Investment News
Newsletter of Mid-America Association of Real Estate Investors
Federal Income Tax 101
By John Hyre, Tax Attorney, Accountant, Investor
This is just the basics. I don’t want to write a summary of 500,000
pages of federal income tax law, and you certainly don’t want to
read it. The idea here is to give you an idea of how the system
operates. Armed with a basic understanding of the law, tax plan-
ning ideas make more sense. Information that makes sense is
more likely to be used in real life.
So, to begin: the purported purpose of the federal income tax law
is to tax NET INCOME. What’s net income?
Net income is “what you make” minus “what you spend making
what you make”. Congress, the IRS, the courts and guys like me
kill lots of trees attempting to define all of the above. The result:
The world’s most complicated tax rules, some 500,000+ pages of
mind-killing (Read: More boring than French movies), myopia-
inducing (Read: “You’ll go blind doing that”), vice-forming (Read:
Will drive you to drink turpentine, or worse yet, gin) text.
The definition of “what you make” (a.k.a. – gross revenue or gross
income): Anything that increases your wealth, unless the law says
otherwise. Getting cash (e.g. – rents) increases your wealth. So
does finding a brick of gold or a pocket watch in an old piano. So
does trading services for services (“You fix my sink and I’ll do your
tax return”). Basically, anytime you receive, find or are given any-
thing of value, you have income under the tax code. There are a
fair number of exceptions under the law, including:
• Loans: If you receive a bona fide (“honest-to-goodness, to-
tally for real, really!”) loan, the loan proceeds are not taxable.
A bona fide loan usually means money that must be paid
back in a defined amount at a defined time, along with
interest payments.
• Gifts: If you receive a gift or inheritance, it is not income
and not taxable for income tax purposes. The person
who gave you the gift (a.k.a. - “the grantor”) may be
on hook for a hefty gift tax (Uncle Sugar always has
an angle).
• Other Exclusions: The Internal Revenue Code contains
a number of items that would normally be considered
part of gross income, but for Congress’ decision to
exclude these items from taxation – that’s why they
are called exclusions! For example, leasehold im-
provements to a landlord’s property are not treated
as taxable income. Without this exclusion, if some-
one came on to your property and turned bare
rooms into offices, the value of the improvements
would constitute gross income to you (because you
“got something” or your “wealth increased”). Con-
gress decided that if you lease your property and your
tenant improves it (e.g. – adds a deck to that rental
February 2008
444+ Members
house), the value of the improvements is not taxable in-
come to you. That is, the value of the improvements is
excluded from income. Exclusions are sweet – good tax
planners look for as many as possible for their clients.
Once we’ve figured out how much gross income we have, and
have subtracted any excluded income, we then figure out our
deductions. Normally, deductions arise from spending money
on the business. Deductions reduce our gross income….that
is, gross income minus all of our deductions equals taxable
income (also known as “taxable income”). Not everything that
you spend on for your business is deductible (That would be
far too simple and force guys like me to get REAL jobs). For
example:
• If you spend $1,000 on office supplies, the $1,000 is
completely deductible against your gross income;
• If you spend $1,000 on business meals, only $500 is
deductible against your gross income; and
• If you spend $1,000 on contributing to political cam-
paigns that would lower (or at least simplify!) your
business taxes, NONE of it is deductible. You can buy
lots of office supplies for your business, or buy food &
fun for your business, but you’re not supposed to buy
politicians. Go figure.
Just because our business spends money on a permissible
activity does NOT mean that the expenditure is deductible.
Many expenditures must be capitalized – that is, added to our
books as an asset. Things that are capitalized
(treated as assets) may produce
some deductions (e.g. – depre-
ciation) or no deductions at all.
There are lots of very compli-
cated rules (see a pattern
here?) that determine whether
assets produce deductions, and
if so, how fast. Now you know why
the law is ½ million pages! Some ex-
amples of capitalizing:
• You buy a computer. It must be capitalized – mean-
ing that it goes on your balance sheet as an asset.
Normally, you take a percentage of the purchase price
of the computer as a deduction each year – this is
called a depreciation deduction. For example, a busi-
ness can normally deduct 20% of the cost of a com-
puter in the year the computer is purchased, 32% in
the second year, and so on. The exact amount de-
(Continued on page 12)
 MAREI
Mid-America Association
Of Real Estate Investors
Mid-America Association of Real Estate
Investors (MAREI) is one of the largest
real estate investor associations in the
mid-west. MAREI members consist
of full and part-time investors, beginning
investors, real estate brokers and agents,
attorneys, contractors, accountants,
property managers, renovation specialists,
appraisers, bankers - people who want
to enjoy the many benefits of
real estate investing.
MAREI was established in 2003 and
promotes networking and educational
opportunities to its membership.
MAREI services members in
Kansas, Missouri and Nebraska.
MISSION STATEMENT
To provide education, discussion and
networking opportunities to help real
estate entrepreneurs & investors reach
their financial goals using sound,
honest business practices.
BADGE POLICY
All members of Mid-America Association
of Real Estate Investors and guests
must wear a name badge to all General
Meetings. There will be no exceptions.
Mid-America Association of
Real Estate Investors
115 E Gregory Blvd, Suite B
Kansas City, MO 64114
Info Line:
Phone: 816-374-5885
Fax: 816-523-4448
www.MAREInet.com
Info@MAREInet.com
Page 2 ———— Investment News —————
Investment News
February 2008
INVESTMENT NEWS © 2008 by Mid-America Association of Real Estate Investors
(MAREI), a Real Estate Trade Association. Published monthly by MAREI and in-
cluded as benefit for our members. Quotations and reprints are permitted with full
credit given to author, plus “The Investment News: Newsletter of Mid-America As-
sociation of Real Estate Investors.” Subscriptions are $59 per year or are included
with membership.
MEMBERSHIP
Twelve month individual membership is $99, 2 Person Membership is $149. Guest
Fee is $25.
Articles must be received by the 1st of the month two months prior to issue date to
be considered for publication. To be considered for a specific issue, it is recom-
mended you contact the Editor at least three months prior to issue date. All submis-
sions are at the discretion of the editor and are subject to editing.
Advertising space deadline is the 1st of the month one month prior to publica-
tion. All camera-ready artwork and materials for non-camera ready ads are
due by that date. Please see www.MAREInet.com for more information.
CODE OF ETHICS
MAREI members are expected to be civic minded and willing to operate with high standards of honesty and integrity.
It is our duty to conduct ourselves with the highest principles of the free enterprise system. We strive for MAREI to be
synonymous with competence and fairness. As MAREI members, we hereby bind ourselves to this code of ethics:
1. We shall not discriminate against any person with regard to race, color, religion, age, national origin, sex, handi-
cap or familial status as defined by current Kansas, Missouri, or Nebraska law.
2. We shall recognize that real estate is a service related industry.
3. We shall refrain from engaging in any illegal practices, or defrauding any member, customer, or association, with
the aim of always conducting business in a professional manner.
4. We shall endeavor to stay informed and updated on matters affecting housing in our communities, and adhere to
local, state and federal laws.
5. We are individually responsible for our own due diligence and continuing education. Members are expected to
verify any and all assumptions regarding business decisions to prevent falling victim to fraud, misrepresentations
and illegal practices.
Further, if any allegations of conduct considered detrimental to the purposes and interest of MAREI are received in
written and signed communication to the management, we will consider the matter. Should a decision to take further
action be made, a furnished copy of said allegation (s) to the accused, who shall be given adequate time to reply.
Thereafter, management shall take such further action as it may deem property and in accordance to this code of ethics.
The information contained herein is believed to be accurate; however, it is not guar-
anteed or warranted in any manner and is subject to change without notice. Writers’
and speakers’ opinions are not necessarily those of MAREI. You are advised to
seek professional advice.
Mid-America Association of Real Estate Investors
is a Member of the National Real Estate Investors Association
And the Kansas City Better Business Bureau.
www.MAREInet.com
 Mobile Home Park Money Trees
Mobile home park investors across the nation are raking in the
dough while countless single family home real estate investors are
struggling to turn a monthly profit. Okay, so it's not exactly like
investing on Madison Ave. However, if you have the knowledge you
can do just as well as the Donald Trump in real estate. Just ask Jim
Clayton of Clayton homes who sold his company and portfolio of
mobile home parks to Warren Buffet for a cool $1.7 Billion dollars!
Why are mobile home parks the "red-headed stepchildren" of the
commercial real estate investment world? Perhaps one of the
reasons why most investors ignore this lucrative asset class, other
than for obvious eye sore reasons and the negative connotation
associated with mobile home parks (we like to call it the Jerry
Springer effect), is because they believe it requires too much up
front cash and a personal income statement well above their means.
This might be true if you were trying to finance your property through
a large bank, however many mobile home parks are purchased with
much less than 20% down and with little financial reserves in the
bank. In fact, many of these mobile home parks are purchased with
seller financing.
Small to medium sized parks are typically owned by "mom and pop
owners" that have been running or overseeing the managers of their
respective parks for a long time. Many of these owners have mobile
home parks that have a large vacancy due to the glut of
repossessed mobile homes caused by the mobile home industry
overheating in the late 1990's. It is difficult for these owners to
refinance or sell the mobile home parks conventionally due to the
significant vacancies in their park.
Furthermore, some of these same owners prefer doing business the
old fashioned way (without bankers / real estate brokers). In other
words, a large percentage of mobile home park owners would rather
take some initial financial consideration, make a nice profit each
month off the interest on their note and not worry about the day-to-
day issues of running the park. Additionally, many do not want to
deal with a large tax problem if they sell the park outright. Sure they
could 1031 exchange it into something bigger; but then they would
be in the same situation all-over again.
Investing in mobile home parks is an absolutely beautiful thing! Not
only is it a long term land play, but you have NUMEROUS ways to
make money through multiple "profit centers" in a park. Single family
homes and apartments are a "one trick pony" with only one source
of revenue… the rent payment. It is much easier to achieve your
financial goals with mobile home parks due to the following reasons:
1. The parks are usually in a less than favorable part of town.
Therefore the land is cheap and you will be spreading that cost over
numerous mobile homes.
2. Provided you purchased the right mobile home park, there will
be vacancies for you to bring in extra mobile homes. (Yes, that's
right….you want at least 20% of the park vacant so that you have a
huge upside!) You're healthy, sharp and full of energy so you'll
improve the quality of the park, raise rents and maximize your rent
roll. By the way, this will immediately increase the value of your
mobile home park through the cap rate valuation.
Example
30 Space Park, $300 a month Rent Roll (50% Vacant) = $45,000
www.MAREInet.com ———— Investment News —————
yearly rent
$45,000 - 15,000 (33% of rent goes towards Operating Expenses)
= $30,000
$30,000 (N.O.I.) / 9.0 % (cap rate) = $333,333 (Your Purchase
Price)
The Upside:
30 Space Park, 100% Occupancy, $320 a month rent roll =
$115,200 yearly rent
$115,200 - $34,560 (30% park operating expenses) = $80,640
$80,640 (N.O.I.) / 9.0% (cap rate) = $896,000 (at 100%
occupancy)
Over $500,000 profit!
3. If cash flow is low you can add additional revenue by putting in a
coin operated laundry mats, vending machines, lawn service, day
care service, self storage, etc.
4. You can purchase mobile homes at a 40%-50% discount and
resell them on terms (either with a lease option or note). Home
ownership is the American dream so when you advertise "Own
your own home, $2000 down, low monthly payments - Bad credit
OK, call Boca Vista Mobile Home Park" your phone will ring off the
hook, trust me. From there you take their down payment and have
them sign your lease option paperwork that details the term of their
loan with you. So why sell them one of your mobile homes….isn't
that an asset to the park you ask? Yes, but:
A. You now collect the lot rent. Pure profit with no additional
expense.
B. Now you have someone in your park that has pride of ownership
and will most likely take better care of the mobile home than a
renter.
C. No costly maintenance. The buyer is responsible for all
maintenance.
D. You can purchase the mobile home at wholesale cost and sell to
your customer for retail. In many cases, you can double your
money on each home. In addition, you charge an interest rate of
10-15%.
E. Some of your buyers will not finish out the loan term and will
give you back the home in good condition. At that point, the
property is 100% yours again, you've pocketed the $2000 option
payment and you start the process all over.
As you can see, mobile home parks are an amazing real estate
investment. Where else can you find an income property with so
many profit centers (with the exception of self storage). Mobile
home parks are huge cash cows and ultimately will become a land
play.
Take advantage of the untapped opportunity that exists today
in the mobile home park industry before it is discovered by the
masses!
Corey Donaldson started his real estate investing career in 1993
by selling his jet ski to raise enough money for a down payment on
his first deal. Since then, Corey purchased a sizable portfolio of
real estate, including apartments, single family homes, self storage
facilities, and mobile home parks. He purchased 4 mobile home
parks with over 600 total lots and owns 200+ mobile homes. Corey
speaks regularly at real estate clubs, national seminars, and
universities about mobile home and mobile home park investing.
Corey will be our guest speaker at MAREI in March.
Page 3
 General Meeting - February 12th, 2008

Tax Savings for Real Estate Investors in 2008

Most rental property owners and real estate entrepreneus loose hundreds and even thousands of dollars
every year. They just let their money slip away in the form of taxes that they don't really have to pay.
C.P.A. Carl Heintz has spent the past 30 years finding ways for his clients to put a stop to these losses.
With over 30 years of experience helping individuals and business owners including real estate investors
minimize thier tax burdens. Carl's approach is to leave no stone unturned in the quest for tax savings.
Join us on Tuesday February 12 to find out how to save 100's of dollars in taxes you do not need to pay.
Carl will also share with us the new rules that went into effect in 2008.
Remember that we record our General Meetings and make them available to our members online.

Join us at the Overland Park Marriott on Tuesday January, 8th 2008.

6:00 to 7:15 pm Networking & Vendor Expo
7:00 to 7:10 pm New Member Orientation
7:15 to 7:20 pm Announcements Carl Heintz
7:20 to 7:30 pm 30 Second Deals
7:30 to 9:00 pm Presentation and Questions and Answers. Heintz & Flexman CPA’s LLP

Please see www.MAREInet.com and click on General Meeting for exact 4500 College Blvd, #230, Leawood, KS
addresses, more information and to check on scheduling changes due to 913-491-1040
weather. cpa@kcnet.com

www.HeintzFlexman.com

Vendor Expo: At every general meeting we have tables that our Please visit our web site to subscribe to our Newsletter
vendor’s can reserve to share their product or service with our for up to date tips on tax savings. And review our online
members. We generally see between 100 and 130 people at library of articles, calculators, and links.
these meetings and they include new and experienced investors
who may need what you have to offer today or may need you in
the future. Take this opportunity to create a positive impression by visiting with members and visitors about real estate
and how you can help our members in their real estate business. Full and Half Tables for either Member’s or Non-
Member’s can be reserved by going to www.MAREInet.com and clicking on Calendar of Events. Select the appropriate
deadline and reserve your table today. For our Silver and Platinum Members, please email us at info@MAREInet.com
to reserve your tables, remember they are first come, first served, so reserve your’s today!.

Who should reserve a vendor table: Lenders, Realtors, Contractors, Insurance Pro-
viders, Property Managers, Wholesalers, Private Lenders, Real Estate Attorneys, Ac-
countants, Appraisers, Tenant Screening Services, or anyone with property for sale or
a service to provide to real estate business owners.

Member’s be sure to visit with all of our Vendors at each meeting to see what they
have to offer. They specialize in products and services that many area investors
need. They just may have something you have been looking for or may have some-
thing to offer that you may need next week, next month, or next year. Take the time
now to get to know them now so you don’t have to scramble to learn more about them
at the last minute.

Sponsorship: If you would like more exposure than the standard vendor table,
sponsor a meeting. Sponsors will receive a vendor table at the meeting, 10 minutes
to speak at the beginning of the meeting, Announcement here in the newsletter that
you are the sponsor as well as an announcement on the web site. Plus all sponsors
are allowed to place marketing materials on the chairs through out the room. If you
would like to learn more about sponsorship, please email us at info@MAREInet.com
or call 816-523-4400.

Page 4 ———— Investment News ————— www.MAREInet.com

 Tax Tips from Carl Heintz
The major objective for most people in business is to maximize
profits. Cutting your taxes will help you achieve that goal. Review
these tax tips; then contact us for assistance in identifying and
implementing the best strategy for you.
1. Choose your legal form of doing business carefully. The tax
and non-tax consequences of the form you select are signifi-
cant. The basic forms of operation from which to choose
include sole proprietorship, partnership, corporation, or lim-
ited liability company. Seek professional assistance before
deciding, and review your chosen business form from time to
time to see if it’s still appropriate.
2. Consider ”Section 1244” stock for a new business. If you’re
starting a business and choose to operate as a corporation,
investigate the advantages of Section 1244 stock. There are
requirements that must be met, but if your stock qualifies and
your business later fails, you can deduct up to $50,000 of the
loss against ordinary income each year ($100,000 on a joint
return). Without the Section 1244 benefit, the entire loss
would be subject to the capital loss limitations.
3. Incorporate and elect S status. If your sole proprietorship or
partnership is producing a net profit in excess of reasonable
compensation for your time, you could save money by operat-
ing as an S corporation. You’re required to take a reasonable
salary for the work you do but no more than that. With an S
corporation, the salary you take will be subject to both income
and payroll taxes. The profits above that amount are subject
to income tax but not payroll taxes.
4. If you operate in corporate form, keep accurate and thorough
minutes for the corporation. Minutes should document trans-
fer of funds or assets into or out of the corporation, officers’
salaries, shareholder dividends, officer and employee bene-
fits, and related-party transactions that might be scrutinized
by the IRS.
5. If your business is incorporated, it is often a good idea for you
to personally own the business real estate and lease it to your
corporation. There are a number of tax and non-tax concerns
related to real estate ownership. See us before you acquire
new business property or before you change ownership of
property you already have.
6. Consider switching from the accrual method to the cash
method of accounting if you meet the qualifications. Under
the cash method, you generally report income to the IRS in
the year you receive payment from customers. Under the
accrual method, you report income when a sale is made to a
customer regardless of when the bill is paid. Most business
owners prefer the simpler cash method.
7. Hire your children to work in your business. Wages paid will
be deductible by your company and taxable to the family
member. Your child’s earnings will probably fall in a
lower tax bracket than yours. Payroll
taxes apply to such wages; however, if
your business is a proprietorship or fam-
ily partnership, they do not apply to
wages paid to your children under 18.
Compensation paid has to be reasonable for
the services performed.
www.MAREInet.com ———— Investment News —————
8. Never use the Internal Revenue Service as your
banker. When cash flow is tight, you may be
tempted to pay your suppliers first and payroll
taxes to the IRS last. The IRS will take steps to minimize
the liability as quickly as possible. Pay the IRS first. If you
absolutely cannot, contact your local IRS office before they
contact you.
9. Keep good records for all business travel, meal , and enter-
tainment expenses. Travel that you do in conjunction with
your business is deductible, but business meal and enter-
tainment expenses are generally only partially deductible.
10. Review your employee benefits package. Fringe benefits
can help you attract and retain good employees and cut your
taxes too.
11. Take a write-off for business equipment. Most business
equipment is depreciated over five or seven years. How-
ever, small businesses are allowed to expense a certain
amount of equipment costs in the year of purchase.
12. Don’t subject yourself to tax penalties by misclassifying an
employee as an independent contractor. The IRS is aware
that employers prefer to treat workers as independent con-
tractors to avoid paying fringe benefits and payroll taxes. If
you’re not absolutely sure how to treat a given worker, con-
tact us.
13. If you conduct business from your home, become familiar
with the rules for home office deductions. Accurate records
may preserve your deductions.
14. Review your corporate income before year-end. If you oper-
ate your business as a personal service corporation (a tax
definition that applies to taxpayers performing services in the
fields of health, law, engineering, architecture, accounting,
actuarial science, performing arts, or consulting), be aware
that such corporations pay a flt 35% tax on all taxable in-
come. Compare this rate with individual tax rates before
deciding whether to pay out all corporate income as salaries
or bonuses.
15. Keep repairs separate. Ordinary repairs and maintenance
on business equipment and buildings as deductible business
expenses. Improvements which materially add to the value
of the property or significantly prolong its useful life must be
depreciated over a period of years. To avoid losing tax de-
ductions for repairs and maintenance, make major improve-
ments completely apart from repairs and maintenance.
16. Don’t miss business tax credits that are still available. Con-
gress often uses tax credits to encourage certain activities.
Regularly check for credits that could apply to your busi-
ness.
17. Consider establishing a retirement plan to cut your current
tax bill and provide retirement income. A plan must cover
your employees too. If you’re a small business, consider a
SEP (Simplified Employee Pension plan) or a SIMPLE
(Savings Incentive Match Plans for Employees), two plans
designed specifically for smaller companies. Check all the
(Continued on page 12)
Page 5
 Educational Materials
Entities & Asset Protec- • Cover the TRUE Nature of the “Lawyer Problem”: This
country does have a lawyer problem – but it is probably not what
tion: Lots of Expensive you think or what the gurus tout. To effectively defend yourself,
Hype & Mythmaking in you must know the true nature of the enemy.
the RE Business! • Available for the Following States: AL, AZ, CA, CO, FL,
GA, IL, LA, MD, MI, MO, NJ, NV, OH, TN, TX, WA
John Hyre
My Entities Material is: The Real Estate Investor’s
KISS Guide to Bookkeeping
• Based on current experience: I am a practicing attorney
and accountant and real estate investor. All of my clients are real John Hyre
estate investors. I get lots of information from books. Unlike many Save THOUSANDS of Dollars
would-be “gurus”, I also learn from dealing with real estate, RE EVERY Year!
investors and the legal system day-in and day-out.
• Reasonably priced: What you get for $299 will more than Good bookkeeping is the most under-
suffice to meet the entity needs of a small to medium sized RE rated way to hammer the IRS and save thousands on your tax
investor. Spending more than that makes little sense. bill.
• Focused on cost-benefit: Every business cost has to pay its In The Real Estate Investor's KISS Guide to Bookkeeping, tax
own freight. My material focuses on balancing the cost of entities attorney, accountant and real estate investor, John Hyre, shows
versus their benefits. Unlike many authors, I do not focus on you exactly how to do it, year after year, EVERY year, including:
benefits to paint a rosy picture and pump sales. Instead, I look at • How to keep your books and stop overpaying your tax
the benefits in light of their costs – and costs arise in many ways preparer
(e.g. – your time). I look at the benefits in terms of their true im-
pact (Remember the $50,000 in deductible life insurance). The • How to save thousands of dollars on professional fees
costs of entities can also be indirect (e.g. – needing a licensed • How to do the books right and get the deductions you
attorney to evict once a property is no longer in your personal deserve
name). A high cost and lack of real benefit is why I do not care for
Nevada entities in RE, for example. Cost-benefit, cost benefit, • How to break out certain assets and increase deprecia-
always cost-benefit. tion deductions
• Explanations: I have heard countless investors lament that “I • How to get tax savings of up to $2,000 to $6,000 per
get different advice from different gurus….who do I listen to?” I do year
not just tell you what to do (or not to do!) – I also explain WHY you • How to take the deductions and avoid IRS penalties
should or should not do something. That way, you can use your
own judgment in making important decisions. You can compare • How to keep your books so you can survive an IRS
my “why’s” to others’ reasons for doing things (assuming that they audit
provide any reasons at all).
• How to train your accountant (if you use one) to do it
• A state-by-state approach: The first two-thirds of the course RIGHT
focus on universal principles, applicable across the nation. The
• And much, MUCH more
last third provides the documents needed to set up and run an
entity in your specific state. One size does NOT fit all. This course is written in plain English for the lay person, and it's
very easy to understand, even for those of us who shy away from
• A KISS approach to setting up entities: Setting up an entity "numbers."
is quite easy – any literate adult can do it. We walk you through
the process, step by easy step. Most attorneys charge at least Both Courses are just $299 each
$500 to do this (I do). Setting up ONE entity pays for the course! on the web, go to
www.MAREInet.com and click on
• The documents needed to run the entity: Meeting minutes, MAREI Store
corporate resolutions, bylaws, they are all there.
Visit www.MAREInet.com and click
• Clear Choice of Entity Rules: Knowing which entity to use is on Articles to review the article on
of key importance, especially where taxes are concerned. We the front page of this newsletter
provide an analysis of entity types and the reasons to use (or not
use) each one. Which entity for flips? For rentals? For Sub2’s &
Lease-Options? We answer those questions! John Hyre
• Non-Entity Asset Protection: Entities are just ONE step for Real Estate Investor
proper asset protection. We cover a number of other KEY issues,
Tax Attorney
such as how to run your business and tips on drafting enforceable
contracts. CPA

Page 6 ———— Investment News ————— www.MAREInet.com

 Service Guide
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www.MAREInet.com ———— Investment News ————— Page 7

Newsletter & Service Guide
Our monthly newsletter is the Investment News. All of our MAREI Business members receive a Business Card ad or a monthly $25
credit for a larger ad. The Investment News is currently mailed out in paper version to approximately 320 addresses and handed
out at our monthly meetings. We also post our newsletter archives on our web site for any new members or guest to read past arti-
cles. Or write an article to be included in our newsletter that will showcase your expertise. We will include your contact information
at the end of the article. Cost is currently just $100 for a one page article in the newsletter and posted on the web site.

Accurate Title Company, LLC Own Your Own Vacation Townhome

Ron Kraft
Title, Closing, & Escrow Services
7011 W 121st St, Ste 100, Overland Park, KS 66209
Jackie White / 913-338-0100 / Fax 913-338-0107
4025 NE Lakewood Way, Suite 100, Lee’s Summit, MO 64064
Stacy Parton / 816-795-5577 / Fax 816-795-5579
www.AccurateTitleCo.com
7 Miles from the Maingate of Disney
MAREI Members
24 month lease back guarantee
Two Units for the Price of One
Units Starting from the $290’s
Call 863-424-0130
www.biminibayresortandspa.com

Asset Protection Insurance Agency

Investor Owned Insurance
• Vacant or Occupied Properties
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• Professional, Courteous & Knowledgeable Staff
Call Randy Deutch
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APIA, Inc. 877-752-2742 www.reoins.com 9821 W 67th St : Merriam KS : 913-432-7900
Dedicated to Excellent Service

Tucker One Properties, Inc. FREE LEGAL CONSULTATION*

Rehab ~ Wholesale ~ Foreclosures
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David R. Nachman
Joe Reece
Property Specialist 816-474-4114
Cell: 816.507.4203
Email: jrprops@yahoo.com * 15 minute consultation

Kyle Bush
KC Family Home Buyers Jeff Williams

Joe Shojayi We specialize in providing rehab loans to real estate

investors. FAST Closings & No Junk Fees!
Joe@kcfhb.com
Phone: 816-561-5155
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Page 8 ———— Investment News ————— www.MAREInet.com

 MENTORSHIP PROGRAM
REAL ESTATE INVESTING
WE GUIDE YOU EVERY STEP OF THE WAY
♦ We mentor new investors and teach you no money down
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♦ The basics in Renting and Contact for Deed Tenancy
♦ Help you with your Purchase, Financing, and
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LIMITED SPOTS AVAILABLE - MUST QUALIFY
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HELPING INVESTORS GET THE MONEY
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Quick Closings, Good Service, Good Rates!
Pat Grace 816.453.5532 or 816.456.1843

www.MAREInet.com
———— Investment News ————— Page 9
Vendor Expo
Each of our General Meetings feature about an hour trade show before the presentation. Please arrive around 6 pm to visit with all
of our vendors who have reserved tables. If you would like to have a table at the meeting or would be interested in sponsoring a
meeting, please visit the calendar on the MAREI web site for more information. Vendor Tables are $35 for members and $75 for
non members or sponsor the entire meeting. Reserve your table through the Calendar online or email us at info@MAREInet.com.

FLATIRONS FINANCIAL, INC

INVESTMENT PROPERTY REHAB LOAN SPECIALIST

EMAIL: SALES@FLATIRONSFINANCIAL.NET
PHONE: 913-393-2448 or 866-393-2448
www.FLATIRONS.LENDINGSTATION.COM

Ask us about MAREI membership reimbursement with your loan!

Due Diligence
An investigation or audit of a potential investment.
Due diligence serves to confirm all material facts in
regards to a sale.

Generally, due diligence refers to the care a reason-

Julie Barnes
Your Virtual Coordinator Let’s Coordinate, LLC
Office: 913.648.4055
julie@letscoordinate.com
www.letscoordinate.com
able person should take before entering into an
agreement or a transaction with another party. Per-
form your own due diligence on all deals, service pro-
viders, product providers, lenders, realtors, contrac-
tors, etc . . Before going to contract with them!

MAREI Classifieds NEED TO FLIP A

PROPERTY FAST?
Did you know that MAREI has a classi-
fieds page where you can find a deal T.O.T.L. (TOP OF THE LINE)
or post your investment property for sale. RENOVATIONS
Currently over 40 listings with about 80 will complete all your rehab
available properties. quickly, at a reasonable price.
We specialize in: Now Accepting
Out of state investors looking at Kansas City • Make - ready
for the first time will be directed to our web
• Siding and Windows
site from many different other real estate
• Carpentry & Roofing
networking sites. Be sure to post your prop-
erties on our classifieds. • Plumbing & Electrical
• Painting & Flooring
Other headings available: vehicles, employ- • Drywall & Doors
ment, rentals, and misc. Do you have a • Fences and Decks
product or service you would like to pro- • Kitchens and Baths
mote? Are you looking for a service pro-
vider? Visit the Vendor Page on the web
site to see who is on there or advertise your Call Anthony @ 816-606-0266 or
business on the vendor page for $150 for 6
months or $300 for a year!. Emily @ 816-252-0095

FINANCING AVAILABLE

———— Investment News ————— www.MAREInet.com

 30 Common Title Problems
There are many title issues that can arise to cause the loss of
your home, business, or mortgage investment.
Title issues not disclosed by the most careful search of the public
records—called hidden hazards— are the most dangerous. Be-
cause of them, your abstract may be perfect, but your title worth-
less. Your attorney’s examination may be the finest that skill, ex-
perience, and legal knowledge can produce, but your title may still
be defective.
An owner’s title policy protects you as well as your heirs from fi-
nancial loss caused by title issues. And the title insurer, without
expense to you, will defend you against a claim made against the
title of your property. The one-time premium is small. The protec-
tion is great.
Before buying real estate, give one of our offices a call. Ask how
simple it is to fully protect yourself against title loss.
Listed here are 30 title problems that can occur. You may not
discover them when you buy real estate, but months or years
later, they can result in the loss of your property or an expensive
lawsuit.
1. False impersonation of the true owner of the land
2. Forged deeds, releases, etc.
3. Instruments executed under fabricated or expired power of
attorney
4. Deeds delivered after death of grantor or grantee or without
the consent of grantor
5. Deeds to or from a defunct corporation
6. Undisclosed or missing heirs
7. Misinterpretation of wills
8. Deeds by persons of unsound mind
9. Deeds by minors
10. Deeds by aliens
11. Deeds by persons supposedly single but secretly married
12. Birth or adoption of children after date of a will
13. Surviving children omitted from a will
14. Mistakes in recording legal documents
15. Want of jurisdiction of persons in judicial proceedings
16. Discover of will of apparent intestate
17. Falsification of records
18. Claims of creditors against property sold by heirs or devi-
sees
19. Deeds in lieu of foreclosure given under duress
20. Easements by prescription not discovered by a survey
21. Deed of community property recited to be separate property
22. Errors in tax records, e.g. listing payment against wrong
property
23. Deed from bigamous couple
24. Defective acknowledgements
25. Federal condemnation with out filing of notice
26. Corporation franchise taxes, a lien on all corporate assts
27. Erroneous reports furnished by tax officials
28. Administration of estates of persons absent but not de-
ceased
29. Undisclosed divorce of spouse who conveys as consort’s
heir
30. Marital rights of spouse purportedly, but not legally, divorced
This article is intended for information purposes only. Your title
insurance policy contains terms and conditions that may limit or
restrict coverage. Consult your attorney for specific advice re-
garding your legal rights. Provided to MAREI by Land America
and Accurate Title Company.
Accurate Title Company, LLC
Ron Kraft
Title, Closing, & Escrow Services
7011 W 121st St, Ste 100, Overland Park, KS 66209
Jackie White / 913-338-0100 / Fax 913-338-0107
4025 NE Lakewood Way, Suite 100, Lee’s Summit, MO 64064
Stacy Parton / 816-795-5577 / Fax 816-795-5579
www.AccurateTitleCo.com

www.MAREInet.com ———— Investment News ————— Page 11

(Continued from page 1) Federal Income Tax
ductible per year depends on the kind of asset pur-
chased and the IRS’ depreciation tables. In some cases,
the computer may depreciated all in one year (I call it
“super-depreciation”, most tax people call it the “Section
179” deduction. Most tax people are really boring.)
• You buy a piece of raw land. It must be capitalized. Un-
der IRS rules, raw land is not depreciable. You get no
depreciation deductions. But at least the tenants can’t rip
out the carpets.
To summarize deductions: Many of your business’ expenses are
deductible, meaning that they reduce your taxable income. Any-
thing that reduces your taxable income saves you money, be-
cause lower taxable income means lower taxes. Congress and
their henchmen at the IRS created some very complex rules that
determine whether, when and how fast an expense may be de-
ducted. Most assets must be capitalized and deducted over time,
if at all.
OK, we’ve looked at the definition of gross income, deductions
and net income. Once we’ve defined something as net income, it
gets taxed. How it gets taxed depends on the type of income in-
volved. The type of income is very important, because certain
types of income are taxed at much higher/lower rates than others.
Most income is called ordinary income (makes sense, oddly
enough). Such income is taxed at different rates, depending on
how much you make (a.k.a. – “ordinary rates” or “your bracket”).
For example, a married couple that files a joint return for the 2002
tax year would pay the following rates on ordinary income:
$0 to $14,000 at 10%
$14,001 to $56,800 at 15%
$56,801 to $114,650 at 25%
$114,651 to $174,700 at 28%
$174,701 to $311,950 at 33%
$311,950 or more at 35%
For example, if a married couple with a joint return had $24,000 of
taxable income in 2003, they would owe $2,900 in federal income
tax - $1,400 (10% on the first $14,000 in taxable income) plus
$1,500 (15% on the next $10,000 in taxable, for total taxable in-
come of $24,000). All income is treated as ordinary unless the law
says otherwise.
An important “otherwise” is long-term capital gains. Any gains
from the sale of capital assets (which are of course defined by a
billion words in the law) that are held for more than a year (that’s
the “long-term” part of “long-term capital gains”) are taxed at 15%
(and sometimes less – there’s ALWAYS an exception). Because
long-term capital gains tax rates are lower than ordinary income
tax rates, investors will define their income as capital instead of
ordinary whenever legally possible.
One other important category of income is “earned income” (as
distinguished from “unearned income”). Earned income (e.g. –
wages, income from a “flipping business”) is subject to social se-
curity taxes (a.k.a. self employment taxes) of approximately 15%
(that’s IN ADDITION to your income tax!). Unearned income (e.g.
– rents, dividends, interest, long-term capital gains) is NOT sub-
ject to social security taxes. I take affront to the idea that rental
income is not “earned” – but I won’t whine too loudly since that
classification makes rental income exempt from social security
taxes! Whenever possible, investors will seek to define income as
“unearned” to avoid social security taxes.
Page 12 ———— Investment News —————
SUMMARY
The feds tax taxable income (Doyathink?). That’s gross income
(“anything of value that you get”) less excluded income (defined by
the law in painful detail) less deductions (also defined by the law in
great, mind-numbing detail). Many expenditures are capitalized
(treated as an asset) and normally produce deductions over time
or not at all (meaning, that they do not immediately reduce your
income). The amount of tax that you pay depends both on how
much income you make AND what kind of income you make.
Long-term capital gains and rental income get treated less badly
(“better” in English, though not quite as accurate as “less badly”)
than other sorts of income. And Congress obviously hasn’t dealt
with tenants very much, because they classify rental income as
“unearned”. They’ve got a lot of room to talk about “unearned in-
come”!
Read more articles from John Hyre on our web site. Go to
www.MAREInet.com and click on articles. John is a Real Es-
tate Investor, a CPA, and a Tax Attorney.
(Continued from page 5) Tax Tips
plan options available to you before making your decision.
18. If you’re the only employee in the business, look into an indi-
vidual 401(k) plan. These plans offer higher contribution limits
than other retirement plans, yet they are less complicated to
manage than traditional 401(k) plans.
19. Don’t overlook an IRA if you qualify for one. Compare the
traditional IRA and the Roth IRA, and choose what’s best for
your situation. A traditional IRA give you a current tax deduc-
tion for your contribution and tax-deferred growth. A Roth
contribution is not tax-deductible, but qualified withdrawals are
tax-free.
20. Consider a tax-deferred exchange if you plan to sell a piece of
business property and replace it with other business or invest-
ment property. On a qualified exchange, current tax liability is
postponed until you dispose of the new property.
21. Avoid the alternative minimum tax. If it cannot be avoided,
you may be able to use it to your advantage in a given year.
But you must know where you stand before year-end and give
yourself time to execute tax-saving strategies.
22. Use your tax advisor wisely. We can best serve you by as-
sisting you in carefully planning your important financial
moves so they’re structured to minimize taxes. Please check
proposed transaction with us before you complete them.
The information in this article is of a general nature and should not
be acted upon with out further details and/or professional assis-
tance. To identify and
implement the tax strate-
gies best suited to your
situation, please contact us.
Carl M Heintz : Certified Public Accountant
4500 W College Blvd., Suite 230
Leawood, KS 66211
(913) 491—1040 cpa@kcnet.com
www.cmhcpa.com
www.MAREInet.com
 Financing Investment Properties
When we are financing residential investment properties there are the future. So be very careful on these “stated income” loans.
several things that we as investor need to take note. Weather we
Title Seasoning. Title Seasoning, meaning how long has the
are buying or selling, we are facing new challenges everyday as
title been in one persons name breaks down into two areas:
lending guidelines become more strict.
seasoning for refinances and seasoning for sales.
Holding Title in the Name of an LLC or a Corporation. We as When refinancing, most lenders require the owner of a property
investors are taught to get that title out of your personal name and
to have been the owner of record for at least a year. There are a
into a corporate entity to for asset protection purposes, yet many
few who will still refinance with less or no seasoning, so check
lenders will not allow this. Typically we will buy or refinance under
around.
our personal names and then we will fill out a quit clam to move
ownership from our personal to our corporate names after the Then if you are selling a property, the lenders usually want the
loan closes. seller to have owned the property for at least 90 days. But again,
there are lenders with out this seasoning requirement. If you
Recently, lenders have been taking note of this practice in many
buy, then take a little over a month to make repairs, and then a
fraudulent loans or foreclosed loans and so many have changed
little over a month to get it sold, you are at the three month mark
their requirements to a property must be held in a personal name
and the seasoning should not be an issue.
for at least 90 days before it can be refinanced. You need to be
aware of this as well as your loan officer if you plan to refinance When you are buying bank owned properties their may be sea-
immediately upon purchase. soning requirements imposed by the seller. For example if you
purchase a home owned by Fannie Mae, their sales contract
Comparable Properties in Appraisals. The old standard was
stipulates that the buyer may not sell to another buyer or encum-
three sales closed with in the past 6 months and usually found
ber the property with a loan for 120% or more of the purchase
with in the local multiple listing service. This is getting tougher
price. So if you bought a house for $50,000 and want to have a
and tougher in many places for appraisers to meet this minimum,
rehab loan that will cover the purchase and another $25,000 of
and many lenders are making this minimum even more stringent.
rehab, you will then have a loan for 150% of the purchase price
Many are wanting to have two sales with in the past three months,
and it is not allowed. Check on this if you are buying bank
and only one with in the six month. They are also wanting to see
owned properties or if you are a wholesaler buying bank owned
comparable properties with pending sales in the market.
properties to flip to other investors, this deed restriction will also
Here in our market we are seeing areas of the metro where the apply to the new buyer.
only sold values in the multiple listing service are bank owned
Declining Markets. Because of all the foreclosures across the
property sales. Over 90% of all houses sold in some areas are
country, many markets are ion the decline. When the market is
fixer uppers, bank owned, or rental property, making it very diffi-
on the decline, the lender may question if the appraisal accu-
cult for the appraiser to determine a true appraisal value for a
rately reflects the current market and may request a second or
home that is not in any kind of physical or financial distress.
a review appraisal. And if the property is located in a
Loan to Value Changes. Just last year lenders were marketing declining market, the lender may reduce their
95% and 100% financing available on investment property. But loan to value limits. There are some
we are not seeing this in today’s market. Most end lenders areas across the country in a very
(permanent financing, not rehab or hard money) are still offering large decline that some
up to 90% loan to value, but may will need to see good credit lenders will not lend
scores and a full documentation loan. There are a few lenders money.
still offering stated income loans, but if market conditions continue
to go down, stated income may soon become a thing of the past.
Even if you have been pre-approved with a lender for a purchase
or a line of credit, be sure to renew that approval and review the
loan to values as they may have changed since the last time you
talked with your lender.
Stated Income. Yes, there are still a few lenders offering stated
income loans, but they are becoming very cautious. They may
want to see cash reserves equal to three and sometimes four
times the monthly stated income, in addition to six months of PITI
(principle, interest, taxes, insurance) in reserves as well.
The lending industry over stated income and in many cases made
up numbers to fit the rest of the loan, because it was a “stated
income” and did not need to be proved in anyway, the didn’t real-
ize it would be a problem. Now that many of these “stated” loans
are ending up in foreclosure, they lenders are now learning that
over “stating” income on a loan, even when it does not need to be
proven, is fraud and it may need to be proved to investigators in

www.MAREInet.com ———— Investment News ————— Page 13

Whether you have cash, equity, or are willing to put in sweat equity to create a lifetime of cash flow, Mobile Home Millions 6 is
the event for YOU. This 3 day mega conference was created to provide present and future investors with a goldmine of educa-
tional and networking opportunities in one of the most profitable real estate asset types, Mobile Homes and Mobile Home Parks!
LONNIIE SCRUGGS ♦ COREY DONALDSON ♦ DYCHES BODDIIFORD ♦ STEVE CASE ♦ PETE YOUNGS STEVE
WAIITE ♦ JJACK SHEA ♦ TONY COLELLA ♦ SCOTT ST.. AUBIIN ♦ BLAKE DONALDSON
STOP trying to compete for good deals in site-built homes! You could be cherry picking mobile home deals with a fraction of the
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year’s Mobile Home Millions conference sold out with over 500 people in attendance. Take the time now to confirm your seat to
this extraordinary event - this IS THE TIME to change your life and realize all of our dreams and goals of financial independence!

Learn how to GENERATE CASH FLOW, BUILD WEALTH, and COME OUT ON TOP in the changing real estate
market through Mobile Home and Mobile Home Park Investing!
Educational Briefings. At this amazing money making event
you'll learn all the SECRETS and TECHNIQUES to making
HUGE PROFITS in Mobile Homes and Mobile Home Parks:
1) How to buy and sell Mobile Homes, Mobile Home Lots, and
Mobile Home Parks for little cash and risk, but maximum profit
2) How to make the move from single family homes to Mobile
Homes and Mobile Home Parks
3) How to go from dabbling in real estate part time to creating
a full-time, passive income
...and much more!
Roundtable Discussions. Get all of your questions an-
swered by the industry experts. For one full night, you’ll have
the opportunity to sit down face-to-face and brainstorm with
market leaders, speakers, and other mobile home investing
experts in attendance.
Networking. Meet hundreds of real estate entrepreneurs and
investors from all over the country who are interested in, or
are already making tremendous profits in the mobile home
industry. Mobile Home Millions events have resulted in well
over $45 million worth of business among attendees. Don't
miss out on a chance to find your next investing partner or
deal!

Mobile Home Millions 6 will host the largest and most Mobile Home Millions 6
accomplished group of mobile home gurus ever to grace April 18 - 20, 2008
the stage of a industry event - experts in Individual Mobile
Sheraton Austin Hotel
Homes, Land-Home Packages, Small Mobile Home Parks,
Mobile Home Millions 6 will be held
Large Mobile Home Parks, Rehab, Financing, Opera-
at the Sheraton Hotel in the heart of
tions…it’ll have it all!

SPECIAL OFFER! Workshop Package (register by March 31st & attend both Workshops FREE)
Workshop #1: Self Storage for the Savvy Investor Workshop #2: Owner Carryback Financing
Friday, April 18….8:00am - 11:00am Friday, April 18….1:00pm - 5:00am
Dates/Hours Location & Hotel Sign Up Now and SAVE!
Friday, April 18 Sheraton Austin Hotel Register for Mobile Home Millions 6 by midnight on March
Self Storage Investing Workshop 701 East 11th Street 31st and…
8:00am – 11:00am Austin, TX 78701 1) Save over $195 on the price of a single ticket
(512) 478-1111 2) Save an additional $200 on the price of a second ticket
Carryback Financing Workshop for a spouse or business partner
1:00pm – 5:00pm
Special Rate! $119/night 3) Attend both Workshops for FREE!
Saturday, April 19 & 20th Mention “Mobile Home University” Pricing One Attendee $398* Two Attendees (bring spouse,
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REGISTRATION FORM - MOBILE HOME MILLIONS 6 APRIL 18 - 20, AUSTING TX

Please check one: □ One Attendee $398 (after 3.31, price $597) □ Two Attendees (Spouse / Partner) $598 (after 3.31, ,price $797)

Registrant #1 _____________________________________________ Billing Address _____________________________________________

Phone ___________________________________________________ __________________________________________________________

Email ____________________________________________________ Method of Payment □ Visa □ Master Card □ America Express

Registrant #2 ______________________________________________ Credit Card # _____________________________________________

Phone ____________________________________________________ Expiration Date ___________________________

Email _____________________________________________________ Referred by Mid-America Association of Real Estate Investors

Fax form to (866) 897-6528

Page 14 ———— Investment News ————— www.MAREInet.com

 Self Storage Secrets Revealed
There’s a small group of real estate investors making a killing by ac-
commodating the American public with our propensity to store junk.
You won’t find these folks at your local REIA meetings or seminars.
Your most likely chance of meeting them is on the golf course or a
cruise ship. They are quietly enjoying their growing cash-flow and
building their net worth through the virtually unknown investment
arena of self storage or mini-storage. What keeps the common real
estate investor from joining this exclusive club?
Exposing the Myths
Perception is not always reality and this couldn’t be truer than with self
storage. I believe there are false perceptions among the real estate
community that keeps investors from diving into the self storage busi-
ness. Test yourself and see how many of these were embedded in
your mind about self storage.
Myth #1: There is a self storage facility on every corner. I
can’t make money with all of that competition.
It’s true, self storage is a business that has grown from out-of-sight
garages in industrial areas to modern multi-use facilities. A billion
dollar industry has sprung up in the past twenty years all geared to-
ward development and building. There are more than 45,000 facilities
nationwide which equates to over 6 square feet of storage for every
U.S. citizen. However, there are investors making phenomenal returns
even in overbuilt markets. The key is in purchasing an existing facility
at the right price based on actual income and increase the cash flow
by operating the business effectively and efficiently.
The very first facility I purchased was in an overbuilt market in Florida.
Every facility in town was running in the 75 percent range in occu-
pancy. After a short 18 months, the occupancy was at 92 percent
with an increase in cash flow of almost $6,000 per month. Meanwhile,
my competitors were still in the 70 – 80 percent occupancy range.
Don’t let anyone convince you that you can’t make money in today’s
market.
Myth #2: I either need to build a new facility or buy a newer
one to make money.
Most people think that self storage buildings must be cheap to build
since they are just metal buildings with doors. Yes, they are cheaper
to build than most other commercial buildings, but there is much more
to developing and building than meets the eye. In most cases, it’s a
laborious process that takes months, if not years, to complete. Then
all you have is an empty facility with a large debt service. It may take
several years to break even and this is definitely not a fast track to
success.
The smart investors are buying existing, older facilities that are poorly
operated and need minor repairs. These properties are not on the
radar screen of the big companies and can be picked up at great
prices. With these facilities, you often start with a positive cash flow
and once the repairs have been made and you operate it profession-
ally, the money really starts rolling in.
Myth #3: It takes a lot of money to get in the self storage busi-
ness and financing is difficult to obtain.
In many cases, you can purchase a 30,000 square feet, 20 year old
facility for less than a single-family home in California. Sure, it is go-
ing to be more expensive than most rental houses, but financing is
extremely easy to obtain. There are an abundance of lenders nation-
wide who are fighting for self storage loans and will even finance up to
90 percent of the purchase price. Self storage has some of the best
loan programs available in the commercial market with great interest
www.MAREInet.com ———— Investment News —————
rates and terms. It is due to fact that this asset class has the lowest
default rate among all commercial real estate types.
It Doesn’t Get Any Better Than This
Now that we’ve dealt with the most common myths that keep inves-
tors from looking at self storage, let’s concentrate on the benefits of
this business. Once you grasp these strategies, you will begin to
understand why few, if any speakers have ever showed up at your
real estate club exposing this great investment.
The powers of numbers…An average size self storage facility
has 300 units and let’s say that a 10 x 10 unit rents for $60 per
month. I typically increase the monthly rental price by five percent
each year at my facilities. So, the $60 unit would increase by $3 to
$63 per month. $3 times 300 units will increase the cash flow by
$900 per month or $10,800 per year. If there were no increases in
expenses, the value of the facility just went up over $100,000 due to
a $3 per month rental increase. How many jobs out there allow you
to increase your income over $10K and add $100K to your retire-
ment every year? What if you could do this every 8 months instead
of annually?
Better late than never…Late fees are unbelievable in the self
storage business. It’s not uncommon for many tenants at my facili-
ties to pay an additional $20 in late fees each month on a $35 per
month 5 x 10 rental unit. I have one facility that averages 8 percent
of the gross income each month in late fees. This particular property
averaged $1,165 per month in 2006 in late fees. Talk about free
money and cash flow, it added up to almost $14,000 last year. Not
only was it found money (the previous owner didn’t charge late fees),
it also increased the value of the property by over $140K.
Give them something for FREE and still make money…One
of the easiest profit centers to set up in this business, as long as it is
done correctly, is the administration fee. I charge every new cus-
tomer a $15 administration fee, but give them a new, sturdy cylinder
lock as a gift. This lock would most likely cost them about $15 if
purchased at a local store, but my cost is only $3 since I buy them in
bulk. I have very few customers complain about the fee because
they feel like they received something of equal value in return. Bot-
tom-line is I make an additional $12 every time someone moves into
a unit. At one facility, we get 15 new customers each month which
equates to an additional $180 per month in income from administra-
tion fees. This adds another $2,160 per year in income and over
$20K to the value of the facility.
These are only three of more than 30 profit centers that I can gener-
ate from a self storage facility. Some of the others include record
storage, ebay consignment, mailbox rental, moving supplies, outside
RV/boat parking, packing and shipping services, notary services, fax
services, copy services and the list is as long as your imagination.
It has never been a better time to invest in Self Storage Facilities!
Corey Donaldson started his real estate investing career in
1993 by selling his jet ski to raise enough money for a down
payment on his first deal. Since then, Corey has purchased a
sizable portfolio of real estate, including apartments, single
family homes, motel, self storage facilities, and mobile home
parks. He owns/manages 4 self storage facilities with more
than 1,500 units. Corey speaks regularly at real estate clubs,
national seminars, and universities about mobile home and
mobile home park investing. He will be the guest speaker in
March at MAREI and has several more articles on our web site.
Page 15
 PRESORT STANDARD
Mid-America Association US POSTAGE PAID
SHAWNEE MISSION KS
Of Real Estate Investors PERMIT NO. 185

Building Networks for Success!

115 E Gregory Boulevard, Suite B

Kansas City, MO 64114

Info Line: 816-374-5885

Business Office: 816-523-4400
Email: info@MAREInet.com

General Meeting
ROBYN THOMPSON Tax Savings in 2008
QUEEN OF REHAB For Real Estate Business
With Carl Heintz
We have a new teleconference with Robyn
Thompson posted on the web site. Currently Overland Park Marriott
this Teleconference is available to the general public and 10800 Metcalf
soon it will be moved to the Member’s Only area. Just south of I435
If you have not yet listened to this conference, be sure to
visit the web site to learn how Robyn went from working 2 Tuesday February 12, 2008
jobs to rehabbing and reselling 264 houses. What her
three top sources of deals area. The three most costly mis-
takes new rehabbers make. How to do deals if you have Registration, Networking, and Vendor
no money. How to find good contractors. And how Robyn Trade Show open at 6 p.m.
sells houses so quickly!
This is about an hour and fifteen minute call with over a full
hour packed with information. At the end she shared with
us a little bit about her training programs.
♦ Rehabbing Houses from Beginning to End
♦ Retailing for All Cash
♦ Advanced Retailing
If you purchased her materials from this call, she is includ-
ing 4 bonuses that she lists on the call.
And she also offered up her 5 Junker’s to Millions Boot
Camp at 2007 pricing.
Please visit www.MAREInet.com and click on teleconfer-
ence to learn more!
Listen to other calls from the For more information
GURU page in the Member
Area on the web. www.MAREInet.com