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INVESTMENT NEWS
MEETING
LOCATION
Holiday Inn & Suites Overland Park West 8787 Reeder Road Overland Park, KS
Top Floor Sunset Ballroom
Real Estate Investor Meeting
On January 13th, 2015, at MAREI’s Monthly Meeting, 32 year industry veter-
an, Eddie Speed will present “The State of the Industry 2015”. See the supporting
data of the Shift in the Industry that points to the Need for Every Real Estate In-
vestor to learn the Note Industry in the next five years.
Industry Shifts
The fact that the smart money, such as Wall Street Hedge Funds, has already
noted the changes and taken appropriate actions for huge profits in the future. In
order to profit big just like the smart money, investors must first familiarize them-
selves with the shift that has taken place in the market.
New changes in government regulations have posed new challenges that must be
counteracted such as rising prices, lack of inventory, falling profit margins, in-
creased competition and increased issues with landlords. Investing in the note
industry comes with a range of benefits spanning high national inventory, discount
buys of up to 70%, less competition, huge investment returns, no issues with land-
lords, exemptions by Dood-Frank, payments from government funds, streams of
passive income to payouts in lump sums.
Tuesday’s Meeting is FREE for member’s and has a cost of $25 at the door or
$15 if you preregister on the calendar of events at MAREI.org.
Mid-America Association of Real Estate Investors Newsletter January 2015
Buying or Selling Property? MAREI members post properties on their own free website.
Properties flow through to the MAREI website where they are sent out to the Member Data-
base and the MAREI Facebook pages. If you are buying, please check our website, if you
are selling, please join and market your property
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What is a Note ~ Eddie Speed
Most real estate investors have heard of the “Note Business” but many misunder-stand it while others think that it is completely separate from the real estate busi-ness. The fact is, most real estate investors are in the note business, and they just don’t know it. The note business is the financing side of the real estate business.
Note Business in the Simplest Terms
The note business is based upon the purchase, sale and assigning of two docu-ments: the promissory note and the mortgage agreement. These two documents represent a promise to pay and a solution for non-payment.
When someone borrows money to purchase real estate, they have to sign an agreement to promise to pay it back. This agreement also outlines the terms of the payback. This written promise is not enough to get a loan. This promise must be backed by collateral of value, which is typically the real estate itself. The collateral agreement pre-authorizes the foreclosure of the property if the debt is not paid according to the promissory note.
Move from the Paying End to the Receiving End of the Business
So if you have ever borrowed money from a traditional lender, private or hard-money lender, or even a property seller, you have been in the “note business”! Well, you have been on the paying side of the note business. Why not get on the receiving end of the note business!
In the receiving end of the note business, you can receive monthly cash flow with-out the headaches and liabilities of being a landlord, lump sum cash payouts, or even end up with the property at 30 to 40 cents on the dollar!
Acquire Property or Cash Flow for Pennies on the Dollar
Today’s inventory of both performing and non-performing notes is so massive that it doubles the number of foreclosures since 2008. This supply has prices for notes at historical lows but it will not last forever.
Non-Performing
When you buy a non-performing note on a vacant home, you will acquire a Deed in Lieu or foreclose and end up with the property. You are a real estate investor simply acquiring property in a different way.
If you buy a non-performing note on an occupied property, you will either modify the loan to start receiving monthly cash flow, get a Deed in Lieu or foreclose.
Performing
When you purchase a performing note, you acquire long term, real estate backed, monthly cash flow. Today, these assets can be purchased for 60 cents on the dollar. That is an unbelievably good deal. No land lording, no hassles, just auto-matic monthly deposits into your account.
Note = Promissory Note = IOU (I Owe You)
Mortgage = Collateral Agreement = Foreclosure Agreement
BUSINESS
directory
Service Company Contact Phone Web
Auction Company Cates Auction Staff 816-781-1134 CatesAuction.com
Contractor Building Trades Robert Massey 816-868-1817
Contractor Discover Heating & Air Curt Whitlock 816-500-2970 Discover HVAC.net
Contractor Supply Choice Cabinets Karl Dunivent 816-343-8887 ChoiceCabinet.com
Contractor Supply Home Depot George Neal 816-510-9199 HomeDepot.com
Contractor Supply Odor Universe Mike Riddle 816-718-9136 OdorUniverse.com
Contractor Supply Sherwin Williams Mike Steiner 816-589-8506 SherwinWilliams.com
Hard Money Great Plains Funding George Hersch 913-735-6605 GreatPlainsFunding.com
Hard Money Investor Choice Funding Dave Williams 303-500-7088 InvestorsChoiceFunding.com
Hard Money Kansas City Investor Funding JJ Pawlowski 816-916-4593 KCInvestorFunding.com
Hard Money Longhorn Investments Mike Friedl 913-634-6386 LonghornInvestments.com
Home Buyer kcmoHomeBuyer Don Tucker 816-200-2198 kcmoHomeBuyer.com
Insurance Asset Protection Insurance Lisa Goodner 877-752-2742 APIAProtects.com
Investor 3B Real Estate Investments Bob Hult 913-940-0992 3BREI.com
Mortgage Pulaski Bank Beth Langston 816-234-8660 PulaskiBank.com
Realty Realty Resource Staff 816-523-4400 RealtyResourceKC.com
Realty & Management Arrow Realty Candace Davis 913-956-5003 ArrowRealtyKC.com
Realty & Management Home Rental Services Kandy Meehan 913-469-6633 Home4Rent.com
Realty & Management Jamieson Home Team Kevin Jamieson 913-384-8331 JaimesonHomeTeam.com
Security COPR Cage Geoff Miles 816-398-4045 COPRcage.com
Title & Escrow Accurate Title Jackie & Tina 913-338-0100 AccurateTitleCo.com
Title & Escrow Alpha Title Patsy Archer 913-498-8999 AlphaTitleLLC.net
See full details on all Business Associates at MAREI.org/Business-Directory/
Mid-America Association of Real Estate Investors does not render legal, tax, economic or investment advice. All pro-
grams, properties and services are provided with the understanding that Association is not engaged in rendering legal, tax,
or other professional services. If legal, tax or other expert assistance is required, the services of a competent professional
should be sought. Everyone should complete their own due diligence!
Where do we find houses? ~ Joseph Varnadore/NoteSchool
What should the investor do?
Today more and more people are attracted to real estate and naturally by extension, real estate investment associations and clubs. Many of these investors are new or “newbie” investors who are easily overwhelmed with information and constantly search for the best way to start. They suffer from paralysis of analysis.
The instructors at NoteSchool each have dozens of years of experience in the real estate investment space. This includes buying real property and mortgage-backed notes. In this article we will use that insight to cut through the “noise” so that you can get started making money in real estate investments by breaking this industry down to the very simple basics.
Two Ways to Acquire Real Estate
As an investor, you can acquire real property by purchasing the property outright or by purchasing the mortgage-backed
security and then acquiring the property. Several things will determine which of these two approaches you use. So let’s take
a bird’s eye view of these approaches.
Acquire Real Property by Purchasing the Property Outright
In this approach you are directly acquiring the Deed to the property. The goal here obviously is to acquire the property at a
discount, in fact the greater the discount the higher the profit. This requires a motivated seller. This type of acquisition is ei-
ther through a voluntary sale or a legally enforced sale.
Voluntary: A voluntary sale would be simply purchasing the property from a motivated owner/seller. These owner/sellers
include:
Individual motivated property owners MLS listed sales
Disenchanted landlords Owners of inherited property
Property in probate Bank and other lender owned property (REO property)
Bank or other lender approved sales (short sales)
The supply of these types of properties has drastically dwindled in the past year. In fact, RealtyTrac reports that Short Sales
have dropped in half in just the past 8 months. In that same time period, REO sales have dropped 25%. It should be noted
that the price of these types of acquisitions has gone way up to the point where even seasoned individual investors simply
can’t afford to buy and make a decent profit.
Involuntary: In today’s economy, most investors acquire the property through a legally enforced sale. This means that the
property owner was negligent on some legally required payment and the party who is suffering the delinquency has filed a
From
Noteschool
Students
“This had been a
very good year for
us... if I can do it,
you can do it...”
~ Paula from
Kansas City
“NoteSchool has
given me the pow-
er to achieve my
dreams...”
~ Imran from
Phoenix
"We're receiving a
check for $30,000
on an $11,000 in-
vestment..."
~ Jason from
Phoenix
legal action for restitution. That’s a fancy way of saying “it’s time to pay the piper”.
These owner/sellers include those with homes sold at Auction Foreclosure Sale
for Non-Payment of
IRS Taxes Property Taxes (Tax Deed Sales) HOA fees
Super Lien 1st Mortgage Junior Liens
These types of acquisitions are competitive not only with local investors but large
institutional investors such as Blackstone and other hedge funds, private equity
firms and real estate investment trusts.
Acquire Real Property by Purchasing the Mortgage-Backed Security
In this approach you are acquiring the Deed to the property by purchasing the
underlying mortgage debt. The goal here, as always, is to acquire the property at
a discount. As stated previously; the greater the discount the higher the profit. This
type of acquisition is also through a voluntary sale or a legally enforced sale.
Voluntary A voluntary sale for this acquisition type would be a relief for the prop-
erty owner. These owners, looking to get out from under the enormous debt load
would Sign Deed in Lieu of Foreclosure or a Loan Modification.
A Deed in Lieu allows the debtor to simply walk away from the problem. In fact,
right now, the Debt Forgiveness Act allows them to walk away with out any federal
tax ramifications. A loan modification allows the qualified homeowner to start mak-
ing payments once again but on an adjusted loan schedule that they can afford
and the debtor agrees to.
Involuntary An involuntary sale for this acquisition type would be done by simply
enforcing the legal documents that the property owner has already agreed to. This
acquisition means the investor simply Enforces the Mortgage or Deed of Trust.
Owners who simply got tired of waiting for the bank to enforce the mortgage have
already vacated many of these properties. The neighbors, city and local county
government are happy to see these properties acquired and turned into owner
occupied homes once again.
Discount Your Way to Higher Profits
Statistics show that:
REO and Short Sale acquisitions are being purchased at about 30% discount
Non-performing mortgage-backed notes are being acquired at about 70%
discount
This is where the market is today. In fact, Bloomberg just interviewed 8 of the top
financial managers in the world. These top investors run companies that have
unlimited funds and virtually every investment asset in the entire worldwide spec-
trum and yet US non-performing mortgage backed notes was a highly recom-
mended favorite for 2014.
In addition, because the cost of entry level is significantly lower for acquiring mort-
gage backed notes, investors are finding that they don’t have to go into debt with a
high interest acquisition loan such as a hard money loan. In fact, over the past few
years we trained investors who were able to acquire properties for less than
$5000 (five thousand dollars-not a typo!).
Why Would a Seasoned Real Estate Investor
Need to Be in the Mortgage Backed
Note Business? ~ Joseph Varnadore/NoteSchool
As a seasoned real estate investor you understand that you make your money when you buy and that is why you need to
buy at a discount. The most common “discount buying” strategies are:
Short Sale
Foreclosure Sale
REO Property
Tax Deed Sale
Probate Sale
You, of course, realize the profit from your discount buy when you apply your pre-planned exit strategy. The most common
exit strategies are
Wholesale
Retail (fix and resell)
Fix and Rent
Lease Option
New government regulations have forever changed today’s real estate market. The repeal of the Glass-Steagall Act, and the
implementation of the Dodd-Frank and SAFE Acts have forced lenders, buyers and investors to adjust.
To simply continue to pursue the above discount buying strategies and exit strategies will severely limit your in-
Photo by Stuart Miles with FreeDigitalPhotos.net
Connect
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Groups Promoting
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Real Estate
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sas City Connec-
tions by joining
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Investors
vestment opportunity and profit margins.
These adjustments have created both problems and opportunities. The problems
the seasoned investor faces are:
Lack of Inventory
Rising Prices
Increased Competition
Falling Profit Margins
Increased Landlord Issues
The opportunities that have been created are primarily in the finance side of the
real estate business. The finance side of the business is the note industry. This is
an opportunity that the seasoned investor can easily add to their current skill set
because the investment philosophy is the same: buy at a discount with a pre-
planned exit strategy.
The opportunity of adding this part of the real estate industry to your existing busi-
ness is:
Record high national inventory
Up to 70% discount buys
Way less competition
Huge returns on investment
No landlord issues
Dodd-Frank exemptions
Government funds can pay you
Passive income streams
Lump sum payouts
Take a look at this case study that will yield our very seasoned REO specialist
student 322% in one year, on one deal!
Our student purchased an $85,725 non-preforming note for $10,862. Now that’s a
discount. In addition he had to pay off some other liens, which totaled about
$1500.
Since the owner was still living in the property and wanted to stay, our student
modified the $85,725, 8.84% loan to a $52,000, 7.75% loan. This reduced the
property owner’s payment from $617 per month to $358 per month.
As a part of this debt reduction and loan modification, they applied to the hardest
hit funds. In exchange for forgiving debt and modifying loans, these special funds
pay up to a certain amount back to the lender. In this case, our student is receiv-
ing a check for $30,000 from the state!
The raw numbers:
Paid out $12, 362
Received $30,000 plus a $2000 reinstatement fee
Will also receive $358 per month for 30 years
By the way, this investor purchased 30 deals in his first year with Note
School..
Recently Released Economic News
Will Affect You and Your BUSINESS
All the changes in the national economy and real estate market indicate one clear thing; investors are confused. They need
guidance and a strong network around them. That is why we compiled data and statistics to present at the NaREIA Mid-Year
event in Denver in June.
Since that event, even more data continues to prove our point:
Nobel Laureate on Economics, Robert Shiller, says that stocks have been more expensive only three times in the last
century: 1920’s, late 1990’s and the prelude to the 2007 crisis,
2013 was the worst year in history for the Bond Market,
Mutual Fund giant, Vanguard, says that IRA’s are being used as money market parking lots.
This shows that investors are weary of the stock market, afraid of the bond market and are sitting in cash-like positions. Ex-
pect these investors to turn their focus toward “value buys”: real estate and real estate notes.
May no mistake; these new investors will change the market! How well you position yourself for these changes will deter-
mine how well you do (or don’t do). Think about how the hedge funds changed the REO and rental market over the past 2
years.
Here are some projections:
Large cash buyers (hedge funds) will exit single-family real estate and focus on selling rent-backed securities and pur-
chasing large pools of non-performing loans
New “value-seeking” cash investors will be looking for turn-key investments
Millennials are not ready to move out of Mom and Dad’s house just yet and when they do, they will rent not buy
Re-performing notes will continue to be priced historically low as hedge funds and private equity firms buy non-
performing notes and re-sell them after modifying the loans.
REO inventory will have spurts of growth but ultimately continue to shrink as banks liquidate their non-performing assets
through note sales to quickly meet new government regulations
Non-performing note inventory levels will remain mostly unchanged as shadow inventory is leaked into the market coun-
tering the sale of these notes
Short sales will continue to fade unless Congress retroactively reinstates the Mortgage Debt Forgiveness Act
Notes on <$500,000 commercial and multi-family properties will be sold by large investment firms to small investors
From
NoteSchool
Students
“Working with Ed-
die & NoteSchool
has changed our
business . . “
~ Kim from
Kansas City
"I am here to learn
what is coming up
and what we
should expect in
the next 2-5
years..."
~ Tim from
Raleigh
"We are learning,
not only to line our
pocket books, but
to make an im-
pact.. that makes
it all worth wile.."
~ TJ & Rick from
Orlando
Note Investors:
Helping People Stay
in Their Homes
Ms. Solomon was desperately trying to help her father. She became the financial and medical advocate for him since her mothers passing in 2011. Her father was in poor health and simply unable to afford the mortgage on the property that he and his wife had shared. Letters to the bank went unanswered and the future was uncertain.
The property value had dropped on their Florida home to $60,000; far less than the $110,000 that was owed. Ms. Solomon was desperate to work with the bank but wasn’t able to find anyone who could help her. Her goal was very clear: she wanted to make a short payoff so that she could move into the house and provide for her ailing father.
The note and mortgage was sold by the bank and eventually purchased for $35,000 by NoteSchool students, TJ and Rick. These business partners studied the file and recognized that the father and daughter were emotionally attached to the property. They simply wanted someone to listen to them and to work out a solution. TJ and Rick did just that.
TJ and Rick were able to quickly present 2 options for Ms. Solomon:
Option 1: A short payoff of $55,000.
Option 2: $35,000 payoff with a new $35,000 loan.
If she chose Option 1, TJ and Rick were willing to forgive 50% of the loan. In addi-tion, they would forgive all past due payments and waive their deficiency clause.
If she chose Option 2, they would reduce the balance of the loan to $35,000. They would also reduce the interest rate to 5%, shorten the payoff to 72 and lower their payment to $564 per month.
Ms. Solomon chose Option 1. This lingering problem was solved very quickly once TJ and Rick owned the note. Ms. Solomon was able to keep her father in his com-fortable and familiar surroundings without the fear of losing the home.
The solution to this real estate crisis is the entrepreneur. Unlike big lenders, entre-preneurs such as note buyers have the ability to make quick and nimble decisions. These quick decisions can make the difference between somebody remaining in their home or having to move out.
Attend the January Meeting of Mid-America Association of Real Estate Investors to
Learn the State of the Real Estate Investing Industry for 2015 and Why the Note Business is the Hottest Topic in Real Estate Investing Right NOW!! Then Attend an All Day Workshop on Saturday January 24th to Learn Why Every
Real Estate Investor Simply MUST Learn the Note Business in the next Five Years or Get Lost in the changing Industry.
Thirty Year Note Business Veteran Eddie Speed has dedicated his professional life
to the seller financing and non-performing note industry. Over the years, he has intro-
duced innovative ideas and strategies that have positively impacted the way the real
estate industry operates today. His group of businesses includes Colonial Capital
Funding Group, that is active in buying and selling notes and NoteSchool that trains
students how to buy, sell, workout and hold both performing and non-performing notes.
He also manages a family of Private Equity Funds that acquire bulk portfolios of notes.
His active participation for the past 30 years in the Note Industry and most recently in
his own businesses, make’s Eddie uniquely qualified to give us an overview of the
Current Real Estate Investing Market.
Eddie will bring his facts and figures to help you understand:
Why the Note Business is the Hottest Topic in Real Estate Today
and why the Government is pushing it!
How To Find Real Estate Bargains Via Notes
How To Find The “Hidden Inventory” of Real Estate That No One Else Knows
How To Buy Non-Performing Real Estate for Pennies on the Dollar
How to Turn $100 in Your Roth IRA into $100,000 or More and Retire Tax Free
How to earn velocity income without using any of your own money
Why Real Estate Agents, investors, builders, property buyers and sellers are creating a strong de-
mand for these services and how you can cash in by becoming the “go to” person
Why flipping notes is easier and less time consuming than flipping properties
How to “paper out” of properties and triple your net income
How “anxious money” is changing the industry making your opportunities greater than ever before
How to become a Note Buyer with as little as $100 dollars
How to apply your current real estate knowledge and skills to make even greater profits with the
note business
Join us and 80 to 100 fellow investors as we connect and Get the Low Down on the Current Real Estate
Industry with Note Expert Eddie Speed. This is all happening at the MAREI Meeting on Tuesday
January 13th at 6PM at the Holiday Inn & Suites Overland Park West located at 8787 Reeder Road,
Overland Park, KS and get a jump start on your 2015 business.
This monthly meeting is open to all members of MAREI at no charge and the general public for a fee.
At the door fee is $25 per person, or pre-register on our calendar of events for $15. Visit MA-
REI.org to get more information and to pre-register or call the MAREI office at 913-815-0111
State of the Industry 2015
Why the Note Business is HOT!
Eddie will share what Wall Street & the Insider Hedge Funds already know . . .
Understand why Non-Performing Notes are the New REO
Sell landlords loaded rentals using our innovative 50/50 model that will have you making lump sum
cash now and long term monthly cash flow
That you can profit while significantly helping people suffering from the mortgage meltdown
Make cash flow like a landlord without the hassles of being a landlord
Use your IRA or 401k to make tax free- often double digit returns
Why note investors are making double digit returns on investments right now
How to purchase notes without using any of your own money
Pull back the curtain on the “Shadow Inventory” being held by banks, HUD, Fannie and Freddie and
why the note business is the solution to the real estate crisis
How to Sell Your Properties Using Seller Financing
How to “Flip” Real Estate Notes Without Any of Your Own Money
How government mandates are driving the business!!
See case studies of real deals showing you how our students (some right here in Kansas City) are
closing hundreds of deals!
Eddie Speed has been selling out similar Saturday training events across the country, so we have
booked this event at the Holiday Inn so we are able to increase our room size. We still may sell out this
all day event, so be sure to register early, there may not be any at the door seats available. Saturday,
January 24th, Holiday Inn at 8787 Reeder Road in Overland Park, Check in at 8:00 and start at 8:30. We
will be serving Lunch around Noon. Register at www.MAREI.org or call 913-815-0111.
————— REGISTRATION ———————
Regular Pricing: $49 for member, plus $20 for guest. $69 for non-member, plus $20 for guest.
Special Pricing on the MAREI Website at www.MAREI.org
Add $99 for Annual Membership for 1 or $149 for Annual Membership for two. Total: _______________
Name: _____________________________ Second Person Name: ________________________________
Email: _____________________________ Second Person Email: _________________________________
Phone: _____________________________ Secondary Phone: ____________________________________
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Paid by Check: #__________ Paid by Credit Card: #_____________________________________________
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New government regulations have forever changed today’s real estate market. The repeal of the
Glass-Steagall Act, and the implementation of the Dodd-Frank and SAFE Acts have forced lenders,
buyers and investors to adjust. To simply continue to pursue the discount buying and exit strategies
we have always used will severely limit your investment opportunity and profit margins. These
adjustments have created both problems and opportunities that Veteran Note Investor Eddie
Speed will discuss on Saturday January 24th!
Workshop: Why Every Investor
Must Learn the Note Business
Contact Us
Learn more about Mid-America Association of Real Estate Investors
Chapter of National REIA
Kansas City Office 8014 State Line Rd, Suite 210 Leawood, KS 66208
(913) 815-0111
Visit us on the web at www.MAREI.org
Why Every Investor should
Learn the Note Business
One Day Workshop
To simply continue to pursue the discount buying and exit strategies we have al-
ways used will severely limit your investment opportunity and profit margins.
These adjustments have created both problems and opportunities that Veteran
Note Investor Eddie Speed will discuss on Saturday January 24th!
Eddie Speed has been selling out similar Saturday training events across the
country, so be sure to register early, there may not be any at the door seats avail-
able. Saturday, January 24th, Holiday Inn at 8787 Reeder Road in Overland Park,
Check in at 8:00 and start at 8:30. We will be serving Lunch .
Want more info, visit our website at MAREI.org .
Member Forum Do you have a question about
how to do something?
Do you need to run some ideas
by someone?
How about a referral?
Just want to connect?
Visit the Member Forum!
New Location We are excited to announce our new meeting location at the Holiday Inn &
Suites at 8787 Reeder Road in Overland Park, KS. Conveniently located just
off 69 & I35 Highways at 87th Street.
Meeting Agenda 6:00 pm: Networking & Vendors
6:00 pm: Announcements & Introductions
7:30 pm: State of the Industry with Eddie Speed
9:30 pm: Late Night Networking at Whiskey Joe’s Bar & Grill
