Newsletter - February 2009

Investment News Newsletter of Mid-America Association of Real Estate Investors February 2009

BANKRUPTCY . . . The Banks Worst Nightmare When You Understand the Bankruptcy Process in Detail, You Can Get a Lot More Short Sale Deals Accepted by the Bank!

6. How to deal with the bank when bankruptcy is on the table. 7. How to stop the bankruptcy process and get a short sale accepted

As our market changes, bankruptcy knowledge is becoming a more important part of the short sale negotiation process than ever before.

8. Why investors who know the bankruptcy process are getting a lot more short sale deals accepted in less times and at lower prices.

It's almost impossible to get good short sale deals these days without some knowledge...the more you have the less the bank can shut you down…

This teleconference came at a very timely point to fit in with our current market and short sales and to give us a brief intro before our February meeting when our very own MAREI members attorney David Nachman and attorney Ronald Kraft join us for our Legal Eagle night.

On our most recent teleconference our host Norm Reid interviewed Bill Twyford about the topic and discussed:

If you are working short sales at all or know of someone who may be facing foreclosure and a possible short sale, reviewing this teleconference and brining your general foreclosure and bankruptcy processes questions to the meeting will help you be able to deal with more motivated sellers facing foreclosure or bankruptcy.

1. How today’s market is affecting the bankruptcy process, and what we as investors need to know and do about it. 2. The phases of Bankruptcy: 

Who can file and when

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Chapter 7 or 13? What are the differences, which ones can we work with.

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What is the 341 Hearing and what we need to know about it.

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When homeowners use or don’t use an attorney, how it will affect our short sale.

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How late the bankruptcy can be filed before the foreclosures sale date.

3. Where we as investors fit in 4. Once we gain an intimate knowledge of the process, what do we do with the information and how will it help us with our real estate investing. 5. How can we talk to homeowners who think they want to file in order to “buy” more time to negotiate.

To listen to the teleconference please click on the “teleconference link” on the MAREI web site at www. MAREInet.com. The replay from this call will be posted on the web site through February 12th. After that MAREI members will be able to access this call by logging into the Member Area and accessing the our teleconference archives through the “GURU” page. While there review a few of the other teleconferences. We have over 60 calls on just about every subject you as an investor may have questions about.

Bill Twyford (and his wife Dwan)

Investment News

MAREI Mid-America Association Of Real Estate Investors Mid-America Association of Real Estate Investors (MAREI) is one of the largest real estate investor associations in the mid-west. MAREI members consist of full and part-time investors, beginning investors, real estate brokers and agents, attorneys, contractors, accountants, property managers, renovation specialists, appraisers, bankers - people who want to enjoy the many benefits of real estate investing. MAREI was established in 2003 and promotes networking and educational opportunities to its membership. MAREI services members in Kansas, Missouri and Nebraska.

MISSION STATEMENT To provide education, discussion and networking opportunities to help real estate entrepreneurs & investors reach their financial goals using sound, honest business practices.

INVESTMENT NEWS © 2009 by Mid-America Association of Real Estate Investors (MAREI), a Real Estate Trade Association. Published monthly by MAREI and included as benefit for our members. Quotations and reprints are permitted with full credit given to author, plus “The Investment News: Newsletter of Mid-America Association of Real Estate Investors.” Subscriptions are $59 per year or are included with membership. MEMBERSHIP Twelve month individual membership is $99, 2 Person Membership is $149. Guest Fee is $25. Articles must be received by the 1st of the month two months prior to issue date to be considered for publication. To be considered for a specific issue, it is recommended you contact the Editor at least three months prior to issue date. All submissions are at the discretion of the editor and are subject to editing. Advertising space deadline is the 1st of the month one month prior to publication. All camera-ready artwork and materials for non-camera ready ads are due by that date. Please see www.MAREInet.com for more information. CODE OF ETHICS MAREI members are expected to be civic minded and willing to operate with high standards of honesty and integrity. It is our duty to conduct ourselves with the highest principles of the free enterprise system. We strive for MAREI to be synonymous with competence and fairness. As MAREI members, we hereby bind ourselves to this code of ethics: 1. 2. 3. 4. 5.

We shall not discriminate against any person with regard to race, color, religion, age, national origin, sex, handicap or familial status as defined by current Kansas, Missouri, or Nebraska law. We shall recognize that real estate is a service related industry. We shall refrain from engaging in any illegal practices, or defrauding any member, customer, or association, with the aim of always conducting business in a professional manner. We shall endeavor to stay informed and updated on matters affecting housing in our communities, and adhere to local, state and federal laws. We are individually responsible for our own due diligence and continuing education. Members are expected to verify any and all assumptions regarding business decisions to prevent falling victim to fraud, misrepresentations and illegal practices.

Further, if any allegations of conduct considered detrimental to the purposes and interest of MAREI are received in written and signed communication to the management, we will consider the matter. Should a decision to take further action be made, a furnished copy of said allegation (s) to the accused, who shall be given adequate time to reply. Thereafter, management shall take such further action as it may deem property and in accordance to this code of ethics.

BADGE POLICY All members of Mid-America Association of Real Estate Investors and guests must wear a name badge to all General Meetings. There will be no exceptions.

The information contained herein is believed to be accurate; however, it is not guaranteed or warranted in any manner and is subject to change without notice. Writers’ and speakers’ opinions are not necessarily those of MAREI. You are advised to seek professional advice.

Mid-America Association of Real Estate Investors PO BOX 8685 Prairie Village, KS 66208 Phone: 816-523-4400 Fax: 816-523-4448 www.MAREInet.com [email protected]

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Mid-America Association of Real Estate Investors is a Member of the National Real Estate Investors Association And the National Association of Responsible Homebuilders & Remodelers

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REAL ESTATE INVESTING WITH A 401k National figures suggest that 401(k) accounts lost over $3,000,000,000.00 (trillion) in value during calendar year 2008. Persons invested 100% in stock funds throughout 2008 experienced losses between 25% and 50%, depending on how aggressive or not they were in their investing. At the same time, real estate prices throughout the Midwest region of the United States were reported to have lost between 5% and 10%. Even money market funds held inside 401(k) and IRA accounts came under fire as the $1.00 per share price that most money markets are priced at, found investor concern as bank defaults loomed. The government had to take action last October and guarantee these funds to avoid mass liquidations from fearful investors earning less than 2% on their money. This was unprecedented government action. No matter how you looked at things, year 2008 was a very difficult year for investors. As investors look to 2009 and beyond, the question begs of what to do now. That is a very important question when one realizes that the vast majority of working individual's retirement wealth is held in their current, or former, employer's defined contribution plan such as a 401(k) or Profit Sharing Plan. The Internal Revenue Service gave their approval several years ago for certain IRA custodians to hold retirement assets that are allowed to be invested into real estate and real estate related investments such as private lending and mortgage notes. Most investors are not aware of this alternative investment strategy. Financial advisors rarely discuss it with their clients and you never hear anything about this from the national financial talk show guru's. What you NEVER hear anyone talk about is the fact that most 401(k) Plans have a Plan provision (rule) that allows ACTIVE employees to take a withdrawal from their account and roll the money over to an IRA custodian WITHOUT penalty or taxation. Read that sentence again. If you have a 401(k) Plan and you are still employed with the sponsoring employer of that Plan, you very likely can move money from your 401(k) into an IRA through a simple rollover process. What does this mean to you? It means that in most cases, you can move money from your 401(k) where the employer dictates which investments you can use and instead put that money into an IRA where YOU can dictate how you wish to invest the money. Perhaps real estate? As noted earlier, real estate such as residences or commercial property did lose value in 2008, but at a much smaller rate here in the Midwest than the stock market. Which will rebound faster? The “Rule of 72” suggests that the rate of return on your investment divided into 72 will tell you how long it will take

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you to double your money. As an example, getting a 12% annual rate of return (ROR) should allow you to double your money every 6 years. It is very realistic that an IRA investor, acting as a private money lender with their IRA assets, can achieve a double digit annualized ROR. Or how about the IRA investor who buys a 2 bedroom 1 bath bungalow for $50,000 and collects $600 monthly rent. This person's $50,000 IRA investment earns $7,200 per year before taxes and insurance (which the IRA pays). Suppose the net income is $6,000 per year. That works out to a 12% ROR. IRA's can certainly buy and sell discounted privately held mortgage notes. These are often bought and sold at an 14% to 20% annual ROR. Others use IRA assets to buy and wholesale properties. Buying at $40,000 and assigning them for $5,000 each gives one a 12.5% ROR.....per EACH deal. Your annualized ROR could be triple digits with 8 deals. These are but a few examples. There are many more opportunities. And in each of these examples, the IRA investment is protected by real estate. Protecting the investment with at least a 65% to 75% loan to value is very common and affords a high degree of comfort against any loss potential. Is buying real estate or lending on real estate a viable option for some of your 401(k) assets? If you believe that it is, then explore your 401(k) rules for an “In-Service Withdrawal” provision. That's the key for moving any 401(k) assets to a self directed IRA.

About the Author: Edward Griffin has worked over 20 years in the mutual fund industry with 16 of those years working with multiple types of retirement accounts including IRAs, IRA-SEPs, Profit Sharing Plans, and more. The past 11 years he has specialized in 401(k) plans and holds the industry’s certification of “Qualified Pension Administrator” issued by the American Society of Pension Professionals and Actuaries. He is a member of MAREI and is offering consulting on a limited basis on 401ks and Self Directed IRAs. Please look for Ed at MAREI meetings or give him a call at 913-825-5257.

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General Meeting ~ February 10th ~ 6pm Networking ~ 7:30 pm Presentation ~ Marriott, Overland

MAREI Presents:

Legal Eagle Night Ron Kraft with Accurate Title and Kraft Law Firm has been a member of MAREI since we started. He has presented on various subject regarding real estate law and helped numerous members with closing and title issues. David Nachman with Nachman Law has also been a member of MAREI since we started. He has presented on several topics including asset protection. Both specialize in Real Estate Law as well as small business, estate planning, trust, probate. We have asked David and Ron to join us and answer those odd questions we all have, but never ask because we have not had the time with an attorney. Because of the current economy and the number of foreclosures and short sales, we would like to ask them to start with the following questions:   

What is the basics on how a foreclosure works ? KS foreclosure vs MO foreclosure David R. Nachman If a borrower is foreclosed upon, and the lender files a judgment for the delinquent amount, are there any options for the borrower? 816-756-5800  Can the borrower delay a foreclosure with bankruptcy?  Can Bankruptcy Help the Borrower?  Key Phrases to put in a Real Estate Sale Contract to Protect the Seller or Borrower:  Return of Earnest Money  for Occupied Rentals regarding: Security Deposit, rents  Others Ronald Kraft  Basic Structure of Owner Finance Transactions  True Owner Finance 913-338-0100  Contract for Deed  Lease to Own  Subject to  Options Ron and David may not be able to answer all questions fully, but will be able to give us a good general direction. If you need further assistance on any legal issue, both would be happy to assist you further through their office. Please give them a call to find out fees.

This meeting is sponsored by U First Financial. MAREI has recently became an independent associate with U First Financial and invites all MAREI member and guests to visit their personal web site to learn more about how to pay off your mortgages early and to put your money to work for you. Visit http://www.u1stfinancial.net/934513 to request your own analysis to see how much faster you could be debt free. (See page 14)

Tuesday February 10th, 2009 6:00 pm Networking 7:30 pm Presentation Sponsor Meeting: $200 Reserve Networking Table: $35 for Member’s

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Overland Park Marriott 10800 Metcalf Members Attend FREE $25 Guest fee at Door Reregister for $15 on Web Site More info www.MAREInet.com

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WORKING WITH CONTRACTORS Some thoughts on how to use a contractor and keep him on your side. As an investor it would be nice to have all your numbers in place before we make an offer. An inspection by a contractor to give an estimate of repairs or to give an assessment of the condition of the property is helpful when making your decision to purchase. But how do we find the contractor who is willing to inspect properties for us. When you call and ask for a break down of needed repairs and a detailed repair bid on the house, most don’t even call you back. I get calls from new investors asking why they can’t find a contractor to do these bids, after all “I told him I would use him in the future.”

riod. Think about it. If you look at 4 or 5 houses for someone in the hopes of getting the contract to do the rehab. You don’t get paid for any inspections up front and the investor keeps loosing the bid. Then finally, on the 5th house the investor has the highest bid and gets the house. Since the contractor did not get paid for the repair bids and may not get paid for future bids, you may find that his bids on each house get a little bit higher because he adds those (Continued on page 12)

Has this happened to you? Lets first talk about working with a contractor. Investors tell me their contractor is a bum, or that he left the job site without finishing the job, or took all my money. The list goes on and on. Nine times out of ten, the investor who hired the contractor is at fault. I know I’m not popular with that statement, but lets review some of the problems.

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Was there written instructions on the scope of work to be completed? Was there an agreement on price for services before he started, verbal or written? Was there an agreement on when the contractor would be paid? Have you asked for an inspection, without paying for his services? Have you ask for his advice without paying for his services?

You pay your Attorney, Doctor, and Accountant when you ask for advice or services, your contractor should be treated the same way. Assuming Contractors work for free is where the problem starts. Promising the contractor future work, is an old trick that doesn’t work. The best way to establish a good working relationship with a contractor where both sides win is to have an agreement up front that spells out his prices for services. I hope everyone understands, that a good contractor will help you make money. Initial Inspections If you are buying properties and making bids and you have a question about the condition of the house, having a contractor you can call on puts you in a better position to buy the house right. I know it’s unheard of, but pay the contractor to inspect the house and use his services when you get the bid. On the first few houses, go with him on the inspection. Let him show you the house and have him point out his concerns and problems with future repairs. It may be that after the first few, you can make your own rough estimates to make offers, and then hire the contractor to do a hard bid during your inspection pe-

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MONEY SAVINGS FROM MAREI You have paid your $99 for membership and want to get the most out of your membership. We want to make sure you save at least that much if not more through out the year. Sherwin Williams: Do you paint or do you have a contractor that paints your properties for you? Be sure to check out the discount available at Sherwin Williams. While they do offer a contractor rate that any local contractor can receive, this is based solely off of the volume that the one contractor buys. The discount card that we offer is a National Contractor account that ties together the buying volume of every member of MAREI with every other member of other REIA groups that are a part of National REIA.

to save here. First go to the “Vendors” page on the web site and find Vista Print under the printing category. Click on details to find links to save:  250 FREE Business Cards. Keep in mind that free will get you the vista print logo on the back.  75% off Premium Business Cards. This is our favorite, recently we used this to purchase 500 Business Cards that we designed, printed front and back for less than $10 plus delivery fee.  50% off Post Cards and other discounts posted.  Delivery. We have also found that you do not need to pay extra for faster delivery. Our last order with regular delivery was ordered on a Thursday and arrived by the next Tuesday. It does not always come through this fast, but has for about 90% of the orders we have placed.

Kinkos: Do you make copies of flyers, post cards, letters, etc? While our discount card with Kinko’s will not compete with the volume discounts that they offer when you make copies in the 1000’s, our discount card does offer up to 20% off of the regular rates you would pay for a normal copy service.

Photo Sharing: For those of you who do a lot of online stuff this is old had, but for those people who have not found all of the latest tricks, take a look at http://picasaweb.google.com. You can load up your photos from a house, type in captions and detailed information, create albums and then share them. They provide you with a way to email your album, Office Max: If you shop at Office Max, we have two ways for you to save. imbed the photos directly into a web page, and provide a link to put into a web page or email for other First be sure to go to www.OfficeMax.com and sign up people to go to your album online. This is a great refor their Max Perks rewards. They will send you a source for sharing photos quickly and easily. card that you can have them scan or use online with every purchase and it will track your purchases. They Dry Erase Board on the Cheap: You have probawill give you small rebates on certain items that you bly priced these things in the 100’s of dollars for a purchase as well as give you credit for returned ink large one. But there is a product that comes in a cartridges. This will be paid out to you in shopping sheet like drywall or paneling that sells for about $15 cards periodically. They will also send you discount a sheet at home depot. I found it near the roofing cards for use in store and online. Our favorite is $10 panel section. They can cut it down to size and then off a $20 purchase. you can bolt to the wall using screws, washers, and anchor bolts. For about $25 if you do the work yourSecond we are also supposed to have a discount card self you can have a giant, unframed dry erase board. with them that does offer a great savings on some Home Depot uses the same materials for their items. (Can’t be used with the Max Perks) Right now boards by the check out counters, take a look. we are having a little bit of difficulty on getting these cards but members can log into the member area and Any discounts you want to offer members or FREE from the home page while logged in visit “member re- or reduced cost items fellow members might benefit sources” page and click on “discounts for members” from, please tell us about them. to get the log in and discount codes to use online. Vista Print: If you need business cards, post cards, brochures and the like, we have several ways for you

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Service Guide Advertising Supplement Tucker One Properties, Inc. Rehab ~ Wholesale ~ Foreclosures Residential & Commercial 115 E. Gregory Kansas City, MO 64114

Phone: 816-523-4400 Fax: 816-523-4448

Joe Reece ~ Paul Surles www.TuckerOneProperties.com

Yellowletter.com Yellow Letter Automated Mailings Pre NOD Leads Available

John & Donna MacNeil Phone: (904) 880-2742 Fax: (904) 880-2741 Email: [email protected]

This is a Business Card Sized Ad MAREI members place An ad for one month $25 Or included in Business Membership

Beth Langston Homefront LLC Call me to review your portfolio! 200 NE Missouri Rd, Ste 200 Lee’s Summit, MO 64086 816-246-5999 cell [email protected]

JEFF BASLER PORTFOLIO MANAGER O: 816-474-0010 C: 913-568-9344 F: 816-474-0016 FOR TURN KEY RENTAL PROPERTIES CONSISTENT CASH FLOW & APPRECIATION WWW.JBFUNDINGLLC.COM

Accurate Title Company, LLC Ron Kraft Title, Closing, & Escrow Services 7011 W 121st St, Ste 100, Overland Park, KS 66209 Jackie White / 913-338-0100 / Fax 913-338-0107

www.AccurateTitleCo.com www.MAREInet.com

FLATIRONS FINANCIAL, INC

INVESTMENT PROPERTY REHAB LOAN SPECIALIST

PHONE: 913-393-2448 Ask about our houses for sale

I Buy Private Mortgage Notes, & Land Contracts, Lump Sum Cash Edward Griffin 913-499-6518 [email protected]

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Service Guide Monthly Advertising Special Tammy Robb (KS and MO) 10503 Shawnee Msn Pkwy, Shawnee, 66203

Business Card Ad in Newsletter Newsletter emailed to 5000 and posted for year.

913 268-6060 Phone www.robbagency.com Get a Health quote on robbagency.com Call for RENTAL/REHAB Home Rates. Life * Business * Auto * Home * Multi-Family Landlord Protector (Rental) * Vacant (Rehab)

Lost time is never found again. Benjamin Franklin

Listing on Web Site In Vendor Section for 1 Month.

1/2 Vendor Table at Meeting We currently have between 80 and 110 people visiting our meetings each and every month. These are New & Experienced Investors, Local & Out of State, Residential & Commercial.

1 Email Blast of Your Ad To the Database Sent out on date of our choosing with in the other monthly emails. $100 for Package, Prepaid Call 816-523-4400 or email [email protected]

Newsletter & Service Guide Our monthly newsletter is the Investment News. All of our MAREI Business members receive a Business Card ad or a monthly $25 credit for a larger ad. The Investment News is currently mailed out in paper version to approximately 320 addresses and handed out at our monthly meetings. We also post our newsletter archives on our web site for any new members or guest to read past articles. Or write an article to be included in our newsletter that will showcase your expertise. We will include your contact information at the end of the article. Cost is currently just $50 for a one page article in the newsletter and posted on the web site for members.

Vendor Expo

REO Properties & Bank Owned Short Sales Fixer Uppers Turn Key Rental Properties Apartments for Sale Build your Kansas City Area Investment Portfolio with Us

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

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For Investors, By Investors

Visit our Web Site to See Currently Available Properties Connect with our Team of Specialists

www.RealtyResourceKC.com 816-523-4400

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Service Guide NEED TO FLIP A PROPERTY FAST? T.O.T.L. (TOP OF THE LINE) RENOVATIONS will complete all your rehab needs quickly, at a reasonable price. **THE ANSWER TO INSURING YOUR PROPERTIES** OUR PROGRAM HAS BEEN IN EXISTANCE SINCE 1999 A NATIONAL INSURANCE PROGRAM THAT PROVIDES:  PROPERTY & PREMISES LIABILITY COVERAGE  CURRENTLY INSURING OVER 750 BUSINESSES  WE OFFER MONTHLY REPORTING & BILLING  VERY COMPETITIVE INSURANCE RATES WITH CARRIERS RATED A+  SAME DAY TURN AROUND TIME FOR PROOF OF INSURANCE FOR CLOSING FLOOD AND OTHER SPECIALTY LINES OF COVERAGE AVAILABLE

Affinity Group Management Company: 1-800-790-4872 PHONE, 913-894-6534 FAX Email [email protected] Email [email protected]

We specialize in:  Make - ready  Siding & Windows  Carpentry & Roofing  Plumbing & Electrical  Painting & Flooring  Drywall & Doors  Fences & Decks  Kitchens & Baths  Maintenance LICENSED AND INSURED

Call Anthony @ 816-606-0266 or Emily @ 816-252-0095 [email protected]

ONE STOP SHOP Full Service for Real Estate Investors REAL ESTATE SERVICES Full Service Real Estate Company Buy & Sell Property

REHAB LOAN COMPANY Hard Money & Rehab Loans No Seasoning on Title Refits to Payoff Rehab Loans LLC Loans, FHA Loans, Purchase Money

KC REHAB CONSTRUCTION Lots of Crews, Cheap Prices Renovation, Rehab, Remodeling Services Patrick and Marta Grace

LAS CASAS MANAGEMENT Full Service Property Management

GRACE REAL ESTATE COMPANY LLC 207 NE 72nd St, KCMO 64118 www.MAREInet.com

816-453-5532 or 816-456-1843 [email protected]

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INVITE A FRIEND To a MEETING .MAREI Members do you have a friend, coworker, or person who provides you a service that is interested in real estate investing? Our Next meeting will be an excellent opportunity for a new potential member to check us out. Please cut out or copy this page and provide it to all of your friends who want to attend and have never been to a meeting and they will be able to attend for FREE! If they have attended before, please encourage them to join, it’s only $99 a year and the get access to so much training through the web site. And if they are just not quite ready to join, and they have attended before, remind them that the guest fee at the door is $25, but if they reregister at www.MAREInet.com through the Calendar of Events, they can save ten bucks.

Membership Benefits           

Free entrance to General Meetings Printed Version of this Newsletter Discounts to Paid Events Access to Online Library Post Houses on our Classifieds Interact on Member’s Only Message Board Post your Profile & Read Profiles for Other Members E-Messaging System through Profiles Membership List in Excel (no emails) Discount Card to Sherwin Williams Discount Card to Office Max

Cost: $99 annually for one, $50 per additional

FREE GUEST ENTRANCE FOR FIRST TIME ATTENDEES NAME: _________________________

To Join, fill out form below. Name #1: ______________________________________________ Email: _________________________________________________ Name #2: ______________________________________________

PHONE: ________________________ EMAIL: __________________________

Email: _________________________________________________ Company: ______________________________________________ Address: _______________________________________________

ADDRESS: _______________________ CITY: ___________________________ STATE: _______

ZIP: ____________

REFERED BY: ___________________

_______________________________________________________ Phone: ________________________________________________ Standard Membership $99 Add on Spouse or Partner $50 Business Membership $499 Additional Employee $50 Check Enclosed (make payable to MAREI)

Free entrance is limited to the October 2008 meeting at the Overland Park Marriott from 6 pm to 9 pm for first time guests. If you have attended before, remember guest fee at the door is $25. Membership is just $99 for one and you can join right now on our web site at www.MAREInet.com! Be sure to bring your business cards and flyers for networking. Don’t forget your note pad, because you will want to take notes during the presentation and take down names and contacts while you are networking. Arrive early and have dinner at one of the fine establishments in the area!

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Credit Card: ____________________________________________ $______________________________ Total Amount

___________________ Expiration Date

_______________________________________________________ Name as it Appears on Card

_______________________________________________________ Billing Address (if different from left)

______________________________________________________ Signature Date

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BUSINESS GRAB BAG IRS Ruling on Scanning and Shredding Original Documents: The IRS has a Revenue Procedure Code that provides guidance to taxpayers for maintaining books and records by using electronic storage system. Records maintained electronically must meet their requirements. The taxpayer must ensure the integrity and reliability of the electronic storage system. You must also be able to reproduce legible and readable hard copies. If the taxpayer can produce the image of the receipt, the IRS will accept it as though it was the original receipt. If the taxpayers records are available only by electronic means and he fails to be able to reproduce legible copies, the taxpayer may be subject to applicable penalties and interest. Questions regarding this procedure can be directed to the Office of the Assistant Commissioner at 202-622-5480 or written questions can be mailed to: Internal Revenue Service, Attention: CP:EX, 1111 Constitution Avenue, NW, Washington, DC. 20224. What Would You Do?: I had a client contact me last month. Her office had been broken into and their computer had been stolen. What would you do? Do you back up your QuickBooks data file frequently? Do you keep a back up off site in case of a fire or theft? Stop right now and verify that your back ups are correctly working so you won't be heart broken to find that you lost HOURS of data! For between $10 and $50 you can purchase an external jump drive to back up: 

Accounting Files

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Contact Databases

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Contracts of current and sold projects

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Tenant Information

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All those training CD’s you have loaded online.

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Your Favorites with all of your web site addresses, user names and passwords.

The Real Estate Investor’s In-Depth Look Into: 1. Paying substantially less in income and capital gains taxes. . . 2. Making sense of the business bookkeeping side of things to save time & money . . . 3. The NEW way to structure business entities that make more sense MAREI members, please log into the “member area” click on the “GURU” tab to access our Teleseminar Archives. You will find a replay of this 90 minute teaching call with John Hyre, a no-nonsense real estate investor who’s primary business is that of legal and tax services specifically for the Real Estate Investor. If you are just starting or just spent countless hours getting your current business ready for the accountants office, you will find information in this call that you can put to use today. He also is offering his courses for sale for $899 you get his complete two course system, personal consulting with John and with his Bookkeeper. Here at MAREI we have utilized both his Bookkeeping System for our companies and found it to be very beneficial, but please note we were already using Quickbooks. We did not spend much time in the book on learning the Quick Books Portion. His Guide to Entities and Asset Protection we also used to take us step by step in setting up an LLC. This is a great resource if you already have your company structure in place and are just adding an extra LLC for holding properties. Very simple and easy to use.

Do you have Kids?: Pay your Kids to work for you and open an IRA for their income: 

Addressing Direct Mail & Stuffing Envelopes

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Modeling on your Advertising Pieces

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Searching for FSBO’s in the Paper

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Managing your Web Site, Blogging, Web 2.0 stuff.

www.MAREInet.com

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Contractors Continued “free” bids into his repair costs. So would you not be better off to pay up front for a rehab bid and have it agreed upon before the contractor makes the bid rather than having him pad his actual rehab bid on the job he does get to cover all his time spent on the bids on the houses he did not get. Don’t always promise future work; pay him today for the work he has performed, and deal with the future when it arrives. Inspecting the house takes time and is work; it has taken him away from what he was doing to look at this house that you may never buy. We know it’s a numbers game when buying properties. You are going to be looking at a lot of houses you don’t ever buy. Home inspectors charge $300.00 to $500.00 to inspect a house, and if you hire them they expect to be paid. This price is too high if your looking at 2 to 3 houses per week. Keep in mind these prices usually include a full write up and possibly photos, you may find that hiring a contractor who does not have to do all the write up may offer the same service for much less. (Note that many inspectors have a much lower fee if there is not write up and they get paid at the time of inspection) When you buy the house you have been searching for, if the contractor did the inspection, they are all set to give you a hard repair bid for your rehab or for you to use when you wholesale the property. By agreeing up front what you will pay for a repair bid or inspection, paying at the time of inspection and the contractor not having to hope to get the rehab to get paid, you will have established a decent working relationship with your contractor. You will now have a contractor in place and ready to do your rehab once you close, just be sure to outline the scope of work (what you expect to be done and the quality of materials) and the payment plan in place before the project begins.

After you have a working relationship with a contractor, the bidding process will go smoother knowing your numbers up front before you buy. When he knows he will get paid like you promised, that you will in fact give him work, and you will hold true to your word, the contractor will get to your job faster than other people he works with and may just throw in a free inspection now and then. Because our contractors and subs know that when they do a job for us that they will get paid in a very timely manner, our jobs may be bid cheaper and be acted upon more quickly than other jobs. When we have a small question of how something should be fixed, they will often stop by and look at it for free and give us advice, they will probably get the repair if it is warranted. And they even bring us deals because they know what we look for in a house and that when we buy it for rehab, that they will get the job. Try out some of these ideas and let me know how they work for you.

About the author: Donald Tucker has been investing in real estate since 2000 and has been in the construction and building trades working with contractors and sub contractors for the past 20 years. Currently his company Tucker One Properties (www.TuckerOneProperties.com) is wholesaling homes in the Kansas City metro area and his real estate brokerage Realty Resource (www. RealtyResourceKC.com) is helping investor buyers and sellers in the metro.

Another mistake I have seen new investors make (even the ones on the TV shows) is waiting until the day of closing to start looking for a contractor. This will cost you valuable time and holding costs and could cut into your profits. Payment Plans Also keep in mind that a contractor is always skeptical when starting a rehab with a new investor. They have the same questions in their mind about you as you do about them. That’s why many will ask for 50% up front when starting the rehab. They want to make sure that they get paid enough to start the job and getting paid 50% up front is not that out of order when starting a rehab as the majority of the money needed in the rehab is spent in the first two weeks of the project: roof, furnace, air, electrical, plumbing, windows, etc are all usually done if the first two weeks and eat up a majority of the cost of the repairs. Don’t put him on a 30-day payment plan; he won’t be around in 30 days. A good contractor has people working for him that expect to get paid every Friday and the materials that go into your rehab are not free, they need to be paid to cover these items. Expect the contractor to be able to carry a little bit of the costs, but if your contractor can afford to carry all of these costs, he is probably charging you a lot more than the competition.

Earn Safe Return on your Investment Great way to build up IRA Funds. Request a FREE Brochure on Private Lending www.ROIwithTuckerOne.com 816-523-4400 Don or Kim Tucker

Working Relationships

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Education at MAREI Member Orientation: This is a short 1 hour workshop we will be offering for FREE for MAREI members. We will cover the benefits available to the MAREI members and walk you through the web site so you know how to log into the member area, create your profile, view the profile of others, post a classified, and access our online networking. Must be a Member of MAREI to register. Saturday February 21st 8:30 am to 9:30 am Saturday March 21st 8:30 am to 9:30 am 115 E Gregory Boulevard, Kansas City, MO Investing with your IRA: This is a 2 hour workshop devoted to teaching you the basics of investing with your IRA. We will cover the 2 larger IRA custodians, who you can and can’t do business with, how to buy and sell a house in your IRA, and how to lend money from your IRA. This class is open to MAREI members for $25 a person and the general public for $50 a person. Saturday February 21st 10:00 am to 12:00 pm 115 E Gregory Boulevard, Kansas City, MO Offered by Realty Resource of KC Getting Started as a Bird Dog: This is a 2 hour workshop devoted to teaching you: what a property bird dog does, how you can get paid legally, how to build your buyer’s list, how to find motivated sellers, and touch on becoming a Realtor. This class is open to MAREI members for $25 a person and the general public for $50 a person. Saturday February 21st 1:00 pm to 3:00 pm

Registration Information PLEASE CHECK THE APPROPRIATE Workshop Member Only Orientation Free for Members: Jan 17 Investing with your IRA for Members: $25 Investing with your IRA Non-Members: $50 Getting Started as a Bird Dog for Members: $25 Getting Started as a Bird Dog for Non-Members: $50

_________________________________________________________ Name _________________________________________________________ Company _________________________________________________________ Address _________________________________________________________ City / State / Zip _________________________________________________________ Email Address

115 E Gregory Boulevard, Kansas City, MO _________________________________________________________ Business Telephone Business Fax

Offered by Tucker One Properties Finding Motivated Sellers: This is a 2 hour workshop devoted to teaching you the basics of finding motivated sellers. Some of the best deals are made by purchasing directly from the sellers who are highly motivated. These are usually deals that no one else knows about. Find out how to get motivated seller’s calling you. This class is open to MAREI members for $25 a person and the general public for $50 a person.

Payment Information Credit Card _______________________________________________________ Credit Card Account Number

Saturday March 21st 10:00 am to 12:00 pm 115 E Gregory Boulevard, Kansas City, MO Offered by Tucker One Properties What is a Good Deal: This is a 2 hour workshop devoted to teaching you: what is a good deal. When you are looking at a property to purchase how do you know if it is a good deal? Directed primarily at residential property. This class is open to MAREI members for $25 a person and the general public for $50 a person.

$______________________________ Total Amount

___________________ Expiration Date

_______________________________________________________ Name as it Appears on Card

_______________________________________________________ Billing Address (if different from left)

Saturday March 21st 1:00 pm to 3:00 pm 115 E Gregory Boulevard, Kansas City, MO Offered by Tucker One Properties Seating is limited—register with form to the right or through the Calendar online at www.MAREInet.com

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______________________________________________________ Signature Date Check fax registration to 816-523-4448 Seating is very limited: only 12 per workshop. Questions, please call 816-523-4400 x 222.

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OWN IT FREE and CLEAR sensitivity of each client’s goals

What would you do if you could erase years of loan payments and potentially save tens of thousands of dollars in interest on your mortgage, student loan, car loan, credit card debt or any other consumer debt? What would you do if you could build wealth by putting your money to work for you?

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Software setting that let you select how aggressively to pay down debt—or build wealth

Would you take a family vacation? Start a college fund? Invest in real estate? United First Financial (UFF) can help you achieve your financial goals through the strategic interest cancellation and wealth building power of the revolutionary Money Merge Account (MMA) program.

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Ability to pay down multiple properties at the same time

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Text messaging bill pay and more

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User-friendly software interface

You can save time and interest on nearly every loan you have. The key is to make your money work smarter with little to no impact on your standard of living. The MMA program (it’s a software program) calculates the fastest way to pay off your mortgage and consumer debt based on your specific income, payments, living expenses and financial goals. You never have to guess which loans to pay off first, when to pay or how much extra to send.

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Financial education and coaching

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Toll-free client support

But it doesn’t stop there. It also applies the same advanced interest calculations to help you build interest, putting your money to work more effectively than ever before. Put Your Mortgage on the Fast Track The MMA program pays off a mortgage using an interestreducing strategy. While many homeowners realize that they can save money by reducing the interest rate they pay on their loans, few think about the length of time they will be paying on their loans. The MMA) program combines innovative software with traditional banking systems and personal coaching to drastically reduce your mortgage term and minimize your interest. With this incredible tool, you can pay off your mortgage in as little as 1/3 to 1/2 the time with: 

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Little to no change to your lifestyle

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Tens of thousands of homeowners are on schedule to save themselves time and interest with the Money Merge Account program from United First Financial. They will soon own their homes free and clear. The MMA program can help pay off one primary residence, multiple homes or even business and investment properties—it’s that powerful.

It Doesn’t Stop at Zero See what the Money Merge Account program can do for you by scheduling a free analysis from your United First Financial independent agent. You’ll find out how quickly you can pay off your mortgage and other consumer debts, and how quickly you equity will build.

Action Steps NOW Visit Web Site http://www.u1stfinancial.net/934513 (please get all of the address) Watch 2 Short Videos Why UFF Money Merge Account Overview (bottom of home page)

Request Free MMA Analysis To left of Video Links We will Call you with our Results

So Much More is Possible The Money Merge Account program offers enhanced features that truly take your financial life to a new level: 

Comprehensive budgeting system, fine-tuned to the

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Why No Real Estate Investor Can Live Without an Assistant Having an assistant is one of the best investments you’ll make as a real estate entrepreneur. Like all parts of your business (and yes, buying, leasing, and selling houses is a business), they require an investment of your money and also your time. You’ll need to invest a little money in order to hire, train, and compensate them for their services. And, you’ll need to invest some time to help them get the job done right — more in the beginning and much less as time goes on. In exchange for your investment in them, a good assistant will help you to generate much more money than you are paying (bringing you a rate of return that would make any investor jealous). And, they will save you countless hours for every extra hour you spend developing them. Although many investors are hell-bent on trying to do it all themselves, or think they can’t afford one, here is a partial list of reasons why you absolutely can’t live without an assistant: You will do more deals. Marketing is probably the best thing to hire an assistant to do. They will help you to execute advertising campaigns that you just would not have gotten around to doing on your own. They can compile lists, print letters, make calls, stuff envelopes, buy supplies, shop around for pricing, and do plenty of other things that generate leads for you that you would not have had the time or inclination to do otherwise. You will look more professional. When people receive a call from your assistant, they will know that you are a real player. It makes you look successful, organized, and trustworthy. Your credibility with sellers will increase, which will put them at ease and help you to get more offers accepted. Private lender prospects will acknowledge you as a legitimate business and will feel safer sending money to you knowing that you are not a fly-by-night operation. You will have less stress in your life. No one likes drowning in work. One of the worst feelings on earth is to have more work due than you can possibly hope to accomplish in the time available. Having an assistant will take a huge burden off of your back, especially when they do tasks that you don’t like doing or are not good at. You will be able to build a team. Having an assistant will help you to practice your skills at hiring, training, and managing team members. They are the ideal "starter employee" because they are not difficult to find and can immediately begin doing simple tasks for you. And, there is almost always an immediate use for their help. They will help prepare you to hire other team members when the time comes, if you so desire, such as a salesperson, renovations supervisor, or a purchasing representative. You will have a better lifestyle. Isn’t this one of the reasons why you got into real estate to begin with? When I started my real estate investment company, I had visions of lying around on the beach somewhere, living the good life while the rent money poured in. Then, I found out there’s actually a lot of work involved. A good assistant will give you your life back so you can spend it with your family, working on hobbies, or working on your business

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(which is always more fun than working in it). I have hired, trained, and managed personal assistants for years. I would never have experienced all of the benefits above if I had been stuck trying to do it all myself (and failing). A good personal assistant will not only help you to grow your business — they will give you your life back. Alan Brymer is the creator of The Assistant Who Pays Their Own Salary and the Founder and President of the Utah Valley Real Estate Investors Association. He has been a full-time investor since his first property at the age of 22 and has raised millions in private funding. Alan’s investment company was named by the Utah Valley Entrepreneurial Forum as one of the “Top 25 Companies Under Five Years Old.” He is a frequent guest expert for the news media, having been featured on multiple television programs as a real estate expert, published in 12 magazines nationwide, and as a speaker at seminars and associations around the country. In addition to his real estate experience, Alan is an expert at systemizing businesses. Like many, he attended seminars and bought courses but found that while the techniques of real estate are frequently taught, there were no courses that showed how to run a business in the level of detail that he was searching for. He began to develop systems for his own real estate business, which has allowed him to do more deals in less time each month. He has incorporated these into his consulting and is now presenting them as complete systems modules, the first of their kind for real estate investors. Read this article and others on www.REIClub.com. http://www.reiclub.com/articles/real-estate-investor-assistant Visit our teleconference archives to listen to one of our past teleconferences with Alan. Go to the Member’s Area, log in with your user name and password, click on GURU to access our archives.

Virtual Assistant Resources  www.ivaa.org  www.odesk.com  www.eleace.com  www.vanetworking.com  www.ireaa.com  www.revananetwork.com  www.virtualcas.com Do you offer virtual assistance locally, please let us know or post on our online networking sites.

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Mark Your Calendar

Saturday February 21st Member Orientation Workshop Investing with your IRA Workshop Getting Started as a Bird Dog

Tuesday February 10th General Meeting Legal Eagle Night with 2 of MAREI’s Attorney Members

Monday February 23rd Kansas City Metro Investors Lunch

Saturday February 14th Lee’s Summit Investors Breakfast

Thursday February 26 Landlords of EJC

KC Northland Cash Flow Club Evening Tuesday February 17th And all Tuesdays—Mo Kan REIN Wednesday February 18th Northland Investor Lunch Thursday February 19th MAREI TeleSeminar 8pm CST Syndicating Deals with David Lindahl

Real Estate Questions Do you have questions? Not sure how something works? Need to find a service provider?

Tuesday March 10th MAREI General Meeting Lease Options w/ Marck de Lautour Please visit the Calendar Online at www.MAREInet.com For other events Times & Location Registration

General Meeting Overland Park Marriott 10800 Metcalf 110th & Metcalf, S of I435 Tuesday February 10th, 2009

Can’t remember a name or a contact? We have several sources for answers and they all start with our web site: www.MAREInet.com Read Articles & Past Newsletters Listen to Recorded Meetings & Teleconferences Check the Vendor’s Online Online Forums linked from Web Site KCREI on Yahoo Groups http://finance.groups.yahoo.com/group/KCREI/ http://kcrealestateinvesting.ning.com/ Member’s Only Forums Member’s Only Profiles You will probably find your questions discussed in an article or recording or answered in a past question on the forums. Ask again and get even more answers.

Legal Eagle Night David Nachman & Ronald Kraft Registration, Networking, and Vendor Trade Show open at 6 p.m. See page 4 for more information.