/JMMAREInet.com/JMMAREInet.com/JM
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38/48


Full Day Workshop Saturday March 22nd

Joe McCall has been investing for over 7 years and he says there has probably never been abetter time to invest than right now. In the last 24 months, he has seen his part-time businesstake off by using a simple strategy he calls Wholesaling Lease Options.

Discover why "Wholesaling Lease Options" is one of the easiest, cheapest, fastest, and safestways to make big chunks of cash in real estate today. You can get started right away with zeroprior experience, no sales skills, and no big down payments (just $10)... because you are notbuying and selling houses.

Lets look at some facts

1) There are TONS of sellers out there who cant sell their home.

2) There are TONS of buyers out there who cant buy a home.

3) Creative Investors have the solutions these people need!

Most Sellers cant discount their home to 70 cents on the dollar to compete with all the dis-tressed houses in their neighborhood.And most Buyers cant get a loan because the bankswont lend them any money! Its a vicious, downward spiral.

So, Joe asked himself, why am I throwing away all these leads? Why cant I do anything withthem? Why cant I plug Lease Options and Wholesaling together, and start making moneywith these two strategiesat the same time?

So thats exactly what Joe did. Within 3 months, He started consistently making $10,000 -$15,000 every month,working part-time, spending very little money on marketing, and hardlythrowing away any leads!

Watch the MAREInet.com Blog ove


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I believe there is no easier way than Wholesaling Lease Op-

tions to make quick chunks of cash in 2-4 weeks. Its so easy to

do, doesnt require any money, and involves very little risk.

Join me on February 22nd, when I am in Kansas City for a full

day workshop with me and I will teach you how to do it!

Joe Mc all

For Low Equity Deals & Very Little Capital!

REGISTER BEFORE FEB 19th for EARLY BIRD PRICING

Member Price $39 (early $25) Non-Member $49

Member Price for 2 $49 (early $35) Non-Member for 2 $69

$99 Add Membership for 1 Person $149 Add Membership for Two People

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Register Online MAREInet.com/JM Scan & Email to [email protected] / Fax to 201-574-2969 /

Or Call 913-815-0111 Mail to MAREI : 8014 State Line, Suite 210, Leawood, KS 66208

More Information at MAREInet.com/JM

days for quick tips and articles from Joe


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Wholesale

So what are your plans for 2014? Are they writtenout and scheduled? Do you have an effective sup-

port group and coach to keep you on task?

FINANCIALLY FIT:

PLANNING FOR REAL ESTATE

SUCCESS IN 2O14

A brand new year with brand new possibilities!

Kim Tucker, KCInvest

THIS TIME, 2014 is the year I will reach my Goals.

I have read time and again that in order to reach goals, you need to be able to visualize what it you want to ac-

complish and have bench marks to be able to determine if you have met your goal. Next you need to outline the

steps needed to reach those goals, breaking a big goal into smaller portions that need to be completed. You

need to take the time to schedule all of these steps and probably most importantly, you need a support structure

to help keep you on task. Lets face it, life happens, stress and schedules get in the way and if you dont have thesupport you need to keep you motivated and to offer assistants, you might lose sight of the prize.

To give you an example that everyone can relate to we will turn to the most common New Years Resolution: Get

ting Fit / Losing Weight. We can all probably relate to getting fitter. We can all visualize what we want to look like

and feel like when we do get fit. We can set down with a doctor, nutritionist and / or exercise coach to help us

come up with a written plan of what we need to do. Eat the right things, limit the bad things we do to our body an

have an exercise routine. We jump in week 1 in January and we work real hard and follow the plan to a T.

Week 2, you are so busy on Tuesday that you grab some fast food not on the plan and you are so tired on Satur-

day that you skip the exercise. Week 3, you screw up even more and by Week 4, you have given up.

Sound familiar? What was missing in our exercise example? We left out the support structure, if we dont have

the support we need from our friends and family as well as from outside sources we might get discouraged when

we deviate from our plan and eventually give up.

Do you remember way back when to one of the times that Oprah lost a bunch of weight and looked so great?She did it several times, as did many famous people. How do they so dramatically change their lives? Well firstthey have the money to hire someone to help them. They decide I want to do X, then they hire a coach to helpthem define what X is and to create a plan to attain X, then they hire support staff and coaches to keep themon track until, they achieve X. We also know that Oprah, while she lost all the weight and looked so awesome,also gained it all back, why? Well, I dont know the real reason, but I am going to bet that once she reached the



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Success Strategies

goal, she didnt need the chef and

the exercise coach at her house

daily to support her in her efforts

and to keep her on track. The

coaches stopped coming, the exer-

cise and the diet slipped and back

came all the weight.

How can we apply these to our real

estate goals for 2014? Well, keep

reading and lets see if I can trans-

late . . .

I have heard this several times from

new investors this past month. I

have been thinking about getting into

real estate and this year is the year.

I have also heard that This is the

year I take my real estate to the next

level!

These are both great statements, but

what is the goal? Do you want to be-

come a Realtor or the guy who drives

around and takes photos of houses

or the gal who goes in and stages

houses? All three are Getting into

Real Estate but might not be exactly

what you had in mind.

So you need to define what you want

to do and put in measurable bench-

mark points. So for example if you

want to build your rental portfolio you

might say: I want to buy 5 Rental

Properties using Creative Financing

Techniques in 2014 that Cash Flow

$300 a month so that at the end of

2014 I have only $2,000 out of pocketon each house and a net cash flow of

$1500 by December. If your goal is

to become a house flipper, you might

state that I want to flip 6 houses with

a minimum profit of $3,000 each to

add $18,000 to my IRA by the end of

December.

Next, take that goal and break it

down, from the goal of what you want

to achieve over the whole year and

put it into monthly or quarterly goals.Then define the necessary steps you

need to take to reach the smaller

goals. After you have the steps de-

fined, put in deadlines and get them

on your calendar so you can make

sure they happen and that life will not

get in the way.

You may need some help finding

breaking down the goals and outlin

ing the steps that need to be taken

acquire the goals. One way to get

the help is to purchase a training p

gram or hire or partner with a men

Where can you find courses, coac

and others in the business to partn

with? I would suggest getting in-

volved and meeting people at your

local Real Estate Investor Associa

tion. The local REIA will be filled w

people who are doing exactly what

you want to do as well as have rec

ommendations on training and coa

es.

You might also find that you alread

have a course from past years gat

ering dust on your shelf. Or you

might find a great resource in one

the many online sites for Real Esta

Investors.

If you purchase a training course a

it is not step by step, then get busy

and convert it into a step by step

plan. Set deadlines for each item

your plan and schedule it out on yo

calendar.

Then once you have the plan, you

need to go out and do it. This is

where things often slip through the

cracks, its easy to plan out the tas

but much harder to go out and get

them done.

As you look at each step, be it sen

ing out marketing letters, posting

craigslist ads, returning seller calls

posting property ads or whatever,

make sure each step is scheduled

your calendar. And make sure it g

completed. If you just dont have t

time to complete the steps, then yo

might have to give up some other

activity or hire someone to do som

of the steps.

So for example, if you know for a f

that you will not physically print ou


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Regulations

Owner FinancingD o d d F r a n k & t h e S a f e A cWilliam Bron

LegalWiz

Owner Financing, Dodd-Frank and the SAFE ActIf you are selling properties to owner occupants and doing

ing financing, you ought to be aware of some comprehensive new regulations that have been in effect for a fe

years, and a real zinger that goes into effect on January 10, 2014.

A few years ago, the SAFE Act was passed on the federal level, then was implemented on a state-by-state

sis. The SAFE Act basically required that you be a mortgage loan originator, or use a mortgage loan originato

sell properties with owner financing. This means getting a loan application like a FNMA 1003, comply with Tru

Lending, and have the buyer sign the thick pile of other lender disclosures.

People panicked when the SAFE Act came out, and declared that seller financing was all but dead. I simplywalked down the hall of my office building and asked a mortgage guy if he could originate my seller financin

loans. He printed the stack of documents from his lender software and charged the buyer $400 as a loan orig

tion fee. No big deal, just a waste of good trees in my opinion.

The SAFE Act was later amended in my state (and many others) to allow you to do three or so deals a year w

having to do all this nonsense. The Act did not address using different entities every three deals, so, as a pra

matter, the issue was put to bed for us in Colorado. In other states, however, there were NO exemptions, me

unless you were selling your own principal residence, you had to be a mortgage loan originator, or use one in

transaction, even for one deal. Technically, you cant even ADVERTISE the seller-financing feature the mo

loan originator has to do so. But, again, as a practical matter I dont think the powers that be are searching th

craigslist or looking for owner will finance signs on houses, and the likely scenario is a cases and desist let

from your state agency, giving you a chance to get licensed. No fines, no jail time.

Enter two corrupt, knucklehead politicians named Dodd and Frank. They managed to pass the Dodd-Frank r

tions that go into effect January 10, 2014. This one is a bit more complex and difficult to deal with, largely bec

it is confusing and has regulations that have yet to be clarified.

Well start with who is exempt and who is not. If you are selling raw land, commercial property, or to a person

is not going to a live in the property, you have nothing to worry about. If you are a person or a trust, you can d

deal a year, so long as its not a funky loan, like a reverse amortization, etc . I know, youre thinking, Ill use

ferent land trusts for each property, but that may end up blowing up in your face if you get caught. Admittedl

Reprinted from William Bronchicks website http://legalwiz.com/owner-financing-d-frank-safe-act/.

Please visit his website for a video on the subject as well as a lengthy discussion

over the past few months between Bill, readers of his blog and other experts in thindustry.
http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/http://legalwiz.com/owner-financing-dodd-frank-safe-act/


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Regulations

however, nothing clearly in the Dodd-

Frank regulations address this. We

certainly are anticipating a controlled

group definition to come out

soon. One federal regulator com-mented that the rule was 25% com-

mon ownership, but nothing in the

regs back that up.

If you are a corporate entity, then you

can do up to three deals a year, if the

deals meet the following three crite-

ria:

1. Theres no balloon in the note(meaning it must be fully-

amortizing)

2. The interest rate is fixed for atleast five years, and

3. You qualify your buyer.Of course, these geniuses did not lay

out what the qualifications are sup-

posed to be, except for the debt-to-

income ratio (43%) In my opin-

ion, youd be a fool if you sold a

property and did not check the buy-

ers credit, verify their income (withtax returns and employment), and

make sure their gross income is at

least THREE times their total monthly

debt payments, including the mort-

gage. Personally, Ive always done

this and I dont object to making this a

rule, other than the fact that there are

already too many regulations in this

Country. On a practical note, if you

are selling to a tenant or lease/option

tenant, you can use their rental histo-ry as strong proof of their ability to

repay.

Again, it is not clear if you form a new

LLC or corporation for every three

deals you can get around all of this,

but nobody wants to be the test

case.Also, if you want to have a

balloon after five years, simply pop

the interest rate up so it hurts the

buyer enough for him to want to re-

finance and pay you off anyway

(note: you can only increase the rate

2% a year for a maximum of 6%above the original rate).

So, effectively you can do three deals

in an entity, and one deal in a trust or

your own name if you are strictly fol-

lowing the law. A second entity

owned by your IRA and a third owned

by your spouse would add six more

deals, in theory. If you buy and sell

with owner financing more than 10

times a year, you will likely need to

become a licensed mortgage loanoriginator or hire one on staff, which

may not be a bad idea, just a bit of a

hassle because the slew of other nit-

picky regulations that come with

it. Also, when you are beyond the 4

deal limit, you must not only prove

ability to repay, you must DOCU-

MENT it. Tax returns, W-2s, bank

statements the works. Thus, if you

have a self-employed person who

looks broke on paper but has 30%cash to put down, you really cant

document his ability to repay

(suggestion lease/option for 2

years, then convert to a owner-carry

sale).

Are the Feds going to be chasing

down real estate investors for

this? No, the SAFE Act already co-

vers that at the state level. What the

Dodd-Frank Act does is provide a

buyer who is being foreclosed orevicted with a counterclaim recouping

all their interest paid, plus their down

payment, attorneys fees, and court

costs. I always recommend that peo-

ple settle out of court when a buyer

defaults, using the cash for keys

method. But on the off chance that

they arent paying you and can still

afford a lawyer, then you will be fa

ing a fight. One investor I met in

Houston recently commented, If t

happens, Ill just give them the pro

erty. Since he was dealing in $60homes, that would be a simple sol

tion. Its really rare that youd end

in court over this Dodd Frank issue

anyway, butwhat keeps me up at

night is the slimy consumer protec

tion lawyer who puts out an ad tha

says, Have you bought a house w

owner financing? Call 1-800-BAD

LOAN. Yikes! Even so, if you do

every deal in a separate LLC, then

you are limited in exposure to the v

ue of the equity in the home. If yo

bought the property subject-to the

existing loan with little or no equity

then all you really risk losing is the

cash flow from the deal.

So, to sum it up:

You can do one deal per year as a

natural person or trust, three deals

per year in an entity without being

licensed under Dodd-Frank. HOWER if your state has no exemptio

under the SAFE Act, you still have

use a