MAREI Newsletter July 2013

2013 RE investment News

RE investmentinvestmentinvestment

NEWSNEWSNEWS July / August 2013 Volume 1July / August 2013 Volume 1July / August 2013 Volume 1

Magic WordsMagic WordsMagic Words

T h a t M a k eT h a t M a k eT h a t M a k e M i l l i o n sM i l l i o n sM i l l i o n s

Hard MoneyHard MoneyHard Money

M a d e E a s yM a d e E a s yM a d e E a s y

2 RE investment News 2013

MAREI Members Enroll to receive a

2% semi-annual rebate on all qualifying pre-tax purchases. See your Member Benefits Section of the Member Library for Detailed Instructions.

We introduced our nationwide on site floor plan services

At the National REIA Meeting in June

Order Online at http://www.homedepotmeasures.com/realestate.html

Enhance your real estate marketing with custom floor plans from The Home Depot. Our floor plans can

be used in website advertising, feature sheets, virtual tours and more!

Schedule your personal measure visit online at www.homedepotmeasures.com/realestate.

Create your account, enter the property information and choose a date. Our technicians come to your

site and use handheld tablet computers to create your floor plan which is then emailed to you the fol-

lowing business day. No sign up, monthly or membership fees. NREIA associates also save $10 on every

floor plan ordered by entering Promo Code NREIA14.

http://www.mynationalreia.com/clubportal/redirect.cfm?ID=298326394&MID=45317&LID=2760&EID=1824545


cover story

28

MAGIC

WORDS

That Make Millions Investor Scripts to Put the Deals Together.

10

Show It, Don’t Tell It How to use video to engage with your customers, members and prospects

22

Hard Money Made Easy

CONTENTS


CONTENTS

6

5 Real Estate Recovery Myths 8

Home Depot Rebate Changes in Progress

7

KCMO Water Department & Landlords: an Update 14

Vacancy Break-Ins Ways to Deter Them

16

Pre-Screen Contractors Get the Job Done

20

MAREI Wins Awards For Third Year in a Row

34

Wholesale Real Estate Getting Started Investing

Regular Features

6

March Market Report 18 Member Benefits at a Glance

36 Invest in the KC Metro

38 Monthly Meetings & Dates

July August 2013

PUBLISHER Kim Tucker

ADVERTISING INFORMATION 913-815-0111

[email protected]

RE INVESTMENT NEWS IS PUBLISHED IN ASSOCIATION WITH

MID-AMERICA ASSOCIATION OF REAL ESTATE INVESTORS

P.O. Box 8685

Prairie Village, KS 66208

www.MAREInet.com

913-815-0111

DISCLAIMER Mid-America Association of

Real Estate of Investors and

the RE Investment News does

not exist to render and does

not give legal, tax, economic

or investment advice and dis-

claims all liability for the

action or inaction taken or

not as a result of communica-

tions from or to its members,

officers, directors, employ-

ees and contractors. Each

individual should consult

his/her own counsel, account-

ant and other advisors as to

legal, tax, economic, invest-

ment and related matters con-

cerning real estate and other

investments.

The views and opinions ex-

pressed by authors of arti-

cles contributed to this

newsletter do not necessarily

reflect those of the associa-

tion, the board of directors

or the staff.

Rehab Workshop

Follow the Money

Saturday July 27th

Coming in

September

Ron LeGrand &

Jay Conner

Saturday

September 28th


Welcome to

RE Investment News

CONTENTS

To be successful in any new enterprise and real es-

tate investing in particular, one needs to surround

themselves with successful experienced people so

you have the support network to help you through

your learning and doing process.

One of the many reasons to be a part of a larger

group is to have more experienced people to draw

upon when you need words of advice on where to

find a house, how to analyze a deal, who to use for a

contractor, how to sell a house and everything in-

volved in a real estate investment deal.

Members of MAREI are always willing to go the extra

mile to help their fellow investor. Just this morning an

email came into the MAREI office from one member,

thanking 4 other members for their assistance in his

very first rehab flip property.

So when you need encouragement through your first

or second transaction or maybe help on a problem

deal, be sure to reach out to your fellow member,

through the forums and social media, live, face-to-

face connections at meetings and networking events.

Do not be afraid to ask for help. There is going to be

someone within the group who has the answer or

knows where to get the answer. It may be that you

just need a word of advice and it may be that you are

seeking out a partner for some aspect of the deal.

And, when it comes time, remember to reciprocate

and pay it forward to the next generation of investor.

Shaun McCloskey and Jason Roberts teaching to a packed house at a recent MAREI Workshop on June 22nd.


Market

1. Recovering Too Fast: Markets do

go up and down, overall not fast.

2. Investors are Driving Demand: They are, but were only about 20% of May Home Sales.

3. Sellers are stuck: Yes, now they

can sell, but prices are higher too.

4. Rates are Through the Roof: They are up, but they are still low.

5. Foreclosures a Thing of the Past: The have slowed down, but not gone.

Real Estate

Recovery Myths 5

April Real Estate Market Report

Sales Prices Up, Sales Up, Pending Sales Up

Kansas City Regional Association of REALTORS® reports that inventory is down and prices are up across the metro area.

Sale Price: All counties except Platte experienced an increase in the average sale price of existing homes and new homes over last year. Existing Homes were up 11 % May over May and New homes were up 12%

Home Sales: All counties experienced an increase in the total number of exist-ing homes sold at 13 percent as well as new homes at 18 percent with an over all increase of 14 percent this May over 2012.

Home Inventory: Existing home inventory is down by 12 percent and new homes are down by 9 percent with an overall decrease of 12 percent from May 2012.

Pending Sales: Existing home pending contracts are up 8% over April 2012, New Homes up 35% and Overall they are up 11% over last year.

Supply of Homes: Supply of homes is the calculated by dividing inventory by the 12 month average number of sales. A 5 to 6 months supply is a “balanced” market. Existing homes have a 5.6 month supply and new homes are at a 5 month supply with an over all 5.6 supply compared with a 7.2 supply this time last year. Read more about market data at www.KCRAR.com

Read Full Article on Trulia: Digital Readers Click Here

http://youtu.be/_ZZMcwaA6Ro

http://www.trulia.com/blog/taranelson/2013/06/5_real_estate_recovery_myths


Advocacy

Legislative Agendas

Get Involved

ACT: When your local, state or federal governments are considering leg-

islation that affects the real estate industry, MAREI calls on its members to

act. Simply by contacting your local legislators, state representatives, and

members of the Congress through an e-mail or a phone call. You can

ensure that your business remains strong by getting involved and taking

part. MAREI and REIA members nationwide join together and speak with

one loud, powerful voice.

VOTE: We ask that our members pay attention and educate yourself on

the issues so when it comes time to vote that you make an informed deci-

sion and make your voice heard.

INVEST: From time to time there will be issues that take more than the

grass roots involvement. Times when a lobbyist or attorney needs to be

hired to protect our interest. At those times we will ask all members to

donate funds and efforts to protect our industry.

GET INVOLVED: Ready to take part? Be sure to notify MAREI of im-

portant issues in your local city or here in our local States. We do not

have a full time lobbyist on staff so it is up to our members to notify us of

issues. At the Federal Level we monitor issues through the National As-

sociation of Realtors and National REIA to keep you informed.

“The man who gets the most satisfactory results is not always the man with the most brilliant sin-gle mind, but rather the man who can best coor-dinate the brains and talents of his associates.”

- William Jones

“Avoid becoming overwhelmed into inaction. Try to break every issue into ‘bite-size” pieces.”

- Sanjyot P. Denung

Corker-Warner Bill Introduced

On June 25th, Senators Bob Corker (R-

TN) and Mark Warner (D-VA) introduced

legislation that, if passed, would have a

direct impact on the real estate invest-

ment world.

The bill is supposed to replace govern-

ment-sponsored enterprises Fannie Mae

and Freddie Mac with a privately capital-

ized system that preserves market liquidi-

ty and protects taxpayers from future eco-

nomic downturns according the website of

Senator Corker.

2013 President of the National Associa-

tion of Realtors states that NAR “supports

replacing Fannie Mae and Freddie Mac

with a non-shareholder owned authority or

authorities. In our vide (NAR), the new

entity should be subject to tighter regula-

tions on product, revenue generation and

usage and retained portfolio practices in a

way that ensures the mission of the GSEs

continues to meet the needs of consum-

ers while protecting taxpayers. Moreover,

it should be managed in such a way as to

encourage private capital’s participation in

the secondary mortgage market.”

We urge all in the Investor community to

be aware of potential legislative changes

in our industry.

Read More MAREInet.com/Corker-Warner




Home Depot Rebate Program

Changes in Progress

The Home Depot is excited to announce that they

have gotten the green light to merge the Customer

Recognition Program (CPR) System that manages the

2% Rebate Program for members of National REIA

with the Home Depot Pro Rewards Program.

As Home Depot serves many segments of the real

estate industry with the CPR programs and Pro Re-

wards programs it made sense for them to consolidate

the programs to better accommodate their custom-

ers.

Integrating their systems allows them to bring more

functionality to the users and to provide higher quality

customer service.

By merging to the Pro-Rewards Programs Members

will still be able to add credit, debit and checking ac-

counts plus gift cards. When a member shops at the

Home Depot with one of their registered accounts,

they receive a 2% Rebate for all purchases. They

have also implemented a new key tag program for

members who prefer to pay cash.

Members can log into their account and review all

sales and track purchases and review transactions

made within the past 2 years and have electronic re-

ceipts emailed or stored within your account which re-

solves the problems with entering sales in your ac-

counting software from faded cash register receipts.

Records can also be accessed any time, anywhere.

The Pro Rewards Account also allows you to save

more on purchase of paints, primers and exterior

stains from top brands like Kilz, Behr and Glidden.

Spend $2,000 minimum, and save 10%, Spend $4,000

and save 15%, spend $7,500 and save 20%.

The member should keep in mind that one of the up-

grades to the system is the ability to use the new

Home Depot Estimator online tool. This new tool is

accessed from the dashboard once registration is

complete and allows the member to shop online, get

estimates, and place the order which will be pulled

from the inventory of their preferred store and will be

packaged and waiting for them when they arrive for

pickup.

With any major change, there is inevitably going to be

a few hick-ups. All Members are encouraged to ac-

cess the registration guide in the MAREI member Li-

brary listed under member resources to find how to log

in and where to call to confirm their accounts have

been moved successfully or to merge the newly creat-

ed Pro Rewards Account with any old existing ac-

counts that may have had previously.

Once the merging of the new system has been worked

8 8 RE investment News 2013


Member Benefits



out, members of MAREI should expect

to see the new mobile applications

and investor ecosystems being creat-

ed around the Home Depot’s new mo-

bile application RenoWalk.

RenoWalk is an iPad based mobile

renovation task identification, materi-

als and labor specification, quotation

and ordering system. This basic en-

gine is being licensed and lent to part-

ners to embed in their investor support

programs.

Some of the features of this new tool

from the Home Depot include:

1. Allows the Investor manage Home

Depot’s benefits for National REIA

members and keep track of the

most used stores.

2. A portfolio of individual properties

can be built with property address,

location and delivery preferences.

3. Allowing the investor to build a li-

brary of frequently used products

from the Home Depot Database

and local store inventory, allowing

the investor easy access to the

items they purchase on a regular

basis.

4. Allows the investor to take exten-

sive photos to create a portfolio by

property to create an audit trail of

before and after photos, tagged by

date and to further detail where

and what is contained in the pho-

tographs.

5. Investor can use built in tools to

take room measurements and cal-

culate amounts of materials need-

ed to help in the estimation pro-

cess and property analysis.

6. Once the investor has photo-

graphed, measured and selected

all items needed a full order can

then be sent to the pro desk at the

favorite store to for a bulk pricing

quote to save the investor money.

Look for RenoWalk in to be rolled out

in 2013, to provide the member with

accelerated ordering, online inventory

(thus minimizing wasted THD store

trips), convenience, pricing benefits

and other business support services

that are made possible by applications

running on mobile devices like the

iPad.

In the mean time, be sure to log into

your Pro-Rewards account and ac-

cess the Home Depot Estimator.





Marketing


If you haven’t started experimenting with online video, now might be the time.

You don’t need a fancy production crew or a big budget, either. You just need a

good story and a smartphone or digital camera.

Show It

Don’t Tell It

How to use video to engage with your customers, members, and prospects

Insight provided by Constant Contact KnowHow

Do you like to watch videos? Who doesn’t?! Visible Measures’ Q2 2012 Social Video Advertising Report found that almost 900 million people watched video online in the second quarter of 2012, making it the second largest quarter for online video ever .

That’s a 45% jump from Q2 2011 and a jump of nearly 75% from Q2 2010.

People aren’t just watching the latest viral videos, they’re also watching clips from their favorite businesses and organizat ions.

If you haven’t started experimenting with online video, now might be the time. You don’t need a fancy production crew or a big budget, either. You just need a good story and a smartphone or digital camera.

In this guide, we’ll share with you why your business or organization should be leveraging online video in your marketing efforts, give you a few ideas for getting started, and provide a few tips for shooting a quality video without breaking the bank

Why Use Video

Video engages people in a way that photos and text alone can’t. For small business owners and nonprofit managers, using video in your marketing can bring faces, voices, personality, and heart to your operation, while also demonstrating your authentici ty. To top that, on sites like Facebook, video posts generate 100% more engagement than text-only posts.

If that kind of engagement isn’t enough to convince you, here are five more reasons to add video to your marketing mix.

1. Tell your story quickly.

People don’t have a lot of time, so you want to get your message across quickly. Video can communicate a lot of information in a

Get Social MAREI South Meeting Tuesday August 6th 6pm to 9pm With Paige Cahill From ConstantContact.com

Check out our Seminars at www.ConstantContactSeminars.com

Educate, Empower, & Engage!

Paige Cahill

Regional Development Director KS, MO, & NE

E: [email protected]

Phone: 913.428.9007

http://www.constantcontactseminars.com/

mailto:[email protected]

tel:913.428.9007


short amount of time.

Inexpensive software tools such as Apple

iMovie or Windows Live Movie Maker can be used to easily edit your video, add

titles, music, and get it ready for upload-ing to a video hosting site.

2. Put a face to your business or organi-zation.

A video helps bring your business or or-

ganization to life, and it makes your com-munications more personal. Putting peo-

ple on camera makes you and your team

real to your customers and members.

3. Get your readers to remember your message.

Let’s face it: In general, we remember

little of what we read. Our retention of a message is much better (estimates are

three times better) when it includes pic-

tures, sound, and motion. Your readers can only take action if they remember

what you said.

4. People enjoy video.

People like to read, but they really like

video. We watch TV, go to the movies, stream video content to our computers

and mobile phones, and more.

5. Videos are easy and inexpensive to create.

The great myth is that video is hard and

expensive to create. Yes, the ads you see

during the Super Bowl cost a lot, but you don’t have to spend much to get good

video. If you already have a smartphone, laptop, or tablet—you likely already have

a camera that can create high quality

video. If you want to take things a step

further, video cameras like the Kodak Z18 are available for around $450 and are

capable of shooting videos in HD.

Plus, it’s free to host video on sites such as YouTube, Blip.tv, and Vimeo, making

your videos easily accessible, easily

shared through social media, and easily embeded on web sites and in blog posts.

Not only that, videos hosted on these sites can help your search engine optimi-

zation (SEO) efforts as they give sites like

Google and Bing yet another piece of content associated with your brand to

crawl and serve up to the masses.

Video Ideas for One and All

As with any type of marketing content, it may be difficult to think of video topics

that apply to your business or organiza-

tion. But there are plenty of simple ideas out there that can help jump-start your

video efforts. Among them:

1. Thank your customers for their busi-ness or your volunteers for their support.

Film yourself or a few of your staff mem-

bers giving their well wishes, and stitch the clips together as fun way to say

“thanks” to all those who support your business or organization.

2. Feature a customer raving about your

company, product, or service. Catch

people when they’re happy: getting ready

to leave your restaurant after a great meal, just taking their first bites of that

ice cream cone, or if they stop by to ex-

press their happiness with your service.

3. Share a cool company milestone. For

example, when Constant Contact’s logo

went up on our building, we filmed it. Any time your organization celebrates an

achievement, film the celebration and put

snippets up to share with your customers and members.

4. Announce a fundraiser or special event. Let people know what you’re doing

and why they would want to be involved. NYC nonprofit, Pajama Program used

video to show people the difference their involvement can make.

5. Ask for feedback from your subscrib-ers. Each week, we shoot a video inter-

view where we answer questions we re-ceive from readers on our blog or at-

tendees at our marketing webinars. We post the “Ask an Expert” interview to our

blog and encourage viewers to share

their questions, as well.

6. Share your expertise or provide tips for using your products.

• A mechanic could show what he looks

for when examining various parts for

wear

• Sales folks can demonstrate how their products work together

• Any business can introduce a new

website and its features

7. Put the spotlight on your team to high-

light your weird or wacky culture.

8. Review a book that your members or customers may enjoy.

9. Share highlights from a past year’s

event to promote an upcoming gathering.

10. Have your staff wish customers and


Marketing

Customer Spotlight: Video Works for Fourword Marketing

As an author and speaker, and the owner of Fourword Marketing in Toronto, video has become an effective way forMarc Gordon to market himself and his company in a way that he believes cannot be accomplished with words alone.“The impact of video is far be-yond what you can do in a written blog,” Marc explains. “You can present things on so many different levels and illustrate examples in settings that people can visually understand, which can be challenging to do in a written blog.”

Since March 2010, Marc has produced MarcTV, a bi-weekly sixminute program that covers topics ranging from how to create a killer press release to good business networking practices. Marc shoots the videos in his “studio” — i.e., his office when in his native Cana-da. Once posted to his Vimeo account and embedded in a blog post, Marc promotes the videos across multiple channels, including his Constant Contact–based email list and social media sites like Twitter and Facebook.


members a happy holidays.

Your video content doesn’t even have to

be 30 frames-per-second of moving pic-tures.

You could also:

Use Images with voiceover. Pictures or

images are a great way to communicate.

If you like, you can easily use what is

known as voiceover on an image. This combines a narrative that you can record

over the image. String a set of these to-gether to tell your story.

• Your pictures: Using any camera, take pictures of your building, product, people,

etc.

Images: There are lots of places on

the web to get images, either for free or for a relatively small investment. A

few examples include Google Imag-

es, iStockphoto,Flickr, and stock.xchng.

Note: As with any media, be careful

you’re abiding by copyright law.

Create a Screencast. Capturing a demon-

stration of your product or a walkthrough of your business or organization using

your website is another way to create engaging video. Screencast software runs

on your computer and captures what

takes place on the screen. You can also record your voice speaking at the same

time or add music. The combination makes for an informative and engaging

experience.


Marketing

Marc uses a single camera and a wireless microphone for each shoot. When on location, Marc has a colleague shoot the video, but in the office, a tripod acts as the lone cameraman. Editing is done with Apple’s iMovie software. “A lot of people put in a lot of transi-tions and effects,” says Marc, who does all the editing himself. “You don’t need that. It’s all about simple, clean transitions that keep the video nice and clean. Let the content be the draw.”

For Marc, the message is important, but humor is a key aspect of his video effort. For instance, in a Halloween episode, Marc went shopping dressed as Wonder Woman. He also likes to use edgier titles on his videos to draw attention to certain clips — a tactic that seems to be working: Views of his videos have grown steadily and his email list has grown 29% since he started MarcTV.

“My initial goal was use MarcTV as a marketing tool to promote myself as an expert and personality,” Marc says. “But the popularity of the show has really given it a life of its own. People from all kinds of industries are now reaching out to me as a result of the vide-os.”

There are many software tools that ena-

ble you to take an image and add a voiceover.

Examples are Microsoft’s PowerPoint

(10.0 or greater), Apple’s Keynote, TechSmith’s Camtasia, and iMovie.

4 Tips for Shooting Quality Video

It doesn’t take thousands of dollars in gear to make a great video, but paying

attention

to a few details will make your final prod-uct that much better:

1. Whenever possible, use a tripod.

Keeping the camera steady will make for better picture quality when you upload

your video to a service like YouTube. Plus, your viewers won’t get seasick while

watching.

2. Film in a quiet area.

This is particularly important if the only

mic you have is the one built-in to the camera as those tend to pick up all the

ambient noise as well as the speaker. In these cases, the less ambient noise, the

better.

3. Bright light is good.

Cameras have come a long way when it

comes to the ability to record in low light, but the more light you can provide, the

better the video quality. When filming,

have the subject facing the main source

of light, not in front it:

4. Orientation is key.

When shooting on an iPhone, Android, or other video-capable smartphone, make

sure to hold the device in a landscape

(horizontal) mode and not vertically. Holding it vertically makes for a messy

editing process as you crop the video to fit a standard size video window.



Vacancy Break-Ins

Ways to Deter Them From MR Landlord.com

Tips are shared by regular contributors to the popular MrLandlord.com Q&A forum, and by real estate authors. To

receive a free sample of Mr. Landlord newsletter, call 1-800-950-2250 or visit their informative Q&A Forum at

LandlordingAdvice.com, where you can ask landlording questions and seek the advice of other rental owners 24

hours a day.

Install Motion lights, fake security signs, and a hun-

dred dollar camera system from Amazon.

One of the handyman who does work for me (been

with me for 10+ years) is willing to stay in my empty

units during rehab. I just provide him with a bed, a

TV, and a few other things. Perhaps you can find a

similar person.

Talk to several of the neighbors, adults who have

lived there awhile, know the area and have a good

idea of what's going on.

Keep it well locked, and rotate the lighting.

Put an (extra) car in the driveway.

Get yourself 2 radios. Dial them into the same talk

radio channel and put one at the front door and one

at the back.

Go to Goodwill and find 2 pairs of size 14" or bigger

work boots. Put a pair outside on each porch with a

couple of spent shotgun shells.

We use a portable monitored alarm system from

Lasershield that uses an integrated cell phone.

They run a few hundred and $25 a month.

One of the speakers on the CDs from the recent

MrLandlord.com Convention suggested installing an

alarm system, even if it isn't monitored, and then

pretend to adjust it and set the alarm off several

times when neighbors are around. His reasoning

was that most break-ins are perpetrated by locals

and "announcing" the presence of the alarm system

reduces the likelihood they'll target that property.

Put curtains and blinds then install a couple of lights

on timers so the house looks as someone lives in.

Be sure all newspapers are picked up as the house

would be like someone is living there.

I have lights on timers. A radio playing. Blinds so no

one can look in. In bad areas with vacant properties

I have a under carpet switch or on a door a motion

sensor wired to a 150 db alarm inside the house

that cause a normal person to go deaf -- they run

away and neighbors call the police and me.

I place large dog food bowls, dog house in back,

few PBR empties for decoration, maybe a bottle for

cigarette butts at the vacant rental.

I purchased a game cam which is a camera and

motion detector. I set it to take pictures of the AC

unit and / or driveway. So far I have not been hit

when it was installed. It lets me see the people who

have been in the yard. It moves house to house

without a monthly charge.

Mostly keep the place from looking abandoned. Cut

the grass, keep it clean and nice, porch lights on,

blinds and lights inside, etc.

For Landlords

tel:1-800-950-2250


Industry Services

Don’t Toss another Seller Lead for Lack of Buyers!

Let Us Review Your Lead . . . Assign to us or partner with us.

kcmoHomeBuyer.com

816-200-2198

Rehab & Retail

Turn Key Rental

Fixer Uppers

Multi Family

Non-MLS

Call Don or Scott 816-200-2198

Houses & Notes

WANTED


How to Pre-Screen

Contractors & Get The Job Done

Robyn Thompson

Many real estate investors shy away form the ugly house business because they fear hiring contractors. We have

all heard the horror stories of rehabber who looser their shirt because a contractor took them to the cleaners.

I am here to tell you that contractors can be your worst enemy or you best friend, depending if you hire a good

one or a bad one. So how can the beginning novice real estate investor make the correct choice – the hard work-

ing team player that gets the job done on time, on budget and at a high standard of quality? The answer is by fol-

lowing all eight of the critical prescreening steps below.

1. Ask the contractor you are interviewing, how long they have been in the business. I prefer at least five years of

experience in the trade. I want a contractor who has seen and repaired every strange, odd and crazy thing that

could be wrong with a house. Experienced contractors know how to estimate all tough projects and experienced

professionals can give an accurate price to fix any problem.

Inexperienced contractors, on the other hand, underestimate repairs to get the business, and then they try to push

their mistake on the home owner by upping the price half way through construction. The investor needs to say

NO. No is the most powerful word in the dictionary, and a rehabber needs to use this tool. If they did not have the

knowledge to make a good estimate, it is their problem not yours.

2. Ask for three references from the last three major projects that the contractor has recently completed. Once you

receive the reference letters, make sure you call to certify the reference and the quality of the workmanship per-

formed. The quality of work should be satisfactory to the homeowner and should have been completed in a timely

manner.

If any of the reference don’t check out, do not hire this contractor. If they gave you false information upfront, you

know they can not be trusted. Move on to the NEXT quote.

3. Ask for a copy of the contractor’s license (if required in your state) and for a copy of their workman’s comp in-

surance. Once you receive a copy of their license, make sure to check that they are not suspended. Also check to

Contractor’s Corner


Industry Services

see if any complaints have been filed against the contractor

with the Better Business Bureau.

It is absolutely mandatory that a contractor prove that he or

she has workman’s comp for all the employees that will be

working on the job site, before they start renovations. Why

is this so important? Well, if one of the workers has an acci-

dent, you do not want to be sued as a potential employer.

4. Make the contractor pull all necessary permits required

by your local building department. The homeowner should

NEVER pull the permits. The contractor should also be re-

sponsible to pass all necessary inspections required

throughout the construction process so a certificate of occu-

pancy (CO) can be obtained when construction is complete.

5. The real estate investor should make it mandatory for all

contractors to buy all necessary materials to do all neces-

sary material to do the renovations. They investor should

never waste their valuable time buying materials. If the in-

vestor buys the materials, the workers could be viewed as

the home owner’s employees per the IRS guidelines. You

do not want this.

6. The real estate investor should always demand a six

month to one year warranty of all parts, labor, workmanship

and material provided by the contractor. This warranty

should be in writing. WARNING: If a contractor will not pro-

vide a warranty and stand behind the quality of his or her

workmanship – DO NOT hire them!

7. Real estate investors should never agree to pay any con-

tractor by the hour. You pay a fixed price for the complete

job. Never pay the final payment in your independent con-

tractor agreement until the project is 100% complete.

8. Ask for financial references (ex: where the contractor pur-

chases materials). I will contact the supply houses to make

sure the contractor is not behind on paying for materials be-

cause I do not want to give the contractor a check to payoff

an old bill and they have no money for the materials they

need to buy for my job.

The last words of advice that I can give to anyone beginning

a renovation project is to make sure everyone agreement

with a contractor is detailed in writing with an independent

contractor agreement. A detailed list of materials required

should be listed in comprehensive scope of work. The docu-

ment should have work completion time frames, penalty

clauses for finishing late, require all permits be pulled and

inspections complete before final payments are released.


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For the Third Year

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Awards

For three years running, Mid-

America Association of Real

Estate Investors has returned

from the National REIA Mid-Year

Conference with Honors of Merritt

Awards from the Awards of

Excellence Challenge.

Each year members of National REIA submit their best efforts in many different categories including:

Government Affairs, Community Service, Membership Development, Print Communications, Electronic

Communications, Education, Convention and Trade Show and Finance.

In 2011 MAREI received awards in the areas of Electronic Communications and Membership Development.

In 2012 MAREI received awards in Electronic Communications, Finance, Government Affairs and Print

Communications.

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Convention and Trade Show for the joint venture partnership with Realty411 in the Kansas City Real Es-

tate Expo held in April.

Membership Development for the addition of a 2nd monthly meeting being held in the North Kansas City

area.

Print Communications for the current version of the RE News, the newsletter for Mid-America Associa-

tion of Real Estate Investors.

Kim Tucker, MAREI’s Executive director shared “Mid-America Association of Real Estate Investors strives to

be the best because they have the best members who give back to their fellow members and the communi-

ty. MAREI would like to thank all of their members for their continued support through out the years that has

made their continued success and the honor of these awards possible. Without our Members we would be

just another club in Kansas City.”

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REHAB FUNDING



Hard Money Made

. . . Easy

From eBook from Merrill Kaliser, Esq. & Michael Hoffman Esq. What is a Hard Money Loan?

Okay. You have heard (or maybe not) of the terms “Hard Money Lender” or “Hard Money Loan”.

What is a Hard Money Lender? What is a Hard Money Loan? Why is it “hard”? What does all of this mean? Is

there easy money out there?

Ironically, “Hard Money” is the easiest money to find and borrow. This book will walk you through the step-by-step

analysis a Hard Money Lender uses when deciding to issue a Hard Money Loan.

First, a Hard Money Loan (“HML”) has been defined as “a specific type of asset-based loan financing through

which a borrower receives funds secured by the value of a parcel of real estate.” (Wikipedia). How is that any dif-

ferent from the financing provided to you on the house you live in, your homestead? Presumably, your home is

not in distressed condition and is not as much of a risk (if you ignore the last three years) to the banks. HMLs are

typically issued at much higher interest rates than conventional loans and are primarily based on the future value

of the house rather than the current value of the distressed house. This is asset based lending. Because the

house is distressed, the value (in the conventional lender’s mind) is more difficult to calculate and the loan is per-

ceived to be more speculative and higher risk.

A HML is generally based on the after-repair value (“ARV”) of the house in contrast to the actual value (“AV”) of

the house. A conventional loan is typically based on the AV which is quite simply defined as the value of the

house “as is” at the time the loan is made either using the contract price or an appraisal of comparable houses.

The ARV, on the other hand, is calculated based on the value of the house after the estimated repairs are made on the property. This ARV is usually determined by an appraiser who searches for comparables of similarly dis-tressed properties that have been rehabbed and sold in the same neighborhood within the last 3 to 6 months. We will discuss the calculation of ARV later. As you can see in Exhibit 1 (next page), there is a huge difference in the amount a conventional lender will loan on a house versus that of a Hard Money Lender, assuming that the con-ventional lender would even entertain a loan on a distressed house.

REHAB FUNDING



In Exhibit 1, our buyer finds a dis-tressed home that is listed for $50,000 and in need of approxi-mately $20,000 of repair work. After the anticipated repairs are made, the house should be worth $100,000 (ARV).

Assuming that a conventional lender would loan on this distressed invest-ment property, they would most like-ly lend based on the actual purchase price. With the typical conventional lenders, 70% - 75% loan to value formula, the investor would only re-ceive financing of $35,000 (70% of contract price) vs. $70,000 (70% of ARV) from the typical Hard Money Lender. Remember, to complete the house and sell it at comparable mar-ket value the investor needs approx-imately $70,000 (acquisition plus rehab). Yes, you are correct, the in-vestor will come out-of-pocket ap-proximately $35,000 for the deal in order to avoid higher interest and higher fees. We will discuss later, in detail, what those higher interest rates and fees are and how they af-fect the investor’s out-of-pocket ex-penses and profit.

Why do we have Hard Money

Lenders?

Now that we know the basic differ-ence between a HML and a conven-tional loan, we need to know who the hard money lenders are. You probably already figured out that a conventional loan is issued by a conventional lender, and a HML is issued by a ….. Hard Money Lender.

What is a Hard Money Lender

A Hard Money Lender can be an

individual, a self-directed IRA, a group of individuals, a corporation, a limited liability company, a busi-ness…the list goes on and on.

None of these are regulated deposi-tory institutions, except for the self-direct IRA which is subject to its own set of rules and regulations. In reali-ty, a Hard Money Lender is anyone or any entity that is willing to loan money based on a distressed house having a higher ARV in 3 to 6 months.

To simplify, a Hard Money Lender is lending on the future value of the house. Higher risk yields higher re-turns in the mind of a Hard Money Lender. The novice investor may think a Hard Money Loan has great-er risk; however, we will dispel this notion. This book, along with our courses, forms and due diligence checklist will show you how to mini-mize risks and capture higher re-turns.

Wow!! You should be nervous! We are telling you that a federally in-sured bank will lend money to a startup company with no real proper-ty as collateral (knowing approxi-mately 2 in 10 startup companies fail in their first year); however, it will not lend on a house that has a value (or future value) of at least 30% more than the loan amount. Additionally, the HML will be personally guaran-teed by the borrower (i.e., a “recourse” loan). That’s right, gener-ally, conventional lenders will not lend on distressed houses. That is one of the most important reasons why we have Hard Money Lenders.

Another reason Hard Money Lend-

ers exist, and in our opinion the most important reason, is the in-vestor/borrower.

The investor/borrower wants to pick up that distressed property, rehab it and either flip it or rent it. The in-vestor/borrower has contracted to acquire the house at a discounted price, creating a large equity spread between cost and ARV. This equity spread encourages investors to seek out Hard Money Lenders for funding instead of tying up signifi-cant amounts of their own money in one property or using their own self-directed IRA as funding. This is called “OPM”. OPM is a very tech-nical term for “other people’s mon-ey.”

Many real estate investors have sig-nificant amounts of cash and other resources, yet they still choose to use OPM. By using OPM, you keep your cash for other investments, emergencies, college education for your children, etc., in exchange for paying a higher interest rate and ad-ditional fees. OPM is another way of saying I am using someone else’s money to finance my investment property.

Let’s recap:

We have told you that it is ex-tremely difficult to find a conven-tional lender that will loan on dis-tressed properties

We have told you that if you actually find a conventional lender willing to loan, the loan will most likely be based on the actual value.

We also mentioned that there are higher fees and interest

REHAB FUNDING


REHAB FUNDING

rates associated with Hard Money Loans.

However, we haven’t discussed what HML fees are and how they affect your return on investment (“ROI”). Are the interest rates really that high, and fees really excessive? Yes. This book is written by brutally honest Hard Money Lenders. Facts are facts, and we will share with you the aver-age fees and expenses3 associated with a HML versus a conventional loan, and why smart investors still choose hard money.

We will not discuss using your own cash instead of financing because if you were interested in that you wouldn’t be reading this book. How-ever, a brief point on using your own cash – OPPORTUNITY COST/LOSS. If you tie up $70,000 of your own cash in a single house, you have de-creased three fold your potential re-turns. You could have leveraged that $70,000 on several houses by using OPM.

Exhibit 2 is an example of the differ-ence between a conventional loan and a HML on a buy, rehab and flip investment. In this example, our in-vestor is buying a home for $50,000 and needs to put $20,0003 into the house to be able to sell it for $100,000. We show the basic fees and expenses associated with each type of loan based on averages. For clarification purposes, closing costs are points, fees and other expenses. A “point” is simply a percentage of the loan amount (i.e., 1 point on $70,000 is equal to $700). In our example, the investor could qualify6 for $70,000 in financing by using a Hard Money Lender (70% of ARV) vs. $35,000 (70% of the acquisition price) with a conventional lender (if they are willing to lend on this house). One lender will lend $70,000 and the other will lend $35,000. Without taking into considera-tion points, fees and interest, the in-vestor using the conventional lender will be out-of-pocket $35,000 in order to rehab the house.

In this example, we assume the house will be rehabbed and sold within six months. Remember, the interest rates are annual interest rates. If our inves-tor is holding the property for six months, the interest paid on the loan amount is cut in half (3.25% vs. 7%). In our example, the interest rate for the HML is a little more than double the conventional rate, but the amount of the loan is twice as high. The points and fees typically charged by Hard Money Lenders are 4 points and $1,000 in administration fees. There may also be an appraisal fee, inspec-tion fee and survey fee. We have rounded the points and fees to 8% of the loan amount. If you add the interest payments, closing costs and out-of-pocket cost for rehab, you are left with the “Total Out-of-Pocket” cost. The Hard Money Loan is less than one-third of the conventional loan when looking at total cash out-of-pocket for

the investor. The closing costs are typi-cally 10%; 6% commission to the agent plus seller’s concessions and title fees and costs.

The bottom line is the return on invest-ment. This is the investors report card. In this example, our investor’s return on investment is almost 2 times great-er using a hard money loan. They ben-efit by using 1/3 of the amount of cash that would be needed for a convention-al loan.

Let’s recap.

The investor/borrower can make twice as much profit on every dollar she puts into the subject property using a Hard Money Loan.

Our Investor used about 1/3 of her cash to buy and flip a house by utilizing a Hard Money Lender.

Our Investor could have purchased three homes (assuming same

Exhibit 2


costs and expenses) and would still use less cash than an investor purchasing just one house with conventional funds, with a return of $28,500 (3 times $9,500) on ap-proximately $31,500 in total out-of-pocket.

That’s right, the investor can use $6,000 less to make $10,500 more in profit on essentially the same cash.

In the example above, we have pre-sumed that the borrower/investor is buying, rehabbing and flipping the property. Below is an example of the conventional loan versus a Hard Mon-ey Loan in the buy, rehab and rent scenario.

In Exhibit 3, we demonstrate the costs and expenses associated with a con-ventional loan on AV and a HML on ARV. The example assumes that the conventional loan on AV will be re-financed in six months on ARV and (a big “and”) the borrower receives a “cash out” of up to 70% of the ARV less the original loan amount (i.e., $35,000). Given these assumptions, at the end of the six month period our investor would be out-of-pocket about $8,500 less than if they went to the Hard Money Lender. Remember, that is at the end of 6 months. If our in-vestor/borrower did not have $35,000+ in cash to pay for their rehab and re-maining acquisition costs, they would only be able to do the HML. Another way, from the investor/borrower’s standpoint is to tie up $37,000 in the property for six months with a conven-tional loan, while our investor/borrower who chose to go with the Hard Money Lender only tied up $10,500. If other great opportunities on distressed prop-erties occurred during that time frame, the investor/borrower that went with the conventional lender would have missed opportunities unless they had an additional $35,000+ to put down on each deal.

We cannot stress enough that the like-lihood of finding a conventional lender to lend on distressed houses is practi-cally nil. Further, the likelihood of a

conventional lender allowing a re-finance on the investment property in six months without a pre-payment pen-alty may be slim, as is finding another conventional lender that will allow you a “cash-out”. If our investor/borrower is able to find conventional lenders that can facilitate these transactions, they should use them and send us their contact information so that we can use them as well!

Finally, while we have provided finan-cial and leverage scenarios to demon-strate why smart investor/borrowers choose Hard Money Lenders over con-ventional lenders; another reason is time. The time it takes to get lender approval and actually loan money to our investors/borrowers to acquire a home will make or break a deal. Many times, the only leverage that an in-vestor/borrower has when making an offer to a seller is the promise of clos-ing the transaction within 3-5 days af-

ter the option period (if one even ex-ists). There are few, if any, convention-al lenders that can do this. Not every Hard Money Lender has the ability to close a transaction in 3 – 5 days; how-ever, our company can and we know a few of our competitors can as well. This ability gives our investor/borrower leverage with the seller. If the seller is aware that our investor/borrower is pre-approved with a reputable Hard Mon-ey Lender and can close in 3 – 5 days, the likelihood of obtaining a lower ac-quisition price on the subject house is much greater. The lower the price, the greater the potential equity for our in-vestor/borrower and the collateral for the Hard Money Lender.

REHAB FUNDING


Where: Career Education Systems,

Training Room

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8600 Ward Parkway,

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When: Saturday July 27th,

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COVER

Success Strategies

I've got a collection of magic words I've accumulated over the years. Most are designed to help me get into or out of a real estate deal. All of them work.

MAGIC Words

T h a t M a k e M i l l i o n s

I've just finished reading (for the second time) a book called Magic Words That Bring You Riches, authored by my good friend Ted Nicholas, a member of our Board of Directors. Ted has sold over 200 million dollars worth of information products worldwide by direct marketing. Over the years he put together a collec-tion of Magic Words to get people to do things they ordinarily wouldn't do.

In Magic Words, Ted discusses how to do such things as get the best table in a restaurant and first class seats on airplanes. He talks about how to slash the cost of a room at first class hotels and attract all the money you need for any business venture. Want to approach a member of the opposite sex and immedi-ately gain interest? How about renting a Mercedes for the price of a Ford or buy-ing jewelry at below wholesale prices?

Ted can tell you how to attract the best employees to make your business prosper, as well as how to get capable people to work for free. He even discusses ways to gain financial interests in other people's companies without investing one red cent. Pretty cool stuff, huh? And that's just the first few chapters. This book is also a masterful direct marketing bible covering every aspect of the business by a consummate professional. Like I said, I read it twice.

Then it hit me! Like Ted, I've got a collection of magic words I've accumulated over the years. Most are designed to help me get into or out of a real estate deal. All of them work.

The words you are about to read have made me millions of dollars and, if used properly, could do the same for you. The truth is, students have been trying to get me to do this for years, but it was Ted Nicholas book that pulled the trigger. Incidentally, this one issue of the Mentor could easily justify your cost for the next ten years.

Okay, here goes. Here's a set of magic words you should know by now and use daily:

"If I pay you all cash and close quickly, what's the least you would accept??

and that's always followed by:

"Is that the best you can do?"



COVER STORY



If you're not using these words to get to the bottom line

quickly, you're making a mistake, not to mention wasting

valuable time. These words cut to the chase and save

you a lot of time otherwise spent beating around the

bush. Of course, if you're naming the price you'll pay be-

fore you ask what the seller wants, I'll have to take you

out behind the woodshed . . .

Ye who speak first have big mouth & will pay hand-

some price for house.

Those words aren't exactly magic, but they speak the

truth nonetheless. Never, never name the price you'll pay

or the down payment or monthly payment you'll pay or

accept when selling.

Okay, lets say you've asked 'Is that the best you can do,'

and the seller says yes. A good follow-up line that works

for me is . .

"So you're saying if I don't give you $_____, you

won't sell the house?"

Now if the answer is still yes, you won't be buying today

unless you're willing to change the focus to a terms deal

rather than a price deal.

A good icebreaker to use when you want to make it clear

that you're not happy with the number you've been quot-

ed is . . .

'What's your second choice?'

I usually chuckle or use a hint of humor when I ask this.

It's better than simply saying I won't pay the asking price.

Let's say you're trying to get a seller to name the asking

price and they won't. You know better than to pressure

them, but you just can't get them to break. Try this . . .

"How about a dollar?"

This will get through to them and probably produce an

answer. If so, you're back in the screening process and

you know where you stand. If not, you can come back

with . . .

"I simply have too many prospects to work with to

waste time on those I can't buy. If you'll tell me what

you're asking, I'll know quickly if we can do business.

Is that fair?"

By this time, they're usually in or out. You can't buy hous-

es from uncooperative sellers. By the way, did you notice

some powerful magic words hidden in there? Take note

of how I tend to answer a question with a question. 'Is that

fair?' turned my response into a question and put the re-

sponsibility to answer back on the seller. It also softened

the blow and made me seem more warm and fuzzy. 'Is

that fair?' is a powerful set of magic words that should

become a part of your everyday vocabulary with almost

everything you negotiate.

Let's say you're pre-screening a seller who has a house

with a mortgage balance. First, you want to know what's

owed on the property or you can't possibly determine

whether it's a deal or not. These aren't magic words, but

Success Strategies


Ron LeGrand shares the Maximum Allowable For-mula for purchasing in-vestment properties with students at a recent training event.


Success Strategies

are critical ones:

"What do you owe on the house?"

What if they say it's none of your busi-

ness? You say . . .

"I buy ____ houses per year and

use many different methods. I'm

probably the most serious buyer

you've talked to yet. However, I'll

need the facts to be able to present

you with an intelligent offer. Will

this be a problem for you?"

Again, a question in an answers cloth-

ing. Did I not sock it to them on that

one?

Frankly, anyone who won't give you

the facts is not ready to sell yet. You

got your answer . . . move on. You

can't make un-motivated sellers moti-

vated.

Now you have your answer. You know

the loan balance. Now it's time to find

out where you're headed with this

deal, so ask . .

"Will you sell the house for what

you owe on it?"

Those magic words can make you

$500,000 per year if you ask them on

all your deals. With just those twelve

little words, you'll instantly know

whether you'll be getting a free house

by taking over the debt or an almost-

free house with debt plus a little cash

thrown in. Of course, you may also

learn that the seller wants full price

and is not flexible. Again, you found

out what you needed to know with

twelve words. Now you know whether

to proceed with the deal or move on.

Now let's say you can't get a deed be-

cause of the due on sale clause or the

seller won't trust you with their credit.

But you see opportunity there and a

lease /option makes sense. Here's the

opening line to present the offer . . .

"I will lease your house with the

right to buy it for the loan balance

when I purchase. I'll guarantee your

payment and maintenance until the

loan is paid off and the house is

out of your life. How does that

sound?"

Notice how all the benefits come be-

fore the question. The seller has

enough information to encourage a

positive response. Isn't that better

than will you lease/option your home

to me?? Another good question that

will ease the seller's mind and make

you seem genuine is . . .

"If it doesn't work for both of us,

then we don't want to do it, do we?"

That makes it pretty clear that you're

not desperate to make the deal. An-

other version is . . .

"If this will cause you to lose sleep

at night, I'd rather not do it. Is it go-

ing to be a problem?"

Here's a good one to break a stale-

mate and get you back in negotiation

as well as collect more facts that

might lead to different offers . . .

"If you and I can't do business to-

day, what will you do with the

house?"

This also gets the seller thinking, par-

ticularly about all the ugly answers to

that question. Their answer may be,

'I'll put it on the market or list with a

Realtor until it sells.' Your response . .

.

"And what if it doesn't sell?"

At least you'll get a feel for whether

this seller is worthy of your follow-up

list. I hope you know by now that . . .

"All seller's minds will change with

time and circumstance"

Here's one you'll love if you're a be-

ginner and worried about the seller

finding out that you don't exactly know

what you're doing. First, don't sweat it.

You don't have to appear to be an ex-

pert. You can try to fake it, but if

you're confronting an intelligent seller,

many times they'll see through you

and try to ask you embarrassing ques-

tions. So if you're asked if you've ever

done this before, use these words . . .

"Well actually, no. This is my first

deal after graduating from some

rather intense training. I was hop-

ing you'd help me do it right, OK?"

Asking for help brings you down to the

seller's skill level and you've built trust

by answering truthfully. Don't worry

about the seller expecting you to be

an expert. If you seem sincere and

excited, you'll usually get the deal. In

fact, being too smart or seeming too

confidant will often turn off more peo-

ple than if you appear to be a novice.

They'll think you're too green to cheat

them.

Now let's say you're talking to a seller

about carrying a mortgage and the

subject of interest comes up. Your

goal is zero interest, so you shouldn't

be the one to initiate conversation on

this topic. If the seller doesn't mention

interest, you shouldn't, either.

When presenting an installment offer,

the magic words are . . .

"I'll pay $____ per month until

you're paid in full."

Of course, this means you've divided

the loan amount by the monthly princi-

pal payment you want to pay, exclud-

ing interest. If the seller comes back

with ?what interest rate is that?? Your

response is . . .

"Why do you need interest?"

Then if you get more argument and it

becomes a sticking issue, you could

respond by saying . . .



"What's more important, your inter-

est or getting the house sold now?"

If that doesn't get the job done, say . .

.

"If I give you interest, how much

can we lower the price?"

Or . . ."Will you sell to me with no

down payment?"

Or . . ."Would you wait six months

(or a year) for your first payment?"

Or . . ."Would you take 25% off the

balance I owe you if I agree to pay

you off within _____ years?"

Of course, these same tactics can be

used if the seller is asking you to raise

your offer. You'll notice it all comes

down to some very powerful magic

words that can be adapted to many

uses (If I . . . , Would you . . .). How

about when you're raising private

money and approaching potential

lenders? Here's my icebreaker that

hasn't changed one whit in 16 years .

"Do you have an IRA or any other

investment capital that's not get-

ting you a 15% return safely?"

These magic words will get you all the

money you need assuming you ask at

least some people who have money

to invest.

Now let's look at the selling side and

discuss a few choice words I use to

find good buyers. When wholesaling, I

want to know my buyer will come to

closing with the money and isn't simp-

ly trying to jerk my chain. In this case,

the magic words are . . .

"When do you want to close?"

If they need more than ten days,

they're a time waster and I'm at risk. If

they say "ASAP", I know they're seri-

ous.

There are so many magic words to

use when pre-screening buyers, it's

easier to simply use the whole script

because these words are all magic. I

can't tell you how many hundreds,

maybe thousands of buyers (idiots) I

talked to before I developed the words

and the order in which I use them.

Here we go . .

"Do you want to buy or rent?"

If the answer is rent and you want to

sell, the rest is worthless conversa-

tion. But before giving up, use one

more line . . .

"If I can show you how to buy and

get you financed, would you rather

own than rent?"

If yes, continue. If no, save your

breath. Next . . .

"Have you ever tried to buy be-

fore?"

"Yes."

"What stopped you?"

This lets you know immediately what

you're dealing with.

"Is your credit good, fair or poor?"

Don't ask how's your credit.' Some

people are ashamed to tell you it's

ugly and will simply lie. Give them a

multiple-choice question so they know

you won't be shocked if they have

poor credit. If it's bad . . .

"What's on it a bank wouldn't like?"

This breaks the ice and gets the cus-

tomer to open up.

Now the big question . . .

"How much money can you raise

for a down payment?"

Whatever the answer . . .

"Can you get any more?"

"Can you borrow from relatives?"

"Do you have credit cards?"

"Do you have something you could

sell or trade to me?"

"Can you repair houses or have

other skills to earn more?"

"Are you willing to rob a bank to

raise cash?"

Oops! Got a little carried away on that

last question. It might not be appropri-

ate.

Now let's assume you see someone

you can work with and you want them

to get excited and realize that you are

their solution to home ownership.

Here are the words that will glue them

to you . . .

"If you can convince me you want

the house and make a commitment

to buy, I'll get you financed one

way or another. Even if I have to be

the bank. If I can't get you in a

home of your own, no one in this

city can."

These words have sold a lot of real

estate for me. They really make an

impact on your buyer's level of hope.

Follow them up with assurance that

you are easy to work with and very

flexible and the prospect will be putty

in your hands.

"We can do whatever you and I

agree. I own the house and I'll do

what it takes if you will. Is that

fair?"

Well that ought to be enough magic to

keep you practicing awhile. Of course,

these words aren't really magical until

you begin to actually use them and

make them work.

Success Strategies


Coming to Kansas City in September:

Ron LeGrand

Ron LeGrand is a nationally renowned real estate expert and lecturer who has taught

thousands of people how to make big incomes without using personal capital or cred-

it.

LeGrand’s philosophy is “The less I do, the more I make”. It’s not about working hard;

it’s about working smart - doing things that allow you to get wealthy quickly and not

doing the things that consume your days swapping hours for dollars.

LeGrand started out as a simple auto mechanic with a redneck background who bare-

ly got out of high school. He borrowed money 30 years ago to attend his first real es-

tate seminar. Since then he has personally bought more than 2,000 homes, and con-

tinues to do so. Today he owns or controls several hundred million dollars in real es-

tate developments and owns several businesses.

Affectionately known as the “Godfather”, he is recognized as the nation’s leading authority on buying and selling single

family homes for fast cash with no credit and little or no personal investment or risk. His unique approach has made

him an in-demand author, trainer, lecturer and consultant. More than 250,000 people have attended one of his work-

shops and he has aptly been named the “Millionaire Maker”.

Jay Connor Jay Conner is a proven real estate investment leader. Without using his own money

or credit, Jay maximizes creative methods to buy and sell properties with profits aver-

aging over $50,000 per deal - with little to no risk. “Jay is a real estate magician” as

“He works seemingly magical deals for buyers and sellers alike.”

When Jay was introduced to the world of Private Lending he said “PRIVATE LEND-

ING ROCKED MY WORLD AND MY REAL ESTATE INVESTING CAREER!” His first

Private Lender gave him $250,000 in Private Money. Then, within less than 90 Days,

Jay raised $2,150,000.00 in Private Money.

Jay has been a full-time Real-Estate Entrepreneur for 10 years in a population of only

40,000 while producing a seven figure net income per year. He is a National Best

Selling Author with his new book: “The Masters of Real Estate: Getting Deals Done in

the New Economy.” For the past 4 years, he has been mentoring Real Estate Invest-

ing Students across the U.S. and Canada . Since he started raising Private Money, he

has developed new, easy and simple techniques for raising all the money you’ll ever

want for your real estate deals.

Jay pours his talents and energies into numerous activities. He is President of Conner Properties and EZ Mortgages,

plus former CEO of Leader Homes, and past President of Business Networking International. In 1997 Jay formed En-

core Music, a private record label, where he records original piano compositions.

When: Saturday September 28th 9:00 AM - 4:00 PM (8:30 AM Registration) Where: To Be Determined Cost: Members $29 Non-Members $59

Details being worked out

Please Watch MAREI Calendar

And Your Email for Details


Wholesale Real Estate

Building Your Buyer’s List

Kim Tucker

“I want to get into this real estate investing. Where should I start?”

This is a question that I often receive and while many factors should go into where you personally start like time and money, I quite often recommend getting your start in this business by learning how to wholesale properties. It does not take a bunch of money to wholesale a house and all the tasks needed in wholesaling should be learned in just about any other type of residen-tial real estate investing.

In May’s Investment News we had a broad overview of

Wholesale Real Estate Investing, that is an essential compo-

nent of any type of real estate investing. If you can master

the art of finding deals, evaluating properties, solving prob-

lems for sellers, finding buyers, and selling the deal - the key

steps in Wholesaling, then you are ready to take on most real

estate transactions.

Today we are going to talk about Building Your Buyers List.

This is the second step in wholesaling real estate because

before you spend all the time, money and effort of finding

motivated sellers and properties to wholesale, you want to

make sure you are finding what the buyers want. So first,

you have to find the buyers.

There are many different ways to find buyers and how you go

about it will depend on your goals. If your goal is to have the

biggest list of buyers names then you could go out and buy a

list, give away free reports, collect business cards at REIA

events and do anything and everything you can to collect a

name and an email address. But remember, an email ad-

dress does not buy properties from you over and over again.

It may be that one person on that list might buy a bunch, but

the rest are just time spent collecting the names and working

the system.

Case in point, as an investor for the past 13 years I have col-

lected every name and email from every investor I have ever

came in contact with and faithfully put then in my database

and had a follow up system to keep in touch. I have a list of

well over 6000 names. When I have a wholesale house to

sell, invariably I sell it to one or two people on that list and

usually the same one or two people. So size of list is not my

goal, rather a quality list of people who buy houses is my

goal.

So where do I personally start in building my buyers list, with

people who I know that buy houses.

My family and I have been investing in real estate since 2000

and we have an established list here in Kansas City. But re-

cently we have expanded to non-performing notes across the

country and I have found myself with a house I need to sell in

a market where I don’t know anyone. So I have had to build

a buyers list, FAST in 3 markets in the past year.

So think about your market and who buys houses, typically all

cash and fast? Other Real Estate Investors. Who does it

over and over again . . . Landlords and Rehab Investors.

Where can you find Landlords and Rehab Investors?

Let me tell you my little secret to finding these types of peo-

ple . . . www.SocialServe.com. This is a site that covers most

markets across the nation where landlord investors can list

their homes for rent on Section 8. This site is searchable by

county and zip code. So when I go into a new area, I do a

search of all the properties for rent in the particular area

where I want a list of buyers and then screen for just houses

or privately owned properties and look at who is offering the

homes for rent. I get a name and a phone number and about

50% of the time, I get an email address as well. Personally I

just grab those folks with emails, as I have a property to blast

out.

I am probably missing out on two or three very good buyers

that don’t have email. I should take one more step and call

all the owners listed and ask if they buy houses, what they

buy and the best way to reach them and add that information

to my database.

My next place I look for buyers is Craigslist and not by post-

ing an ad, but rather by looking at all the ads on Craigslist

that appear to be a real estate investor or landlord. Again

take the time to personally call all of these people and ask

them the pertinent questions about where they buy, what they

buy and the best way to reach them and add this information

into your database.

Wholesale


The next place I look for Cash Buyers

is the local Recorder of Deeds office. I

personally subscribe to a service that

contacts my local Recorder of Deeds to

research out a list of people who have

purchased a single family property in

the past 60, 90, 180 days or what ever I

want and paid all cash. It eliminates

corporate buyers that appear to be a

banking institution and then I have an

excel spreadsheet of names and ad-

dresses to mail out a postcard. You

can get the same data for free if you

want to do a little legwork at your own

county recorders office.

Now you can do a lot with this list. Per-

sonally when I have a property for sale

is when I put together a postcard and

mail it out to the list. I tell them about

the house and direct them to my web-

site to collect photos. If you listen to

the gurus, you should have some sort

of free report on the site so you can

capture a name and email when you

give away the report. But as I am look-

ing for buyers, not a huge list of names,

I just send out the house and my catch

is that if they go to my website they will

get full interior photos of the property.

Real Buyers will go to my site and I

only have to interact with real buyers

who want to buy my houses.

You can also go to live events and net-

work which is an excellent way to build

a list. Or consider hosting a table at a

local REIA group to collect names and

email addresses and buying criteria.

Now before you get yourself all caught

up in a huge pile of contacts you can’t

possibly deal with, be sure to invest in

some sort of database management

system that will allow you to deal with

all these names, emails, phone num-

bers and buying criteria.

Here in our office we have used out-

look, Top Producer, Act and we are

currently using RealFlow. We really

like the functionality of Real Flow as it

will allow us to give away a free report

for an email if we choose. We can en-

ter contact information and buying crite-

ria. The best feature by far is the fact

that it will keep track of who buys what

type of house and where and when we

have a new property we put into the

system, it goes out and does an instant

search for us and gives us a list of only

buyers who are looking for properties

that are in the same city, size, style and

price as the property we are currently

dealing with. Then we can send that

one property out to 12 buyers and

make 12 follow up phone calls.

We really like to use this tool BEFORE

we write a contract on a property so we

have a cash buyer in place immediate-

ly. And should we find ourselves the

proud owner of a killer deal, well we

can always blast it out to all 5000 plus

names to find a cash buyer fast if the

select list of matched buyers do not

buy.

So build your list and find out what they

want, so you can go to the next step of

Implementing a Marketing Plan to find

houses that fit your buyers needs.

Get on the Short List For Non MLS Properties

Rehab and Retail Houses Turn Key Rental Properties Fixer Uppers & Multi Family Off Market

We are sourcing properties that are not on MLS and selling them fast to a Select Group of Preferred Cash (and financed) Buyers in the KC Metro. KCInvest.com Call and speak with Don or Scott 816-523-4400 or Submit Through Website

Cash Buyers

WANTED

Wholesale


Properties


Invest in KC Metro

MAREInet.com/ Properties

11212 E 25th Street Independence, MO

$60,000 4 bed

2b Bath

All Brick Duplex in Inde-

pendence Scott Tucker

Realty Resource

913-523-4400

[email protected]

8034 Euclid Ave

Kansas City, MO 64132

$15,500 2 Bed

1 Bath

Fixer-Upper

Investment Property

Near Rent Ready

Christoph Becker

Blueprint Properties Inc

816–419–1165

[email protected]

5252 Brookwood Ave


$19,500 3 Bed

1 Bath

Solid 3 bdrm in

Brookwood Subdivision

Christoph Becker


816–419–1165

[email protected]

3717 Indiana Ave

Kansas City, MO

64127

$16,500

3 Bed

1.5 Bath

Fixer Upper

Rehabber Special

Christoph Becker


816–419–1165

[email protected]

11215 Crystal Ave Kan-

sas City, MO 64134

$45000

4 Bed

1 Bath

This house is a home

owners Dream!

Scott Tucker

Realty Resource

913-523-4400

[email protected]

2214 E 58th St.

Kansas City, Mo 64130

$10,000 2 Bed

1 Bath

This home needs some Love.

Cheap Fixer Upper! Christoph Becker


816–419–1165

[email protected]

10106 Canbridge Ave.


$49000

3 Bed

1.5 Bath

Turn Key Money maker

in south KC!

Kim Tucker

KCInvest

816-523-4400

www.kcinvest.com

3824 Bellefontaine


$35,000 3 Bed

1 Bath

Property is currently occu-

pied and cash flowing with

a market tenant $750 a

month.

Christoph Becker


816–419–1165

[email protected]

3342 Bales Ave


$35,000 3 Bed

1.5 Bath

Market Renter is lined up

for this property paying

$750 a month.

Christoph Becker

Blueprint Properties, Inc

BlueprintPropertySoltions.com

(816) 419-1165

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MAREI Mid-America Association of Real Estate Investors

Member Digital Library Members can Learn about a Wealth of Real Estate Topics Through the MAREI website

Forms & Documents: log in to the

member library to access all kinds of forms, sales and rental contracts to use in your real estate business

Special Reports: MAREI as been col-lecting E-Books for 10 years and adding all of them with real educational content to the library.

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All hosted on Google Drive.

Benefit included in all Membership Plans - Join Today!


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Meetings There’s not a better investment in yourself that you could make!

At our monthly meetings we host guest speakers, panels and roundtable discussions with industry experts providing insightful and current information for attendees. MAREI meetings are an essential tool for building a comprehensive team for real estate professionals.

MAREI works to keep its members up-to-date with the latest infor-mation on the real estate industry. MAREI has built relationships with members and the community at large who provide our members with information they need to be successful in today’s world.

We are the place to go for the information you need from the novice to the experienced Real Estate Investor. Monthly meetings are the best place to connect and build relationships with like-minded people and learn a thing or two along the way.

MAREI MEMBERSHIP

MEETINGS HELD AT:

Northland

(1st Thursday of the Month)

North Kansas City Community Center

1999 Iron Street

North Kansas City, MO

(816) 300-0433

MAREInet.com/KCNorth

Southland

(2nd Tuesday of the Month)

Career Education Systems/ In Mall

8600 Ward Parkway, Ste 2080

Kansas City, MO

(816) 444-7277

MAREInet.com/KCSouth

Upcoming D ates

August 1st Meeting: Online Security: We maintain so much personal and financial data on our computers,

laptops, smart phones and the internet, we need to take steps to protect it, find out how . Northland

August 6th Meeting: Why Social, we all have small businesses to promote, we all need customers, find out

how to use Online Social Networking to grow your business. Southland

September 5th Meeting: Northland Meeting - Topic to be Determined

September 10th Meeting: Southland Meeting - Topic to be Determined

MA

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Mid

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tio

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of

Rea

l E

sta

te I

nve

sto

rs

A R

eal

Esta

te C

om

mu

nit

y

GUEST PASS

Name: ______________________________

Date: _______________________________

Email: _______________________________

Source: ______________________________

For first time guest to visit meeting.

Guest P

ass is a

vaila

ble

for

firs

t tim

e a

ttend

ees to M

AR

EI.

If

yo

u

have a

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efo

re, exp

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Investment News Page 5

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Members look for your discount card in your members Benefit Pack-

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