2014 summer re investment news

2014 RE investment News

RE

Vendor Expo

Charity Raffle

Expert Auction

Benefit Harvesters

Perfect Storm

Uncertain Future

Apartment House

Investing

Fundamental vs

Technical

Houses to Avoid

Creative Seller

Financing

Deal Structuring

2 RE investment News 2014

MAREI Mid-America Association of Real Estate Investors

A Real Estate Community

FAST IN AND OUT Time is money — we’ll get you back to work quickly.

Dedicated Pro Desk Associates.

Two hour advance order pulling.

In Store Hands On—How To

Workshops Want to learn How a project is completed. Check out our work-

shops.

In store workshops each month, check out our website and

your local store.

Access step by step video 24-7 on our website—look for our

Project Guide Library

10% Price Guarantee If you find a lower price on identical in-stock item

We will match the price & beat it by 10%.

Excludes special orders & bid pricing and others—see website for complete details.

GREAT PRICES JUST FOR PROS We Offer everyday low prices, plus more ways to save on larger orders.

You can count on competitive pricing on everything in every de-partment

Volume pricing discounts available on purchases as low as $2,500.

Instant bulk price savings available 1000s of items.

MAREI Member Discount

MAREI Members receive a rebate of 2% on all purchases, twice a year.

Must be registered through MAREI with Home Depot and register your

tender accounts with the Home Depot and spend a minimum of

$2500 in a 6 month period.

MAREI Business Partner

Discount


H

A Publication of Mid-America Association of Real Estate Investors MAREI Office: 8014 State Line, Suite 210, Leawood, KS 66208 MAREI Phone: 913-815-0111 LEGAL: Mid-America Association of Real Estate Investors, MAREI, does not render any legal, tax or economic advice. MAREI does not investi-gate its members, officers, directors, employees, agents or contrac-tors. Persons should consult their own council, accountant or other professional advisors as to the legal, tax, and economic risk in mat-ters concerning real estate and other investments. CONTENT: Products, services, investment opportunities, etc. may be offered by members, guests, business associates and or content from MAREI. MAREI does not endorse any product, service, investment opportuni-ty, et, that may be offered formally or informally. Persons should complete their own due diligence and seek advice from their own counsel, accountant or other professional advisor prior to doing busi-ness with anyone. TO ADVERTISE: 1/8 Page Ad: Member Price $65 / Non-Member $130 1/4 Page Ad: Member Price $75 / Non-Member $150 1/2 Page Ad: Member Price $85 / Non-Member $170 Full Interior Ad: Member $100 / Non-Member $200 Inside Front Cover: Member $200 / Non-Member $400 Inside Back Cover: Member $200 / Non-Member $400 MAREI MEETINGS & SEMINARS Held Monthly on the 2nd Tuesday of the Month Career Education Systems Top Floor Ward Parkway Shopping Center 8600 Ward Parkway Kansas City, MO 64114


From the Publisher

I have been talking to people in the industry and

reading article after article.

First off, banks have gotten tired of dealing with

all the new rules and regulations on non-

performing loans, so rather than deal with them,

they are selling them to people outside of the

banking industry. They are selling in bulk to

hedge funds who in turn are breaking up these

loans and selling to the smaller real estate in-

vestor.

Secondly, REO property is being bought up in

bulk by these same hedge funds who are hold-

ing on to them for cash flow and waiting for the

market to increase prices. So there is a short-

age of REO property.

Out of country investors who were investing in

US stock market and their own country invest-

ments are buying up houses in areas like Kan-

sas City for rental cash flow. Or are becoming

the funding source for partners that work local

and flip houses.

So the real estate investing market that we

knew in past years has a whole new face.

Houses are going to be harder and harder to

come by and investors who want to deal with

houses are going to have to work harder to find

the motivated seller or REO property to purchase.

Or turn to new sources of investing to get to the

property such as tax sale investing that Tom Di-

Agostino taught at MAREI last month and default-

ed notes that Note School taught last year.

With all the new rules and regulations on lending,

banks are still trying to figure out what they can

and can’t do and the creative financing is going to

come back in a big way, but again with new rules

for the investor to know and understand. So

learning this niche is going to be vital, so we have

invited an expert on this topic to join us in Septem-

ber.

Here at MAREI we try to stay on top of the indus-

try and bring you the most important news and ed-

ucation to keep you on top of your business. We

are also working to bring you updates when you

need them so you can take action and contact

your government officials when needed. Now,

more than ever it is important for those of us in the

industry to work together and be informed so we

can adapt and change as needed and have a say

in shaping the new real estate investing industry

that is already upon us.

Kim A. Tucker Publisher & Founder of MAREI



BUSINESS

directory Service Company Contact Phone Web

Auction Company Cates Auction Ray Bucklew 816-781-1134 CatesAuction.com

Contractor Building Trades Robert Massey 816-868-1817

Contractor Discover Heating & Air Curt Whitlock 816-500-2970 Discover HVAC.net

Contractor Elite Contractors Jim Murphy 913-207-6973

Contractor Supply Choice Cabinets Karl Dunivent 816-343-8887 ChoiceCabinet.com

Contractor Supply Home Depot George Neal 816-510-9199 HomeDepot.com

Contractor Supply Odor Universe Mike Riddle 816-718-9136 OdorUniverse.com

Contractor Supply Sherwin Williams Mike Steiner 816-589-8506 SherwinWilliams.com

Environmental Titan Environmental Kyle Gunion 816-561-0959 TitanKC.com

Hard Money Great Plains Funding George Hersch 913-735-6605 GreatPlainsFunding.com

Hard Money Investor Choice Funding Dave Williams 303-500-7088 InvestorsChoiceFunding.com

Hard Money Kansas City Investor Funding JJ Pawlowski 816-916-4593 KCInvestorFunding.com

Hard Money Longhorn Investments Mike Friedl 913-634-6386 LonghornInvestments.com

Home Buyer kcmoHomeBuyer Don Tucker 816-200-2198 kcmoHomeBuyer.com

Insurance Asset Protection Insurance Lisa Goodner 877-752-2742 APIAProtects.com

Insurance Missouri Farm Bureau Stephanie Cunliff 816-781-4370 MOFBInsurance.com Mortgage Pulaski Bank Beth Langston 816-234-8660 PulaskiBank.com

Realty Realty Resource Kim Tucker 816-523-4400 RealtyResourceKC.com

Realty & Management Arrow Realty Candace Davis 913-956-5003 ArrowRealtyKC.com

Realty & Management Jamieson Home Team Kevin Jamieson 913-384-8331 JaimesonHomeTeam.com

Staging ShowHomesKC Kent Welch 913-449-4555 ShowHomesKansasCity.com

Title & Escrow Accurate Title Jackie White 913-338-0100 AccurateTitleCo.com


Harvesters and its network of agencies provide a helping hand to tens of thousands of people in need every week.

As the community’s response to hunger, the food bank could not function without the generous support it receives

from individuals and companies across our community.

Carla, director of the Don Bosco Center, a Harvesters agency, helps individuals and families struggling to make

ends meet every day.

“Donating a can of food seems like a small thing to the average person,” she said. “But when you’re a parent look-

ing at your children’s faces and the empty cabinets, it’s actually a major thing.”

Harvesters' mission is to feed hungry people today and work to end hunger tomorrow.

As this area's only food bank, Harvesters is a clearinghouse for the collection and distribution of food and related

household products. We've been helping people in need since 1979 by Collecting food and household products

from community and industry sources

Distributing those products and providing nutrition services through a network of nonprofit agencies

Offering leadership and education programs to increase community awareness of hunger and generate so-

lutions to alleviate hunger

Our network includes more than 620 nonprofit agencies throughout our 26-county direct service area, including

emergency food pantries, soup kitchens, homeless shelters, children’s homes, homes for the mentally disabled

and shelters for battered persons. Our network provides food assistance to as many as 66,000 different people

each week. Harvesters is a certified member of Feeding America, a nationwide network of more than 200 food

banks, serving all 50 states.

Many Ways to Donate

Harvesters can turn a $1 donation into 5 meals. How do we do it? By leveraging that dollar to acquire, transport,

sort, store and distribute enough donated food to feed five people. Where else can you get that kind of return on

your investment?

We are proud to be recognized for excellence in the use of donated resources. Harvesters currently uses less than

3 percent of these resources for administration and fundraising, with the bulk being spent in program areas directly

related to food acquisition, food distribution and nutrition education.

Below are a number of ways you can contribute financially to Harvesters and help us accomplish our mission to

Feeding the Hungry Harvesters Community Food Network

MAREI’s Chosen Charity for 2014

http://www.harvesters.org/GetHelp/Index.asp?Reference=AgencyLocator&~=

http://www.harvesters.org/GetHelp/Index.asp?Reference=ServiceAreaMap&~=

http://www.harvesters.org/Link.asp?IdS=000680-1765430&Url=http%3A%2F%2Fwww%2Efeedingamerica%2Eorg


Make a donation of stock or marketable securities to Har-

vesters and receive a tax benefit as well.

Missouri tax credit

If you file taxes in Missouri, you can increase the value of

your donation.

Planned giving

You can be a philanthropist even if you are not wealthy by

making a gift to Harvesters during your lifetime or at the

time of death.

Heart of America United Way

You may designate a specific agency like Harvesters as the

recipient of your contribution.

MAREI Annual Vendor Night

Buy a Raffle Ticket, Buy an Expert, Just Donate.

Go to Harvesters.org or find out more about Expo Below:

end hunger in our community.

DONATE ONLINE

One-time gifts

Your gift today, whatever the amount, significantly impacts

the lives of the hungry in our community.

Monthly giving

Become a part of our monthly donor program and spread

your gift out over 12 months.

Memorials/Tributes

Give a gift to Harvesters in memory of a loved one, or to

honor a birthday, anniversary or other important occasion.

Virtual Food Drive

Donate today through our fun, interactive online "food drive,"

or sponsor your own Virtual Food Drive.

SPECIAL EVENTS

Purchase Tickets

Buy a ticket or sponsor one of Harvesters’ annual events.

Sponsorship Opportunities

Explore ways your company or organization can sponsor

one of Harvesters’ annual fundraising events.

OTHER WAYS TO DONATE

Matching gifts

Double your gift to Harvesters with your employer’s help.

Gifts of stock and mutual funds

#MAREIVendorEXPO July 8th, 2014

Networking Vendors & Raffle Tickets

Expert Auction To Benefit Harvesters

Details at MAREI.org/EXPO

http://www.harvesters.org/GiveMoney/Index.asp?Reference=MissouriTaxCredits&~=

http://www.harvesters.org/GiveMoney/Index.asp?Reference=PlannedGiving&~=

http://www.harvesters.org/GiveMoney/Index.asp?Reference=Onetime&~=

http://www.harvesters.org/GiveMoney/Index.asp?Reference=monthly&~=

http://www.harvesters.org/GiveMoney/Index.asp?Reference=Memorials&~=

http://www.harvesters.org/GiveMoney/Index.asp?Reference=VirtualFoodDrive&~=

http://www.harvesters.org/GiveMoney/Index.asp?Reference=SpecialEvents&~=

http://www.harvesters.org/GiveMoney/Index.asp?Reference=sponsorship&~=

http://www.harvesters.org/GiveMoney/Index.asp?Reference=Matchinggifts&~=

http://www.harvesters.org/GiveMoney/Index.asp?Reference=Stocks&~=


All Proceeds to go to Harvesters!

Time: 6pm to 9pm

Date: Tuesday July 8th 2014

Where: Career Education Systems

Ward Pkwy Shopping Center

8600 Ward Parkway

Kansas City, MO 64114

Mid-America Association of Real

Estate Investors Main Monthly Mtg.

OPEN TO THE PUBLIC COST: DONATION TO HARVESTERS

Build Your Team with MAREI’s

Business Associates

Buy an Expert at Auction

Win a Prize

Contact [email protected] or

Call 913-815-0111

Sign Up: MAREI.org/EXPO


Michelle Winberry

Due Diligence Houses & Notes

Andrew Syrios

Buy & Hold Investing Single & Multi Family

Paul Worcester

Apartment House Investing

Donald Tucker

Rehab & Flip Single Family

Brian Winberry

Real Estate Investing Houses & Notes

Kim Tucker

Marketing Social Media


The Perfect Storm Three Factors Driving the Surge

in 1031 Exchange Activity in 2014

By Scott R. Saunders

In the movie The Perfect Storm, the convergence of two large storm systems led to unu-

sual weather conditions that ultimately resulted in the demise of the ship and its crew. In

the real estate market, the convergence of much higher tax rates, a very strong commer-

cial market, and a recovering residential market has resulted in a surge in 1031 exchange

activity this year.

Although real estate investors are experiencing solid gains, they are faced with a head-

wind of high taxation which threatens to significantly reduce investment returns. Conse-

quently, investors are actively seeking out ways to reduce their tax liability. Once again,

Section 1031 of the Internal Revenue Code has emerged as a valuable tool for boosting

net investment returns by reducing tax liability, and for preserving capital for reinvestment

into better performing “like‐kind” replacement properties. This article explores each of

the three factors creating this “perfect storm.”

FACTOR #1: HIGHER TAX RATES

Tax rates, and their impact on an investor’s net investment return, can drive investment decisions. Econ-

omist Art Laffer posited that, as tax rates increase, actual tax revenues can decrease as a result of ef-

forts by investors to mitigate tax consequences. In essence, as tax rates increase, an investor’s motiva-

tion to defer or postpone immediate taxation also increases. This is reflected currently in an increase in

1031 exchange activity.

Many investors are surprised to find out that today they may face four different taxes and, when com-

bined together, the aggregate impact can result in a large tax bill owed to the government:

In the real estate market, the convergence of much higher tax rates, a very strong

commercial market, and a recovering residential market has resulted in a surge in

1031 exchange activity this year.


ven, and their demand further fuels CRE activity.

Commercial investors have strong borrowing and

buying capacity, allowing them to capitalize on favor-

able CRE opportunities. The demand for quality CRE

assets is so strong that CRE activity is now beginning

to expand to secondary and non‐core markets. All of

this CRE activity is contributing to the surge in 1031

exchange activity as CRE investors utilize 1031 to

minimize the tax impacts of their transactions.

Sales of office, retail, multifamily, hospitality and land

were approximately $370 billion last year, 18% higher

than the year before, and the strongest year since

2007 and this momentum is continuing in 2014. Va-

cancy rates have decreased and net absorption has

been strong in the office, industrial and retail market.

Last year and continuing into this year, investors con-

tinue to be very active in the hotel property sector

which was up 40%, industrial increased by 23%, of-

fice up by 18% , multifamily rose 14%, and retail rose

10%. In addition, REITs appear to be very active this

year with a projected pace of acquisition and expend-

itures running about 60% higher than the pace of dis-

A. Depreciation Recapture: Depreciation recapture is

taxed at 25% on all depreciation recapture.

B. Federal Capital Gain Taxes: Federal capital gain

taxes are assessed on the remaining economic gain

depending on an investor’s taxable income. Investors

in the highest bracket pay at a 20% rate and a 15%

capital gain tax rate applies to other investors.

C. Net Investment Income Tax: Pursuant to IRC Sec-

tion 1411, an additional 3.8% surtax applies to

taxpayers with “net investment income” who exceed

certain threshold income amounts.

D. State Taxes: Investors must also pay the applicable

state tax (which can be as high as 13.3%).

FACTOR #2: ROBUST COMMERCIAL MARKETS

Currently, commercial real estate (CRE) prices nation-

wide are about 3% above the previous market peak in

2006. Domestic commercial investors, institutions, and

real estate investment trusts (REITS) continue to ex-

hibit a strong appetite for quality commercial proper-

ties. International investors see the U.S. as a safe ha-


of new single family homes, further pushing up home

prices.

The recovery of residential home prices is another

factor causing an increase in 1031 exchange activity.

However, since home buyers are generally more sen-

sitive to increases in the interest rate than CRE inves-

tors, rising interest rates in the future could have a

negative impact on demand for single family home

purchases.

1031 EXCHANGES

The “perfect storm” resulting from the convergence of

these three factors has led to an increase in 1031 ex-

change activity as investors turn to this powerful tax

strategy to preserve investment equity and improve

returns. This increase in activity has led to a signifi-

cant increase in demand for secure, knowledgeable,

and service‐oriented qualified intermediary (QI) ser-

vices. As always, investors should discuss their tax

situation with their tax advisor to assess the potential

value of using Section 1031.

positions. More evidence of the strong commercial

activity can be seen by the year‐to‐date rent growth

in the U.S. apartment market is the best since the

economy started to recover from the Great Recession

according to Axiometrics Inc.

FACTOR #3: RESIDENTIAL HOME PRICE RECOV-

ERY

According to the Case‐Schiller Index of 20 major cit-

ies, home prices nationwide have recovered by about

20% from the market trough. Among the nation’s 35

largest metro markets, all but St. Louis and Kansas

City have experienced year‐over‐year home price

increases as of April, 2014. Those with the most nota-

ble annual increases include Riverside (22%), Las Ve-

gas (22%), Sacramento (16%), and Orlando (16%).

Forecasts show about one‐third of the nation experi-

encing home appreciation higher than the national av-

erage over the next 12 months. Rents on single family

rentals have also increased, rising by 2.3% on a year-

over-year basis. Also, the lack of new home construc-

tion during the Great Recession has led to a shortage

Keep Your Profits,

1031 Exchange Your Way to

Wealthy!

With Greg Schowe Tuesday

August 12th 6:00 pm

MAREI Main Meeting

Details: MAREI.org/Exchange No charge MAREI members

Guests $25 at Door Join or PreRegister Online

Exchange Smart Don’t pay capital gain taxes

APIExchange.com


Uncertain Future Legislative proposals are afoot to significantly alter

or eliminate capital gains tax deferral on like-kind property.

By Scott R. Saunders

Like-kind exchanges have been a vital part of the Internal Revenue Code under Section 1031since 1921. A 1031 exchange allows an in-

vestor to defer the recognition of capital gains when exchanging one appreciated investment property (the “relinquished property”) for

another “like-kind” investment property (the “replacement property”).

Most commercial 1031 exchanges today are orchestrated transactions in which an investor uses a qualified intermediary (QI) to facili-

tate the sale of the relinquished property to one party and the purchase of the replacement property from another party. The capital

gain inherent in the relinquished party is not taxed upon its transfer.

However, since the basis of the relinquished property becomes the basis of the replacement property, the capital gains tax is not elimi-

nated, it is merely deferred until the property is sold, or exchanged for non-like-kind property.

Contrary to popular myth, Section 1031 is not a loophole or a tax savings vehicle. As mentioned above, the capital gains tax is not avoid-

ed — it is merely deferred. This outcome is based on sound tax policy.

The essential logic is that the investor, in exchanging one appreciated property for another like-kind property, has not realized the gain

inherent in the relinquished property. The investor has merely changed the form of his investment.

Since the basis of the relinquished property becomes the basis of the replacement property, the built-in gain is still there; it will be taxed

later when the investor actually realizes the gain by selling the property for cash.

Section 1031 accurately reflects the economic reality of investment continuity in which no profit is realized, thus there is no premise for

taxation.

Over time, 1031 exchanges have become an important fixture in the economy and the real estate industry. This is particularly true in the

commercial market, where approximately 25 percent of all transactions involve an exchange on either the sale or purchase.

What’s more, 1031 exchanges allow investors to freely adjust their investments among like-kind properties, allowing for a more efficient

allocation of capital.

Exchanges allow investors and business owners to change geographic locations, consolidate, diversify and redeploy into different types

of investment assets. This commercial activity creates jobs, financial opportunities and provides a valuable stimulus to many economic

sectors.

Section 1031 Under Siege

There are currently three different proposals that the federal government is weighing, which would significantly

alter Section 1031:

Do you have concerns about Government changes or interventions that change the real estate investing industry. Join your local REIA and help


1. Former Sen. Max Baucus (DMontana),

who became U.S. ambassador to China ear-

lier this year, released a draft proposal

when he was chairman of the Senate Fi-

nance Committee that would potentially

eliminate 1031 exchanges. His proposal,

which is still before the Senate Finance

Committee for discussion, contains other

provisions unfavorable to real estate invest-

ments, including lengthening depreciation

schedules for commercial and residential

properties from 39 and 27.5 years, respec-

tively, to 43 years for both and characteriz-

ing gains from real estate sales as ordinary

income, instead of capital gain.

2. U.S. Rep Dave Camp (R-Michigan), chair-

man of the House Ways and Means Com-

mittee, has released a proposed

tax bill eliminating all Section 1031 exchang-

es beginning Jan. 1, 2015.

3. President Obama, in his 2015 budget pro-

posal, proposes limiting the amount of capi-

tal gains deferred in a 1031 exchange to $1

million (indexed for inflation) per taxpayer

per taxable year, beginning Jan. 1, 2015.

Unintended Consequences

The motivation behind these proposals is to

increase tax revenue. The effect is to target

the real estate industry, particularly real

estate investors and business owners. Other

professionals involved in commercial trans-

actions would also be negatively affected.

The above proposals appear to be based on

calculations that do not consider that if in-

vestors are unable to defer gains by using

Section 1031, many prospective sellers will

simply hold on to their properties and will

not sell at all.

Most of the projected additional tax reve-

nue will never materialize because investors

with significant gains will simply hold onto

their property rather than face a sizeable

tax consequence.

The result would be a significant decrease in

transactional activity, and a significant re-

duction in the inventory of available in-

vestment properties.

Potential Ripple Effects

This would result not only in reduced com-

missions for commercial brokers, but would

also have a negative impact on jobs across a

wide array of ancillary services that are also

involved in exchange transactions.

Banks and commercial lenders would see

reduced activity, as would title companies,

escrow agents, appraisers, environmental

companies, and many other services typical-

ly involved in commercial real estate trans-

actions.

Eliminating Section 1031 would have a neg-

ative impact that would extend far beyond

the real estate market, into the overall na-

tional economy. It is foreseeable that the

elimination of Section 1031 would result in

a decrease in property values as investment

properties become more illiquid.

This loss of equity in real estate would result

in less spending and investment in the econ-

omy overall, which would ultimately result

in lost jobs, increased unemployment and

billions of lost revenue each year for the

national economy.

This is not the first time the government has

tried to reduce the tax deferral benefits of

Section 1031. In fact, there have been nu-

merous attempts to limit exchanges in the

past. One proposal was to create a much

more narrow definition of like-kind proper-

ty. This would have had a significant damp-

er on real estate activity.

The key to preserving 1031 exchange tax

deferral is to educate legislators on the eco-

nomic benefits of exchanging. Once govern-

ment representatives really understand that

exchanges actually promote transactional

activity, thereby creating jobs and other

taxable income that helps small and

midsized business prosper, they realize Sec-

tion 1031 is a vital part of the U.S. econo-

my’s economic engine.

Exchanges encourage property owners and

business owners to preserve and manage

cash flow, thus encouraging U.S. business to

reinvest domestically rather than offshoring

business activity. Exchanges also help foster

higher property values which increases the

property tax base.

1031 Exchange Supporters

In light of these potentially dire conse-

quences resulting from the elimination of

Section 1031, the Federation of Exchange

Accommodators (FEA) continues to educate

legislators about the essential economic

value of 1031 exchanges.

The FEA and roughly 42 industry groups

have filed comments with the Senate Fi-

nance Committee advocating the retention

of 1031 exchanges, and they continue to

work to enlighten Congress on the job-

creating aspects of 1031 exchanges.

Scott R. Saunders is a senior vice president

of Roseville, Calif.-based Asset Preservation

Inc., a national qualified intermediary and

Stewart Title subsidiary. Questions regard-

ing 1031 exchanges can be directed to him

at [email protected] or 888-531-

1031.

Greg Schowe of Asset Preservation Inc will

be our guest speaker at MAREI’s August

Monthly Meeting. See Page 19.


1. Targeting a Qualified Property

The first step is to locate an apartment investment with value. I look for inefficiency in the market. I want to find an apartment in-

vestment that appears to be able to be acquired at a discount to its true value. It is easiest to do this by analyzing as many prop-

erties as possible. My acquisitions team subscribes to the 100-10-3-1 rule: review 100 properties, offer on 10, negotiate 3, and

buy 1. In my experience, the more apartment investments I evaluate, the clearer the potentially great deals appear to me.

2. Communicating With the Seller/Broker

Once I’ve found a deal I’m interested in, I speak to the seller or broker as soon as possible. During the first conversation I real-

ly have two main goals: to communicate that Worcester Investments is a serious buyer, and to quickly determine what value I

might be able to add to the property in question. My goal is to help the seller, to make his/her life better. I try to accomplish

these goals by asking pointed questions that provide clues as to how I may solve a problem the property struggles with and

that portray that we are a serious buyer. For example, I may ask any of the following questions:

“What is the situation with the seller and why is he/she selling?”

“What is the seller’s ultimate goal?”

“Where do you think this will trade?”

“Who pays each utility: Gas? Water? Electric?”

“How many units are there ad what is the unit mix?”

“What is the average in-place rent?”

“Should I submit an offer now, or are you going to wait for a call for offers?”

“If I were to offer _______, what do you think the seller’s response would be?”

While I complete these initial questions, I always request access to extensive property information: a recent rent roll, a recent,

preferably trailing, operating statement (also known as a profit and loss statement), and a property package (also known as an

offering memorandum). It is necessary for me to obtain these in order to underwrite the property at the standards we have in

place, so it is best to request this information as early as I can. Next I will request to schedule a tour of the property. If I have

strong interest in the property, I will try to get this part done as soon as possible. Whether I underwrite or tour the property

next doesn’t necessarily matter, as long as both are completed, ideally within a few days of each other.

3. Touring the Potential Property Investment

I try to arrive at the property at least 15-30 minutes early so I can drive the neighborhood to get a feel for the surrounding ar-

ea. I always record my drive-around, and even parts of the tour, so I can reference them later if necessary. The first thing I do

when the tour actually begins is interview the property manager and/or whoever has been working at the property the longest.

In my opinion, the interview is the most important part of the entire tour. I may ask any of the following questions:

Ten Steps

A p a r t m e n t I n v e s t i n g

By Paul Worcester


Be sure to see the Worcester’s Seminar

Multi Family Investing A Local Perspective Saturday August 23rd

8am to 5pm

Hosted by MAREI Details at MAREI.org/Apt


“What is the unit mix and number of bathrooms in each unit

type?”

“What is the square footage of each unit type?”

“Does the rent roll I have portray the actual in-place rents?”

“How long has it been since the rents have increased?”

“Do you offer specials or discounts? If so, please elabo-

rate.”

“Who pays the gas, electric, water/sewer, and hot water?”

“Do you have any unusual contracts I should know about?”

“What other income do you collect, including RUBS

(resident utility billing system)?"

“What is the delinquency?”

“If you have an opportunity to put money anywhere into the

property, where would you make your first improvements?”

“What are your reoccurring problems, things that annoy you

about the property?”

“How do you generate your traffic?”

Once I have completed the interview, I check out a sampling of

4-8 units, recording and photographing this part of the tour as

well. I ask questions and take notes, documenting anything that

may be of interest. Before leaving, I try to speak candidly with

the broker or owner and give them my immediate thoughts and

get further feedback on the pricing and other desires of the

owner, such as why he or she is selling.

4. Underwriting the Financial Performance of the Property

Underwriting the property is perhaps the single most important

step to the entire investment, as it allows for financial analysis

and risk mitigation. Using the rent roll, profit and loss state-

ment, and offering memorandum, extensive and accurate un-

derwriting helps us determine whether or not the property is

capable of redeeming its value, and in what areas we can im-

prove the financials. The numbers we come up with in the un-

derwriting process determine what a comfortable strike price

(the price we feel comfortable paying) would be, which is why

we underwrite a property multiple times before closing.

The documents we require have very specific functions in the

underwriting process. A rent roll is a list of every unit, vacant,

occupied, down, and leased, that the property consists of. Rent

rolls typically include information such as the current rent per

unit, the length of each lease, other income the property re-

ceives from each resident, and what kind of discounts any of

the residents currently receive. An operating statement lists all

of the expenses and income of the property. These are typically

broken down into specific categories (we use eleven), which

allow us to more accurately determine where the property

spends too much or too little. The offering memorandum typi-

cally contains information like the unit mix, square footage of

each unit type, and useful statistics and pictures regarding the

property and the neighborhood. Oftentimes, the documents

required for us to underwrite a property are unavailable or out-

dated. It is important to be persistent in obtaining the most re-

cent copies of these documents, but that isn’t always possible.

We try to be prudent in our estimates anyway, but we are even

more so when this is the case.

Over the past several years, our underwriting template has

evolved frequently to become what it is now. We use an Excel-

based proprietary document that lets us quickly plug in num-

bers without having to manually calculate advanced equations

for each new property. This saves us time and stress, but we

often make it a point to double check some of the key figures

manually to ensure its accuracy.

5. Negotiating the Purchase Contract

If you believe, like I do, that doing business is making

someone’s life better, then executing a contract should be mu-

tually beneficial. A contract is a written agreement covering

necessary terms executed by all parties, with the purpose of

providing everyone their end goal. When I am negotiating a

contract with a seller of an apartment community, the single

most important factor in determining my success is my under-

standing of what the seller needs, wants, or doesn't want. I

consider it a successful interaction when I can understand the

seller’s desires and respond accordingly, while maintaining a

healthy relationship. Oftentimes I do not end up buying the

property for sale, and that is okay, as I often am not the best

buyer to meet the needs of the seller. But when I am the best

buyer to meet his or her needs, I try to structure the contract

such that it does just that.

For example, when we acquired the Northcrest Apartments for

$3M in November 2010, there was at least one offer we know

of that was higher than ours. If all I know is that the seller is

asking $3.5M for the property, then my offer may not meet all of

the seller’s needs. In this case, however, I understood that the

seller of Northcrest desired to sell quickly for cash, as it was the

end of the year and the bank wanted to move the property be-

fore the new year. I believe our ability to close quickly played a

part in our offer being chosen over others, as the offer we sub-

mitted proposed a 30 day closing period with no financial con-

tingencies.

6. Conducting Thorough Due Diligence

Due diligence is typically completed after the execution of the

purchase contract. By the time we get to this point, I have typi-

cally toured the property, interviewed the owner or manager,

and scrutinized the financials. The end purpose of due dili-

gence is to verify that what I already assume to be true about

the property is, in fact, accurate, matching up with all the find-

ings of my previous financial analysis. If the property is accu-

rately represented, we can close with no re-trading. (We always

try to avoid a re-trade, which is why it is imperative to exten-

sively complete the previous steps of the process.) If there are

major items of misrepresentation, either intentionally or out of


ignorance, then I may request that the

seller compensate me to resolve the

new findings.

We utilize multiple divisions of our com-

pany to conduct and oversee the due

diligence process. We’ve developed a

series of checklists that help us ensure

we’ve done everything necessary to pre-

pare for takeover. During the due dili-

gence process, we thoroughly inspect

each building, each unit, the parking lot,

the foundations, all contracts and lease

agreements associated with the proper-

ty, all financial documents, utilities, the

laundry set-up, roofs, and many more.

Every part of the property is analyzed

inside and out by qualified experts. We

also interview the current residents and

property staff. Conducting thorough due

diligence is necessary in order to fully

prepare for the stabilization period and

all that it will require. The goal of due

diligence is to truly understand what it is

we are buying.

7. Placing the Capital that Funds the Deal

There are various ways to fund an apart-

ment investment, but our investment

funds typically come from two primary

sources: banks and equity partnerships.

My brother, Joel, manages the capital

allocation of new properties. He will typi-

cally engage a bank to fund 75%-80% of

the total investment, which includes the

purchase price, closing costs, and reha-

bilitation costs. The other 20%-25% of

the funds typically come from equity

partnerships, meaning accredited inves-

tors put forth capital into the investment

and gain an ownership percentage in

return. Sometimes we will fund the in-

vestment personally in cash. During the

capital allocation process, we create our

own property packages (also known as

offering memorandums). Our property

packages include a summary of the

property and the reasons we desire to

own the property. We always make it a

point to describe how we intend on add-

ing value to the property and our strate-

gy in bringing the property to its full po-

tential. We also include maps that out-

line nearby attractions, such as colleges,

commercial shopping centers, or large

employers, and pictures of the property

in its current state. The property packag-

es always display the current financials

of the property and the potential finan-

cials we feel we can successfully exe-

cute. This gives our investors and lend-

ers a strong sense of our intentions and

reasoning behind the purchase of the

property and how we’ll add value to it as

a whole.

8. Closing the Investment Deal

Closing does not happen until we’ve met

all the criteria in order for us to comforta-

bly take over: we’ve underwritten and

toured the property, agreed upon a con-

tract, conducted extensive due diligence,

and allocated all the necessary funds.

We have a proven track record of clos-

ing quickly, but that can’t happen until

each piece of the puzzle is in place. The

day before or of closing, we conduct a

final inspection of the property to ensure

that all things are as they should be. We

verify that all the funds are in escrow

and that all closing documents have

been effectively executed. It is important

to have these prepared well in advance

to account for unforeseen circumstanc-

es.

9. Stabilizing the Acquired Property

The stabilization period is the time frame

in which we begin all the preemptive

work required to operate the property at

its full potential, and the process begins

on day 1 of takeover. My brother, Jesse,

along with a team of over 80 employees,

executes and oversees every aspect of

this step in the process. In order to stabi-

lize a property, we must first hire and

train on-site staff, implement our policies

and procedures, collect old debts, buy

supplies for the property, shift the market

positioning if necessary, conduct com-

parative market surveys, set up various

vendor and utility accounts, create and

prioritize cap-ex rehab wish lists, and

begin capital improvement. This is a very

brief description of stabilization require-

ments, as it is a rigorous and thorough

process. Stabilizing a property requires

unified efforts amongst the operations,

capital improvement team and property

management divisions, all acting with a

long-term mindset. We maintain a very

detailed account of the progress taking

place, because the stabilization period is

all about following through on our ex-

pressed plans with the property.

10. Operating the Investment Responsi-

bly

The work doesn’t end when a property is

fully stabilized. Operating a property is a

continuous effort on all parts of our compa-

ny. We have to keep in mind that each prop-

erty is an extension of our brand, staff, and,

most importantly, our investors. It is always

a priority to operate our properties responsi-

bly, as financial assets for our partners and

as a housing resource for our residents. We

always have to be prepared for anything,

which means having the knowledge, funds

and staff readily available to make real-time

decisions that may be necessary in order to

maintain performance. To do this requires

unified effort from everyone involved.

Brooke and Shelly, our regional property

managers, do a

phenomenal job of holding each of our prop-

erty managers accountable to the high

standards of excellence we

have collectively put in place. Billy, who

manages our construction team, directs all

the recommendations on

repair and maintenance items, and has culti-

vated and trained a highly skilled team of

knowledgeable and talented

individuals.”

Ultimately, operating a property and

maintaining its true value comes down to

the people behind it: the owners, the

staff and the residents. We have seen

success in the operation of our proper-

ties because we have accumulated a

team of outstanding individuals, capable

of exceeding and improving upon the

high standards of Worcester Invest-

ments and Worcester Properties.


Multi Family Investing

Thinking about pulling the trigger and investing in your first or maybe your second Multi-Family property,

but unsure of where to start? Or, just getting started in real estate investing and researching to find yoru

niche? Or possibly you have several single family rentals under your belt, and want to grow your portfo-

lio?

This All Day Seminar is FOR YOU!!

Worcester Investments is a family-owned-and-operated real estate investment company located in Kan-

sas City, Missouri. Founded in 2006 by the Worcester brothers and their father, the family business be-

gan acquiring rental property almost immediately. Expanding into the Kansas City area through a real

estate connection in 2007 and focusing on multifamily real estate, they have continued to see steady

growth since their expansion in the Kansas City apartment market.

The Worcesters purchase property below its intrinsic value to create steady, passive income through re-

sponsible management of its assets. They have collaborated with 30+ partners who have invested over

$10M of private capital, and today owns $60M+ of real estate, and currently owns and operates 2,000+

apartment units in the greater Kansas City area.

The Worcesters . . . Paul, Jesse and Joel are bringing their expertise to MAREI in this one day Seminar

to help you learn the ins and outs of multi family investing, how to find the right investment, how to raise

the capital for the purchase, how to analyze the deal, how to negotiate the deal, how to get to closing

and how to add value and manage the property day to day.

Everyone who attends should walk away with at several new tool in your arsenal to help you make

sense of all your options.


A Local Perspective

PLEASE NOTE: Regular Price to attend is $99 for Members and $129 for Non-Members. To re-ceive early bird pricing you need to register online, at the August Meeting or via phone before August 21st at 5pm. Members who are participating in our Express Success Program can attend this Seminar for No Charge, just call or email the office to reserve your space.

Why Invest in Kansas City Multi Family Earned Income vs. Passive Income

Pros and Cons of Multiple Investing Vehicles

Local and National Market Trends

Kansas City Metropolitan Market

10 Steps of Apartment Investing Finding the Right Apartment Investment Deal

Successful Underwriting & Due Diligence

Raising & Placing Investor Capital

Takeover, Stabilization & Operating the Asset

Securing & Executing a Purchase Agreement Structuring & Submitting an LOI

Negotiating With Brokers & Private Owners

Why & When to Request a Retrade

Preparing For the Closing Process

Getting the Most Out of Your Due Diligence Period Structuring a Due Diligence Checklist

Interior & Exterior Property Inspections

Communicating with Existing Residents

Auditing Resident Files & Financial Documents

Transition From Single Family to Multi Family Working Your Way From Small to Large

Evaluating & Projecting Conservatively

Reading & Understanding Financial Statements

Scaling Systems With Your Growth

Hiring The Right Team Members For Your Property How Employees Impact Your Reputation

Being Patient in the Hiring Process

Getting The Whole Truth From the Applicant

Background Checks & References

How to Fund Your Apartment Purchase Banks, GSEs & Private Money Lenders

National Banks & Life Insurance Companies

Debt vs. Equity (Other People’s Money)

Partnering With Investors Investor Qualification & Accreditation

Selecting & Presenting Deals to Investors

Communication Etiquette

Building & Maintaining Investor Confidence

Marketing to Investors: SEC Marketing Regulations

Structuring a Property Package for Investors

Creating & Maintaining Your Annual Portfolio

Disclaimers Every Marketing Piece Should Have

Building Credibility Through Digital Marketing Using Social Media to Build Relationships

Design & Optimize an Investor-Friendly Website

Utilizing Attraction Marketing Through Email

Disclaimers, Unsubscribes & Privacy Policies


Fundamental vs Technical What type of Real Estate Investor

Are YOU?

By Paul Worcester

When it comes to investing, there are two major schools of thought: 1.) fundamental investing (also known as value in-

vesting) and 2.) technical investing (also known as trading). A technical investor asks what the market says the invest-

ment will be worth tomorrow, deriving a conclusion from external factors. The fundamental investor asks what the invest-

ment is worth today according to its intrinsic value, which is derived from factors within the investment itself.

For example, two investors go to a shopping mall. The fundamental investor goes to each store, studies the products,

their use and cost, and then decides whether to purchase based upon the product’s perceived value. The technical inves-

tor sits on the mall bench and watches people go into stores. Never entering the stores, the technical investor bases his

buying decision on the patterns and activity of people going into each store, noting what was purchased.

Technical Investing

Technical investing asks the question, “How quickly can I sell/flip/trade and for how great a profit?” Technical investing

does not necessarily look closely at the financial state of the investment, but rather where the property value might be in

the future based upon what others will pay for it. Technical investors are primarily going to analyze price movement and

market activity as a basis for evaluating an investment opportunity. Technical investing considers many facets that may

surely affect the investment, but focus little on the investment itself. Value is derived from where the investment has been

and where it is going, but not from within its current state.

A technical investor looking at a potential apartment investment might ask the following questions pertaining to the mar-

ketplace.

What are others paying for similar apartment properties?

Are there new apartments being built in the area?

Are there new jobs being created nearby?

Will the prices in the area go up? Is transportation convenient?

Are the schools decent?

What kind of crime is around the area?

Is the apartment market healthy?

Notice how these questions concern external factors, but do not inquire about the investment itself.

Fundamental Investing

Fundamental investing is concerned with deep analysis of an investment’s intrinsic value. Fundamental investors are gener-

ally looking to hold their purchases longer and are more concerned with acquiring an asset based upon inefficiency in the

market valuation. Fundamental investors look at an apartment investment in its current state, the rental income, the ex-


MAREI’s MEMBER BENEFITS PROGRAM

—- YOUR OFFICIAL MEMBER BENEFITS PROGRAM —-

Mid-America Association of

Real Estate Investors

Member Benefits Program

Constant Contact*

OFFICE SUPPLIES

FedEx Office*

Office Max*

QuickBooks*

REAL ESTATE SERVICES

Jamieson Home Team

kcmoHomeBuyer.com

kcInvest.com

RealtyResourceKC.com

STAGING

ShowHomesKansasCity.com

TITLE SERVICES

INSURANCE SUPPLIERS

Asset Protection Insurance Agency

Farm Bureau Insurance

Real Protect

INDUSTRY INFORMATION

Personal Real Estate In-vestor Magazine

RE Investment News

Dearborn Publishing*

Local Market Monitor*

LANDLORD RESOURCES

AAA Screening*

Rentals.com*

EZLandlord Forms*

MARKETING RESOURCES

Click2Mail

CONTRACTOR & SUPPLY

Building Trades

Elite Contractors

Choice Cabinet

Home Depot*

Sherwin Williams*

Odor Universe

EDUCATION NationalREIAU ENVIRONMENTAL SERVICES

Titan Environmental

FUNDING

Great Plains Funding

Investors Choice Funding

Longhorn Investments

Pulaski Bank

Accurate Title Company TRAVEL / AUTOMOTIVE

Avis*

Budget*

Enterprise*

EDUCATIONAL TOOLS

Express Success

Member Library

Professional Housing Provider

National REIA University

MEMBER SERVICES

eUpdate

Government Updates

Property Marketing

* Offer’s Discounts for Members of MAREI

penses, and the immediate needs of

the property. A fundamental investor

makes their profit by adding value to

the investment to increase its worth,

and so they consult the financial per-

formance of the investment’s internal

factors to determine its intrinsic value.

A fundamental investor considering an

apartment acquisition would ask ques-

tions pertaining to the investment’s

performance and condition.

Are the existing rents low?

Are the expenses high?

What is the story behind the apart-

ment property?

Is there a problem I can solve or

value I can add?

Are there management problems or

deferred maintenance?

What is the cap rate?

Are the utilities separated?

What is the physical condition of the

property?

What is the physical and economic

occupancy?

What is the current cash on cash

return?

All of these questions speak to the

financial and physical condition of

the investment as it is in its current

state.

We find that our investment philosophy

aligns more closely with fundamental

investing, although we maintain a

healthy pulse on technical investment

factors surrounding our investment

deals. It is important to establish an

opinion on the technical factors that

may affect our investment, and we

certainly take them into consideration.

The vast majority of our investment

decisions, however, are based solely

from within the investment itself. Our

conclusions are primarily based on a

sound review and thorough under-

standing of the financial health of the

investment and our confidence that we

can solve what is lacking, so we are

therefore seeking an intrinsic and inde-

pendent valuation. As opposed to tim-

ing the market, we choose to funda-

mentally evaluate potential invest-

ments through internal measurements

of the investment.


I want to share with you my thoughts about some types of property you may want to avoid if you plan

to maximize your profits from the deals you do. I have personally bought several of the houses I now

and recommend you think about not buying. I believe buying any of the following properties will defi-

nitely give you a financial seminar you really don’t want to take for numerous reasons.

I have taken a few of those financial seminars and I can tell you that you don’t want nor need to go

there and make the same mistakes I have made. For those just getting started in the business these

examples are a must for you to know so you don’t buy houses that will be extremely hard to sell or

rent.

Houses in Area’s with Many “FOR RENT” signs.

Any house located in an area with many For Rent signs leaves little hope of selling to a family who

wants to live in that area and can qualify for a loan. Too many renters in any neighborhood will many

times run out the families with small children who can qualify for a loan that want to buy.

Houses in Area’s with Many “FOR SALE” signs.

Too many FOR SALE signs usually indicate a problem in that neighborhood. Always be sure to find

out why there are so many properties for sale before you make an offer to buy one of them. There has

to be a reason, find out what the problem is.

Houses with a Flat-Roof.

A house with a flat roof is not very attractive and will have more roof leaking problems. Few people

want houses with flat roofs for this very reason.

Houses to Avoid

Important Information about Hard to Sell or Rent Houses

By Larry Harbolt


Don’t Miss Larry Harbolt in September

Creative Financing Say Good By to Banks

September 9th Intro at Meeting September 27th Full Day Training

Hosted by MAREI

Details MAREI.org/Larry


Houses With No Curb Appeal.

Ugly houses when looking from the street usually will

not make buyers proud to show their extended fami-

lies and friends their home. People want to be proud

of their home and a house with no curb appeal will

always be harder to rent or sell to families who can

qualify for a loan.

Houses With Steep Driveways.

Steep driveways in different areas of the country

where heavy snow or icing is normal, many buyers

won’t want a house with a steep driveway and this

type of house will be hard to sell or rent. Many of

these older houses with steep driveways only have

room for one car at the top of the driveway and most

families have two cars; their other car will need to be

parked in the street. This is not a desirable type of

house to buy or rent because of this.

Houses On or Near Swampy Ground.

Damp swampy ground has too many issues to be

very desirable. Most parents won’t like their children

playing in standing water or in constant wet grass all

of the time. Wet yards attract snakes, mosquitoes,

allergies and will provide a perfect place for mold to

grow and thrive. Believe me you don’t want one of

these houses because they will be impossible to sell

or rent.

Houses With VERY Small Front Yards Too Close

to the Street.

Small front yards I have found are not popular with

the majority of home buyers or long-term renters.

Most people like a front yard where they can have

some nice landscaping and get as far away as possi-

ble from the traffic noise.

Houses On Busy Streets.

Most families with children fear their children will

dash out into the street and get hit by a fast moving

car. They also don’t want difficulty backing into traffic

and it will always be TOO NOISY for most buyers or

renters. These properties are harder to sell or rent.

Houses In or Near a War-Zone.

Families that can qualify for a loan usually prefer

NOT living close to areas where there is gang activi-

ty, drugs being sold on every corner, and undesira-

ble people found everywhere.

Houses Near an Industrial Area Close to Facto-

ries.

This is NOT an area where most families want to

live. Noise, Smoke and Fumes and heavy Semi-truck

traffic is common. These areas are not beautiful are-

as to live.

Houses Near an Airport or a Busy Highway

Airports and busy highways are always VERY noisy.

This is a turn off for most people who want to live in

a quiet, peaceful area.

Houses Where Someone Was Murdered or Com-

mitted Suicide.

I won’t buy these houses because I fear if a new

family moved into a house where someone was mur-

dered or committed suicide without knowledge of

what happened there and the children at school were

to tell the new children now living in the house what

actually happened could cause trauma for the chil-

dren now living in the house and I don’t want to be

responsible for doing that to the kids.

Houses That Are Just Plain UGLY.

Ugly will always be difficult to rent or sell and will be

far more costly to correct the problem. When you find

a house that is just plain ugly turn and walk away.

There are thousands of houses for sale, so why

would you want to waste your time trying to com-

pletely overhaul an ugly house when there are plenty

of pretty houses available across the country?

Houses with VERY Small Bedrooms and Small

Closets and Small Square Footage of Living

Space.


These houses are not usually very

popular for the average family that

can qualify for a loan. These hous-

es eliminate over 75% of your buy-

ers and renters. These houses

ONLY work for a single person, a

couple without children, a family

with only one child. If a family has

two children of the same sex, if

they have a son and a daughter a

three bedroom house will be need-

ed.

Any House Where You Have to

Walk Through a Bedroom to Get

to a Bathroom

Having a functionally obsolete

screwed-up floor plan definitely will

be hard to rent or sell. You can fix

them and make them functional,

but why would you when there are

so many houses that don’t need to

be fixed to overcome the undesira-

ble houses?

Houses with LOW CEILINGS in

Each Room

Low ceilings are definitely a NO

SELL and will be hard to rent and

will be Too Expensive to fix. Find-

ing a house with this problem is a

house you need to quickly walk

away from.

Houses That Need Major Struc-

tural Repairs.

Why buy a house that needs major

structural work done to it when

there are thousands of other hous-

es that you won’t need to spend

that much time and money to fix?

These houses are definitely some-

thing beginning investors won’t

want to tackle.

Houses That Are Over-Priced No

Matter Where They Are.

Only a fool would pay more for a

house than it is worth unless they

plan to live in the property. If you

over-pay for a house there is no

room for a profit. So why would

you buy that house in the first

place when there are so many that

are not over-priced?

Houses on Dead-End Streets in

Older Parts of Town without a

Cul-de-Sac

These houses aren’t particularly

popular with most home-buyers

who can qualify for a loan. These

are houses that are located where

they get less city attention for

maintenance.

Houses with Wet Basements

These houses have a largehouses

amount of wasted space that will

be conducive to constant mold

problems and will also create other

problems with the house because

of the moisture attracting termites

and salamanders. Musty houses

are always hard to rent or sell.

Houses with Very Small Back

Yards

A house with a small back yard will

always be less attractive to most

families who want a place for the

family to barbeque, eat and a place

for the children to play or a place to

put a pool. Stay away from small

back yard houses.

Houses Located On a Dirt Road

Within a City

Houses located on unpaved

streets within a city are not only far

less desirable, they will be nearly

impossible to rent or sell because

of the dirt blowing every time a car

passes. Dead end streets are al-

ways less maintained than any

through street.

Houses Located Close to a Sew-

age Disposal Plant

Needless to say – the smell will be

the deterrent and will be difficult to

rent or sell.

Houses Located Near a Garbage

Dump or a Garbage Transfer

Station

Houses next to a garbage dump or

a garbage transfer station will be

extremely difficult to rent or sell be-

cause of garbage trucks coming

and going all hours of the day and

night and these places attract rats,

rodents of all kinds and the smell

will definitely not be acceptable to

any qualified buyer or renter.

I hope you now have a better idea

of some of the houses you don’t

want to own that will be hard to sell

or rent and making a profit will be

far more impossible to do.

Happy investing


Spend an evening with Larry Harbolt, the Nations Leading Creative Seller Financing Expert

Never Step Into a Bank Again &

Buy All the Houses You Will Ever Need to

Become Independently Wealthy!

SEPTEMBER 9TH, 2014 @ 6pm Meeting Space in KC Metro

to Be Determined Please Check Website

The Key Components of Every Successful Real Estate Transaction.

Determining What You Need to Think About Before You Every Make an Offer to Pur-chase.

What Type Properties Generate the Most Profit?

Why You Should NEVER Use Dollars Per Square Foot as a Cost Factor to figure the Value of Any Property.

“15” Types of Properties to Avoid Like the Plague.

The Multiple Different Types of Profit Real Estate Can Give You.

What Are the Key Questions You MUST Ask Every Seller?

Killer Negotiating Strategies That Rarely Fail.

How to Overcome Your Fear of Talking to Sellers.

Larry’s “8” Basic – Simple Offers

“8” Ways to Get Started When You have NO MONEY and FAR LESS THAN GOOD CREDIT.

Key Factors About the Paperwork You Use That Is Critical to Your Deals.

Who You Need on Your Team to Build Suc-cess the Fastest.

Larry will be back at MAREI on Saturday September 27th for a full day training seminar, we hope you can join us.

MAREI is excited to announce that Larry Harbolt will be our special guest on Sep-tember 9th at our Monthly Meeting. Larry is the Nation’s Leading Expert on Creative Seller Financing both to buy and to sell.

The Truth is many investors only know one way to buy property… with Cash. And now that banks are not lending to just anyone, where do investors turn? The investor today is likely dead in the water unless they know how to Buy with Creative Owner Financing and learn how to Sell with Creative Owner Financing. Larry has over 35-plus years of experience doing just that. That is why he has been called the Master at teaching how to buy houses with No Money and No Cred-it using Creative Owner Financing.

At the September MAREI meeting you will learn:

Wholesale at Lightning Speed = Pay off Debts & Stable Cash Flow!

Buy Properties Without Banks! = No Credit and No Money!

Become Wealthy Owning Properties That Are Paid Off in 8.3 Years!

Create Non Recourse Financing and Never Gamble Again!

Sell at Lightning Speed! Don’t Be a Puppet to a Bankers Whim!

Become Wealthy and Be Done in 3-5 Years!

MAIN MONTHLY MEETING

MEETING AGENDA 6:00 Meet & Greet Networking & Vendors 6:45 Introductions Haves & Wants 7:00 Creative Seller Financing With Larry Harbolt 9:00 Late Night Networking At Nearby Establishment Note we are currently in nego-tiations with several Overland Park Hotels and hope to have a new location by this meeting. Please check Website for ex-act Location.

MAREI Members Can Attend For FREE and guests for $15.00

If Pre-Registered. Door Price $25.00 MAREI.org/September


REGISTER FOR THIS EVENT AT MAREI.org/LARRY

Build your Business with the Ultimate Fast Track Success Workshop. . . . Right now is the best time in modern histo-ry to buy real estate. . . . If you have the knowledge on how to make money in this or any market . . . And that is how to buy real estate profitably with only $10 down, even if you have bad credit or are bankrupt!

At this workshop Larry will teach you . . .

Buy real estate profitably in any market or ycle.

Learn how to buy real estate when you have No mon-

ey.

Buy real estate when you have No good credit.

Learn how to create the terms to make cash today.

Learn how to overcome seller objections like a pro.

Learn the right questions that will create Golden Deals.

How to create extra profit out of thin r

Never have to beg for or apply for a loan again.

How to buy and sell all the property you want, no

banks.

How to structure offers with no payments or interest

and get the seller to gladly accept. This will drive your cash flow through the roof.

Why you can buy millions of dollars in real estate and never have a debt show on your credit report or be person-ally liable for a penny.

Build your income stream, like the banks have, acquire

free assets, without investing a dime.

How to change the terms of the loan months or years

after the closing and make the seller ecstatic to do so.

Build an empire from monthly cash flow and cure neg-ative cash flow – The secret only a handful of people know how to do.

Big profits from the “deal after the deal”. All seller-

financed deals have back end profit centers if structured properly, and will cost you a fortune not knowing them.

How a few carefully chosen words you can easily mas-ter in minutes can potentially earn you big paydays when you’re ready to cash out your seller.

Come and join Larry on Saturday, September 27th, 2014 for The Ultimate Fast Track to Your Business Success Workshop. Bring a new pad and a couple sharp pencils because Larry promises you will leave with New Methods, Processes and Systems that are Efficient, Effective! And WHEN YOU Learn them, they can be measured by the amount of NEW CASH in YOUR bank account.

A Full Day Deal Structuring

Seminar with Larry Harbolt Saturday September 27th, 2014, 8:30 AM to 5:00 PM

Career Education Systems—Ward Parkway

8600 Ward Parkway, Kansas City, MO 64114

MAREI Member Pricing is just $49 and Non-Member’s attend for $69 Early Bird Pricing of $29 for MAREI Members and $49 for Non-Members

MAREI Members bring a spouse or business partner for just $20 (Early Bird $10) Extra Special Pricing offered at August & September Meetings. Be sure to Attend.


MAREI MEMBERSHIP

MEETINGS HELD AT:

Main Monthly

(1st Tuesday of the Month)

Career Education Systems

Ward Parkway Shopping Center

8600 Ward Parkway

Kansas City, MO

We suggest parking on State Line Side

by Starbucks. Meeting space behind

the elevators.

Other Events

Live and Online

Full Details on Calendar at

MAREInet.com

MA

RE

I

Mid

-Am

eri

ca

As

so

cia

tio

n

of

Rea

l E

sta

te I

nve

sto

rs

A R

eal

Esta

te C

om

mu

nit

y

GUEST PASS

Name: ______________________________

Date: _______________________________

Email: _______________________________

Source: ______________________________

For first time guest to visit main meeting.

Guest P

ass is a

vaila

ble

for

firs

t tim

e a

ttend

ees to M

AR

EI.

If

yo

u

have a

tten

ded b

efo

re, exp

lore

m

em

bers

hip

op

tio

ns o

r p

ay

guest fe

e.


Sherwin-Williams is a National REIA approved supplier of paint and related products. The alliance results in quality and value with consistent pricing and substantial savings on the products that you use the most. For maximum savings we recommend the following products: PROMAR 200 ZERO VOC, PROMAR 400 ZERO VOC, PAINTERS EDGE, SUPERPAINT EXTERI-OR, A-100 AND WOODSCAPES.

Since 1866, Sherwin-Williams has been at the forefront of innovative coating and color technologies, With excep-tional products and services, Sherwin-Williams can help you get the job done fast and get the job done right.

A wide range of coatings that offer quality and value from a brand you know and trust.

Applicators, tools and equipment to get the job done right.

Substantial savings and credit pro-gram.

3,0900 stores and 2,200 represent-atives provide fast, local service. Products are readily available from

Sherwin-Williams stores everyday.

Phone or fax ordering and on-site delivery available.

Expert advice for property surface prep and selecting the correct coat-ing systems and supplies.

Broad range of coatings to meet the most stringent VOC regula-tions.

Wide selection of flooring with in-stallation available from more than 125 Sherwin-Williams Floorcover-

ing Centers.

Recommendations for local experi-enced painters.

Color consultation and a wide range of color tools in-store or online for easy selection.

Online account management, in-cluding view balances and other history, make payments and save favorite information—register on myS-W.com.

MAREI members receive substantial savings by use their MAREI member discount card that ties their savings into our National Discount Pricing with National REIA.


MID-AMERICA ASSOCIATION OF REAL ESTATE INVESTORS

The Mid-West’s Premier Real Estate Professional Association

COMMUNITY : NETWORKING : EDCUATION : OPPORTUNITY

MAREI is a Real Estate Community committed to providing Educational & Networking Opportunities.

We strive to introduce potential and existing real estate professionals to all areas of the real estate

investing industry through meetings, workshops, & seminars, both live and online. We keep our

members informed of legislative issues and the latest strategies and technologies.

MAREI provides a positive, no pressure environment where the individual professionals can grow,

network and expand their business. Plus we bring members together for the greater good be it

through discounts from our combined buying power or making our voices heard when there are

governmental or community issues.

JUST A FEW OF OUR INDUSTRY PARTNERS

“You do such a great

job at bringing in great

ideas & speakers, we

are so very happy we

joined MAREI this

year!”

“I wanted to share with

you that my most recent

rebate

check was $349.94 !!

Wahoo! It’s like free

money!

“Save your hard earned

dollars, join MAREI for $99

yr and have more benefits

and learn from oth-

er members as you need to

do so. Develop friends and

associations that will en-

dure and enhance your real

estate investing from now

on. You will be glad you

did.”

- Kara K - Christoph B

- Don S MAREInet.com

2014 summer re investment news

Documents

member price

marei phone

investment news

marei meetings seminars

price guarantee

lower price

page ad

investment opportunities