MAREI wins Awards of Excellence at National REIA Mid Year for 2nd Year in a Row!
MID-AMERICA ASSOCIATION OF
REAL ESTATE INVESTORS
P e ag 10
NETWORKING : EDUCATION : COMMUNITY : GOVERNMENT September 2012
This Month at MAREI: FORECLOSURE How it Works & When you Need It. Tuesday September 11th, 2012
Page 6 How I Did the Deal
Page 10 Benefits at a Glance Page 12 Bill Twyford Building Instant Rapport Page 14 Welcome New & Returning Members Page 16 Title Exceptions From Accurate Title Page 18 Calendar of Events Schedule Now Page 20 Local Market Conditions from Local Market Monitor Page 22 For Sale Member Properties Page 24 Show me the LIST! Building Your Buyer’s ist Page 26 Help Wanted Volunteer at MARE Page 27 Investing Using NLP with Bill and Dwan Twyford Page 28 September Meeting
Page 3 Business Members Build your team with our Service Providers & Industry Partners
Page 8 September Speaker Bud Whisler: Foreclosures Page10 Foreclosures Judicial vs Nonjudicial
MAREI Business Members are here to serve you in your Real Estate Business. They specialize in Real Estate Professionals and have joined our association as a Business. You can find out more about each of our Business Members at www.MAREInet.com/Services . Don’t see a service you need? Ask on the Forum!
Foundations Cornerstone Foundation Joe Williams 913-220-5253 CornerstoneFoundationRepair@yahoo.com Insurance www.NREInsurance.com Jim Jrolf 913-915-3232 1-888-741-8454 email@example.com Property Management
Your Company Here $499 annual Or $135 a Quarter
Insurance www.APIAprotects.com Lisa Goodner 1-877-752-2742 firstname.lastname@example.org
Investors www.kcmoHomeBuyer.com The Tuckers 816-200-2198 kcmoHomeBuyer.com Property Management Real Estate Brokerage www.RealtyResourceKC.com 816-523-4400 RealtyResourceKC@gmail.com
www.JamiesonHomeTeam.com www.MyPremierleasing.com Kevin Jamieson Jeff Wood 816-503-4671 816-841-9500 email@example.com firstname.lastname@example.org Staging www.ShowHomesKC.com Michelle Davis 913-449-3593 email@example.com Suppliers: Building www.CabinetGiant.com Josh Burns 1-877-484-4268 info@CabinetGiant.com Title Company Suppliers: Building www.Sherwin-Williams.com Mike Steiner swrep4735@Sherwin.com www.AccurateTitleCo.com Jackie White / Mary Peterson 913-338-0100 firstname.lastname@example.org
Suppliers: Building www.HomeDepot.com
Title Company www.Coffeltlandtitle.com Bud Whisler 816-581-2299 email@example.com
PO Box 8685, Prairie Village KS, 66208 Phone: 913-815-0111
Our Mission Statement
Mid-America Association of Real Estate Investors is dedicated to promoting ethical real estate investing and to protect and promote the best interest of our membership through educational and networking opportunities as well as community, legislative and public relations.
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MAREI does not exist to render and does not give legal, tax, economic or investment advice and disclaims all liability for the action or inaction taken or not as a result of communications from or to its members, officers, directors, employees and contractors. Each individual should consult his/her own counsel, accountant and other advisors as to legal, tax, economic, investment and related matters concerning real estate and other investments.
The views and opinions expressed by authors of articles contributed to this newsletter do not necessarily reflect those of the association, the board of directors or the staff.
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MAREI STAFF & Volunteers
Executive Director Kim Tucker kim@MAREInet.com Investor : Realtor Advisory Board / Membership Desk Scott Tucker sTucker319@gmail.com Realtor
Advisory Board Donald Tucker DonTuckerRE@gmail.com Investor Focus Group Leader: Blue Springs / Lees Suumit Debra Felderhoff firstname.lastname@example.org Landlord : Investor Focus Group Leader: Weekly Wednesdays Michelle Winberry email@example.com Investor : Realtor Focus Group Leader: Weekly Wednesdays Brian Winberry
Advisory Board / Membership Desk Dan Goodwin DanGoodwin@kw.com Realtor : Short Sales Advisory Board / Membership Desk Shelda Goodwin SheldaGoodwin@kw.com Realtor : Short Sales Focus Group: Eddie Speed Mentoring Students L. Scott Ficinus Scott@Ficinus.com Realtor Advisory Board / Membership Desk John Welchert JWelchert@platinumrealtykc.com
Investor : Focus Group Leader: IRA Investing Coming Soon . . . Leader Located
Realtor : Investor : Landlord Focus Group Leader: KC Note Buyers Coming Soon
Focus Group Leaders: Transaction Engineers Leader Wanted
Focus Group Leader: Commercial Leader Wanted
Focus Group Leader: Women in Real Estate Leader Wanted
Focus Group Leader: Advanced Investors Leader Wanted
or orking f Netw ls tate Dea Real Es
More often that not with every deal I am looking for four different things: (1) Something to purchase, (2) a funding partner to pay for the deal (3) a buyer for the deal or (4) some sort of service provider. We have been in business for over 12 years now and one of the key activities we still participate in is networking to meet new people so we can do more deals. At the recent Realty411 event here in Kansas City that I attended as vendor promoting MAREI, Don my husband attended as the Real Estate Investor in the family. I can’t tell you how many times we have heard presentations about Self Directed IRA investing or Insurance for real estate investors so attending for us to listen to the speakers was not a high priority, even though I got a few new ideas from each and everyone of the speakers. There were few people who came for a few minutes and left. When I asked them why later, they said that they had already seen speakers on all these topics and didn’t see any point in staying. I noted that the people who did stay for the entire day were the highly experienced investors who could have taken the place of most of the presenters for the day. So why would the investors who have been in this business for a year or less find the event a total waste of time and the experienced people who have done countless deals tell me the event was excellent. The difference is the people who do deals realize that they can always learn something new in this industry because it is always changing and that at large events there are a lot of new people to meet. Adding people to your database is key as they could be the next person to bring you a deal, fund a deal or buy a deal or be the service provider. Just last week I was reading a weekly email newsletter , “The Notebuyers Notebook” that was talking about how their company is utilizing
d the I di ow
MeetUp.com. This is an online networking website that is a social networking website designed to facilitate live meetings. Meetup is designed to help you make live connections with people with similar interests and there are meetups for just about every interest imaginable.
L! EA D
Anyway, Dave, the writer of the newsletter said “we were deciding on new means of networking we turned back to Meetup . . . I noticed that joining a Meetup, . . ., expanded your network by usually at least 50 people that share a similar interest.” Then today I received a voice mail from a new investor who was wanting to find out where he could get “the list” of wholesale buyers. My response was to find a place where real estate investors meet on a regular basis: like a MAREI or KCIG meeting or a special event like the Realty 411 event last week and to network his way into a quality list of not only wholesale buyers, but other wholesale sellers, service providers that would be needed in all of his deals and potential funding partners just in case he would rather buy the deal instead of wholesale it. So this month, how did I do the deal? I did it by knowing someone. So I will see you at the MAREI meeting, doing a deal or being a part of someone else’s deal. Deal provided by Kim Tucker, local real estate investor and MAREI Director. Kim and her husband Don have been investing in Kansas City since 2000. Find them online at kcmoHomeBuyer.com or GBIFunding.com.
Do you have a deal, we would love to hear about it. Email it to us at info@MAREInet.com
Publish investment property opportunities on our marketing page.
For title, escrow, 1031 & foreclosure.
Turn Key Rentals Wholesale Properties REO & Short Sale Listings Multi Family & Offices
Review the Membership Package on the Resource tab for instructions on how to log in and post your properties MAREInet.com/Properties
Bud Whisler 816-380-3441
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Judicial vs Nonjudicial
Foreclosure happens when a borrower falls behind on house payments and the lender uses state procedures to the house that is the underlying collateral for the debt. Foreclosure works differently in different states. In some states, like Kansas, the lender has to file a lawsuit to foreclose (judicial foreclosure), while in others, like Missouri, it can foreclose without going to court (nonjudicial foreclosure). Judicial Foreclosure In a judicial foreclosure, the lender must go to court to get the foreclosure started. A judicial foreclosure typically takes several months or more, giving the borrower time to look for another place to live, and to save some money for the future. Another advantage for the borrower is that they can raise in court any legal defenses they may have to the foreclosure (without having to file a lawsuit). Here's how a typical judicial foreclosure might proceed. Borrower gets behind in your mortgage payments. A mortgage holder can begin foreclosure procedures if just one payment is missed, but usually will wait longer -- much longer in many states. The lender sends a notice of intent to begin foreclosure. In many states, the lender sends a ten-day notice of intent to begin foreclosure proceedings. The notice informs that the proceedings can be avoided if the missed payments are made up, plus costs and interest. The lender files a lawsuit. If back payments are not caught up, the lender will then go to court and file a lawsuit. The lender gives notice of the lawsuit. The lender does this by delivering a summons and complaint to the borrower (called "serving " a summons and complaint in legalese). Chance to respond. The summons and complaint gives the borrower a period of time within which they must respond if they are going to contest the lawsuit (usually between 15 and 30 days). Whether or not a response is filed is up to the borrower. Either way, the lender will have the burden of proving to the judge that the foreclosure is justified under the terms of the mortgage.
If no response, the chances are excellent
Details: Tuesday September 11 6:00 pm to 9:00 pm Career Education Systems Agenda 5:30 pm Pre Meeting / Setup 6:00 pm Registration 6:00 pm Vendor Hall 7:00 pm Speed Networking 7:15 pm Presentation 8:30 pm Q & A / Networking 9:00 pm Adjourn
Don’t miss this event!
Guest Speaker: Business Member Bud Whisler with Coffelt Land Title
Ward Parkway Shopping Center—8600 Ward Pkwy Kansas City Missouri Top Floor
that the foreclosure will go through. The court will issue a default judgment that authorizes the lender to sell the home. If there is a response, the borrower has the opportunity to tell a judge just why they think they have a legal right to keep the house and that foreclosure is not warranted. The better the defenses, the longer the process will drag out in court. Even if the borrower wins, however, it may be a temporary victory if the lender can fix whatever problem caused it to lose this time. The lender sends a notice of intent to sell. Once the judge issues a judgment, the lender typically will send a ten-day notice of intent to sell the property. At this point, in many states the borrower can avoid the foreclosure sale if somehow they can "redeem" the mortgage (pay it off in full, as well as the foreclosure costs and attorney's fees). The auction is held. If no one buys the home at the auction, ownership goes to the lender. Up to this point, the entire process, from the first notice to the auction, typically takes three and a half months -- more, if a response to the summons and complaint is filed.. Eviction If the borrower loses ownership of the home, most state laws don't require them to move out right away. The lender may just let the house sit, waiting for the market to improve and the borrower can remain in the home payment-free until they get evicted. Statutory Foreclosure If a non-judicial foreclosure state, the lender does not have to go to court in order to foreclose on a home. This means that the foreclosure can proceed more quickly.
Nonjudicial Foreclosure Process State law sets out the specifics of the foreclosure procedure, including how much notice is given, how the property will be sold (typically at a public auction), and what rights (if any) the borrower has to reinstate the loan before the foreclosure date or recover title to the property after it's sold. Time may be short. Borrower’s must pay attention when a foreclosure looms in a nonjudicial state because very little notice of the foreclosure sale will be given, and once it happens, the borrower may be permanently out of luck. Notice of sale. In most states, the first notice of the proceeding will be the notice of sale. Depending on the state, this notice will be either served on to the borroewer, published in the local newspaper, posted in the courthouse and on the property itself, or by some combination of the above. Notice of default and notice of sale. Some states provides the borrower with two notices -- a formal written notice of default (usually about 30 days, but sometimes more and sometimes less) and another formal notice that thehouse will be sold at auction (again, usually about a month, but it can be as little as 15 days). Right to reinstate. Between the notice of default and notice of sale, typically the borrower is allowed to reinstate the mortgage by paying off what is owed, plus fees and costs (which can be very high). With a couple of exceptions, however, once the sale occurs, your house is gone. The auction is held. If the
mortgage is not reinstated, the home will be sold at auction. As with judicial foreclosures, if no one meets the minimum bid, the property goes to the lender. Right to redeem. A few states give you some time after the foreclosure auction to redeem the property (to recover ownership of the property by paying off the successful bidder). Challenging a Nonjudicial Foreclosure in Court Because the borrower does not have the opportunity to raise defenses to the foreclosure in a nonjudicial foreclosure, the borrower will have to file a lawsuit. When this happens, the borrower is asking the court to temporarily stop the foreclosure so that the legal issues can be resolved in court. In these lawsuits, the borrower typically asks the court for three things, in the following order:
a temporary restraining order (which lasts about ten days) a preliminary injunction (which, in foreclosure actions, will last until the court decides the case), and
a permanent injunction (which will be issued if the judge decides in your favor). Next Steps To learn more about the ins and outs of foreclosure, both judicial and nonjudicial, be sure to attend the September MAREI meeting when Business Member Bud Whisler with Coffelt Land Title is going to explain further how the foreclosure process works in Kansas and Missouri and more importantly discusses when we as investors need to conduct foreclosures.
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Building Instant Rapport
. . . Bill Twyford Every investor has heard how important it is to build rapport with distressed homeowners. What we never hear about is how to do it. What is it about someone that makes us instantly like or dislike them? We don’t really know what it is about that person, we just know it’s something. Rapport is developed in the subconscious. We can’t quite pinpoint it, but there is something about that person that seems familiar and makes us feel comfortable around them. So … how do you establish rapport? Let’s start with a few basic tips. When I am looking for distressed homeowners, I like to knock on doors. It is the fastest way to get deals. If I knock on twenty doors over a weekend, I will have several contracts by Sunday afternoon. I’d rather spend a day or two getting multiple deals instead of waiting for my phone to ring hoping for just one deal. Here are some dos and don’ts when you knock on doors or meet a homeowner in person:
Do not wear sunglasses. Homeowners can’t see your eyes and subconsciously you seem suspicious. Never wear a hat, like a baseball cap. Again, homeowners can’t see your eyes and are suspicious. Always have a clipboard in your hands so that both of your hands are visible. If you tend to stand with your hands in your pocket or behind you, the homeowners will think you have a gun and are going to rob or kill them and will not hear what you are saying. Never wear cologne or perfume. I know this one seems strange, but let’s look at it from the homeowners point of view. You’re a guy and you wear Eternity. You show up at the door and a woman answers. Her husband used to wear Eternity. He ran off with another woman and she still hates him for it. You are wearing what the ex-husband used to wear and subconsciously, you remind her of him. She now dislikes you without knowing why. The same goes for the girls, too. You don’t want to remind the homeowners of someone they now dislike. Be aware of what color your clothing is. Green promotes trust, while red promotes dominance. I like warm colors like green, blue, pink, or brown. Stay away from reds and blacks. Dress casual, but professional … no suits. Also, lose the jewelry. HomeownMAREInet.com
Bill & Dwan Twyford will be teaching a 2 day workshop November 3rd & 4th on Communicating for Better Profits based on their own Real Estate and Short Sale Business. See Ad on Page 26 or go online at www.MAREInet.com/NLP ers losing their home do not need to see that you own a Rolex.
Be aware of what you are driving. If you drive a Rolls Royce, you may want to consider getting a middle-of-the-road car for meeting homeowners. Yes, homeowners need to see that you are successful to feel confident that you can help them. No, they do not need to see that you have become a millionaire from distressed properties. You never want them to wonder if you have taken advantage of others and that is why you have so much stuff. People are leery to begin with, don’t feed in to it. Be certain you are speaking to the right person. Instead of blurting out why you are there, ask if this is Mrs. Or Mr. so and so first. Once you are sure, continue with your conversation. Never use the “f” word … foreclosure. State that you were doing some research and see that they have a “pending problem with their property” and that you would like to help them. This puts the blame on the property, not the person.
think that fast talkers are slick and untrustworthy. Is it true? No, it is a subconscious thought that most people are not aware of. When you follow the homeowners’ rate of speech, you seem familiar to them and, again, they like you without knowing why.
Ask them to share a little about their current situation and listen with respect and empathy. Once you feel that they have properly vented, begin to ask details about their situation. Homeowners want to tell you what happened because they don’t want you to think that they are losers. No one grows up with the goal of being in foreclosure. Something in their lives changed and they want to be certain you know what it is. Make an appointment to view the property then call back to confirm the appointment. During the second phone call, ask more questions. Be certain that everyone on the deed is home and willing to put a deal together. When on the phone, listen for the objections you are going to get when you meet in person. For example, “we don’t have to sign a deed, do we?” If they ask questions on the phone, be ready to handle them in person.
Let’s look at establishing rapport over the phone.
Speak at the same rate of speech as the homeowners. For example, if the person who answers the phone speaks slowly, do the same. If they speak fast, do the same. People who speak fast think that people who speak slowly are stupid. Likewise, people who speak slowly
So, you see folks, it’s not that difficult to establish rapport. Take the time to be approachable, honest, and trustworthy and business will follow. Better yet … just be that way naturally and you will reap what you sow.
WELCOME NEW MEMBERS
To the premier trade association representing Kansas City Area Real Estate professionals
MAREI continues its growth with a total of 390 members to-date.
JOIN NOW (MAREInet.com/join)
◎ ◎ ◎ ◎ ◎ ◎ ◎ ◎
Nick & Lorena Collier: Oak Grove, MO Marilyn Dugan: Overland Park, KS Pat Edins: Liberty, MO Stacey Holscher: Shawnee, KS Debbie Olivarez: Independence, MO Bruce Roberts: Prairie Village, KS Tom Scanlon: Overland Park, KS Kelley Vince: Kansas City, MO
◎ ◎ ◎ ◎ ◎ ◎ ◎ ◎ ◎ ◎ ◎ ◎
Greg Billeisen: Kansas City, MO (Since 2011) Carol Cutler: Kansas City, MO (Since 2011) Karl Dunivent: Liberty, MO (Since 2011) Kerry Eikenbary: Independence, MO (Since 2010) Jeannie Estavez: Lees Summit, MO (Since 2011) Jeffrey Forster: Independence, MO (Since 2011) Beatrice Gicharu: Kansas City, KS (Since 2010) Kenneth Mabrie: Raytown, MO (Since 2006) Joseph Schoonover: Liberty, MO (Since 2011) Ray Strickland: Overland Park, KS (Since 2006) Jamieson Home Team—Business Member Premier Leasing—Business Member
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Whether you are local or from out of state, just getting started or experienced professional . . . . . MAREI will assist you in reaching your goals. Call or go Online!
Mid-America Association of Real Estate Investors www.MAREInet.com : 913-815-0111
Investment News Page 15
The owner of a property called to inquire about his coverage for a "right of first refusal" built into the Homes Association Declarations. One of the items almost all title insurance policies EXCEPT are the terms and conditions of the Restrictions and Protective Covenants and/or Homes Association Declarations. If you don't know what they are, ask for a copy and read it. In a few of the Home Association Restrictions or Covenants, most of which were created in the 60's and 70's, there is a right of first refusal for the adjoining land owners to purchase the property if you sell. These restrictions require that before you sell, you have to offer the property at the same price and terms to your neighbors. Depending upon the subdivision, it could be the neighbors whose lots adjoin yours or any one of many configurations. Some of these restrictions were an attempt to circumvent discrimination laws. Other typical restrictions are prohibition of additional buildings, fences and even sometimes basketball goals to just name a few. Of course, the owner hadn't read it. Didn't do his due diligence when he bought it nor did he read them anytime since he owned it. Nor did he read the current title commitment that was given to him upon the signing of his existing contract to sell the property, which required him to notify the property owners to the left and right of his property that they had 15 days to meet the offer or their right expired. He was supposed to close on the
sale that day and had moved out and needed his proceeds to purchase another property. The adjacent owners could relinquish their rights, however one said they would not sign as they had never had to do that before. So now the current owner had to wait 15 days to sell. He was in jeopardy of losing the property he had contracted to purchase and he and his family were living in a motel.All of this could have been avoided had he read and understood either commitment: the one when he bought it or the one he just received a few weeks ago. He was pretty angry that he didn't have coverage for the Homes Association restriction and that we didn't advise him about this clause out of 60 in the declarations of the subdivision. We explained that he should have read them or hired an attorney to advise him. We can't practice law as a title insurance agent or escrow company and can't advise anyone. We are a neutral third-party who follows instructions given us and federal and state laws. When looking at a Title Insurance Commitment be sure to read and understand SCHEDULE B, SECTION TWO, EXCEPTIONS. These are the things that are NOT covered. This is true for a Lender's Policy, also. Typically, among other items, easements, homes associations covenants and/or restrictions, right of ways and sometimes items on recorded plats and surveys are excepted, although there can be other items as well. You need to do your due diligence on all these items to make sure you can live with them. If you don't understand them, hire an attorney to advise you so that you can make an informed decision and are aware of how these items might affect your ownership or loan. Then it will not be a surprise that the EXCEPTIONS are items that are not covered. Article provided by Accurate Title Company, LLC is a full-service title insurance agency that is a new breed of title company with the expertise and ability to handle the most complex transactions along with the skill and responsiveness of a boutique firm. Find online at www.AccurateTitleCo.com or call 913-338-0100.
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Subscribe & Sync
The MAREI calendar is hosted on Google Calendars. This allows you to subscribe to our calendar and sync it with your own Google Calendar, Mobile Calendar, or Outlook Calendars. Find it online at http://www.MAREInet.com/Calendar
Sat Sept 1 , 2012: 4 pm SubGroup: Blue Springs / Independence Investors Sun Sept 2, 2012: 9 am Sub-Group: Lees Summit Real Estate Investors Wed Sept 5, 2012: 9 am Weekly Wednesdays - Sub Group Meeting Sat Sept 8, 2012: 4 pm SubGroup: Blue Springs / Independence Investors Sun Sept 9, 2012: 9 am Sub-Group: Lees Summit Real Estate Investors Mon Sept 10, 2012: 5 pm Deadline to reserve Vendor Table for MAREI meeting Tues Sept 11, 2012: 6 pm Sub-Group: Lees Summit Real Estate Investors Wed Sept 12, 2012: 9 am Weekly Wednesdays - Sub Group Meeting Mon Sept 10, 2012: 5 pm Deadline to reserve Vendor Table for MAREI meeting Tues Sept 11, 2012: 6 pm Sub-Group: Lees Summit Real Estate Investors Wed Sept 12, 2012: 9 am Weekly Wednesdays - Sub Group Meeting
Sat Sept 15, 2012: 4 pm SubGroup: Blue Springs / Independence Investors Where: 18800 E Us Highway 40, Indep. Sun Sept 16, 2012: 9 am Sub-Group: Lees Summit Real Estate Investors Mon Sept 17, 2012: 7 pm REIA Group—Omaha NE Omaha
Wed Sept 19, 2012: 9 am Weekly Wednesdays - Sub Group Meeting Thurs Sept 20, 2012: 7 pm am Meeting—Roeland Park, KS KCIG
Thurs Sept 20, 2012: 7 pm Shawnee County Landlords—Topeka, KS Sat Sept 22, 2012: 4 pm SubGroup: Blue Springs / Independence Investors Sun Sept 23, 2012: 9 am Sub-Group: Lees Summit Real Estate Investors Wed Sept 26, 2012: 9 am Weekly Wednesdays - Sub Group Meeting See more online at www.MAREInet.com/Calendar
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Local Market Monitor on Kansas City
This market has typical risks and returns for investors. The local economy is well diversified. Population growth has been slightly above average. Income is average. The housing boom was mild, with a 14 percent rise in prices followed by a 9 percent drop. The recession was moderate, with jobs down 5 percent. Home Price Change
Home Price Home prices in this market peaked in Q2 2007 at $176,495. Since their peak, prices have fallen by 12%. In the last 12 months, prices have gone down by 2 percent. The average home price in this market is currently $154,765. Equilibrium Home Price Home Price Forecast Home values for Kansas City are forecast to decrease by 1 percent over the next 12 months. Nationally, prices are forecast to remain constant. In the second and third year, prices are forecast to increase 1% and 5%, respectively. Local Market Risk Premium The Risk Premium for investing in this market is currently 1.6 percent. The Local Market Risk Premium measures the risk of lower future income from a property - due either to lower rents or higher vacancies - and the risk of lower future property value due to a fall in home prices. Job Growth In the past 12 months, jobs in this market have grown by 0.8 percent. This compares to a national increase of 1.4 percent. Job growth is our most immediate guide to the demand for housing. New jobs spur population in-migration while jobs regained in a recovery create new households. Investments are riskier when job growth is falling, less risky when job growth is strong. The Equilibrium Home Price in this market is currently $196,496. The Equilibrium Home Price shows where home prices would be in the absence of market distortions. If actual home prices rise well above the Equilibrium Prices, they ALWAYS eventually come back down. This risk is part of the Local Market Risk Premium. The Equilibrium Price is often - but not always - the floor when home prices fall. Local Capitalization Rate The Local Capitalization Rate is used to price a rental property, based on the annual rent stream minus the annual operating expenses. The Cap Rate incorporates both national and local economic risk. The local Investment Cap Rate is used to estimate the value of an apartment building or single-family rental. Proposed property prices that produce a sharply lower cap rate should be scrutinized very carefully. Population The population in this market grew less than 1% in 2011, while the US population grew less than 1%. Population growth - or the lack of it - has the strongest effect on local demand for housing. Average population
growth in the US is 1 percent per year. Investments are usually less risky in markets with above-average growth, though more risky in small markets with very high population growth. Population data are always several years old, but current job growth is a fair substitute. Migration In 2011, net population migration was 0.0%. While migration tends to be small, it can have a large effect on demand for real estate Home Prices and Rents Home prices and rents often move in cycles but not at the same rate. Rents are more closely tied to local income, while home prices more easily respond to relatively small changes in supply and demand. Investments often are less risky in markets where home prices and rents increase slowly and steadily.
investment risks. An above-average concentration of jobs in construction, manufacturing, finance or tourism indicates a greater vulnerability to economic cycles. But strong growth in these sectors means the current situation is favorable. Large health-care or government sectors often mean more stability and lower risk - but not always. The Unemployment Rate in July 2012 was 7.5% versus 8.2% last year. Employment by Industry
Home Price and Rent Change
Financial Capitalization Rate The Financial Capitalization Rate shows the average return on investments with similar perceived risk as residential investment properties - such as BBB corporate bonds - but without taking into consideration the special local risks measured by the Local Market Risk Premium.
Financial Capitalization Rate Rents We forecast rents to increase 18 percent over the next three years in this market, to an average of $889 per month, partly due to higher inflation. Rents rarely decrease, but sharp job losses and falling home prices can push them down. Rents are closely related to local income. Monthly rent on average is 2 percent of local per capita income, but there is a lot of variation. Housing Permits Total housing permits in July 2012 were up 13 percent from last year. Single family permits were up 40 percent. Vacancy Rates The Rental Vacancy Rate rose to 12.1 percent in Q2 2012. The Owner Vacancy Rate rose to 2.4 percent. The survey technique used by the Census to get local vacancy rates for rentals relies heavily on large apartment landlords. It can't easily capture homes that are available for rent. Large changes from quarter to quarter in some markets can be due to survey problems rather than actual vacancies. Employment Jobs were up 0.3 percent in the past year, compared to the national gain of 1.4 percent.. The concentration of jobs in various industries can reveal special
Forecast Accuracy The Local Market Monitor forecast relies to a large extent on recent price changes and the momentum of price changes and expected changes in local income and job growth.
Learn more about YOUR market online at
http://localmarketmonitor.com http://investors.localmarketmonitor.com MAREI members receive a 25% discounts on all report purchases.
3343 Bellefontaine $34,500 Kansas City, MO
3 Bed 1 Bath Basement
Newly Rehabbed Kansas City Investment Property 20% Net ROI
Christoph Becker Blue Print Properties info@BluePrintProp.com 816-419-1165
1459 N Martway Dr Olathe, KS
$80,000 Rehab—to Flip
4 Bed 2 Bath 1246 sq t
This JOCO Flip would be an easy sell. Make Me an Offer.
Makeba Hart Virtue Investments, LLC Makebashart2gmail.com 816-665-0491
8409 E 103rd Kansas City, MO
3 Bed 2 Bath 1354 Sq Ft 3 Bed 1.5 Ba 2 Story
Raised Ranch, needs Beatirce Gicharu rehab finished. Esti- kcpropetiesmated ARV $98,678 firstname.lastname@example.org
1518 Poplar Ave Kansas City, MO
$13,500 Rehab Rental
Wholesale Price only $13,500. Most has already been done to this Solid 2 Story. Live upstairs & rent out the basement. Excellent first home/ rental opportunity. One of a kind home blocks from the Country Club Plaza, Westport & KU Med Most tenant occupied, free and clear title, can break up. Sold as is.
Christoph Becker Blue Print Properties info@BluePrintProp.com 816-419-1165
6149 Harvard Raytown, MO
$109,900 Potential 2 Family $159,000 Custom Home Bulk Package
4 Bed 3 Bath 2 Living Qtrs 3 Bed 2 Bath Full Bsmt
Scott Tucker Realty Resource Scott@GBIFunding.com 913-620-7934 Paul Panos Building Freedom 816-786-3854 Facebook.com/ BuildingFreedomLLC Christoph Becker Blue Print Properties info@BluePrintProp.com 816-419-1165
2019 W 47th Tr Westwood, KS
26 Off Market Kansas City Pkg
MAREI Member Properties
237 N 15th St, Kansas City, KS
$35,000 Rental Rehab 3 Bed 1 Bath Basement Carport
Good rental or rehab opportunity. ARV of $48-50k. Needs a few repairs.
Steve Gardner Destination Properties
7315 Nieman Rd Shawnee, KS
3 Bed 1.5 Bath Basement 2 Car Gar
JOCO house in Shawnee, new roof, foundation and exterior paint. Must move it. Bring any offer. $30—$35k Rehab. Great Overland Park ranch, good schools, strong resale value, needs help Double Lot. Westport / Plaza. New Roof, Repaired Foundation. Huge Discounts 2 house for under 10k Make me an offer!!!
Steve Gardner Destination Properties Steve.Gardner@homevestor s.com Steve Gardner Destination Properties
5809 W 70th St Overland Park, KS
$89,000 Rehab Rental
3 Bed 1 Bath Crawl
4407 Genessee St Kansas City, MO
3 Bed 1 Bath 2 Car
Steve Gardner Destination Properties Steve.Gardner@homevestor s.com Makeba Hart Virtue Investments, LLC Makebashart2gmail.com 816-665-0491 Christoph Becker Blue Print Properties info@BluePrintProp.com 816-419-1165
2 Houses Kansas City, MO
Under $10K Each—Need Rehab $27,500 Rehab Rental
3 Bed 2 Bath
3829 Benton Blvd Kansas City, MO
3 Bed 1.5 Bath Basement
Excellent curb appeal – This 3/1.5 home is situated on the distinctive “Benton Blvd” in KCMO
Your Property Here
MAREI members can post investment properties online which are pushed out through our Social Media Pages, Email, and Printed at least once here in our Monthly Newsletter for our entire database of buyers to see.
We had a call this past week at the MAREI office from someone looking to find a copy of “the LIST”. They were new real estate investors focusing on wholesale investing and had learned enough to contact the local real estate investment association, but unfortunately their education source failed to explain that there is not a list available, that they have to do a bit of work to create their own list. So where do you start? Well starting at the local REIA is a good start, but you need to do a few things to find the movers and shakers that will actually buy your houses. 1. See if they do have a ready made list, doubtful, but they might. Check their member forums, we have a buyers list section on our forum that could potentially grow into a magic list. 2. Network at meetings, that means talking to people, collecting cards and following up via phone to drag contact information and buying criteria out of people. 3. Going to all the live events that are available and networking is a must. See deal article on page 6. Next I would take a look at places online where Investor Buyers might be. There are a few places on all the major sites like Facebook, LinkedIn, and Yahoo that have groups that other investors have created to market their properties. They have grown a HUGE buyer’s list by allowing everyone to post their investment properties. They will let you post your properties on their groups, but they are not going to give you their list. Do not create your own page and invite their list to come like your list, this will get you kicked out The best way I can describe my next step is to stalk buyers on social media. That means going through post after post after post till you find one that sparked a lot of interest and buyers posting their contact information to find out more about deals. Build a list from these contacts and contact them to see if you could add them to your buyers list. Take it a step further and note the postings that create a lot of response. Take the time to recreate similar posts of your own in an attempt to generate your own flurry of replies.
Craigslist is probably the next best place to work on. Here you need to do a little bit of reverse ad marketing. There are programs out there that will allow you to scan Classified sites for key words and kick out an email to them with a generic email reply. The entire purpose to get them to respond. These software programs work to a point, but if you do this to an investor who advertises a lot, who is really doing the business, they get these types of responses, know they are computer generated and just delete them. So take this reverse ad marketing a step further. Using any software, or the search engine for the classified site and search for key terms like for sale by owner, for rent by owner, we buy houses, we sell houses, seller financing and other key phrases. As you search through these ads, build a list of names, emails if available, websites if available and most importantly - PHONE NUMBERS. Sift your report to remove duplicates and now, I want you to take a deep breath and CALL these people. Ask them if they can take two minutes to answer a few questions about what they buy and how you can bring them deals to them. Note, that as an investor who advertises on craigslist a lot, I get tons of emails wanting me to tell them what I buy. These get put on the back burner for when I have more time, which is NEVER. But if they call, I will usually talk to them and tell them what they want to know. Another option takes a bit of money to buy a list or to take some time and sift through county records to find cash buyers of properties in the area where you want to work. You want all the contact info you can find and then you can send a postcard to all the cash buyers offering them some reason to go to your website for more information. The gurus will tell you to give away a free report, I would suggest having information about a house for sale. You will have to test different postcards to see which ones work better. These are just a few ideas to get you started. There is no magic list, it just takes time and a bit of work and you will soon have your own buyers list.
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MAREI is looking for a few volunteers to help in several areas. Volunteers receive recognition online and in the newsletter. Get your name in front of all our members and guests: Blog Contributors: Are you an expert on title, real estate law, property management, home inspection, short sales, wholesale, technology, marketing or any one of the many other real estate industries and would be able to contribute four articles or more a year, please apply. All blog posts will include your bio and links back to your designated website. Official Photographer: MAREI needs real estate photos for the website and newsletter of real estate out in the general public as well as shots taken at official events. If you have an eye for a good shot and a digital camera, please apply. Official Videographer: MAREI needs someone to make one or two short 2-3 videos at monthly meetings and post
to YouTube. If you like playing with YouTube and have a digital camera, please apply. Moderators: Our Social Media pages need moderators to not only contribute relevant conversation, but to also keep our social media pages clean, relevant and free of spam. If you are an expert on one of the many social media and stay current on real estate topics, please apply. Trainers & Speakers: MAREI would like to revamp our Personal Housing Provider Courses this fall and winter and needs assistance assembling 1 to 3 hour workshops to train members and to potentially take to other REIA groups. If you have ever thought you could do what the GURU’s do, please apply. To apply, please send us your contact information, position you are interested in and why you think you would be a good fit to info@MAREInet.com.
Learn How NLP is applied in all Areas of Your Investing!
Bill Twyford aka The King of Communication and author of “How to Sell a House When It’s Worth Less Than the Mortgage,” will be here LIVE and IN PERSON, Nov.3rd & 4th, 2012. He will teach us how to get OUR DEALS ACCEPTED! Bill says that it all boils down to NLP! Bill is an NLP specialist. He can teach you how to speak the language of the banks, the homeowners, and the buyers…In other words: He can make you wealthy! You will learn:
MARK YOUR CALENDAR SATURDAY & SUNDAY NOVEMBER 3RD & 4TH KANSAS CITY
What to say to the banks to get your short sale package to the top of the heap What to say when the bank says no How to get the bank to work with you even when your homeowners are in bankruptcy How to get your homeowners to sign contracts on the first meeting What paperwork to use to make every deal “air tight” Learn the “little known” Bankruptcy Short Sale How to negotiate when buying notes How to automate your communication system And much, much more!
With everyone offering you the next, best, “make a million dollars while you sleep” program – people have forgotten that this is a people business and without the proper COMMUNICATION SKILLS you are dead in the water! Unless you are closing 75% or MORE of your short sales, you must attend this TWO-DAY WORKSHOP. This is not a sell-a-thon, it is Bill Twyford teaching you for TWO SOLID DAYS! Please bring a calculator, a good attitude, and come with an open mind. We guarantee that you will learn more in these TWO DAYS than any other workshop you have ever attended!
Register Today MAREInet.com/NLP
Tons of Networking
Speed Networking Best Speaker Lineup And Much More!
Industry Partner Expo Experienced Investors
How Foreclosure Works in KS & MO
And When You Need to Foreclose
Coffelt Land Title, Inc.
What Exactly is the Process of Completing a Foreclosure Location: Career Education Systems Ward Parkway Shopping Center 8600 Ward Parkway Kansas City, MO Times: Tuesday September 11 6pm to 9pm What is the Difference Between Judicial and Statutory Foreclosure What is a Redemption Period and How to Avoid Besides Foreclosing on a Mortgage, when would Foreclosure be Needed. In today’s market, more and more investors are purchasing nonperforming mortgages and doing work outs, offering homes for sale on lease to own and contract for deed. When we get more creative in our investing, the need to understand the foreclosure process from the seller / lender side of the equation becomes much more important. Bud Whisler with Coffelt Land Title, Inc. is an expert on Title and Foreclosure process in and he will be telling us what we need to know at the September Meeting.
Agenda for Tuesday September 11th 5:30 pm – Pre-Meeting & Set Up 6:00pm - Focused Networking: Meet the Right People at the Right Time & bring business cards & flyers! 6:00pm — Industry Partner Tradeshow (reserve vendor table) 6:30pm — New Member Orientation 7:00pm – Main Meeting Deal Makers “Haves & Wants” Exchange: Quick Pitch Session for Your Real Estate Deals! Industry Partner Introductions: Build Your Dream Team 7:15pm — Special Guest: Local Title Expert: Bud Whisler presents: Foreclosures 8:30pm — Adjourn: Speaker ends and offers one on one Q & A, plus unstructured networking – 9:00pm — Meeting Ends
Cost Investor Member—No Charge Business Member—No Charge Internet Member—Guest Fee Guest Fee $25 Per Person at the Door $15 Per Person on Web Go to MAREInet.com/September All Guest Fees Paid will Be credited toward membership when you join at the Meeting.