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MI D - A ME R I C A A S S O C I A T I O N O F R E A L E S T A T E I N V E S T O R S

January 2013

MAREI launches their 2nd monthly meeting. Starting January 2013, look for 2 monthly meetings.

NETWORKING : EDUCATION : COMMUNITY : GOVERNMENT

Investment News

Page 2 MAREInet.com

CONTENTS

Effective Mailing Lists

8 How to locate and Create Effec-

tive Mailing Lists

Embracing Mistakes

12 Tom Zeeb, Traction REIA tells us

to Learn From Our Mistakes.

Marketing Trends

14 Important Trends in 2013 and

how to Capitalize on Them.

Note Sales

16 What you should know about

Note Sales.

Anti –Redlining

18 Did the Community Reinvestment

Act Cause the Housing Crisis.

Every Issue

06 How I Did the Deal

10 Benefits at a Glance

14 Membership

20 Investment Opportunities

22 January Member Training

23 January Monthly Meetings

24 Monthly Calendar

Web Exclus ive

Emerg ing Trends in

Real Estate

2013 MAREInet .com/

Trends2013

@ Check out our Website MAREInet.com

Contact us by Phone 913-815-0111

Email US info@MAREInet.com

Join The Conversation MAREInet.com/Blog

Join Association MAREInet.com/Membership

Investment News Page 3

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Page 4 MAREInet.com

Mid-America Association of

Real Estate Investors

The only National REIA Chapter in the Tri State Region Serving KS, MO & NE

Honor’s of Merritt Winner

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2011 & 2012

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Our Mission Statement Mid-America Association of Real Estate Investors is dedicated to promoting ethical real estate

investing and to protect and promote the best interest of our membership through educational

and networking opportunities as well as community, legislative and public relations.

Legal Disclaimer MAREI does not exist to render and does not give legal, tax, economic or investment advice and

disclaims all liability for the action or inaction taken or not as a result of communications from or

to its members, officers, directors, employees and contractors. Each individual should consult

his/her own counsel, accountant and other advisors as to legal, tax, economic, investment and

related matters concerning real estate and other investments.

Content Disclaimer The views and opinions expressed by authors of articles contributed to this newsletter do not

necessarily reflect those of the association, the board of directors or the staff.

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Investment News Page 5

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did have was a huge buyer list and the ability to move the properties. So we made a rough intent to purchase at about 65% of the asking price on their spreadsheet if

we could buy them over 5 months and one at a time. With the properties under contract to buy I would then be

able to start marketing them for sale.

We toured the properties and ended up adjusting prices down a bit more. The attorney drafted a contract be-

tween us as buyers and the estate that we would buy the properties one at a time and that in 5 months time we would have purchased all of the properties. We were

then able to start marketing the properties to wholesale them. When we had a buyer, we would then purchase the property and immediately wholesale it to our buyer.

No money needed.

We also had in our agreement that we could change the buyers name on the final individual purchase contracts.

So some of these properties were wholesaled by our company and some of them were actually purchased and

wholesaled by our self directed IRAs.

Some other things we learned about—the joy of selling a home where the previous owner was murdered. Selling

rental houses that had been rented to drug dealers. That two one bedroom houses side by side are not as easy to

sell as a duplex.

We learned about seller financing as we ended up seller financing 1 individual houses and the 2 side by side one bedroom homes. We learned that seller financing is a great way to increase the number of potential buyers on

home to sell it faster.

By the way, I am teaching two wholesaling workshops on January 26. If you decide to join me, we can talk about

this deal over lunch. See details about the workshop online at www.MAREInet.com/WorkShop or see page

22.

How I did the deal is back, submit your deals to

info@MAREInet.com. Deals selected for publi-

cation will receive a $25 credit on account to

apply to trainign workshops.

This deal was a package of 23 houses that were marketed in the area to a lot of investors for over a year. This deal

has a ton of learning opportunities.

First this package of homes were rental homes owned by a local real estate investor who was murdered. He managed everything himself and did not have a plan to deal with the

rentals should anything happen to him. His left these 23 plus several others to his 16 year old daughter.

As there was no plan for his estate they went into probate and his attorney, who really did not have any expertise in managing properties took over. At the time of his death, I believe that most were in good livable condition and were rented and cash flowing. The attorney ordered appraisals and proceeded to market them at full appraisal price. The attorney did not hire a property manager but attempted to maintain and collect rent themselves. Due to poor man-

agement, tenants moved out, houses went vacant and were vandalized, and the homes that stayed occupied did not have tenants that were very faithful about paying rent.

Needless to say in less than 6 months the homes were worth way less than the appraised values.

They attorney also did not hire a Realtor to market the properties. Granted he was a member of MAREI and new investors, but his expertise was not in marketing of proper-ties. His marketing was to send out an excel list of proper-

ties and basic details and the appraised value. Any moti-vation as to sale price was never really mentioned.

This list hit our email quite often. We inquired as to what the asking price was several times and were told that the appraised values were listed and to make an offer. I am

sure this is what everyone else was being told and no one was making an offer.

Finally after about a year of seeing this come across our email I emailed back and said we were interested in the

package if they could tell me a rough price, that we would think about it. They came back with a price that was re-

duced from the appraised values, but based on rough com-parables without seeing the properties, were just too high.

My response was thanks for lowering the prices, but I would need to be about 65% less. This was about 2007, so prices were quite a bit higher, but prices are not really

relevant. What was important was that I really had no way to actually purchase these properties with cash. What we

Page 6 MAREInet.com

How I did the

DEAL! Don & Kim Tucker

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Investment News Page 7

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Page 8 MAREInet.com

Where can I find a good mailing list to find moti-

vated sellers? How can I create my own list to

find highly motivated sellers? These are the big

questions that I get a lot from Real Estate Inves-

tors! The true secret to success for a Real Estate

Investor is finding sellers who really need to sell.

I use different direct mail campaigns to locate

different types of motivated sellers: out of state

owners, properties quit-claimed from one person

to another, expired listings, burned out land-

lords, vacant properties, military transfers, and

pre-foreclosures, just to name a few.

The best part is that you can customize your di-

rect mail piece and your list to reach exactly the

kinds of motivated sellers you want to deal with

in order to create the kinds of deals you want for

your real estate investing business. This is best

done by locating mailing lists and refining them

to meet your individual criteria, then mailing to

these potential sellers again and again, thus cre-

ating a multitude of profitable deals.

Investors often neglect to market to sellers using

direct mail because they think the list is too

difficult to get, or they only send the mailings

once and quit. They don’t take the time to cre-

ate the machine that will bring them deal after

deal.

These are some of the easiest lists for you to

get and it will be very profitable for you to do

so. You can contact a list broker or your local

property assessor’s office and ask them for

these lists, or you can create the lists yourself.

It’s fairly easy to do. You can go to the court-

house and research divorce cases, death notic-

es, liens and judgments, tax liens, marriage

licenses, bankruptcies or Lis Pendens, which is

the first step toward foreclosure. Let me share

a few pointers here.

Do your homework when picking a list bro-

ker. How current is the list? Does it have all

the information you need to create your di-

rect mail campaign? Does it reach the audi-

ence you are targeting?

Do a test mailing of 100 pieces to test any

Effective Mailing Lists

How to Locate & Create

Kathy Kennebrook

The Marketing Magic Lady

Investment News Page 9

new list. How many re-

sponses did you get? How

many letters came back

with a bad address?

Don’t waste your marketing

dollars marketing to a bad

list that won’t get you the

result you want.

Create continuity with your

direct mail campaigns. You

can mail a lot of letters or a

few letters but you need to

have a flow of mail going

out at all times in order to

create a funnel of incoming

leads.

Never mail more pieces than

you are comfortable getting

responses to. If you do a

huge mailing and you get

tons of responses you can’t

get to, you are wasting mar-

keting dollars. Put systems

in place to help you respond

to the mailings and grow

your business gradually.

Another way to find motivated

sellers is to cultivate relation-

ships with individuals who can

help you find deals. One of the

ways I do this is to create a di-

rect mail campaign targeting

attorneys who handle family

law, estate planning and pro-

bate law, divorce and marital

law, and corporation and busi-

ness law and I let them know

we are in the business of buy-

ing houses.

Once you develop relationships

with some of these attorneys,

they will call you when they

have a client who needs to sell

a property quickly no matter

what condition it’s in. This is

just another way to build ongo-

ing lead sources using direct

mail. You only have to create

this direct mail campaign once

to create an ongoing source of

leads for your Real Estate In-

vesting business.

If you own any kind of business

and you need certain types of

leads, think about unique re-

sources that can provide you

with the leads you need and

create a direct mail campaign

targeting these resources. This

can be really profitable. For ex-

ample; if you own an alarm

company or a lawn mainte-

nance service it would behoove

you to create a direct mail cam-

paign targeting owners of prop-

erties in your area who live out

of state. These are potential

customers who need your ser-

vices.

The main reason that direct

mail works so well is that you

are reaching highly targeted

leads. You become the potential

seller’s first option when they

need to sell. Even if you are on

a limited budget, direct mail is

an excellent source of leads for

you since you can buy more

houses from fewer leads, thus

maximizing your marketing dol-

lars. As your business grows,

you can increase the number of

mailings you do. You can also

target specific neighborhoods or

dominate certain parts of town.

In doing so, you become a

“property value expert” in those

areas, which makes the offer-

making process that much easi-

er for you.

You end up creating an ongoing

relationship with your target

market, which makes it easy for

you to follow up with formerly

inflexible or unmotivated

sellers. Since these mailings are

so targeted and so residual,

there is virtually no competition

for these properties. It puts

your lead generating system on

“auto-pilot,” leaving you more

time to make offers, do more

deals, and make more money.

Most importantly, be consistent

in all your efforts. The success-

ful Real Estate Investor has a

network of people and strate-

gies at their fingertips at all

times. If you don’t develop con-

tinuity to your marketing cam-

paigns, you’ll see your results

begin to drop off immediately.

This is true no matter what

business you are using direct

mail to target to.

When you implement multiple

techniques and several different

direct mail campaigns, you will

have more opportunities than

you’ll be able to handle and the

possibilities become almost

endless. Using direct mail to

develop a “cookie cutter” sys-

tem to accomplish this is one of

the most affordable, reliable,

and effective ways I know to

build your lead base quickly and

have all the business you will

ever need.

Be sure and visit my website at www.marketingmagiclady.com for all the information you need on developing highly

effective direct mail campaigns and finding all the list brokers you need to increase the number of leads coming into your real estate business. I have done all the work for you and can provide you with all the tools you need to be successful using di-rect mail in your business.

Page 10 MAREInet.com

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City. And coming in 2013 the New Home Depot App for iPad exclusively for Chapter Members to use in project esti-

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AT-A-GLANCE USE THIS PAGE AS A GUIDE TO VALUE ADDED DISCOUNTS TOOLS AND SAVINGS CREATED JUST

FOR YOU ON GOODS AND SERVICES YOU USE EVERY DAY.

E-Update

MAREI’s award winning weekly email

update with what’s happening in real

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ernment affairs and local market data.

Investment News

The award winning newsletter for Mid-

America Association of Real Estate In-

vestors: published monthly and distrib-

uted both in print at our meetings and

digitally to our database of over 5000

people. One of the best ways to get

your message in front of a targeted

group of real estate professionals.

Magazine for the real estate investor. With discount subscriptions for MAREI members and FREE copies available

at our monthly meetings.

Free issues of both magazines

available at the monthly meetings of MAREI.

Landlord Services

Office Solutions

Suppliers

Marketing

News & Information

Investment News Page 11

We have several services as part

of our website to help you grow

your business.

Calendar of Events to stay up to

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Browse the member properties to

find your next deal. Take the

time to post your investment op-

portunities for other members

and site visitors to browse.

The Member Library is packed

and ever growing with pdf ver-

sions of entire books, EBooks,

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Nearly 70% of QuickBooks users say that it makes their business more prof-itable. Get your Accounting on track. Buy at a 20% discount our special links from the MAREI Web Site.

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Page 12 MAREInet.com

Are you the kind of person who hates making

a mistake? Would you rather not take any

action than risk making a mistake? Does the

thought of messing up and making a mistake

make you want to crawl into a hole and

hide?

DROP THIS HABIT RIGHT NOW!

It is often said that success lies just past fail-

ure. Therefore, you will never succeed if you

do not fail first.

Get this fact into your head and recognize

that it is through your mistakes that you will

learn discipline, toughness, persistence and

what it takes to succeed.

You simply cannot be successful if you do not

make mistakes. Errors, mistakes and adver-

sity are far better teachers than success.

Success is going from failure to failure with-

out losing enthusiasm. Stay in the game and

constantly learn more and improve yourself

and you will achieve the success you are

striving for.

Try letting your advance worrying become

advance thinking and planning. Action is by

far the greatest fear killer.

Get in over your head and swim to the top.

Nothing worth having in life comes easy. Cli-

ché? Yes. But it is true.

Think about how very little you appreciate

the things in life that came easily to you, but

how much pride and respect you have for

things that you fought for or struggled to at-

tain.

This isn’t true just for material things, it is

also true for the more important things in

life, like health and relationships.

Successful athletes, mountain climbers, busi-

ness owners, husbands, wives and parents

Embracing Mistakes

and Learning from Failure

Tom Zeeb

Traction REIA.com

Investment News Page 13

all know that they wouldn’t be where they are

today if they hadn’t gone through some rough

times.

Winston Churchill once said, “This is no time

for ease and comfort. It is time to dare and

endure”.

So dive in. Accept that you will make some

mistakes, but acknowledge that you will learn

from them and get better and stronger in

business or whatever endeavor you are pur-

suing.

Tom Zeeb has been featured by CNBC, The

Washington Post, Kiplinger's Magazine, The

Washington Examiner, Financial Lifeline Radio

and National Real Estate Investors Associa-

tion's Magazine among others. He is the Presi-

dent of the former Capital Area REIA, the Re-

cipient of the National REIA "2010 & 2011

Honors of Merit" and the "2009 Award of Ex-

cellence" for Best Real Estate Investor Associa-

tion! Capital Area REIA now known as Traction

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On Tuesday last week, London hosted tһе Local Social Summit 2012, tһе fourth year tһіѕ ɡrеаt

(а ח.рυt οח ԁ growing) summit һаѕ bееח

I want tο υѕе tһіѕ post tο highlight ѕοmе signifi-cant trends discussed аt tһе Summit. I аƖѕο want tο warn tһаt tһе rapid pace οf innovation mау in-deed leave real estate investors, agents, business-

es struggling tο keep up.

Key Trends

1. Mobile іѕ king

2. Rise οf ‘Local Discovery’

Data Purity & Ubiquity

Mobile Iѕ King

Tһіѕ topic һаѕ bее חdone tο death, ѕο I’m חοt going tο dwell ο חіt tοο much. Wе ѕһουƖԁ һаνе аƖƖ read

tһе key facts bу now, bυt аѕ a qυісk refresher:

Mobile Internet usage tο surpass desktop Inter-

net usage і2014 ח

50% οf smartphone users һаνе used a local

app

Mobile advertising spend tο hit US$15 billion і ח

2015 wаѕ US $1 billion in 2014*

Anecdotally, a representative frοm Yelp tοƖԁ every-one tһаt approx 45% οf searches ο חYelp аrе done

via tһеіr mobile apps. Given tһаt Yelp һаԁ 84 mil-lion unique visitors іחin Q3, 2012, wһіƖе tһеіr app

wаѕ used on just 8.2 million mobile devices in this period,

іt shows a һυɡе level οf activi-ty bу tһеіr mobile audience.

WһіƖе tһе headline figures аrе hugely exciting, іt’s іחtеrеѕtіחɡ tο note tһаt οחƖу 10% οf Internet usage іѕ done on mobile,** ѕο a lot fewer pages/visits

аrе being consumed bу mobile users. AƖѕο, tһе mοѕt рοрυƖаr рƖасе fοr using a smartphone іѕ in the home. Sο, wһіƖе mobile іѕ undeniably a game

changer , tһе behavior οf mobile users isn’t neces-sarily wһаt wе mіɡһt presume іt tο bе.

*Based ο חnumber οf users accessing Internet ο חa mobile device

**Based ο חnumber οf pages consumed ο חa mobile device

Tһе Rise οf ‘Local Discovery’

‘Local Discovery’ іѕ а חevolution οf ‘Local Search.’

Tһе ԁіffеrеחсе being tһаt ‘Search’ іѕ broad and

requires tһе user tο invest time and effort і חnarrowing down and identifying tһе content tһеу want.

‘Discovery’ іѕ аbουt presenting users wіtһ pre-

filtered results based on tһеіr preferences, location and οtһеr elements οf personalization. It means less effort on tһе part οf user, more curation аnd

editorial involvement bу site/application owners.

It’s hard tο ԁο tһіѕ well ο חlarge sites wһісһ cover a broad set οf verticals а ,.ԁ locations (e.gחSuperpages, YP.com) bесаυѕе οf tһе need fοr de-tailed understanding οf each industry οr market.

Fοr a consumer tο рυt tһеіr trust і חa service wһісһ pre-filters results, tһе consumer needs tο know tһаt site/app іѕ a specialist і חtһеіr field.

Market ing Trends

Important 2013 Marketing Trends

and How to Capitalize on them

Duncan Wierman

Investment News Page 15

Christoph Becker: Overland, KS (since 2010)

Christina Kanas: Grandview, MO (since 2006)

Brenda Linstra: Kansas City, MO (since 2009)

Curt Linstra: Kansas City, MO (since 2009)

Renewing Jim Brashears: Shawnee, KS

Rebecca Flaig: Overland, KS

Thomas & Sylvia Gill: Kansas City, MO

Bill Kennedy: Greenwood, MO

Kyle Luetjen: Overland, KS

Tim McCleary: Shawnee, KS

Brett & Brenda Richman: Kansas City, MO

Matthew Ritvo: Oak Park, CA

Austin Siemens: Olathe, KS

Jeanann Spore: Overland, KS

New Members

New & Renewing MEMBERS

Marketing Tips fοr real es-tate investors : Keep a look

out fοr חеw sites and mobile apps wһісһ аrе dedicated tο уουr industry and city. Mаkе

sure уουr business іѕ correctly listed ontһеm (see ‘Data Purity & Ubiquity’ below) and engage wіtһ tһеѕе sites tο supply deals

and content wһісһ wіƖƖ convert tһеіr users іחtο уουr customers.

Data Purity & Ubiquity

WһіƖе tһе mobile Web and tһе desktop Web mау compete wіtһ

each οtһеr fοr a user’s time, tһе data wһісһ drives tһеm іѕ es-sentially tһе same.

Yelp’s apps υѕе tһе same data-base аѕ yelp.com. Google maps

app uses tһе same database аѕ

Google maps on уουr PC (all differences aside). And many οf

tһе data aggregators wһісһ sup-ply business info tο websites аƖѕο feed mobile sites а ԁח

applications — wіtһ a few others wһісһ уου mау חοt һаνе considered (e.g., TomTom feeds іחtο Apple Maps, Nokia һаѕ іtѕ

οw חsolution)

Wе аƖƖ appreciate tһе need tο build ‘citations’ and ensure tһаt tһе data shared аbουt ουr busi-

ness іѕ ассυrаtе and consistent асrοѕѕ аѕ many directories and ԁ data aggregators аѕחpossible.

Well… tһіѕ task јυѕt ɡοt more

іmрοrtаחt. Mobile Internet users consume less pages and take action qυісkеr than PC Web

users. Sο, іf уουr information іѕ inaccurate οr (worse) absent

frοm a site, tһе חуου wіƖƖ bе missing out ο חmore а ԁ moreחpotential customers.

Marketing Tips fοr real es-tate investors: Double уουr

citation efforts ѕο tһаt уου сƖеаח incorrect listings and build out еw listings on data aggregatorsח

and directories. Bе sure tο add уου listings tο services like TomTom & Nokia ѕο уου

ɡеt іחtο tһеіr ecosystem а ԁח

data supply chain.

—-

Reprinted from Duncan Wierman’s website DuncanWier-man.com—published originally

on November 25th.

Page 16 MAREInet.com

Due to the current lack of inventory, many in-

vestors have been thinking outside the box to

obtain investment property in the valley. One

thing I have started to see more and more of

are note sale transactions. To most, note sales

seem like easy money but there are a lot of

twists and turns that you need to be careful of.

I would highly recommend if you are new to

working with these types of transactions that

you have an agent or attorney assist you.

As the purchaser of a non performing note, you

will need to collect a lot of information from

the seller of the note. These items would be

things like the promissory note, the deed of

trust, the assignment of beneficial interest, etc.

One of the things I have seen that will kill the

deal is when the buyer fails to obtain the finan-

cial status of the account. Usually the lender

will supply a payoff statement for you to pre-

sent to the trustee but the best thing is to

have an account statement that discloses the

payment history of the account. When you are

buying a non performing note, typically you

are buying the

ability to exer-

cise the rights

granted to the

beneficiary to

foreclose on the

loan. Keep in

mind though that in order to foreclose, the

substituted trustee must be able to define the

default, and the trustee must be able to sub-

stantiate the terms of the note and define the

default. If you miss one item you have just

bought a piece of paper not worth much more

to you than the ink it is written on. You have to

remember as the purchaser of a non perform-

ing note you are stepping into the shoes of the

lender. Arizona revised statute 813-D reads

that the trustor (borrower) or any person with

a recorded interest in the property shall have

the right to expect from the trustee the exact

amount necessary to reinstate the trust deed,

separately specifying costs, fees and any other

amounts that are required to be paid as a con-

Note Sales:

What You Should know

DiAnna Jackman

Chicago Title Reprinted from Azreia.org

Investment News Page 17

HOUSES WANTED

Built After 1950

Minimum 3 Bed, 1.5 Bath

Eastern Jackson County

MO or Johnson County KS

Retail Value $100k-$200k

No Rental Local Cash Buyer Looking for 2 to 4 Houses a month to purchase,

rehab and sell. Money Partners want their money placed quickly so

they can turn their money fast and make a profit. Can’t do that

with out houses! Bring us a deal!

Email: kcmoHomeBuyer@gmail.com

Submit Online: kcmoHomeBuyer.com

www.AccurateTitleCo.com

913-338-0100 phone

Title Services Provided for: FSBO, Wholesale, & REO Transactions New Construction Closings Commercial Purchases and Refinance All Types of Loan Closings 1031 Exchanges FHA, VA, USDA, Conventional Loans, and

Hard Money Loan Closings Refinance & Reverse Mortgages Doc Prep, Prelim HUDS, Curing Issues Short Sale Closing & Assistance 100 Years of Combined Service!

accurate

Accurate Closings: Smooth, Timely, Professional.

dition to the reinstatement of

the trust deed. You do not

want to give any opportunity

to the trustor to object to the

completion of the trustee sale.

You really do not want to fight

it out in court. If you get all

the information prior to close

and use a trustee that knows

what they are doing (you can

always ask your favorite title

company for a referral), note

sales can be very lucrative.

Remember as you approach

new investment opportunities

keep your same business

sense and use your experts to

help do it right. As with any

transaction, I do not recom-

mend you close a note sale

without title insurance. You

would be buying a loan policy

instead of an owner’s policy

because you are considered a

lender not an owner. Title in-

surance will ensure you have

no liens that would cause you

a headache in the foreclosure

process and that you are not

inheriting anything that would

survive the trustee sale like

city liens, etc. Chicago Title

has many experienced Escrow

Officers for these types of

transactions and it is IM-

PERITAVE that you work with

someone that knows how to

close this type of transac-

tion. Title insurance will add

an additional (and in my

eyes), an invaluable layer of

protection from the unknown.

Remember, Chicago Title is

here to help with anything

you need and just a phone

call away!

Page 18 MAREInet.com

Redlining is the practice of denying, or charging

more for services such as banking, insurance, ac-

cess to healthcare, stores, jobs to residents of a

particular, often racially determined areas. The

term “redlining refers to the practice of marking a

map in red to show the areas where banks would

not invest or lend.

In 1977, the Community Reinvestment Act, an anti-

redlining law that went into effect. It was updated

in 1995 and again in 2005. Since subprime mort-

gage crisis and the resulting recession, the question

has been, did the Community Reinvestment Act

(CRA) cause the whole mess. Democrats and many

media say no, but a recent study by the National

Bureau of Economic Research finds that by follow-

ing the CRA banks got into riskier lending.

In short banks were required to serve all their cus-

tomers from all neighborhoods in the areas where

they were in business, including the areas where

low and moderate income. Banks were required to

make affordable housing loans. Congress forced

Fannie Mae and Freddie Mac to back more and

more CRA grade loans and had HUD enforce quotas

with fines if they were not met.

They ran into a problem. With quality underwriting

standards, they could not qualify the borrowers in

the low and moderate income areas at a rate that

would allow them to meet the quotas. So Fannie

and Freddie went to work and came up with new

loan products with much looser lending standards.

In 2000, Fannie went to the lenders and told them

to use the new mortgages with less than 3% down

and flexible underwriting so Fannie could buy up

the loans, meet their quotas and then package

them and sell them as Securities.

Lenders that were not under the quotes to meet the

CRA lender requirements, like Countrywide also

jumped into the party too. Countrywide and other

lenders that were regulated by HUD signed con-

tracts with the government supporting lending prac-

tices similar to the CRA rules.

The report shows that Banks that did not meet the

lending quotas were denied plans for merger and

other penalties until they pledged to make more

loans to help credit challenged and poor minorities.

Some banks, such as Washington Mutual say that

they wanted to tighten lending standards, but were

afraid they would not be able to meet their CRA rat-

ing.

They were out there making loans after loans with

ever increasing easy standards. The more loans

they made available to credit challenged people, the

more buyers in the market buying houses and the

higher the prices of homes kept going . . . . . and

the bubble was growing, and the growing selling of

these loans on wall street as very complicated secu-

rities. The securities in turn were pledged to bor-

row short term money by the big Wall Street Banks.

Then when these poorly underwritten loans started

going bad in droves, the big banks could not renew

the short term loans, could not get credit and that’s

when first banks Bear Stearns and Lehman failed.

Here in Kansas City our urban cores were devastat-

ed by the very loans that were being offered to help

the area. Banks using fancy loan products that had

almost no lending standards made loans to borrow-

ers with very marginal credit. For example they

Anti Redlining

Did it cause this mess?

Investment News Page 19

would offer a loan with a low in-

troductory rate that would be set

to adjust up in 2 to 3 years, the

quote to the borrow being that in

2 to 3 years you will be earning

more money and have better

credit you will be able to re-

finance out. Never mind that the

people getting these loans had

poor work history and a very

lengthy history of bad credit and

no one was helping them im-

prove their income or credit so

they would be able to refinance

in 2 to 3 years. When the 2 to 3

year time frame came, the loans

started adjusting their rates up

and the defaults started and

grew.

All these newly made borrowers

that really could not afford to buy

a home and did not have the

credit to handle a home loan, in-

creased demand for our urban

core. More demand made the

prices go up and up. Enter our

fellow real estate investors.

The real estate investor was pro-

vided just as out of whack loans.

Only here, the investor did have

“good” credit, but no reportable

income. So in came the liar loan

where the investor who had good

credit could basically make up a

income number with nothing to

substantiate it and get a loan.

So as the urban core was one of

the lowest priced homes availa-

ble, they were buying up houses

and putting tenants in them for

cheap and pulling cash out of the

house with a liar loan cash out

refinance. The demand by the

investor further raised the value

of the homes.

When the home owners started defaulting in the urban core, the banks choose to foreclose and start tightening lending stand-ards. Tightened standards meant no more loans for the home owners with no money down and questionable credit and the stat-ed income loan. These two loans were how the majority of the buyers in our urban core bought

houses. Cutting out the majority of the buyers in our urban core meant that there were a lot fewer buyers for those foreclosures. Priced dropped . . . what would have sold for $80,000 to $100,000 at the high dropped down to $15,000 to $20,000 at the low as the only one buying was the investor buyer who had cash.

While having a law against not offering loans period in a specific area is good, having one with quotas that require banks to make loans and lowering stand-ards to be able to do so is really stupid. What would have helped would have been those banks and lenders saying, “Hey wait a minute, let’s modify those loans in an effort to keep from a glut of bad loans all at once” But no way no how were they going to do that back in 2008 and 2009. Today, they would love to modify the loan and keep in performing as long as they can . . . but hind sight is 20/20.

Learn more . . . Google “Community Reinvestment Act” and “Risky Lending.”

Property Management

Section 8 Housing

KC Metro Wide

Jeff Woods

Broker

www.MyPremierLeasing.com

816-849500

Webinar! Communications Expert &

Real Estate Investor Bill Twyford

What to Say!

How to Say It!

With everyone offering you the next, best,

“make a million dollars while you sleep”

program – people have forgotten that this is

a people business and without the proper

COMMUNICATION SKILLS you are dead

in the water!

Register: MAREInet.com/Webinar

Thursday January 10th

8pm CST No Charge

Page 20 MAREInet.com

2803 S Norwood

Independence, MO

$59,900 3 Bed

1 Bath

Crawl

Renovated & Ready

for your Tenant

Scott Tucker

Realty Resource

RealtyResourceKC.com

816-523-4400

2120 SE 3rd St

Lee’s Summit, MO

$135,000 3 Bed

2 Bath

Updated, 3 bedroom

2 bath raised ranch in

Lee's Summit. MLS#

1807386

John Welchert

Platinum Realty

816-522-0002

6149 Harvard

Raytown, MO

$89,900

4 Bed

3 Bath

Ranch

Two Living Spaces,

Pre-Negotiated Short

Sale

Scott Tucker

Realty Resource

RealtyResourceKC.com

816-523-4400

438 S. Kentucky Ave.

Independence, MO

$22,000 3 Bed

2 bath

Partial

Bsmt

Great Cash Flow

Potential, raised

ranch, 20% ROI

Chad

HomeRemedyKC

HomeRemedyKC.com

913-735-5598

803 S Brookside Av

Independence, MO

$20,000 2 bed

1 Bath

Full

Bsmt

Cash Cow Inde-

pendence Whole-

sale Deal 50% un-

der market value!

Christoph Becker

Blueprint Properties, Inc

BlueprintPropertySoltions.com

(816) 419-1165

3301 Bales

Kansas City, MO

$10,000 3 Bed

1.5 Bath

2 Sty

Rehabbed about a

year ago. Va-

cant.eeds TLC to

bring back to life.

Christoph Becker

Blueprint Properties, Inc

BlueprintPropertySoltions.com

(816) 419-1165

3343 Bellefontaine Ave

Kansas City, MO

$34,500 3 bed

1 bath

Full

Bsmt

Newly Rehabbed

Kansas City IN-

VESTMENT PROP-

ERTY 20% NET ROI

Christoph Becker

Blueprint Properties, Inc

BlueprintPropertySoltions.com

(816) 419-1165

3829 Benton Blvd,

Kansas City, MO

$39,500 3 Bed

1.5 Bath

FRESH REHAB

Prestigious BEN-

TON BLVD. 20%

NET ROI

Christoph Becker

Blueprint Properties, Inc

BlueprintPropertySoltions.com

(816) 419-1165

7708 E 110th St

Kansas City, MO

$19,500 3 Bed

2Bath

Ranch

Structurally Sound

Ruskin Fixer Upper

in need of Remod-

eling/Rehab TLC

Christoph Becker

Blueprint Properties, Inc

BlueprintPropertySoltions.com

(816) 419-1165

MAREI Member Properties

MAREInet.com/Properties

Investment News Page 21

836 E 82nd St,

Kansas City, MO

$53,000 3 Bed

2.5 Bath

Full Bsmt

South KC Super Hot

Deal! 50% under

market value E. 82nd

St. 3bd 2.5ba

Christoph Becker

Blueprint Properties, Inc

BlueprintPropertySoltions.com

(816) 419-1165

3810 College Ave,

Kansas City, MO

$20,000 3 Bed

2 Bath

90% Rehabbed –

3brm, 2bath Whole-

sale Midtown Proper-

ty

Christoph Becker

Blueprint Properties, Inc

BlueprintPropertySoltions.com

(816) 419-1165

5527 Euclid Ave,

Kansas City, MO

$29,500 3 Bed

1 Bath

55th & Euclid Com-

pletely Rehabbed of-

fering a proposed

NET ROI of 23%

Christoph Becker

Blueprint Properties, Inc

BlueprintPropertySoltions.com

(816) 419-1165

11325 Sycamore Tr,

Kansas City, MO

$39,000 3 Bed

1 Bath

Ruskin Gem Turn-

Key 19%NET ROI –

INVESTMENT PROP-

ERTY

Christoph Becker

Blueprint Properties, Inc

BlueprintPropertySoltions.com

(816) 419-1165

703 S Cherry St,

Olathe, KS

$24,000 3 Bed

1 Bath+

1 partial

OLATHE Fixer Upper

Only $24K! -Priced

To Sell – Huge Profit

Potential

Christoph Becker

Blueprint Properties, Inc

BlueprintPropertySoltions.com

(816) 419-1165

5839 Euclid Ave,

Kansas City, MO

$29,500 3 Bed

1 Bath

3bdrm KC Invest-

ment Property Turn-

Key 19% NET ROI

Christoph Becker

Blueprint Properties, Inc

BlueprintPropertySoltions.com

(816) 419-1165

806 S Scott

Belton, MO

$75,000 4 Bed

2 Bath

Finished

bsmt

Great for first time

home buyer, Rehab-

ber or landlord to

hold, built in equity

Mike or Terea Moeller,

Laura & Donna Bullock

memoeller@att.net

816–509–3771

4021 Crossgate Ct

Lawrence, KS

$125,000 2 Bed

2 Bath

Loft

Great Rental or

home for your KU

STudent

Michelle Frye

Reece & Nichols

785-608-9106

Your Property Here, MAREI members post your properties online. Must include an address, price and

contact information and it will appear at least once in the newsletter.

January Workshops

Wholesaling 101 & 102

Wholesaling Real Estate is the real estate niche

whereby investors market to find motivated sellers

and negotiate a purchase price and at the same time match that house up with an end buyer. In

most cases, no money is needed to complete the transaction on the wholesale investors part or

transactional funding can be used.

For new investors just getting started wholesaling is a technique that will serve you well in all the

other niche as it involves mastering the art of finding really good deals that you can wholesale to

other investors (or cherry pick the best and wholesale the rest) .

This Saturday features 2 workshops:

Each qualifies for 2 Hours of PHP Credit (Purchasing for 101 and Marketing for 102)

Each Cost $30 for MAREI members / $45 for Non-Members

Wholesaling 101:

Getting Started

1. What is a Wholesale Deal?

2. What are the best houses?

3. How much to pay?

4. How do you get paid?

5. What happens at closing

6. Who Should be on your Buyers List

7. How to Build a Buyers List - Fast

8. 8:30 to Noon

Wholesaling 102:

Marketing for Motivated Sellers

1. What is a Motivated Seller

2. Where do you Find Motivated Sellers

3. Marketing For Motivated Sellers

4. Websites

5. Direct Mail Marketing

6. Craigslist Advertising

7. Screening Sellers

8. 1pm to 4:30

Registration Information for Saturday Workshop

1 Workshop Member $30 Both Member $55 1 Workshop Non-Member $55 Both Non-Members $85

________________________________________ ____________________________________ Attendee 1 Email ________________________________________ ______________________________________ Address City State Zip ________________________________________ ______________________________________ Phone Fax ________________________________________ _________________ Expire Date Credit Card Number

___________________________________ Signature

Scan & Email to info@MAREInet.com

Fax: 1-201-574-2969 (email first)

Call 913-815-0111 Online www.MAREInet.com/WorkShop

KC North:

North Kansas City

Community Center

1999 Iron Street

Kansas City, MO

Times:

Thursday January 3rd: 6pm to 9pm

6:00 Registration & Networking

7:00 Deal a Minute

7:15 Presentation

8:45 Final 15 Networking

Monthly Meetings January!

The Top 10 Ways to find Real Estate Deals

As we learned at the MAREI KC South

meeting in December, the Real Estate

Industry has changed immensely in the

past year. Home Buyers and Investors

are paying cash more causing more de-

mand for REO properties. Banks are

not foreclosing and selling the notes,

lowering the number of REO proper-

ties. So with more demand and less

supply, the price is going up. So finding

non MLS deals is going to be even more important going for-

ward than it has in the past.

Join us tonight to find out what’s working and what’s not

working when it comes to finding deals.

MAREInet.com/KCNorth

The Top 3 Mistakes that New Investors Make

The December meeting was packed

with so much information that we could

not fit it all into one meeting. So we

asked Debra Felderhoff to come back in

January and share her top 3 (or more)

mistakes new investors make. We

wanted to make sure she had time to

share her knowledge and answer your

questions.

You may know Deb from past appear-

ances on guest panels at MAREI as well

as from her networking groups on Sat-

urday and Sunday. She is in the medi-

cal field by day and later afternoons

and weekends she devotes to her full time real estate business

and helping other investors. Deb’s expertise lies in creative pur-

chase with very little if any money in the deal and then renting or selling them lease to own and

keeping all of her very many units occupied.

If you are just getting started in real estate and want to see how a real live local investor does

her deals, please join us to learn from Debra. If you have some specific questions, please come

early or stay late to ask.

MAREI.com/KCSouth

KC South:

Career Education Systems

Ward Parkway Shopping Center

8600 Ward Parkway

Kansas City, MO

Times:

Tuesday Jan 8th: 6pm to 9pm

6:00 Registration & Networking

7:00 Haves & Wants

7:15 Presentation

8:45 Final 15 Networking

January Workshops

Wholesaling 101 & 102

Subscribe & Sync

MAREInet.com/Calendar

The MAREI calendar is hosted on Google Calendars. This allows you to subscribe

to our calendar and sync it with your own Google Calendar, Mobile Calendar, or

Outlook Calendars. Check calendar for times and locations.

January 2013 Sun Mon Tue Wed Thu Fri Sat

1 2

SG: Weekly Wed.

Networking

3

KC Northland on the

1st Thursday of the

Month

4

SG: Connected Inves-

tors

5

SG: Blue Springs /

Independence Inv.

6

SG: Lees Summit

Investors Network

7

Deadline: Vendor

Tables for KC South

Meeting

8

KC Metro South on

the 2nd Tuesday of

the Month

9

SG: Weekly Wed.

Networking

10

NLP Webinar with Bill

Twyford

11

12

SG: Blue Springs /

Independence Inv.

13

SG: Lees Summit

Investors Network

14

15

16

SG: Weekly Wed.

Networking

17

18

Deadline: Newsletter

ads & articles for Feb

19

SG: Blue Springs /

Independence Inv.

20

SG: Lees Summit

Investors Network

21

Omaha REIA

22 23

SG: Weekly Wed.

Networking

24

25

26

SG: Blue Springs /

Independence Inv.

Wholesaling 101

Wholesaling 102

27

SG: Lees Summit

Investors Network

28 29 30

SG: Weekly Wed.

Networking

31 1

SG: Connected Inves-

tors

2

SG: Blue Springs /

Independence Inv.

3

SG: Lees Summit

Investors Network

4 5 6

Deadline: Vendor

Tables for KC North

Meeting

7

KC Northland on the

1st Thursday of the

Month

8 9

SG: Blue Springs /

Independence Inv.